Mananthavady: The CPM-controlled Thirunelly Service Cooperative Bank is in the eye of a storm for allegedly refusing to allow devaswams of Thirunelly Mahavishnu Temple and Thrisslery Shiva Temple to withdraw their fixed deposits, despite the Malabar Devaswam Board's direction in 2023 to the effect and a recent High Court verdict.

The bankers' predicament is understandable, though not legally tenable. The two devaswoms deposited over ₹17 crore in FDs. The temple authorities have so far withdrawn ₹9 crore. The bank now owes them ₹8 crore of which ₹1.13 crore belongs to the Thrisslery Shiva Temple, excluding interest. 

Two High Court verdicts pronounced in August -- one on a petition filed by a devotee, Ravi Ulliyeri of Kozhikode, and another by the Malabar Devaswam Board -- directed the authorities of cooperative financial institutions to return the temple funds. 

In the latest verdict on August 8, a High Court bench of Justices Raja Vijayaraghavan V and KV Jayakumar directed the executive officer of the Thirunelly Mahavishnu Temple and the manager of the Thrisslery Shiva Temple to submit requests for the closure of FDs at the earliest. "The societies shall close the deposits on receipt of such requests and release the amount," the order said. 

Earlier, in 2023, the commissioner of Malabar Devaswam Board (MDB) had issued a circular calling for the speedy transfer of temple funds from registered societies branded as "banks" and also directed that all such accounts be closed. The circular stated that FDs should be withdrawn upon maturity and redeposited only in financial institutions authorised under MDB norms. 

These decisions have put the cooperative society in a fix, as it is unable to cobble up the required funds it is legally bound to pay back. Bank authorities have been asking the temple office bearers for more time to realise the funds they have loaned or deposited in other cooperatives. However, they are trading on thin ice, given that repayment of such a large sum could wipe out their entire net worth. The banking regulator Reserve Bank of India's stance is also against them.

RBI warning 
The MDB circular to all temples of the Malabar region followed an RBI directive warning against depositing funds in cooperative societies registered as per the Kerala State Cooperative Societies Act, 1969. 

Such cooperative entities often engage in financial transactions with non-members and mislead investors by using the term 'bank' in their names, the RBI noted. The use of the term "bank" by these societies violates Section 7 of the Banking Regulation (BR) Act, 1949. Moreover, several of these societies accept deposits from non-members, nominal members, and associate members -- actions that also contravene the BR Act, according to the RBI.

The RBI circular also claimed that the functioning of such societies is not transparent or trustworthy, making the deposits unsafe. 

According to the data of the Department of Cooperation, 1,581 cooperative societies in Kerala use the term "bank" in their names, but only 61 have approval from the RBI. Moreover, deposits in such societies are not covered by the Deposit Insurance and Credit Guarantee Corporation (DICGC), which covers deposits up to ₹5 lakh.  

Deposits 'illegal'
According to the affidavit by Ravi Ulliyeri, the ThirunellyTemple had deposits ₹17.93 crore while the Thrisselry Shiva Temple deposited ₹1.22 crore in FD. Later, the bank returned a portion of the funds after the HC order. Ravi told Onmanorama that he intervened after being informed by a member of the temple administrative committee that the "funds of the Gods" were locked in the bank. "After the 2023 MDB circular that prohibited deposits in such societies, the investments have turned illegal," he said. 

There were also allegations that the ThirunellyService Cooperative Bank denied funds to the temple renovation committee for the infrastructure expansion at the Thirunellytemple. Sources said that the Tirunelly temple has parked the majority of its funds in several cooperative societies, including the Thirunelli Service Cooperative Bank, Mananthavadi Cooperative Urban Bank, Mananthavadi Cooperative Rural Society, Wayanad District Temple Employees' Service Cooperative Society, and Wayanad Primary Cooperative Agriculture and Rural Development Bank. As per RBI directive, these institutions are not entitled to use the term 'bank' in their names, as they lack a valid banking licence.

KV Narayanan Namboothiri, the executive officer of the Malabar Devaswom Board in charge of the two temples, told Onmanorama that though the devaswom authorities demanded immediate release of funds, the societies refused, citing fund shortage and releasing money only in parts. "Even after the High Court order in August, we tried several times, but there has been no action. The pending amount is around ₹6.5 crore and the interest thereof," he said. "Up until 2023, the temple revenues were routinely deposited in such societies," he said. 

A political tool against CPM
Meanwhile, political parties, including Congress and the BJP, have launched agitations against the bank, alleging diversion of temple funds for vested interests and violation of banking norms. 

The allegations gained traction following the Brahmagiri controversy, where investors of the CPM-controlled Brahmagiri Development Society (BDS) allegedly lost deposits totalling more than ₹100 crore. Many investors, mostly CPM loyalists, are still struggling to reclaim their funds.  

Adding to the CPM's woes, all five cooperative societies where the Thirunellyand Thrisslery Devaswoms had deposited funds are controlled by the party. 

Both the BJP and Congress have held protest marches to the Thirunelly Service Cooperative Bank and even laid a siege to it, demanding the immediate release of devotees' funds. More agitations are expected, as the CPM faces mounting public backlash following the BDS investors' outcry.  

A century-old legacy at stake
According to bank records, the cooperative entity traces its origin to the anti-feudal and anti-colonial movements in 1919. The bank played a crucial role in liberating the agrarian community from the clutches of landlords and moneylenders.   

Located about 40 km away from here, the bank - originally set up to serve local farmers and the temple staff - now has more than 13,000 A-class members. Bank authorities argue that the deposits are circulated among the local credit societies, individuals, and farmers' groups, and that sudden mass withdrawal would cripple its day-to-day functioning. "The bank has never denied any genuine request for funds from the devaswam, but only opposed the withdrawal of the entire funds all at once," a bank official said, requesting anonymity.

"The temple funds have been deposited in various cooperative banks of the region for almost a century," said PT Biju, CPM area secretary. "The crisis is part of a central government agenda to destroy Kerala's cooperative sector. We will survive with the support of our members; that is our strength. The administrative body will contest the case legally to seek more time for repaying the deposits while exploring all possible ways to remit the funds as soon as possible", he said.