Borrowings from a bank on a current account which are payable on demand?

• A. Instantaneous
• B. Relative Change
• C. Bank Overdraft
• D. Conviction

Answer: (C)

The concept being tested is overdraft financing. A bank overdraft is when you borrow from the bank using your current account—spending beyond the available funds—but the bank allows it up to an agreed limit. That borrowed amount becomes a liability for you, and it is payable on demand, meaning the bank can require repayment at any time. It’s a flexible, short-term way to cover timing gaps in cash flow, with interest charged only on the overdrawn balance and no fixed repayment date like a standard loan. The other terms don’t describe this arrangement: instantaneous isn’t a borrowing facility, relative change is a math term, and conviction is unrelated to finance.