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    Listing because RBI has been asking us to, says Tamilnad Mercantile Bank

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    Listing because RBI has been asking us to, says Tamilnad Mercantile Bank

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    Tamilnad Mercantile Bank’s outgoing MD and CEO KV Rama Moorthy, on September 5, said that ownership disputes have been haunting the bank for a while.

    Tamilnad Mercantile Bank’s outgoing MD and CEO KV Rama Moorthy, on September 5, said that it is going public since the Reserve Bank of India has been asking for the same, adding that ownership disputes have haunted the bank for a while now.
    The bank's initial public offer (IPO), to raise up to Rs 832 crore, was subscribed three percent in the first 30 minutes on the first day of the bidding process. Shares of TMB — one of the country's oldest private sector lenders — are available for bidding in a price band of Rs 500-525 in multiples of 28 under the IPO. The subscription window will close on September 7.
    Speaking to CNBC-TV18, Moorthy said, “Ownership disputes and shareholding disputes have been haunting the bank for quite some time. And various disputes are being handled at different levels as of now.”
    Talking about the loan book, he said, “Almost 50 percent of our loan book comprise of collateral security and that is the comfort level and that is the reason why we are in a position to enforce our securities more effectively when compared to our peer banks.”
    However, said Moorthy, the bank’s ROE and ROA might get affected temporarily. “Temporarily, our return on equities (ROEs) and return on assets (ROAs) may get affected for a six-month period or so, but when the industry is likely to grow at a decent CAGR of more than 10-15 percent, we should also be in line with the growth aspirations of the banking sector,” he said.
    As of March 31, the bank restructured advances to around 3,000 borrowers for an outstanding amount of Rs 67.57 crore. Nearly 1/5th or 19.6 percent of the total loans on the book are under SARFAESI. It also highlighted some risk factors to its business in its RHP.
    For the entire interview, watch the accompanying video
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