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?

Correct Answer: 2 only

Let us analyze the statements given in the question step-by-step:

Statement 1: Capital infusion into public sector banks by the Government of India has steadily increased in the last decade.
This statement is incorrect. While the Government of India has regularly infused capital into Public Sector Banks (PSBs) to strengthen their balance sheets and fulfill Basel III capital requirements, the capital infusion has not been continuously or steadily increasing year-over-year over the last decade. It has fluctuated significantly depending on fiscal targets, non-performing asset (NPA) levels, and budgetary allocations in specific fiscal years.

Statement 2: To put the public sector banks in order, the merger of associate banks with the parent State Bank of India has been affected.
This statement is correct. As part of banking sector reforms to consolidate and strengthen public sector banking in India, five associate banks—State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore—along with Bharatiya Mahila Bank, were merged with the State Bank of India (SBI) effective from April 1, 2017.

Therefore, only statement 2 is correct.