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Clearing House System Economises the Use of Cash. - Economics

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Question

Clearing house system economises the use of cash.

Solution

True. The clearing house function implies that the Central Bank settles inter-bank claims of the commercial bank. In this way it reduces the need for cash reserves by the commercial bank, thereby economising the use of cash

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Central Bank Function - Banker's Bank
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2015-2016 (March)

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