Read the following case study paragraphs carefully and answer the question based on the same.     The Indian economy has diversified quite significantly and been growing rapidly since 1991, and getting increasingly integrated with the global economy. Therefore, the fourth generation (1991-2014) of Indian banking saw landmark reforms such as issue of fresh licences to private and foreign banks to infuse competition, thereby enhancing productivity as well as efficiency by leveraging technology; introduction of prudential norms; providing operational flexibility coupled with functional... Show more

Read the following case study paragraphs carefully and answer the question based on the same.    

The Indian economy has diversified quite significantly and been growing rapidly since 1991, and getting increasingly integrated with the global economy. Therefore, the fourth generation (1991-2014) of Indian banking saw landmark reforms such as issue of fresh licences to private and foreign banks to infuse competition, thereby enhancing productivity as well as efficiency by leveraging technology; introduction of prudential norms; providing operational flexibility coupled with functional autonomy; focus on implementation of best corporate governance practices; and strengthening of capital base as per the Basel norms.    
Since 2014, the banking sector has witnessed the adoption of the JAM (Jan-Dhan, Aadhaar, and Mobile) trinity, and issuance of licences to Payments Banks and Sm all Finance Bank s (SFBs) to ach ieve last-m ile connectivity in the financial inclusion drive. For instance, SFBs had mobilised deposits of ' 82,488 crore and extended credit of ' 90,576 crore to small and marginal farmers, and MSMEs (micro small & medium enterprises) by the end of FY 2019-20.    
Given the current challeng es o f a burgeoning population, the ongoing Covid-19 pandemic, and the West's intention to shift its manufacturing base as well as supply/ value chains from China to India and elsewhere, it is essential to say 'yes' to fifth generation (2014 and beyond) banking reforms. This calls for a paradigm shift in the banking sector to improve its resilience and maintain financial stability.    
The Narasimham Committee Report (1991), as well as the discussion paper on Banking structure in India – The way forward (Reserve Bank of India, 2013), emphasised that India should have three or four large commercial banks, with domestic and international presence, along with foreign banks. The second tier may comprise several mid-size lenders, including niche banks, with economy-wide presence.    

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