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A STUDY ON THE GENESIS, STRUCTURE, PRODUCTS AND SERVICES AND PRACTICES FOLLOWED IN TMB

LTD.

AGNES MIRIAM .I312215631004

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Indian Banking Industry First Bank – General Bank of India – 1786 East India Company1. Bank of Calcutta – 18092. Bank of Bombay – 18403. Bank of Madras – 1843 Allahabad Bank – 1865 – first bank run by Indians.

1949: Enactment of Banking Regulation Act. 1955: Nationalization of State Bank of India. 1959: Nationalization of SBI subsidiaries. 1961: Insurance cover extended to deposits. 1969: Nationalization of 14 major Banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalization of seven banks with deposits over

200 Crores.

Presidency Banks

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RESERVE BANK OF INDIA

SCHEDULED BANKS

SCHEDULED COMMERCIAL BANKS

(RRBs & LABs)

PUBLIC SECTOR

BANKS(26)

CO -OPERATIVE

BANKS

NON SCHEDULED BANKS

FOREIGN BANKS(36)

REGIONAL RURAL

BANKS(82)

PRIVATE SECTOR

BANKS(21)

GOVT OWNED BANKS(2)

SBI & its SUBSIDIARIES(

6)

NATIONALISED BANKS(19)

NEW PRIVATE SECTOR

BANKS(7)

OLD PRIVATE SECTOR BANKS

(14)

Fig: Structure of Indian Banking System

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Major players SBI HDFC Bank ICICI Bank Axis Bank Kotak Mahindra Bank YES Bank IDBI Bank Punjab National Bank Canara Bank

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Tamilnad Mercantile Bank Ltd. an old private sector bank that comes under the second

schedule of Reserve Bank of India. started back in 1921 by the Nadar community - “The Nadar

Bank Ltd.” registered on 11.05.1921. became a scheduled bank under the Reserve bank of India

Act on 11.05.1935. changed its name to Tamilnad Mercantile Bank Ltd. on

26.11.1962. MD and CEO: Shri. H. S. Upendra Kamath. Board :13 directors including the MD&CEO and two nominees

from RBI Head Office: Thoothukudi, Tamil Nadu

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Mission and Vision VISION “To be a progressive bank with strong brand

equity, enhancing value for all the stake holders through excellence in performance and good governance.”

MISSION “We shall provide exemplary service with

highest delivery efficiency, based on ethics, honesty and sincerity with cutting edge technology and emerge as a truly national bank.”

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Departments Accounts ATM Cell Business Development Credit Credit Audit & Monitoring Customer Service DP Cell Establishment Department Human Resource

Development Information Technology Inspection

Integrated Treasury International Banking

Division KYC/AML Cell Legal Cell Planning Recovery Risk Management RTGS Cell Secretarial Vigilance

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Products and Services

PRODUCTS and SERVICES OF

TMB

BUSINESS and CORPORATE

BANKING

N.R.I. and INTERNATIONAL

BANKINGPERSONAL BANKING

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Products and ServicesPERSONAL BANKING

RETAIL SERVICESRETAIL LOANS/CREDIT

RECURRING DEPOSITSFIXED DEPOSITSSAVINGS ACCOUNT

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Products and ServicesN.R.I. and

INTERNATIONAL BANKING

TRAVEL CARDSN.R.I. LOANS/ CREDITN.R.I. ACCOUNTS

FOREX SERVICESMONEY TRANSFER

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Products and Services

BUSINESS and CORPORATE

BANKING

CORPORATE BUSINESS SERVICES

BUSINESS/ COMMERCIAL

LOANSBUSINESS ACCOUNTS

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Products and Services

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Organizational Structure BOARD OF DIRECTORS

MD and CEO

BRANCH MANAGER

GENERAL MANAGER

REGIONAL MANAGER

Fig: Hierarchical Structure

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BOARD OF DIRECTORS

MD and CEO

GENERAL MANAGER

GENERAL MANAGER

GENERAL MANAGER

GENERAL MANAGER

GENERAL MANAGER

CREDIT

BUSINESS DEVELOPMENT,

PLANNING,CUSTOMER

SERVICE, RISK MANAGEMENT

AND ACCOUNTS.

HRD,INTEGRATED TREASURY,

INTERNATIONAL BANKING

DIVISION, DP CELL,RTGS

CELL,ESTABLISHMENT DEPT. AND

INSPECTION.

INFORMATION TECHNOLOGY

AND VIGILANCE

RECOVERY,CREDIT AUDIT

& MONITORING,

KYC/AML CELL,MIS & LEGAL CELL

Fig: Functional Structure

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Branch Network Branches: 488 Regional Offices: 10 Extension Counters: 11 ATMs: 1031 CPCs: 6 Currency Chests: 4 Service Branch: 1 E-lobbies:11 SME Branch: 11

•PERSONNEL: 4119•Officers: 1421•Clerks: 2099•Sub-staff: 599

Per employee business: Rs. 12.85

crores

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Financial Highlights (Rs. in crores) Total Business : Rs. 52,946. 58 Deposits : Rs. 30,368.87 Advances : Rs. 22,577.71 Forex Turnover : Rs. 23,388.68 Net Profit : Rs. 402.16 Operating Profit : Rs. 725.49 Return on Assets : 1.23% Return on Equity : 14.39% Net Interest Margin : 3.25% Gross NPA : 1.84 % Net NPA : 0.89% Earnings per share: Rs. 14,138.

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Awards and Recognitions “Best Bank Award” among all private

sector banks under Atal Pension Yojna(APY) for the period 01.12.2015 to 09.01.2016.

ASSOCHAM India Award 2015 for social banking excellence under Small Banks category.

SFBCK Banking Excellence Award 2015 for 3rd best bank at national level under private sector banks for FY 2014 – 15.

The Financial Express in its survey on its survey India’s Best Banks 2013 ranked TMB as #1 among Old Private Sector Banks

Best Bank in Rural Reach for the year 2009, by Dun & Bradstreet

Business World/ Price Waterhouse Coopers Survey 2010 ranked TMB as #1 in Performance among Small Size Banks.

TMB’s Certificate of Deposits are rated by CRISIL as A1+ (Very Strong).

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CSR Policy Complies with the requirements of

section 135 of the Companies Act, 2013 and the Companies Rules, 2014 and allied notifications issued by the Government of India

CSR Committee : 7 members Various activities are done by the bank

as per the Schedule VII of the Companies Act, 2013

CSR Budget : not being lower than 2% of the average annual net profits

Places of Operation : India only. Recent activities: Rs. 2 crores for the

Chennai Flood Relief in December 2015

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Nagercoil Branch fifth branch. started functioning right

from 22.11.1956. Under the control of

Trivandrum region. Branch Code: 005 IFSC No.: TMBL0000005 SWIFT (of TMB Ltd.):

TMBLINBBCHE Authorized Dealer Number:

620014-9360006 BSR Code: 6910333 MICR Code: 629060002

No. of Safe Lockers: 250 No. of ATMs under control: 3 No. of Kiosks present in the

branch:1. Cash Deposit kiosks2. Cash Deposit and Receipt kiosk3. Coin Vending Machine4. Cheque Deposit kiosk5. Passbook Printing Kiosk PRESENT BUSINESS (as on

15.07.2016) 1. Customer Base : Nearly 22,0002. Total Deposits: Rs. 207. 92

crores 3. Total Advances: Rs. 122.27

crores

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Structure of the branch

CHIEF MANAGER

MANAGER (DEPOSITS)

AM (LOANS)AM (JEWEL

LOAN,RTGS,NEFT,DD,TRANSFER

)

AM (FOREX and NRI

BANKING)CLERK

(DEPOSITS)AM (CASA)

CLERK CLERK

CLERK

CLERK

CLERK

CLERK

CLERK

CLERK

JEWEL APPRAISER

CLERK

CASHIER (RECEIPT)

CASHIER (PAYMENT)

CLERK (SA)

CLERK (CA)

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Sections in the Branch Term Deposits Current Accounts/Savings Account (CASA) Loans Cash Jewel Loan Foreign Exchange and N.R.I. Banking RTGS, NEFT, Transfer Net Banking and Mobile Banking

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Working Capital Assessment TMB Ltd. follows the Tandon Committee’s ii

method of lending i.e. the modified MPBF system of assessment.

Layout of the method: 

Total Current Assets

Less: Current liabilities other than bank borrowingsA

Less: 25% of TCA (or) Available net working capital(whichever is higher)Maximum Permissible Bank Finance (MPBF)

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Term Loan Assessment Project report must be submitted. Project implementation schedule - Critical Path Method

(CPM) or Project Evaluation Review Technique (PERT). Projected profitability statements of the term of the loan. Debt service coverage ratio - determine the period of

repayment of the loan. 

  Benchmark Annual DSCR is 1.5:1 ( Every year DSCR should

not go below 1.25:1) Lower ratio - inability to repay as per schedule. Higher ratio - ability to repay earlier than the schedule time.

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NPA Recovery Mechanisms Thorough credit assessment

before disbursement of loan. 1 month - irregular Continuously for 90 days - NPA Registered Demand Notice

Letter to borrower – 60 days. Possession of property

mortgaged to the bank. No re-possession without

giving prior notice. Re-possession of security –

realization of the dues. Carried out as per the

SARFAESI Act, 2002 without the intervention of the court.

Valuation and sale – as per law. Sale – Auctions – Auction

Notice. Filing of suit – Agricultural land . Loan amount – Rs. 10 lakhs –

DRT – 1993. Genuine cases – exemptions Recovery camps. Employees appointed for

recovery purposes. Contacted through phone or

meet at residence. Respect the privacy of the

customers. Documents every effort made

for recovery.

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Best practices followed in the branch Loan Mela, Agricultural Loan Mela, MSME Mela etc. to

increase advances with a motive of improving their overall business.

CASA Campaigns and other such campaigns - general public, students and senior citizens.

Names of the Best Performers during these campaigns in the branch’s notice board.

monetary and non monetary awards. Financial Inclusion Programmes (FIP). Regular meetings with the customers and NRI customers -

tools for customer retention. Customer grievance box - the grievances are redressed

immediately. Job Rotation is done once in 6 months.

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Suggestions to the branch Cross Selling - employees - good rapport with the

customers - utilized to the maximum to cross sell their products.

Reduce the waiting time of the customers in the queue.

The queues in the counters especially the cash payment counter in very long during peak hours.

Alterative arrangements can be made to reduce the waiting time of the customers.

Customers - directed to use the various kiosks present in the branch to avoid long queues during peak hours.

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Key learning in the study Indian Banking Industry, its structure and the major players. Genesis and Growth of Tamilnad Mercantile Bank Ltd. Various products and services of TMB Ltd. and how it differentiates

its products from that of others. SWOT Analysis. Competitiveness of the Indian Banking Industry was studied using

Porter’s five forces analysis. Financial performance of the bank. Various departments of TMB Ltd. and its functions. Basic banking operations - Nagercoil branch. RBI norms and Regulations on how a bank should function, how it

should offer products and services to the customers, key ratios to be maintained by the bank, periodic reporting of the bank to the RBI.

Working Capital and Term Loan Assessment methods. NPA and its recovery mechanisms. Various management and financial concepts studied already -

observed how they are being done in reality.

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Thank You !!