What is meant nostro, vostro and loro accounts?
The information has to be read having India as the base country:
01.When one branch of a commercial bank which has been established in India opens an account with a bank branch which has been established in a foreign country and the account is denominated in foreign currency of the country, the account is known as nostro account.
For example, SBI having branch at Mumbai opens an account with Citibank at Washington and the account is in US dollars
02. When one branch of a commercial bank which has been established in a foreign country opens an account with a bank branch which has been established in India and the account is denominated in Indian currency, the account is known as Vostro account.
For example, Standard Chartered Bank at London opens an account with Punjab National Bank at New Delhi and the account is in Indian rupees
03. When one branch of a commercial bank which has been established in one foreign country opens an account with a bank branch which has been established in another foreign country and the account is denominated in the currency of the latter country, it is known as Loro account
For example, Standard Chartered Bank, London opens an account with Citi Bank at New York and the account is denominated in US dollars
