A Clearing House is a financial institution or system that facilitates the settlement of transactions between banks or financial institutions.
A Clearing House acts as an intermediary that ensures smooth and secure transfer of funds between banks. It processes transactions like cheques, electronic payments, and securities trades by calculating net obligations and settling them efficiently.
In India, clearing systems are managed by the Reserve Bank of India and institutions like the National Payments Corporation of India.
"When you deposit a cheque from another bank, the clearing house processes the transaction and transfers funds between banks."