Bank Clearing(redirected from Clearing, Bank)
The process of settling transactions between banks. Because so many transactions take place between banks on a given day, bank clearing exists to process what each party owes or is owed in a central location so the least amount of money actually changes hands. For example, suppose Bank A owes $1 million to Bank B in cleared checks, but Bank B owes Bank A $1.5 million. Bank clearing is the process of determining that Bank B must only pay Bank A $500,000.