Tamilnad Mercantile Bank (TMB), a 104-year-old private sector bank headquartered in Thoothukudi, Tamil Nadu, has taken a significant leap in its digital transformation journey. The bank has successfully implemented Oracle HCM Cloud Payroll integrated with AI agents, in partnership with Kovaion Consulting, marking a pioneering move in India's banking, financial services, and insurance (BFSI) sector.

Cloud-Enabled Payroll and AI-Driven Employee Services

The implementation provides TMB with cloud-enabled payroll capabilities and introduces AI-driven employee self-service features. This innovative step is set to enhance automation, improve accuracy, and elevate the overall employee experience within the organization.

Key Features of the New System

Industry Impact

This implementation positions Tamilnad Mercantile Bank as the first in India's BFSI industry to adopt AI-powered automation for payroll and HR operations. The move sets a new benchmark for HR transformation in the banking sector, combining human trust with machine intelligence.

Leadership Perspective

Mr. Salee S. Nair, MD & CEO of Tamilnad Mercantile Bank, commented on the achievement: "The migration to Oracle HCM Cloud Payroll with AI integration marks a key step in our digital journey, enhancing operational efficiency and redefining employee experience while maintaining our legacy of trust and innovation."

Collaborative Effort

The project was executed through a joint effort involving Oracle, Kovaion Consulting, and TMB's internal teams. Nanda Kumar, Founder and Director of Kovaion Consulting, emphasized the focus on creating a future-ready system built on trust, scalability, and precision.

About Tamilnad Mercantile Bank

Tamilnad Mercantile Bank Limited, with its century-long history, has established itself as a strong player in the Indian banking sector. Some key facts about TMB include:

• 104 years of continuous profitable operations
• Pan-India presence with 600 branches
• 12 Regional Offices across 17 states and 4 Union Territories
• Serves over 5.3 million satisfied customers

This digital transformation initiative underscores TMB's commitment to innovation, modernization, and people-first growth. By leveraging AI and cloud technologies, the bank is positioning itself at the forefront of digital HR practices in the banking industry, paving the way for a more efficient and employee-centric future.

Tamilnad Mercantile Bank (TMB) has reported a strong performance in the second quarter, with total business growth of 11.40% and deposit growth of 12.32%, signaling a revival in the bank's growth trajectory. The bank's Managing Director and CEO, Salee S Nair, highlighted these achievements during the Q2 earnings conference call.

Key Highlights

• Total business growth: 11.40%
• Deposit growth: 12.32%
• CASA growth: 9.30% year-on-year
• Net profit: INR 318.00 crores (4.73% YoY growth)
• Gross NPA: 1.01%
• Net NPA: 0.26%
• Return on Assets (ROA): 1.85%
• Return on Equity (ROE): 13.77%

Expansion and Digital Initiatives

TMB opened its 600th branch during the quarter, adding 22 branches in the first six months of the fiscal year. The bank plans to open another 30-36 branches in the current year, focusing on expanding its footprint to accelerate growth.

The bank is investing heavily in IT modernization, with a budget of INR 250.00 crores for the current year. This includes implementing a new loan management system, revamping Internet and mobile banking platforms, and exploring artificial intelligence applications to enhance productivity.

Financial Performance

TMB's net profit stood at INR 318.00 crores, showing a quarter-on-quarter growth of 4.14% and a year-on-year growth of 4.73%. The bank maintained its asset quality with a gross NPA of 1.01% and a net NPA of 0.26%. The provision coverage ratio improved to 74.36%, up by 132 basis points.

Deposit and Advances

The bank reported a significant improvement in its CASA (Current Account Savings Account) share, which increased by 92 basis points. The CASA growth stood at 9.30% year-on-year.

On the advances front, TMB is seeing growth in the MSME sector, with a quarter-on-quarter growth of 3.84%. The RAM (Retail, Agriculture, MSME) portfolio now constitutes 94.59% of the total advances.

Future Outlook

TMB has provided guidance for 14-15% credit growth and 12-13% deposit growth. The bank expects significant growth momentum, projecting a profit growth of around 20%.

Mr. Nair expressed confidence in maintaining the current ROA levels of around 1.85% going forward. He also mentioned that the bank aims to keep the cost-to-income ratio under 45% in the coming quarters.

Conclusion

Tamilnad Mercantile Bank's Q2 results demonstrate a clear revival in growth, with improvements across key financial metrics. The bank's focus on expanding its branch network, investing in digital infrastructure, and growing its MSME portfolio positions it well for sustained growth in the coming years.

As the bank continues to modernize its operations and expand its presence beyond Tamil Nadu, it aims to outperform market growth rates and solidify its position in the Indian banking sector.