In what could be a first in the history of banking mergers in the country, the erstwhile Global Trust Bank (GTB) may be accorded a strategic business unit (SBU) status by the Oriental Bank of Commerce (OBC). The move is expected to immensely benefit the amalgamation between OBC and GTB which came into effect from August 14. | |
| Highly placed sources at OBC said such a move was being strongly considered as this would help the bank immediately maximise the value already created through the amalgamation. |
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| The move could also mean that certain products being offered could selectively have a higher rate of interest than what is being offered to customers of OBC. |
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| "A strategic business unit would mean that they can come up with their own products, tailor-made for customers and in certain cases the interest rates may be even higher," the source said. Products offered though will be under the OBC brand. |
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| "GTB is a highly technology intensive bank and certain processes such as cash management, credit cards and demat businesses are all automised. OBC at the same time does not enjoy such a high level of automisation in its operations. Hence the move to grant a SBU status would mean that you start deriving value from the very beginning." |
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| Senior employees at erstwhile GTB said the bank had not lost many clients and this was because of the prompt action by the RBI in announcing the amalgamation with OBC. |
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| OBC, after the moratorium on GTB was announced, opened temporary accounts for customers who had salary accounts with GTB to minimise their inconvenience. | Notification on GTB assets | | | | The Oriental Bank of Commerce has informed BSE that the aggregate amount representing the value of the assets determined as readily realisable assets of erstwhile GTB shall be credited to the asset account. | | | | The credit balance of the Asset Account shall be appropriated to the extent required to meet the liabilities of erstwhile GTB as detailed in the scheme and surplus, if any, shall be distributed pro-rata amongst the ordinary share holders of the Global Trust Bank Ltd after the expiry of 12 years from the prescribed date or such earlier period as the Centre after consulting the RBI may specify for this purpose. |
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