Mumbai: The crisis-ridden Global Trust Bank (GTB) was today (July 24, 2004) placed under a three-month moratorium partially freezing its operations following "wrong" financial disclosures and the Reserve Bank of India (RBI) appointed three Directors on the board of the private-sector bank.

Stating that the decision by the Union Government was in the interest of public, depositors and the banking system, RBI Executive Director Usha Thorat said depositors would be permitted to withdraw upto Rs 10,000 from their saving banks or current account or any other deposit account through the bank branches but not ATMs, which have been disabled, during the moratorium period.

RBI would consider various options, including merger of the 1994 promoted Secunderabad-based GTB with any other bank and finalise the plans in public interest, she said.

Thorat said "the audited balance sheet for year ended March 2002 showed a networth of Rs 400.40 crore. However, a RBI inspection found it out to be actually negative".

In view of this "large variance" in assessment of Ramesh Gelli-promoted GTB, an independent chartered accountant was appointed by RBI to reconcile the position, which found that the central bank's assessement was correct, she said.

The bank was given time to improve its financial position and capital adequacy ratio (CAR) and GTB submitted a "concrete proposal" (involving international private equity fund Newbridge Capital) in first week of July 2004, which was however "rejected by RBI as certain terms and conditions were not acceptable", she pointed out.