commercial banks settle their daily interbank indebtedness through the

Commercial banks settle their daily interbank indebtedness through the Clearing House. A Clearing House is a financial institution that facilitates the exchange of payments, securities, and other financial transactions between banks. It acts as an intermediary between banks that need to transfer funds or securities to each other. At the end of each business day, each bank sends its transactions to the clearinghouse, which then matches and nets the payments to be made between the banks. This results in a reduction in the number of transactions that need to be settled in cash, which reduces the risk and cost of settlement for banks. The Clearing House helps to ensure the smooth functioning of the payment system and promotes efficiency in the banking sector.