OBC to ease GTB salary account woes

Oriental Bank of Commerce to open temporary accounts for salary

Oriental Bank of Commerce (OBC) plans to open temporary accounts for the customers who have salary accounts with Global Trust Bank (GTB) to minimise inconvenience.

Addressing a press conference, Rajiv Madhok, general manager of Oriental Bank of Commerce, said: "The modalities of these accounts are being worked out and a solution would be found soon."

He said that for such accounts the bank does not require the clearance from the Reserve Bank of India (RBI).

Madhok said that the purpose of his visit was to meet the top brass of GTB and also meet some of the corporates whose salary accounts were with GTB.

According to him, the due diligence would start soon and the entire process would be completed in about four weeks. "The due diligence would be done by a third party which would be recommended by OBC to the RBI," he said.

Madhok said that they were in talks with the RBI for the last one month for merging GTB with OBC. "We volunteered for the merger as we were scouting for a partner to expand our business in the south," he said.

Madhok said that after the merger some of the branches would be rationalised. "Wherever there are a number of branches we would be rationalising the branches and repositioning the staff," he said.

According to him, there would be a gap of around Rs 800 crore after the merger process has been completed. "We expect to cover up this gap with recoveries and tax breaks," he said.

Responding to a question, Madhok said that the strength of OBC was in recoveries and expressed confidence that a good amount of non-performing assets (NPAs) of GTB would be recovered.

Madhok said that the merger would help OBC break into the top five banks in the country.