The Managing Director and CEO of Tamilnad Mercantile Bank (TMB), S Krishnan, has stepped down from his position following a recent banking blunder. The bank mistakenly deposited a staggering Rs 9000 crore into the account of a Chennai cab driver named Rajkumar, who hails from Palani in Tamil Nadu. Krishnan cited “personal reasons” for his resignation, although he still had two-thirds of his term remaining.

In his resignation letter, Krishnan reflected on his thirteen-month tenure at the bank, during which several strategic initiatives were undertaken to fortify and modernize its operations. These included Business Process Engineering, a Digital Transformation, system and procedure enhancements for greater robustness, skill set development, risk matrix strengthening, and fostering a culture of compliance. These efforts aimed to prepare the bank for the challenges of the future.

How did Rajkumar receive Rs 9000 crore?

Rajkumar discovered the colossal deposit of Rs 9000 crore in his account on September 9 when he received an SMS notification. Initially, he suspected it might be a scam. To confirm the authenticity of the deposit, Rajkumar transferred a smaller sum of Rs 21,000 to a friend, and the transaction went through smoothly. It was only then that he realized the bank had indeed transferred the substantial amount into his account.

However, his joy did not last long as the bank promptly debited the entire sum from his account, rectifying the colossal error. The incident had caused a significant stir in the banking world.

In a statement, the bank clarified that S Krishnan would continue to serve as MD and CEO until further guidance or advice from the Reserve Bank of India (RBI). It appears that Krishnan’s departure has connection to the recent banking irregularities, which gained attention when the Income Tax Department conducted a verification process on the bank in June of this year and raised concerns about certain irregularities. The situation remains fluid, and the RBI’s directives will shape the bank’s future course of action.

The resignation of S Krishnan and the remarkable deposit mishap have underscored the need for increased vigilance and regulatory oversight in the banking sector, as financial institutions continue to adapt to the challenges of the modern era.