When a cheque is drawn against bank A and deposited in another bank, the first bank loses reserves as the cheque is cleared.Yet the cheque collection involves no loss of reserves by the banking system.Explain what significance this has for the lending ability of the system as a whole.

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The Answer of When a cheque is drawn against bank A and deposited in another bank, the first bank loses reserves as the cheque is cleared.Yet the cheque collection involves no loss of reserves by the banking system.Explain what significance this has for the lending ability of the system as a whole.

When a Cheque Is Drawn Against Bank a and Deposited