Tamilnad Bank to focus on lending to small businesses
ECONOMY & POLICY

Tamilnad Bank to focus on lending to small businesses

According to Tamilnad Mercantile Bank (TMB), the retail, agricultural, and MSME (RAM) segments will continue to account for between 80 and 85 per cent of the bank's loan portfolio.

After the Reserve Bank of India (RBI) lifted its three-year ban in October of last year, the bank with its headquarters in Thoothukudi will open 25 new branches by March of this year. TMB is one of India's oldest private sector banks. It was founded in 1921 as Nadar Bank and serves agricultural, retail, and micro, small, and medium-sized enterprises (MSME) customers. RAM accounted for 89 per cent of the company's portfolio in the third quarter of the current fiscal year, up from 87 per cent from July to September.

Because my risk is spread out, the RAM segment always has a multiple advantage. This bank has been well-versed in MSMEs and their trading for 100 years. S Krishnan, the bank's managing director and chief executive officer, stated, "We understand the nuances of MSMEs very well, and MSME units also understand the bank."

“In the future as well, it may remain in the same range of 80-85 per cent. We will also deal with the business segment. However, RAM will continue to be the primary focus,” he stated.

Two of the bank's 511 branches were established following an initial public offering and the RBI's lifting of the ban. The ban was imposed in response to TMB shareholders' decision in 2016 to increase the company's authorised share capital to Rs 500 crore. In light of the fact that TMB did not raise its subscribed capital to at least half of the authorised capital as required, the RBI imposed a number of restrictions in June 2019. In March 2021, some restrictions were lifted; however, the restriction on branch expansion remained in place until October 2022.

By the end of the previous quarter, we had received RBI approval. After that, we opened two more branches, and by the end of March, we intend to open 25 more across the country. Krishnan stated, "We will also have our first footprint in North East India in the very near future."

In addition, TMB is developing expansion strategies for the upcoming fiscal year and will present a plan to its board. According to Krishnan, the bank is concentrating on phygital mode, or services that combine digital and physical features, and it will soon offer tablet banking to customers. By the first week of February, it will also begin offering mobile banking in its second phase. Wherever there is potential for business, the bank will establish branches.

TMB's net profit increased by 38 per cent to Rs 2800 million in the third quarter of this fiscal year, up from Rs 2030 million in the October to December quarter of last year. When you look at growth, there are a number of factors that contributed to it. NIM, which is one of the best in the industry, is one of the factors driving this growth. In addition, I have been able to control the slippages and recover, resulting in a very low credit cost,” Krishnan stated.

According to Tamilnad Mercantile Bank (TMB), the retail, agricultural, and MSME (RAM) segments will continue to account for between 80 and 85 per cent of the bank's loan portfolio. After the Reserve Bank of India (RBI) lifted its three-year ban in October of last year, the bank with its headquarters in Thoothukudi will open 25 new branches by March of this year. TMB is one of India's oldest private sector banks. It was founded in 1921 as Nadar Bank and serves agricultural, retail, and micro, small, and medium-sized enterprises (MSME) customers. RAM accounted for 89 per cent of the company's portfolio in the third quarter of the current fiscal year, up from 87 per cent from July to September. Because my risk is spread out, the RAM segment always has a multiple advantage. This bank has been well-versed in MSMEs and their trading for 100 years. S Krishnan, the bank's managing director and chief executive officer, stated, We understand the nuances of MSMEs very well, and MSME units also understand the bank. “In the future as well, it may remain in the same range of 80-85 per cent. We will also deal with the business segment. However, RAM will continue to be the primary focus,” he stated. Two of the bank's 511 branches were established following an initial public offering and the RBI's lifting of the ban. The ban was imposed in response to TMB shareholders' decision in 2016 to increase the company's authorised share capital to Rs 500 crore. In light of the fact that TMB did not raise its subscribed capital to at least half of the authorised capital as required, the RBI imposed a number of restrictions in June 2019. In March 2021, some restrictions were lifted; however, the restriction on branch expansion remained in place until October 2022. By the end of the previous quarter, we had received RBI approval. After that, we opened two more branches, and by the end of March, we intend to open 25 more across the country. Krishnan stated, We will also have our first footprint in North East India in the very near future. In addition, TMB is developing expansion strategies for the upcoming fiscal year and will present a plan to its board. According to Krishnan, the bank is concentrating on phygital mode, or services that combine digital and physical features, and it will soon offer tablet banking to customers. By the first week of February, it will also begin offering mobile banking in its second phase. Wherever there is potential for business, the bank will establish branches. TMB's net profit increased by 38 per cent to Rs 2800 million in the third quarter of this fiscal year, up from Rs 2030 million in the October to December quarter of last year. When you look at growth, there are a number of factors that contributed to it. NIM, which is one of the best in the industry, is one of the factors driving this growth. In addition, I have been able to control the slippages and recover, resulting in a very low credit cost,” Krishnan stated.

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