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

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Q: 81 (IAS/2018)
 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_subject: 

Economics

question_exam: 

IAS

stats: 

0,111,85,18,111,57,10

keywords: 

{'public sector banks': [0, 0, 0, 4], 'public sector banking': [0, 0, 0, 1], 'associate banks': [0, 0, 0, 1], 'parent state bank': [0, 0, 0, 1], 'merger': [1, 0, 2, 4], 'capital infusion': [0, 0, 0, 1], 'governance': [4, 1, 1, 13], 'government': [5, 0, 0, 1]}

This question checks the understanding of the governance structure of public sector banking in India.

Option 1 suggests that the Indian government has consistently increased capital infusion into public sector banks in the past decade. However, this is not entirely accurate as the capital infusion fluctuates based on various economic factors, including fiscal deficit and the financial health of banks. So, this statement is not correct.

Option 2 asserts that the merger of associate banks with the parent State Bank of India has been implemented to streamline public sector banks. This statement is accurate as such mergers have indeed been pursued in India to consolidate the banking sector and improve its efficiency.

Option 3 implies that both statements are correct, which is untrue since statement 1 is incorrect.

Option 4 implies that neither statement is correct, which is also incorrect since statement 2 is accurate.

Hence, the correct answer is option 2 (2 only).

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