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C.R. Sukumar

Hyderabad , Dec. 1

PRICEWATERHOUSECOOPERS, the statutory auditors of Global Trust Bank (GTB), have qualified the bank's accounts for the fiscal ended March 31, 2003 for the management's failure to make provisions for certain restructured advances and non-banking assets.

However, the management considers that provision was not necessary regarding restructuring of certain advances subsequent to the year-end aggregating Rs 311.61 crore. It was of the view that these advances were fully/substantially secured and interest had been serviced till March 31, 2003, on restructuring.

The bank has acquired non-banking assets to the value of Rs 181.75 crore These assets were being held by the bank for disposal in the long-term in terms of Section 9 of the Banking Regulation Act. Accordingly, the management felt that diminution in the value of these assets, if any, would be recognised on sale.

The GTB Managing Director, Mr Sudhakar Gande, told Business Line that the restructured advances amounting to Rs 311.61 crore were considered as standard assets.

According to him, though the loans were not fully secured in March 2003, full security was obtained subsequently. Further, interest was serviced till March and all the RBI guidelines with respect to restructure of loans were fully complied with.

"With regard to non-banking assets amounting to Rs 181.75 crore, no provisions were considered necessary since the bank can hold the property for a period of seven years as per the provisions of the Banking Regulation Act. The properties are at prime locations and are expected to appreciate in value, during which time, the bank can sell them," he said.

Meanwhile, the GTB board has approved a resolution to change the auditors and appoint M. Bhakara Rao & Company as its new statutory auditors for the fiscal year 2003-04.

At the adjourned annual general meeting held on September 27 last year, the shareholders had appointed PricewaterhouseCoopers as its auditors for the fiscal year 2002-03. They hold the office of statutory auditors till the conclusion of the ensuing annual general meeting, which is scheduled for December 24, 2003.

"The bank is making necessary application to the Reserve Bank of India seeking its approval for the appointment of statutory auditors of the company for the year ending March 31, 2004," Mr Gande said.

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