2. Examine the reasons for poor performance of public sector banks in India. Give an account of the steps taken by the government and RBI to improve their performance. Also analyse whether the risks arising from the consolidation of the Indian banking sector outweigh the potential longer-term benefits.

Approach:

♤ Briefly describe the poor performance of PSBs.

♤ Enumerate the reasons for this. Mention the impact of the reason you give.

♤ Next, mention the steps taken by the Government and RBI. Be specific.

♤ Finally, mention the risks posed by consolidation. Give a balanced opinion.