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?
Correct Answer: Option B
Explanation
1. Statement 1 is incorrect. While the Government of India has periodically infused capital into public sector banks (PSBs), the amount has fluctuated significantly over the last decade (approx. 2008-2018) based on the banks' requirements and economic conditions. It has not steadily increased year after year.
2. Statement 2 is correct. As part of banking sector reforms aimed at strengthening PSBs and putting them in order, the merger of five associate banks (State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore) and Bharatiya Mahila Bank with the parent State Bank of India was indeed affected and came into force on April 1, 2017.
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