Can Odisha Withdraw Jagannath Temple Funds As Soon As The Deposits Mature?

Bhubaneswar: Odisha Law Minister Pratap Jena rubbished fears over the Rs 592 crore Jagannath temple fund parked the crisis-ridden Yes Bank, asserting that the money was safe and the RBI restrictions on withdrawals did not affect the Sri Jagannath Temple Administration (SJTA)’s claim on fixed deposits. The deposits can be withdrawn when they mature on March 19, 23 and 29, the minister said.

The minister’s assurance comes even as temple servitors and civil society members went on the offensive and demanded a probe into the decision to deposit the staggering amount in the private bank and urged the government to punish those who are involved in putting Lord Jagannath’s funds at risk. Charges of embezzlement and misutilization of funds have also been levelled, leaving the SJTA and the state government red faced.

Meanwhile former speaker and BJD strongman in Puri, Maheswar Mohanty did not mince words as he rebuked the temple authorities for depositing the cash in a private bank.

‘It was a wrong decision’, Mohanty said and urged the government to convene an urgent meeting with the RBI to recover the money.

Opposition BJP and Congress leaders were quick to put the government in the dock on the issue. Congress veteran Suresh Routray threatened a state wide stir if the government failed to recover the amount while BJP leader Bhrugu Buxipatra upbraided the state government and accused it of a casual approach to temple funds.

Significantly the RBI clamp down will last at least for a month during which time it is expected to come up with a credible restructuring plan. Hence the minister’s claim on the withdrawal dates raised eyebrows among financial experts and banking honchos.

 ‘While it’s okay to assume that the temple fund is safe it is unlikely that the SJTA can withdraw the money on the stated dates’, said a former Yes Bank official requesting anonymity.

Yes Bank customers were in a tizzy while the markets and the country’s banking sector went into a tailspin following Thursdays’s RBI curbs on the private bank regarding deposits, loans and withdrawals owing to its poor financials. This is only the second time that the RBI has resorted to such a move since 2004 when the regulator got the Oriental Bank of Commerce to take over the embattled Global Trust Bank.

The move had triggered fears over the fate of the huge temple cash deposited in the bank. The SJTA decision to withdraw the money from nationalised banks and parking it in a private bank only last year apparently in a hush hush manner had drawn sharp reactions from opposition political parties and also servitors and the temple managing committee. The managing committee was not consulted about the move, senior members alleged. Servitors had even threatened to take the SJTA to the Supreme Court over the decision that was taken ostensibly because the Yes bank was offering higher interest rates on the deposits.

“We want safety of the Lord’s money, not higher interest rates,” managing committee member Madhav Mohapatra said.

The Rs 592 deposit includes a Foundation Fund of nearly Rs 91.74 crore and Corpus and Temple Funds that have Rs 244.60 crore and 255.66 crore respectively.

Stung by the criticism, the SJTA had hurried to announce that the cash would soon be withdrawn and deposited in nationalised banks.

All the money that is collected from different ‘hundis’ in  the temple and other parts of the state is deposited in the Foundation Fund. Ninety per cent of this fund is deposited in banks on a fixed-term basis that cannot be liquidated. Ten per cent of the fund is diverted to the temple fund that can be utilised on expense heads of the temple. The corpus fund is a statutory fund as per the temple act.

Donations above Rs 500 are deposited in the corpus funds. The money donated by different companies also comes under this head. All the money that the temple gets as revenue like selling its land goes to the temple funds. The temple administration also keeps the corpus fund on a fixed-term basis.

The RBI Moratorium

This moratorium will be valid from 6 pm on March 5 to April 3, 2020 and withdrawals above Rs 50,000 will require RBI’s permission. The restriction is valid across all types of accounts, including savings, current and other deposits.

RBI, however, may permit the bank to allow withdrawals of over Rs 50,000 in the following conditions:

– in connection with the medical treatment of the depositor or any person actually dependent on him

– towards the cost of higher education of the depositor or any person actually dependent on him for education in India or outside India

– to pay obligatory expenses in connection with marriage or other ceremonies of the depositor or his children or of any other person actually dependent upon him