Tamilnad Mercantile Bank has received a monetary penalty of ₹17.88 lakh from GST authorities for violations related to GST payments during the period from April 2018 to March 2021. The bank disclosed this development to stock exchanges on January 2, 2026, in compliance with regulatory requirements.

Penalty Details and Breakdown

The Superintendent of CGST & Central Excise, Tuticorin South Range, Tuticorin Division, imposed the penalty through order no. GST/TTN/SUPDT/SOUTH/45/2025 dated December 31, 2025. The penalty comprises two components related to different GST violations.

Legal Framework and Violations

The penalty has been imposed under the provisions of Section 74(9) read with Section 122(2)(a) of the CGST Act, 2017 and Section 20 of the IGST Act, 2017. The violations specifically relate to:

• Non-payment of GST on "Less Previously Collected" transactions
• Non-payment of GST on Tax Deducted at Source (TDS) matters
• Period of violation spanning from April 2018 to March 2021

Bank's Response and Next Steps

Tamilnad Mercantile Bank received the penalty order on January 1, 2026, and has indicated its intention to challenge the decision. The bank is in the process of filing an appeal before the Commissioner of GST & Central Excise (Appeals).

Financial Impact Assessment

According to the bank's disclosure, the penalty amount of ₹17.88 lakh is not considered material in nature. This assessment suggests that the penalty will not significantly impact the bank's financial position or operational activities. The bank has made the requisite disclosures under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The disclosure was signed by Swapnil Yelgaonkar, Company Secretary and Compliance Officer, ensuring proper regulatory compliance and transparency with stakeholders regarding this regulatory development.

Tamilnad Mercantile Bank has released its provisional business figures for Q3 FY26 under SEBI LODR Regulations, demonstrating continued strong performance across key banking parameters. The private sector lender reported 14.28% year-on-year growth in total business to ₹1,07,470 crore for the third quarter ended December 31, 2025.

Q3 FY26 Business Performance Overview

The bank's business update shows robust growth momentum across all major business segments, with total business growing from ₹94,042 crore in the same quarter last year. Sequential growth was also strong at 4.93% from ₹1,02,417 crore in the previous quarter.

Credit Portfolio Expansion

The bank's lending portfolio showed particularly strong performance with total advances growing by 16.30% year-on-year to reach ₹50,763 crore. Sequential growth was equally impressive at 8.01% from ₹46,996 crore in the September quarter, reflecting the bank's effective lending strategies and robust credit demand in its operational markets.

Deposit Growth and CASA Performance

Total deposits increased by 12.53% year-on-year to ₹56,707 crore, with sequential growth of 2.32% from ₹55,421 crore in the previous quarter. CASA deposits demonstrated strong growth of 14.93% year-on-year, reaching ₹15,847 crore compared to ₹13,788 crore in the previous year, with quarterly growth of 4.51%. This improvement in CASA deposits indicates enhanced customer engagement and cost-effective funding.

Stock Performance and Recent Developments

The bank's shares are trading at ₹517.90 apiece, marginally higher by 0.80% than the day's opening. The company recently expanded its branch network by opening five new branches in Velandipalayam, Kalapatti, Davanagere, Puthukkadai, and Nikol. Additionally, the bank appointed Thiru S Balasubramanian, Deputy Vice President, as the data protection officer effective December 26, 2025.

Regulatory Compliance

The business update was communicated to both stock exchanges as part of the bank's obligations under SEBI regulations. Company Secretary & Compliance Officer Swapnil Yelgaonkar signed the regulatory filing, with the provisional figures subject to limited review by statutory central auditors.