GTB Slaps Notices On Defaulters For Recovering Rs 100 Crore

New Delhi, October 20: | Updated: Oct 21 2002, 05:30am hrs
Taking advantage of the re-promulgated Securitisation Ordinance, Global Trust Bank (GTB) has slapped notices on 25 defaulters for recovering around Rs 100 crore from them and is evaluating the prospects for distributing insurance products and mutual funds.

We have sent notices to 25 defaulters, GTB managing director Sudhakar Gande told PTI.

Banking sources said through this process the bank is aiming to recover around Rs 100 crore.

The re-promulgated Ordinance enables the banks and financial institutions to give notices to recover the non-performing assets (NPAs), which stand at over Rs 100,000 crore in the system.

At present, GTBs net NPAs stand at 9.25 per cent of the net advances. The gross NPAs is around 14 per cent.

Aiming Rs 14,500 crore business this year as compared to Rs 12,900 crore in 2001-02, GTB is expected to open 15 more branches across the country by the end of this fiscal.

Asked about plans to increase the capital base, Gande said there was no need since the capital adequacy ratio was 11.25 per cent, well above the Reserve Bank stipulated nine per cent. GTBs tier-I capital of equities and reserves stood at Rs 400 crore.

On foraying into distribution of insurance products, he said the bank was evaluating prospects and was waiting for the final notification allowing the banks and FIs to be corporate agents.

A legislation in this regard is likely by the end of this month with both the Houses of Parliament passing the Insurance (Amendments) Bill.

The foray into fee-based income had become imperative for banks considering the lower spread in view of soft interest rate regime.

Interest income earned by GTB in April-June 2002 was down by nearly 16 per cent to Rs 168.6 crore as compared to Rs 200.43 crore in the year-ago period.

Accordingly, total income registered a fall of nearly 24 per cent to Rs 199.13 crore in the first quarter of this year as compared to Rs 260.98 crore in the corresponding period of 2000-01.

On branch expansion, Gande said around 15 branches would be opened and the bank had applied to RBI for approval. GTB, with over 100 branches across 33 cities, has 7.5 lakh customers.

We are expected to have 10 lakh customers by March 31, 2003, Gande said. He said bank would have around 100 ATMs by this year taking the total to 325. Hyderabad-based GTB, the third bank after ICICI Bank and Corporation Bank, had recently launched E-remit facility, a system by which its customers could send money through the Internet.

PTI