For Tamilnad Mercantile Bank, the immediate priority is to get a new helmsman. The current Managing Director has resigned and is functioning more as a caretaker. The TMB board, it is learnt, has proposed three names to the Reserve Bank of India.

Pending RBI's decision, the outgoing Managing Director, Mr A. K. Jagannathan, would in all likelihood be handing over charge to a core committee this week. Incidentally, the non-executive Chairman's post has remained vacant since November 2006; Mr S. Radhakrishnan was the last Chairman.

Churn at the top

There has been churn at the top as well as spells of vacuum during the past decade, even as the ownership tussle raged on. For instance, about six years ago, the offices of both the Chairman and Managing Director were vacant for a month until Mr G. Narayanamoorthy, ex-General Manager of Canara Bank and Chief Vigilance Officer, Indian Overseas Bank, joined Tamilnad Mercantile Bank as its MD in December 2006.

He was given three extensions, before the RBI appointed Mr G. Nagamal Reddy as the MD of TMB in 2009. Mr Reddy, an ex-GM from Bank of Baroda, joined TMB at a crucial time, when its board was still being reconstituted.

In September 2010, Mr Reddy stepped down and Mr A. K. Jagannathan, former Managing Director of State Bank of Travancore, assumed office as the Chief Executive and MD of the Nadar-community dominated bank.

Within a year and a half, Mr Jagannathan resigned his post citing personal reasons. The bank lost no time in inviting applications from interested persons for filling up this vacancy.

Many applicants

Those in the know of developments say that over 100 senior bankers, including retired bank officials, had applied for the post. The board has short-listed three names from the list of applicants and forwarded its proposal to the RBI for clearance.

While remaining tight-lipped on the proposed list, the source hinted that the board was only looking at getting a senior banker from a state-run institution to head TMB. Senior personnel from both private and foreign banks are said to have also evinced interest in joining TMB. This 90-year-old institution, despite its ownership imbroglio, has emerged as one of the fastest growing among the 17 small-sized banks in the country. It has a paid-up capital of Rs 28.45 lakh, and reserves of over Rs 1,000 crore.

Strong growth

With Net Interest Margin at 4.09 per cent, Capital Adequacy Ratio at 14. 69 per cent and 25 per cent growth in net profit at the end of the 2011-12 fiscal, the bank, according to Mr Jagannathan, ‘is on a strong growth momentum'.

The bank's shares are not listed, but the Rs 10 share is said to be trading in the grey market at Rs 52,000-55,000/share.

In the recent past, Mr Sivanthi Adityan and his brother Mr Ramachandran and some foreign investors with stakes in TMB locked horns over control of the bank. Mr Jagannathan maintained that the matter is in court and refused to comment on this issue.

The issue over ownership is also delaying the prospect of the bank going public. The management however is of the view that TMB would be able to finance its operations through internal accruals till 2019.

AGM delayed

The annual general meetings for the last three years (2009-10, 2010-11 and 2011-12) have been delayed and the dividend payouts pending. The board decided to pay 7,500 per cent dividend in 2009-10. This rose to 10,000 per cent the following year.

In 2011-12, the bank paid an interim dividend of Rs 900/share and resolved to pay final dividend at Rs 450.

lnr@thehindu.co.in

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