1056 Tirumala Tirupati Devasthanams Executive Officer seems to have acted inaptly and imprudently in depositing Temple Funds with Private Banks

Here is a Times of India News Report which indicates that Tirumala Tirupati Devasthanams (TTD), Tirumala, deposited Rs. 1,000 crore (RS. 10 billion or approx. $200 million) with a Private Bank by name IndusInd Bank, tempted by an additional interest of 0.33% p.a. offered by them when compared to Public Sector Banks like Andhra Bank and Vijaya Bank. This act of TTD and its E.O. appears to be an imprudent step. First, I shall provide a link to the Times of India News Report: Click here to go to https://timesofindia.indiatimes.com/city/vijayawada/ttd-dismisses-charges-of-bank-deposit-scam/articleshow/63586776.cms. The Report has also mentioned that the TTD's Executive Officer, Shri Anilkumar Singhal has justified his action. Here are quotes from what Shri Anilkumar Singhal was reported to have said:

TTD executive officer, Anil Kumar Singhal, condemned the allegations. Singhal, addressing a media conference here, on Monday, said that the TTD is following guidelines given by state and Union governments in depositing temple money in banks.

Singhal said that the TTD had called for sealed bid quotations for depositing its money in nationalised public sector, as well as private banks, according to the directions of the investment committee. Officials who opened sealed cover quotations sent by banks on March 24, 2018 had asked the banks to revise quotations with best possible interest rates by March 27, he said.

“We have deposited Rs 4,000 crore acquired through interest in various banks, in which Rs 3,000 crore were deposited in public sector banks and Rs 1,000 crore in IndusInd bank, which accepted to give 7.66% interest per annum,” said Singhal.

The TTD has deposits of Rs 10,589 crore in various banks as of now, and every transaction is done transparently following guidelines, he said.

ybrao a donkey's personal views which are not intended to be imposed on others. No love or hatred towards any individual or institution. Exceptions: Atheism and Marxism.

"That the TTD is following guidelines given by state and Union governments in depositing temple money in banks." cannot be a reasonable explanation, which can be given by I.A.S. Officers. Reason: I.A.S. Officers are supposed to be Cream of the Intelligent brains in India. They are supposed to guide even their Superior Bureaucrats and Politicians, when they go wrong (pramAdO dhImatA api-- English: Even brave and wise persons can accidentally go wrong). And these suggestions of Prudence are to be given by IAS-IPS-IFS-IRS Officers, irrespective of the consequences they may face, in case bosses get annoyed. The IAS-IPS-IFS-IRS Officers are not glorified Clerks. At the same-time, they cannot disobey their bosses continuously. That means, they have to bring facts, possibilities, and consequences to the notice of bosses, and in spite of the subordinates' suggestions if the bosses persist with their wrong Orders, the Subordinates may have to comply with as long as the Orders are reasonable, not against Natural Justice, not against Laws, and not Unconstitutional.

Question: Why depositing Public (Government, quasi-Government, Fiduciary and Trusts etc.) Funds with Private Banks can be dangerous?

Ans: When Banks burst/broke (this has not happened in recent years in India, but still it is possible. Nothing is impossible), the Deposit Insurance Protection available to Depositors is Rs. one lakh (Rupees one hundred thousand only_. This 100,000 Rs. is total amount indemnified for all deposits of the customer with all Banks put together. That means, if two Banks become bankrupt, the Depositor cannot get protection of Rs. 200000/-. His total cover will be limited to Rs. 100,000/-. This protection will be available only when the Bank involved pays the Insurance Premium regularly to the Deposit Insurance Credit Guarantee Corporation. This DICGC seems to have become somewhat inert, as some banks seems to have stopped paying premium and taking cover. This Rs. 100,000/- limit is applicable both to Private Banks and Public Sector Banks.

However, in respect of Public Sector Banks, there seems to be a 'maDi guDDa (Engl: Sacred cloth used in some Indian Homes for Worship purposes, and is not touched or allowed to be touched except during worship.), or 'siggu biLLa' (a peepal-leaf-shaped silver ornament worn by babies, particularly female babies, as a sort of cover for their private parts to hide from the glare of visitors).

What is this sacred cloth or modesty plate? Ans: A hope of some believers, and a promise by Finance Minister in Parliament, that Public Sector Banks in India will not be allowed to go burst. That means, if Public Sector Banks face difficulties, either RBI or the Govt. of India is likely to come to their rescue. Though a Finance Minister's Assurance is not written Law, for the time being it will be like a log of wood for a Depositor floating in a Sea of Hardships.

Will Govt. or RBI come to the rescue of Private Banks, Foreign Banks in India if they fail?

Ans: There does not appear to be any legal obligation either for the Government or for the RBI. Private Banks and Branches of Foreign Banks operating in India, come under the category of Scheduled Banks. As per the Banking Regulation Act, they maintain some Deposits in Current Accounts with RBI, called 'CRR'. RBI may allow the Banks to withdraw these moneys intended for CRR. Similarly, Scheduled Banks have to maintain some Term Deposits/Approved Securities / Government Bonds with Approved Institutions, total of these being called 'SLR' "Statutory Liquidity Ratio". When Banks face difficulties, RBI may allow loans against the SLR Securities / or allow Repurchase-Resale (popularly called Reverse REPO and , REPO). Under ordinary circumstances, these may be sufficient for Banks to tide over funds crunches / crises. Suppose the Liabilities (Deposits from customers are also liabilities) of Banks become an unwieldy and too-much-of-a-burden, will RBI support, beyond what are permitted under-against CRR and SLR. This has not been adequately tested. We have to wait and have a taste of it.

Question:Will High Courts and Supreme Court direct respective State Governments or the Union Government to come to the rescue of Depositors?

Ans: Though inspecting and supervising all Scheduled Banks in India (all-- private banks, Public Sector Banks, Foreign Banks operating in India, some Co-operative Banks), is the right and the responsibility of RBI, to ensure their health, it is not clear how far RBI can be made accountable or liable or responsible for lapses of its Officials. This has not been sufficiently tested in Courts.

Though Sahara is not a Bank, SEBI and Supreme Court seem to be doing an impeccable job in protecting the Indian Public. Similarly, in case of Agri Gold Scam, Andhra Pradesh Government is selling some assets and making some payments to depositors under directions of AP High Court. A similar instance is yet to arise in respect of Private Banks in India.

Question: In various State Level Bankers' Meetings, the Hon. Chief Minister of Andhra Pradesh threatens Public Sector Banks that AP Government will direct its Departments/Corporations to withdraw their deposits from Banks which do not lend as per the Government's Expectations. Though, strictly, TTD is not a Government Organ, did the Chief Minister exert his Policies on TTD, so as to make its Executive Officer to divert some funds to the Private Bank i.e. IndusInd Bank.

Ans: It appears to be so. But Mr. Naidu appears to be busy with his travails on Special Status and Special Packages, Utilisation Certificates issues with the Centre, and the Parliament. He may not have that much of time. But, somebody from CMO (Chief Miniser's Office at Amaravati) might have used his sly hand.

Incomplete. To be completed and corrected soon.