Tamilnad Mercantile Bank has secured a significant reduction in the penalty imposed by the Directorate of Enforcement, with the Appellate Tribunal under SAFEMA lowering the amount from ₹17.00 crore to ₹3.40 crore. The tribunal passed the order on July 9, 2026, and the bank received the communication on July 16, 2026. This decision concludes the appeal preferred by the bank and its then Directors and Company Secretaries against the adjudication order dated August 14, 2020, which arose from a Show Cause Notice issued in December 2014 regarding alleged contraventions of FEMA Regulations in recording the transfer of shares.

The reduction in penalty has a direct positive financial implication as the bank had already deposited the full ₹17.00 crore with the Directorate of Enforcement at the time of filing the appeal. Consequently, the excess amount of ₹13.60 crore is now liable to be refunded to the bank. The penalty imposed on the then Directors and Company Secretaries has also been reduced substantially, though specific figures for individuals were not disclosed.

Details of the Order

The bank stated that it is examining the order issued by the Appellate Tribunal and will take appropriate steps in due course if necessary. The disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Tamilnad Mercantile Bank shareholders approved a final dividend of ₹12.50 per equity share for the financial year ended March 31, 2026, at the 104th Annual General Meeting (AGM) held on July 14, 2026. The meeting, conducted via video conferencing, saw the adoption of audited financial statements and the re-appointment of key statutory auditors and directors. All resolutions were passed with the requisite majority, though voting rights for certain shareholders were restricted to 4.99% of the paid-up capital in compliance with Reserve Bank of India (RBI) directives.

The scrutinizer's report confirmed that remote e-voting occurred from July 11, 2026, to July 13, 2026. A total of 223 shareholders attended the meeting through video conferencing. The facility for appointing proxies was not available due to the virtual mode of the meeting. The voting process was supervised by I.D. Saravanan of Alagar & Associates LLP.

Voting Results and Restrictions

The approval for the final dividend received 99.995% assent, with 73,437,733 votes in favour and 3,366 against. The re-appointment of Shri K.V. Rama Moorthy as a Non-Executive Director was approved with 99.321% votes in favour. The special resolution to re-appoint Shri C. Chiranjeeviraj as a Non-Executive Independent Director secured 96.807% assent.

The report noted that 98,06,073 equity shares held by four shareholders acting in concert were restricted to 79,01,738 shares, representing 4.99% of the total voting rights, following an RBI order dated March 15, 2019. Consequently, 19,04,335 equity shares were treated as invalid.

Auditor and Director Appointments

M/s. Sundaram & Srinivasan and M/s. Chandran & Raman were re-appointed as Joint Statutory Central Auditors for the financial year 2026-27. The remuneration for each firm was fixed at ₹26,40,000, plus reimbursement of out-of-pocket expenses. The Board was also authorized to appoint statutory branch auditors for FY27 and fix their remuneration in consultation with the Joint Statutory Central Auditors.