FM defends move on GTB merger

Defending the government's decision to merge the Global Trust Bank with the Oriental Bank of Commerce, Finance Minister P Chidambaram today said that GTB had been sliding since March 2001.

Shortly after the United Progressive Alliance government took over, the FM discussed the matter with the Governor of the Reserve Bank of India (RBI), requesting him to take suitable steps to protect the interest of stakeholders, particularly depositors, said an official press release issued today.

The Reserve Bank of India conducted its own enquiries and advised the government to impose a moratorium on GTBs activities. This was done with effect from 24 July 2004.

On 26 July, a draft scheme proposing the merger 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 the Oriental Bank of Commerce was made on 14 August, 2004, the release stated.

The Prime Minister's approval was taken for publication of the notification.