How are cheques drawn on banks within a single district settled?

1. Processing and clearing cheques between financial institutions is one of the four central bank functions. 2. Cheques drawn on banks within the same district are handled through the local central bank office. 3. The settlement is made using a series of bookkeeping entries that transfer funds between the financial institutions. 4. No cash is carried between vaults, which is exactly what the clearing system exists to avoid. 5. The system also lets a distant institution convert a cheque into cash quickly, so the customer is not sent to the paying branch. 6. Cheques crossing between different districts follow a more complex version of the same process. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 15 "Understanding Money and Financial Institutions", section 15.2 The Federal Reserve System_