{"id":86601,"date":"2025-06-01T03:52:11","date_gmt":"2025-06-01T03:52:11","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=86601"},"modified":"2025-06-01T03:52:11","modified_gmt":"2025-06-01T03:52:11","slug":"consider-the-following-statements-a-rupee-vostro-account-is-an-acco","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-a-rupee-vostro-account-is-an-acco\/","title":{"rendered":"Consider the following statements:\n  A rupee Vostro account is an acco"},"content":{"rendered":"<p>Consider the following statements:<\/p>\n<ul>\n<li>A rupee Vostro account is an account that an Indian bank holds for a foreign bank in the domestic currency (rupee) to enable domestic banks to provide international banking services.<\/li>\n<li>Insurance density, i.e., average insurance premium per capita does not fully capture the financing gap in the event of a premature death because most of the insurance products sold in India are savings-linked with a small component of protection.<\/li>\n<\/ul>\n<p>Which of the statements given above is\/are correct ?<\/p>\n<p>[amp_mcq option1=&#8221;1 only&#8221; option2=&#8221;2 only&#8221; option3=&#8221;Both 1 and 2&#8243; option4=&#8221;Neither 1 nor 2&#8243; correct=&#8221;option3&#8243;]<\/p>\n<div class=\"psc-box-pyq-exam-year-detail\">\n<div class=\"pyq-exam\">\n<div class=\"psc-heading\">This question was previously asked in<\/div>\n<div class=\"psc-title line-ellipsis\">UPSC CDS-2 &#8211; 2024<\/div>\n<\/div>\n<div class=\"pyq-exam-psc-buttons\"><a href=\"\/pyq\/pyq-upsc-cds-2-2024.pdf\" target=\"_blank\" class=\"psc-pdf-button\" rel=\"noopener\">Download PDF<\/a><a href=\"\/pyq-upsc-cds-2-2024\" target=\"_blank\" class=\"psc-attempt-button\" rel=\"noopener\">Attempt Online<\/a><\/div>\n<\/div>\n<section id=\"pyq-correct-answer\">\nStatement 1 is correct. A Vostro account is an account that one bank holds on behalf of another bank. A Rupee Vostro account, specifically, is an account maintained by an Indian bank for a foreign bank in Indian Rupees. This facilitates international transactions and trade settlements in the Indian currency, allowing domestic banks to handle international banking services for their foreign counterparts and customers.<\/p>\n<p>Statement 2 is correct. Insurance density (average premium per capita) measures the penetration of insurance based on premium collection. However, in India, a significant portion of insurance policies sold are traditional plans that combine savings\/investment with a relatively small life cover (protection component). While these policies contribute to premium collection and thus increase insurance density, the sum assured in case of the policyholder&#8217;s premature death might not be sufficient to cover the financial needs of the family, leaving a significant &#8220;financing gap&#8221; despite a seemingly higher insurance density figure. Therefore, insurance density alone may not fully reflect the adequacy of protection cover.<br \/>\n<\/section>\n<section id=\"pyq-key-points\">\n&#8211; A Rupee Vostro account is an INR account held by an Indian bank for a foreign bank.<br \/>\n&#8211; Insurance density calculation may not fully reflect the adequacy of life cover due to the nature of policies sold in India (savings-linked).<br \/>\n<\/section>\n<section id=\"pyq-additional-information\">\nVostro accounts are part of correspondent banking relationships between banks in different countries. Insurance density is often used as an indicator of insurance market development, alongside insurance penetration (premium as a percentage of GDP).<br \/>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>Consider the following statements: A rupee Vostro account is an account that an Indian bank holds for a foreign bank in the domestic currency (rupee) to enable domestic banks to provide international banking services. Insurance density, i.e., average insurance premium per capita does not fully capture the financing gap in the event of a premature &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"Consider the following statements:\n  A rupee Vostro account is an acco\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-a-rupee-vostro-account-is-an-acco\/#more-86601\">Detailed Solution<span class=\"screen-reader-text\">Consider the following statements:<br \/>\n  A rupee Vostro account is an acco<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1088],"tags":[1103,1120,1190],"class_list":["post-86601","post","type-post","status-publish","format-standard","hentry","category-upsc-cds-2","tag-1103","tag-economic-development","tag-money-banking","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Consider the following statements:  A rupee Vostro account is an acco<\/title>\n<meta name=\"description\" content=\"Statement 1 is correct. A Vostro account is an account that one bank holds on behalf of another bank. A Rupee Vostro account, specifically, is an account maintained by an Indian bank for a foreign bank in Indian Rupees. This facilitates international transactions and trade settlements in the Indian currency, allowing domestic banks to handle international banking services for their foreign counterparts and customers. Statement 2 is correct. Insurance density (average premium per capita) measures the penetration of insurance based on premium collection. However, in India, a significant portion of insurance policies sold are traditional plans that combine savings\/investment with a relatively small life cover (protection component). While these policies contribute to premium collection and thus increase insurance density, the sum assured in case of the policyholder&#039;s premature death might not be sufficient to cover the financial needs of the family, leaving a significant &quot;financing gap&quot; despite a seemingly higher insurance density figure. Therefore, insurance density alone may not fully reflect the adequacy of protection cover. - A Rupee Vostro account is an INR account held by an Indian bank for a foreign bank. - Insurance density calculation may not fully reflect the adequacy of life cover due to the nature of policies sold in India (savings-linked).\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-a-rupee-vostro-account-is-an-acco\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Consider the following statements:  A rupee Vostro account is an acco\" \/>\n<meta property=\"og:description\" content=\"Statement 1 is correct. A Vostro account is an account that one bank holds on behalf of another bank. A Rupee Vostro account, specifically, is an account maintained by an Indian bank for a foreign bank in Indian Rupees. This facilitates international transactions and trade settlements in the Indian currency, allowing domestic banks to handle international banking services for their foreign counterparts and customers. Statement 2 is correct. Insurance density (average premium per capita) measures the penetration of insurance based on premium collection. However, in India, a significant portion of insurance policies sold are traditional plans that combine savings\/investment with a relatively small life cover (protection component). While these policies contribute to premium collection and thus increase insurance density, the sum assured in case of the policyholder&#039;s premature death might not be sufficient to cover the financial needs of the family, leaving a significant &quot;financing gap&quot; despite a seemingly higher insurance density figure. Therefore, insurance density alone may not fully reflect the adequacy of protection cover. - A Rupee Vostro account is an INR account held by an Indian bank for a foreign bank. - Insurance density calculation may not fully reflect the adequacy of life cover due to the nature of policies sold in India (savings-linked).\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-a-rupee-vostro-account-is-an-acco\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T03:52:11+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Consider the following statements:  A rupee Vostro account is an acco","description":"Statement 1 is correct. A Vostro account is an account that one bank holds on behalf of another bank. A Rupee Vostro account, specifically, is an account maintained by an Indian bank for a foreign bank in Indian Rupees. This facilitates international transactions and trade settlements in the Indian currency, allowing domestic banks to handle international banking services for their foreign counterparts and customers. Statement 2 is correct. Insurance density (average premium per capita) measures the penetration of insurance based on premium collection. However, in India, a significant portion of insurance policies sold are traditional plans that combine savings\/investment with a relatively small life cover (protection component). While these policies contribute to premium collection and thus increase insurance density, the sum assured in case of the policyholder's premature death might not be sufficient to cover the financial needs of the family, leaving a significant \"financing gap\" despite a seemingly higher insurance density figure. Therefore, insurance density alone may not fully reflect the adequacy of protection cover. - A Rupee Vostro account is an INR account held by an Indian bank for a foreign bank. - Insurance density calculation may not fully reflect the adequacy of life cover due to the nature of policies sold in India (savings-linked).","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-a-rupee-vostro-account-is-an-acco\/","og_locale":"en_US","og_type":"article","og_title":"Consider the following statements:  A rupee Vostro account is an acco","og_description":"Statement 1 is correct. A Vostro account is an account that one bank holds on behalf of another bank. A Rupee Vostro account, specifically, is an account maintained by an Indian bank for a foreign bank in Indian Rupees. This facilitates international transactions and trade settlements in the Indian currency, allowing domestic banks to handle international banking services for their foreign counterparts and customers. Statement 2 is correct. Insurance density (average premium per capita) measures the penetration of insurance based on premium collection. However, in India, a significant portion of insurance policies sold are traditional plans that combine savings\/investment with a relatively small life cover (protection component). While these policies contribute to premium collection and thus increase insurance density, the sum assured in case of the policyholder's premature death might not be sufficient to cover the financial needs of the family, leaving a significant \"financing gap\" despite a seemingly higher insurance density figure. Therefore, insurance density alone may not fully reflect the adequacy of protection cover. - A Rupee Vostro account is an INR account held by an Indian bank for a foreign bank. - Insurance density calculation may not fully reflect the adequacy of life cover due to the nature of policies sold in India (savings-linked).","og_url":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-a-rupee-vostro-account-is-an-acco\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T03:52:11+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-a-rupee-vostro-account-is-an-acco\/","url":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-a-rupee-vostro-account-is-an-acco\/","name":"Consider the following statements: A rupee Vostro account is an acco","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T03:52:11+00:00","dateModified":"2025-06-01T03:52:11+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"Statement 1 is correct. A Vostro account is an account that one bank holds on behalf of another bank. A Rupee Vostro account, specifically, is an account maintained by an Indian bank for a foreign bank in Indian Rupees. This facilitates international transactions and trade settlements in the Indian currency, allowing domestic banks to handle international banking services for their foreign counterparts and customers. Statement 2 is correct. Insurance density (average premium per capita) measures the penetration of insurance based on premium collection. However, in India, a significant portion of insurance policies sold are traditional plans that combine savings\/investment with a relatively small life cover (protection component). While these policies contribute to premium collection and thus increase insurance density, the sum assured in case of the policyholder's premature death might not be sufficient to cover the financial needs of the family, leaving a significant \"financing gap\" despite a seemingly higher insurance density figure. Therefore, insurance density alone may not fully reflect the adequacy of protection cover. - A Rupee Vostro account is an INR account held by an Indian bank for a foreign bank. - Insurance density calculation may not fully reflect the adequacy of life cover due to the nature of policies sold in India (savings-linked).","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-a-rupee-vostro-account-is-an-acco\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-a-rupee-vostro-account-is-an-acco\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-a-rupee-vostro-account-is-an-acco\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC CDS-2","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-cds-2\/"},{"@type":"ListItem","position":3,"name":"Consider the following statements: A rupee Vostro account is an acco"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/86601","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=86601"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/86601\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=86601"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=86601"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=86601"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}