Question

Assertion (A): An overdraft is a facility that allows the customer to overdraw from the amount of his current account.

Reason (R): An overdraft facility is given to respectable and reliable customers for a short period.

Options

• Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true but Reason (R) is false.

• Assertion (A) is false but Reason (R) is true.

Answer 1

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Explanation:

Both statements are correct on their own, but there is no clear cause-and-effect relationship between them. While an overdraft is defined as a temporary financial facility that allows current account users to overdraw their balances, banks provide this privilege based on client loyalty rather than the account feature itself.