Question : A ______________account is maintained by an Indian Bank in a foreign country usually in the currency of that country to carry out transactions there.
Option 1: NOSTRO
Option 2: VOSTRO
Option 3: LIBOR
Option 4: MIBOR
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Correct Answer: NOSTRO
Solution : The correct option is NOSTRO.
A NOSTRO account is an account maintained by an Indian bank in a foreign country, typically denominated in the currency of that country. The primary purpose of establishing a NOSTRO account is to facilitate and conduct transactions in that foreign jurisdiction. Because they provide the infrastructure needed for smooth transactions in many currencies, NOSTRO accounts are essential for facilitating international trade, payments, and other cross-border financial activity.
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