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Question
The ______ function of the Central bank involves the settling claims of Commercial banks through a process of book entries.
Options
The monopoly of note issue
Government’s bank
Clearing house
Developmental
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Solution
The Clearing house function of the Central bank involves settling claims of Commercial banks through a process of book entries.
Explanation:
For Commercial banks, the Central Bank serves as 'The-Clearing-House.' This means it settles commercial banks' mutual claims through a book-entry process.
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