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    Question

    The process by which a bank converts the cheques and

    other instruments deposited by customers into cash is known as:
    A Clearing Correct Answer Incorrect Answer
    B Discounting Correct Answer Incorrect Answer
    C Overdraft Correct Answer Incorrect Answer
    D Collection Correct Answer Incorrect Answer

    Solution

    Clearing is the banking process of exchanging cheques and other payment instruments between banks to settle the amounts and facilitate the transfer of funds from the payer's account to the payee's account.

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