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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?

Foreign currency bank accounts in various correspondent banks (A) Signup and view all the answers

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

Relationship between the IB and the AB in Doc Credit (B) Signup and view all the answers

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

RM (Ringgit Malaysia) (A) Signup and view all the answers

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

A Singapore bank's account maintained in foreign currency with their correspondent banks (C) Signup and view all the answers

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

For small payments without the need for the beneficiary's account number (B) Signup and view all the answers

What does TT/SWIFT stand for in banking?

Telegraphic Transfer/Society for World-wide Interbank Financial Telecommunication (D) Signup and view all the answers

What is the main characteristic of Blockchain Technology?

No single point of failure as information can be programmed to record non-financial transactions (C) Signup and view all the answers

How are cheques and drafts authenticated?

Through the verification of signatures (D) Signup and view all the answers

What is the main function of SWIFT messages?

Providing an automated international communication & information system between member banks (A) Signup and view all the answers

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

NOSTRO account with CitiTokyo and VOSTRO account with CitiNY (D) Signup and view all the answers

What currency accounts does CitiTokyo maintain?

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