## Passage - 2 Household finance in India is unique. We have a tendency to invest heavily in physical assets such as gold and property. Steps to encourage the financialization of savings are critical. A populace accustomed to traditional processes will not simply jump into financialization. Hurdles to change include onerous bureaucracy, a scepticism of organized financial institutions, a lack of basic information about which of the myriad services and providers is best for each family, and how (and even if) one can make the transition between them if necessary. Regarding the financialization of household savings, which of the following statements best reflect the solutions that are implied by the passage? 1. A flexible environment is needed to develop solutions. 2. Households need customised solutions. 3. Innovations in financial technology are required. Select the correct answer using the code given below:

The passage highlights several hurdles to the financialization of household savings in India. Let's analyze each statement: 1. A flexible environment is needed to develop solutions. The passage mentions "onerous bureaucracy" as a hurdle. Overcoming bureaucracy and facilitating transitions between financial services (implied by "how...one can make the transition between them if necessary") suggests a need for a less rigid, more adaptable, and thus flexible environment. 2. Households need customised solutions. The passage states "a lack of basic information about which of the myriad services and providers is best for each family". The phrase "best for each family" directly implies that different families have different needs and require tailored, i.e., customized, solutions. 3. Innovations in financial technology are required. While not explicitly stated, the challenges mentioned – "onerous bureaucracy", "scepticism of organized financial institutions", "lack of basic information", and difficulty in making "transition between them if necessary" – strongly suggest a need for modern, efficient solutions. Financial technology (FinTech) is a primary means to simplify processes, enhance transparency, provide accessible information, build trust, and facilitate seamless transitions, thereby addressing these hurdles through innovation. All three statements reflect solutions implied by the challenges described in the passage. The final answer is D