Banking structure — Should India have a few large banks instead of many smaller ones? Statement: Should there be only a few banks in place of numerous smaller banks in India? Arguments: I. Yes. Big banks can better withstand intermittent market shocks, protecting investors. II. No. Post-merger redundancies will cause many people to lose jobs. III. Yes. Consolidation can strengthen the industry and promote healthy competition.

Introduction / Context:The issue is structural reform of the banking sector through consolidation. We must identify which arguments are strong at the level of systemic stability and public interest, not just transitional inconveniences.

Given Data / Assumptions:

• Larger balance sheets may diversify risks and absorb shocks better.
• Consolidation can reduce duplication, unify technology, and sharpen competition among larger peers.
• Mergers often entail short-term job redundancies, but also redeployment and long-term productivity gains.

Concept / Approach:Strong arguments (I and III) focus on stability, efficiency, and industry health. Argument II cites a transitional effect; by itself, it is not a decisive policy refutation of consolidation.

Step-by-Step Solution:

Verification / Alternative check:Many jurisdictions have executed phased consolidations with safeguards for employees and competition, aligning with I and III.

Why Other Options Are Wrong:

• None strong: ignores the robust systemic rationale.
• Only I and II / Only II and III / All strong: each includes II as “strong,” which overweights a mitigable, transitional issue.

Common Pitfalls:Equating short-term transition costs with long-term structural benefits; policy should weigh both and include social safety nets.

Final Answer:Only I and III are strong