Define or Explain the following concept.Clearing House System – InterviewSolution

InterviewSolution

1.	Define or Explain the following concept.Clearing House System
Answer» All the commercial banks are mandatorily required to keep a certain percentage of their deposits, other than cash reserve ratio (CRR), with the Central Bank. The Central Bank acts as a clearing house for the commercial banks. As a clearing house, it settles inter-bank claims and reduces the need for cash reserves by the commercial banks.

Discussion

No Comment Found

Related InterviewSolutions

State whether the following statement is TRUE or FALSE. Central Bank also performs commercial banking business.Options True False
State whether the following statement is TRUE or FALSE. Bank Rate is the selective credit control measure used by the Central Bank of the country.Options True False
Fill in the blank with appropriate alternatives given below: Central bank has the __________ of note issue.Optionsmonopsonymonopolyduopolyoligopoly
Define or Explain the following concept.Clearing House System
Define or Explain the following concept.Prof. Samuelson's definition of Central Bank
Fill in the blank with appropriate alternatives given below: _______ is the apex body of the monetary and banking systems of the nation's economy.Options Commercial bank Central bank Government Co-operative bank
Define or Explain the following concept. Central Bank as Bank of Issue
Define or Explain the following concept. Moral suasion
Fill in the blank with appropriate alternatives given below: Bank Rate is also called as __________ rate.Options rediscount market general exchange
Distinguish between:Central Bank and Commercial Bank