Exporters and importers can now use a Special Vostro Account linked to the correspondent bank of the partner country for receipts and payments denominated in rupees.
Nostro and vostro are terms used to describe the same bank account.
Which of the statements given above is/are correct? Answer:
Both 1 & 2
Notes:
RBI has decided to put in place an additional arrangement of international trade for invoicing, payment, and settlement of exports / imports in INR.
Banks acting as authorised dealers for such transactions would have to take prior approval from the regulator to facilitate this.
All exports and imports under the invoicing arrangement may be denominated and invoiced in Rupee.
Exchange rate between the currencies of the two trading partner countries may be market determined.
Exporters and importers can now use a Special Vostro Account linked to the correspondent bank of the partner country for receipts and payments denominated in rupees.
Nostro and vostro are terms used to describe the same bank account; the terms are used when one bank has another bank’s money on deposit.
They are used to differentiate between the two sets of accounting records kept by each bank.
Nostro comes from the Latin word for “ours,” as in “our money that is on deposit at your bank.”
Vostro means “yours”, as in “your money that is on deposit at our bank”.