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?
Answer & explanation
Answer: (b) 2 only
Statement 2 is correct: SBI absorbed its five associate banks and Bharatiya Mahila Bank in 2017. Statement 1 is wrong because the Government's yearly capital infusion into public sector banks (PSBs) went up and down rather than rising steadily.
- ✗ 1. The CAG's audit records infusions of ₹1,900 crore (2008-09), ₹1,200 crore (2009-10), ₹20,117 crore (2010-11), ₹12,000 crore, ₹12,517 crore, ₹14,000 crore, ₹6,990 crore (2014-15), then ₹25,000 crore in each of 2015-16 and 2016-17. The dips in between mean it was not a steady increase; the jump to ₹88,139 crore came only in 2017-18.
- ✓ 2. With Government sanction and in consultation with the RBI, State Bank of India took over State Bank of Bikaner & Jaipur, Hyderabad, Mysore, Patiala and Travancore, plus Bharatiya Mahila Bank. The merger took effect on 1 April 2017.
Remember · SBI merged its five associate banks and Bharatiya Mahila Bank on 1 April 2017; recapitalisation of PSBs was uneven year to year before the 2017-18 surge.
Sources
- Report No. 28 of 2017, Chapter III: Infusion of Capital Funds by GOI in PSBs (Comptroller and Auditor General of India), Table 3.1 ↗ “Total 1900 1200 20117 12000 12517 14000 6990 25000 25000 118724”
- Recapitalisation of Public Sector Banks (PSBs) (PIB, Ministry of Finance) ↗ “Rs. 88,139 crore was infused by the Government in PSBs during financial year (FY) 2017-18 after the recapitalisation announcement”
- Annual Report 2017-18, Department of Financial Services, Ministry of Finance (2.3 State Bank of India Merger) ↗ “acquired the business including all the assets and liabilities of its associate banks (State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore) and Bharatiya Mahila Bank, in 2017.”
Question and answer: UPSC's official GS Paper I (2018, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·