•  Even though under dual regulation, the bank regulator has to use its powers more effectively and take steps to resolve weak banks. Failure of a fairly significant mid sized commercial bank in 2004 The Global Trust Bank Ltd, a private sector bank had reported substantial growth and was growing too fast. The bank’s balance sheet was flawed and disclosures inadequate.
Very large capital market exposures and shortfall in provisioning were the causes for downfall of the bank. The common depositor does not have the wherewithal to study bank balance sheets before making a deposit, but even the institutional investors seem to be gullible investors.