The Madras High Court on Wednesday, 20 May, issued notices to the Reserve Bank of India (RBI) and the Union Ministry of Finance over a Public Interest Litigation (PIL) challenging a Tamil Nadu government order that permits temple funds to be deposited in state-owned non-banking finance corporations (NBFCs). The court sought responses from both authorities regarding the controversial decision, which has raised concerns over the safety of temple money.

The notices were issued by a Vacation Bench comprising Justices GR Swaminathan and V Lakshminarayanan. The bench admitted the PIL and directed the Hindu Religious and Charitable Endowments (HR&CE) department to submit its counter-affidavit by 27 May. The matter is expected to come up for final hearing next week.

The PIL was filed by temple activist TR Ramesh. He challenged a government order dated 17 February 2026 issued by the Department of Tourism, Culture and Religious Endowments. The order amended the Religious Institutions (Custody, Investments and Lending or Borrowing of Money) Rules, 1963. According to the petitioner, the amendment allows temple funds worth hundreds of crores to be deposited in state-run NBFCs such as Tamil Nadu Power Finance and Infrastructure Development Corporation (TNPFC) and Tamil Nadu Transport Development Finance Corporation (TNTDFC).

Ramesh argued that the order was illegal, arbitrary and beyond the powers granted under the HR&CE Act, 1959. He also claimed that the decision violated Articles 25 and 26 of the Constitution, which deal with religious freedom and the rights of religious denominations. Through the PIL, he sought the quashing of the government order and urged the court to prevent temple money from being placed in financially weak corporations.

The petitioner told the court that both TNPFC and TNTDFC have been collecting public deposits to fund the capital expenditure and working capital requirements of state-run institutions. He explained that TNPFC has been financing projects linked to Tamil Nadu Generation and Distribution Corporation (Tangedco), while TNTDFC has been supporting state transport corporations.

Ramesh informed the court that the financial position of these corporations was worrying. He stated that TNPFC currently holds a BBB minus rating, which is the minimum rating required for an NBFC to legally accept public deposits. Highlighting the risks involved, the petitioner said the corporation’s weak financial health should not be ignored while handling temple funds.

“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.

The petitioner further pointed out that TNPFC has been funding several companies operating in the state power sector, including Tangedco. According to the affidavit, these companies together have accumulated losses of more than ₹1.62 lakh crore. He argued that such financial conditions make the investment of temple money highly unsafe.

Ramesh also expressed concerns over the financial condition of TNTDFC. He submitted before the court that the corporation was not in a strong financial position either. He urged the High Court to stop the state government from using temple funds to indirectly support loss-making state-run institutions.

The PIL has triggered a larger debate over the management and use of temple funds under the HR&CE department. Critics of the order believe that religious funds collected from devotees should be invested only in secure financial institutions and not in corporations facing financial stress. Supporters of the PIL argue that temple money should remain protected and should not be exposed to risks linked to state-run entities struggling with heavy losses.

The Tamil Nadu government order under challenge was passed during the previous Dravida Munnetra Kazhagam (DMK) administration. The petitioner has maintained that the amendment to the 1963 Rules goes against both legal provisions and the interests of devotees whose donations are meant for religious and charitable purposes.

The High Court’s decision to issue notices to the RBI and the Union Finance Ministry indicates that the matter could have wider financial and regulatory implications. The responses from these authorities, along with the HR&CE department’s counter-affidavit, are likely to play a key role in the next stage of the proceedings.

The case will now be heard again next week, when the court is expected to examine the legality of the government order in greater detail.