TMB to continue growing gold loan business in FY26, says MD & CEO Nair

The bank's total gold loan portfolio as of March 31 is a little over Rs 18,000 crore

Tamilnad Mercantile Bank (TMB) will continue to grow its gold loan portfolio in the financial year 2025-26 (FY26), Salee Sukumaran Nair, managing director and chief executive officer (MD & CEO) of the bank, said on Thursday, adding that the focus will also be on growing retail and MSME (micro, small, and medium enterprises) books.

 

The bank’s total gold loan portfolio as of March 31 is a little over ₹18,000 crore. Nair said that they were well equipped in terms of handling gold loans, hence the impact of the Reserve Bank of India’s (RBI’s) draft guidelines on such loans will be limited. “In fact, we are looking to bring jewel loan delivery end-to-end in six-to-seven minutes,” Nair told Business Standard during an interaction.

 

“The bank has a significant gold loan portfolio, which is at the pink of its health. SMAs (special mention accounts) is just about six basis points and non-performing asset (NPA) ratio is at 0.1 per cent,” Nair said. 

 

On the deposit front, Nair said the bank has taken several initiatives to improve the overall deposit base, such as setting up of a transaction business unit for current accounts, a global non-resident Indian (NRI) centre for NRI deposits, and elite services for high networth individuals (HNIs). “Last year, we got $129 billion of remittances; we do not see any impact of global uncertainty on NRI deposits,” Nair added.

 

Currently, the current account and savings account (CASA) of the bank is at 8.43 per cent, lower than the industry figures. Further, the growth in term deposits, which was at 13.37 per cent, led to a slight deterioration in the net interest margin (NIM).

 

On loans, the focus of the bank is on growing its retail, agriculture, and MSME (RAM) book, and consciously concentrating on reducing other books, including corporate book, said Nair. The bank is targeting to grow its RAM book to 15-18 per cent in FY26.

 

Nair said that due to a small exposure to microfinance institutions (MFIs) and non-banking financial companies (NBFCs), the impact of the RBI rolling back the risk weight norms will be minimal. “The unsecured exposure is just ₹160 crore, and we are very immune to that, and exposure to MFI is only ₹23 crore,” he said.

 

The bank is planning to enter into colending pacts with NBFCs and fintechs as the RBI has expanded the arrangement to all regulated entities, Nair added.