The recent Global Trust Bank fiasco

[Ankur]

The recent Global Trust bank fiasco points to the fact that the banking system in India has become a major area of concern. My gutfeel is that even the nationalized banks may follow suit and play havoc with the trust of the depositors.

The RBI has tried to offer relief to the investors by merging the GTB with OBC, which might ensure safety of depositor’s money.

The RBI should however act in a more proactive manner and come up with a list of banks every month of those banks which might be in financial trouble so that the general public has the idea beforehand.

[Editor]

The Global Trust Bank collaspe is indeed horrifying. It sure created panic amongst the depositors.

[garcons]

I remember something similar had happened to HDFC bank too, but i cant re-collect what exactly happened after that. Indeed, some info should be avialable beforehand coz such things could really create a havoc in the country.

On second thoughts, i think the HDFC thinggie was just a rumour and eventually nothing happened.

[anshulseth]

The GTB fiasco is a slap in the face.
We simply don't seem to learn from past experiences.
RBI, instead of acting proactively, always racts to situations.
The health of a bank is generally measured by the liquidity ratio.
This n many other factors need to be monitored from time 2 time by the regulating body, from creating a mess like GTB.
The sufferer is the common man, and also the state banks which have to suffer as a punishment, the amalgamation of the sick bank into themselves.
This may generally weed off whtevr profit they earn.
RBI may try to shove off the blame, by saying tht such monitoring is generaly not possible, n requires a huge workforce.
But this may not absolve it of its duty.

GTB has been under pressure from some time, with the bad debts, FII leaving it, the link with Ketan Parekh. All had its toll on the bank, which promised a lot whenit started.

Its time RBI or the finance ministry put some measures to stem the rot, or at least have a contingency plan to deal with such calamities from time to time.