The Hindu Business Line : Govt rules out JPC probe into GTB collapse

The Finance Minister said that the demand for a JPC would have been justified if the Government had shown inaction in dealing with the emerging situation.

New Delhi , Dec. 1

THE Government today rejected the demand for setting up of a Joint Parliamentary Committee (JPC) to probe the collapse of Global Trust Bank (GTB).

Responding to a calling attention motion on the collapse of GTB in the Lok Sabha, the Finance Minister, Mr P. Chidambaram, said that the Government is likely to file criminal cases before the month-end against those responsible for the bank caving in.

"Any director, manager or employee (responsible) will be punished. There is no amnesty. The investigation is complete. A criminal case will be filed before the month is over. I will be the last one to be soft against anyone who has done a criminal act," Mr Chidambaram said.

The Finance Minister said that the demand for a JPC would have been justified if the Government had shown inaction in dealing with the emerging situation. He pointed out that he had initiated action on the matter barely days after assuming office.

GTB was merged with OBC in August after the RBI had placed a moratorium on the ailing bank. "It was essential to place the bank under a moratorium to prevent a run on GTB and any malfeasance by directors or management," the Finance Minister earlier said in a statement.

Pointing out that there was no "sudden collapse" of the bank, Mr Chidambaram said that the amalgamation scheme prepared by the RBI and the Government "fully protects the interests of the depositors and the bank."

He said that the interest of the shareholders have been addressed in the scheme "to the extent of the availability of the funds after all dues and liabilities have been met as per the provision of the scheme."

The Finance Minister pointed out that the RBI had noticed the deterioration of GTB's health during July-October, 2002. "RBI initiated corrective action and provided an opportunity to GTB management to infuse capital. When these efforts failed, on the recommendations of RBI, Government placed GTB under an order of moratorium (July 24, 2004)."

Mr Chidambaram said that RBI has also approached the Institute of Chartered Accountants of India (ICAI) to take action against the statutory auditors of GTB who he said had given "false certification" of the bank's financials. The auditors had failed to identify the non-performing assets (NPAs) of the bank so as to reflect its true picture, he said.

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