(a) Central bank also acts as a clearing house for the settlement of accounts of commercial banks. A clearing house is an organization where mutual claims of banks on one another are offset, and a settlement is made by the payment of the difference. Central bank being a bankers’ bank keeps the cash balances of commercial banks and as such it becomes easier for the member banks to adjust or settle their claims against one another through the central bank. Suppose there are two banks, they draw cheques on each other. Suppose Bank A has to take Rs. 3,000 from bank B and has to pay Rs. 4,000 to B. At the clearing house, mutual claims are offset and bank A pays the balance of Rs. 1,000 to B and the account is settled. Clearing house function of the central bank leads to a good deal of economy in the use of cash and much of labour and inconvenience are avoided. 

(b) 1. High Costs : Air transport is a costly sendee. Its operational costs are too high. Middle class and poor people cannot affect its cash. 

2. Transportation : Transportation of all materials is not permissible by Air transport. Travellers cannot carry liquids, sharp objects while travelling. 

3. Huge Investments : For creating aviation facilities, huge investments are required. The cost of aeroplanes, construction and maintenance of aerodromes and control mechanism needs a capital expenditure. 

4. Unreliable : Most of the air transports are uncertain and the unreliable because these are controlled by weather condition. It is seriously affected by adverse weather- conditions. Fog, snow and heavy rain weather may cause cancellation of some flights. 

5. Small Carrying Capacity : The air crafts have small carrying capacity and therefore these are not suitable for canying bulky and cheaper goods. The load capacity cannot be increased as it is found in case of rails.