Banking Notes / Reasoning & Puzzles / Chapter 18
Chapter 18 of 24

Cause & Effect

Determining how two given statements relate — independent causes, a common cause, or one being the effect of the other.

📖 ~7 min read 🧩 Banking Reasoning & Puzzles

Introduction

Cause & Effect questions give two statements and ask how they relate: is one the cause of the other, are they both effects of some common underlying cause, or are they independent events with no real connection?

Classification Rules

RelationshipHow to Identify
Statement I is the cause of III happens first (chronologically or logically) and directly leads to II
Statement II is the cause of III happens first and directly leads to I
Both are independent causesNeither statement results from the other; they're unrelated events
Both are effects of a common causeNeither causes the other, but some unstated factor likely caused both
Q. Statement I: The bank's ATM in the local market was found to be out of service for two days.
Statement II: Several customers filed complaints regarding cash withdrawal issues in that area.
The ATM being out of service directly leads to customers being unable to withdraw cash, prompting complaints. Chronologically and logically, Statement I precedes and causes Statement II. Answer: Statement I is the cause, Statement II is its effect.
⚠️ Key Insight: Two events happening around the same time are not automatically cause and effect — check for a genuine logical/practical link before assuming one caused the other; if none exists, they may simply be independent.
💡 Exam Tip: If both statements describe outcomes that could plausibly stem from the same unstated trigger (e.g., a policy change, a market event), and neither directly causes the other, classify them as effects of a common cause rather than forcing a direct cause-effect link.
✅ Practice Focus: Identifying direct cause-effect chronology · Recognising common-cause scenarios · Distinguishing genuinely independent, unrelated statements.

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