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Tamilnad Mercantile Bank MD resigns

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A couple of days after Dhanlaxmi Bank's chief executive resigned, the top post in has also become vacant. A K Jagannathan, managing director and chief executive of the Tuticorin-based, old generation private bank, put in his papers on Thursday, citing personal reasons.

“I will be there for another three months, till a new person takes over. The decision is purely because of personal reasons," he told Business Standard over telephone. He took charge in October 2010, after moving from State Bank of Travancore. He has an experience of three and a half decades in the banking industry.

In the recent past, and his brother, Ramachandran, and some foreign investors with stakes in the private sector lender, have locked horns over control of the bank. This delayed the annual general meetings in 2009-10 and 2010-11. Ramachandran has opposed the entry of a consortium of foreign investors led by former PepsiCo head Ramesh Vangal.

The foreign investors' consortium comprised McKinsey's former managing director, Rajat Gupta, Ravi S Trehan, Vector Program, Swiss Re investors and some others. The matter is in court and Jagannathan refused to comment on this issue.

The issue over ownership has also led to postponement of the bank's plans to raise funds through an Initial Public Offer. The management, however, said it would be able to finance its operations through internal accruals for at least three years.

Under Jagannathan, the bank grew its total business by 26 per cent. In the first nine months of this financial year, deposits expanded 15 per cent, while advances were up 19 per cent from a year before.

The bank has said its total business would touch Rs 31,000 crore by March 31. It aims to grow its business to Rs 50,000 crore, comprising Rs 28,000 crore of deposits and Rs 22,000 crore in advances by the end of financial year 2013-14.

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