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Balances with the Bank of England
 

 

Balances held at the Bank of England by UK commercial banks. Most payments by cheque involve the customers of different banks: the bank whose cutomer makes a payment has to transfer money to the bank whose customer receives it. This is done through the bank clearing system. Most of these payments are mutually offsetting, but the small residual of payments due to or from each bank at the close of the daily clearing is ittled by the transfer of bankers’ balances with the Bank of England.

Reference: The Penguin Business Dictionary, 5th edt.