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Prelims 2018 · Q96 · Banking & NBFCs

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

  1. 1.Capital infusion into public sector banks by the Government of India has steadily increased in the last decade.
  2. 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 ?

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Answer: B. Statement 1 is wrong: government capital infusion into public sector banks varied year to year and did not rise steadily over the decade. Statement 2 is correct: the five associate banks and Bharatiya Mahila Bank were merged with SBI in April 2017. So only 2.

Watch for: Big recapitalisation announcements in 2017 make students think infusion always rose.

Why the other options are wrong
  • A. Wrong because capital infusion did not rise steadily.
  • C. Wrong because statement 1 is false.
  • D. Wrong because the SBI merger did take place.

Source to check: Department of Financial Services, Ministry of Finance, annual reports; SBI press release on merger of associate banks, April 2017

Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.