Not Worried About NPAs: Narang

New Delhi, July 26 | Updated: Jul 27 2004, 05:53am hrs
The Delhi-based Oriental Bank of Commerce , which will take over Global Trust Bank , is hopeful of recovering about 40 per cent of the total non-performing assets (NPAs) of GTB within one year. The total NPAs of GTB are estimated to be around Rs 1,500 crore.

Talking to FE, OBC chairman and managing director BD Narang said, I am not particularly worried about the NPAs. I will be able to recover 40 per cent of the NPAs within one year. He added that the bank would get 40 per cent tax rebate on the bad assets of GTB.

Mr Narang also said, The GTB baggage will not have any major impact on OBCs balance sheet. OBC would take about six weeks to complete the due diligence for the merger. An auditor will be engaged for the process at the earliest by the Reserve Bank of India (RBI).

On the positive side, the OBC chief said, the nationalised bank would gain in terms of market penetration as it would get about 100 branches and one million customers on a platter.

With this take-over, OBC will now focus on expanding its customer base in the eastern region. The merger with the south-based GTB would also give OBC the much-needed edge in the southern part of the country, he said.

GTB has about 1,300 employees while OBC has about 13,500 employees of its own. All GTB employees would be absorbed into the OBC fold, Mr Narang said.

Earlier in the day, finance minister P Chidambaram said that all deposits in the bank were reasonably safe and added that the RBI was acting in the interest of the depositors.

Financial sector secretary NS Sisodia also said, The RBI has already taken action and there is no cause for concern.