Russian bank’s Vostro accounts in India

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.
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