KOCHI: A Rs38-crore loan with South Indian Bank (SIB) that snowballed into a Rs57-crore liability for Thiruvambady Devaswom has finally been settled — at Rs21 crore, representing a steep discount even to the original principal.
PNC Menon, founder of Sobha Ltd, has stepped in in his personal capacity to settle the Devaswom’s dues to SIB through a one-time settlement (OTS), according to a message circulated by the temple authorities to their members.
The settlement means that a liability of about Rs57 crore has been brought to an end with a payment of Rs21 crore — a reduction of Rs36 crore, or about 63 per cent.
Even more striking is the settlement against the original principal. The Devaswom had initially borrowed about Rs38 crore from South Indian Bank. The Rs21-crore settlement is therefore about 45 per cent below the original principal itself.
The temple authorities, in their communication to members, said Menon had made the payment as a gesture of goodwill. They also said that the Devaswom had been in discussions with Menon on the matter for some time.
Menon transferred the Rs21 crore to the Devaswom’s account, following which the temple authorities transferred the money to South Indian Bank towards settlement of the dues, according to the communication.
The intervention comes against the backdrop of prolonged financial stress at the Devaswom, which had borrowed for its convention centre project. The loan subsequently became difficult to service, particularly after the Covid-19 pandemic hit the convention-centre business.
Settlement at steep discount
What makes the settlement significant is not merely the size of Menon’s contribution but the financial arithmetic behind it. A Rs38-crore principal had grown to about Rs57 crore through accumulated interest and other dues. The bank has now received Rs21 crore in settlement, equivalent to about 55 per cent of the original principal.
For Thiruvambady Devaswom, the settlement removes one of its most onerous financial obligations and potentially reduces the pressure to monetise valuable temple properties to meet the bank liability.
The Devaswom’s financial difficulties had earlier come under public scrutiny, with its overall liabilities estimated at substantially higher levels than the bank exposure alone. The South Indian Bank liability had been among its most pressing obligations.
The settlement also represents an unusual instance of a prominent businessman stepping in personally to resolve a religious institution’s financial liability.
For South Indian Bank, meanwhile, the transaction brings closure to a stressed exposure through an OTS. The Rs36-crore gap between the dues and the settlement amount represents the price of achieving a final resolution of the long-pending liability.
For Thiruvambady, the equation is considerably different: an obligation that had grown to Rs57 crore has been extinguished for Rs21 crore, thanks to a contribution from Menon that the temple authorities themselves describe as a gesture of goodwill.
