"Another private sector bank has fallen by the waysidethe second one since January (2006). United Western Bank (UWB), a Maharashtra-based bank which has been languishing for months now, was put on `moratorium' on Saturday (September 02, 2006) afternoon by the government, following an application from RBI," screamed a headline in The Economic Times (ET), India's leading business daily. The news about the moratorium by the Reserve Bank of India (RBI) spread like wildfire, urging depositors to press the panic button and rush to the UWB's head office at Satara in Maharashtra, to withdraw their hard-earned money. But they realized that they could not withdraw more than Rs. 10,000 from their account till the moratorium was lifted. However, withdrawals in excess of Rs. 10,000 were allowed only in cases of unforeseen expenses like medical treatment and higher education, or to meet expenses related to marriages or other ceremonies or for any other unavoidable emergencies.

No one including the depositors would have expected that the GTB (Global Trust Bank) fiasco would be replicated by any other bank; and that too, so soon. No doubt, this was also shocking news for the shareholders who believed that the country's central bank would do enough to prevent another GTB-like failure. Yet, the truth was that another bank had gone bankrupt. However, not many knew that the central bank was aware that UWB had not been in the pink of health since June 2001. "The bank was placed under monthly monitoring from June 2001. It was also unable to come up with any credible plan to raise fresh capital to bring its CAR to the prescribed level," the ET quoted Anand Sinha, Executive Director of RBI.

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