Date:30/03/2005 URL: http://www.thehindubusinessline.com/2005/03/30/stories/2005033002020600.htm

Back GTB to be integrated fully with Oriental Bank by June — Common settlement system for accounts being installed

Our Bureau

`We have captured data on each and every NPA account. Everybody except Ketan Parekh has come to the negotiating table.'

New Delhi , March 29

THE integration of the erstwhile Global Trust Bank (GTB) with Oriental Bank of Commerce (OBC) is to be completed by June with the installation of a common settlement system for the accounts of both banks.

"We are in the process of installing a settlement system for accounts of both the banks. For this our software has to be slightly modified. We expect the system to be in place by June, after which the merger would be complete," the Chairman and Managing Director, OBC, Mr B. D. Narang, said at a function to announce the bank's tie-up with Western Union for inbound money transfer. The transfers would be through Western Union's principal agent, Weizmann Forex Ltd.

Mr Narang said that OBC was aggressively pursuing recovery of non-performing assets of GTB. "We have captured data on each and every NPA account. Everybody except Ketan Parekh has come to the negotiating table," he said.

A total of 20 criminal complaints have so far been filed by OBC with the Central Bureau of Investigation involving bad loans of Rs 980 crore. While another Rs 400-crore worth of bad debts have been rescheduled, compromise settlements have been arrived at for Rs 425 crore.

Mr Narang said that cash recovery so far has been about Rs 136 crore, while accounts worth Rs 50 crore have been upgraded from doubtful to standard. "We had inherited a loss of Rs 1,450 crore. We have made substantial progress so far," he said. GTB had capital and reserves of Rs 225 crore. On the liabilities side all issues have been resolved.

Mr Narang said the National Institute of Bank Management that was entrusted the task of suggesting ways of dealing with the staff problem had given its report. The report would be placed before the OBC Board shortly. "There would be one single service regulation for all," Mr Narang said.

He said that barring the senior GTB officials there was not much difference between the salary packages of the two banks. "The CTC (cost to company) is almost the same except that for senior officials," Mr Narang said.

On the current performance of GTB branches, he said that he expected operating profits by the end of the first quarter of the next fiscal. While the operating losses for the quarter ended December 31, 2004 was Rs 67 crore, another Rs 10-15 crore operating loss is to be added during the current quarter.

Since the merger, fresh aggregate sanctions in GTB branches have been Rs 2,500 crore, of which Rs 1,500 crore has been funded and Rs 1,000 crore non-fund based. "The pace of disbursement would decide the profits in the coming months," Mr Narang said.