Fall of a banker

Uday Chatterjee
27 July 2004

He had a successful stint at Vysya bank but could not repeat the success at Global Trust Bank. Instead he led it to its doom. The best of bankers are essentially a dull and boring lot. After all, they are the custodians of public funds and public funds are meant to be deployed keeping the public in mind. They should therefore stick to the knitting and go through the job by diligently sticking to norms.

Global Trust Bank (GTB) chose to be the custodian of founder-chairman Ramesh Gelli's flamboyance. Predictably, it paid the price for it.

Not many in banking circles are surprised at the bank's woes. Two years back, Gelli was seen manipulating the stock markets in league with rogue broker, Ketan Parekh. Apart from lending huge sums of money to Parekh and other brokers, Gelli was also busy rigging up the GTB stock to gain advantage of an impending merger. The Reserve Bank of India at that time removed Gelli as a director of the bank but the damage had been done — the assets of the bank had eroded and the fall of a once-promising, efficient, private sector bank, was just a matter of time.

Gelli, an engineer from Osmania University and a graduate of the Asian Institute of Management, Manila,was roped in to become the CEO of Vysya Bank (now Vysya ING Bank). That was in the early '80s when Gelli was in his mid thirties — unheard in Indian banking circles. To head a bank, the one criteria has always been that the incumbent should be just a few years away from retirement, if not his grave.

The Vysya (trader) community, to which Gelli also belonged, controlled Vysya Bank. Vysya Bank was a small bank, which catered to the trading community of south India. Its main business was the safe but dull bills discounting — a sound and a profitable business as traders all over the country rarely ever dishonour their bills.

Discounting bills, however, is considered to be at the low end of the banking snob value chain. Gelli wanted the bank to get into more sophisticated areas. He did that and did it in style. For the decade or so that he was at the helm of Vysya Bank, he converted it from an old parochial inward looking bank to a modern and throbbing bank with an pan India presence.