MUMBAI, INDIA, May 8, 1998—The International Finance Corporation today signed agreements to invest a total of US$10 million in Global Trust Bank Limited, a commercial bank established in 1994 with IFC’s support. The investment will help overcome the problems that many exporters in India encounter in obtaining adequate funding, and should contribute to building the export sector and lowering India's significant trade deficit.
The investment takes the form of a subordinated loan of US$5 million and a convertible loan of US$5 million for on-lending to Indian private companies involved in trade and project finance projects that promote export-oriented enterprises.
IFC’s investment will expand the operating capacity of Global Trust Bank, one of nine new private banks in India. Mr. Rashad Kaldany, Director of IFC’s Asia II Department said it would help to finance India’s export efforts while also supporting the Indian government’s efforts to revitalize the banking sector.
These transactions reaffirm IFC’s confidence in the role and performance of GTB, Mr. Ramesh Gelli, Chairman and Managing Director of GTB said at the signing ceremony. He noted that with these loans, GTB becomes the first bank in India to raise a convertible loan and to raise equity from multilateral institutions.
Global Trust Bank Limited is managed by professional bankers, led by Mr. Ramesh Gelli, with the technical support of Hambrecht & Quist, a mid-sized U.S. investment bank, and TA Enterprise Berhad, a leading financial services group and securities company in Malaysia. IFC currently holds 9.62 percent of GTB shares. Global Trust Bank is headquartered in Hyderabad in Southern India and serves the southern and western parts of the country.
The project is part of IFC’s capital markets strategy in India, which seeks to support new entrants into sectors previously dominated by the public sector, such as insurance and commercial banking. IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets and providing technical assistance and advice to governments and businesses.
