tag:blogger.com,1999:blog-19649274.post2564356273435871129..comments2024-03-27T17:16:12.789+05:30Comments on The Leap Blog: Government equity infusions into PSU banksAjay Shahhttp://www.blogger.com/profile/03835842741008200034noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-19649274.post-31697922893132324842012-10-12T00:26:15.309+05:302012-10-12T00:26:15.309+05:30The point is not the returns generated but the uti...The point is not the returns generated but the utility of this funding. Yes Bank was the last private bank allowed with a license by the RBI. The way it has functioned since 2004 says enough of the ability and utility of private sector in the banking space. <br /><br />Another problem is the clout of PSU NBFCs (the RECs and the IFCIs) and their pathetic lending practices to the un-creditworthy SEBs/similar bodies. All work with the given premise of a Govt bailout as and when required.<br /><br />Another blatant misuse of growth capital is forcing LIC to fund the rights issues as and when the govt falls short. Funding PSU banks should be last on the least of a fund out there to generate returns for it's stakeholders. However things work differently in India as we have always seen.Rudra Chowdhuryhttps://www.blogger.com/profile/15560021225817713499noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-35606890798941857512012-10-11T11:40:05.996+05:302012-10-11T11:40:05.996+05:30If the RoA is 1.1% and assuming leverage ~10 times...If the RoA is 1.1% and assuming leverage ~10 times on assets to equity, I would think the RoE for Govt.'s capital infusion would be around 11% which may not be great but is definitely not very bad either.<br /><br />Am I missing something?Wandererhttps://www.blogger.com/profile/13620645929465439067noreply@blogger.com