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?

QUESTION

Medium

Economy

Prelims 2018

With reference to the governance of public sector banking in India, consider the following statements

Capital infusion into public sector banks by the Government of India has steadily increased in the last decade.
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?

Select an option to attempt

Explanation

Statement 1 is incorrect. The govt has been infusing large amounts in seven public sector banks through recapitalisation bonds but this has not been steady as statement 1 says.

Statement 2 is correct. To put the public sector banks in order, the merger of associate banks with the parent State Bank of India has been affected. For example, the merger of SBI associate banks will result in the creation of a stronger merger entity.

Hence, option C is the correct answer.

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