ask whether public and private banks deployed resources freed up by reduced state preemption to increase credit to the … private sector. We find that even after liberalization, public banks allocated a larger share of their assets to government … securities than did private banks. Crucially, we also find that public banks were more responsive in allocating relatively more …

State-owned banks may help to soften the financing constraints of public sector entities and consequently become a … factor that hampers fiscal discipline. Using a panel dataset, we find that a larger presence of state-owned banks in the … crowding out of credit to the private sector. These results suggest that the lending practices of state-owned banks should be …

credit and deposit of commercial banks - across all sectors and maturities - has declined, with larger declines for …