The correct option "Both 1 and 2 only" is accurate as it highlights the role of Business Correspondents (Bank Saathi) in enhancing financial inclusion in rural and branchless areas. By enabling beneficiaries to access subsidies and social security benefits directly in their villages (1), and facilitating basic banking services such as deposits and withdrawals (2), Business Correspondents serve as a vital link between the formal banking system and underserved populations. This model not only strengthens the economic empowerment of rural communities but also aligns with national policies aimed at promoting financial literacy and inclusion, reflecting key governance objectives in the context of effective service delivery as emphasized in UPSC syllabus materials on economic development and welfare programs.