Yes, banks do net settlement with each other. They tally up all the debits and credits on both sides and then make a single transfer to settle between each othe

Yes, banks do net settlement with each other. They tally up all the debits and credits on both sides and then make a single transfer to settle between each other. Say Bank A owes Bank B $200, and Bank B owes Bank A $150. Bank A will send Bank B $50, as that is the net amount after subtracting 150 from 200. https://en.m.wikipedia.org/wiki/Net_settlement https://en.m.wikipedia.org/wiki/Net_settlement