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Directors Report of Tamilnad Mercantile Bank Ltd.
Mar 31, 2025
Your Board of Directors have great pleasure in presenting
the 103rd Annual Report along with the Audited Financial
Statements as on March 31, 2025 along with the Cash
Flow Statement for the year ended March 31, 2025.
1. Business Performance
The Bank had a successful year in its 103rd year of
operations and recorded satisfactory performance.
During the year under review, the total business
increased from H89,485.47 crores to H 98,054.49
crores registering a growth of 9.58%.
Performance Highlights:
⢠Operating profit increased from H 1,481.78 crores
to H 1,745.74 crores ( 17.81%).
⢠Net profit Increased from H 1,072.03 crores to
H 1,182.61 crores ( 10.32%).
⢠Deposits of the Bank increased from
H 49,515.07 crores to H 53,688.96 crores ( 8.43%)
during the year.
⢠Gross Advances increased from
H 39,970.40 crores to H 44,365.52 crores ( 11%)
during the year.
⢠Net Advances increased from H 39,733.75 crores
to H 43,983.67 crores ( 10.70%) during the year.
⢠Gross NPAs Decreased from 1.44% to 1.25%.
⢠Net NPAs Decreased from 0.85% to 0.36%.
⢠Provision Coverage Ratio (PCR) increased from
87.52% to 93.86%.
The total income increased by H648.90 crores
during the year from H5,492.85 crores in the previous
year to H6,141.75. crores during the year under
review ( 11.81%).
Interest income increased from H4,847.91 crores
to H5,291.26 crores. Other income increased from
H644.94 crores to H850.49 crores during the FY 2024¬
2025. Increase in total expenditure was at H384.94
crores. The total expenditure increased from
H4,011.07 crores during the FY 2023-2024 to H4,396.01
crores during the FY 2024-2025. Earnings per share
increased from H67.70 to H74.68, the book value of
the share increased from H500.23 to H568.90.
2. Profit and appropriation
The net profit stood at H 1,182.61 crores for the
financial year ended March 31,2025 after making
all necessary provisions under various categories
as per the prudential norms prescribed by Reserve
Bank of India. The appropriation out of the profit
earned for the financial year 2024-25 are as under:
|
Transferred to: |
J in crores |
|
Profit and Loss account opening |
219.14 |
|
Add: Net profit during the year |
1,182.61 |
|
Less: Final Dividend for 2023-24 |
158.35 |
|
Available for appropriation |
1,243.40 |
|
Statutory Reserve |
355.00 |
|
Special Reserve u/s 36(1)(viii) |
50.00 |
|
Investment Fluctuation Reserve |
- |
|
Capital Reserve |
3.11 |
|
Transfer to General Reserve |
575.00 |
|
Balance carried over to next year |
260.29 |
|
Total |
1,243.40 |
3. Dividend
Your Directors have recommended the payment
of a final dividend at the rate of H11.00 (Rupees
Eleven only) per equity share of the face value of
H 10/- each (110%) for the year ended March 31, 2025.
Dividend pay-out is in accordance with the Bank''s
dividend distribution policy (https://www.tmb.in/
pages/Regulatory-Policies), RBI guidelines and will
be payable subject to approval of members at the
ensuing Annual General Meeting and deduction of
tax at source, to those Shareholders whose names
appear in the Register of Members as on the Cut-off
date i.e. August 01, 2025.
4. Capital and Reserves
The Bank''s issued and paid-up capital was H 158.35
Crores as on March 31, 2025.
5. Issue of Equity shares
During the year under review there was no fresh
issue of equity shares.
6. Earnings Per Share (EPS) and Book Value
The earnings per share stood at H 74.68 (basic) and
H 74.68 (diluted) for the financial year ended March
31, 2025. This was H67.70 (Basic) and H67.70 (diluted)
during the previous year. The book value per share
has further improved to H568.90 as on March 31,
2025, as against H500.23 during the previous year.
7. Capital adequacy
The Capital to Risk Weighted Assets Ratio (CRAR)
stood at 32.71% (as per Basel III) as on March 31,
2025, as against the minimum required level of
11.50% (including the Capital Conservation Buffer)
stipulated by Reserve Bank of India. The CRAR
consisted predominantly of Common Equity Tier I
(CET 1) which was 31.24% out of 32.71% of CRAR.
8. Deposits
The aggregate Deposits of the Bank as on March
31,2025 stood at H 53,688.96 crores, registering
a growth of 8.43% over H 49,515.07 crores as on
31.03.2024. The interest rates for deposits were
kept aligned with the prevailing trends in the
Banking Industry.
Being a Banking Company, the disclosures required
as per Rule 8(5)(V) of Companies (Accounts) Rules,
2014 are not applicable to your bank.
9. Advances portfolio - management of
assets and development of business
The Bank continued its lending activities in conformity
with its Board approved Policies and Guidelines of
the Reserve Bank of India. The Gross Advances of
the Bank increased from H 39,970.40 crores as on
31.03.2024 to H 44,365.53 crores as on 31.03.2025. The
increase in advances is mainly due to the growth
recorded in Retail and Agricultural advances.
The Bank continued its thrust on lending to Priority
Sectors (PS) including Agriculture and Micro and
Small Enterprises comprising both Manufacturing
and Service Enterprises. The level of advances to
Priority Sectors stood at H 34,278.68 crores as on
March 31, 2025. The Total PS Advances (Net of PSLCs
Sold) at H 21,675.70 Crores constitutes 69.94% of
ANBC as on March 3, 2024, as against the regulatory
minimum requirement of 40%. The achievement of
PS Advances, based on the Quarterly Average level of
PS Advances / Quarterly Average ANBC is at 73.82%.
Agricultural Advances reached H 18,583.69 Crores as
on March 31st, 2025. The Total Agricultural Advances
(Net of PSLCs Sold) and including RIDF and other
qualifying investments for Priority - Agriculture
constitutes 20.02% of ANBC as on 31/03/2024, as
against the regulatory minimum requirement of 18%.
The achievement of Agriculture Advances, based on
the Quarterly Average level of Agriculture Advances
/ Quarterly Average ANBC is at 24.77%.
Total advances to the weaker sections stood at
H 14,619.71 Crores as on March 31, 2025. The Total
advances to Weaker Sections (Net of PSLCs
Sold) at H 5,004.71 Crores represents 16.15% of the
ANBC as on 31/03/2024, as against the regulatory
minimum requirement of 12.00%. The achievement
of Advances to the weaker section, based on the
Quarterly Average level of Advances to weaker
section / Quarterly Average ANBC is at 19.53%.
Similarly, the bank achieved the mandatory targets
for the sub-sectors like Loans to Small and Marginal
Farmers (at 10.75% as on March 3, 2025 based on the
ANBC as on March 3, 2024, as against the regulatory
minimum requirement of 10.00%). The achievement
of Advances to the Small and Marginal Farmers,
based on the Quarterly Average level of Advances to
the Small and Marginal Farmers / Quarterly Average
ANBC is at 14.52% and Advances to Micro Enterprises
(at 25.52% as on March 3, 2025 based on the ANBC
as on March 3, 2024, as against the regulatory
minimum requirement of 7.50%). The achievement
of Advances to Micro Enterprises, based on the
Quarterly Average level of Advances to Micro
Enterprises / Quarterly Average ANBC is at 26.12%.
Under export credit, the bank achieved a level of
H 597.76 Crores as on March 31,2025 as against
H 834.60 crores achieved as on March 31, 2024, due
to underutilization of sanctioned Export limits.
The Bank has sanctioned totally 20,761 No of Working
Capital Term Loans (WCTLs) to the tune of H 2675.01
crores as on March 31,2025 since the inception of
the scheme Emergency Credit Guarantee Line
Credit Scheme (ECLGS). There is no account opened
during the FY 2024-25 under Emergency Credit
Guarantee Line Credit Scheme (ECLGS).
During the current year, the bank will strive further to
increase the flow of credit to Agriculture, Retail, and
MSME Sectors and the Weaker Sections.
The bank has been actively participating in all the
initiatives and schemes of the Government of India
including Pradhan Mantri Mudra Yojana (PMMY),
Dairy Entrepreneurship Development Scheme
(DEDS),Pradhan Mantri Awas Yojana (PMAY),
Entrepreneurship Development & Employment
Generation Scheme (EDEGS), PM Street Vendors
Atma Nirbhar Nidhi (PM SVANIDHI) etc. by
implementing the same in the Bank.
Sale of Priority Sector Lending Certificate (PSLCs):
The Bank has sold PSLCs worth H 12,640.00 crores
till 31/03/2025, which fetched an income of H 195.92
Crores. In Category-wise, the Bank had sold PSLC-
Small & Marginal Farmers for H 9,615.00 Crores, PSLC-
Agriculture for H 2,800.00 Crores and PSLC-Micro
Enterprises for H 225.00 Crores as on 31/03/2025.
Financial Inclusion:
Under the Financial Inclusion (FI) Programme, the
Bank has covered 142 villages as on 31.03.2025. The
total Basic Savings Bank Deposit Account (BSBDA) of
the bank as on 31st March 2025 stood at 1.50 lakhs.
10. Investments and treasury operations
During the financial year ended March 31st, 2025,
the Bank achieved a turnover of H 20,679.75 crores in
trading operations, resulting in a net profit of H 21.77
crores, as against H 6.53 crores in the previous year.
The net investments of the Bank stood at H 15,100.50
crores as on March 31, 2025, as against H 15,262.60
crores as at the end of the previous year. The
Investment-to-Deposit Ratio of the Bank was 28.13%,
as against 30.82% at the end of the previous year.
The average realized yield on the investment
portfolio during the year stood at 6.77% as against
6.85% in the previous year. The income earned
during the year from investments, comprising of
interest income and dividend income excluding
income from RIDF was H 1017.42 crores as against H
1055.86 crores in the previous year.
Particulars of Loans, Guarantee, or investments
The disclosures regarding particulars of loans,
guarantee given and securities provided is exempt
under the provisions of Section 186(11) of the
Companies Act, 2013 since it is a banking company.
11. Foreign Exchange Business
Foreign exchange business during the year 2024¬
25 in terms of actual inflows was H11,269.96 crores
(Previous Year H11,577.57 crores) whereas Foreign
Exchange outflows was H8,071.76 crores (previous
year H 9,400.97 crores)
The total merchant turnover of the bank for the year
2024-25 was H 19,341.72 crores against H 20,978.54
Crores during the previous year 2023-24. The profit
on foreign exchange business for the year 2024-25
was H38.91 crores against H40.38 Crores during the
previous year 2023-24.
Your Bank has correspondent relationship with
328 overseas banks by exchange of Relationship
Management Application (RMA) under SWIFT
(Society for Worldwide Interbank Financial
Telecommunication). It facilitates smooth and fast
flow of communication in the international business.
The SWIFT arrangement has enabled the Bank to
give timely and efficient service to customers.
During the year under review, 56 branches are linked
to Forex Processing Centre(FPC) and the total number
of branches linked to FPC has been increased to 525
from 469 branches. Our Bank has the necessary
infrastructure to render fast and efficient service
relating to inward remittance and for crediting the
beneficiaries accounts on receipt of the foreign
currency funds in our Nostro accounts abroad.
Your Bank is committed to increase the Forex
Business activities significantly for adding good
revenues to the bank in the coming years. Your Bank
has provided online Electronic Trading Platform
named as TMBFXBRIDGE for concluding exchange
rates in 39 branches & FPC and direct view access to
your forex customers. FX-Retail platform is provided
to Forex customers.
12. Branch network
During the year under review, your bank has
added 26 new branches and the branch network
of the bank has been increased to 578 branches.
In addition to that, your bank has added 4 ATMs,
22 CRMs. The Bank''s ATM and alternate delivery
channel network stood at 1150 ATMs, 380 CRMs, 124
e-lobbies, covering 17 States and 4 Union Territories.
13. Human Resources Development
As on 31st March 2025, the Bank''s total staff
strength is 4,743 (including 20 contract employees)
consisting of 2,368 Officers, 1,738 Customer Service
Executives and 637 Supporting Staff. During the year
under review, 365 regular employees and 6 contract
employees were recruited and 476 employees were
promoted. Out of 4,743 employees, 2,853 employees
were moved to the CTC structure.
The Business per employee has increased from
H 19.34 crores to H 20.67 crores in the FY 2024-25.
The Bank''s Staff Training College at Nagercoil had
conducted 74 physical training programmes and 12
online training sessions on various banking subjects
like Credit, Forex, Recovery, KYC/AML Information
Security etc. 3,001 staff members had undergone
training programmes during the FY 2024-25.
TMB eSMART, an online e-learning Management
System was indigenously developed by your Bank
to cater the training needs of all staff members. It
can be accessed 24x7x365 by our staff members in
intranet and internet. Using TMB eSMART, our staff
members can learn varied Bank subjects like Credit,
Forex, Information Security, KYC etc. In order to build
skill sets in different facets of Banking, your bank
has introduced 13 TMB Capacity Building exams in
various areas like KYC, Credit, Forex, Recovery etc.
In addition to the above, your Bank has tied up with
reputed training institutions like SIBSTC-Bengaluru
(Southern India Banks'' Staff Training College), NIBM-
Pune, IIBF- Mumbai, IDRBT, Hyderabad, CAFRAL, etc.
1350 staff members were trained in these leading
institutions during FY 2024-25.
Industrial relations in the Bank continued to
be very cordial during the year with frequent
interactions between the management and the
Officers'' and Employees'' Associations and various
staff welfare activities were undertaken during
the year. The Bank continues to lay emphasis on
developing the individual skills of its employees and
providing a healthy and cordial work environment
so as to get maximum contribution from the
employees of the Bank.
14. Inter branch adjustments
The Bank has continued to maintain a very good
record in internal housekeeping. The core banking
solution made it possible for the branches to
balance all their accounts and tally reconcile all
the balances up to March 31st, 2025. There was
also timely submission and scrutiny of the control
returns, which was given adequate importance at
all levels with necessary follow up.
15. Internal Control and Inspection / Audit
Risk Based Internal Audit system
The bank has put in place an effective and strong
Risk Based Internal Audit (RBIA) System. During
the financial year 2024-25, RBIA were conducted
through TMB eTHIC Module in 540 branches (Totally
619 audits) of the bank. Submission of compliance
reports and closure of audits are followed up
through the respective regional offices. Besides, RBIA
was conducted at critical Departments such as KYC
and AML Cell, Risk Management Department, Credit
Department, Information Technology Department
(Chennai & Thoothukudi), CPC Tirunelveli, CPC
Chennai, Service Branch Chennai, Compliance
Department, Integrated Treasury Department,
International Banking Division.
The bank has a proper and adequate internal control
system. The bank has standardised operating
procedures in monitoring the account operations to
have effective internal controls.
Credit Audit
During the year under review, Credit Audit has
been conducted for 1154 borrowal accounts
in 229 branches.
Concurrent Audit system
The bank continued to have the system of Concurrent
Audit through TMB eTHIC Module, which covered 268
branches and important departments. Concurrent Audit
has been recognized as an important tool of internal
control and is in force at major branches including 39 ''B''
category branches designated for forex business.
Further concurrent audit is implemented in the
following important departments - International
Banking Division, Treasury, DPS Cell, Chennai Service
Branch, Forex Processing Centre, Transaction
reconciliation at various divisions of ITD, Accounts
Department, Expense approval of ITD, Establishment
Department, Planning and Development & Resource
Mobilization Department, Central Processing Centres
at Chennai and Tirunelveli and all the four Currency
Chests located at Chennai, Podanur, Madurai and
Thoothukudi Pudukottai. As per RBI direction, the
Bank is conducting bi-monthly surprise verification
of cash in currency chest at Madurai, Chennai,
Podanur and Thoothukudi Pudukottai and the
reports are forwarded to Planning Department and
respective Regional Offices, for further follow up.
Submission of compliance reports and closure
of audits are followed up through the respective
regional offices / departments.
Information System Audit
As per RBI guidelines, Information System audit cell
has been established under Inspection Department.
Information System audits were conducted at all
the 540 branches (619 audits) along with Risk Based
Internal Audit, 11 Departments and 12 Regional offices.
Every year, critical Information systems deployed
in your Bank like Core Banking System, E-Banking,
Mobile banking, ATM, RTGS, Treasury, CTS
clearing process, Server, SOC, HRMS and network
infrastructure etc., are subjected to Information
Systems audit by an external auditor.
Management Audit system
To assess the robustness of the systems and
procedures established in various operational
units of the Bank and to have an oversight on
the effectiveness of the management, various
departments at Head Office and all Regional Offices
are subject to Management Audit, which was
conducted once in every 18 months.
During the year under review, Management
Audits were conducted at 10 Regional Offices
(Ahmedabad Region, Chennai Region, Bengaluru
Region, Hyderabad Region, Madurai Region, Salem
Region, Tirunelveli Region, Trichy Region, Mumbai
Region and Thiruvananthapuram Region) and
25 Departments (Vigilance Department, Human
Resource Development Department, Operations
& Services Department, KYC/AML Cell, Credit
Monitoring Department, Accounts Department,
MIS Department, Staff Training College (Nagercoil),
Inspection Department, Recovery Department,
Credit Department, Disciplinary Action Cell (DAC),
Bancassurance Cell, Customer Service Cell & Internal
Ombudsman Department, Compliance Department,
Establishment Department, Legal Department,
Chennai Service Branch, RTGS/WUMT, CPC,Chennai,
CPC,Tirunelveli, IBD-Treasury-FPC, Information
Security Department, Planning Development
Resource Mobilization Department and DPS Cell).
|
Period |
Number |
Number |
|
01.04.2022 to |
8 |
11 |
|
31.03.2024 |
||
|
01.04.2023 to |
2 |
14 |
|
30.09.2024 |
||
In addition to the above audit the Bank regularly
conducts revenue audit in the branches, to detect
revenue leakages.
Vigilance
The functions of the vigilance machinery of the Bank
are broadly divided into 3 types, viz. preventive,
surveillance and punitive. The Vigilance Department
undertakes a study of the existing procedures and
practices prevailing in the organization with a view
to modify those procedures or practices that provide
scope for malpractice/fraud perpetrated by the staff
members and also finding out the causes of delay in
reporting and the points at which the delays occur
and devising suitable steps to minimize delays at
different stages. To educate the employees of the
Bank, the Vigilance Department brings out various
fraud awareness circulars and conducts training
programmes periodically. As a part of creating
awareness, ''Vigilance Day'' is observed on the 31st
October every year.
The Vigilance Department plays a vital role in the
implementation and follow-up of the directives
and guidelines issued from time to time by Reserve
Bank of India. Upon the directions of RBI, Vigilance
Department has also formulated/implemented a
Vigilance Policy from July 13, 2011 and the Policy is
being reviewed every year.
Vigil Mechanism
The Bank has implemented the Whistle-blower cum
Protected Disclosure Policy, intended to promote the
participation of employees at all levels and detection
of corruption, misuse of office, criminal offences,
suspected/ actual fraud, failure to comply with the
rules and regulations prescribed by the Bank and
any events/acts detrimental to the interest of the
Bank, depositors and the public resulting in financial
loss/operational risk, loss of reputation etc. Further,
the mechanism adopted by the Bank encourages
the Whistle Blower to report genuine concerns
or grievances. It provides adequate safeguards
against Whistle Blower''s victimization for those who
avails such mechanism and offers direct access to
the Chief of Internal Vigilance (CIV). Further, there
was no occasion where a person was denied access
to the Audit Committee of the Board. The details of
the Whistle-blower cum Protected Disclosure Policy
are posted on the Bank''s website and available at
the link: https://tmb.in/pages/Regulatory-Policies.
16. Customer Service
Customer service is an important part of
maintaining the going customer relationship, which
is a key for continuous business growth and to retain
the customer. The Bank is well known for its good,
courteous and effective service to customer and
constantly endeavouring to meet the expectations
of the modern-day tech-savvy customers, by
introducing new and innovative products for
seamless digital experience.
As per the provisions of Internal Ombudsman
Scheme 2018 and the Integrated Ombudsman
Scheme 2021, Shri.V.Seetharaman was appointed
as the Internal Ombudsman for your Bank and
he joined duty on October 4, 2024. The Internal
Ombudsman examines customer complaints which
are in the nature of deficiency in service on the
part of the bank, that are partly or wholly rejected
by the bank. As the bank shall internally escalate
all complaints, which are not fully redressed to the
Internal Ombudsman, before conveying the final
decision to the complainant, the customers need
not approach the Internal Ombudsman directly.
17. Technology Absorption:
Your Bank is taking various steps to provide
technology-enabled products and services to
customers by adopting latest developments in
technology. Banking Services are extended to our
customers through Branches and ATMs by using
multiple network technologies such as MPLS, Leased
Line, GSM and VPNoBB with redundant connectivity.
As an alternative to traditional Branches / ATMs,
the digital services are seamlessly offered to our
customers without any disruption through various
delivery channels viz. Internet Banking, Mobile
Banking, IMPS, UPI, AEPS, Point of Sale terminals,
Cash Deposit Kiosk, Passbook Printing Kiosk,
WhatsApp Banking etc.,
The availability of the services of all the alternate
delivery channels to our customers is ensured by
way of active monitoring and attending to outages
if any, instantly.
Core Banking:
Your Bank has implemented "Finacle", the Core
Banking Solution in all its branches. Core Banking
Solution (Ver. 6.x) was implemented during 2001¬
02 and its major migration v10.2.25 was carried out
during August 2022.
The Bank has 1,150 ATMs and 380 CRMs as on
31 March, 2025.
Your Bank has implemented Software Defined WAN
(SD-WAN) for both primary and secondary link at
Branches. Implementing SD-WAN enables Branches
to use Bandwidth more efficiently by utilizing both
Primary and Secondary link providing uninterrupted
banking services to its customers.
Internet Banking:
Your Bank had introduced "Internet Banking facility"
to the customers during November 2008. Currently
the e-Banking facility has been extended to all
our customers. The Bank has has also introduced
Corporate Net banking facility for our customers
with maker / checker facility to bring in more security
to the transaction initiated by corporate customers.
The Bank has has also tied up with multiple Payment
Gateway service providers for extending utility bill
payment services to our customers.
Facilities provided to customers through Internet
Banking includes RTGS, NEFT, IMPS, opening of
Deposit Accounts, e-Commerce transactions, online
tax payment, online bills IPO applications, Foreign
Exchange Transactions utility services payment,
scheduled payments, etc. Payments to TMB Credit
Card dues and Prepaid Card Top-up facility are also
provided through Internet Banking.
Mobile Banking as Super App:
Mobile Banking facility has been provided in both
Android and iOS. Customers can self-onboard in
Mobile Banking and also through branches. By using
mobile banking facility, customer can perform SB/
CA/loan/deposit inquiry, transfer of funds (Within
TMB/NEFT/IMPS/RTGS), Deposit Opening, TNEB
payment, Mobile Recharge, Cheque Book Issuance,
ATM Card Blocking, Cheque Status Inquiry, etc.,
In addition, certain features like Transaction limit
setting, Credit Card details and Payment Dues, Debit
Card Blocking, Beneficiary Management, Beneficiary
Name Lookup, Voice Authentication, Loan against
Deposits, Overdraft against Deposits and Form 15 G
/ H declaration are available for the Mobile Banking
Customers. The Bank is striving to continuously add
new features in our Mobile Banking application.
UPI:
Unified Payment Interface (Acquirer and Issuer)
service is available as an additional feature in TMB
MBank Application to our customers. Customers
using TMB MBank app can Send Money, Receive
Money, Approve Payments, Scan and Pay QR, IPO
Mandates, One Time Mandates, Recurring Mandates
and more, by linking our Bank account or other Bank
accounts in TMB MBank app, similar to various NPCI
Certified Third Party UPI applications like BHIM.
NRI Customers can send funds through Foreign
Inward Remittance via UPI to our Bank accounts.
UPI Lite facility with auto top-up is available where
customers can do their UPI Payments up to H1000
without entering UPI Pin. Recently our Bank is live
in UPI International Payments, Credit Card on UPI,
UPI Circle (Delegate Payments) and Credit Line
on UPI as issuer.
Bank has initiated various steps to increase its
digital footprint.
Server Infrastructure:
Bank''s Server infrastructure is maintained at primary
(DC - Chennai) and secondary (DR Site - Bengaluru)
co-located Data Centers. The Bank is having
Physical, Virtual, Hyper Converged Infrastructure
and dedicated Storage devices.
Hyper Converged infrastructure installed at
our DC and DR locations, which is a three-node
cluster arrangement, provides high availability,
high scalability, cost effective, improved workload
performance and occupies less space.
Storage Infrastructure was upgraded from SAS
to Flash storage to get high performance in Core
Banking Solution (Finacle). It is scalable for our
future needs and high availability.
Health of Server Infrastructure is monitored on
real time for Server related parameters such as
CPU Utilization, CPU Load, Memory Usage, Process,
Threads, Disk Space Usage, Network Traffic, Uptime,
Regex (Regular Expression) based alerts etc.
PAM (Privileged Access Management) solution was
implemented to provide access to the servers in a
more secure way. We are activating the DR Site on
quarterly basis, to ensure that the Disaster Recovery
operations remain accurate, relevant and operable
during adverse conditions.
Security Infrastructure:
Your Bank is having Endpoint Extended Detection
and Response (XDR) system to protect our
Endpoints from Malware and Ransomware attacks.
Also, the Bank has have implemented Data Loss
Protection (DLP) which facilitates to block / alert
transmission of data based on sensitive keywords
across intra / inter network infrastructure. We have
adequate Firewall, Intrusion Prevention System (IPS)
and Intrusion Detection System (IDS) to protect our
network from external threats accessing through
internet. All the endpoints have been integrated with
domain and policies have been enforced through
Network Access Control (NAC) and Active Directory.
Further, Bank has setup Security Operation Center
(SOC) under the direct control of Information Security
Department where the following tools / components
are installed to monitor SOC operations.
1. Security Incident & Event Management (SIEM)
2. Database Activity Monitoring (DAM)
3. Privileged Access Management (PAM)
4. Web Application Firewall (WAF)
During Financial year 2024-25, your Bank has
completed the following major IT Projects:
1. Enabling of GST Payment by Customers in
Government Business Module.
2. Implementation of Direct Tax (CBDT) payments
by Customers in Government Business Module.
3. Engaged Fintech as Merchant Aggregator
to onboard merchants and provide QR
Code to merchants.
4. Implementation of Rupay National
Common Mobility Card (NCMC) to travel in
Metro and Buses.
5. Enabled Online Foreign Exchange Operations to
Customers in Internet Banking.
6. Introduced Insta Kit for Savings
Account Opening.
7. Enabled UPI on Rupay Credit Card as issuer.
Customer can link their Rupay Credit Card for
UPI Transactions.
8. Enabled Voice Authentication as additional
factor of authentication for Transactions in
Mobile Banking.
9. Enabled Loan against Deposits and Overdraft
Against Deposit in Mobile Banking.
10. UPI Credit Line, Auto Topup for UPI Lite and
Delegate Payments (UPI Circle), Credit Card on
UPI is enabled for Customers as Issuer.
11. IT Infrastructure has revamped to handle
increased transaction volume growth.
18. Product Innovation, New Products and
Services
Major initiatives during Financial Year 2024-25:
⢠Launched TMB Apartment Savings Bank
Accounts
⢠Launched TMB Student Saving Bank Accounts
⢠Launched TMB Prime Salary and Super
Salary SB Accounts
⢠Launched various Term Deposit Schemes with
attractive interest rates
⢠TMB 400 (400 Days)
⢠TMB 300 (300 Days)
⢠TMB Akshay Deposit Scheme
19. Awards / Ratings obtained by the Bank:
The Bank has bagged the following awards during
the year under review:
⢠The Bank has bagged two Atal Pension
Yojana (APY) awards during the Felicitation
program conducted by PFRDA on 21 June,
2024 at New Delhi
⢠Ultimate Champions Trophy
⢠Award of Ultimate Achiever
⢠The Bank has bagged six Atal Pension
Yojana (APY) awards during the Felicitation
program conducted by PFRDA on 28 June,
2024 at Chennai
⢠Numero Uno Exemplary Award of
Par Excellence
⢠Diamond Cup
⢠Award of Exemplary Leadership
⢠Exemplary Award of Par Excellence (2)
⢠Award of Achievement
External Rating:
During the financial year 2024-25, CRISIL renewed
the rating for the Certificate of Deposit programme
of the Bank as follows,
|
Instrument category |
Ratings |
Instrument |
|
Long Term |
CRISIL A |
H 15,000 crores Fixed |
|
Short Term |
CRISIL A1 |
H 25,000 crores short |
20. Risk Management
Your Bank has a proactive approach towards Risk
Management. Its risk philosophy involves developing
and maintaining its banking activities within its risk
appetite and regulatory framework.
The Risk Management Architecture of the Bank
comprises of an Independent Risk Management
Organizational structure at the corporate level, Risk
Management Policies, Risk Measurement Tools and
Risk Monitoring and Management Systems. The
Bank has a well-defined risk appetite statement and
all the banking functions are dovetailed to the risk
appetite statement.
The Board of Directors of the Bank is primarily
responsible for laying down risk parameters and
establishing an integrated risk management
and control mechanism. The Board of Directors is
supported by a Sub-Committee of the Board known
as the Risk Management Committee of the Board
(RMCB), which in turn is aided by the Asset Liability
Committee (ALCO), Credit Risk Management
Committee of Executives (CRMCE) and Operational
Risk Management Committee of Executives (ORMCE).
The executive level Committees are headed by the
MD & CEO of the Bank. The Bank''s RMCB reviews its
Risk Management policies and recommends to the
Board for approval. The Board also sets out limits,
taking into account the risk appetite of the Bank
and the goals set.
The bank''s liquidity ratios, i.e. LCR & NSFR are also
above the minimum stipulated level indicating
comfortable position with regard to liquidity risk.
Your Bank has been proactively conducting internal
assessment of adequacy of capital, liquidity ratios
and leverage ratios in accordance with Basel-
III standards. Your Bank is also conducting stress
testing and scenario analysis periodically to assess
our resilience under extreme but plausible situations
Your Bank''s capital position is in compliance
with Basel-III expectations and well above the
minimum requirements.
21. Board of Directors
The Bank''s Board as on March 31st, 2025 comprises
of 13 Directors and the composition of Board
are given below:
|
S. No |
Name |
Sector Represented / Area |
|
1 |
Shri Salee S Nair |
Majority Sector - Banking |
|
2 |
Shri Vincent M.D. |
Majority Sector - Banking |
|
3 |
Shri A.Niranjan |
Minority Sector - |
|
4 |
Shri S.R Ashok |
Minority Sector - SSI |
|
5 |
Shri D.N.Nirranjan |
Minority Sector - Business |
|
6 |
Shri K.V.Rama |
Majority Sector - Banking |
|
7 |
Shri B.Prabaharan |
Minority Sector - |
|
8 |
Shri C.Chiranjeeviraj |
Majority Sector - |
|
9 |
Shri S.Sridharan |
Majority Sector - Banking, |
|
10 |
Shri R.Deepak |
Minority Sector - SSI |
|
11 |
Smt R.Kanagavalli |
Majority Sector - Law |
|
12 |
Shri Thomas |
Additional Director, RBI |
|
13 |
Shri C S |
Additional Director, RBI |
All Directors, other than Managing Director and CEO
& The Executive Director, are non-executive Directors
on the Board. The details of Directors are available in
the Corporate Governance report, which forms part
of this report.
The details of directors or key managerial personnel
who were appointed or have resigned during the year
is mentioned in the Corporate Governance Report.
22. Employee Stock Option Plan
The Board of Directors of the Bank in their meeting
held on January 17, 2025, have approved the
Tamilnad Mercantile Bank Limited (TMB) Employee
Stock Option Plan 2024 (âTMB ESOP 2024") and
the same was approved by the shareholders of
the Bank on March 12, 2025 through Postal Ballot.
The Bank has filed an application with the Stock
Exchanges for obtaining in-principle approval from
them for issuing new shares under TMB ESOP 2024.
In connection with the application submitted for in¬
principle approval, the National Stock Exchange of
India has advised the Bank to modify some clauses
in the TMB ESOP 2024 scheme so as to comply with
the rules & regulations prescribed under SEBI (SBEB)
Regulations, 2021. Based upon the requirement,
the Compensation Committee has approved the
modifications in the scheme. Approval from the
Stock Exchanges is awaited.
Pursuant to Regulation 13 of the Securities Exchange
Board of India (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021, a certificate from
the Secretarial Auditor is attached as Annexure 9.
23. The statement of declaration given by
independent directors under sub-section
(6) of section 149
Your Bank has received necessary declarations
from all the Independent Directors under Section
149(7) read with Section 149(6) of the Companies
Act, 2013 and Regulation 25(8) read with Regulation
16(1)(b) of the SEBI LODR, they meet the criteria of
independence laid down thereunder.
24. Woman Director
In terms of the provisions of Section 149 of the
Companies Act, 2013, and Regulation 17 of SEBI
(LODR) Regulations, 2015 the Bank has appointed
Smt. R. Kanagavalli (DIN: 00883998) as Woman
(Independent) Director on the Board of the Bank.
25. Details of Subsidiaries and Associates
Your bank does not have any subsidiaries or
Associates or Joint Ventures for the financial year
ended March 31, 2025.
26. Change in the nature of Business
During the Financial year ended March 31, 2025, there
is no change in the nature of business of the Bank.
27. Directors'' Responsibility Statement
Pursuant to Section 134 (3) (c) read with Section
134 (5) of the Companies Act, 2013, it is hereby
confirmed that:
(a) In the preparation of the annual accounts for
the financial year ended March 31, 2025, the
applicable accounting standards had been
followed along with proper explanation relating
to material departures;
(b) The Board of Directors have selected the
accounting policies and applied them
consistently and judgments and estimates
made are reasonable and prudent so as to
give a true and fair view of the state of affairs of
the Bank at the end of the financial year 2024¬
25 and of the profit of the Bank for that period.
(c) The Board of Directors have taken proper
and sufficient care for the maintenance of
adequate accounting records in accordance
with the provisions of the Companies Act, 2013
for safeguarding the assets of the Bank and
for preventing and detecting fraud and other
irregularities;
(d) The Board of Directors have prepared the
annual accounts for the financial year ended
on March 31, 2025, on a going concern basis;
(e) The Board of Directors have laid down internal
financial controls to be followed by the Bank
and that such internal financial controls are
adequate and were operating effectively; and
(f) The Board of Directors have devised
proper systems to ensure compliance with
the provisions of all applicable laws and
that such systems were adequate and
operating effectively.
28. Details of contracts or arrangements with
related parties
During the year under review, the bank has not
entered into any significant material transactions
with related parties, which could lead to potential
conflict of interest, other than transactions entered
into in the ordinary course of business and at
arm''s length basis. Hence, the disclosure in Form
AOC-2 is not applicable. The policy on Related
Party Transactions is placed on the Banks'' and
available at the link https://www.tmb.in/pages/
Regulatory-Policies
29. Board Level Performance Evaluation
Pursuant to the provisions of the Companies Act,
2013 and the SEBI Listing Regulations, the Nomination
and Remuneration Committee of the Board had
laid down the criteria for Performance Evaluation of
the Board as a whole, Individual Directors including
Independent Directors, Non-Independent Directors,
the Chairman and the Committees of the Board, as
well as the process for such evaluation.
The Bank has aligned its Board Evaluation
Framework in line with the Guidance Note on Board
Evaluation issued by the SEBI as per Circular dated
January 5, 2017. The Board of Directors has carried
out the annual evaluation of the performance of
the Board as a whole, Individual Directors including
Independent Directors, Non-Independent Directors,
the Chairman and the Committees of the Board.
The performance of the Board as a whole, Individual
Directors including Independent Directors, Non¬
Independent Director, the Chairman and the
Committees of the Board have been evaluated /
reviewed by the Nomination and Remuneration
Committee, by the Independent Directors and by
the Board of Directors
The Board has formulated a Policy on Performance
Evaluation which includes the aspects such as
1) Acting in the best interest of the Bank
2) Exercise of due and reasonable care, skill,
diligence and independent judgement
3) Avoidance of direct or indirect conflicts of interest
4) Avoidance of undue gain or advantage either
to self or relatives, partners or associates
5) Maintaining confidentiality of information,
including commercial secrets and unpublished
market - sensitive information
6) To oversee the Bank''s financial reporting
process and ensuring correct, adequate and
credible disclosure of financial information.
7) To review with the management, the financial
statements with special emphasis on
accounting policies and practices, compliance
with accounting standards and other legal
requirements, concerning financial statements
8) To review the adequacy, quality and
effectiveness of external and internal audit,
internal control system, interaction with
external auditors before finalization of Annual
accounts and reports.
9) To review Bank''s finance and risk
management policies.
10) Striving to attend all committee Meetings
11) Display of requisite knowledge and expected
level of awareness of the Bank and external
environment in meetings and comments
12) Seeking appropriate clarification or
amplification of information where necessary
13) Contribution in terms of constructive ideas,
guidance and knowledge of better decision
making and management of Bank''s affairs.
30. Bank''s policy on directors'' appointment
and remuneration
The Bank has a Board approved Nomination and
Remuneration Policy for appointment of Directors
and Senior executives of the Bank.
The Bank also has a Board approved compensation
policy which deals with the compensation & benefits
of the Managing Director & CEO, the Executive
Director and all executives of the Bank.
The remuneration of the MD & CEO and the Executive
Director is recommended by the Nomination &
Remuneration Committee (NRC) to the Board for
approval after considering the factors prescribed
under the Compensation Policy. The Board
considers the recommendations of NRC and
approves the remuneration, modifications, subject
to shareholders'' and regulatory approvals.
The other non-executive directors are paid only
sitting fees for attending the meetings of the Board
and its Committees. None of the directors including
the MD & CEO and the Executive Director receives any
profit linked remuneration. The sitting fees payable
to the non-executive directors is H 50,000/- for Board
Meeting and H 25,000/- for Committee Meetings for
the year under review.
The terms and conditions of appointment of
Independent Director are available on the Bank''s
website - https://www.tmb.in/doc/2point.pdf
31. A statement regarding opinion of the
Board with regard to integrity, expertise
and experience (including the proficiency)
of the independent directors appointed
during the year
The details are available in the Corporate
Governance Report.
32. Board/Committee meetings
During the year under review, total 19 meetings of
the Board and 77 meetings of the Committees
of the Board were held. For details of the meeting
of the Board and its Committees, please refer to
the Corporate Governance report forming part
of this report.
33. Annual General Meetings
For the details of the Annual General Meetings,
please refer to the Corporate Governance report
forming part of this report.
34. Compliance Function
The Bank has embraced compliance as a part
of good governance and not for purely meeting
the regulatory requirement. Hence, the Bank has
institutionalized a strong compliance culture and
mechanism across the organization, founded on
the principles of transparency and trust by involving
all the stakeholders. The Bank has a dedicated
Compliance Department headed by Executive Vice
President, for ensuring regulatory and organization
level compliance, across all its businesses and
operations. The key functions of this department
includes, dissemination of key regulatory updates
affecting the various business verticals of the Bank,
review of processes from a regulatory compliance
perspective, provide guidance on compliance-
related matters, among others.
35. Compliance with the provisions of
Companies Act, 2013
The Bank has complied with all the provisions of the
Companies Act, 2013 and the Rules made thereon,
to the extent that are applicable to the Bank. The
Bank has filed an sue moto application before the
Registrar of Companies, Chennai under Section
441 of the Companies Act, 2013 for which final
order is awaited.
36. Internal Auditors
The Bank is required to appoint an internal auditor
as per the requirements of Section 138 of the
Companies Act, 2013, who should either be a
chartered accountant or a cost accountant, or
such other professional as may be decided by the
Board to conduct internal audit on the functions and
activities of the Bank.
The Bank has an internal audit department and
it engages a practicing charted accountant as
concurrent auditor to conduct the audit of the
branches as per the Reserve Bank of India''s guidelines.
The internal audit department of the bank conducts
audit of the various departments and branches on a
periodical basis and findings of the audit are being
placed before the Audit Committee of the Board.
Considering the above, the Bank has not appointed
any third party internal auditor as mandated under
section 138 and rule 13 of Companies (Accounts)
Rules, 2014 to conduct internal audit of the branches
and various department of the Bank.
37. Statutory Auditors
Pursuant to provisions of Section 139 of the
Companies Act, 2013 read with Section 30(1A) of the
Banking Regulation Act, 1949, the Board of Directors
have recommended the appointment of M/s.
Sundaram & Srinivasan, Chartered Accountants,
Chennai (Firm Registration No. 004207S) and M/s.
Chandran & Raman, Chartered Accountants,
Chennai (Firm Registration No. 000571S) as the
Joint Statutory Central Auditors of the Bank for the
financial year 2025-26. The Reserve Bank of India
vide its letter dated 26 June, 2024 has approved the
same, subject to the approval of members at the
Annual General Meeting.
The proposed Auditors have confirmed their
eligibility to be so appointed in terms of Section 141
of Companies Act, 2013.
38. Comments on Auditors'' Report
The Notes on Accounts and the Significant
Accounting Policies referred to in the Auditor''s
Report and forming part of the annual accounts and
the references made by the Auditors in their Report
are self-explanatory. The Auditors have not made
any observations or adverse comments warranting
any explanation on the part of the Board as referred
to in Section 134 (3) (f) of the Companies Act, 2013.
39. Details in respect of frauds reported by
Auditors
During the year under review, the Auditors have
not reported any instance of fraud committed in
the Bank by its officers or employees to the Audit
Committee of the Board under section 143 (12) of the
Companies Act, 2013.
40. Secretarial Audit
The Bank had appointed M/s. SPNP & Associates,
Practicing Company Secretaries, Chennai, as the
Secretarial Auditor to conduct the Secretarial Audit
of the Bank for the FY 2024-25. The report of the
Secretarial Auditor is enclosed as Annexure 1.
The Secretarial Auditor has made the following
observation and your directors would like to submit
the response to the observation as below;
⢠During the period under review, Mr. K. Ananth
and Mr. S. Ilangovan were appointed as Heads
of Internal Audit. However, the Audit Committee
did not formally review and approve the
appointments and the terms of remuneration of
the Chief Internal Auditor, in deviation from the
duties of Audit Committee as stipulated under
the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
This has been marked as a remark, with a
suggestion that, going forward, the Bank
shall ensure formal compliance with the
aforementioned SEBI regulation.
The comment made by the Secretarial Auditor
is self-explanatory in nature and Your Bank has
taken necessary steps to ensure compliance with
regulatory guidelines as amended from time to time.
⢠The Bank received a demand notice from the
Income Tax Department on March 29, 2024.
However, the intimation to Stock exchange was
made only on April 2, 2024 causing a three days
delay in intimation of demand notice as per SEBI
Circular dated July 13, 2023, and SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015.
This has been marked as a remark, with a
suggestion that, going forward, the Bank
shall ensure formal compliance with the
aforementioned SEBI regulation.
The above facts came to the knowledge of the Bank
on 30.03.2024 and having consecutive holidays on
31.03.2024 and 01.04.2024, the said intimation was
made on 02.04.2024. However, the filings submitted
with stock exchanges contains the factual condition
also, which is reproduced as below: "Due to
intervening holiday and Financial year end closure,
the intimation is being provided today"
⢠The Risk Management Committee (RMC)
had not reviewed the appointment and
terms of remuneration of Chief Risk Officer in
deviation from the duties of Risk Management
Committee as stipulated under the SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015.
This has been marked as a remark, with a
suggestion that, going forward, the Bank
shall ensure formal compliance with the
aforementioned SEBI regulation.
The comment made by the Secretarial Auditor
is self-explanatory in nature and Your Bank has
taken necessary steps to ensure compliance with
regulatory guidelines as amended from time to time.
⢠During the period under review, Mr. Sanjay
Kumar Goel was appointed as the Chief
Financial Officer (CFO) at the Board meeting
held on January 29, 2025. However, the said
appointment was neither presented to nor
approved by the Audit Committee, which is in
deviation from the duties of Audit Committee
as stipulated under the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015.
The comment made by the Secretarial Auditor
is self-explanatory in nature and Your Bank has
taken necessary steps to ensure compliance with
regulatory guidelines as amended from time to time.
⢠During the period under review, the Bank made
contributions in the form of non-monetary
assets which are not classified under Schedule
VII of the Companies Act 2013, including
barricades, CCTV cameras, waiting sheds, and
computersâto various Police Departments.
Though the contributions in the form of non¬
monetary assets which were provided to the Police
Departments, the same will be used for the benefits
of the general public at large.
⢠During the period under review, the Bank has
transferred Rs. 6.78 Crores to the unspent CSR
account which was originally contributed to
TMB Foundation, during the financial year
2020-21. And the same was categorized under
"ongoing projects.". In compliance with Section
135 of the Companies Act, 2013, the said amount
should have been transferred to the specified
unspent CSR account by the end of FY 2023-24.
The implementing agency has informed the Bank
that due to some unavoidable circumstances /
conditions, the ongoing projects were continued
after the expected completion time. In view of the
above, the aforesaid delay was caused.
41. Annual Secretarial Compliance Report:
The Bank has undertaken an audit for the Financial
Year ended March 31, 2025 for all applicable
compliances as per SEBI Listing Regulations and
Circulars / Guidelines issued thereunder. The
Annual Secretarial Compliance Report duly signed
by M/s. SPNP & Associates, Practicing Company
Secretaries, Chennai, has been submitted to the
Stock Exchanges and is enclosed as Annexure 2 to
this Directors'' Report.
42. Compliance to Secretarial Standards
The Bank has complied with the provisions of the
applicable Secretarial Standards issued by the
Institute of Company Secretaries of India and has
put in place systems which are adequate and are
operating effectively.
43. Funding sources of renewable energy
(Cnnservation of Energy)
The Bank has been supporting and financing
various activities for development of alternative
energy generation. The Bank recognizes wind and
solar energy as main sources of best renewable
and pollution free energy throughout the year and
considers funding these initiatives as its contribution
towards the worldwide effort against global
warming. Accordingly, bank encourages setting up
of solar panels by financing solar energy generation
plants. The Bank has also taken various steps to
conserve energy in its own premises, by establishing
solar plant in 18 branches.
44. Corporate Social Responsibility
The Bank has constituted a Corporate Social
Responsibility (CSR) Committee which has also
adopted a CSR Policy. The CSR Policy is available on
the Bank''s website. The disclosure in respect of the
CSR activities of the Bank as required to be made as
per the Companies (Corporate Social Responsibility)
Rules, 2014 is given in Annexure 3.
As per Section 135 of the Companies Act 2013 and
Rules thereunder, the total amount to be spent is
H 26.09 crores for the Corporate Social Responsibility
activities for the financial year 2024-25 and a sum
of H 18.83 crores has been transferred as ongoing
and multiyear projects to the implementing agency.
45. Annual Return
Annual Return Pursuant to provision of Section 134(3)
(a) and Section 92(3) of the Companies Act, 2013,
the Annual Return as at March 31, 2025 is available
in the Bank''s website. The same can be accessed at
https://www.tmb.in/pages/Annual-Return.
46. Disclosures Pertaining to the Sexual
Harassment of Women at Workplace
(Prevention, Prohibition and Redressal)
Act, 2013 and Maternity Benefit Act, 1961
The Bank has zero tolerance towards any act on
the part of any executive / employee which may
fall under the ambit of ''Sexual Harassment'' at
workplace and is fully committed to uphold and
maintain the dignity of every woman working in
the Bank. The Policy provides for prevention and
protection against sexual harassment of women at
workplace and for redressal of such complaints. All
the employees (permanent, contractual, temporary
or trainee) are covered under this policy.
Number of complaints pending as at the beginning
of the financial year - Nil
Number of complaints filed during the financial year
- 1 (The same has been disposed)
Number of complaints pending as at the end of the
financial year - Nil
Also, your Bank is in compliance with the Maternity
Benefit Act, 1961 as amended from time to time.
47. Transfer of Equity Shares to Investor
Education and Protection Fund (IEPF)
Authority / Unclaimed Dividends.
The details of the equity shares / unclaimed
Dividends transferred to Investor Education and
Protection Fund (IEPF) Authority are available in
the Corporate Governance report forming part
of this report.
48. Strictures and Penalties
During the year under review, RBI has imposed the
following penalties on the Bank:
i. RBI has imposed penalty of ^4,30,000/- under
the scheme of penalty for Non-replenishment
of ATM (DCM(RMMT) No.S153/11.01.01/2022-23)
dated August 10, 2021. (debited in our account
maintained with RBI on various dates)
ii. RBI has imposed penalty of f10,000/- for
deficiency in rendering customer service
observed during incognito visit by RBI official at
Cheranmadevi Branch on 11.11.2024 (Order date:
11.11.2024 & Paid on 17.12.2024)..
iii. RBI has imposed penalty of f20,050/- on
28.05.2024 for the reason of irregularities
and directions violated during their visit at
our Madurai Currency Chest. (debited in our
account maintained with RBI on 28.05.2024)
49. Requirement for maintenance of cost
records
The cost records as specified by the Central
Government under Section 148(1) of the
Companies Act, 2013, are not required to be
maintained by the Bank.
50. Management Discussion & Analysis
The Management Discussion & Analysis as required
under the Listing Regulations is enclosed as
Annexure 4, forming part of this Report.
51. Particulars of Employees and
Remuneration:
The information required under Section 197(12) of
the Companies Act, 2013 read with Rule 5 of the
Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is attached as
Annexure 5 which forms part of this Report.
52. Corporate Governance Report and
Certificate:
Your Bank is committed to follow the best
practice of corporate governance to protect the
interest of all the stakeholders of the Bank, viz.
shareholders, depositors and other customers,
employees and the society in general and maintain
transparency at all levels.
As required under Regulation 34 (3) read with
Schedule V (C) of the Listing Regulations, a report
on Corporate Governance and the certificate
as required under Schedule V (E) of the Listing
Regulations from M/s. SPNP & Associates, Practicing
Company Secretaries, Chennai, regarding
compliance of conditions of Corporate Governance
are given in Annexure 6 and Annexure 7 respectively,
forming part of this report.
53. Business Responsibility and Sustainability
Report:
The ''Business Responsibility and Sustainability
Report'' (BRSR) of your Bank for the Financial Year
ended March 31, 2025 is attached as Annexure
8 as required under Regulation 34(2)(f) of the
Listing Regulations. Your Bank continues to execute
strong ESG proposition by working with all relevant
stakeholders as well as in its own operations.
54. Material changes and commitment, if any,
affecting the financial position of the Bank
from the end of the financial year and till
the date of this report
There are no material changes and commitments
affecting the financial position of the bank.
55. The details of significant and material
orders passed by the regulators or courts
or tribunals impacting the going concern
status and Bank operations in future
During the Financial Year 2024-25, no significant
and material orders were passed by the Regulators
or Courts or Tribunals against the Bank which
impacts its going concern status and Bank''s
operations in future.
56. The details of difference between amount of
the valuation done at the time of one-time
settlement and the valuation done while
taking loan from the Banks or Financial
Institutions along with the reasons thereof
Being Banking Company, the aforesaid provision is
not applicable to your Bank.
57. Insider Trading Compliances
The Bank has adopted the Code of Conduct for
Prevention of Insider Trading in the securities (''PIT
Code''), adopted in line with the provisions of the
SEBI (Prohibition of Insider Trading) Regulations,
2015 (''PIT Regulations''). The PIT Code, inter-alia
requires, pre-clearance for trading in the securities
and prohibits the purchase or sale of securities
while in possession of unpublished price sensitive
information(UPSI) and during the closure of
trading window.
The Board has also adopted a Board approved
Code of Practices and Procedures for Fair Disclosure
of UPSI, which is available on the website of the
Bank at https://www.tmb.in/doc/Code%20of%20
conduct%20to%20regulate%20monitor%20and%20
report%20trading%20by%20insiders.pdf.
The Board reviews the PIT Code on an annual
basis and whenever required. The PIT Code has
been reviewed by the ACB and the Board, as part
of annual review process, during the financial
year under review and certain changes are made
therein in order to provide more clarity in certain
clauses as per recent development in the aforesaid
regulations. The Company Secretary of the Bank
acts as the ''Compliance Officer'' in terms of the PIT
Code and PIT Regulations, and is responsible for
implementation and overseeing compliance with
the PIT Code across the Bank.
The Bank has also undertaken various initiatives
during the financial year to spread awareness
amongst the employees of your Bank about the
provisions of the PIT Code and PIT Regulations. The
Bank has automated the process for submission of
declarations and disclosures by designated persons
electronically through software. Further, your Bank
has maintained the Structured Digital Database
(''SDD'') internally with adequate internal controls, in
compliance with the provisions of Regulation 3(5) of
the PIT Regulations. The report on the compliance
with the PIT Code is also submitted to the ACB/
Board periodically
58. Acknowledgment
The Board of Directors are grateful for the
valuable guidance and support received from the
Government of India, various State Governments,
regulatory bodies such as RBI, SEBI, MCA, RBI, IBA,
UIDAI, CERSAI, IRDA as well as to all the shareholders,
Lenders, Credit Rating Agencies for their unwavering
support and trust in the Bank.
The Board would further like to express appreciation
to BSE Limited, National Stock Exchange of India
Ltd., National Securities Depository Limited, Central
Depository Services (India) Limited, Registrar &
Share Transfer Agent, Vendors and Service Providers
for their continued support & co-operation.
The Board also wishes to place on record its
profound appreciation for the valuable contribution
of the Bank''s Staff at all levels and looks forward
to their continued involvement with commitment
towards achieving the future goals.
Lastly, our sincere thanks to all our customers in India
and abroad and our shareholders for their patronage
and continued faith in Brand TMB as we strive to
improve the Bank''s position and performance on an
ongoing basis and remain strongly committed to
creating value for our stakeholders.
59. Conclusion
This year has been a significant milestone for the
Bank, marking 103 years since its establishment â a
truly commendable accomplishment.
Both the banking sector as a whole and your Bank
in particular remain committed to supporting
the MSME segment through the effective rollout
of initiatives introduced by the government and
regulatory authorities. The Bank has adopted a
prudent approach in expanding its operations while
maintaining strong financial performance.
Looking ahead, your Bank remains optimistic and
self-assured, confidence rooted in its ability to
overcome numerous challenges over the past
century. With the knowledge and experience gained,
the Bank is well-positioned to embrace the next
hundred years with renewed vigor, driven by the
trust of its valued customers and the unwavering
dedication of its employees.
Your Bank looks to the future with great hope and
confidence born out from the fact that the Bank has
weathered many storms in its journey of hundred
years and with the experience gained, will be able
to look forward to the next 100 years with renewed
strength, stemming from the trust of the customers
and protected by the loyalty of its staff.
For and on behalf of the Board of Directors
Place : Thoothukudi Salee S Nair K. Ramachandran
Date : July 08, 2025 MD & CEO Additional Independent Director
Mar 31, 2024
Your Board of Directors have great pleasure in presenting the 102nd Annual Report along with the Audited Financial Statements as on March 31, 2024 along with the Cash Flow Statement for the year ended March 31, 2024.
1. BUSINESS PERFORMANCE
The Bank had a successful year in its 102nd year of operations and recorded satisfactory performance. During the year under review, the total business increased from f85,056.18 crores to f89,248.82 crores registering a growth of 4.93%.
PERFORMANCE HIGHLIGHTS:
⢠Operating profit decreased from f1,572.84 crores to f1,481.78 crores (-5.79%).
⢠Net profit Increased from f1,029.26 crores to f1,072.03 crores ( 4.16%).
⢠Deposits of the Bank increased from f47,766.49 crores to f49,515.07 crores ( 3.66%) during the year.
⢠Gross Advances increased from f37,582.11 crores to f39,970.40 crores ( 6.35%) during the year.
⢠Net Advances increased from f37,289.69 crores to f39,733.75 crores ( 6.55%) during the year.
⢠Gross NPAs Increased from 1.39% to 1.44%.
⢠Net NPAs Increased from 0.62% to 0.85%.
⢠Provision Coverage Ratio (PCR) decreased from 90.90% to 87.52%
The total income increased by f782.70 crores during the year from f4,710.15 crores in the previous year to f5,492.85 crores during the year under review ( 16.62%).
Interest income increased from f4,081.04 crores to f4,847.91 crores. Other income increased from f629.11 crores to f644.95 crores during the current year. The total expenditure increased from f 3,137.31 crores during the previous year to f4,011.07 crores during the current year. Increase in total expenditure was at f873.77 crores. Earnings per share decreased from f68.06 to f67.70, the book value of the share increased from f437.53 to f 500.23.
2. PROFIT AND APPROPRIATION
The net profit stood at f1,072.03 crores for the financial year ended 31.03.2024 after making all necessary provisions under various categories as per the prudential norms prescribed by Reserve Bank of India. The appropriation out of the profit earned for the financial year 2023-24 are as under:
|
TRANSFERRED TO: |
f IN CRORES |
|
Profit and Loss account opening balance |
123.29 |
|
Less: Final Dividend for 2022-23 @ Rs.5/- per share |
79.18 |
|
Add: Net profit during the year 2023-24 |
1,072.03 |
|
Available for appropriation |
1,116.14 |
|
Statutory Reserve |
322.00 |
|
Special Reserve u/s 36(1)(viii) of IT Act, 1961 |
50.00 |
|
Investment Fluctuation Reserve |
--- |
|
Capital Reserve |
--- |
|
Transfer to General Reserve |
525.00 |
|
Balance carried over to next year |
219.14 |
|
Total |
1,116.14 |
3. DIVIDEND
Your Directors have recommended the payment of a final dividend at the rate of f10.00 (Rupees Ten only) per equity share of the face value of f 10/- each (100%) for the year ended March 31, 2024. Dividend pay-out is in accordance with the Bank''s dividend distribution policy (https://www.tmb.in/ pages/Regulatory-Policies), RBI guidelines and will be payable subject to approval of members at the ensuing Annual General Meeting and deduction of tax at source, to those Shareholders whose names appear in the Register of Members as on the Cut-off date September 20, 2024.
4. CAPITAL AND RESERVES
The Bank''s issued and paid-up capital was f158.35 Crores as on March 31, 2024.
5. ISSUE OF EQUITY SHARES
During the year under review there was no fresh issue of equity shares.
6. EARNINGS PER SHARE (EPS)
AND BOOK VALUE
The earnings per share stood at Rs.67.70 (basic) and Rs.67.70 (diluted) for the financial year ended March 31, 2024. This was Rs.68.06 (Basic) and Rs.68.06 (diluted) during the previous year. The book value per share has further improved to Rs.500.23 as on March 31, 2024, as against Rs. 437.53 during the previous year.
7. CAPITAL ADEQUACY
The Capital to Risk Weighted Assets Ratio (CRAR) stood at 29.37% (as per Basel III) as on March 31, 2024, as against the minimum required level of 11.50% (including the Capital Conservation Buffer) stipulated by Reserve Bank of India. The CRAR consisted predominantly of Common Equity Tier I (CET 1) which was 27.97% out of 29.37% of CRAR.
8. DEPOSITS
The aggregate Deposits of the Bank as on 31.03.2024 stood at f 49,515.07 crores, registering a growth of 3.66% over f47,766.49 crores as on 31.03.2023. The interest rates for deposits were kept aligned with the prevailing trends in the Banking Industry. Being a Banking Company, the disclosures required as per Rule 8(5)(v) of Companies (Accounts) Rules, 2014 are not applicable to your bank.
9. ADVANCES PORTFOLIO -MANAGEMENT OF ASSETS AND DEVELOPMENT OF BUSINESS
The Bank continued its lending activities in conformity with its Board approved Policies and Guidelines of the Reserve Bank of India. The Gross Advances of the Bank increased from f37,582.11 crores as on 31.03.2023 to f39,970.40 crores as on 31.03.2024. The increase in advances is mainly due to the growth recorded in Retail, Agricultural and MSME advances.
The Bank continued its thrust on lending to Priority Sectors (PS) including Agriculture and Micro and Small Enterprises comprising both Manufacturing and Service Enterprises. The level of advances to Priority Sectors stood at f30,264.46 Crore as on March 31, 2024. The Total PS Advances (Net of PSLCs Sold) at f21,285.37 Crore constitutes 68.04% of ANBC as on 31/03/2024, as against the regulatory minimum requirement of 40%. The achievement of PS Advances, based on the Quarterly Average level of PS Advances / Quarterly Average ANBC is at 73.28%.
Agricultural Advances reached f14,409.01 Crore as on March 31st, 2024. The Total Agricultural Advances (Net of PSLCs Sold) including RIDF and other qualifying investments for Priority -Agriculture constitutes 21.83% of ANBC as on 31/03/2024, as against the regulatory minimum requirement of 18%. The achievement of Agriculture Advances, based on the Quarterly Average level of Agriculture Advances / Quarterly Average ANBC is at 26.13%.
Total advances to the weaker sections stood at f10,797.67 Crore as on March 31, 2024. The Total advances to Weaker Sections (Net of PSLCs Sold) at f6,047.67 Crore represents 19.33% of the ANBC as on 31/03/2024, as against the regulatory minimum requirement of 12.00%. The achievement of Advances to the weaker section, based on the Quarterly Average level of Advances to weaker section / Quarterly Average ANBC is at 21.07%.
Similarly, the bank achieved the mandatory targets for the sub-sectors like Loans to Small and Marginal Farmers (at 14.03% as on 31/03/2024 based on the ANBC as on 31/03/2023,
as against the regulatory minimum requirement of 10.00%). The achievement of Advances to the Small and Marginal Farmers, based on the Quarterly Average level of Advances to the Small and Marginal Farmers / Quarterly Average ANBC is at 15.40% and Advances to Micro Enterprises (at 22.05% as on 31/03/2024 based on the ANBC as on 31/03/2023, as against the regulatory minimum requirement of 7.50%). The achievement of Advances to Micro Enterprises, based on the Quarterly Average level of Advances to Micro Enterprises / Quarterly Average ANBC is at 26.22%.
Under export credit, the bank achieved a level of f834.60 Crore as on 31.03.2024 as against f631.62 Crore achieved as on March 31, 2023, due to underutilization of sanctioned Export limits.
The Bank has sanctioned totally 20,761 No of WCTLs to the tune of f2675.01 crore as on 31.03.2024 since the inception of the scheme ECLGS. Out of which 3 number of WCTLs to the tune of f0.47 crore are opened during the FY 2023-24 under Emergency Credit Guarantee Line Credit Scheme (ECLGS).
During the current year, the bank will strive further to increase the flow of credit to Agriculture, Retail, and MSME Sectors and the Weaker Sections.
The bank has been actively participating in all the initiatives and schemes of the Government of India including Pradhan Mantri Mudra Yojana (PMMY), Dairy Entrepreneurship Development Scheme (DEDS), PMAY- Pradhan Mantri Awas Yojana (PMAY), Entrepreneurship Development & Employment Generation Scheme (EDEGS), PM Street Vendors Atma Nirbhar Nidhi (PM SVANIDHI) etc. by implementing the same in the Bank.
Sale of Priority Sector Lending Certificate (PSLCs):
The Bank has sold PSLCs worth f9,050.00 crore till 31/03/2024, which fetched an income of f75.21 Crores. In Category-wise, the Bank had sold PSLC-Small & Marginal Farmers for f4,750.00 Crores, PSLC-Agriculture for f2,900.00 Crores and PSLC-Micro Enterprises for f1,400.00 Crores as on 31/03/2024.
Financial Inclusion:
Under the Financial Inclusion (FI) Programme, the Bank has covered 142 villages as on 31.03.2024. The total Basic Savings Bank Deposit Account (BSBDA) accounts of the bank as on 31st March 2024 stood at 2.53 lakhs.
10. INVESTMENTS AND TREASURY OPERATIONS
During the financial year ended March 31st, 2024, the Bank achieved a turnover of f53,403.94 crore in trading operations, resulting in a net profit of f 6.53 crore, as against f 6.96 crore in the previous year.
The net investments of the Bank stood at f15262.60 crores as on March 31, 2024, as against f14,156.03 crores as at the end of the previous year. The Investment-to-Deposit Ratio of the Bank was 30.82%, as against 29.64% at the end of the previous year.
The average realized yield on the investment portfolio during the year stood at 6.85% as against 6.85% in the previous year. The income earned during the year from investments, comprising of interest income and dividend income excluding income from RIDF was ?1055.86 crore as against ?904.50 crore in the previous year.
Particulars of Loans, Guarantee, or investments
The disclosures regarding particulars of loans, guarantee given and securities provided is exempt under the provisions of Section 186(11) of the Companies Act, 2013 since it is a banking company.
11. FOREIGN EXCHANGE BUSINESS
Foreign exchange business during the year 2023-24 in terms of actual inflows was Rs.11,577.57 Cr (Previous Year Rs.11,706.38 Cr) whereas Foreign Exchange outflows was Rs.9,400.97 Cr (previous year Rs.8,740.68 Cr)
The total merchant turnover of the bank for the year 202324 was ?20,978.54 crores against ?20,447.06 Crore during the previous year 2022-23. The profit on foreign exchange business for the year 2023-24 was ?40.38 crores against ?35.97 Crores during the previous year 2022-23.
Your Bank has correspondent relationship with 338 overseas banks by exchange of Relationship Management Application (RMA) under SWIFT (Society for Worldwide Interbank Financial Telecommunication). It facilitates smooth and fast flow of communication in the international business. The SWIFT arrangement has enabled the Bank to give timely and efficient service to its NRI customer.
During the year under review, 369 branches are linked to Forex Processing Centre(FPC) and the total number of branches linked to FPC has been increased to 469 from 100 branches. Our Bank has the necessary infrastructure to render fast and efficient service relating to inward remittance and for crediting the beneficiaries accounts on receipt of the foreign currency funds in our Nostro accounts abroad.
Your Bank is committed to increase the Forex Business activities significantly for adding good revenues to the bank in the coming years. Your Bank has provided online Electronic Trading Platform named as TMBFXBRIDGE for concluding exchange rates in 39 old B Category branches & FPC and direct view access to 65 of our forex customers. FX-Retail platform is provided to 26 Forex customers.
12. BRANCH NETWORK
During the year under review, your bank has added 22 new branches and the branch network of the bank has been increased to 552 branches. In addition to that, the bank has added 8 ATMs, 34 CRMs & 7 e-lobbies. The Bank''s ATM and alternate delivery channel network stood at 1157 ATMs, 358 CRMs, 126 e-lobbies, covering 17 States and 4 Union Territories.
13. HUMAN RESOURCES DEVELOPMENT
As on 31st March 2024, the Bank''s total staff strength is 4,628 (including 26 contract employees) consisting of 2,185 Officers, 1,773 Clerks and 670 Supporting Staffs. During the year under review, 343 regular employees and 1 contract employee were recruited and 504 employees were promoted.
The Business per employee has increased from ?18.95 crore to ?19.34 crore in the FY 2023-24.
The Bank''s Staff Training College at Nagercoil had conducted 68 physical training programmes and 18 online training sessions on various banking subjects like Credit, Forex, Recovery, Information Security etc. 3,076 staff members had undergone training programmes during the FY 2023-24.
TMB eSMART, an online e-learning Management System was indigenously developed by our Bank to cater the training needs of all staff members. It can be accessed 24x7x365 by our staff members in intranet and internet. Using TMB eSMART, our staff members can learn varied Bank subjects like Credit, Forex, Information Security, KYC etc. To groom our staff members in different facets of Banking, we have 13 TMB Capacity Building exams in various areas like KYC, Credit, Forex, Recovery etc.
In addition to the above, your Bank has tied up with reputed training institutions like SIBSTC-Bengaluru (Southern India Banks'' Staff Training College), NIBM-Pune, IIBF- Mumbai, IDRBT, Hyderabad, CAFRAL, etc. 857 staff members were trained in these leading institutions during FY 2023-24.
Industrial relations in the Bank continued to be very cordial during the year with frequent interactions between the management and the Officers'' and Employees'' Associations and various staff welfare activities were undertaken during the year. The Bank continues to lay emphasis on developing the individual skills of its employees and providing a healthy and cordial working environment so as to get maximum contribution from the employees of the Bank.
14. INTER BRANCH ADJUSTMENTS
The Bank has continued to maintain a very good record in internal housekeeping. The core banking solution made it possible for the branches to balance all their accounts and tally balances up to March 31st, 2024. There was also timely submission and scrutiny of the control returns, which was given adequate importance at all levels with necessary follow
up.
15. INTERNAL CONTROL AND INSPECTION AUDIT RISK BASED INTERNAL AUDIT SYSTEM
The bank has put in place an effective and strong Risk Based Internal Audit (RBIA) System. During the financial year 202324, RBIA audits were conducted through TMB eTHIC Module in 540 branches (Totally 572 audits) of the bank. Submission of compliance reports and closure of audits are followed up through the respective regional offices. Besides, RBIA was conducted for the following critical Departments (KYC and AML Cell, Risk Management Department, Credit Department, Information Technology Department (Chennai & Thoothukudi), CPC-Tirunelveli, CPC-Chennai, Service Branch-Chennai, Compliance Department, Integrated Treasury Department, International Banking Division). The bank has a proper and adequate internal control system. The bank has standardised operating procedures in monitoring the account operations to have effective internal controls. Internal Financial Controls of the branches are verified by the statutory branch auditors during their branch audit and covered in the report.
Credit Audit
During the year under review, Credit Audit has been conducted for 1143 borrowal accounts in 233 branches.
Concurrent Audit system
The bank continued to have the system of Concurrent Audit through TMB eTHIC Module, which covered 232 branches and important departments. Concurrent Audit has been recognized as an important tool of internal control and is in force at major branches including 39 ''B'' category branches designated for forex business. Further concurrent audit is implemented in the following important departments -International Banking Division, Treasury, DPS Cell, Chennai Service Branch, Forex Processing Centre, Transaction reconciliation at various divisions of ITD, Accounts Department, Expense approval of ITD, Establishment Department, Planning and Development & Resource Mobilization Department, Central Processing Centres at Chennai and Tirunelveli and all the four Currency Chests located at Chennai, Podanur, Madurai and Thoothukudi Pudukottai. As per RBI direction, the bank is conducting bi-monthly surprise verification of cash in currency chest at Madurai, Chennai, Podanur and Pudukottai and the reports are forwarded to Planning Department and respective Regional Offices, for further follow up. Submission of compliance reports and closure of audits are followed up through the respective regional offices / departments.
Information System Audit
As per RBI guidelines, Information System audit cell has been established under Inspection Department. Information System audits were conducted at all the 540 branches (572 audits) along with Risk Based Internal Audit, 9 Departments and 12 Regional offices.
Continuous offsite monitoring (OFMS) is deployed by IS audit cell. Under a software tool-based supervision process, certain key and vital areas are subjected to offsite monitoring.
Every year, critical Information systems deployed in our Bank like Core Banking System, E-Banking, Mobile banking, ATM, RTGS, Treasury, CTS clearing process, Server, SOC, HRMS and network infrastructure etc., are subjected to Information
Systems audit by an external auditor.
Management Audit system
To assess the robustness of the systems and procedures established in various operational units of the Bank and to have an oversight on the effectiveness of the management, various departments at Head Office and all Regional Offices are subject to Management Audit, which was conducted once in every two years.
During the year under review, Management Audits were conducted at 3 Regional Offices (Coimbatore Region, Mumbai Region and Thiruvananthapuram Region) and 15 Departments (Vigilance Department, Human Resource Development Department, Operations & Services Department, KYC/AML Cell, Credit Monitoring Department, Accounts Department, MIS Department, Staff Training College, Nagercoil, Inspection Department, Recovery Department, Credit Department, Discipline & Fraud Management Cell, Bancassurance Cell, RACPC, Internal Ombudsman Department).
In addition to the above audit the Bank regularly conducts revenue audit in the branches, to monitor revenue leakages.
Vigilance
The functions of the vigilance machinery of the Bank are broadly divided into 3 types, viz. preventive, surveillance and punitive. The Vigilance Department undertakes a study of the existing procedures and practices prevailing in the organization with a view to modify those procedures or practices that provide scope for malpractice/fraud perpetrated by the staff members and also finding out the causes of delay in reporting and the points at which the delays occur and devising suitable steps to minimize delays at different stages. To educate the employees of the Bank, the Vigilance Department brings out various fraud awareness circulars and conducts training programmes periodically. As a part of creating awareness, ''Vigilance Day'' is observed on the 31st October every year.
The Vigilance Department plays a vital role in the implementation and follow-up of the directives and guidelines issued from time to time by Reserve Bank of India. Upon the directions of RBI, Vigilance Department has also formulated/implemented a Vigilance Policy from 13th July 2011 and the Policy is being reviewed every year.
Vigil Mechanism
The Bank has implemented the Whistle-blower cum Protected Disclosure Policy, intended to promote the participation of employees at all levels and detection of corruption, misuse of office, criminal offences, suspected/ actual fraud, failure to comply with the rules and regulations prescribed by the Bank and any events/acts detrimental to the interest of the Bank, depositors and the public resulting in financial loss/ operational risk, loss of reputation etc. Further, the mechanism adopted by the Bank encourages the Whistle Blower to report genuine concerns or grievances. It provides adequate safeguards against Whistle Blower''s victimization for those who avails such mechanism and offers direct access to the Chief of Internal Vigilance (CIV). Further, there was no occasion where a person was denied access to the Audit Committee of the Board. The details of the Whistle-blower cum Protected Disclosure Policy are posted on the Bank''s website and available at the link: https://tmb.in/pages/ Regulatory-Policies.
16. CUSTOMER SERVICE
Customer service is an important part of maintaining on going customer relationship, which is a key for continuous business growth and to retain the customer. The Bank is well known for its good, courteous and effective service to customer and constantly endeavouring to meet the expectations of the modern-day tech-savvy customers, by introducing new and innovative products for seamless digital experience.
As per the provisions of Internal Ombudsman Scheme 2018 and the Integrated Ombudsman Scheme 2021, Mr.K.Selvaraj was appointed as the Internal Ombudsman for our Bank and he joined duty on 13.06.2022. The Internal Ombudsman examines customer complaints which are in the nature of deficiency in service on the part of the bank, that are partly or wholly rejected by the bank. As the bank shall internally escalate all complaints, which are not fully redressed to the Internal Ombudsman, before conveying the final decision to the complainant, the customers need not approach the Internal Ombudsman directly.
17. TECHNOLOGY ABSORPTION:
Your Bank is taking various steps to provide technology-enabled products and services to customers by adopting latest techniques in technology. Banking Services are extended to our customers through Branches and ATMs by using multiple network technologies such as MPLS, Leased Line, GSM and VPNoBB with redundant connectivity. As an alternative to traditional Branches / ATMs, the digital services are seamlessly offered to our customers without any disruption through various delivery channels viz. Internet Banking, Mobile Banking, ATM, IMPS, UPI, AEPS, Point of Sale terminals, Cash Deposit Kiosk, Passbook Printing Kiosk, WhatsApp Banking, CTS Positive Pay System, BBPS in Internet Banking, Green PIN in Internet Banking, Rupay Select Card, Enhanced Card Security for Debit Card Management, e-Mandate Authentication using Debit Cards and Internet Banking, etc.
The availability of the services of all the alternate delivery channels to our customers is ensured by way of active monitoring and attending to outages if any, instantly.
Core Banking:
Your Bank has implemented "Finacle", the Core Banking Solution in all its branches. Core Banking Solution (Ver. 6.x) was implemented during 2001-02 and its major migration v10.2.25 was carried out during August 2022.
The Bank has 1,515 ATMs and CRMs as on 31st March 2024.
Your Bank has upgraded the network bandwidth of both primary and secondary links at branches and other offices to provide uninterrupted banking services to its customers.
Internet Banking:
Your Bank had introduced "Internet Banking facility" to the customers during November 2008. Currently the e-Banking facility has been extended to all our customers.
We have also introduced Corporate Net banking facility for our customers with maker / checker facility to bring in more security to the transaction initiated by corporate customers. We have also tied up with multiple Payment Gateway service providers for extending utility bill payment services to our customers.
Facilities provided to customers through Internet Banking includes RTGS, NEFT, IMPS, opening of Deposit Accounts, e-Commerce transactions, online tax payment, online bills and utility services payment, scheduled payments, etc. Payments to TMB Credit Card dues and Prepaid Card Top-up facility are also provided through Internet Banking. Also, there are other facilities like offline statement, management of limit for Debit Card etc. provided through Internet Banking.
Mobile Banking:
Mobile Banking facility has been provided in both Android and iOS. Customers can self-onboard in Mobile Banking and also through branches. By using mobile banking facility, customer can perform SB/CA/loan/deposit inquiry, transfer of funds (Within TMB/NEFT/IMPS/RTGS), Deposit Opening, TNEB payment, Mobile Recharge, Cheque Book Issuance, ATM Card Blocking, Cheque Status Inquiry, etc., In addition, certain features like Transaction limit setting, Credit Card details and Payment Dues, Debit Card Blocking, Beneficiary Management, Loan against Deposits and Form 15 G / H declaration are available for the Mobile Banking Customers. We are continuously adding new features in our Mobile Banking application.
UPI:
Unified Payment Interface (Acquirer and Issuer) service is available for our customers. They can download various UPI Certified Third Party applications like BHIM for both Android and iOS. Customers can transfer funds, initiate Online Payments, pay using QR Codes, pay in BBPS (Bill Payments), initiate IPO transactions, UPI Recurring Mandate and more, by linking our Bank account into any of these Third-Party applications. UPI Lite facility is available in our Bank where customers can do their UPI payments up to Rs.500 without entering UPI Pin.
Server Infrastructure:
Bank''s Server infrastructure is maintained at primary (DC -Chennai) and secondary (DR Site - Bengaluru) co-located Data Centers. The Bank is having Physical, Virtual, Hyper Converged Infrastructure and dedicated Storage devices.
Hyper Converged infrastructure installed at our DC and DR locations, which is a three-node cluster arrangement, provides high availability, high scalability, cost effective, improved workload performance and occupies less space.
Storage Infrastructure was upgraded from SAS to Flash storage to get high performance in Core Banking Solution (Finacle). It is scalable for our future needs and high availability.
Health of Server Infrastructure is monitored in a real time for Server related parameters such as CPU Utilization, CPU Load,
PAM (Privileged Access Management) solution was implemented to provide access shield and to fix accountability while accessing critical Servers. We are activating our DR Site on quarterly basis, to ensure that the Disaster Recovery operations remain accurate, relevant and operable during adverse conditions.
Security Infrastructure
Our Bank is having Endpoint Extended Detection and Response (XDR) system to protect our Endpoints from Malware and Ransomware attacks. Also, we have implemented Data Loss Protection (DLP) which facilitates to block / alert transmission of data based on sensitive keywords across intra / inter network infrastructure. We have adequate Firewall, Intrusion Prevention System (IPS) and Intrusion Detection System (IDS) to protect our network from external threats accessing through internet. All the endpoints have been integrated with domain and policies have been enforced through Network Access Control (NAC) and Active Directory.
Further, Bank has setup Security Operation Center (SOC) under the direct control of Information Security Department where the following tools / components are installed to monitor SOC operations.
⢠Security Incident & Event Management (SIEM)
⢠Database Activity Monitoring (DAM)
⢠Privileged Access Management (PAM)
⢠Web Application Firewall (WAF)
During 2023-24, our Bank has completed the following major IT Projects:
⢠Mobile Banking Enhancements (Phase II & III)
⢠Formation of Near Disaster Recovery Centre (NDR)
⢠Implementation of Trend Micro XDR
⢠Introduction of OTC and Cassette Swap systems in ATM / CRMs
⢠Shifting of Data Centre
⢠Upgradation of WAF and DAM
⢠Upgradation of NACH application
⢠Upgradation of Network Hubs into Network Managed Switches at all branches
⢠Migration of NPA Security Module to CBS
⢠Implementation of Integrated API Management Solution
⢠Implementation of Customer feedback module
⢠IMPS XML migration
⢠Implementation of new Reconciliation application
⢠Implementation of UPI Lite (Issuer)
⢠Upgradation of FRM Solution
18. PRODUCT INNOVATION, NEW PRODUCTS AND SERVICES
MAJOR INITIATIVES DURING 2023-24:
⢠Launched revamped TMB website.
⢠Form 15G/15H intimation letter sent to all eligible deposit account holders centrally from Head office.
⢠Launched TMB RERA Current account.
⢠Launched various Term Deposit Schemes with attractive interest rates for the short period.
⢠TMB Smart 300 (300 Days)
⢠TMB 444 (444 Days)
19. AWARDS / RATINGS OBTAINED BY THE BANK:
Your Bank has bagged the following awards during the year under review:
⢠The Bank has bagged Atal Pension Yojana (APY) award during the felicitation program & strategy review meeting conducted by PFRDA on 16th June 2023 at Chennai.
⢠The Bank has secured "2nd Best Bank award" under small bank category in emerging Asia banking awards 2022-23 conducted by Indian Chamber of Commerce (ICC), Kolkata.
External Rating:
During the financial year 2023-24, CRISIL renewed the rating for the Certificate of Deposit programme of the Bank as follows,
|
Instrument category |
Ratings |
Instrument |
|
Long Term |
CRISIL A |
f 15,000 crore Fixed Deposits |
|
Short Term |
CRISIL A1 |
f25,000 crore short term Fixed Deposits f 1,000 crore Certificate of Deposits |
20. RISK MANAGEMENT
Your Bank has a proactive approach towards Risk Management. Its risk philosophy involves developing and maintaining its banking activities within its risk appetite and regulatory framework.
The Risk Management Architecture of the Bank comprises of an Independent Risk Management Organizational structure at the corporate level, Risk Management Policies, Risk Measurement Tools and Risk Monitoring and Management Systems. The Bank has a well-defined risk appetite statement and all the banking functions are dovetailed to the risk appetite statement.
The Board of Directors of the Bank is primarily responsible for laying down risk parameters and establishing an integrated risk management and control mechanism. The Board of Directors is supported by a Sub-Committee of the Board known as the Risk Management Committee of the Board (RMCB), which in turn is aided by the Asset Liability Committee (ALCO), Credit Risk Management Committee of Executives (CRMCE) and Operational Risk Management Committee of Executives (ORMCE). The executive level Committees are headed by the MD & CEO of the Bank. The Bank''s RMCB reviews its Risk Management policies and recommends to the Board for approval. The Board also sets out limits, taking into account the risk appetite of the Bank and the goals set.
The bank''s liquidity ratios, i.e. LCR & NSFR are also above the minimum stipulated level indicating comfortable position with regard to liquidity risk.
Your Bank has been proactively conducting internal assessment of adequacy of capital, liquidity ratios and leverage ratios in accordance with Basel-III standards. The Bank''s capital position is in compliance with Basel-III expectations and well above the minimum requirements.
21. BOARD OF DIRECTORS
The Bank''s Board as on March 31st, 2024 comprises of 11 Directors and the composition of Board are given below:
|
S.No |
Name |
Sector Represented / Area of specialized knowledge |
|
1 |
Shri S.Krishnan |
Majority Sector - Banking |
|
2 |
Shri A.Niranjan Sankar |
Minority Sector |
|
3 |
Shri S.R Ashok |
Minority Sector |
|
4 |
Shri D.N.Nirranjan Kani |
Minority Sector |
|
5 |
Shri B.Prabaharan |
Minority Sector |
|
6 |
Shri C.Chiranjeeviraj |
Majority Sector - Accountancy as well as Finance |
|
7 |
Smt S.Ezhil Jothi |
Majority Sector - Corporate Law |
|
8 |
Shri S.Ravindran |
Majority Sector - Accountancy as well as Finance |
|
9 |
Shri S.Sridharan |
Majority Sector - Banking, economics and law |
|
10 |
Shri S.B Suresh Kumar |
Additional Director, RBI |
|
11 |
Shri C S Ramkumar |
Additional Director, RBI |
All Directors, other than Managing Director and CEO, are non-executive Directors of the Board. The details of Directors are available in the Corporate Governance report, which forms part of this report.
The details of directors or key managerial personnel who were appointed or have resigned during the year is mentioned in the Corporate Governance Report.
22.THE STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149
Your bank has received necessary declarations from all the Independent Directors under Section 149(7) read with Section 149(6) of the Companies Act, 2013 and Regulation 25(8) read with Regulation 16(1)(b) of the SEBILODR, they meet the criteria of independence laid down thereunder.
23. WOMAN DIRECTOR
In terms of the provisions of Section 149 of the Companies Act, 2013, the Bank has appointed Tmt. S. Ezhil Jothi (DIN: 07772888) as Woman (Independent) Director on the Board of the Bank.
24. DETAILS OF SUBSIDIARIES AND ASSOCIATES
Your bank does not have any subsidiaries or Associates or Joint Ventures for the financial year ended March 31, 2024.
25. CHANGE IN THE NATURE OF BUSINESS
During the Financial year ended March 31, 2024, there is no change in the nature of business of the Bank.
26. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) read with Section 134 (5) of the Companies Act, 2013, it is hereby confirmed that:
(a) In the preparation of the annual accounts for the financial year ended March 31, 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) The Board of Directors have selected the accounting policies and applied them consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year 2023-24 and of the profit of the Bank for that period.
(c) The Board of Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;
(d) The Board of Directors have prepared the annual accounts for the financial year ended on March 31, 2024, on a going concern basis;
(e) The Board of Directors have laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and
(f) The Board of Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
27. DETAILS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review, the bank has not entered into any significant material transactions with related parties, which could lead to potential conflict of interest, other than transactions entered into in the ordinary course of business and at arm''s length basis. Hence, the disclosure in Form AOC-2 is not applicable The policy on Related Party Transactions is placed on the Banks'' website
www.tmb.in/pages/Regulatory-Policies
28. BOARD LEVEL PERFORMANCE EVALUATION
Pursuant to Section 134(3)(p) of the Companies Act, 2013 and Regulation 17 of SEBI LODR Regulations, 2015 and other applicable provisions, the Board has carried out annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.
The NRC has defined the evaluation criteria and procedure for the Performance Evaluation process for the Board, its Committees and Directors.
During the year under review, feedback was sought by way of structured questionnaires and evaluation was carried out based on various criteria and the responses received from the Directors.
The criteria for performance evaluation of the Board included aspects such as
1. Development of suitable strategies and business plans at appropriate time and its effectiveness
2. Implementation of robust policies and procedures
3. Size, structure and expertise of the Board
4. Oversight of the Financial Reporting Process, including Internal Controls
5. Willingness to spend time and effort to learn about the Company and its business and
6. Awareness about the latest developments in the areas such as corporate governance framework, financial reporting, industry and market conditions.
The criteria for performance evaluation of the Committees included aspects such as
1. Discharge of its functions and duties as per its terms of reference.
2. Process and procedures followed for discharging its functions
3. Effectiveness of suggestions and recommendations received
4. Size, structure and expertise of the Committee
5. Conduct of its meetings and procedures followed in this regard.
A separate peer review exercise was carried out to evaluate the performance of MD & CEO. The performance evaluation of the Chairman of the Board was not carried out, as we don''t have a permanent Part Time Non - Executive Chairman.
Further, the Independent Directors, at their exclusive meeting held during the year on June 23, 2023, reviewed the performance of the MD & CEO.
29. BANK''S POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION
The Bank has a Board approved Nomination and Remuneration Policy for appointment of Directors and Senior executives of the Bank.
The Bank also has a Board approved compensation policy which deals with the compensation & benefits of the Managing Director & CEO and senior executive of the Bank.
The remuneration of the MD & CEO is recommended by the Nomination & Remuneration Committee (NRC) to the Board for approval after considering the factors prescribed under the Compensation Policy. The Board considers the recommendations of NRC and approves the remuneration, modifications, subject to shareholders'' and regulatory approvals.
The other non-executive directors are paid only sitting fees for attending the meetings of the Board and its Committees. None of the directors including the MD & CEO receives any profit linked remuneration. The sitting fees payable to the non-executive directors is ?50,000/- for Board Meeting and ?25,000/- for Committee Meetings for the year under review.
The terms and conditions of appointment of Independent Director are available on the Bank''s website -https://www.tmb.in/doc/2point.pdf
30. A STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR
The details are available in the Corporate Governance Report.
31. board/committee meetings
During the year under review, total 24 meetings of the Board and 87 meetings of the Committees of the Board were held. For details of the meeting of the Board and its Committees, please refer to the Corporate Governance report forming part of this report.
32. ANNUAL GENERAL MEETINGS
For the details of the Annual General Meetings, please refer to the Corporate Governance report forming part of this report.
33. COMPLIANCE FUNCTION
The bank has embraced compliance as a part of good governance and not for purely meeting the regulatory requirement. Hence, the Bank has institutionalized a strong compliance culture and mechanism across the organization, founded on the principles of transparency and trust by involving all the stakeholders. The Bank has a dedicated Compliance Department headed by General Manager, for ensuring regulatory and organization level compliance, across all its businesses and operations. The key functions of this department includes, dissemination of key regulatory updates affecting the various business verticals of the Bank, review of processes from a regulatory compliance perspective, provide guidance on compliance-related matters, among others.
34. COMPLIANCE WITH THE PROVISIONS OF COMPANIES ACT, 2013
The Bank has complied with all the provisions of the Companies Act, 2013 and the Rules made thereon, to the extent that are applicable to the Bank, except for two instances that the entry of Board Meeting in the Minutes book were made beyond the period of 30 days, pursuant to the provisions of Section 118 of Companies Act, 2013. The Bank is in the process of filing an Adjudication application before the Registrar of Companies, Chennai for the said violation.
35. INTERNAL AUDITORS
The Bank is required to appoint an internal auditor as per the requirements of Section 138 of the Companies Act, 2013, who should either be a chartered accountant or a cost accountant, or such other professional as may be decided by the Board to conduct internal audit on the functions and activities of the Bank.
The Bank has an internal audit department and it engages a practicing charted accountant as concurrent auditor to conduct the audit of the branches as per the Reserve Bank of India''s guidelines.
The internal audit department of the bank conducts audit of the various departments and branches on a periodical basis and findings of the audit are being placed before the Audit Committee of the Board. Considering the above, the Bank has not appointed any third party internal auditor as mandated under section 138 and rule 13 of Companies (Accounts) Rules, 2014 to conduct internal audit of the branches and various department of the Bank
36. STATUTORY AUDITORS
Pursuant to provisions of Section 139 of the Companies Act, 2013 read with Section 30(1A) of the Banking Regulation Act, 1949, the Board of Directors have recommended the appointment of M/s.Sundaram & Srinivasan, Chartered Accountants, Chennai (Firm Registration No. 004207S) and M/s. Chandran & Raman, Chartered Accountants, Chennai (Firm Registration No. 000571S) as the Joint Statutory Central Auditors of the Bank for the financial year 2024-25. The Reserve Bank of India vide its letter dated 26/06/2024 has approved the same, subject to the approval of members at the Annual General Meeting.
The proposed Auditors have confirmed their eligibility to be so appointed in terms of Section 141 of Companies Act, 2013.
37. COMMENTS ON AUDITORS'' REPORT
The Notes on Accounts and the Significant Accounting Policies referred to in the Auditor''s Report and forming part of the annual accounts and the references made by the Auditors in their Report are self-explanatory. The Auditors have not made any observations or adverse comments warranting any explanation on the part of the Board as referred to in Section 134 (3) (f) of the Companies Act, 2013.
38. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS
During the year under review, the Auditors have reported one instance of fraud committed in the Bank by its officers or employees to the Audit Committee of the Board under section 143 (12) of the Companies Act, 2013
39. SECRETARIAL AUDIT
The Bank had appointed M/s. M.Alagar & Associates, Practicing Company Secretaries, Chennai, as the Secretarial Auditor to conduct the Secretarial Audit of the Bank for the FY 2023-24. The report of the Secretarial Auditor is enclosed as Annexure 1.
The Secretarial Auditor has made the following observations and your directors would like to submit the response to the observations as below;
1. It is observed that the Bank has not appointed part time Non- Executive Chairperson (PTC) in compliance with Section 10B of Banking Regulation Act 1949.
The Comments made by the Secretarial Auditor are selfexplanatory in nature and does not require separate response from the Bank.
2. During the Audit period, we observed that in two instances that the entry of Board Meeting in the minute''s book were made beyond the period of 30 days.
Your Bank is in the process of filling an Adjudication application before the Registrar of Companies, Chennai for the said violation.
3. We observed that the Bank has not transferred the shares and dividends pertaining to final (financial year 2009-13) and interim dividend (2nd Interim 2015-16 and 1st Interim 2016-17) to the Fund in respect of which dividend has not been paid or claimed for Seven consecutive years or more, as required under Section 124 (6) of the Companies Act, 2013 and Rule 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. Further, during our audit we were informed that based on instructions from the directors the matter was referred to RBI for their guidance.
The Comments made by the Secretarial Auditor are selfexplanatory in nature and does not require separate response from the Bank.
4. The Reserve Bank of India (RBI) vide its letter dated March 19, 2024, imposed a monetary penalty amounting to Rs.1,31,80,000/- for the following non-compliances (i) Failure to benchmark the interest rate on certain floating rate loans to MSMEs to an external benchmark lending rate; (ii) Adoption of multiple benchmarks within the same loan category; (iii) Failure to price certain floating rate loans with reference to actual benchmark rate applicable to those loans and (iv) False reporting of external rating of certain borrowers to CRILC, However the bank has made the payment of Rs. 1,31,80,000/-against the alleged non-compliance on March 28, 2024.
Your Bank has taken necessary steps to ensure compliance with regulatory guidelines as amended from time to time and implemented SOPs to avoid such instances in future. Your Bank strives for adopting the best corporate governance practices.
40. ANNUAL SECRETARIAL COMPLIANCE REPORT:
The Bank has undertaken an audit for the Financial Year ended March 31, 2024 for all applicable compliances as per SEBI Listing Regulations and Circulars / Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by M/s. M.Alagar & Associates, Practicing Company Secretaries, Chennai, has been submitted to the Stock Exchanges and is enclosed as Annexure 2 to this Directors'' Report.
41. COMPLIANCE TO SECRETARIAL STANDARDS
The relevant Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) and adopted by MCA have been complied by the Bank except for the instance mentioned in point no.39.
42. FUNDING SOURCES OF RENEWABLE ENERGY (CONSERVATION OF ENERGY)
The Bank has been supporting and financing various activities for development of alternative energy generation. The Bank recognizes wind and solar energy as main sources of best renewable and pollution free energy throughout the year and considers funding these initiatives as its contribution towards the worldwide effort against global warming. Accordingly, bank encourages setting up of solar panels by financing solar energy generation plants. The Bank has also taken various steps to conserve energy in its own premises, by establishing solar plant in 18 branches.
43. CORPORATE SOCIAL RESPONSIBILITY
The Bank has constituted a Corporate Social Responsibility (CSR) Committee and has also adopted a CSR Policy. The CSR Policy is available on the Bank''s website. The disclosure in respect of the CSR activities of the Bank as required to be made as per the Companies (Corporate Social Responsibility) Rules, 2014 is given in Annexure 3.
As per Section 135 of the Companies Act 2013 and Rules thereunder, the total amount to be spent is ?22.10 crores for the Corporate Social Responsibility activities for the financial year 2023-24 and the bank has spent ?22.10 crores.
44. ANNUAL RETURN
Annual Return Pursuant to provision of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, the Annual Return as at March 31, 2024 is available in the Bank''s website. The same can be accessed at https://www.tmb.in/pages/ Annual-Return.
45. DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAl) ACT, 2013
The Bank has zero tolerance towards any act on the part of any executive / employee which may fall under the ambit of ''Sexual Harassment'' at workplace and is fully committed to uphold and maintain the dignity of every woman working in the Bank. The Policy provides for prevention and protection against sexual harassment of women at workplace and for redressal of such complaints. All the employees (permanent, contractual, temporary or trainee) are covered under this policy. Your Bank has constituted internal committee for redressal of complaints under the PoSH Act, 2013.
Number of complaints pending as at the beginning of the financial year - Nil
Number of complaints filed during the financial year - Nil
Number of complaints pending as at the end of the financial year - Nil.
46. TRANSFER OF EQUITY SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) AUTHORITY / UNCLAIMED DIVIDENDS.
The details of the equity shares / unclaimed Dividends transferred to Investor Education and Protection Fund (IEPF) Authority are available in the Corporate Governance report forming part of this report.
47. STRICTURES AND PENALTIES
During the year under review, the following penalties were imposed on the Bank:
1. RBI has imposed penalty of gT,90,000/- under the scheme of penalty for Non-replenishment of ATM.
2. Based on the supervisory findings, emanated from the statutory inspections for Supervisory Evaluation (ISE) for the Financial Year 2022, RBI vide its letter dated March 19, 2024, imposed a monetary penalty amounting to Rs.1,31,80,000/- on the Bank, for non-compliance with certain directions issued by RBI. The said penalty amount was paid by the Bank on March 28, 2024.
48. REQUIREMENT FOR MAINTENANCE OF COST RECORDS
The cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013, are not required to be maintained by the Bank.
49. MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion & Analysis as required under the Listing Regulations is enclosed as Annexure 4, forming part of this Report.
50. PARTICULARS OF EMPLOYEES AND REMUNERATION:
The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure 5 which forms part of this Report.
51. CORPORATE GOVERNANCE REPORT AND CERTIFICATE:
Your Bank is committed to follow the best practice of corporate governance to protect the interest of all the stakeholders of the Bank, viz. shareholders, depositors and other customers, employees and the society in general and maintain transparency at all levels.
As required under Regulation 34 (3) read with Schedule V (C) of the Listing Regulations, a report on Corporate Governance and the certificate as required under Schedule V (e) of the
Listing Regulations from M/s. M.Alagar & Associates, Practicing Company Secretaries, Chennai, regarding compliance of conditions of Corporate Governance are given in Annexure 6 and Annexure 7 respectively, forming part of this report.
52. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:
The ''Business Responsibility and Sustainability Report'' (BRSR) of your Bank for the Financial Year ended March 31, 2024 is attached as Annexure 8 as required under Regulation 34(2)(f) of the Listing Regulations. Your Bank continues to execute strong ESG proposition by working with all relevant stakeholders as well as in its own operations.
53. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE BANK FROM THE END OF THE FINANCIAL YEAR AND TILL THE DATE OF THIS REPORT
There are no material changes and commitments affecting the financial position of the bank.
54. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND BANK OPERATIONS IN FUTURE
During the Financial Year 2023-24, no significant and material orders were passed by the Regulators or Courts or Tribunals against the Bank which impacts its going concern status and Bank''s operations in future.
55. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE-TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF
Being Banking Company, the aforesaid provision is not applicable to your bank.
56. INSIDER TRADING COMPLIANCES
In compliance with the SEBI (prohibition of Insider Trading) Regulations, 2015, as amended, your bank has a comprehensive "Code of Conduct for prevention of Insider Trading" which lays down guidelines and procedures to be followed and disclosures to be made while dealing in securities of the Bank
57. ACKNOWLEDGMENT
The Board acknowledges and places on record its appreciation for the valuable patronage, co-operation and goodwill received by your Bank from customers, fellow bankers, financial institutions and Non-Resident Indians. The continued support and co-operation of the employees and customers have been a constant source of strength for the Bank in all its endeavours.
The Board also acknowledges and places on record its gratitude to Reserve Bank of India, SEBI, NSE, BSE and other regulatory authorities, the Government of India and State Governments for their continued guidance and support.
The staff members of the Bank have been working with dedication and deep commitment. Teamwork at every level, well supported by appropriate technology architecture, has been the hallmark of the Bank''s performance. The Board places on record its appreciation for the excellent contribution made by each and every member of the staff, who has made our achievements possible through the years, and is confident that such contribution from the staff will continue in the coming years.
58. CONCLUSION
This year has been a very momentous year for the Bank. The Bank has celebrated its 102nd year of existence, which in itself is a wonderful achievement.
Banks in general and your Bank in particular are ready to support the MSME sector by implementing the schemes introduced by the government and the regulator. The Bank has moved cautiously forward in growing its business and ensuring that the Bank reports good financials.
Your Bank looks to the future with great hope and confidence born out from the fact that the Bank has weathered many storms in its journey of hundred years and with the experience gained, will be able to look forward to the next 100 years with renewed strength, stemming from the trust of the customers and protected by the loyalty of its staff.
Place: Thoothukudi Date : August 29, 2024
For and on behalf of the Board of Directors
Sd/- Sd/-
Salee S Nair . ''
MD & CEO Director
Mar 31, 2023
Your Board of Directors have great pleasure in presenting the 101st Annual Report along with the Audited Balance Sheet as on March 31, 2023, the Profit and Loss Account and the Cash Flow Statement for the year ended March 31, 2023.
1. BUSINESS PERFORMANCE
The Bank had a successful year in its 101st year of operations and recorded satisfactory performance. During the year under review, the total business increased from ?78,424.65 crores to ?85,056.18 crores registering a growth of 8.46%. The gross NPAs and net NPAs both decreased in absolute terms and also as a percentage of total advances over the previous year.
PERFORMANCE HIGHLIGHTS:
⢠Operating profit increased from ?1,516.47 crores to ?1,572.84 crores ( 3.72%).
⢠Net profit increased from ?821.92 crores to ?1,029.26 crores ( 25.23%).
⢠Deposits of the Bank increased from ?44,933.11 crores to ?47,766.49 crores ( 6.31%) during the year.
⢠Gross Advances increased from ?33,748.17 crores to ?37,582.11 crores ( 11.36%) during the year.
⢠Net Advances increased from ?33,491.54 crores to ?37,289.69 crores ( 11.34%) during the year.
⢠Gross NPAs decreased from 1.69% to 1.39%.
⢠Net NPAs decreased from 0.95% to 0.62%.
⢠Provision Coverage Ratio (PCR) increased from 87.92% to 90.90%.
The total income increased by ?64.03 crores during the year from ?4,646.12 crores in the previous year to ? 4,710.15 crores during the year under review ( 1.38%).
Interest income increased from ?3,833.86 crores to ? 4,081.04 crores. Other income decreased from ?812.26 crores to ?629.11 crores during the current year. Increase in total expenditure was at ?7.64 crores. The total expenditure increased from ?3,129.67 crores during the previous year to ?3,137.31 crores during the current year. Earnings per share increased from ?57.67 to ?68.06, the book value of the share increased from ?374.41 to ?437.53.
2. PROFIT AND APPROPRIATION
The net profit stood at ?1,029.26 crores for the financial year ended 31.03.2023 after making all necessary provisions under various categories as per the prudential norms prescribed by Reserve Bank of India. The appropriation out of the profit earned for the financial year 2022-23 are as under:
|
TRANSFERRED TO |
f IN CRORES |
|
Profit and Loss account opening balance |
226.32 |
|
Less: Final Dividend for 2021-22 @ ?10/- per share |
142.51 |
|
Less: Interim Dividend for 2022-23 @ ?5/- per share |
79.18 |
|
Add: Net profit during the year 2022-23 |
1029.26 |
|
Available for appropriation |
1033.89 |
|
Statutory Reserve |
309.00 |
|
Special Reserve u/s 36(1)(viii) of IT Act, 1961 |
50.00 |
|
Investment Fluctuation Reserve |
41.60 |
|
Capital Reserve |
- |
|
Transfer to General Reserve |
510.00 |
|
Balance carried over to next year |
123.29 |
|
1 1 |
|
|
TOTAL |
1033.89 |
3. DIVIDEND
Your Directors have recommended the payment of a final dividend at the rate of ?5.00 (Rupees Five only) per equity share of the face value of ?10/- each (50%) for the year ended March 31, 2023. Dividend pay-out is in accordance with the Bank''s dividend distribution policy (https://www.tmb.in/regulatory-policies.aspx), RBI guidelines and will be payable subject to approval of members at the ensuing Annual General Meeting and deduction of tax at source, to those Shareholders whose names appear in the Register of Members as on the Record date August 29, 2023.
In addition to the above, the Board of Directors of the Bank during the reporting period, in its meeting held on Tuesday, February 14, 2023, had declared an Interim Dividend of ?5/- (Rupees five only) per share, i.e., 50% on the fully paid-up equity shares of ?10/- each, for the financial year 2022-2023. Pursuant to Section 91 of the Companies Act, 2013 and Regulation 42 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the record date for the dividend was fixed as Friday, February 24, 2023, and the dividend amount was paid to the shareholders on March 06, 2023.
4. CAPITAL AND RESERVES
The Bank''s issued and paid-up capital was ?158.35 crores as on March 31, 2023.
During the Financial Year 2022-23, your Bank raised capital of ?807.84 crores by way of Initial Public Offering (IPO). 1,58,40,000 Equity Shares of ?10/- each were issued at a premium of ?500/-each. The capital plus reserves of the Bank has moved up from ?5,335.71 crores to ?6,928.35 crores on account of balance of profit transferred from Profit and Loss Account and the Capital raised through IPO including the securities premium during the current financial year.
5. ISSUE OF EQUITY SHARES
Your Bank had issued by way of Initial Public Offering (IPO). 1,58,40,000 Equity Shares of ?10/-each at a premium of ?500/- each. The allotment of shares was made on 12.09.2022 and your Bank''s shares were listed in both the exchanges i.e., BSE & NSE on 15.09.2022.
The total proceeds of IPO of ?807.84 Crores after deduction of offer related expenses, has been fully utilized for the purpose for which these proceeds were raised i.e., towards augmentation of our Bank''s Tier-I capital and there was no deviation.
6. EARNINGS PER SHARE (EPS) AND BOOK VALUE
The earnings per share stood at ?68.06 (basic) and ?68.06 (diluted) for the financial year ended March 31, 2023. This was ?57.67 (Basic) and ?57.67 (diluted) during the previous year. The book value per share has further improved to ?437.53 as on March 31, 2023, as against ?374.41 during the previous year.
7. CAPITAL ADEQUACY
During the year the bank has raised fresh capital ?785.07 crores (share capital share premium - offer related expenses) and profit accretion to capital funds during the year amounted to ?950.08 crores which raised the regulatory capital of the Bank to ?7237.55 crores. The Capital to Risk Weighted Assets Ratio (CRAR) stood at 26.26 % (as per Basel III) as on March 31, 2023, as against the minimum required level of 11.50% (including the Capital Conservation Buffer) stipulated by Reserve Bank of India. The CRAR consisted predominantly of Common Equity Tier I (CET) which was 24.61 % out of 26.26 % of CRAR.
8. DEPOSITS
The aggregate Deposits of the Bank as on 31.03.2023 stood at ?47,766.49 crores, registering a growth of 6.31% over ?44,933.11 crores as on 31.03.2022. The interest rates for deposits were kept aligned with the prevailing trends in the Banking Industry.
Being a Banking Company, the disclosures required as per Rule 8(5)(v) of Companies (Accounts) Rules, 2014 are not applicable to your bank.
9. ADVANCES PORTFOLIO - MANAGEMENT OF ASSETS AND DEVELOPMENT OF BUSINESS
The Bank continued its lending activities in conformity with its Board approved Policies and Guidelines of the Reserve Bank of India. The Gross Advances of the Bank increased from ?33,748.17 crores as on 31.03.2022 to ?37,582.11 crores as on 31.03.2023. The increase in advances is mainly due to the growth recorded in Retail, Agricultural and MSME advances.
The Bank continued its thrust on lending to Priority Sectors (PS) including Agriculture and Micro and Small Enterprises comprising both Manufacturing and Service Enterprises. The level of advances to Priority Sectors stood at ?27,094.14 Crore as on March 31st, 2023. The Total PS Advances (Net of PSLCs Sold) at ?20,794.87 Crore constitutes 75.59% of ANBC as on 31/03/2022, as against the regulatory minimum requirement of 40%. The achievement of PS Advances, based on the Quarterly Average level of PS Advances/Quarterly Average ANBC is at 69.08%.
Agricultural Advances reached ?11,562.43 Crore as on March 31st, 2023. The Total Agricultural Advances (Net of PSLCs Sold) and including RIDF and other qualifying investments for Priority - Agriculture constitutes 28.18% of ANBC as on 31/03/2022, as against the regulatory minimum requirement of 18%. The achievement of Agriculture Advances, based on the Quarterly Average level of Agriculture Advances/Quarterly Average ANBC is at 24.61%.
Total advances to the weaker sections stood at ?8,283.00 Crore as on March 31st, 2023. The Total advances to Weaker Sections (Net of PSLCs Sold) at ?5468.00 Crore represents 19.88% of the ANBC as on 31/03/2022, as against the regulatory minimum requirement of 11.50%. The achievement of Advances to the weaker section, based on the Quarterly Average level of Advances to weaker section/Quarterly Average ANBC is at 18.06%.
Similarly, the bank achieved the mandatory targets for the sub-sectors like Loans to Small and Marginal Farmers (at 13.57% as on 31/03/2023 based on the ANBC as on 31/03/2022, as against the regulatory minimum requirement of 9.50%). The achievement of Advances to the Small and Marginal Farmers, based on the Quarterly Average level of Advances to the Small and Marginal Farmers/Quarterly Average ANBC is at 13.00% and Advances to Micro Enterprises (at 25.73% as on 31/03/2023 based on the ANBC as on 31/03/2022, as against the regulatory minimum requirement of 7.50%). The achievement of Advances to Micro Enterprises, based on the Quarterly Average level of Advances to Micro Enterprises/Quarterly Average ANBC is at 25.92%.
Under export credit, the bank achieved a level of ?631.62 Crore as on 31.03.2023 as against ?726.75 Crore achieved as on March 31, 2022, due to underutilization of sanctioned Export limits.
The Bank has sanctioned totally 20,758 No of WCTLs to the tune of ?2674.54 crore as on 31.03.2023 since the inception of the scheme ECLGS. Out of which 2284 number of WCTLs to the tune of ?352.90 crore are sanctioned during the FY 2022-23 under Emergency Credit Guarantee Line Credit Scheme (ECLGS).
During the current year, the bank will strive further to increase the flow of credit to Agriculture, Retail, and MSME Sectors and the Weaker Sections.
The bank has been actively participating in all the initiatives and schemes of the Government of India including Pradhan Mantri Mudra Yojana (PMMY), Dairy Entrepreneurship Development Scheme (DEDS), Pradhan Mantri Awas Yojana (PMAY), Entrepreneurship Development & Employment Generation Scheme (EDEGS), PM Street Vendors Atma Nirbhar Nidhi (PM SVANIDHl) etc. by implementing the same in the Bank.
SALE OF PRIORITY SECTOR LENDING CERTIFICATE (PSLCS):
The Bank has sold PSLCs worth ?6,403.00 crore till 31/03/2023, which fetched an income of ?74.54 crores. In Category-wise, the Bank had sold PSLC-Small & Marginal Farmers for ?2,815 crores, PSLC-Agriculture for ?1,100 crores, PSLC-Micro Enterprises for ?2,288 crores and PSLC - General for ?200 crores as on 31/03/2023.
FINANCIAL INCLUSION:
Under the Financial Inclusion (FI) Programme, the Bank has covered 142 villages as on 31.03.2023. The total Basic Savings Bank Deposit Account (BSBDA) accounts of the bank as on 31st March 2023 stood at 6.99 lakh accounts, with major share of around 5.53 lakh accounts under Small accounts category.
10. INVESTMENTS AND TREASURY OPERATIONS
During the financial year ended March 31st, 2023, the Bank achieved a turnover of ?26,836.37 crore in trading operations, resulting in a net profit of ?6.96 crore, as against ?72.36 crore in the previous year.
The net investments of the Bank stood at ?14,156.03 crores as on March 31, 2023, as against ?13,035.47 crores as at the end of the previous year. The Investment-to-Deposit Ratio of the Bank was 29.64%, as against 29.01% at the end of the previous year.
The average realized yield on the investment portfolio during the year stood at 6.85% as against 6.74% in the previous year. The income earned during the year from investments, comprising of interest income and dividend income excluding income from RIDF was ?904.50 crore as against ?822.46 crore in the previous year.
Particulars of Loans, Guarantee, or investments
The disclosures regarding particulars of loans, guarantee given and securities provided is exempt under the provisions of Section 186(11) of the Companies Act, 2013 since it is a banking company.
11. FOREIGN EXCHANGE BUSINESS
Foreign exchange business during the year 2022-23 in terms of actual inflows was ?11,706.39 crore (Previous Year ?11,612.56 crore) whereas Foreign Exchange outflows was ?8,740.68 crore (previous year ?7,013.11 crore)
The total merchant turnover of the bank for the year 2022-23 was ?20,447.06 crores against ?18,625.67 crore during the previous year 2021-22. The profit on foreign exchange business for the year 2022-23 was ?35.97 crores against ?37.32 crores during the previous year 2021-22.
Your Bank has correspondent relationship with 407 overseas banks by exchange of bilateral keys under SWIFT (Society for Worldwide Interbank Financial Telecommunication). It facilitates smooth and fast flow of communication in the international business. The SWIFT arrangement has enabled the Bank to give timely and efficient service to its NRI customer.
During the year under review, on 03.08.2022, your Bank has established a Forex Processing Center [fpc] for centralisation of Foreign Exchange operations, 100 numbers of "C" Category branches were upgraded and covered under the FPC. With this, the total number of branches that deals in foreign exchange business has been increased to 139. Our Bank has the necessary infrastructure to render fast and efficient service relating to inward remittance and for crediting the beneficiaries accounts on receipt of the foreign currency funds in our Nostro accounts abroad.
Your Bank is committed to increasing the Forex Business activities significantly for adding good revenues to the bank in the coming years. Your Bank has provided online Electronic Trading Platform named as TMBFXBRIDGE for concluding exchange rates in 39 old B Category branches & FPC and direct view access to 47 of our forex customers. FX-Retail platform is provided to 18 of Forex customers.
12. BRANCH NETWORK
During the year under review, your bank has added 21 new branches and the branch network of the bank has been increased to 530 branches. In addition to that, the bank has added 50 new ATMs / CRMs and 12 new e-lobbies. The Bank''s ATM and alternate delivery channel network stood at 1,149 ATMs, 324 CRMs, 113 e-lobbies, covering 17 States and 4 Union Territories.
13. HUMAN RESOURCES DEVELOPMENT
As on 31st March 2023, the Bank''s total staff strength is 4,505 (including 37 contract employees) consisting of 2,056 Officers, 1,760 Clerks and 689 Supporting Staffs. During the year under review, 192 regular employees and 20 contract employees were recruited and 402 employees were promoted.
The Business per employee has increased from ?17.75 crore to ?19.04 crore in the FY 2022-23.
The Bank''s Staff Training College at Nagercoil had conducted 71 physical training programmes and 5 online (through TMB eSMART) training sessions on in various banking subjects like Credit, Forex, Recovery, Information Security etc. 2,977 staff members had undergone training programmes during the FY 2022-23.
TMB eSMART, an online e-learning Management System was indigenously developed by our Bank to cater the training needs of all staff members. It can be accessed 24x7x365 by our staff members in intranet and internet. Using TMB eSMART, our staff members can learn varied Bank subjects like Credit, Forex, Information Security, KYC etc. To groom our staff members in different facets of Banking, we have 13 TMB Capacity Building exams in various areas like KYC, Credit, Forex, Recovery etc. The online exams are conducted at frequent intervals. During the Financial Year 2022-23, totally 5,487 e-Certificates were issued to the staff members who have successfully completed various exams in capacity building programme.
In addition to the above, your Bank has tied up with reputed training institutions like SIBSTC-Bengaluru (Southern India Banks'' Staff Training College), NIBM-Pune, IIBF- Mumbai, IDRBT, Hyderabad, CAFRAL, etc. 843 staff members were trained in these leading institutions during FY 2022-23.
Industrial relations in the Bank continued to be very cordial during the year with frequent interactions between the management and the Officers'' and Employees'' Associations and various staff welfare activities were undertaken during the year. The Bank continues to lay emphasis on developing the individual skills of its employees and providing a healthy and cordial working environment so as to get maximum contribution from the employees of the Bank.
14. INTER BRANCH ADJUSTMENTS
The Bank has continued to maintain a very good record in internal housekeeping. The core banking solution made it possible for the branches to balance all their accounts and tally balances up to March 31st, 2023. There was also timely submission and scrutiny of the control returns, which was given adequate importance at all levels with necessary follow up.
15. INTERNAL CONTROL AND INSPECTION / AUDIT RISK BASED INTERNAL AUDIT SYSTEM
The bank has put in place an effective and strong Risk Based Internal Audit (RBIA) System. During the financial year 2022-23, RBIA audits were conducted through TMB eTHIC Module in 509 branches (Totally 536 audits) of the bank. Submission of compliance reports and closure of audits are followed up through the respective regional offices. Besides, RBIA was conducted for the following critical Departments (Credit Departments, Risk Management Department, Information Technology Department (Chennai & Thoothukudi) and Central Processing Centre (CPC) - Tirunelveli.
The bank has a proper and adequate internal control system. The bank has standardised operating procedures in monitoring the account operations to have effective internal controls.
Internal Financial Controls of the branches are verified by the statutory branch auditors during their branch audit and covered in the report.
CREDIT AUDIT
During the year under review, Credit Audit has been conducted for 252 borrowal accounts in 122 branches.
CONCURRENT AUDIT SYSTEM
The bank continued to have the system of Concurrent Audit through TMB eTHIC Module, which covered 200 branches and important departments. Concurrent Audit has been recognized as an important tool of internal control and is in force at major branches including 38 ''B'' category branches designated for forex business.
Further concurrent audit is implemented in the following important departments - International Banking Division, Treasury Department, DPS Cell, Chennai Service branch, Forex Processing Centre, Transaction Reconciliation at various divisions of ITD, Accounts Department, Expenses approval of ITD, Establishment Department, Planning and Development & Resource Mobilization Department, Expense approval of all regions, Central Processing Centres at Chennai and Tirunelveli and all the four Currency Chests. Submission of compliance reports and closure of audits are followed up through the respective regional offices / departments.
INFORMATION SYSTEM AUDIT
As per RBI guidelines, Information System audit cell has been established under Inspection Department. Information System audits were conducted at all the 509 branches along with Risk Based Internal Audit, 9 Departments and 12 Regional offices.
Continuous offsite monitoring system (OFMS) is deployed by IS audit cell. Under a software tool-based supervision process, certain key and vital areas are subjected to offsite monitoring.
Every year, critical Information systems deployed in our Bank like Core Banking System, E-Banking, Mobile banking, ATM, RTGS, Treasury, CTS clearing process, Server, SOC, HRMS and network infrastructure etc., are subjected to Information Systems audit by an external auditor.
MANAGEMENT AUDIT SYSTEM
To assess the robustness of the systems and procedures established in various operational units of the Bank and to have an oversight on the effectiveness of the management, various departments at Head Office and all Regional Offices are subject to Management Audit, which was conducted once in every two years.
During the year under review, Management Audits were conducted at 9 Regional Offices (Ahmedabad Region, Bengaluru Region, Chennai Region, Hyderabad Region, Madurai Region, Salem Region, Tirunelveli Region, Thoothukudi Region and Tiruchirapalli Region) and 7 Departments (Legal Department, DPS Cell, RTGS & WUMT Cell, Secretarial Section, Customer Service Cell, CRAPC and Chennai Service Branch).
In addition to the above audit the Bank regularly conducts revenue audit in the branches to monitor revenue leakages.
VIGILANCE
The functions of the vigilance machinery of the Bank are broadly divided into 3 types, viz. preventive, predictive and punitive. The Vigilance Department undertakes a study of the existing procedures and practices prevailing in the organization with a view to modifying those procedures or practices that provide scope for malpractice/fraud perpetrated by the staff members and also finding out the causes of delay in reporting and the points at which the delays occur and devising suitable steps to minimize delays at different stages. To educate the employees of the Bank, the Vigilance Department brings out various fraud awareness circulars and conducts training programmes periodically. As a part of creating awareness, ''Vigilance Day'' is observed on the 31st October every year.
The Vigilance Department plays a vital role in the implementation and follow-up of the directives and guidelines issued from time to time by Reserve Bank of India. Upon the directions of RBI, Vigilance Department has also formulated/implemented a Vigilance Policy from 13th July 2011 and the Policy is being reviewed every year.
VIGIL MECHANISM
The Bank has implemented the Whistle-blower cum Protected Disclosure Policy, intended to promote the participation of employees at all levels and detection of corruption, misuse of office, criminal offences, suspected/ actual fraud, failure to comply with the rules and regulations suspected/actual fraud, failure to comply with the rules and regulations prescribed by the Bank and any events/acts detrimental to the interest of the Bank, depositors and the public resulting in financial loss/operational risk, loss of reputation etc. Further, the mechanism adopted by the Bank encourages the Whistle Blower to report genuine concerns or grievances. It provides adequate safeguards against Whistle Blower''s victimization for those who avails such mechanism and offers direct access to the Chief of Internal Vigilance (CIV). Further, there was no occasion where a person was denied access to the Audit Committee of the Board. The details of the Whistleblower cum Protected Disclosure Policy are posted on the Bank''s website and available at the link: https://tmb.in/regulatory-policies.aspx.
16. CUSTOMER SERVICE
Customer service is an important part of maintaining on going customer relationship, which is a key for continuous business growth and to retain the customer. The Bank is well known for its good, courteous and effective service to customer and constantly endeavouring to meet the expectations of the modern-day tech-savvy customers, by introducing new and innovative products for seamless digital experience.
As per the provisions of Internal Ombudsman Scheme 2018, Dr.D.Sivaguru was appointed as the Internal Ombudsman for our Bank for a period of three years, whose tenure came to an end on 29.05.2022. As per the revamped Reserve Bank - Integrated Ombudsman Scheme, 2021, with the existing guidelines on appointment of Internal Ombudsman, Mr.K.Selvaraj was appointed as the Internal Ombudsman for our Bank and he joined duty on 13.06.2022. The Internal Ombudsman examines customer complaints which are in the nature of deficiency in service on the part of the bank, that are partly or wholly rejected by the bank. As the bank shall internally escalate all complaints, which are not fully redressed, to the Internal Ombudsman, the customers need not approach the Internal Ombudsman directly.
17. TECHNOLOGY ADVANCEMENT
Your Bank is taking various steps to provide technology-enabled products and services to customers by adopting latest technology. Banking Services are extended to our customers through Branches and ATMs by using multiple network technologies such as MPLS, Leased Line, VSAT, GSM and VPNoBB with redundant connectivity. In addition to traditional Branches/ATMs, the digital services are seamlessly offered to our customers without any disruption through various delivery channels viz. Internet Banking, Mobile Banking, AEPS, IMPS, UPI, Point of Sale terminals, Cash Deposit Kiosk, Passbook Printing Kiosk, WhatsApp Banking, other digital services such as CTS Positive Pay System, BBPS in Internet Banking, Green PIN in Internet Banking, Rupay Select Card, Enhanced Card Security for Debit Card Management, e-Mandate Authentication using Debit Cards and Internet Banking, Video KYC Account opening, etc are also made available to our customers.
The Bank has 1,473 ATMs and CRMs as on 31st March 2023.
The availability of the services of all the alternate delivery channels to our customers is ensured by way of active monitoring and attending to outages if any, instantly.
CORE BANKING:
Your Bank has implemented "Finacle", the Core Banking Solution in all our its branches. Core Banking Solution (Ver.6.x) was implemented during 2001-02. During March 2014 core banking solution was upgraded to version 7.0.25 and its upgradation to latest version 10.2.25 was carried out during August 2022.
Your Bank has upgraded network bandwidth of both primary and secondary links at branches and other offices to provide uninterrupted banking services to its customers.
INTERNET BANKING:
Your Bank had introduced "Internet Banking facility" to the customers during November 2008. Currently the e-Banking facility has been extended to all our customers. We have also introduced Corporate Net banking facility for our customers with maker/checker facility to bring in more security to the transaction initiated by corporate customers. We have also tied up with multiple Payment Gateway service providers for extending utility bill payment services to our customers.
Facilities provided to customers through Internet Banking include RTGS, NEFT, IMPS, opening of Deposit Accounts, eCommerce transactions, online tax payment, online bills and utility services payment, scheduled payments, etc. One-time password (OTP) is provided as dual factor authentication to carry out transactions in a secured manner. We have introduced Captcha in our Internet Banking application to differentiate login attempts made by Humans and Robotic software which would help to avoid DDoS attacks. Payments to TMB Credit Card dues and Prepaid Card Top-up facility are also provided through Internet Banking. Also, there are other facilities like offline statement, management of limit for Debit Card etc. provided through Internet Banking.
MOBILE BANKING
Mobile Banking facility has been enabled in both Android and iOS. Mobile Banking registrations can be done at any of our TMB ATMs and through Branches. By using mobile banking facility, customer can perform SB/CA/loan/deposit inquiry, transfer of funds (Within TMB/NEFT/IMPS/ RTGS), Deposit Opening, TNEB payment, Mobile Recharge, Cheque Book Issuance, ATM Card Blocking, Cheque Status Inquiry, etc., In addition, certain features like Transaction limit setting, Credit Card details and Payment Dues, Debit Card Blocking, Beneficiary Management are available for the Mobile Banking Customers.
UPI
Unified Payment Interface (Acquirer and Issuer) service is available for our customers. They can download various UPI Certified Third Party applications like BHIM for both Android and iOS. Customers can transfer funds, initiate Online Payments, pay using QR Codes, pay in BBPS (Bill Payments), initiate IPO transactions, UPI recurring mandate. Now we are issuing QR codes to Merchants also.
SERVER INFRASTRUCTURE
Bank''s Server infrastructure is maintained at primary (DC - Chennai) and secondary (DR Site - Bengaluru) co-located Data Centres. The Bank is having Physical, Virtual, Hyper Converged Infrastructure and dedicated Storage devices.
Hyper Converged infrastructure installed at our DC and DR locations, which is a three-node cluster arrangement, provides high availability, high scalability, cost effective, improved workload performance and occupies less space.
Storage Infrastructure was upgraded from SAS to Flash storage to get high performance in Core Banking Solution (Finacle). It is scalable for our future needs and high availability.
SECURITY INFRASTRUCTURE
Your Bank is having Endpoint Detection and Response (EDR) system to protect our Endpoints from Malware and Ransomware attacks. Also, we have implemented Data Loss Protection (DLP) which facilitates to block/alert transmission of data based on sensitive keywords across intra/ inter network infrastructure. We have adequate Firewall, Intrusion Prevention System (IPS) and Intrusion Detection System (IDS) to protect our network from external threats accessing through internet.
Further, Bank has setup Security Operation Center (SOC) under the direct control of Information Security Department where the following tools/components are installed to monitor SOC operations.
1. Security Incident & Event Management (SIEM)
2. Database Activity Monitoring (DAM)
3. Privileged Access Management (PAM)
4. Web Application Firewall (WAF)
During 2022-23, we have completed the following major projects:
1. UPI Acquirer - Accessing UPI service by our customer through our Mobile Banking application
2. Disaster Recovery Site Shifting (Business Continuity)
3. Core Banking Solution Upgradation to Finacle V10.2.25
4. Full-fledged Call Centre at Madurai
5. Retail Loan account opening through Lend Perfect Application
6. TAB Banking Application for on boarding new customers
7. DLP (Data Loss Prevention) Solution
8. New Cloud based E-Mail Solution
9. Network Monitoring Solution
10. Load Balancer to handle high volume of Digital transactions
18. PRODUCT INNOVATION, NEW PRODUCTS AND SERVICES MAJOR INITIATIVES DURING 2022-23
⢠Launched new Current Account scheme TMB Agaram
⢠Launched various Term Deposit Schemes with attractive interest rates for the short time period
⢠TMB@100 (1000 Days)
⢠TMB Celebration 555 (555 Days)
⢠TMB400 (400 Days)
⢠TMB300 (300 Days)
⢠Tied up with Max Life Insurance Company Limited, Bajaj Allianz Life Insurance Company Limited, Chola MS General Insurance Company Limited and Kotak General Insurance Company Limited for insurance products.
19. AWARDS / RATINGS OBTAINED BY THE BANK
Your Bank has bagged the following awards during the year under review:
⢠Three awards at Atal Pension Yojana Felicitation and Strategic Review Programme conducted on May 2022.
1. Old age Freedom fighters award of excellence (August - October 2021)
2. Outperformers (Q3, 2021-22)
3. Citizen''s Choice Award for Best performing Bank, in the state of Tamilnadu
⢠Two awards in the name of "Numero Uno Exemplary Award of Par Excellence" from PFRDA for achieving the highest performance in Private Sector Bank category during the period from 01-04-2022 to 30-09-2022.
⢠The "Best Small Indian Bank" award in the Best Banks survey for the year 2022 done by Business Today-KPMG (BT-KPMG Best Banks Survey)
⢠The "Best Bank at National Level" for the year 2022, under other than large Private Sector banks category.
⢠The ASSOCHAM 9th MSME Excellence Award "Best MSME Bank - Runner Up".
EXTERNAL RATING
During the financial year 2022-23, CRISIL renewed the rating for the Certificate of Deposit programme of the Bank for ?1,000 crores and reaffirmed the "A1 " (indicating "Very Strong" rating).
20. RISK MANAGEMENT
Bank has a proactive approach towards Risk Management. Its risk philosophy involves developing and maintaining its banking activities within its risk appetite and regulatory framework.
The Risk Management Architecture of the Bank comprises of an Independent Risk Management Organizational structure at the corporate level, Risk Management Policies, Risk Measurement Tools and Risk Monitoring and Management Systems. The Bank has a well-defined risk appetite statement and all the banking functions are dovetailed to the risk appetite statement.
The Board of Directors of the Bank is primarily responsible for laying down risk parameters and establishing an integrated risk management and control mechanism. The Board of Directors is supported by a Sub-Committee of the Board known as the Risk Management Committee of the Board (RMCB), which in turn is aided by the Asset Liability Committee (ALCO) and the Risk and Asset Liability Management Committee of Executives (RMCE). The executive level Committees are headed by the MD & CEO of the Bank. The Bank''s RMCB reviews its Risk Management policies and recommends to the Board for approval. The Board also sets out limits, taking into account the risk appetite of the Bank and the goals set.
The bank''s liquidity ratios, i.e. LCR & NSFR are also above the minimum stipulated level indicating comfortable position with regard to liquidity risk.
Your Bank has been proactively conducting internal assessment of adequacy of capital, liquidity ratios and leverage ratios in accordance with Basel-III standards. The Bank''s capital position is in compliance with Basel-III expectations and well above the minimum requirements.
21. BOARD OF DIRECTORS
The Bank''s Board as on March 31st, 2023 comprises of 13 Directors and the composition of Board are given below:
|
S.NO |
NAME |
SECTOR REPRESENTED / |
|
AREA OF SPECIALIZED KNOWLEDGE |
||
|
1 |
Shri S. Krishnan |
Majority - Banking |
|
2 |
Shri A. Niranjan Sankar |
Minority sector |
|
3 |
Shri P.C.G. Asok Kumar |
Majority-SSI |
|
4 |
Shri S.R. Ashok |
Minority |
|
5 |
Shri D.N. Nirranjan Kani |
Minority |
|
6 |
Shri C. Chiranjeeviraj |
Majority sector (Accountancy as well as Finance) (Independent Director) |
|
7 |
Smt S. Ezhil Jothi |
Majority - Corporate Law (Independent Director) |
|
8 |
Shri B. Vijayadurai |
Majority - Accountancy (Independent Director) |
|
9 |
Shri K. Nagarajan |
Majority - Law, Agriculture and Rural economy (Independent Director) |
|
10 |
Shri B. Prabaharan |
Minority sector (Independent Director) |
|
11 |
Shri B.S. Keshava Murthy |
Majority - Banking (Independent Director) |
|
12 |
Shri S.B. Suresh Kumar |
Additional Director, RBI |
|
13 |
Shri C.S. Ram Kumar |
Additional Director, RBI |
All Directors, other than Managing Director and CEO, are non-executive Directors of the Board. The details of Directors are available in the Corporate Governance report, which forms part of this report.
The details of directors or key managerial personnel who were appointed or have resigned during the year as mentioned in the Corporate Governance Report.
22. THE STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUBSECTION (6) OF SECTION 149
Your bank has received necessary declarations from all the Independent Directors under Section 149(7) read with Section 149(6) of the Companies Act, 2013 and Regulation 25(8) read with Regulation 16(1)(b) of the SEBI LODR,they meet the criteria of independence laid down thereunder.
23. WOMAN DIRECTOR
In terms of the provisions of Section 149 of the Companies Act, 2013, the Bank has appointed Smt. S. Ezhil Jothi (DIN: 07772888) as Woman (Independent) Director on the Board of the Bank.
24. DETAILS OF SUBSIDIARIES AND ASSOCIATES
Your bank does not have any subsidiaries or Associates or Joint Ventures for the financial year ended March 31, 2023.
25. CHANGE IN THE NATURE OF BUSINESS
During the Financial year ended March 31, 2023, there is no change in the nature of business of the Bank.
26. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) read with Section 134 (5) of the Companies Act, 2013, it is hereby confirmed that:
a. In the preparation of the annual accounts for the financial year ended March 31st, 2023, the applicable accounting standards had been followed along with proper explanation relating to material departures;
b. The Board of Directors have selected the accounting policies and applied them consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year 2022-23 and of the profit of the Bank for that period.
c. The Board of Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;
d. The Board of Directors have prepared the annual accounts for the financial year ended on March 31st, 2023, on a going concern basis;
e. The Board of Directors have laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively.
f. The Board of Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
27. DETAILS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review, the bank has not entered into any significant material transactions with related parties, which could lead to potential conflict of interest, other than transactions entered into in the ordinary course of business and at arm''s length basis. Hence, the disclosure in Form AOC-2 is not applicable The policy on Related Party Transactions is placed on the Banks'' website. https://www.tmb.in/regulatory-policies.aspx.
28. BOARD LEVEL PERFORMANCE EVALUATION
Pursuant to Section 134(3)(p) of the Companies Act, 2013 and Regulation 17 of SEBI LODR Regulations, 2015 and other applicable provisions, , the Board has carried out annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.
The NRC has defined the evaluation criteria and procedure for the Performance Evaluation process for the Board, its Committees and Directors.
During the year under review, feedback was sought by way of structured questionnaires and evaluation was carried out based on various criteria and the responses received from the Directors.
The criteria for performance evaluation of the Board included aspects such as:
1. Development of suitable strategies and business plans at appropriate time and its effectiveness
2. Implementation of robust policies and procedures
3. Size, structure and expertise of the Board
4. Oversight of the Financial Reporting Process, including Internal Controls
5. Willingness to spend time and effort to learn about the Company and its business and
6. Awareness about the latest developments in the areas such as corporate governance framework, financial reporting, industry and market conditions.
The criteria for performance evaluation of the Committees included aspects such as:
1. Discharge of its functions and duties as per its terms of reference
2. Process and procedures followed for discharging its functions
3. Effectiveness of suggestions and recommendations received
4. Size, structure and expertise of the Committee
5. Conduct of its meetings and procedures followed in this regard
A separate peer review exercise was carried out to evaluate the performance of MD & CEO. The performance evaluation of the Chairman of the Board was not carried out, as we don''t have a permanent Part Time Non - Executive Chairman.
Further, the Independent Directors, at their exclusive meeting held during the year on 16.03.2023, reviewed the performance of the Board, Non- executive Directors and other items as stipulated under the Listing Regulations.
The performance evaluation of the Independent Directors was carried out by the entire Board, without the participation of Independent Director being evaluated,
29. BANK''S POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION
The Bank has a Board approved Nomination and Remuneration Policy for appointment of Directors and Senior executives of the Bank.
The Bank has also Board approved compensation policy which deals with the compensation & benefits of the Managing Director & CEO and senior executive of the Bank.
As a Banking company, the Bank is required to have not less than fifty-one percent of its Directors, fulfilling the specified eligibility criteria referred to in Section 10A(2) of Banking Regulation Act, 1949. Further, for determining the independence of directors, the Bank strictly follows the criteria as laid down in sub-section (6) of Section 149 of the Companies Act, 2013.
The remuneration of the MD & CEO is recommended by the Nomination & Remuneration Committee (NRC) to the Board for approval after considering the factors prescribed under the Compensation Policy. The Board considers the recommendations of NRC and approves the remuneration, modifications, subject to shareholders'' and regulatory approvals.
Pursuant to the recommendation made by the Nomination and Remuneration Committee and the approval of Board of Directors, the Reserve Bank of India has approved the remuneration payable to MD & CEO vide its letter dated 18.08.2022 and the same was approved by the Shareholders through Postal Ballot on 30.11.2022.
The other non-executive directors are paid only sitting fees for attending the meetings of the Board and its Committees. None of the directors including the MD & CEO receives any profit linked remuneration. The sitting fees payable to the non-executive directors is ?50,000/- for Board Meeting and ?25,000/- for Committee Meetings for the year under review.
The terms and conditions of appointment of Independent Director are available on the Bank''s website - Click here.
30. A STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR
The details are available in the Corporate Governance Report.
31. board/committee meetings
During the year under review, total 30 meetings of the Board and 75 meetings of the Committees of the Board were held. For details of the meeting of the Board and its Committees, please refer to the Corporate Governance report forming part of this report.
32. ANNUAL GENERAL MEETINGS
For the details of the Annual General Meetings, please refer to the Corporate Governance report forming part of this report.
33. COMPLIANCE FUNCTION
The bank has embraced compliance as a part of good governance and not for purely meeting the regulatory requirement. Hence, the Bank has institutionalized a strong compliance culture and mechanism across the organization, founded on the principles of transparency and trust by involving all the stakeholders. The Bank has a dedicated Compliance Department headed by Deputy General Manager, for ensuring regulatory and organization level compliance, across all
its businesses and operations. The key functions of this department includes, dissemination of key regulatory updates affecting the various business verticals of the Bank, review of processes from a regulatory compliance perspective, provide guidance on compliance-related matters, among others.
34. COMPLIANCE WITH THE PROVISIONS OF COMPANIES ACT, 2013
The Bank has complied with all the provisions of the Companies Act, 2013 and the Rules made thereon, to the extent that are applicable to the Bank.
35. INTERNAL AUDITORS
The Bank is required to appoint an internal auditor as per the requirements of Section 138 of the Companies Act, 2013, who should either be a chartered accountant or a cost accountant, or such other professional as may be decided by the Board to conduct internal audit on the functions and activities of the Bank.
As the Bank already has concurrent auditors, internal inspecting officers, compliance department etc. pursuant to the various requirements applicable to a banking company, performing all the activities expected to be done by the Internal Auditors, the functions of internal audit is already enabled. Hence the requirement of internal audit is deemed to be complied.
36. STATUTORY AUDITORS
Pursuant to provisions of Section 139 of the Companies Act, 2013 read with Section 30(1A) of the Banking Regulation Act, 1949, the Board of Directors has recommended the re-appointment of M/s. Suri & Co, Chartered Accountants, Chennai (Firm Registration No. 004283S) and M/s. Abarna & Ananthan, Chartered Accountants, Bangalore (Firm Registration No. 000003S) as the Joint Statutory Central Auditors of the Bank for the financial year 2023-24 for their third year. The Reserve Bank of India vide its letter dated 17.07.2023 has approved the same, subject to the approval of members at the Annual General Meeting.
The proposed Auditors have confirmed their eligibility to be so appointed in terms of Section 141 of Companies Act, 2013.
37. COMMENTS ON AUDITORS'' REPORT
The Notes on Accounts and the Significant Accounting Policies referred to in the Auditor''s Report and forming part of the annual accounts and the references made by the Auditors in their Report are self-explanatory. The Auditors have not made any observations or adverse comments warranting any explanation on the part of the Board as referred to in Section 134 (3) (f) of the Companies Act, 2013.
38. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS
During the year under review, the Auditors have not reported any instances of fraud committed in the Bank by its officers or employees to the Audit Committee or to the Board under section 143 (12) of the Companies Act, 2013.
39. SECRETARIAL AUDIT
The Bank had appointed M/s. SPNP Associates, Practicing Company Secretaries, Chennai as its Secretarial Auditor to conduct the secretarial audit of the Bank for the FY 2022-23. The report of the Secretarial Auditor is enclosed as Annexure 1.
There are no material remarks or observations in the report which require any explanation on the part of the Board, the observations made by the Secretarial Auditor are self-explanatory.
40. ANNUAL SECRETARIAL COMPLIANCE REPORT
The Bank has undertaken an audit for the Financial Year ended March 31, 2023 for all applicable compliances as per Listing Regulations and Circulars / Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by M/s. SPNP Associates, Company Secretaries, Chennai, has been submitted to the Stock Exchanges and is enclosed as Annexure 2 to this Directors'' Report.
41. COMPLIANCE TO SECRETARIAL STANDARDS
The relevant Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) and adopted by MCA have been complied by the Bank.
42. FUNDING SOURCES OF RENEWABLE ENERGY
The Bank has been supporting and financing various activities for development of alternative energy generation. The Bank recognizes wind and solar energy as main sources of best renewable and pollution free energy throughout the year and considers funding these initiatives as its contribution towards the worldwide effort against global warming. Accordingly, bank encourages setting up of solar panels by financing solar energy generation plants. The Bank has also taken various steps to conserve energy in its own premises, by establishing solar plant in 18 branches.
43. CORPORATE SOCIAL RESPONSIBILITY
As stated elsewhere, the Bank has constituted a Corporate Social Responsibility (CSR) Committee and has also adopted a CSR Policy. The CSR policy document is available on the Bank''s website. The disclosure in respect of the CSR activities of the Bank as required to be made as per the Companies (Corporate Social Responsibility) Rules, 2014 is given in Annexure 3.
As per Section 135 of the Companies Act 2013 and Rules thereunder, the total amount to be spent is ?16.71 crores for the Corporate Social Responsibility activities for the financial year 2022-23 and the bank has spent ?16.82 crores.
44. EXTRACT OF ANNUAL RETURN
Extracts of Annual Return Pursuant to provision of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extract of the Annual Return as at 31st March 2023 is available in the Bank''s website. The same can be accessed at https://www.tmb.in/Annual-Return.aspx
45. DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Bank has zero tolerance towards any act on the part of any executive / employee which may fall under the ambit of ''Sexual Harassment'' at workplace and is fully committed to uphold and maintain the dignity of every woman working in the Bank. The Policy provides for prevention and protection against sexual harassment of women at workplace and for redressal of such complaints. All the employees (permanent, contractual, temporary or trainee) are covered under this policy.
Number of complaints pending as at the beginning of the financial year - Nil
Number of complaints filed during the financial year - Nil
Number of complaints pending as at the end of the financial year - Nil.
46. TRANSFER OF EQUITY SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
AUTHORITY / UNCLAIMED DIVIDENDS.
The details of the equity shares / unclaimed Dividends transferred to Investor Education and Protection Fund (IEPF) Authority are available in the Corporate Governance report forming part of this report.
47. STRICTURES AND PENALTIES
During the year under review, RBI has imposed the following penalties on the Bank:.
1. Penalty charged by RBI under Scheme of Incentives and Penalties for Bank Branches including Currency chests for Mutilated, Shortage Currency and Counterfeit Currency during the period from 01.04.2022 to 31.03.2023 - ?22,900/-
2. RBI has imposed penalty of ?10,70,000/- under the scheme of penalty for Nonreplenishment of ATM.
48. REQUIREMENT FOR MAINTENANCE OF COST RECORDS
The cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013, are not required to be maintained by the Bank.
49. MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion & Analysis as required under the Listing Regulations is enclosed as Annexure 4, forming part of this Report.
50. PARTICULARS OF EMPLOYEES AND REMUNERATION
The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure 5 which forms part of this Report.
51. CORPORATE GOVERNANCE REPORT AND CERTIFICATE
Your Bank is committed to follow the best practice of corporate governance to protect the interest of all the stakeholders of the Bank, viz. shareholders, depositors and other customers, employees and the society in general and maintain transparency at all levels.
As required under Regulation 34 (3) read with Schedule V (c) of the Listing Regulations, a report on Corporate Governance and the certificate as required under Schedule V (e) of the Listing Regulations from M/s. SPNP Associates, Practicing Company Secretaries, regarding compliance of conditions of Corporate Governance are given in Annexure 6 and Annexure 7 respectively, forming part of this report.
52. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The ''Business Responsibility and Sustainability Report'' (BRSR) of your Bank for the Financial Year ended March 31, 2023 is attached as Annexure 8 as required under Regulation 34(2)(f) of the Listing Regulations. Your Bank continues to execute strong ESG proposition by working with all relevant stakeholders as well as in its own operations.
53. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE BANK FROM THE END OF THE FINANCIAL YEAR AND TILL THE DATE OF THIS REPORT
There are no material changes and commitments affecting the financial position of the bank.
54. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND BANK OPERATIONS IN FUTURE
During the Financial Year 2022-23, no significant and material orders were passed by the Regulators or Courts or Tribunals against the Bank which impacts its going concern status and Bank''s operations in future.
55. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF
Being Banking Company, the aforesaid provision is not applicable to your bank..
56. INSIDER TRADING COMPLIANCES
In compliance with the SEBI (prohibition of Insider Trading) Regulations, 2015, as amended, your bank has a comprehensive "Code of Conduct for prevention of Insider Trading" which lays down guidelines and procedures to be followed and disclosures to be made while dealing in securities of the Bank.
The Board acknowledges and places on record its appreciation for the valuable patronage, co-operation and goodwill received by your Bank from customers, fellow bankers, financial institutions and Non-Resident Indians. The continued support and co-operation of the employees and customers have been a constant source of strength for the Bank in all its endeavours.
The Board also acknowledges and places on record its gratitude to Reserve Bank of India SEBI, NSE, BSE and other regulatory authorities, the Government of India and State Governments for their continued guidance and support.
The staff members of the Bank have been working with dedication and deep commitment. Teamwork at every level, well supported by appropriate technology architecture, has been the hallmark of the Bank''s performance. The Board places on record its appreciation for the excellent contribution made by each and every member of the staff, who has made our achievements possible through the years, and is confident that such contribution from the staff will continue in the coming years.
This year has been a very momentous year for the Bank. The Bank has celebrated its 101st year of existence, which in itself is a wonderful achievement.
Banks in general and your Bank in particular are ready to support the MSME sector by implementing the schemes introduced by the government and the regulator. The Bank has moved cautiously forward in growing its business and ensuring that the Bank reports good financials.
Your Bank looks to the future with great hope and confidence born out from the fact that the Bank has weathered many storms in its journey of hundred years and with the experience gained, will be able to look forward to the next 100 years with renewed strength, stemming from the trust of the customers and protected by the loyalty of its staff.
Place : Thoothukudi Date : 03.08.2023
For and on behalf of the Board of Directors
S.Krishnan A.Niranjan Sankar
Managing Director & CEO Director
Mar 31, 2007
The Board of Directors have great pleasure in presenting the Eighty
Fifth Annual Report together with the audited Balance Sheet as on 31st
March 2007 and the Profit & Loss Account for the year ended 31st March
2007.
1. OVERALL ECONOMIC REVIEW
The real GDP for 2006-2007 was placed at 9.2 % as against 8.1% in the
previous year. Industrial activity expanded strongly with real GDP
originating in industry estimated to have risen by 10.2% in 2006- 2007
as compared with 8% in the previous year. Real GDP originating from
agriculture and allied activities is estimated to have registered a
growth of 2.7% in 2006-2007, closer to the trend growth but lower than
6% in the previous year. Real GDP originating in the services sector
increased by 11.0 % during 2006- 2007 as against 10.3% a year ago. The
growth in activity in financing, insurance, real estate and business
services and community, social and personal services at 11.1% and 7.8%
respectively were comparable to 10.9 % and 7.7% in 2005-2006. Industry
and services comprising 82% of the economy registered double digit
growth. Inflation measured by variations in the wholesale price index
on a year on year basis increased from 4.1 % at end March 2006 to 5.7%
on March 31,2007. During the year the financial markets shifted from
conditions of easy liquidity to occasional spells of tightness
necessitating injection of liquidity through the LAF. The
uncollateralised call/notice money market experienced occasional
tightness during the last quarter of the year. Call rates peaked at
54.32 % on March 30,2007.
Expressing renewed concerns about the rapid expansion of Bank credit
for three years in succession and the surge in capital inflows, the
Reserve Bank of Indias third quarter review in January 2007 called for
concerted actions in fiscal, external, monetary and prudential
policies. Provisioning requirements on standard assets were further
enhanced and risk weights were increased with regard to exposure to
sectors such as real estate, capital markets, consumer loans and
systemically important non-banking financial companies. There was a
renewed emphasis on quality of credit. It has been the endeavour of the
Reserve Bank to develop a robust, efficient and diversified financial
system so as to anchor financial stability and to facilitate effective
transmission of monetary policy.
2. BANKING SCENARIO
The acceleration in real activity propelled a sizeable expansion in
monetary and Banking aggregates in 2006-2007 for the fourth year in
succession.
The overall credit growth of scheduled commercial Banks increased by
28% (previous year 31.8%). Credit to industry constituted 35.3% of the
total expansion in non food bank credit followed by personal loans
(28.7%), services (23.7%) and agriculture (12.2%). Priority sector
advances grew by 25%.
The benchmark prime lending rates of Public Sector Banks and Private
Sector Banks increased substantially from the earlier lowest of 10.25%
to present highest of 16.50%. Many Banks had PLR in between the above.
The aggregate deposits of scheduled commercial Banks increased by 23%
(previous year 18.1%). Demand deposits growth slowed to 16% from 27.5%
in 2005-06 but time deposit growth of 24.5% was notably high vis-a-vis
16.4% in the previous year.
Commercial Banks investments registered an increase of Rs.4002 crore
during 2006-2007 in contrast to a decline of Rs. 13,237 crore in the
previous year. Commercial Banks holdings of Government and other
approved securities declined from 31.4% of the banking systems net
demand and time liabilities (NDTL) in March 2006 to 28% in March 2007.
Several Banks were operating their statutory liquidity ratio portfolios
close to the statutory minimum level.
3. BUSINESS PERFORMANCE
In tune with banking industry trend, your Banks credit growth also
outpaced deposit growth. The Bank had a successful year in its 85th
year of operations and recorded a continued good performance. During
the year under review the total business excluding inter bank deposits
increased from Rs.8223 crores in March 2006 to Rs. 10035 crores at the
end of March 2007 registering a growth of 22.04%. The Bank had also
improved its performance under various parameters and business
segments. Thereby your Bank crossed an important milestone of Rs.
10,000 crores business. There was noted improvement in recovery and
asset management, thereby resulting in lower percentage of both Gross
and Net NPAs.
* The deposits of the Bank increased from Rs.5203 crores to Rs.6020
crores during the year, a percentage increase of 15.70%
* The advances increased from Rs.3126 crores to Rs.4047 crores during
the year, a growth of 29.46%
* The other income grew from Rs.78 crores to Rs. 83 crores.
* The Gross NPA came down from 7.02% to 4.54%.
* The Net NPA was substantially reduced from 2.17% to 0.98%.
There was an increase of Rs.95 crore in the total income of the Bank
from Rs.626 crores in the previous year to Rs.721 crores during the
year representing 15.18% growth.
The major contributing factor for this income was the increase in
interest income by about Rs.90 crores and increase in other income from
Rs.78 crores in the previous year to Rs.83 crores during the current
year. The increase in total expenditure was at Rs.90 crores. The
expenditure rose from Rs.525 crores during the previous year to Rs.615
crores during the year. This resulted in a net profit of Rs. 105.78
crores as compared to Rs.101.19 crores in the previous year. The net
owned funds of the Bank was in the order of Rs.759.15 crores
registering an increase of 15.58%. Earnings per share was Rs.3719/-.
The capital adequacy ratio inspite of high risk weightages on assets
was one of the highest in the Banking Industry at 16.77%. The Bank was
able to reduce its NPAs and the ratio of net NPAs to net advances stood
reduced to 0.98% as against 2.17% in the previous year.
4. PROFIT AND APPROPRIATION
During the year your Bank has generated an operating profit of
Rs.231.20 crores against Rs. 194.32 crore in the previous year
registering an increase of 18.98%. The net profit stood at Rs. 105.78
crores (previous year Rs. 101.19 crores) after making all necessary
provisions under various categories as per prudential norms prescribed
by Reserve Bank of India. After adding thereto the surplus brought
forward from 2005-2006 Rs.0.31 crore there is; an available balance of
Rs.106.09 crores which has been appropriated as under:
Transferto: Rs. in crores
* StatutoryReserves 31.75
* Capital Reserve 0.61
* General Reserve 70.20
* Proposed Dividend for the year 2.84
* Tax on Dividend 0.57
* Balance carried over 0.12
106.09
5. DIVIDEND
Considering the continued satisfactory performance and the overall
growth in the business of your Bank during the year and also keeping in
view the increase in the amount of earning per share of the Bank, your
Directors have proposed to recommend, a dividend of 1000% to the
shareholders as recommended by the Board in the previous year.
6. CAPITAL AND RESERVES
The Capital and Reserves of your Bank stand increased to Rs.759.15
crores from the previous years level of Rs.656.79 crores, showing an
increase of 15.58% after effecting the proposed appropriations.
7. CAPITAL ADEQUACY
The accretion to capital funds during the year amounted to Rs. 102.36
crores which raised the net worth of the Bank to Rs.759.15 crores. The
Capital to Risk Adjusted Assets Ratio (CRAR) stood at 16.77% as on
31-03-2007 which is more than the minimum required level of 9%
stipulated by Reserve Bank of India.
8. DEPOSITS GROWTH
The aggregate year end deposits of the Bank as on 31 st March 2007 were
Rs.6020 crores, thus recording a growth of 15.70% over the position as
at the end of the previous year against the industrys reported growth
of 23%. In view of the continued thrust given by the Bank, both low
cost and nil cost deposits (excluding inter-bank deposits) have
recorded an increase of Rs.200.57 crores over the previous year showing
a growth of 13.58% and representing 24.55% of the increase in total
deposits. The interest rates of the Bank on deposits are kept in line
with the prevailing trends in the banking industry.
In tune with industry trend there was an increase in cost of funds. The
average cost of deposits increased to 6.16% for 2006-2007 from 5.96% in
2005-2006 owing to the general upward movement in interest rates during
the last quarter of the fiscal. Taking note of the trend in the
interest rate scenario and the dwindling spreads on deployment, the
Bank has adopted a prudential and cautious approach in accepting high
cost deposits.
9. ADVANCES PORTFOLIO
Your Bank continued its lending activities in conformity with the
credit policies announced by the Reserve Bank of India. Total advances
of your Bank increased by Rs.920 crores during this period and reached
the level of Rs.4047 crores showing a growth of 29.46% against the
industrys reported growth of 28%. The increase in the average advances
was also significant during the year at 20.16%. Advances made to export
sector by the Bank increased to Rs.204.66 crores as on 31.03.2007 from
Rs.183.47 crores as on 31 st March 2006. The average yield on advances
increased to 11.21% from 10.01% in the previous year. Though the
Industry showed signs of hotting up of interest rates and most of the
Banks increased their prime lending rates, your Bank insulated itself
from the heat and maintained its PLR at 12% throughout the year.
The Bank continued its thrust in lending to small scale industries,
agriculture, other priority sectors and weaker sections. The level of
advances to priority sectors at Rs. 1892.05 crores was 46.76% of the
total advances as on 31st March 2007 as against the requirement of 40%
prescribed by Reserve Bank of India.
The Non Performing Assets (NPAs) have a direct bearing on the earnings
and profitability of the Bank. Recognizing the importance of recovery
and reduction in the level of NPAs, the Bank has initiated several
measures in this regard during the year under report. These include (i)
vigorous follow up of all suit filed and long pending NPAs (ii) making
earnest efforts to recover and regularise the accounts which have
turned out to be NPAs for the first time (iii) identifying potential
NPAs for effective follow-up, etc. The Bank also made very special
efforts to speed up cases in DRT and DRAT. The Bank has also installed
a software at all Regional Offices and Head Office for a close and
effective monitoring of NPAs. The Bank has constituted exclusive cells
at Head Office, Regional Offices and at certain major branches to speed
up the recovery process. Action under Securitization & Reconstruction
of Financial Assets & Enforcement of Security Act (SARFAESI) 2002 of
the Govt, of India an important tool for recovery has started yielding
good results. The Bank has also taken recourse to the compromise route
to settlements whenever, the proposals are found reasonable.
To ensure standard assets do not slip into NPAs, for intense monitoring
of special mention accounts, a sophisticated software which gives early
warning signals has been installed in the Bank. Due to the various
vigorous steps taken, the gross NPAs as a percentage to gross advances
have come down from 7.02% to 4.54%. The Net NPAs to Net advances have
come down to 0.98% from 2.17% in the previous year. The slippages were
also substantially arrested.
10. INVESTMENTS AND TREASURY OPERATIONS
During the period ended on 31st March 2007 your Bank has made a total
turnover of Rs.1025.69 crores and the total income from treasury
operations stood at Rs.9.15 crores (previous year Rs.6.06 crores).
The Investments of the Bank stood at Rs.2316 crores as on 31st March
2007 as against Rs.2362 crores at the end of previous year. The
Investments Deposits
\Ratio of your Bank was brought down to 38.47%,
thereby enabling accommodation of the higher credit demand during the
year.
The average yield on Investments came down during the year from 9.81%
to 9.49%. The income from Investments, comprising interest and dividend
earned during the year was Rs.219.50 crores as against Rs.230.34 crores
during the previous year.
11. FOREIGN EXCHANGE BUSINESS
During the year, the Bank completed the process of total integration of
Treasury and Foreign Exchange Division. The International Banking
Division at Chennai has been shifted to new spacious premises at Avvai
Shanmugam Road, Royapettah, Chennai with all the state of the art
infrastructures. It also housed the Banks integrated treasury division
and the Banks payment & settlement division aiming still higher degree
of class of service to the clients.
The Banks International Banking Division at Chennai performs the tasks
of foreign exchange business development, maintenance of correspondent
banking relationships, setting up of lines of credit for business
operations etc also ensuring the business control within the regulatory
norms. Aseparate cell for RTGS has been set up and strengthened and
your Bank is one of the forerunners in RTGS in the city. The Bank has
set up a cell for NEFT.
The year under review witnessed a good growth in the foreign exchange
business volume. The total merchant foreign exchange turnover grew to
Rs.3922.78 crores from Rs.3076.49 crores over the previous year, thus
registering a growth of 27.51%. The inter-bank turnover also has grown
to Rs.11691.21 crores for the year 2006-07 from Rs.8542.76 crores
achieved during the previous year. The profit on foreign exchange
business as on 31.3.2007 was higher at Rs.11.51 crores as against
Rs.9.05 crores during the previous year.
The Bank has a global network of 545 correspondent banks overseas with
whom Bilateral keys have been exchanged. It facilitates smooth and fast
flow of international business. Membership with SWIFT has enabled the
Bank to give timely and efficient service to its foreign exchange
client fraternity. The International Banking division of the Bank has
to its credit, the speedy service relating to adjustment of all the
inward remittances within 24 hours of receipt in its 15 nostra accounts
in 9 foreign currencies.
Our International Banking Division, Chennai is providing information
about forex market and the indicative rates based on the ongoing forex
market trends every two hours in the Banks website, which has been
well received by the customers all over the world. The monthly
newsletter being published by the division furnishing the details and
analysis about the forex market is also considered to be useful among
the customers, desk officers etc.
As a significant step forward in the Banks pursuit to improve the NRI
business and also with a view to offer speedy and cost effective funds
transfer service to the expatriate community in the Middle east, the
Bank has tied up with the UAE Exchange Centre LLC, Abu Dhabi for money
transfer services and the Bank is offering a web based speed remittance
system apart from the traditional draft drawing arrangement. The Bank
is in the process of establishing tie up arrangements with more number
of such exchange companies.
Given the buoyancy of the growing Indian economy, globalised business
trend, liberalization in money remittance schemes and increased multi
currency exposures among the foreign exchange clients, the Bank sees a
quantum growth from this business segment. The International Banking
Division of the Bank at Chennai is committed to significantly
increasing the contribution of forex activities to the total revenues
of the Bank in the coming years.
12. BRANCH NETWORK
Reserve Bank of India has accorded permission to open 20 branches, 31
offsite ATMs and 6 service branches/central processing centers all over
the country. The centers selected for housing the 20 branches are
located at semi urban/rural/under banked areas. During the year
2006-07, put of 20 branches the Bank has opened 4 branches and 6 of the
extension counters have been converted into full fledged branches which
resulted in expansion of branch network to 183.
13. PERSONNEL
The Banks total staff strength was 2224 employees as on 31st March
2007, consisting of 789 Officers, 1037 Clerks and 398 other members of
staff.
The per employee business has increased from Rs.3.58 crores to Rs.4.51
crores as on 31st March 2007. The profit per employee increased from
Rs.4.41 lakhs to Rs.4.76 lacs.
The Bank continues to lay emphasis on developing the individual skills
of its employees and providing a healthy and congenial working
environment so as to get maximum contribution from the employees of the
Bank.
The Banks Staff Training College at Nagercoil conducted 47 programmes,
imparting training to 598 Officers, 575 Clerical employees and 203
subordinate staff during the year.
In addition to the in-house programmes, 180 officers were deputed to
other institutions in India like
SIBSTC-Bangalore, BTC-Mumbai, NIBM-Pune, IDRBT- Hyderabad, FEDAI and
other training institutions.
Industrial relations in the Bank continued to be cordial during the
year with frequent interaction between the management and the Officers
and Employees Associations and various staff welfare activities
continued to receive due attention.
There were no employees who were in receipt of remuneration above the
limit prescribed under Section 217 (2A) of the Companies Act, 1956
requiring the Bank to furnish a statement with particulars prescribed
under the Act and the Companies (Particulars of Employees) Rules, 1975.
14. HOUSE KEEPING
The Bank has continued to maintain a very good record in the matter of
internal house keeping. Since the Bank has installed a core banking
solution with 100% networking it was possible for the branches to
balance all their accounts and the balances were tallied upto 31st
March 2007. There was also timely submission and scrutiny of the
control returns which was given adequate importance at all levels with
necessary follow up. The Bank continues to attach greater importance in
the matter of House Keeping to ensure that its good performance during
the year is maintained in future too.
There have been prompt reconciliation and speedy elimination of
unmatched entries in respect of inter branch transactions for the
previous year. During the year under review all entries were reconciled
within 30 days and the maximum time gap for elimination of entries
remained just one month.
15. INTERNAL CONTROL AND INSPECTION /AUDIT
The Bank has in place an effective and strong Internal Audit system.
Your Bank is one of the few Banks which has the system of annual
internal inspection covering all its branches during the Year. During
the year 2006-07, internal inspection was conducted in 173 branches of
the Bank and the remaining 10 branches being opened during the last
quarter of the year were not subjected to internal inspection. These
inspection reports are thoroughly reviewed by the Committee of
Executives. These are also reviewed by the Audit Committee of Board
which has been giving directions from time to time on various aspects
brought out in those inspection reports. Compliance reports are
invariably received from most of the branches in time and now receipt
of compliance is strictly monitored by the Inspection Department.
In addition, the Bank has also embarked upon a system of having
Concurrent audit of its major branches. Concurrent audit has been
recognized as an important tool of internal control and was introduced
in 54 branches including all the Foreign Exchange B category branches
covering 65.41% of the total business of the Bank. Further Treasury
operations, International Banking Division and DPS Cell are also
subjected to Concurrent audit. Revenue audit was also conducted in 58
branches by Banks internal auditors.
The Bank is in the process of further strengthening and making
Concurrent audit more effective.
During the year, Management audit is in progress in Mumbai Region,
Tirunelveli and Thoothukudi Regional Office, Chennai and Madurai
Currency Chest, Chennai Service Branch, Secretarial Section, Inspection
Department and Staff Training College by the Banks Inspection
Department. In addition all accounts having limits of Rs.100 lakhs and
above have been subjected to Post Credit Supervision by the Inspection
Department and 79 branches involving 448 accounts have been covered
during the year.
During the year 2006-07 Stock audit has been conducted by the approved
auditors of the Bank in respect of 106 borrowal accounts having total
credit limits were Rs.5 crore and above. In order to comply with the
directive of Reserve Bank of India, your Bank has also conducted EDP
audit in 173 computerized branches except the newly opened 10 branches,
seven Regional Offices, Service branch, Data Centre, IBD, SWIFT and
RTGS/Funds Department.
The Bank has introduced Risk based Internal Audit of branches from 1st
April 2005. During the year 2006- 2007 Inspection Department has
conducted Risk based Internal Audit in 173 branches except the newly
opened 10 branches simultaneously along with regular inspection.
Your Bank is one of the first Banks to introduce Off- site surveillance
system. Bank has identified 11 areas to be covered underthis system.
A separate cell for monitoring compliance with Know Your Customer and
Anti money Laundering norms has been formed in order to have close
monitoring of the accounts as per the RBI guidelines and underthe
provision of the Prevention of Money Laundering Act, 2002.
16. VIGILANCE
The Vigilance Department functioning at Head Office is initiating
corrective measures for improving the control systems & compliance
thereof and laying down procedures and carrying out preventive
vigilance exercises. It is also ensured that the guidelines and
directives issued by Reserve Bank of India are implemented from time to
time through the Compliance Officer designated for this purpose.
There has been perceptible improvement in identifying the staff lapses
/ fixing the accountability and also in disposing of the disciplinary
proceedings against staff.
17. CUSTOMER SERVICE
Your Bank is committed to provide its customers with a high standard of
services and the Bank is known for its personalized services. The Top
Management of the Bank also keeps a close watch on the redressal of the
customer complaints & grievances. The Banks aim is to respond to
complaints with efficiency, alacrity, courtesy & fairness.
18. TECHNOLOGY ADVANCEMENT
Your Bank is one of the forerunners in introducing technology.
Technology is constantly upgraded as per requirement.
Your Bank was one of the earliest Banks to go in for Technology and one
of the first Banks to achieve Cent Percent Core Banking implementation
in all its branches. "FINACLE", the Core Ednking solution of M/s.
Infosys Technologies Ltd., was chosen and it has been supporting the
entire business of the Bank for the last 5 years. During the year,
migration to the latest version of Oracle - Database and Operating
System - Unix AIX was carried out successfully. This migration provides
the Bank a more efficient and more comprehensive operational platform,
enabling the Bank to give a more efficient and highly competitive
service to its customers.
Your Bank has installed more ATMS taking the total ATMS to 50 (27
Onsite and 23 Offsite ATMs). With the network arrangements entered into
with NFS (National Financial Switch) a Subsidiary to Reserve Bank of
India, customers of your Bank can now access cash from 12300 ATMs
(approx), all over the country.
Your Bank has become one among the few Banks in the country to
implement a sophisticated software to manage and monitor the Banks NPA
accounts. Software for Early Alert System has also been installed
which helps the Bank to take timely steps to prevent accounts becoming
NPA.
The Bank has gone Live with the implementation of eCircular Software,
which enables the Bank not to rely on the practice of issuing Hard
Copies of Circulars issued by various Departments of the Bank.
Further your Bank is in the process of implementing Asset Liability
Management (ALM) Software. This enables the Bank to arrive at the
Future Pricing of its Deposit and Loan Products. Bank is also in the
process of implementing Lending Automation Processing System, thereby
aiming to achieve at the fully automated process of submitting and
sanctioning of Credit Proposals. Further in line with RBI direction
your Bank has procured and installed the required Hardware and Software
and is ready with the project of implementing Cheque Truncation System
at your Delhi Branch as a Pilot Project.
RTGS (Real Time Gross Settlement) / NEFT (National Electronic Funds
Transfer)
Your Bank is one of the earliest adoptors of RTGS (Real Time Gross
Settlement), a robust, fast, secure and efficient online real time
electronic payment and settlement system launched by RBI for funds
transfer between Banks branches situated across the country for High
Value payments.
Our Bank is the first in Tamilnadu and third in India to achieve 100%
RTGS status throughout India at all its branches without any exception.
In view of the Core Banking solution implemented by your Bank and that
all the 183 branches are networked, RTGS services are available at all
the branches. Through this system, our customers can send / receive
funds to / from more than 30000 RTGS enabled other Bank branches
located across the country at nominal cost.
During the year as an extension of this system, NEFT was introduced by
RBI to enable Banks to settle remittances of small value and your Bank
has enabled at its branches to offer these services. This enables the
Bank to offer fast and secure payment services across the country to
its niche of Retail and SME customers.
19. PRODUCT INNOVATION. NEW PRODUCTS- NEW SERVICES
During the year products like TMB-Car, TMB-Home, TMB-Education,
TMB-Traders, TMB-Personal, TMB- Rentals, TMB-Doctor, TMB-Two Wheeler,
TMB- Education (Short Term), TMB-Mahalir, TMB-IPO, TMB-Pensioner,
TMB-Tractor, TMB-Kisan Credit Card, TMB-Easy Mortgage, TMB Gold OD,
TMB-Mini Vehicle have been continuously fine tuned to suit the
customers requirements. With a view to give thrust for flow of credit
to small scale industries and Medium enterprises the Bank has
introduced TMB-SME Credit scheme. Further for the benefit of farmers a
new credit scheme viz. TMB-Banana cultivation under tissue culture has
been introduced. The concerted efforts have resulted in retail credit
reaching a position of 18.21% of the total advances. Based on the
recommendations of RBI the Bank has formulated and introduced a new
loan scheme in the name of General Credit Card to the constituents in
rural and semi-urban areas based on the assessment of income and cash
flow of the household similar to that prevailing under normal credit
card. The objective of the scheme is to provide hassle free credit to
customers based on the assessment of cash flow without insistence on
security. The existing deposit products under Anywhere Banking scheme
viz. TMB-Diamond Current Account, TMB Platinum Current Account, TMB
Gold Current Account, TMB Silver Current Account, TMB-Pearl Current
Account and TMB Premium Savings Bank Account have been marketed
intensively. The Bank has introduced an auto sweep fixed deposit
facility in its TMB-VISA savings account. The Insurance linked
recurring deposit "Siranjeevee" was fine tuned to give additional
benefits to the customers. Deposits schemes like KIDS recurring deposit
for the benefit of children and "Santhosh" deposit scheme for the
benefit of senior citizens receive good response from customers . As
per the directions of RBI the Bank has launched "No Frills" Savings
Bank account scheme to cater to the needs of the low income group who
normally do not have access to banking services. The scheme will enable
individuals to open a SB account with an initial deposit of as low as
Rs.5/-. The Bank has opened 29924 SB accounts under the above category.
Two tax savings scheme in the name of TMB-Mullai & TMB-Malligai were
introduced. New deposit products viz.TMB-444 and TMB-555 were
introduced and it received overwhelming response from the general
public due to competitive rate of interest offered by the Bank.
The Bank had introduced at par DD drawing and cheque collection
arrangement with IDBI Bank Ltd (55 locations) and HDFC Bank Ltd (98
locations). The customers will get the benefit of No extra charge
towards other Banks commission in 152 locations where the Banks
branches are not located.
The Bank has also a tie up arrangement under which Western Union Money
Transfer facility from abroad is available in all the branches. Mutual
Fund Services are now being offered to customers of the Bank by having
tie up arrangement with Prudential ICICI, UTI Bank, Reliance Capital
Asset Management Company Ltd., and Franklin Templeton Asset Management
Company Ltd.
20. ASSET LIABILITY MANAGEMENT & RISK MANAGEMENT
The Bank has implemented ALM system covering 100% of its assets and
liabilities. In terms of the guidelines issued by the Reserve Bank of
India on implementation of the Risk Management system in Banks, the
Bank has established a full fledged risk management department to
measure and monitor various risks. The Bank has charted out strategies
for complying with the guidelines of Reserve Bank of India and the
progress made thereon is being reported to the Banks Board and the
Reserve Bank of India periodically. As regards
Credit Risk Management, the Bank has engaged external agencies to
streamline the process of implementation of the risk management system
complying with the guidelines of RBI in this regard.
As suggested by Reserve Bank of India the Bank has put in place the
various components of Risk Based Supervision (RBS) including adoption
of Risk based Internal Audit along with the internal inspection in all
the branches of the Bank except the newly opened branches. The
developments in other areas of Risk based supervision namely
strengthening of MIS, addressing HRD issues and setting up of
compliance units are also in line with the programme towards smooth
transition to Risk based supervision.
21. BOARD /AUDIT COMMITTEE MEETINGS
The Banks Board held 21 meetings while the Audit Committee of the
Board met 9 times during the year.
22. CHANGES IN THE BOARD DURING THE FINANCIAL YEAR
1. Thiru. S.Radhakrishnan completed his tenure as Chairman and Chief
Executive Officer of the Bank on 06.11.2006 and consequently ceased to
be a Director on the Board.
2. Thiru.G.Narayana Moorthy was appointed on
01.12.2006 as Managing Director and Chief Executive Officer of the Bank
after obtaining the approval of Reserve Bank of India.
3. The Board of Directors after obtaining the approval of Reserve Bank
of India appointed Thiru M.G.M.Maran, Director as a part time non-
executive Chairman of the Bank for a period of one year.
Thiru.M.G.M.Maran assumed charge on 09.04.2007 as a non-executive part
time Chairman of the Bank.
The Board places on record its appreciation of the valuable services
rendered by the erstwhile Chairman and Chief Executive Officer of the
Bank.
23. CORPORATE GOVERNANCE
With the objective of introducing and implementing Corporate Governance
throughout the Bank and in accordance with the directions and
guidelines issued by Reserve Bank of India from time to time, your Bank
had taken several steps towards a more effective Corporate Governance.
The Board consists of persons with rich experience and specialized
knowledge in various areas of relevance to the Bank including banking,
accountancy, finance, small scale industry, agriculture, information
technology, etc. Few Directors of the Bank attended specialized
training in new areas conducted by the outside training institutions.
The Bank has set up the under- noted Committees of the Board of
Directors so that there could be more focused and concentrated
attention on each of the critical areas of Banks operations. These
Committees monitor the activities falling within their terms of
reference.
S.No Name of the Committee
1. Management Committee
2. Information Technology Committee
3. Audit Committee
4. Infrastructure Committee
5. NPA Monitoring Committee
6. Fraud Monitoring Committee
7. Nomination Committee
8. Customer Grievances Committee
9. HRM Committee
10. ALM Committee
11. Risk Management Committee
12. Share Transfer Committee
The Share Transfer Committee was constituted on 23.03.2007 to approve
the transfer of shares referred to the Committee.
ANNUAL GENERAL MEETING
The 83rd AGM of the Bank was held on 27.07.2006. The resolutions with
regard to the adoption of accounts, declaration of dividend and
appointment of auditors were passed and the meeting was adjourned
sine-die without considering the agenda items relating to the
appointment of Directors in terms of order passed by the Honble Madras
High Court on 26.07.2006 in C.S.981 of 2004. The adjourned meeting is
yet to be held.
Without concluding the 83rd AGM, i.e the AGM for the year 2005, it
would not be possible for the Bank to hold the 84th AGM. The Bank
therefore obtained extension of time upto 31.12.2006 from the Registrar
of Companies, Chennai for holding the above 84th AGM of the Bank. As
the issue with regard to exercise of voting rights in respect of 95418
shares of the Bank was pending before the Honble Madras High Court the
Bank filed an application before the Honble Court seeking directions
for holding the 84th AGM of the Bank. The Honble Madras High Court had
extended the time to hold the AGM upto 19.03.2007 and thereafter the
application has not been taken up for disposal.
The Board of Directors are taking all steps to expedite obtaining
directions from the Honble High Court and holding the adjourned 83rd
AGM as well as 84th AGM of the Bank.
24. STATUTORY AUDITORS
The Statutory Auditors of your Bank M/s.Vivekanandan Associates,
Chartered Accountants, Chennai were re- appointed in the 83rd Annual
General Meeting of your Bank held on 27.7.2006 and they are holding
Office upto the conclusion of the next Annual General Meeting of your
Bank.
25. OTHERS
As your Bank has no activity relating to conservation of energy and
technology absorption, such particulars are not required to be
furnished under Section 217(2)(e) of the Companies Act, 1956. .
26. COMMENTS ON AUDITORSREPORT
The Notes on Accounts and Significant Accounting Policies referred to
in the Auditors Report are self- explanatory and do not require
Boards explanations as required under Section 217(3) of the Companies
Act, 1956.
27. DIRECTORS RESPONSIBILITY STATEMENT
In the preparation of the Annual Accounts,
i) the applicable accounting standards have been followed and material
departures have been properly explained.
ii) your Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and Fairview of the state of affairs
of the Bank at the end of the year under report and of the profit of
the Bank for that period.
iii) your Directors have taken proper and sufficient care for the
maintenance of adequate accounting standards in accordance with the
various statutory provisions and
iv) your Directors have prepared the Annual Accounts on a going concern
basis.
28. NEW AREAS
The Bank is in the process of Becoming a Depository Participant through
CDSL
* Introducing various insurance linked deposit /loan products
* Becoming a clearing banker of MCX and
* introducing new delivery channels like internet banking, mobile
banking, etc.
* introducing cheque deposit kiosks at off site ATMs
The Bank has taken proactive steps to develop its services to suit the
new environment and the needs of the discerning customers. The focus in
the coming years would be to achieve a substantial growth of retail
assets, enhance exposure to micro credit and consolidation of the
existing credit portfolio with total emphasis on quality of lending.
The substantial technological improvements made by the Bank by
networking its branches will not only enhance the customer satisfaction
but also enable the Bank to introduce a series of new products and
services during the year.
29. ACKNOWLEDGEMENT
The Board places on record its appreciation of the valuable patronage,
co-operation and goodwill received by your Bank from customers, fellow
bankers, financial institutions and Non-Resident Indians. The continued
support and co-operation of the employees and customers have been a
constant source of strength to the Bank in all its endeavours.
The Board places on record its gratitude to Reserve Bank of India and
other regulatory authorities, the Government of India and State
Governments for their continued guidance and support.
The staff members of the Bank have been working with dedication and
deep commitment. Teamwork at every level well supported by appropriate
technology architecture, has been the hall mark of the Banks
performance. The Board places on record its appreciation of the
excellent contribution made by each and every member of the staff,
which has made our achievements all along possible and is confident
that such contribution will continue in the coming years.
Place: Thoothukudi For and on behalf of the Board
Date : 06.06.2007 Sd/- M.G.M. Maran
Chairman
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