The Hindu Business Line : GTB moratorium: What it means for bank's customers

THE Reserve Bank of India (RBI) has placed the operations of Global Trust Bank (GTB) under suspension to protect the interests of depositors and ensure the safety of funds for three months ending October 23. Here is what GTB customers need to know about the "moratorium":

During the freeze, all the bank's branches will remain open during the normal working hours. The account holders/depositors of the bank, during the period of suspension, can

Withdraw up to Rs 10,000 from their savings or current account or any other deposit account;

Withdraw up to Rs 1 lakh in case of medical treatment, marriage, education or any emergency;

Withdraw only from the bank's branches and not through ATMs;

Operate demat accounts and safe deposit lockers. If you want to shift your demat account to another depository participant (other banks, for instance) no transaction fee will be charged provided the new account is opened in the same name or order of names and type. This facility will be available for three months. The National Securities Depository will also waive its fees for transferring securities from such accounts for three months.

Merger with OBC

The RBI has proposed to merge GTB with Oriental Bank of Commerce (OBC). The banks have been given time up to August 7 to consider the same. The proposal envisages:

Sums deposited by any GTB employee with the bank as staff security deposit, along with accrued interest, if any, will be paid or provided for in full.

For every savings bank account, current account or any other deposit account (fixed deposit, cash certificate, monthly deposit, deposit payable at call or short notice or any other deposits) with GTB, OBC will open a corresponding and similar account with itself and credit the full amount including the interest, if any.

In case of interest bearing deposit accounts, OBC will pay the interest. For balances in any current account or any other non-interest bearing account, interest will not be paid.

Interest, if any, on new accounts opened with OBC, will be at such rates the bank normally gives to its regular depositors.

OBC will pay the creditors of GTB as and when the amount liable falls due

Offers for GTB customers

A couple of other private banks have schemes to help GTB customers tide over the moratorium period. Here are the details:

ICICI Bank offers personal loans to GTB customers for amounts not exceeding five times the net take-home salary at an interest rate of 14 per cent. To get this loan, GTB customers have to provide their net-credit balance statement of their GTB accounts for the past three months.

Centurion Bank also offers personal loans for amounts not exceeding five times their net take-home salary. Those who take the loan need not pay the instalments during the first three months. At the end of three months, the customer can either choose to pre-pay the entire amount or convert it as a personal loan. The interest rate is 12 per cent for the first three months; interest will be charged at the prevailing rate thereafter. The bank has also cut its annual maintenance fee on demat accounts by half for GTB customers for the first year.

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