Global Trust Bank Case

Group-10
Ankit Sharma -063/2018
Shubhrika Tyagi – 064/2018
Krishna Sharda – 065/2018
Puneet Dang – 066/2018
Abhishek Bhardwaj – 067/2018
Rishabh Wadhwa – 068/2018
 • Global Trust Bank was one of the earliest private sector banks in
India founded in 1994
• Founders - Ramesh Gelli, Sridar Subasri and Jayant Madhob
• First branch opened at Secunderabad, Andhra Pradesh
• Well known for its technology based innovations and responsive
services
• Received ₹ 1 Bn in deposits on day 1, ₹ 10 bn by end of first year and
₹ 27 Bn at end of 3 years
ABOUT THE • They had a customer attractive business model such as high deposit
rates, no collateral requirements for loans, flexible timings
COMPANY
 GTB’s History

1993 1996 1997

The bank opened its first branch The Bank introduced Retail Global Trust Bank [GTBs]
in Secunderabad in Andhra depository services under the launched `telebanking' as part
Pradesh brand name of Global of its efforts to strengthen
Depository Account for `convenience banking' through
investors in the stock market. technological support
Global Trust Bank [GTBs] launched ATM
[automated teller machines] service at
GTB announced its foray into the
2001
Hyderabad. The bank has also slated a
simultaneous launch of ATM service in electronic commerce. Infosys Market collapsed and the
Mumbai, Chennai, Bangalore and Pune. Technologies provided GTB with bank’s net and the values
their software BankAway for this of the securities came
1998 initiative. down drastically and the
bank could not recover
1999 from this
3 directors of Global Trust Bank quit on serious differences on 2004
the issue to offload 49 per cent of its equity to strategic
investors, three of bank directors who quit are - chairman of The RBC issued a Moratorium Order on 24 July
board audit committee Mr.Venkappa M Agadi, J V Shetty, & S 2004.
B Ghosh On July 26, 2004, RBI announced that GTB would
be merged with the Oriental Bank of Commerce
2003 (OBC)
 MORATORIUM
• On July 24, 2004, the Government of India imposed a moratorium on Global Trust
Bank (GTB), a leading private sector bank, on the grounds of 'wrong financial
disclosures
• The moratorium was for three months from close of business on July 24, 2004 till
October 23, 2004. Earlier, the Reserve Bank of India (RBI) had announced that
GTB's net worth had turned negative as it had incurred huge losses and
accumulated a significant number of non-performing assets (NPAs).
• RBI stated that the numbers reported in GTB's balance sheet did not match its
audited figures.
• Moreover, GTB failed to provide satisfactory explanations to most of RBI's
queries regarding its capital market exposures and why prudent lending norms
were not observed in disbursing huge amounts for investments in the stock
market.
• RBI said the moratorium was imposed in public interest and to protect the interests
of depositors.
• All operations of GTB were frozen and it was ordered not to give loans without
RBI permission.
• It was allowed only to make payments for day-to-day operations or for meeting
obligations entered into before the order.
FINANCIALS
THANK YOU