UPSC Prelims 2018— Question 56

**Concept and analysis:** The RBI acts as the government's banker and manages government securities for both the Union and states under the relevant arrangements, so the first statement is incorrect. Treasury bills are short-term instruments issued by the Government of India; states issue other instruments such as state development loans rather than treasury bills. Treasury bills are issued at a discount and redeemed at face value, making the second and third statements correct. The question is testing precise UPSC-level identification rather than a broad association. The key is to distinguish the exact institutional, constitutional, historical, geographical, economic or scientific feature being asked. **Option-wise evaluation** **Option A:** Incorrect. It selects 1 and 2 only, but that combination does not match the verified statement-level assessment; it either includes a false statement or omits a true one. **Option B:** Incorrect. It selects 3 Only, but that combination does not match the verified statement-level assessment; it either includes a false statement or omits a true one. **Option C:** Correct. It selects statements 2, 3; these are the statements supported by the relevant constitutional, economic, historical, scientific or geographical facts. **Option D:** Incorrect. It selects 1, 2 and 3, but that combination does not match the verified statement-level assessment; it either includes a false statement or omits a true one. **UPSC takeaway:** The safest way to solve this type of question is to anchor the answer in the defining feature of the concept and then test every option against that feature. Closely related institutions or terms are often used as distractors. In statement-based questions, do not judge the option as a whole before checking each statement independently. In factual questions, compare the wording of each option with the exact definition, location, institutional role, chronology or scientific property. The correct answer follows from that verification rather than from familiarity with a keyword.