Is SIB dragging its feet on recovery of Thiruvambady’s dues?

It’s three months since bank and Devaswam agreed on Rs25cr one-time settlement

KOCHI: What is preventing South Indian Bank (SIB) from recovering the around-a-decade-old loan dues owed by Thiruvambady Devaswam?

What is really intriguing the market observers is that SIB had initiated recovery procedures of the dues about a year ago, and this was confirmed by the Devaswam top sources to businessbenchmark.news at that time.

Why that process failed to make the desired progress is not yet known. The queries sent to Dr Sunder Menon, the Devaswam president, also remain unanswered yet.

The general impression was that both SIB and Devaswam had come to an amicable settlement on the closure of the loan the size of which may have soared by now to about Rs40 crore including the accumulated interest.
One devaswam member told businessbenchmark.news that “the Devaswam had gone on a borrowing spree in the past with a lot of money having been raised from several members as well, and this could be another tens of crores.”

But the flip side is that Thiruvambady Devaswam has huge assets too, one being Nandanam Complex (in the heart of Thrissur city), which has been pledged with SIB for availing the said loan.”

Is there more than meets the eye?

According to reliable sources, the bank and the Devaswam had come to a conclusion on the long–drawn loan issue and the term was that Devaswam would pay the bank Rs25 crore as a one-time settlement of the dues.

Some banking sources have viewed this with disbelief as the bank has enough collateral in its custody, to take care of its exposure to Thiruvambady Devaswam.

Though the said agreement is now more than three months old, the settlement of the issue is still hanging fire.

Deal in a limbo now?

As per the plans conceived by Devaswam for the one-time settlement, it would sell off its land in Kuttoor (near Thrissur), which is valued at about Rs70 crore by any estimate (according to sources), and part of this could very well be used to settle the loan with SIB.

‘There’s a catch‘

Some members are said to have objected to selling of this land in order to settle the dues. There could be ‘inexplicable’ reasons known only to them for this resistance from these members.

Businessbenchmark.news not only tried to call Dr Sunder Menon to get better clarity on the situation, but has also sent a few queries relating to the whole deal between Devaswam and SIB, but was of no avail.

Rumours galore

There are rumours doing rounds that SIB can’t down its foot on Devaswam to thrash out the dues because Thiruvambady Devaswam, as the borrower, hadn’t enjoyed the ‘legal competency’ to execute a loan deal with a bank, and hence the deal itself is ‘null and void’

Businessbenchmark.news, in an attempt to get the bank’s view on this, as well as other vital details of the loan deal as a whole, have sent queries to South Indian Bank (SIB) a few days ago, but failed to get any responses yet.

A member of Thiruvambady Devaswam confided with this portal, “If we are not legally bound to pay the loan, why should we (pay) it in the first place?”

Businessbenchmark.news primarily tried to get SIB’s views in order to prevent any possibility of readers sensing any insinuations or innuendoes between the lines of this article.

Though SIB has expressed its willingness to share its views on the queries sent to them, the responses are still awaited.