Nadars ink deal with TMB's foreign investors

The Nadar Mahajana Bank Share Investors Forum, which holds a majority stake in Tuticorin-based Tamilnad Mercantile Bank (TMB), has signed an MoU with the bank's foreign investors (FIs) to find a solution to the vexed issue of complex stakeholding pattern.

Speaking to reporters in Chennai, T R Tamil Arasu, former director, TMB, said on Tuesday that foreign investors led by Ramesh Vangal, chairman and founder, Katra group, agreed not to increase their current ownership level of 24.5 per cent.

Under the MoU terms, the FIs will elect a majority of the directors on the TMB board from the Nadar community. Six new directors from the community are likely to be elected at the bank's annual general body meeting (AGM) scheduled on April 11. The FIs have also agreed to favour Nadars for employment within the bank. They will also work with the community in the fields of education, medical and rural development," Arasu said.

A total of 28,000 Nadars hold 74.5 per cent stake (of which 8.5 per cent is under judicial dispute) in the bank, whereas the FIs own 24.5 per cent.

The bank has set a deposit and advance mobilization target of Rs 50,000 crore, with 500 branches, by 2013. It is also planning to enter the insurance business through a bancassurance channel, in an attempt to increase its fee-based income. Talks with insurance companies are in progress and a partner is yet to be finalised, Arasu said.