s like Japan and Korea can be attributed to this.
             One method of obtaining funds for expansion is by retaining a part of the earnings. This is a basis expansion over a period of time, but in shipping the acquisition of a new ship may well require funds well beyond any retained earnings and other sources must be considered in addition. This is largely due to the steady increase in the size and complexity of modern ships resulting in an increase in cost in real terms.
             Equity markets comprise of equity capital markets, venture capital and private equity funds. Equity funding in shipping markets is more popular in the case of high-risk projects where vessel acquisition is not backed by a firm contract for deployment or where vessels are acquired for asset play. For an example, in India, an equity route by shipping companies was adopted mainly after the 1980s, owing to factors like phasing out of subsidised debt funding by Shipping Development Fund Committee (SDFC), ease of norms for tapping the equity market and shipowners becoming increasingly aware of the pitfalls of a highly leveraged capital structure.
             Public sector commercial banks control a major portion of the banking business. These banks through their savings and current account deposits, in addition to other sources, have access to very easy sources of finance. Because of such low cost of funds these banks are in a position to lend at very attractive rates.
             Public sector banks, which used to concentrate on meeting the working capital needs of their clients, have recently taken up project finance in a big way. They offer better rates over financial institutions that have been the traditional project financiers, because of the extremely low rates at which they raise funds. Further, quantum of funds required is not a constraint with them and they can take up large exposures in any given company. However, public sector banks take up considerable time in evaluating a project...