The collapse of GTB came as a wide shock to the country. It challenged the ethical and corporate governance issue in Indian banking system. It shook the foundation of trust in private sector banking in India. This article tries to track the events and reasons that led to the ultimate collapse of the bank that was one of the leading new era banks in India.

The process of liberalization and deregulation in the Indian financial sector set the tone for the creation of new private sector banks in the country. The year 1993-94 in particular saw the Reserve Bank of India allow new players in private sector banking thus paving the way for greater competition and elevation in the levels of banking service and efficiency in the country. Global Trust Bank (GTB) was one of the private sector banks that were set up with great fanfare in 1994. The bank grew very fast and brought in increased use of technology.

GTB was promoted by a generation of very successful professionals. It made impressive international alliances that gave the bank its unique strengths. It was the first Indian bank to attract equity participation from two global multilateral institutions and leading investment banks. The International Finance Corporation (IFC) and Washington DCthe private sector arm of the World Bank contributed to the bank's strategic direction, international vision and expertise in infrastructure project evaluation. GTB's MOU with Daiwa Securities Group (a part of Daiwa Institute of Research) to undertake joint research and training on Indian economy and industry, was another initiative to be in tune with the future. At the time of its inception, Global Trust Bank dreamt of setting the highest banking standards in the country but six years later, it saw the beginning of the end of that dream.