CHENNAI: Tamilnad Mercantile Bank has said that a few Specified Financial Transactions (SFT) returns were not filed and certain errors or deficiencies were observed in few of the filed returns. "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.
The bank said this has no implication on the financial statements filed by the bank with the Income Tax Authority and other statutory authorities. "As a law-abiding organisation, 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.
This comes after the department said that TMB did not file a statement of financial transaction (SFTs) pertaining to cash deposits of over `2,700 crore involving more than 10,000 accounts. The Income Tax department said that during verification of the bank to address reporting entity compliance issues, it also found discrepancies in specified credit card payments involving total transactions worth `110 crore; dividend distributed of more than `200 crore and shares issued of over `600 crore.
Further, SFTs already filed by the bank were found incomplete in several respects. The bank had failed to report major transactions which included interest paid of more than `500 crore; time deposits; cash deposits and withdrawals in current accounts, etc. The verification also revealed defective filing of Form 61B for Automatic Exchange of Information about account holders "resident" in other countries.
"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," said a source aware about the development. Sources indicate this may not lead to any penalty on the bank, as even if the omissions are wilful the penalty is likely to be in the range of `50,000 only.
The I-T Department conducted a surprise raid on the Thoothukudi-based bank's offices on June 27-28. The department said several large transactions, including interest payments of over `500 crore, time deposits, cash deposits, and withdrawals from current accounts, were not reported by the bank. In addition, Form 61B, which gives information about account holders residing in other countries, 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 required documents," he said.