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?

The correct answer is B (2 only).

• Statement 1 is wrong. Government capital infusion into PSBs has not risen in a smooth line. It was lumpy: the Indradhanush plan (2015) front-loaded support, FY2017-18 saw a large infusion of about Rs 88,000 crore, and FY2018-19 was higher still before the flow moderated. Treat 'steadily increased' as the trap.
• Statement 2 is correct. Five associate banks of SBI and Bharatiya Mahila Bank were merged with SBI effective 1 April 2017. This was a consolidation step meant to build larger, stronger PSB units.

The core concept is the consolidation-versus-recapitalisation debate in public sector banking governance. Mains expects you to link this to the Bank Board Bureau, the 2015 Indradhanush reforms, and the question of whether recapitalisation without governance reform solves NPA and accountability problems.

Trap: aspirants often accept a plausible-sounding trend claim without checking whether the data actually shows a steady rise.