Recorded RBI impact
Business restriction
Business restriction · Fresh imposition
Published by RBI
24 Jul 2004
Case Brief
The Central Government issued an Order of Moratorium against Global Trust Bank Ltd. on 24 July 2004, following an application by the Reserve Bank of India. The moratorium was imposed in public interest, in the interest of depositors and the banking system, and was to remain effective from the close of business on 24 July 2004 until 23 October 2004, unless earlier alternate arrangements were put in place. During this period, the bank could make only specified payments, and depositors were allowed to withdraw only up to Rs. 10,000 from their accounts at branches; ATM withdrawals were not permitted. RBI said it would examine options including amalgamation with another bank to safeguard public deposits.
Why RBI Acted
On RBI's application, the Central Government issued an Order of Moratorium against Global Trust Bank Ltd. The order was passed in public interest, in the interest of depositors and the banking system. During the moratorium period, the bank could make only permitted payments specified in the order, while depositors were allowed to withdraw up to Rs. 10,000 from savings/current/other deposit accounts through bank branches. ATM withdrawals were not permitted to enforce the monetary ceiling. RBI stated it would consider options including amalgamation and finalise plans to protect public deposits.
Operating Impact
The bank's ordinary operations were constrained for the moratorium period, especially customer withdrawals and other payments. Depositors could access only limited amounts from branches, and ATM access was suspended. RBI/Central Government would use the period to arrange a resolution, including possible amalgamation, to protect public deposits.
Action Facts
- Primary Impact
- Business restriction
- Order Date
- 24 Jul 2004
- Effective From
- 24 Jul 2004
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank