Reserve Bank of India (RBI) does not transact the business of which of the following State Government?

Jammu and Kashmir

The correct answer is Option (2) - Jammu and Kashmir

The Reserve Bank of India (RBI) conducts banking business for all state governments in India, including Bihar, Telangana, and Meghalaya. However, as of my last update in January 2022, Jammu and Kashmir has its own central bank, the Jammu & Kashmir Bank, which conducts banking business for the state government of Jammu and Kashmir independently of the RBI.