A current account maintained by a domestic bank with a

Solution

Banks deal in Forex market and so have to maintain stocks of foreign currencies in the form of bank accounts with their overseas branches / correspondents.  It refers to an account that a domestic bank holds in a foreign currency in foreign bank. Nostros, a term derived from the Latin word for “ours,” are frequently used to facilitate foreign exchange and trade transactions.  Nostro A/C (our account with you) – is a current account maintained by a domestic bank (say SBI) with a foreign bank (say Citi Bank) in a foreign country.