Going by the bad loans and earnings reports, there is no reason to believe that Indian banks are out of the woods. Bad loans may not come to an end anytime soon, but banks may get the legal structure to punish the defaulters soon.What's more, their valuations are affordable. But equity investors are saying that they may well be the ugly ducklings of stock markets. The BSE Bankex rose 1.65 per cent on Monday — the highest among sector indices — and state-run banks advanced 3.6 per cent.What's driving the optimism? The government investing nearly a third of the promised Rs 70,000-crore this year has lifted the spirits.

Source: Economic Times July 25, 2016 20:37 UTC