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प्रश्न
Explain the 'Clearing House Function' of the central bank.
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उत्तर
- The central bank provides a clearing house facility to the commercial banks. In other words, it settles the claims of commercial banks through a process of book entries.
- The daily balances between the commercial banks can easily be adjusted by means of debit and credit entries in their respective accounts with the central bank.
- Let us take an example to explain this process. Suppose the Bank of Baroda has to pay an amount of ₹ 20 lakhs to the Punjab National Bank. To settle its dues, the Bank of Baroda will issue a cheque of ₹ 20 lakhs to the Punjab National Bank. The Reserve Bank of India will debit the account of the "Bank of Baroda" by ₹ 20 lakhs and credit the account of the Punjab National Bank by the same amount.
- The clearing house facility offers several advantages. Firstly, settlements between different commercial banks can be made conveniently through book entries. Secondly, the possibilities of cash withdrawals during an economic crisis are reduced. Therefore, it helps to stabilise the banking system in the country. The State Bank of India carries out these settlements where the Reserve Bank of India has no office.
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संबंधित प्रश्न
Explain the functions of the RBI with respect to the following:
- Custodian of foreign exchange reserves.
- Monopoly of note issue.
- Clearing house facility.
- Banker and fiscal agent to the government.
The RBI settles claims of other commercial banks by a process of book entries. It helps to stabilize the banking system in the economy. Which function of the Central bank is explained here.
The Central bank is having the authority to regulate the amount of money supply in the economy.
Based on the above explain the following.
- Credit Rationing
- CRR
- Regulation of Margin Requirements
- Bank Rate
Identify which of the following is not the function of the central bank?
The central bank acts as ______.
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Reserve Bank of India creates credit.
Reason (R): Reserve Bank of India is known as a bank of note issue.
Give two reasons why the central banks enjoy monopoly of note issue.
How is Bank rate altered to correct a depression in an economy?
Discuss the role of the Central Bank as the fiscal agent to the government.
Explain the banker’s bank function of the Central Bank.
