Read the following passage about public sector banks in India and answer the question that follows. How can these banks take necessary risks without inviting failure in their operations?

Introduction / Context:
The passage discusses public sector banks in India that are passing through a transitional phase. They are expected to balance their social responsibility with financial health, and at the same time explore new areas of business. The specific question asks how these banks can take risks without actually ending up in failure.

Given Data / Assumptions:

• Public sector banks are in a period of transition and are at a crossroads.
• They must not give up their social responsibility but should remain financially healthy.
• They need to undertake risky experiments but must perform them in an innovative way so that they do not fail.
• The passage clearly says that absence of any bad advance only shows conservatism, not efficiency.
• The passage stresses the need for a balance between liquidity and risk.

Concept / Approach:
This is a reading comprehension question that tests the ability to locate a specific idea in a passage. The key is to identify the exact phrase in the text that answers the question. Instead of relying on general knowledge about banking, the candidate should focus on the wording used by the author to show how risk can be managed without failure.

Step-by-Step Solution:

Verification / Alternative check:
To verify, notice that the passage does not mention government support or pure financial strength as the main method of handling risk. Instead, it clearly links risky experiments with innovative execution. Therefore, the option that highlights innovation perfectly reflects the author's statement and is consistent with the overall theme of balancing risk and liquidity.

Why Other Options Are Wrong:

• Option b: Government help may support banks, but the passage does not present it as the method for taking risks without failure.
• Option c: Being financially healthy but inactive does not involve experimenting with risk and so does not answer the question.
• Option d: Conservatism is described in the passage as an attitude that avoids bad advances but is not a sign of efficiency and does not guarantee profit.

Common Pitfalls:
Many candidates quickly choose options that sound safe and familiar, such as dependence on the government or extreme conservatism. However, these are not supported by the text. Another common mistake is to ignore the precise wording in the passage and rely instead on assumptions about how banks work in general. The correct strategy in reading comprehension is always to base the answer strictly on the passage, not on outside knowledge.

Final Answer:
By being innovative is the correct answer, because the passage explicitly says that risky experiments must be carried out innovatively in a way that they do not fail.