MEDIA ARTICLES ON GLOBAL TRUST BANK
RBI HAS ANNOUNCED THAT ORIENTAL BANK COMMERCE TO TAKE OVER GLOBAL TRUST BANK. IT IS HIGH TIME THAT THE CITIZENS OF INDIA TAKE A DEEP DIVE TO SAVE HIMSELF, HIS FAMILY , HIS PARENTS AND HIS FRIENDS.
Tuesday, November 02, 2004
OBC planning asset recovery company- The Times of India
OBC planning asset recovery company- The Times of India
OBC planning asset reconstruction company
Monday, September 20, 2004
Archive A run for the bank
Archive
THE REFORMS BANK
A run for your bank
There must be a banking regulator which is able to predict risks for a bank and liquidate a weak bank while it is still solvent.
It�s Time To Take Cover, India Inc
It�s Time To Take Cover, India Inc
Big companies like ICICI Bank, VSNL, BPL, HDFC Bank, L&T, Tata Chemical, TCS, Infosys have already taken huge D&O covers for various reasons. Also, the collapse of Global Trust Bank is creating new imperatives for the other private sector financial institutions to buy liability products, says an industry observer.
Wednesday, August 18, 2004
The Asian Age - News Worldwide
The Asian Age - News Worldwide
New Delhi, Aug. 18: The Union finance ministry has denied the charges levelled by BJP Rajya Sabha MP Balbir K. Punj against Prime Minister Manmohan Singh and former Prime Minister P.V. Narasimha Rao in the Global Trust Bank case.
"Government have noted, with considerable disappointment and regret, that in an article by Balbir K. Punj veiled insinuations have been made against the Prime Minister Manmohan Singh and the former Prime Minister P. V. Narasimha Rao in the matter concerning Global Trust Bank (GTB). It is obvious that Mr Punj is willing to strike but afraid to wound, and that is why he has stopped just short of making accusations," said the statement issued by the ministry on Wednesday.
It said, "Nevertheless, the references to the Prime Minister and the former Prime Minister deserve to be deplored."
According to the statement, the GTB has been sliding since March 2001 till date of merger. If, as the author alleges, the GTB has burnt a hole of Rs 800 crores-Rs 1,200 crores, the hole was burning since March 2001. Shortly after the UPA government took over, the finance minister discussed the matter with the RBI governor and asked him to take suitable steps to protect the interest of the stakeholders, especially the depositors.
The RBI acted promptly and, after conducting its own enquiries, advised the government to impose a moratorium on the activities of the GTB, and this was done with effect from July 24. On July 26, a draft scheme proposing the merger of GTB with Oriental Bank of Commerce was proposed and a notice inviting objections was published. Within three weeks, the objections were processed, and a final order directing the amalgamation of GTB with OBC was made on August 14, the statement said.
It added that the depositors have welcomed the swiftness and promptitude with which the government and the RBI have acted in the matter. These decisions were taken at the level of the finance minister and the governor, RBI. The Prime Minister’s approval was taken for the publication of the notification with effect from August 14, 2004, it added.
filing of objections to RBI- in regard to amalgamation of GTB
ASIAN AGE August 6, 2004
RBI lauded GTB’s 02-03 accounts
- By Our Special Correspondent
Mumbai, Aug. 5: Former CBI official and IPS officer Yogendra Pratap Singh has sent his
objections to the proposed amalgamation of the Global Trust Bank with the Oriental
Bank of Commerce. Objection have to be filed by August 7 to the RBI.
Mr Singh in his objection mentioned why the amalgamation is violative of several
sections of the Banking regulations Act.
Some of the objections raised are:
1) The amalgamation has to be considered after a moratorium as per section 45. But in
this case it was all done prior to the announcement, which was just a formality.
2) OBC has voluntarily agreed to the amalgamation so it should have take the approval
of two-thirds of the majority shareholders as required under section 44 of BRA.
3) Deposit insurance claim under the Deposit Insurance Corporation does not provide
for staking that claim to set off the loss to equity shareholders.
4) OBC has been guilty of violation of section 12A of the Securities and Exchange
Regulation Board of India. They have taken the entire equity on the basis of non
public information.
5) Under the Sebi takeover regulations for a bailout/merger you require at least three
offers. There should have been open offers so that shareholders get the best terms.
6) There should be accountability of the regulator.
7) RBI is meant to protect depositors and Sebi the investors, but RBI did not act in
conjunction with the Sebi.
8) There should be a CBI enquiry against the RBI officials concerned for their
collusion with GTB.
Mr Singh pointed out that the RBI took the unusual step of issuing a press release on
September 30, 2003 saying that the RBI welcomes cleaning up of the balance sheet
(2002-03) of Global Trust Bank Ltd.
He further said that,“The present management had made special efforts in the recovery
of non-performing assets relating to the previous years and have also made necessary
provisions in accordance with the Reserve Bank guidelines.
The Reserve Bank of India has noted that even though the financial statements show an
overall loss, the bank has made an operating profit for the year 2002-03.”
Then 11 months later it decides to freeze the GTB’s accounts and amalgamate the bank
with OBC because it fudged the previous year’s balance sheet.
Monday, August 09, 2004
Star Of Mysore Online BANKING IN BLUDERLAND 6TH AUGUST
Star Of Mysore Online
Banking in Blunderland
Now that the Global Trust Bank (GTB) has failed, what next ? asked my friend and colleague, when we met during the lunch break.
'Why should we worry about it ? I am not a customer of GTB. Neither are you,'
'Yet, to think that one million depositors of the Bank are facing a grave risk of loss...'
'No fears ! Don't you know that nothing is lost when a candle burns?'
'Don't try to philosophise the incident. Today it is GTB. Tomorrow it may be another. It may be your bank, my bank or our bank ! Who knows ?'
Risk-ridden world
'No one knows. In this highly risk-ridden world anything is possible. Suddenly a vein in the body may snap and the person may collapse, thus bringing a sudden end to all the achievements of the individual ! What a tragedy, as Dr. K.M. Panikkar once said. His own end was no different.'
'Again don't philosophise. You are in a very pensive mood today. You are also affected by the incident, though you refuse to admit it.'
'Forget it. Let us enjoy the cup of coffee. Tomorrow ! Why, tomorrow we may be with seven thousand yesterdays, as Omar Khayyam says. Think of yesterdays. How many banks have failed, not only in the distant past, even recently. History repeats itself, not in circles but in spirals; every time a bank fails the consequences appear to be more serious than in the past, with increasing complexity and gianticity of the situation. Along with it, the regulating mechanism also is being perfected. Yet the malaise continues'.
'You said that history repeats itself. You also spoke of the remote past and recent past. Would you explain ?'
'But remember that during the lunch break or coffee break, whatever it may be, we have to refresh ourselves after half-a-day's hard work. Why worry about all these ?'
'But you have aroused my curiosity by saying so many things not found in the papers. Don't you think that when our government embraced a policy of liberalisation and initiated economic reforms, it opened the banking sector to more private banks. Private sector banks were deem-ed to compete successfully with nationalised banks and usher in a new era of efficiency.'
'In the distant past, before we got our freedom, there were many banks in the private sector. But just as our country is known for a large percentage of infantile mortality, history of our banks is the history of failures. We have brought back the private sector after tinkering with nationalisation and realising that the public sector is the breeding ground of many unhealthy practices. But with the revival of private sector banks, the long-forgotten ills have once again come to the forefront. We don't seem to have learnt much from history'.
'How do you say so? We are told that post-nationalisation banking scene is much better. Fresh wind is blowing. Public sector banks also are given much freedom. Old statutory restrictions are relaxed. Compulsory investment in government securities, priority sector lending, lending a helping hand to sick industries, etc., are no longer strictly obligatory. Loan melas are long being forgotten.'
Unrealisable debts
'The Narasimham Committee Reports on reforms in the banking sector are being implemented. There is consolidation. A number of modern private banks are competing with the public sector banks. New products and electronic banking are being introduced. The accumulation of non-performing assets is being prevented. Provisioning for unrealisable debts and the introduction of capital alequacy norms have made banks stronger and there is a feeling of confidence among the bankers'.
'No doubt there are many plus points. Productivity, profitability, resilience and concern for the consumer are the sine qua non of banking. All these are good. But look at the structure and ownership of some of the modern private sector banks. For example, the Global Trust Bank.
Professional running
Today banking is a very highly specialised sector. It is harmful if a large chunk of the capital of the bank were to be in the hands of a single person or a few persons. Diversification of ownership and professional running are essential. If a single shareholder has a dominant role, it is dangerous. Even in western countries there is diversification and professionalism. This norm was forgotten while granting bank licences. Personal interest or the interest of one's own business should not get precedence.
Nascent capitalists
In the days of British rule, particularly after the American Civil War, when Indian cotton exporters had a heyday, capital came to be accumulated in a few hands. The nascent capitalists started a number of industries, banks and insurance companies.
Banks and insurance companies had to feed their industries with finance. There was interlocking of directorates. The result was disaster. There was infantile mortality on a large scale. The nationa-lisation of major banks undid this tendency. But it created fresh problems.
Liberalisation was an antidote to the evils of public ownership. But care was not taken to see that the old disease did not recur. Micro-banking is not the answer to macro-banking. The Global Trust Bank, started in the year 1992, has been ailing almost from its inception.
Instead of piling up profits, the Bank piled up non-performing assets. The auditors drew the attention of the management to the several irregularities. The Reserve Bank also noticed that all was not well. It asked the Bank to honour capital adequacy norms. It had to raise its owned capital to a minimum of 8 per cent of the net weighted assets. The management did not heed the advice. The RBI had to ask the Bank to suspend operations. It had to be done immediately to avoid flight of resources. It appears that some people had already got scent of it and had begun to withdraw funds.
'So you think that the people have lost faith in private sector banking ?'
'I don't think so. There are weak banks in the public sector also. But they have the support of the government. The government came to the rescue of UTI and IBRD. GTB is now tagged on to OBC —Oriental Bank of Commerce. Public or private, there are only strong banks, large banks and other banks. So the drama goes on. Now, let us go back to work.
The Hindu Business Line : Moral hazard explained ON GTB
The Hindu Business Line : Moral hazard explained: "The proposed acquisition by OBC will ensure that GTB depositors will get their money in full. Experts claim that protecting GTB depositors sends wrong signals to other banks. Why?
This decision may lead other banks to think that they will be bailed out too if their loans turn bad. So, they may actively seek high-risk clients. After all, such clients pay higher interest rate. That is the moral hazard experts are talking about"
Tuesday, August 03, 2004
White-Collar Crime Victims and the Issue of Trust: Spalek
White-Collar Crime Victims and the Issue of Trust: Spalek
GENERAL ARTICLE ON ISSUE OF TRUST
THE QUEEN IS EXPOSED BEHIND US BANKING SYSTEM
THE QUEEN IS EXPOSED BEHIND US BANKING SYSTEM
not connected with gtb
lessons to be learnt
�Bank Failures, Systemic Risk, and Bank Regulation� general articles
�Bank Failures, Systemic Risk, and Bank Regulation�
The artilcle is not connected to GTB at all
Monday, August 02, 2004
The Asian Age - News Worldwide 2nd August 2004 by Olga Tellis
The Asian Age - News Worldwide
RBI gets brickbats for delayed action on GTB
The Hindu Business Line : GTB moratorium: What it means for bank's customers
The Hindu Business Line : GTB moratorium: What it means for bank's customers
august 1,2004 article
Thursday, July 29, 2004
washingtonpost.com - Redirect on water gate scandal investigation
washingtonpost.com - Redirect
Many have watched a movie called All teh President's men played by dustin hoffman and robert redford.
Dustin played Carl bernstein and Redford played woodword both washington post investigators .
By simple questioning as reporters- they uneartherd water gate scandal
What Was Watergate? dated 29 7 2004
What Was Watergate?
Watergate" is now an all-encompassing term used to refer to:
political burglary
bribery
extortion
phonetapping
conspiracy
obstruction of justice
destruction of evidence
tax fraud
illegal use of government agencies such as the CIA and the FBI
illegal campaign contributions
use of public money for private purposes.
domain-B : Indian business : finance : banks : A crisis tale and two banks: Global Trust Bank, ICICI Bank
Previous Posts
- Happy days for GTB defaulters are over - Sify.com
- Happy days for GTB defaulters are over - Sify.com
- OBC protest high wages to ex-GTB staff - Sify.com
- OBC planning asset recovery company- The Times of ...
- Archive A run for the bank
- The Financial Express
- It�s Time To Take Cover, India Inc
- The Asian Age - News Worldwide
- filing of objections to RBI- in regard to amalgama...
- BS Online News GTB FINANCIAL RESULTS AUGUST 9
