Question
With reference to the governance of public sector banking in India, consider the following statements
1. Capital infusion into public sector banks by the Government of India has steadily increased in the last decade
2. To put the public sector banks in order, the merger of associate banks with the parent State Bank of India has been affected.
Which of the statements given above is/are correct ?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer:
B
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Explanation:
Statement 1 is incorrect. While capital infusion into public sector banks has taken place in the last decade, it has not steadily increased. The capital infusion has been variable over the years depending on the financial condition and requirements of the banks.
Statement 2 is correct. To address issues in the public sector banking system, the merger of associate banks with the parent State Bank of India (SBI) has been implemented. This merger aimed to consolidate the operations of associate banks with SBI and streamline the functioning of public sector banks.