Global Trust Bank to be merged with Oriental Bank

Monday, 26 July 2004, 07:00 Hrs
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MUMBAI: The Reserve Bank of India (RBI) Monday proposed to amalgamate the crisis-ridden Global Trust Bank (GTB) with the state-owned Oriental Bank of Commerce (OBC).

A draft scheme of amalgamation has been drawn up by the banking sector regulator that advises the Hyderabad-headquartered Global Trust Bank to submit its suggestions and objections, if any, not later than Aug 7, a statement said.

The draft scheme has also been forwarded to the government for approval with a notification to the markets regulator Securities and Exchange Board of India (SEBI) and the Bombay Stock Exchange (BSE), where the bank's shares are listed.

"We will also be putting up the draft scheme of amalgamation on our website. The RBI and SEBI are looking forward to proceeding in the matter expeditiously," said the central bank's executive director Usha Thorat.

RBI officials clarified that there would be no automatic swap arrangement for GTB shareholders once it is amalgamated with Oriental Bank.

Oriental Bank was chosen since it was looking forward to a better presence in the south and saw a synergy in merging its operations with GTB.

GTB was put under moratorium for a period of three months till Oct 23 by the RBI Saturday.

The central government took the step after successive attempts over the past two years to revive the bank -- whose capital and reserves had been wiped out by bad debts -- had failed to produce concrete results.

Soon after, several depositors -- panicking at possible loss of their savings and retirement benefits -- began flocking various branches of the 10-year-old private bank that has been financially troubled for the past two years.

Depositors are allowed to withdraw up to 10,000 during the moratorium.

Source: IANS
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