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The History of Tamilnad Mercantile Bank

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Shri A.K.Jagannathan Chairman Tamilnad Mercantile Bank
Shri A.K.Jagannathan Chairman Tamilnad Mercantile Bank

The History of Tamilnad Mercantile Bank Ltd., the then Nadar Bank Ltd., dates back to 1921. The Bank was registered on 11.05.1921 as “THE NADAR BANK LTD”. The Bank threw open its doors to the Public on 11th November 1921 at Tuticorin.

A group of dedicated men with shrewd business acumen and sound integrity were constituted as the first Board of Directors and they elected Shri.M.V.Shanmugavel Nadar as chairman on 04.11.1921. The Bank was opened by Shri.T.V.Balagurusamy Nadar, the then President of the Nadar Mahajana Sangam and the bank threw open its doors to the public on 11.11.1921 at 09.00 A.M in Aana Mavanna Building at South Raja Street, Tuticorin.

The Founder Directors:

Shri.M.V.Shunmugavel Nadar, Shri.M.V.E.Rathnasamy Nadar, Shri.M.V.E.Kasisamy Nadar, Shri.A.R.A.S. Arumugasamy Nadar, Shri.K.A.M.A.Kaliappa Nadar, Shri.W.P.A.Marimuthoo Nadar, Shri.T.V.Balagurusamy Nadar, Shri.A.M.M.Sinnamani Nadar, Shri.P.K.S.A. Arumuga Nadar, Shri.AR.A.Shenbaga Nadar

The Bank became a Scheduled Bank under the Reserve Bank of India Act on 11.05.1935. The Nadar Bank Ltd., had changed its name and assumed its present name TAMILNAD MERCANTILE BANK LTD., on the 26th November 1962.

Now the Bank is 90 years young and celebrating 90th anniversary on 11.11.2011. It has been always a proud moment for any organization to celebrate its Founders Day, which is an occasion to cherish the old values and reinvent the future with a view to fulfil the vision of our founding fathers. Excellence in Management

The ever increasing profit figures of the bank depict the efficiency of the management. The bank, which was opened with a small capital of 5 lakhs, has an impeccable record of having a networth of 1,366.01 crore as on 31.03.2011 making it a strong and sound bank.

The Chief Executives of the bank from the very beginning by their profound knowledge, outstanding efficiency, able administration and devotional duty laid down the strong foundation.

In 1969, the Reserve Bank of India advised for the appointment of whole time Chairman of the Bank. The following persons served in that post.

Chairman

Shri R.Jeyaraj 1969-1988, Shri J.Kasiviswanathan 1989-1991, Shri M.Jesudasan1992-1996 (May), Shri K.N.V.Nayar 1996-1997 (July), Shri S.Krishnamurthy 1997-2002 (September), Shri R.Natarajan 2002-2004(September), Shri S.Radhakrishnan 2004 –2006 (November)

Managing Director and Chief Executive Officer

Shri G.Narayana Moorthy 2006 (Dec) – 2009 (May)

Shri G.Nagamal Reddy June 2009 -- 23.09.2010

Present Managing Director and Chief Executive Officer

Shri A.K.Jagannathan since 23.09.2010

Branch Network

The Bank was having only 4 branches in the year 1947 at Tuticorin, Madurai, Sivakasi and Virudhunagar. The Bank also had a branch at Colombo in the year 1933 and was closed in the year 1939 due to losses incurred. The first branch outside the State of Tamilnadu was opened in the year 1976 at Bangalore. The first fully computerized branch was opened at Tuticorin on 09.12.1984. The bank has now 250 full fledged branches all over India, 250 ATMs, 7 Regional Offices and 11 Extension Counters. The bank established its first Currency Chest at Madurai in 1993 and another Currency Chest at Chennai during 2001. The Bank had spread its wings in 11 States and three Union Territories.

Business Growth:

The Bank which had a deposit base of 21,010/- in the year 1921 increased it to 27 lac during 1946 and to 182 lac during 1971. The deposit level of the bank as on 31.10.2011 stood at at 15,021 Cr. with a growth rate of 27.53% on YoY which pronounces the confidence reposed on the bank by the public.

The level of advances which stood at 52 lac in the year 1962 has since crossed 11,642 Cr. with a YoY growth rate of 29.95%. The credit deposit ratio of the bank is 77.50%. The bank focused on increased deployment to SME and retail sector with the intention to protect and improve the yield from advances.

Profitability

The bank, which had a Net Profit of 6,984/- in the year 1921 had spurted its Profit to 5.05 lakhs in the year 1971. As on 31.03.2011 the Bank's net profit stood at 250.90 crore.

The level of profit earned by the Bank, year after year, has enabled to build up its Reserve base to a high level of 1,366.01 crore. As per Reserve Bank of India directive the bank should have achieved the capital adequacy ratio of 9%. The capital adequacy ratio of the bank as on 31st March 2011 was 15.13 % as per Basel II.

The Earnings Per Share of the bank for the year ended 31.03.2011 is 8,820/-. Tamilnad Mercantile Bank Ltd., is one of the very few banks having very high Reserve base and Earnings Per Share.

The Return on Assets of the bank as on 31.03.2011 stood at 1.74% and Return on Equity stood at 18.30%. The Net Interest Margin of the Bank stood at 4.24%.

Rewards to Shareholders

TMB is the only bank in India declaring dividend consistently to its shareholders from the beginning. The bank had declared 6% dividend to its shareholders in 1921 and recommended a dividend of 10,000% for the year ended 31.03.2011. The Board has approved an interim dividend of 9,000% during the current financial year. In the Silver Jubilee year Souvenir (1946-1947) it has been mentioned as follows:

“It is worthy of the attention of the depositors that taking the capital and reserves on the one side and the deposits on the other side the ratio works at 1:3.7 only whereas in other banks the deposit amounts bear a ratio of more than 20 times the capital and reserve.”

There was no Basel I or Basel II at that time. But the Directors on the Board of TMB were conscious of ‘Leverage' sixty four years back.

Bank for Common Men, Small Traders and Small farmers

Bank has financed 8,043 Cr. being 70.71 % of total advance to retail sector which is the financial strength of the Bank. Bank is strong in rural lending through its 58 rural centres.

Technology Initiatives

Tamilnad Mercantile Bank Ltd., is having the record as the first Private Sector Bank in India to introduce massive computerization for branch level operations. The bank adopted modernization, as early in the year 1983. Computerization of the branches has added a new dimension in rendering quality service to its clients.

Today 250 branches of the Bank had been networked under Core Banking solution “FINACLE” Software of M/s.Infosys Technologies Ltd., and achieved 100% connectivity of branches.

RTGS/NEFT facilities in ebanking have been successfully implemented. The bank has also entered into an agreement with M/s. Bill Desk (India ideas.com Ltd) and CC Avenues (Avenues India P Ltd.,) for providing payment gateway services to the internet banking customers. The introduction of mobile banking and POS machines are in final stage and testing is going on.

With a view to enlarge the scope of our service to unbanked centres, Eighteen villages nearer to Thoothukudi and Vallioor were identified and introduced “Mobile Branch Banking” – the first in the Banking industry in Tamil Nadu on 30.08.2008.

Our bank has successfully implemented Cheque Truncation System at Delhi Region and now Chennai CTS center has been established as per RBI guidelines.

The bank has implemented video conferencing facility to connect Head Office with various departments and Regional Offices for faster communication and decision making.

Bank is also a member of National Financial Switch for its ATM operations.

Tie-up arrangement made with Western Union Money Transfer for remittances from abroad to India to facilitate quick report of remittance by the beneficiaries.

Tie-up agreement made with ICICI Prudential Mutual Fund, UTI Mutual Fund, Reliance Mutual Fund, Franklin Templeton Mutual Fund, Birla Sun Life Mutual Fund and HDFC Mutual Fund for selling their Mutual Fund Products.

Became a Depository Participant through NSDL to make available Demat facilities.

Offers off-line and Online share trading platform through REligare Securities Ltd. Entered into the Commodity futures market by becoming a clearing bank for NCDEX and MCX.

Tie-up with Export Credit Guarantee Corporation for selling their policies and guarantees. Tie-up with IDBI Bank for pay e-tax payment. Corporate agent of United India Insurance Co Ltd., for selling Insurance Products. Arrangement with NSE for offering ASBA facility.

Online Deposit opening through TMB e-connect facility.

Financial Inclusion

Our Bank has been allotted with 33 villages in Tamilnadu State for providing Door Step Banking as advised by State Level Bankers' Committee, Chennai. To begin with, we launched the Financial Inclusion programme in one of the villages called Karadipatti in Madurai District on 30.07.2011 by Dr.K.C.Chakrabarthy, Deputy Governor, RBI, Mumbai and the following activities were undertaken on that day.

Issuance of Smart Cards, Micro Credit disbursal, Issuance of Micro Insurance Policies, Financial Literacy Campaign through screening of an animation film.

Customer Service

Improving the quality of service is one of the Bank's top priorities. We are working towards “Total Customer Satisfaction” in all our services. To ensure this, we are conducting “Branch Level Customer Service Committee” meetings regularly, once in a month and their suggestions / grievances are redressed immediately.

During this year “CUSTOMER SERVICE CELL” is formed at our Head Office to deal exclusively customers grievances / complaints and to redress the same within the shortest possible time. We introduced “CUSTOMER CARE” a “SMS / CELL PHONE” based “HELP LINE” No.9842 461 461 to help and assist the customers in our services. The Customer care team will hear the grievances of the customer through the above line and take up the issues with the branches / offices and redress the same immediately.

New Initiatives in 90th year

Online share trading facility 3 in 1 account with the advantage of savings, Demat and trading facilities is offered by the bank. The bank also provides other financial products as life insurance (in tie up with LIC), mutual fund investments (in tie-up with six mutual funds) and general insurance (in tie-up with United India Insurance Co Ltd).

Introduction of International prepaid and Credit Card is on anvil.

Activities on the 90th Anniversary Day

9 Rural Bus Shelters are dedicated to the public, 90 Saplings planted at 9 centres, 90 Staff Members from Head Office donate blood

90 Staff Members from Head Office have pledged Eye Donation, 900 Beneficiaries identified to donate needy items like Bedsheets, Sewing Machines, Iron Boxes etc.,

Awards and Accolades

Bank has got the “Best Bank Award” among all Private Sector Banks, including new generation banks for 2010 from “The Analyst”.

The Business World / Price Waterhouse Coopers Survey 2010 ranked us as # 1 in Performance among Small Size Banks.

TMB has been awarded as No. 2 position among all Old Private Sector Banks in India, for Two years consecutively in 2009 and 2010, by “The Financial Express”.

Bank has been adjudged as Best Bank in Rural Reach for the year 2009, by Dun & Bradstreet. Bank was rated # 1 for overall performance in Savings Bank Customer Satisfactions Survey 2008 by GALLUP Inc and IBA. Our Bank is rated as P1+ by CRISIL which refers Highest Degree of Safety for our Bank's Certificate of Deposit programme.

The Bank is ‘Small'. Here is a case of ‘Small is Beautiful'. It has withstood competition for 90 years proving it is Quality of Banking and not size of Banking that matters.

(This article was published in the Business Line print edition dated November 11, 2011)
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