Question

The central bank settles the claims of commercial banks is called ______.

Options

• Banking facility

• Ledger facility

• Clearing House facility

• Accounts facility

Answer 1

The central bank settles the claims of commercial banks is called Clearing House facility.

Explanation:

The Clearing House Facility is a mechanism set up by the Central Bank to oversee the settlement of transactions among Commercial Banks. This facility ensures the accurate clearing of balances by reconciling interbank transfers. It is crucial for maintaining the efficiency of the banking system by simplifying the process of clearing cheques and facilitating interbank payments.