GLOBAL TRUST BANK LOSSES WRITTEN OFF BY OBC
The ORIENTAL BANK OF COMMERCE has written off the entire unabsorbed losses of Global Trust Bank (GTB) amounting to 487.72 crore, including the Rs 242 crore earlier slated for 2008-09, in the financial statements for 2007-08 itself. GTB was amalgamated with OBC in the year 2004.
The move to get rid of “all legacy issues of GTB” has resulted in OBC registering a 39- per cent decline in net profit for the year ended March 31, 2008 at Rs 353.22 crore as compared to a net profit of Rs 580.81 crore in the previous fiscal.
“Tough decisions are taken when the times are tough. Despite the external challenges faced by us, we felt it would be better for us to get over the legacy issues of GTB instead of continuing with quarterly provisioning in fiscal 2008-09 also. I did not want to continue explaining quarter after quarter to investors and others what the GTB provisioning was all about”, Mr Alok K. Misra, Chairman and Managing Director, OBC, told a press conference to announce the audited results for 2007-08.
Under the amalgamation scheme approved by the Government in 2004, OBC had an option to absorb the GTB losses amounting to Rs 1,252 crore over a period of five financial years beginning 2004-05. The bank has been providing about Rs 61.5 crore every quarter towards the amalgamation.
Rather than absorbing the losses over five years, we have done it in four years itself. We have got over legacy issue of GTB. All GTB issues are behind us. From this quarter itself, there will be no provisioning of GTB impacting financial performance. To that extent, our profits will be more from Q1 this fiscal”, Mr Mishra said.
OBC has also written back excessive provision for bad and doubtful debts to the tune of Rs 143 core (net), said a senior OBC official.
Why OBC was pressurised to write off the losses of GTB ? Why the looters of GTB are left free ? Is it not time for us to ask the details of the defaulters of GTB and actions taken by OBC to recover the loan amounts. OBC cannot donate its profit towards defaulters loan account. OBC is a govt bank, utlimately govt is paying for the looters. Is there any sense to write off ? Instead, a CBI enquiry should be done and recovery should have been done from the defaulters. Why the Govt. supported the looters ? Who are behind the looting ?
Also view:
http://www.frontlineonnet.com/fl2117/stories/20040827003502800.htm
The move to get rid of “all legacy issues of GTB” has resulted in OBC registering a 39- per cent decline in net profit for the year ended March 31, 2008 at Rs 353.22 crore as compared to a net profit of Rs 580.81 crore in the previous fiscal.
“Tough decisions are taken when the times are tough. Despite the external challenges faced by us, we felt it would be better for us to get over the legacy issues of GTB instead of continuing with quarterly provisioning in fiscal 2008-09 also. I did not want to continue explaining quarter after quarter to investors and others what the GTB provisioning was all about”, Mr Alok K. Misra, Chairman and Managing Director, OBC, told a press conference to announce the audited results for 2007-08.
Under the amalgamation scheme approved by the Government in 2004, OBC had an option to absorb the GTB losses amounting to Rs 1,252 crore over a period of five financial years beginning 2004-05. The bank has been providing about Rs 61.5 crore every quarter towards the amalgamation.
Rather than absorbing the losses over five years, we have done it in four years itself. We have got over legacy issue of GTB. All GTB issues are behind us. From this quarter itself, there will be no provisioning of GTB impacting financial performance. To that extent, our profits will be more from Q1 this fiscal”, Mr Mishra said.
OBC has also written back excessive provision for bad and doubtful debts to the tune of Rs 143 core (net), said a senior OBC official.
Why OBC was pressurised to write off the losses of GTB ? Why the looters of GTB are left free ? Is it not time for us to ask the details of the defaulters of GTB and actions taken by OBC to recover the loan amounts. OBC cannot donate its profit towards defaulters loan account. OBC is a govt bank, utlimately govt is paying for the looters. Is there any sense to write off ? Instead, a CBI enquiry should be done and recovery should have been done from the defaulters. Why the Govt. supported the looters ? Who are behind the looting ?
Also view:
http://www.frontlineonnet.com/fl2117/stories/20040827003502800.htm
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