Interestingly, even at the time of moratorium, the bank had huge inter-bank borrowings and deposits reflecting the confidence placed by other banks and institutional investors or the moral hazard view that banks will not be allowed to fail. Auditor accountability came under focus.
The problem had to be dealt with heads on when all avenues and options for revival by the promoters and directors failed. Compulsory amalgamation with a public sector bank was resorted to. This experience gave us valuable lessons of how to deal with a bank run. •  The process of resolution should be swift and decisive and preferably over the weekend.