Government Owned Banks (GOBs) have other explicit or implicit objectives apart from profit maximization. In this paper, I study whether this affects the liquidation risk of firms borrowing from GOBs. Using the natural experiment of securitization reform in India that increased firms' liquidation...

In the panic of the global financial crisis of 2007-09, many depositors in India moved their deposits from private banks to the largest and government owed bank, State Bank of India (SBI). This created need for firms not borrowing from SBI to start a relationship with it. I find that firms that...