TMB stock ends flat as RBI rejection of proposed chairman has little impact

RBI advised private sector lender to submit a fresh proposal of another Independent Director for the post of Chairman

The stock of Tamilnad Mercantile Bank (TMB) closed flat today, perhaps taking in its stride the Reserve Bank of India’s rejection of the private lender's proposal to appoint board member B Vijayadurai as its chairman.

The bank said in filing with BSE last night that RBI had declined a request made by the lender for the appointment of B Vijayadurai as its part time non-executive chairman.

On Wednesday its stock closed 0.21 per cent lower at Rs 493 per share on BSE.

RBI advised the private sector lender to submit a fresh proposal of another Independent Director for the post of Chairman.

The bank did not elaborate on reasons for RBI declining the request in BSE filing nor it responded to queries from Business Standard.

The development comes within a few days of the listing of the bank's shares on bourses. The stock began trading on the exchanges on September 15.

Amit Tandon, managing director, Institutional Investor Advisory Services India Limited (IiAS), said RBI had views in the past even about the appointment of managing directors of lenders, including RBL Bank and Yes Bank. RBI acts in a supervisory capacity and it is the regulator's prerogative. It will respond when the bank writes to it, he added.

In June 2021, RBI extended Vishwavir Ahuja’s tenure as RBL Bank’s managing director and chief executive for one year compared to three years sought by the lender’s board. It did the same with then Yes Bank MD and CEO Rana Kapoor a few years back.