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What is a net settlement bank?

net set - tle - ment bank
noun

A net settlement bank can be compared to a financial intermediary that plays a pivotal role in ensuring the orderly settlement of payments. Think of it as an amiable financial arbiter that computes who owes what to whom, ensuring the accurate flow of funds among different businesses. This function contributes to the overall efficiency and precision of financial transactions, promoting smooth and accurate operations.
 

How does the  net settlement bank work?

It serves as a central hub where financial obligations are meticulously reconciled. This benevolent facilitator ensures that all financial matters are balanced, streamlining the handling of payments in an efficient and cost-effective manner. This simplifies the financial landscape for companies, enabling them to save both time and money by consolidating numerous individual transactions.