ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Credit in British Current a/c
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Debit in British Current a/c
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Credit in British Capital a/c
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Debit in British Capital a/c
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Detailed explanation-1: -What Is a Nostro Account? A nostro account refers to an account that a bank holds in a foreign currency in another bank. Nostros, a term derived from the Latin word for “ours, ” are frequently used to facilitate foreign exchange and trade transactions.
Detailed explanation-2: -Can one pay by cash full rupee equivalent of foreign exchange being purchased for travel abroad ? Foreign exchange for travel abroad can be purchased from banks against rupee payment in cash up to Rs. 50, 000/-. However, if the rupee equivalent exceeds Rs.
Detailed explanation-3: -An Authorised Dealer (AD) is any person specifically authorized by the Reserve Bank under Section 10(1) of FEMA, 1999, to deal in foreign exchange or foreign securities (the list of ADs is available on www.rbi.org.in) and normally includes banks.
Detailed explanation-4: -How are foreign exchange transactions between international banks settled? Answer: The interbank market is a network of correspondent banking relationships, with large commercial banks maintaining demand deposit accounts with one another, called correspondent bank accounts.