Correct Option
The passage explicitly states that "With further globalization, consolidation, deregulation and diversification of these financial systems, the banking business may become more complex and riskier. Issues like risk and liquidity management and enhancing skill therefore assume greater significance." This directly indicates that further globalization (Statement 1), more consolidation and deregulation of the financial system (Statement 2), and further diversification of the financial system (Statement 3) are the reasons for the increased importance of risk and liquidity management in the Indian banking system.
Incorrect Options
Statement 4, which refers to "more financial inclusion in the economy," is not mentioned in the provided passage as a factor contributing to the increased importance of risk and liquidity management. The analysis must be based solely on the information presented in the passage.
- Option 2 (2, 3 and 4) is incorrect as it includes Statement 4, which is not supported by the passage.
- Option 3 (1 and 2 only) is incorrect as it omits Statement 3, which is explicitly mentioned in the passage.
- Option 4 (3 and 4 only) is incorrect as it includes Statement 4 and omits Statements 1 and 2, all of which are inconsistent with the passage's content.