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

The 'lender of last resort' function refers specifically to the RBI providing emergency liquidity to commercial banks facing temporary crises to maintain systemic stability and prevent bank runs. Statement 3 is a common misconception, but lending to the government for budgetary deficits is categorized as deficit financing or debt monetization, not the LOLR function. This question tests the core concept of central banking functions and the specific mechanisms used to ensure financial system stability.