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Questions
What is meant by the following function of the central bank?
Clearing house
What is a clearing house?
Answer in Brief
Short Answer
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Solution
The central bank functions as a clearinghouse to facilitate the transfer and settlement of mutual claims among commercial banks. It offers clearinghouse services in major cities and commercial hubs. This system is straightforward, efficient, time-saving, and cost-effective for resolving interbank claims.
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Function of Central Bank - Bank of Issue
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