Experts say it is best to avoid investments in stocks that are expected to post declining return on equity. This seems logical as the company will have lesser distributable profits to share with its shareholders. Given this logic, public sector banks need to be avoided. Reserve Bank of India Governor D Subbarao on Tuesday said that the return on equity of the Indian banking system was expected to decline for a short term on adoption of Basel-III norms. Indian banks would require an additional capital of Rs 5 lakh crore to meet the norms by March 31, 2018. Out of this Rs 3.25 lakh crore will be the non-equity capital while Rs 1.75 lakh crore needs to be equity funded.