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A Vostro account is best described as:
ATheir account held with us in local currency
BOur account with a foreign bank in foreign currency
CA merchant transit account for exporters
DA foreign currency account of an NRI customer
Answer & Solution
Correct answer: A. Their account held with us in local currency
1. Identify what the question asks: this concept maps to vostro (§4).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (A).
_Source: ICAI BoS CA Final Paper 2, Ch 10 "Foreign Exchange Exposure and Risk Management"_
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