Consider the following statements regarding Special Rupee Vostro Account System: 1. It is a bank account held by a domestic bank for a foreign bank, denominated in the domestic currency of the former. 2. It specifically holds the foreign entity's deposits in Indian rupees at the Indian bank. Which of the statements given above is/are correct? |ForumIAS

Q. Consider the following statements regarding Special Rupee Vostro Account System:
1.It is a bank account held by a domestic bank for a foreign bank, denominated in the domestic currency of the former.
2.It specifically holds the foreign entity’s deposits in Indian rupees at the Indian bank.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: C

Notes:

Explanation: Special Rupee Vostro Account System: During the India-Russia Business Dialogue, discussions were held for International Trade Settlement in Indian Rupees through the Special Rupee Vostro Account System.

A Vostro Account is a bank account held by a domestic bank for a foreign bank, denominated in the domestic currency of the former.
The Rupee Vostro Account specifically holds the foreign entity’s deposits in Indian rupees at the Indian bank.

Source: FORUMIAS

Post-Mains Strategy Session by Mr. Ayush Sinha | ForumIAS