Question
The term "Nostro Account" was recently in the news is related to:
Select the correct answer using the code given below:
- It is an account that one bank holds in another bank
- It is used to facilitate international transactions
Select the correct answer using the code given below:
Answer: Option B
Answer: (b)
A Nostro account refers to an account that a bank holds in a foreign currency in another bank. Nostro account and Vostro account refer to the same thing from a different perspective.
For example, Bank X has an account with Bank Y in Bank Y's home currency.
To Bank X, that is a Nostro account, meaning "our account on your books," while to Bank Y, it is a Vostro, meaning "your account on our books."
These accounts are used to facilitate foreign exchange and international trade transactions.
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Answer: (b)
A Nostro account refers to an account that a bank holds in a foreign currency in another bank. Nostro account and Vostro account refer to the same thing from a different perspective.
For example, Bank X has an account with Bank Y in Bank Y's home currency.
To Bank X, that is a Nostro account, meaning "our account on your books," while to Bank Y, it is a Vostro, meaning "your account on our books."
These accounts are used to facilitate foreign exchange and international trade transactions.
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