Global Trust Bank (India)

Global Trust Bank (India) (GTB) was a private sector bank in India, founded in 1994 and headquartered in Secunderabad, Andhra Pradesh (later Telangana). It was one of the first of the new generation private sector banks that emerged in India following the liberalization of the banking sector in the early 1990s.

GTB rapidly expanded its branch network and offered a wide range of banking services, including corporate and retail banking, investment banking, and treasury services. It initially focused on financing small and medium-sized enterprises (SMEs).

However, the bank faced significant financial difficulties due to high levels of non-performing assets (NPAs) and alleged financial irregularities. In 2004, the Reserve Bank of India (RBI), the central bank of India, imposed a moratorium on the bank’s operations due to concerns about its financial stability.

Following the moratorium, Global Trust Bank was merged with Oriental Bank of Commerce (OBC), a public sector bank, in August 2004. This merger was orchestrated by the RBI to protect the interests of depositors and maintain stability in the Indian banking system. The merger effectively brought an end to GTB as an independent entity. The shareholders of GTB received no value for their shares in the merger. The episode served as a significant learning experience for the RBI and led to tighter regulatory oversight of private sector banks in India.