Global Trust Bank

shame-globaltrustbank

Thousands of depositors and investors were caught unawares when the RBI announced a three-month moratorium on Global Trust Bank in late July to protect depositors' interest. It was shameful the way the bank kept its depositors and public at ransom. Equally shameful was the inadequacy of the financial system to let the rot set in, even though enough pointers to the spreading malaise in the private-sector bank were available much earlier.

Despite repeated warnings from RBI, the bank could not bring its books in order and get back into financial shape and when the central bank got cracking, it was the depositors, who had to go through extreme hardship and anxiety in getting their investment back -- that too in multiple retrievals. Thousands of investors were left with dud scrips of the erstwhile bank, when plans to merge it with Oriental Bank of Commerce were announced and no provision for conversion of GTB shares into OCB's was made. More than mere breach of trust, the GTB collapse showed the lacunae that that exists in financial sector regulation.

- Koshy Samuel