Question

Assertion (A): If the central government desires to allocate funds under any schemes to the states, it uses banks for the financial transactions.

Reason (R): Like individuals and businesses, it is a bank that facilitates financial transactions of the state and central governments.

• A. Both A and R are true, and R is the correct explanation of A.
• B. Both A and R are true, but R is not the correct explanation of A.
  
• C. A is true, but R is false.
• D. A is false, but R is true.

Answer 1

The correct option is A Both A and R are true, and R is the correct explanation of A.

Banks don't only function as financial insitutions for individuals and other businesses but also for the government. They carry out the same fucntions and play a key role in facilitating the financial transactions for the central and the state governments.