I-T department reports violation by Tamilnad Mercantile Bank; No SFTs filed for over Rs. 2,700 crore deposits

Major transactions, including as interest payments totaling more than 500 crore, time deposits, cash deposits, and withdrawals from current accounts, were not reported by the bank.

According to a report by, the Income Tax (I-T) department said that the Tamilnad Mercantile Bank (TMB) had not submitted a statement of financial transactions (SFT) pertaining to cash deposits totaling more than 2,700 crore and involving more than 10,000 accounts. The I-T department stated that officials discovered inconsistencies in specific credit card payments involving total transactions worth 110 crore, dividend distribution of more than 200 crore, and shares issued for more than 600 crore during verification at the bank to address reporting entity compliance issues, the report added.

Additionally, the bank’s SFTs were found to be lacking in a number of key areas. Several significant transactions, including interest payments totaling more than 500 crore, time deposits, cash deposits, and withdrawals from current accounts, were not reported by the bank, the audit stated.

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Additionally, the verification found that Form 61B for the Automatic Exchange of Information (AEOI) about account holders who are “resident” of other nations had been filed incorrectly. In order to get their comments, TMB authorities could not be reached. The paper states that reporting companies including banks, forex dealers, and sub-registrars are typically where information is obtained regarding the financial transactions of taxpayers.

With a decrease in bad loans, the private sector lender saw an increase in net profit of 11.45% for the fourth quarter that ended in March 2023, totaling 253 crore. For the previous fiscal year, the bank recorded a net profit of Rs. 227 crore. In a regulatory statement, TMB stated that the overall income for the quarter increased to 1,204 crore from 1,200 crore the previous year.

Comparing the current quarter to the same quarter last year, interest income increased to 1,070 crore from 986 crore. According to the statement, the board of directors has recommended a 100% dividend, of which 50% would be paid as an interim dividend in March 2023.

Gross non-performing assets (NPAs) dropped from 1.69 percent at the end of March 2022 to 1.39 percent of gross loans as of March 31, 2023. Additionally, the net NPAs decreased from 0.95 percent to 0.62 percent. The decrease in the bad loan ratio made it possible to reduce the provisions for NPAs and contingencies for Q4FY23 from 146 crore to 57 crore.