Mumbai: In a move that could provide succour to existing customers of troubled Global Trust Bank (GTB), its acquirer Oriental Bank of Commerce (OBC) said today (Aug 23, 2004) that lending rates would eventually come down in line with the PSU bank.

"Lending rate of GTB was higher than the market average. In order to retain and rope in more customers, we will bring it (GTB rates) down to the OBC rate level," OBC chairman B D Narang said.

OBC's benchmark prime lending rate is at about 11 per cent while it's floating home rate is at 7.5 per cent and 8.0 per cent for fixed rate for a 5-year maturity.

He also said interests of GTB depositors would be fully taken care of by the Delhi-based bank although investors of GTB would have to wait for 12 years to get back any value.

"GTB depositors' interest is totally safe. They won't suffer loss of a single penny. All contractual obligations will be met," Narang said.

The cost of funds of GTB is also higher by 1.5 per cent from OBC's cost of funds now at a little above 5.0 per cent, he said.

In fact, customers of GTB can expect loans at a lower rate offered by OBC. The cost of funds of GTB would become at par with OBC within 12 months, he said.