The history of Tamilnad Mercantile Bank dates back to 1921. The idea to establish a bank for the Nadar business community was first proposed at the annual meeting of the Nadar Mahajana Sangam held at Tuticorin in 1920. The bank was originally registered on 11 May 1921 as Nadar Bank Limited under the Indian Companies Act, 1913. M.V.Shanmugavel Nadar was elected as the first chairman on 4 November 1921. The bank was opened to the public by T.V.Balagurusamy Nadar on 11 November 1921 in Ana Mavanna Building at South Raja Street, Tuticorin. In 1937 Nadar Bank opened a branch in Ceylon, but by 1939 it had closed it.
By 1947 the bank had only four branches: Tuticorin, Madurai, Sivakasi and Virudhunagar. The bank opened its first Indian branch outside the state of Tamil Nadu in 1976 at Bangalore. The first fully computerised branch was opened at WGC Road, Tuticorin on 9 December 1984. The Bank launched its ATM Card on 11 November 2003.
Today, Tamilnad Mercantile Bank Limited (TMB) is a bank headquartered at Tuticorin, Tamil Nadu. TMB was rated as the fastest growing Private Sector Bank continuously for the five years from 2010 to 2015. It was also rated as the Best Bank in the years 2013, 2014 and 2015, due to its robust growth. During the years of 2016 and 2017 it did total business of 541 billion rupees. The bank's planned outlay for the financial year is to reach business worth 600 billion rupees, add an additional 24 branches, and increase its ATMs to 1150. The bank has won the Lokmat BFSI Best Private Sector Bank 2014-15 award. The bank had achieved a turnover of Rs. 28,411 crores in foreign exchange for the year ended March 2017. In terms of forex turnover, TMB ranks first among the Tamil Nadu-based private sector banks. With a view to provide enhanced facilities to the bank’s customers, the bank shifted its foreign exchange department from Tuticorin to Chennai, and created an integrated Treasury and Foreign Exchange Operations Department with adequate infrastructure to handle trading in Government Securities, Bonds, Shares, foreign exchange and derivatives etc. TMB is a member of the Society for Worldwide Interbank Financial Telecommunication (SWIFT).