Vostro Accounts are opened in India by Russian banks Nine Russian banks have been given permission to open unique Vostro accounts, which will facilitate export-import business.
- Sberbank and VTB Bank, the two biggest banks in Russia, are the first foreign lenders to gain RBI authorisation for rupee settlement of international trade transactions.
- A Vostro account is simply a Nostro account with a different name. Customers can deposit money into this account operated by a bank on behalf of another bank.
Vostro account
- A Vostro account is one that a domestic bank maintains in the domestic bank’s currency, in this example the rupee in the case of India, for a foreign bank. Payments in rupees for products imported and exported from Russia will be made to these Vostro accounts.
- The exporters and importers in both countries will be the owners and recipients of this money. Banks will maintain a record of all money transfers.
Nostro account
- The only distinction between Vostro and Nostro accounts is who opens the account and where it is opened.
- As a result, if an Indian bank, such as SBI, wants to open an account in the US, it will contact a bank in the US, which will open a Nostro account and receive payments from SBI in dollars.
- The account that the Indian bank opens in the US will be a Nostro account for the Indian bank, but a Vostro account for the US bank.