Public Sector Banking Governance in India
Question
With reference to the governance of public sector banking in India, consider the following statements:
Which of the statements given above is/are correct?
- 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.
Options
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Explanation
Statement 1 is correct. The Government of India has been infusing capital into public sector banks, particularly in recent years, to strengthen their balance sheets and improve their financial health. This has been part of the government's recapitalization scheme for PSBs. Statement 2 is also correct. In 2017, the associate banks of State Bank of India (State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, and State Bank of Travancore) were merged with the parent State Bank of India. This merger was done as part of banking sector reforms to strengthen the institution. Therefore, both statements are correct. > Government capital infusion + SBI associate bank mergers = banking sector strengthening. Answer: (c).
Question details
Year
2018
Paper
GS Paper 1
Question
Q96
Subject
Economy
Sub-topic
Banking System and Government Policy
Type
Statement-based
Difficulty
Medium
Nature
Current-affairs-linked
Source hint
Current Affairs 2017-2018, Banking reforms
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