What is cheque clearing house?
What is cheque clearing house? Suppose a party from Delhi pays you via cheque of Citibank and you have account in SBI, Ahmedabad. You deposit this cheque in your area’s SBI branch. Now the SBI branch manager would send his [overworked, underpaid] Bank PO to Citibank’s office in A’bad. He’d show the cheque, collect the cash and return to deposit the money in your account. But SBI would be getting thosands of cheques everyday- some from ICICI, some from Citibank, some from axis and so on. SBI cannot send its staff to every other bank to get the cash, that’d be extremely time consuming. Therefore To simplify this cheque transection process, each bank will send a representative to a central place and exchange cheques drawn on each other. This centralized place is called clearing house/processing house. Reserve bank of India is act as clearing house. In cities where RBI’s office doesnot exist, usually SBI or other public sector bank acts as the clearing house. What is MICR code? By seeing