The Tamilnadu Mercantile Bank (TMB), according to the income tax authorities, did not provide all the details regarding transactions worth up to Rs 3,610 crore, but sources told Business Standard that this was due to a technological glitch. The bank has now submitted all the required documents during the past 3 days.

“The returns which were to be submitted have since been submitted and errors or deficiencies observed are also being attended to and rectified,” TMB said in a letter to National Stock Exchange and Bombay Stock Exchange.

According to the bank, this is unrelated to the financial statements that the bank filed with the Income Tax Authority and other statutory authorities. “As a law-abiding organization, we are providing all details that are required by the department. Business operations of the bank are continuing as usual and are not impacted. We are complying with our legal obligations for disclosure from time to time,” the bank said.

TMB Faces I-T Department Scrutiny for Unreported SFT and Transaction Discrepancies

The Income Tax (I-T) department states that TMB failed to submit an SFT for cash deposits totaling around Rs 2,700 crore that involved more than 10,000 accounts. Additionally, officials stated that during its verification the bank to address issues with reporting entity compliance, it also found discrepancies in specific credit card payments, including ones involving over Rs 110 crore in total transactions, over Rs 200 crore in dividends, and over Rs 600 crore in shares issued.

“Banks have to report these SFT transactions at periodical intervals to the I-T. The bank had done all the required filings, but this was not updated in the portal due to some unintentional technical error. It was not a wilful omission,” a source with awareness of the development stated.

According to sources, even if the omissions were done on purpose, the bank may not face any penalties because they are likely to be in the range of Rs 50,000 only.

On June 27 and 28, the I-T Department conducted an unexpected raid on the bank’s Thoothukudi offices.

According to the agency, the bank did not report a number of large transactions, including interest payments totaling over Rs 500 crore, time deposits, cash deposits, and withdrawals from current accounts.

Form 61B, to give information on account holders who reside internationally, was also reportedly filed incorrectly.

“The department reviewed all the transactions of the last three years starting 2020-21. The bank now corrected the technical error and uploaded the required documents,” he said.


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