What Is Vostro Account?
The Reserve Bank of India (RBI) has allowed the opening of nine special vostro accounts in two Indian Banks (UCO Bank and IndusInd Bank) for the settlement of payments in rupee for trade between India and Russia.
- Russia’s two largest banks — Sberbank and VTB Bank — are the first foreign lenders to have received approval from the RBI towards settling international trade transactions in rupee.
- A Vostro account is just another name for a Nostro account. It is an account held by a bank that allows the customers to deposit money on behalf of another bank.
Nostro account:
- A Nostro account is an account held by a bank in another bank.
- It allows the customers to deposit money in the bank’s account in another bank. It is often used if a bank has no branches in a foreign country.
- The main difference between a deposit account and a Nostro account is that the former is held by individual depositors while foreign institutions hold the latter.
Vostro account:
- A Vostro account is just another name for a Nostro account.
- It is an account held by a bank that allows the customers to deposit money on behalf of another bank.
- A Nostro account is a Vostro account for the bank that opens the account.
- If a person deposits money in the Vostro account, it will be transferred to the account holder’s bank.
