Product details

The case describes the growth and collapse of Global Trust Bank (GTB), a leading private sector bank in India. Since 2001, GTB's name was associated with scams and controversies, thereby casting shadows over the credibility of the bank and its management. Due to the over exposure to capital markets and huge non-performing assets (NPA's), the bank was in a financial mess. When GTB tried to cover up its monumental NPA's through under provisioning, the Reserve Bank of India (RBI) - the Central Bank and the Regulatory Authority for Banks in India, appointed an independent team to review the finances of the bank. The review revealed various financial discrepancies kept covered by the bank. RBI imposed a three month moratorium on GTB on the ground of 'wrong financial disclosures' and within two days the bank was merged with Oriental Bank of Commerce (OBC), a public sector bank. With the merger becoming effective, GTB's identity came to an end and it became a part of OBC. The case aims to teach students how financial mismanagement can lead to significant losses for a bank.