Hugar to become head of Global Trust Bank
Mumbai: In a surprising announcement by the board of Global Trust Bank, one that took even the new incumbent by surprise, former chairman of Corporation Bank has been appointed the new chairman and managing director of Global Trust Bank. It was during his tenure that the Corporation Bank went public and was rated as one of the best public sector banks after more than doubling its business in three years.

This follows the resignation of Ramesh Gelli as the CMD of the bank. The change comes even as Credit Rating Information Services of India Ltd (Crisil) announced it had downgraded and placed GTB’s certificates of deposit (CDs) on ‘‘rating watch with developing implications’’ to P1 from P1+.

The board at its next meeting will decide whether Gelli, who with his associates control 17 per cent of the bank’s equity, will continue as a director in GTB.

Minutes after being appointed to the hot seat, Mr. Hugar told journalists that he would launch a clean-up operation without delay and also hinted at organizational restructuring.

He stated that his first priority would be restoration of confidence of all the constituents, depositors, borrowers, regulators and employees.

Despite the bank’s aim to split the post of chairman and manging director, the appointment of Mr. Hugar to both posts was made as, in the opinion of the board, the bank is yet to identify an independent professional capable of taking over as managing director.

While sources say that Mr. Gelli’s stepping down was due to pressure from the Reserve Bank of India, bank officials insist that it was an internal decision. Gelli had quit in the face of allegations of insider trading and price manipulation in the GTB scrip, ahead of the announcement of the bank’s merger with UTI Bank in January.
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