Global Trust Bank (India)
| Company type | Private |
|---|---|
| Industry | Banking, Financial services |
| Founded | October 21, 1994 in Secunderabad, India |
| Founder | Ramesh Gelli, Sridar Subasri, Jayant Madhob |
| Fate | Merged into Oriental Bank of Commerce |
| Headquarters | Secunderabad , India |
Key people | Ramesh Gelli (Chairman) |
| Products | Banking services |
Global Trust Bank (India) (GTB) was established on 21 October 1994 in Secunderabad by Ramesh Gelli, who served as its inaugural Chairman, along with Sridar Subasri, Jayant Madhob, and additional founders. The institution was recognized for pioneering various technology-driven advancements and customer-centric offerings.
In 2001, GTB became entangled in a stock market scandal linked to broker Ketan Parekh due to substantial lending to speculative investors. The subsequent market downturn inflicted severe financial damage, causing merger discussions with UTI Bank to collapse. The Reserve Bank of India (RBI) compelled Gelli to step down; his replacement resigned within half a year, and Gelli’s son joined the board. Gelli made a brief return in 2004 before resigning once more.
An RBI audit during 2001-02 uncovered GTB’s negative net worth but stopped short of shutting down the bank. Despite ongoing financial challenges, GTB grew its branch network from 87 in 2002–03 to 103 prior to RBI’s intervention. The bank offered attractive deposit interest rates and pursued capital infusion through prospective investors. By mid-2004, GTB was negotiating a US$200 million funding deal with Newbridge Capital, subject to RBI approval, which was ultimately denied.
On 24 July 2004, the RBI issued a Moratorium Order against GTB. Before its liquidation, Goldman Sachs owned a 4% stake while the International Finance Corporation held 5%. Shareholders received no reimbursement, although depositors’ funds were safeguarded. GTB initiated legal action against Goldman Sachs. Subsequently, on 14 August 2004, GTB was acquired by and merged into Oriental Bank of Commerce (OBC), which was not involved in the Goldman Sachs litigation.
Following the merger, RBI and OBC discovered that GTB’s financial status was worse than initially disclosed. The acquisition strengthened OBC’s footprint in southern India and facilitated enhanced community service and regional economic development. Post-merger, OBC expanded its workforce, branch network, deposits, investments, and loan portfolio.