Commercial banks settle their inter-bank indebtedness through
Answer Details
Commercial banks settle their inter-bank indebtedness through **central banks**. When one commercial bank needs to settle an obligation to another bank, it may not necessarily have cash reserves in the other bank. In such a situation, the banks can go through the central bank, which acts as an intermediary to settle the inter-bank transactions. The central bank facilitates the transfer of funds between the banks, making sure that the payment obligations of each bank are met.