Foreign Exchange Accounts
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Nostro Accounts
Vostro Accounts
Loro Accounts
Mirror Accounts
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Nostro Accounts are accounts maintained by a bank
with its overseass branch/ correspondent for
settlement of foreign currency transactions.
Balances are maintained in line with business
requirements.
Reconciliation of these accounts are very important.
Unmatched items should be investigated.
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Vostro Accounts are those maintained in local
currency by a correspondent overseas.
It is their account with you – the opposite of a nostro
account.
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A third bank’s account is referred to as a LORO account.
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The account a bank keeps abroad must be reflected in
the books of account in local currency.
It is the reflection of the nostro account in local
currency and in foreign currency.
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Banks receive and make payment by keeping foreign
currency accounts with their branches in those
countries or with their correspondent banks.
An account maintained with another bank is a nostro
account.
An account kept by a correspondent bank/ branch
with the bank isa vostro account.
A third bank’s account is a vostro account.
A mirror account is a nostro account denominated in
local currency in the bank’s books.