Global Trust Bank (India) (GTB) was founded on 21 October 1994 and commenced operations at

Secunderabad Secunderabad, also spelled as Sikandarabad (, ), is a twin cities, twin city of Hyderabad and one of the six zones of the Greater Hyderabad Municipal Corporation (GHMC) in the States and union territories of India, Indian state of Telangana. It ...

. Its founders included

Ramesh Gelli Ramesh Gelli is an Indian banking executive who served as the Chairman and Managing Director (CMD) of Vysya Bank and was a promoter and CMD of Global Trust Bank. Gelli set up GTB in 1993 along with Jayant Madhab, a top official of the Asian D ...

(its first Chairman), Sridar Subasri, and Jayant Madhob, among others. The bank introduced a number of technology-based innovations and responsive service.Sridar (2004). GTB was involved in the stock market scam of 2001, that the stockbroker

Ketan Parekh Ketan Parekh is a former stockbroker from Mumbai, who was convicted in 2008 for involvement in the Indian stock market manipulation scam that occurred from late 1998 to 2001. During this period, Parekh artificially rigged prices of certain chos ...

ran. GTB lent heavily to individuals speculating in the stock market; when the market crashed the bank suffered extensive losses. One consequence was that merger talks with

UTI Bank Axis Bank Limited, formerly known as UTI Bank (1993–2007), is an Indian banking and financial services company headquartered in Mumbai, Maharashtra. It sells financial services to large and mid-size companies, SMEs and retail businesses. As ...

fell through. The

Reserve Bank of India The Reserve Bank of India, chiefly known as RBI, is India's central bank and regulatory body responsible for regulation of the Indian banking system. It is under the ownership of Ministry of Finance, Government of India. It is responsible for ...

(RBI) forced Gelli to resign. Gelli's successor resigned after six months, and Gelli's son joined the board of directors. In 2004, Gelli briefly returned to the bank in February 2004 before being again forced to resign. RBI examined GTB's accounts for 2001-2 and found that GTB's net worth had turned negative, but did not close the bank. GTB did not address its problems. Instead, and despite its dire straits, GTB continued to grow. It had 87 branches in 2002–2003, and grew to 103 branches before the RBI forced it to close. It also paid interest on deposits at a rate equal to or better than other banks in its area. GTB sought to recapitalize itself by bringing in new investors. In mid-2004 GTB was in close talks with

Newbridge Capital TPG Inc., previously known as Texas Pacific Group and TPG Capital, is an American investment company based in Fort Worth, Texas. The private equity firm is focused on leveraged buyouts and growth capital. TPG manages investment funds in growth c ...

. Newbridge was to invest US$200million, subject to RBI approval. However, RBI was reluctant to permit private investors to restructure GTB.Marcello (2004). RBI issued a Moratorium Order on 24 July 2004. Before GTB's winding up,

Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...

owned 4% of the bank and the

International Finance Corporation The International Finance Corporation (IFC) is an international financial institution that offers investment, advisory, and asset-management services to encourage private-sector development in less developed countries. The IFC is a member of t ...

owned 5%. GTBL has filled financial lawsuits against Goldman Sachs on 24 July 2004. GTBL shareholders received nothing for their shares; depositors, however, suffered no loss from Shareholders of

. GTBL was acquired by and amalgamated into

Oriental Bank of Commerce Oriental Bank of Commerce (OBC) was an Indian public sector bank headquartered at Gurgaon, Haryana. It had 2390 branches and 2625 ATMs across India. In April 2020, the bank along with United Bank of India has been merged with Punjab National B ...

on 14 August 2004 excluded

from financial lawsuits against

on 24 July 2004. RBI and OBC discovered that situation was even worse than it had appeared at the time of departing of

with 4% of the bank capital. OBC did gain an increased presence in the southern parts of India and presence improved due to community service to improved economic growth. OBC has improved extensively with more staff and more branches with economic growth to community service and improvement in deposits, investments, and advances.Gupte (2004).

Citations and references

;Citations ;References *Gupte, V. Yatin (July 2004) ''Impact Analysis: GTB-OBC merger'

- accessed 2 November 2014. *Marcello, Ray (27 July 2004) "RBI directs Global Trust Bank to Merge". ''Financial Times'

- accessed 2 November 2014. *Sridhar, V. (14–27 August 2004) "The Collapse of a bank". ''Frontline'', Vol. 21, #1

- accessed 2 November 2014. *Suryanarayana, A. (2006) ''The Rise and Fall of Global Trust Bank''. (ICFAI). {{DEFAULTSORT:Global Trust Bank (India) Defunct banks of India Banks established in 1994 Banks disestablished in 2004 Companies based in Telangana 1994 establishments in Andhra Pradesh Indian companies established in 1994 Indian companies disestablished in 2004