Financial Intermediation & Stability
How financial institutions, regulation, and market design shape credit allocation and financial stability
Shadow Banks on the Rise: Evidence Across Market Segments
with Kim Fe Cramer, Pulak Ghosh, and Nishant Vats.
Conditionally Accepted, Journal of Financial Economics.
Different shadow banks are not substitutes. We show that technology gives fintechs a comparative advantage in unsecured lending, while regulation and physical presence drive traditional shadow banks' strength in collateralized markets.
Deposit and Credit Reallocation in a Banking Panic: The Role of State-Owned Banks
with Viral Acharya, Abhiman Das, Prachi Mishra, and N. R. Prabhala.
Reject & Resubmit, Journal of Financial Economics.
A flight to safety is not always a flight to quality. We show that deposits fleeing distressed private banks to state-owned banks worsen credit quality and lead to an inefficient reallocation of credit.
Bank and NBFI Inter-Linkages: Anatomy of a Non-Banking Liquidity Shock
with K. M. Neelima and Sonalika Sinha.
In-Principle Accepted, Review of Corporate Finance Studies (2026).
Banks can contain financial contagion, not just transmit it. We show that during a system-wide liquidity shock, banks selectively supported healthier non-bank lenders while cutting credit to weaker ones, limiting broader spillovers.
Unearthing Zombies
with S. K. Ritadhi, Siddharth Vij, and Kate Waldock.
Management Science (2025).
Zombie lending persists because bad loans remain hidden. We show that stronger banking regulation—not bankruptcy reform alone—is essential to uncover zombie borrowers and reallocate credit toward healthier firms.
Zombie Lending Due to the Fear of Fire Sales
with Kaushalendra Kishore and Saurabh Roy.
Journal of Corporate Finance (2025).
Preventing fire sales can create zombie firms. We show that banks with large local market shares keep distressed firms alive to avoid collateral price declines, reducing investment and productivity among healthier firms.
Financial Repression, Deposit Rate Deregulation, and Bank Market Power
with Yogeshwar Bharat and Subhadeep Halder.
Working Paper (2025).
Financial liberalization only works when banks compete. We show that deposit rate deregulation expands credit and improves financial intermediation, but gains are muted where banks have greater market power.
The Unholy Trinity: Regulatory Forbearance, Government-Owned Banks, and Zombie Firms
with Anusha Chari and Lakshita Jain.
Reject & Resubmit, European Economic Review.
Regulatory forbearance can prolong financial crises. We show that relaxing loan recognition rules encourages zombie lending, crowding out credit to productive firms and delaying bank balance-sheet repair.
Resolving Zombie Lending with Collateral Reform
with Saurabh Das.
Working Paper (2024).
Collateral reforms reduce zombie lending. We show that India's 2002 collateral reform reduced continued lending to distressed borrowers and reallocated credit to healthier firms, improving allocative efficiency by nearly 19%.
Banking the Underbanked: Capital Investment and Credit-Constrained Firms
with S. K. Ritadhi and Kanika Mahajan.
Working Paper (2026).
Paper · Coverage
Banking infrastructure shapes who gets access to credit. We show that expanding bank branches increased lending and investment among small, young, and financially constrained firms.
Banking Catch-22? Trading off Mark-to-Market and Default Risk
with Karthik Narayan and Akshat Singh.
Working Paper (2023).
Paper
Mark-to-market losses can reshape bank risk-taking. We show that banks with greater exposure to interest rate losses expanded lending to infrastructure projects, highlighting the trade-off between interest rate risk and credit risk.
Monetary Policy Transmission through the External Benchmark Lending Rate (EBLR)
with Avijit Bansal, Marti Subramanyam, and Gautham Udupa.
Work in Progress.
Monetary policy does not affect all borrowers equally. We show that external benchmark lending creates markedly different transmission for legacy and newly originated loans.
Digital Infrastructure & Inclusion
How digital infrastructure shapes financial inclusion, credit markets, and household finance.
Cash is King: The Role of Financial Infrastructure in Digital Adoption
with Bhavya Agarwal and S. K. Ritadhi.
Review of Corporate Finance Studies (2021).
Temporary shocks can permanently change financial behavior. We show that India's demonetization accelerated the adoption of digital payments through learning-by-doing, with effects that persisted long after cash returned.
Breaking Barriers to Financial Access: Cross-Platform Digital Payments and Credit Markets
with Shashwat Alok, Pulak Ghosh, Nirupama Kulkarni, and Manju Puri.
Working Paper (2025).
Digital financial histories expand access to credit. We show that India's Open Banking infrastructure enabled lenders to extend more credit—including to first-time and subprime borrowers—by making payment histories verifiable.
Interoperable Payment Infrastructure and Retail Investment
with Meghana Ayyagari and Pulak Ghosh.
Working Paper (2026).
Frictionless payments increase trading, but not investment performance. We show that India's interoperable payment infrastructure expanded retail participation and trading activity without improving long-run investor returns.
Algorithmic Bias with Data Scarcity: Evidence from India
with Abhiman Das, Aarushi Kalra, and Advait Moharir.
Working Paper (2026).
Draft Available Soon
Algorithms can reproduce historical exclusion. We show that fintech lenders misinterpret missing credit histories as risk, restricting credit to borrowers from historically excluded communities despite stronger repayment performance.
Real Estate & Credit Markets
How housing markets shape access to credit and economic opportunity.
Homeownership Segregation
with Ulrike Malmendier.
Journal of Monetary Economics (2022).
Who owns homes matters more than how many people own them. We show that segregation between homeowners and renters reduces upward mobility for children from low-income families by reinforcing residential, school, and economic segregation.
Disparities in Home Loans: Evidence from India
with Prashant Bharadway, Abhiman Das, and Niranjan Kumar.
Working Paper (2026).
Draft Available Soon
Information frictions can create discrimination in credit markets. We show that minority homebuyers receive lower property appraisals, but these gaps largely disappear when lenders have better information.
Creative Destruction: Tunneling and Developer Exits in India
with Sahil Gandhi and Amartya Rajamalla.
Working Paper (2026).
Draft Available Soon
Transparency curbs tunneling and improves capital allocation. We show that stronger disclosure rules reduced related-party transactions, accelerated the exit of weak developers, and shifted credit and housing activity toward healthier firms.
Mortgage Policies, Racial Sorting, and Upward Mobility
with Ulrike Malmendier.
Working Paper (2025).
Place-based housing policies can reshape neighborhoods in unintended ways. We show that targeted mortgage subsidies induced residential sorting, thereby reducing upward mobility for children who remained in treated neighborhoods.
Related Research
Selected work on taxation, household finance, and economic development.
Consumption Tax Reform and the Real Economy: Evidence from India's VAT Adoption
with S. K. Ritadhi and Abhay Aneja
Journal of Empirical Legal Studies (2021).
Tax policy can ease financing constraints. We show that India's adoption of a value-added tax reduced the cost of capital, increasing investment and productivity among financially constrained firms.
Consumption Dispersion, Jati Networks, and Risk-Sharing in India
with Bishmay Barik, Satyajit Chatterjee, and Ashwini Deshpande.
Work in Progress
Social networks shape households' ability to insure against income shocks. We show that consumption risk-sharing in India is organized around jati networks, highlighting the continued importance of informal institutions.