The Travancore Devaswom Board's (TDB) diversion of its employees’ provident fund to bonds has come in for sharp criticism. Worse still is the fact that over Rs 150 crore under this head has been to purchase bonds of crisis-riddled Dhanlaxmi Bank.
The matter has come at Kerala High Court and notices have been issued to the board and the State Government. Dhanlaxmi Bank has been the major banker for the devaswom. And going by the report submitted to by the audit department, little thought has been put into the action. Term deposits in government treasuries would have given better yields and safe when compared unsecured debentures of a private bank like this which has been struggling to stay afloat.
According to the report submitted to the High Court, the devaswom prematurely closed 58 fixed deposits valued at Rs 152.18 crore on maturity to purchase the Dhanlaxmi bonds in March 2018. The tier-2 bonds were issued by the bank as part of raising capital. The decision was taken in a lackadaisical manner without any consultation or proper study or risk analysis, the audit report said.
The PF of the devaswom and temple employees was diverted without looking at the risk factors of when it was hard-earned money of workers. The decision was taken in a day with approvals from the accounts department and the devaswom authorities happening the same day. The haste in purchasing the debentures without proper advice band market study makes the whole exercise suspicious. The bonds were rated as BB+ which means moderate risk. Also, the audit report shows that the performance of the bank is not only not attractive, but dismal. These are term bonds and premature closure to meet the needs of employees could make them unattractive and the risks posed by the not-so-good performing bank were not considered.