Methods of Settlement in International Banking
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Questions and Answers

What is the purpose of a Correspondent Bank?

  • To maintain foreign currency bank accounts in various correspondent banks
  • To offer banking facilities to the customers of another country (correct)
  • To maintain personal cheque and bank draft facilities
  • To keep accounts with each other

    • What can be inferred about Vostro and Nostro accounts?

  • The type (vostro or nostro) depends on the bank's viewpoint (correct)
  • They are only used for domestic banking
  • They are maintained in various correspondent banks
  • They are accounts used for personal transactions

    • From the Singapore bank's point of view, what is a vostro account?

  • An account maintained in S$ of its correspondent banks (correct)
  • An account used for personal cheque facilities
  • An account maintained in multiple currencies
  • An account used to maintain foreign currency bank accounts

    • What does a Correspondent Bank maintain according to the text?

    <p>Foreign currency bank accounts in various correspondent banks</p> Signup and view all the answers

    What reciprocal arrangements are mentioned in the text regarding Correspondent Banks?

    <p>Relationship between the IB and the AB in Doc Credit</p> Signup and view all the answers

    In which currency does CitiSpore maintain accounts of its correspondent banks?

    <p>RM (Ringgit Malaysia)</p> Signup and view all the answers

    What is a nostro account from the point of view of a Singapore bank?

    <p>A Singapore bank's account maintained in foreign currency with their correspondent banks</p> Signup and view all the answers

    What is the purpose of a bank draft or demand draft?

    <p>For small payments without the need for the beneficiary's account number</p> Signup and view all the answers

    What does TT/SWIFT stand for in banking?

    <p>Telegraphic Transfer/Society for World-wide Interbank Financial Telecommunication</p> Signup and view all the answers

    What is the main characteristic of Blockchain Technology?

    <p>No single point of failure as information can be programmed to record non-financial transactions</p> Signup and view all the answers

    How are cheques and drafts authenticated?

    <p>Through the verification of signatures</p> Signup and view all the answers

    What is the main function of SWIFT messages?

    <p>Providing an automated international communication &amp; information system between member banks</p> Signup and view all the answers

    What type of account does CitiS’pore maintain with CitiTokyo and CitiNY?

    <p>NOSTRO account with CitiTokyo and VOSTRO account with CitiNY</p> Signup and view all the answers

    What currency accounts does CitiTokyo maintain?

    Signup and view all the answers

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