Move
to protect depositors, says RBI
Our
Banking Bureau
26 July 2004
Mumbai:
The Reserve Bank of India (RBI) yesterday stepped
in to reassur depositors of the Global Trust Bank, reiterating
that the moratorium was imposed to protect their interests
and safety of funds. This comes in the wake of panic-stricken
depositors thronging branches to make withdrawals.
Assuring depositors that necessary action was being initiated
to ensure return of normalcy, the central bank clarified
that customers having demat account and safe deposit lockers
with the bank can operate them as usual.
GTB,
which came under RBI scanner following its involvement
in the 2001 stock market scam, has been placed under
moratorium by the Gentre on the recommendations of the
RBI from the close of business on Saturday (July 24)
and up to and inclusive of October 23, or an alternative
date, if alternative arrangements are made.
During
the moratorium period, the RBI will consider various
options including amalgamation of GTB with any other
bank. Depositors have been permitted to withdraw only
up to Rs 10,000 from their savings bank account, current
account or any deposit account. However, the RBI may,
via a general or special order, permit withdrawals exceeding
Rs 10,000 but not exceeding Rs one lakh for meeting
expenditure relating to medical treatment, higher education,
obligatory expenses like marriage or other ceremonies,
and any other unavaoidable emergency. ATMs of the bank
have since been disabled.
Indiscriminate
lending to stock brokers, diamond traders, and 
exporters
proved to be the bank's nemesis. It is reeling under
accumulated losses of Rs 260 crore and sticky assets
of Rs 915 crore.
List of reports on Global
Trust Bank
