Financial Daily from THE HINDU group of publications
Thursday, Jun 05, 2003
Financial Daily from THE HINDU group of publications Thursday, Jun 05, 2003 |
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Opinion
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Letters Return of capital
It is surprising that most banks return a part of their capital to the government preferably at par. Many banks resort to the unfair practice of returning the capital to the Centre at par, and the action is either preceded or succeeded by a premium issue to the public. If at all capital is to be returned to the Government at par why raise funds again through a premium offer. The return of capital per se will not matter much, but when read with the impending/preceding IPO for a lesser or equal amount, it makes little sense. The capital returned to the Government is at par and the capital now raised from the public is at a premium. There appears to be no rationale for such an action. It is only a change of ownership of shares. When the Government uses taxpayers' money to bail out banks, it has every right to collect a premium when the capital is returned. Indira
Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in
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