GTB Effect Saw Centurion Lose Rs 102 Crore In 12 Days

Mumbai, Aug 26 | Updated: Aug 27 2004, 05:30am hrs
Its a case of collateral damage stemming from the Global Trust Bank (GTB) crisis. Centurion Bank witnessed premature withdrawals of its fixed deposits (FD) to the tune of Rs 102 crore in just 12 days (between July 24 and August 4). GTB was placed under moratorium on July 24.

As on March 31, 2004, total deposits of the bank stood at Rs 3,028 crore, including term deposits of about Rs 2,200 crore. The total premature withdrawals constituted about 3 per cent of the banks deposit base and 4.5 per cent of its total term deposits.

Confirming the withdrawals, Centurion Bank managing director Shailendra Bhandari told FE,That was a temporary phase. The anxiety and concern about the prospects of the bank in the minds of a section of customers in the wake of GTB crisis have subsided. The term deposits which were withdrawn prematurely by the depositors are coming back to the bank.

Several other private sector banks too witnessed such premature withdrawal of their term deposits. This followed the announcement of moratorium on GTB on July 24, 2004, freezing all banking operations, except in accordance with the order of moratorium.

According to analysts tracking private banks, the total premature withdrawals from all private sector banks in the country is estimated at over Rs 3,000 crore during the period. Total deposits of 30 private banks as on end-March 2003 stood at Rs 207,164 crore.

The concern subsidised to some extent following the announcement of the merger of GTB with the state-run Oriental Bank of Commerce. On August 5, the finance ministry gave a clean chit to Centurion Bank. There is no problem with Centurion Bank, finance secretary DC Gupta had said then. Mr Gupta had said overall, private banks were doing well. This also eased the depositors anxiety somewhat.

The Rs 90.80 crore rights issue of Centurion Bank opened on August 24 and will close on September 22, 2004.