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NOSTRO/VOSTRO/LORO ACCOUNT NOSTRO ACCOUNT

Data?1494421730 rohit awasthi asked about 3 years ago

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5 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered almost 3 years ago

Nostro Account A nostro account will be in foreign currency (it is a record of money held by a bank in another country in the currency of that country) i.e. a bank in country A keeping a record of money held by a bank in country B, in the currency of country B. Vostro account A vostro account will be in the local currency of the bank where the money is being held i.e. it is the bank in Country B's record of the money kept by the bank from country A with it.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered almost 3 years ago

Dear Friend, **Definition**The terms nostro and vostro are used, mainly by banks, when one bank keeps money at another bank. Both banks need to keep records of how much money is being kept by one bank on behalf of the other. In order to distinguish between the two sets of records of the same balance and set of transactions, banks refer to the accounts as nostro and vostro. **Nostro Account** A nostro account will be in foreign currency (it is a record of money held by a bank in another country in the currency of that country) i.e. a bank in country A keeping a record of money held by a bank in country B, in the currency of country B. **Vostro account** A vostro account will be in the local currency of the bank where the money is being held i.e. it is the bank in Country B's record of the money kept by the bank from country A with it. A bank counts a nostro account with a debit balance as a cash asset in its balance sheet. Conversely, a vostro account with a credit balance (i.e. a deposit) is a liability, and a vostro with a debit balance (a loan) is an asset. Thus in many banks a credit entry on an account ("CR") is regarded as negative movement, and a debit ("DR") is positive - the reverse of usual commercial accounting conventions. **Loro Account** The terms Nostro (Our) and Vostro (Your) are used in the bilateral correspondence between the concerned two Banks ie the Bank maintaining the account and the Bank in whose book the account is maintained. But in such correspondence when third bank account is referred it is said as LORO account. For example when XYZ bank of India is maintaining an account with ABC Bank in New York USA in USD when PQR bank of India refers the said account in correspondence with XZY Bank, Now YORK it is said LORO account . LORO is an Italian word which literally means ‘Their’. Loro account means ‘Third Party Account’.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered about 3 years ago

Nostro Account Home Currency of one country is foreign currency for other country. Conversion of foreign currency in to home currency is the fundamental of foreign exchange. Therefore in order to put through the foreign exchange transaction, the bank which is authorized to deal in foreign exchange, maintains an account with its overseas Bank to keep stocks of foreign currencies. Normally, such account is a current account in the books of the overseas Bank. For example, an Indian bank authorized to deal in foreign exchange maintain an account with overseas bank in USA in US Dollar such account maintained in the foreign currency at foreign center by Indian bank is said as ‘Nostro Account’ . Nostro is an Italian word which literally means ‘Our’. So the ‘Nostro Account’ of the Indian bank with its branch/correspondents in USA is said as ‘Our Accounts with You’. Vostro Account For the similarly reason, foreign bank of other country authorized to deal in foreign currency maintains an accounts with overseas Bank to keep stocks of foreign currencies (home currency of the country in which the overseas branches/ correspondents is situated) for the purpose of putting through the foreign exchange transactions. For example XYZ bank of USA maintains an account with a Bank in India in Indian Rupee such account maintained in the foreign currency at foreign center by Foreign bank is said as ‘Vostro Account’. ‘Vostro’ is an Italian word which literally means ‘Your’. So the ‘Vostro Account’ of the foreign bank with Indian bank in India is said as ‘YOUR Accounts with Us’. Loro Account The terms Nostro (Our) and Vostro (Your) are used in the bilateral correspondence between the concerned two Banks ie the Bank maintaining the account and the Bank in whose book the account is maintained. But in such correspondence when third bank account is referred it is said as LORO account. For example when XYZ bank of India is maintaining an account with ABC Bank in New York USA in USD when PQR bank of India refers the said account in correspondence with XZY Bank, Now YORK it is said LORO account . LORO is an Italian word which literally means ‘Their’. Loro account means ‘Third Party Account’. Thanks

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 ROSHNI answered about 3 years ago

Hii Rohit Nostro account Nostro account is an account of Indian Bank maintained by a bank abroad. In other words Nostro Account can be termed as ‘our account with you’. VOSTRO ACCOUNT :A foreign bank may open rupee account with an Indian Bank. In other words Nostro Account can be termed as ‘your account with us’. LORO ACCOUNT : Let's say that State Bank of India is having an account with Citibank,New York.When Syndicate Bank of India likes to refer to this account while corresponding with Citibank,it would refer to it as Loro account,meaning'Their account with you',in Latin Thanks

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Picsjoin 2017224123730582 Archana answered about 3 years ago

Hie Rohit, **1. NOSTRO Account** - Italian word 'nostro' means 'ours'. Hence, Nostro account points at - "Our account with you" - Nostro accounts are generally held in a foreign country (with a foreign bank), by a domestic bank (from our perspective, our bank). It obviates that account is maintained in that foreign currency. **2. VOSTRO Account** - Italian word 'vostro' means 'yours'. Hence, Vostro account points at - "Your account with us" - Vostro accounts are generally held by a foreign bank in our country (with a domestic bank). It generally maintained in Indian Rupee (if we consider India). For example, HSBC account is held with SBI in India. **3. LORO Account** - Again, Italian word 'loro' means 'theirs'. Therefore, it points at - "Their account with them" - Loro accounts are generally held by a 3rd party bank, other than the account maintaining bank or with whom account is maintained. - For example, BOI wants to transact with HSBC, but doesn't have any account, while SBI maintains an account with HSBC in U.K. Then BOI could use SBI account.

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