The Madras High Court on Wednesday (20th May) issued notices to the Reserve Bank of India (RBI) and the Union Ministry of Finance, seeking their response on a Public Interest Litigation (PIL) filed against a Tamil Nadu government order allowing the disposition of temple funds in state-owned non-banking finance corporations (NBFCs). The notices were issued by a Vacation Bench of Madras HC comprising justices GR Swaminathan and V Lakshminarayanan, which admitted the PIL. The judges also directed the Hindu Religious and Charitable Endowments (HR&CE) department to file its counter-affidavit by 27th May.
The impugned order was passed by the previous Dravida Munnetra Kazhagam (DMK) government, allowing the deposition of temple funds worth hundreds of crores in NBFCs such as Tamil Nadu Power Finance and Infrastructure Development Corporation (TNPFC) and Tamil Nadu Transport Development Finance Corporation (TNTDFC).
Temple activist TR Ramesh filed the PIL, which challenged the government order dated 17/02/2026, issued by the Department of Tourism, Culture, and Religious Endowments. Ramesh described the order amending the Religious Institutions (Custody, Investments and Lending or Borrowing of Money) Rules, 1963, as illegal, arbitrary and ultra vires the provisions of the HR&CE Act, 1959, and Articles 25 and 26 of the Constitution. The petitioner sought the quashing of the government order, contending that through the order, temple funds will be deposited in highly unsafe NBFCs, which are already incurring losses.
The petitioner apprised the court that the TNPFC and the TNTDFC had been collecting public deposits and funding capital expenditure and working capital needs of Tamil Nadu Generation and Distribution Corporation (Tangedco) and the State transport corporations, respectively. He added that the TNPFC had been given a BBB minus rating, which was the lowest rating that an NBFC must have to accept public deposits.
“TNPFC may have a perceived advantage of being 100% owned by the Government of Tamil Nadu, and that is perhaps the only reason that prevents its rating from going below BBB (-). Any rating below BBB(-) would at once incapacitate TNPFC or any other non-banking finance corporation from accepting or renewing deposits,” the petitioner stated in his affidavit.
He further informed the court that the TNPFC has been funding companies working in the State power sector, such as Tangedco. He said that these companies have a collective accumulated loss of over ₹1.62 lakh crore. He added that the financial condition of the TNTDFC was also not strong. He urged the High Court not to allow temple funds to be used for funding State-run institutions.
The PIL will come up for the final hearing next week.
