Banking Operations

Topics: Central bank, Foreign exchange reserves, Currency Pages: 3 (649 words) Published: April 17, 2013
University of karachi|
Assignment # 1|
Submitted by:|
Bushra Rizwan|

Presented to:
Sir Harris

Real Time Gross Settlement:
Real Time Gross Settlement Systems (RTGS) are mechanisms that enable banks to make large-value payments to one another in real-time using online telecommunication facilities as well as state-of-the-art computer systems 1. This is a system for large-value interbank funds transfers. 2. This system lessens settlement risk because interbank settlement happens throughout the day, rather than just at the end of the day. 3. SBP departments have the ability to monitor the inter-bank transactions and take immediate action as and when required.

It is the chance that an investment's actual return will be different than expected. Risk includes the possibility of losing some or all of the original investment. Different versions of risk are usually measured by calculating the standard deviation of the historical returns or average returns of a specific investment. A high standard deviation indicates a high degree of risk.

A bank account held in a foreign country by a domestic bank, denominated in the currency of that country. Nostro accounts are used to facilitate settlement of foreign exchange and trade transactions. The term NOSTRO is derived from Latin word for “ours”.

A vostro account is one in which the domestic bank (from the point of view of the currency in which the account is held) acts as custodian or manages the account of a foreign counterpart. The term vostro is Latin for "yours," thus when translated literally, it means "your account."

Foreign currency is any currency not normally used in a particular region or country. There are almost 200 currencies worldwide today. Although most countries have their own currency, there are some that adopt another country’s currency as their own.

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