Global Trust Bank (GTB) today was hit by panic withdrawals of savings deposits from many of its 50-odd ATM counters and 18 branches in Hyderabad following widespread apprehensions among depositors that the bank's financial health.
Delay in replenishing cash in ATMs only added to the problem with depositors queuing up at these centres. However, by evening the bank's management seemed to have 'controlled' the situation by drawing funds from the Reserve Bank of India and meeting most of the demands.
Senior managers and officers of the bank rushed to all centres to convince customers that there was no need to panic and that the finances of the bank were sound.
Managing director Sudhakar Gande in a statement attributed the panic among depositors to "some unscrupulous elements and vested interests" who were spreading rumours about the financial health and stability of the bank.
"We would like to state categorically that there is no truth whatsoever in these rumours and GTB's financial position is absolutely sound", he said.
Maintaining that the situation is not alarming, S L Kaulgud, general manager (banking supervision) at the local office of the RBI said: " As a supervisory body we are monitoring the situation. It is not alarming and we are convinced that the GTB has made all arrangements to meet the situation".
Assuring customers on the financial stability of the bank, the GTB managing director said in his statement that the bank has invested Rs 2,000 crore in bonds towards statutory liquidity ratio (SLR) and Rs 300 crore in cash, which is well in excess of the norms prescribed by central bank.
The bank also claimed to have got another Rs 500 crore liquid assets. GTB has a deposit base of about Rs 6,000 crore.
The trouble started late on Wednesday evening at one of the ATMs when a large number of employees of a major corporate in the city queued up to withdraw cash from their salary accounts held with the bank. When the ATM went out of cash and there was some delay in replenishing the cash, the customers panicked and rushed to other ATMs. That sparked off rumours about the financial health of the Bank. The withdrawals from the ATMs were so heavy by midnight that most of the tellers went out of cash.
"Though we did not expect this kind of rush, we seem to have erred in not visualising such a situation and putting in place a contingency plan", admitted a senior bank official.
He said today's withdrawals could be in the range of Rs 5-6 crore in the city compared with that of below Rs 2 crore per day in normal times.
He said the situation in other cities where GTB has a good presence is normal. "During the recent past, GTB has taken a number of steps to further strengthen its operations and has finalised plans for high growth, including a number of new products and initiatives, which will be launched shortly", the bank release said.
"With these initiatives and strategies, the bank is set to emerge as a very strong and significant entity in the coming months. GTB continues to enjoy the patronage of over seven lakh customers all over the country and this customer base is growing rapidly, having recorded an increase of nearly two lakh customers in the last fifteen months", the release added.
