Tamilnad Mercantile Bank Plans Significant Hiring Expansion to Boost Productivity and Technological Advancements in FY27

Tamilnad Mercantile Bank to Boost Workforce by 1,000 Employees in FY27

Tamilnad Mercantile Bank (TMB), a Tuticorin-based lender, is planning to increase its workforce by approximately 1,000 employees in the fiscal year 2027 (FY27). This move is aimed at improving the bank's tech offerings and maximizing productivity among individuals. According to Salee S Nair, the Managing Director & CEO of TMB, the productivity increase will be driven by higher tech spends.

TMB is undergoing a tech transformation, with its IT spending rising by about 16 percent on a year-on-year basis. The implementation of the first phase of the bank's new loan management system (LMS) is a significant part of this transformation. The second phase of the LMS implementation is expected to be rolled out in the next six months.

As of now, the bank has a headcount of nearly 5,000 employees, according to media reports. Nair had previously indicated that the bank will re-purpose half of its workforce towards sales to maintain customer relationships. The increased tech spends and physical infrastructure investments have resulted in the company's cost-to-income ratio (CIR) rising to 45.5 percent for FY26 from 44.6 percent in FY25.

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Nair does not expect the CIR ratio to cross 50 percent in the future. The bank has also expanded its physical infrastructure, with 60 additional bank branches expected to be opened by FY27. Currently, the bank has a cumulative of 622 bank branches, up from 578 at the end of FY25.

Gold Loan Business Remains a Key Driver

The gold loan book will continue to be a major driver of TMB's overall credit portfolio, due to stable returns, yields, and the secure nature of the product. The return of equity (RoE) for the gold loan product is at 10 percent, according to Nair. The gold loan book has grown 35 percent in Q4 FY26 to Rs 24,790 crore, from Rs 18,249 crore in the previous corresponding period.

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The bank has focused on customer trust, transparency, and operational efficiency in its gold loan business, rather than focusing on ticket size or chasing bigger borrowers. The bank currently processes gold loans in about 30 minutes at branches, while charging interest rates of around 10.15 percent. Nair aims to reduce the turnaround time to between 10 and 12 minutes.

The lender has also acknowledged that the incoming El-Nino conditions may pose a challenge to its gold loan business, particularly if rainfall falls below expectations.