In India, the central bank's function as the 'lender of last resort' usually refers to which of the following?<br/>1. Lending to trade and industry bodies when they fail to borrow from other sources<br/>2. Providing liquidity to the banks having a temporary crisis<br/>3. Lending to governments to finance budgetary deficits<br/><br/>Select the correct answer using the code given below.

1. Lending to trade and industry bodies when they fail to borrow from other sources — This is not the usual meaning of lender of last resort. The central bank mainly backstops the banking system, not private trade/industry bodies. Verdict: Incorrect.

2. Providing liquidity to the banks having a temporary crisis — This is the classic function of the central bank as lender of last resort: it provides emergency liquidity to solvent banks facing temporary shortages. Verdict: Correct.

3. Lending to governments to finance budgetary deficits — This relates to government borrowing/deficit financing, not the specific LOLR function. In India, automatic monetization of deficits has also been discontinued. Verdict: Incorrect.

Therefore, only statement 2 is correct.