Which of the following is the clearing house for all the banks in the country?

Commercial banks constantly hold cheques and other payment instruments drawn on customers of other banks. Instead of every bank settling each of these individually with every other bank, all the banks in a country route these mutual claims through one central institution that nets off what each bank owes and is owed.

In Nigeria, that central institution is the Central Bank of Nigeria, which acts as the clearing house for all the commercial banks. It coordinates the daily clearing of cheques and other instruments, so that only the net balances between banks need to be settled.

The Nigerian Industrial Development Bank, the Nigerian Bank for Commerce and Industry, and the Federal Mortgage Bank of Nigeria are all specialised development banks that finance particular sectors such as industry, commerce, or housing; none of them performs the clearing function for the whole banking system.

Remember that the central bank of a country always plays this clearing-house role, in addition to its other functions such as issuing currency and acting as banker to the government.