Tamilnad Mercantile Bank (TMB) expects to finalise the name of a part-time non-executive chairman by the end of this year, managing director Krishnan Sankarasubramaniam told Moneycontrol in an exclusive interview on July 25.
The Thoothukudi-based lender’s board has discussed the matter, Sankarasubramaniam said, declining to add anything further. In September last year, the Reserve Bank of India rejected the bank's recommendation to appoint B Vijayadurai to the post. Sankarasubramaniam also spoke on issues including the current business climate and growth expectations.
Edited excerpts:
By when do you expect to have a new non-executive chairman?
I expect to finalise the name of the part-time non-executive chairman by the end of this year. This has been discussed by the board. Right now, I will not be able to disclose anything. So I hope that an excellent non-executive chairman will be joining us this year. We will put the things in front of the regulator (RBI) for approval. All these things are in progress and are on the table.
TMB has been a Tamil Nadu-focused bank. Any plan to expand nationwide?
I have plans to expand my network. Apart from my home state, that is Tamil Nadu, I have good business potential in neighbouring states, be it Andhra Pradesh, Telangana, and relatively more branches in Gujarat, where good business potential is there and the bank is known. We are open to any state, apart from this.
What is the trend in the gold loan portfolio?
Today, I have around Rs 10,500 crore as a gold loan portfolio. There is excellent potential available for growth in gold loans. So definitely we will be capitalising the brand equity that we have and the skillset that our people have on that portfolio… That is one of the most secured lending with zero capital requirement. Looking forward, I'm projecting gold loan portfolio growth of 15 percent by the end of this financial year.
Is the bank interested in joining the RBI's Central Bank Digital Currency pilot project?
We wanted to join the RBI's Central Bank Digital Currency project. So far, we have not got anything from the RBI for our bank, but we are gearing up for that by talking to digital experts.
What is the outlook on growth in deposits and advances?
My overall business will be in the range of 12 to 15 percent in the next financial year. When I say the business, equally it is deposit/advances. I expect growth of 12 to 15 percent in this current financial year.
How much are current and savings accounts (CASA) as a percentage of total deposits?
We plan to have our CASA reach around 35 percent in three years' time. Gross NPA (non-performing assets) will continue to be below 2 percent. Net NPA will continue to be below 1 percent. The provision coverage ratio will be in the range of 88 to 90 percent, maybe a little above that. The slippage ratio will be less than 1 percent. So, this is the guidance that I have given to the street.
The bank reported slippage of Rs 101 crore during the quarter ended June 30, 2023, while cash recovery was at Rs 41.75 crore.
There were reports of spot verification by the intelligence and criminal investigation wing of the income tax department at your headquarters…
Whatever errors were observed by the IT department have been rectified. All the details, whatever the IT department needed, were given and it has got nothing to do with the financial statements of the bank. I hope this will be closed as early as possible.
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