Which of the following explains 'The Rupee Vostro Account system' reg…

The Rupee Vostro Account system is a financial arrangement that enables foreign banks to conduct transactions in Indian rupees with domestic banks. The term “vostro” is derived from the Latin phrase “in nostro vostro,” which translates to “in our account, in your account.” In this context, the domestic bank is referred to as the “vostro” bank, and the foreign bank is the “nostro” bank. The Reserve Bank of India (RBI) regulates the Rupee Vostro Account system, which allows foreign banks to maintain accounts with domestic banks to facilitate trade and investment activities in India. The system provides a secure and transparent mechanism for foreign banks to conduct transactions in Indian rupees without having to set up a local branch in India.