Financial Daily from THE HINDU group of publications
Tuesday, Jul 27, 2004
Money & Banking
GTB deposits reasonably safe: Chidambaram
New Delhi , July 26
THE Finance Minister, Mr P. Chidambaram, on Monday said that the decision to impose a moratorium on GTB with a view to merging it with another bank was taken keeping the interests of the depositors in mind.
Speaking on the developments just hours before the RBI announced the merger of the troubled bank with Oriental Bank of Commerce (OBC), the Finance Minister said that he felt that deposits with GTB were "reasonably safe."
"Given the information I have, I believe deposits are reasonably safe,'' he said speaking to reporters after the meeting of the Cabinet Committee on Economic Affairs (CCEA).
Mr Chidambaram said that the three-month moratorium would be used to take further measures to protect the interests of depositors.
``Within the three-month moratorium period, various steps will be taken to safeguard the interests of depositors,'' he said.
He said: "Every measure will be taken to protect the interests of depositors with the GTB and steps will be taken to revive the bank before the three-month moratorium ends."
The Finance Minister said that the UPA Government would keep a strict vigil to ensure against recurrence of such incidents.
``GTB had been sliding for several months now. May be not enough vigilance was maintained in the past. In the new government, I have urged all concerned to exercise greater vigilance,'' he said.
Later, speaking at the sidelines of the tax conference, the Secretary, Financial Sector, Mr N.S. Sisodia, said that the operations of GTB would be restructured to bring in normalcy at the shortest possible time.
"The RBI's decision to impost moratorium is a pre-emptive measure to safeguard the depositors' interests. There is no need to worry," he said.
He said that the Finance Ministry has left it to the RBI to take the "judgment call on the timing and nature of the remedial actions" needed for the bank.
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