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Showing posts with the label equity shareholding

Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

The YES Bank Conundrum

Events around Yes Bank seemed shocking yet expected. The paradox perhaps is an offshoot of the interesting history of Yes Bank. It was founded in 2003-04 by Rana Kapoor and Ashok Kapur. From a symbolic poster boy of modern age Indian private sector banking to being the fall guy of the long term consequences of the crony socialism at play especially in the early half of the current decade, it has been an eventful journey for good or bad. Indian banking sector had been dominated by the public sector following the nationalisation of banks in 1969. As private banks were allowed post 1991, the new ones generally emerged as off shoots of either non-banking financial institutions or development financial institutions. These included ICICI Bank and HDFC Bank among others. The story of Yes Bank however was one of the first to begin as green-field private bank. The death of Ashok Kapur in a terror attack in 2008 saw a monopolization of control by Rana. He was the archetype new age banker