PSU defaults, moral hazards: Can banks keep relying on govt ownership?

The article discusses the moral hazards associated with Public Sector Undertakings (PSUs) defaults and the reliance of banks on government ownership. It highlights the risks banks face when lending to PSUs, which often assume implicit government backing. This reliance can lead to complacency in risk assessment and credit monitoring. The article calls for stricter regulatory oversight and improved governance practices to mitigate these risks. It emphasizes the need for banks to adopt a more prudent approach to lending, focusing on the financial health and operational efficiency of PSUs rather than relying solely on government support.