Global Trust Bank declined on Wednesday following media reports that an independent auditor appointed by RBI has pointed out substantial under-provisioning of non-performing loans.

The scrip of the private sector bank slipped 2.1% on BSE in mid-morning trades to Rs 15.70. 15,000 Global Trust Bank shares changed hands on BSE.

GTB has been witnessing alternate bouts of buying and selling on the bourses in recent months. The scrip has moved in the Rs 15-19 range - at the Rs 15-level, the scrip witnesses buying interest and, at the Rs 19-band, it witnesses selling pressure.

The scrip today eased following reports that there has been substantial under-provisioning of non-performing loans for FY 2002 by GTB. These are the findings of an independent auditor appointed by RBI, as per reports.

It may be recalled that GTB had received approval from RBI for utilising reserves of Rs 252 crore (Rs 2.52 billion) towards additional write-off required towards non-performing assets in FY 2002. The bank had appropriated Rs 201.95 crore from the reserves for such write-offs. Despite that, there is under-provisioning in the books, reports say.

For Q3 ended 31 December 2002, the private sector bank reported a flat net profit of Rs 8.79 crore as against Rs 8.91 crore posted for the same period in the previous year. Total income of the bank registered a sharp fall at Rs 196.40 crore (Rs 1.96 billion) as against Rs 243.43 crore (Rs 2.43 billion) during the same period in the previous year.

The bank proposes to continue its thrust on improving its asset quality and broad-basing its risk profile.

Last month, GTB said that it is mulling various options for raising additional capital. It appointed Lazard India as financial advisor for advice on various options to raise additional capital by the bank.

The bank recently unveiled an E-remit facility, a system by which its customers can send money through the Internet.

Earlier, on 31 December 2002, Sebi had asked the promoter group entities of GTB and Ketan Parekh entities not to deal in shares of the bank till the completion of investigations into the bank's capital market activities. This was despite the fact the joint parliamentary committee gave a virtual clean chit, saying promoters of the bank had not benefited.