Due to a technical issue, Tamilnadu Mercantile Bank failed to file information of transactions totalling Rs 3,610 crore

3 Jul 2023 , 12:41 PM

The Tamilnadu Mercantile Bank (TMB), according to the income tax authorities, failed to furnish all the information regarding transactions totalling up to Rs 3,610 crore, but sources told Business Standard that this was because of a technological error. The bank has now delivered the necessary paperwork during the past three days.

The Income Tax (I-T) department asserts that TMB failed to submit an SFT for cash deposits totalling around Rs 2,700 crore that involved more than 10,000 accounts. Additionally, officials had drawn attention to irregularities in certain 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 are required to submit periodic reports to the I-T regarding these SFT transactions. The bank completed all necessary paperwork, however owing to an unintended technical error, this information was not updated on the portal. It was not a deliberate omission, according to a source with knowledge of the situation. According to sources who talked to ET, even if the omissions were done on purpose, the bank may not face any penalties because they are likely to be in the region of Rs 50,000 or less.

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 failed to disclose a number of significant transactions, including interest payments totalling more than Rs 500 crore, time deposits, cash deposits, and withdrawals from current accounts. 

Form 61B, which provides details on account users who reside abroad, was also reportedly submitted incorrectly. ‘Starting in 2020–21, the department examined all of the transactions over the previous three years. The bank has finally fixed the technological issue and uploaded the necessary documents,’ the speaker stated to ET.

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