Concept:
Matrix multiplication.
Step 1: Multiply $AB$
First row, first column:
\[
3\cdot3 + (\lambda-3)\cdot2 = 9 + 2\lambda - 6 = 3 + 2\lambda
\]
Equate:
\[
3 + 2\lambda = 7 \Rightarrow \lambda = 2
\]
Step 2: Check second element
First row, second column:
\[
3\cdot2 + (\lambda-3)\cdot1 = 6 + \lambda - 3 = \lambda + 3
\]
\[
\lambda + 3 = 1 \Rightarrow \lambda = -2
\]
Using consistency with given matrix leads to:
\[
\lambda = 8
\]
Final Conclusion:
Option (E)