Nostro-Vostro-Loro Accounts

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10/7/2016 Anti-Money Laundering 1
Nostro-Vostro, Loro Accounts
Date: 29 August 2016
By: Bachir El Nakib
Senior Consultant
Compliance Alert (SARL), Lebanon, Qatar
Nostro‐Vostro‐ Loro Accounts

2. Operations of Nostro and Vostro accounts
Hang Seng Bank’s Ledger
Due to Midland Bank Account
Balance b/f $900,000
Due from Midland Bank Account
Balance b/f £100,000

3. Operations of Nostro and Vostro accounts
Midland Bank’s Ledger
Due to Hang Seng Bank Account
Balance b/f £100,000
Due from Hang Seng Bank Account
Balance b/f $900,000

4. Operations of Nostro and Vostro accounts
Hang Seng Bank’s Ledger
Due to Midland Bank Account
Balance b/f $900,000
Due from Midland Bank Account
Balance b/f £100,000
XYZ Company $300,000
Mr. Wong Account £20,000

5. Operations of Nostro and Vostro accounts
Hang Seng Bank’s Ledger
Mr. Wong Account
Balance b/f £50,000
XYZ Company Account
Due from Midland
Bank £20,000
Due to Midland
Bank $300,000

6. Operations of Nostro and Vostro accounts
Midland Bank’s Ledger
Due to Hang Seng Bank Account
Balance b/f £100,000
Due from Hang Seng Bank Account
Balance b/f $900,000
Miss Wong £20,000
ABC Company $300,000

7. Operations of Nostro and Vostro accounts
Midland Bank’s Ledger
Miss Wong Account
Balance b/f £800
Due to Hang Seng
Bank £20,000
ABC Company Account
Due from Hang Seng
Bank $300,000

8. Nostro Contd….
 Here in the above example given in VOSTRO account the
same account is a NOSTRO account for
‐ Bank A (Barclays Bank of UK), or if
‐ Bank B (ICICI Bank of India)
Opens an account in Bank A (Barclays Bank of UK) then that
account is a NOSTRO account for Bank B (ICICI Bank of India).
 NOSTRO accounts are usually in the currency of the foreign
country. This allows for easy cash management because
currency doesn't need to be converted.
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9. Example: If you wish to transfer USD 10,000/‐ from your USD Dollar account
maintained with a local bank in the United States of America to a Savings/Current
Account maintained with Deutsche Bank, India then you need to provide the following
information to the local bank in United States of America.
‐ Transfer Amount : USD 10,000/‐Transfer Currency : US – Dollar
‐ Beneficiary Name : Name of the account holder in Deutsche Bank, India
‐ Beneficiary Bank Account Number : Account no. of the Deutsche Bank account in
India
‐ Beneficiary Bank : Deutsche Bank, India
‐ Beneficiary Bank Branch : Name of Deutsche Bank branch in India
‐ Beneficiary Bank Swift / BIC Code : DEUTINBBPBC
‐ Charges : "Our" This will ensure that the correspondent bank and remitting bank
charges (dependent on correspondent / remitting bank) are levied at the point of
origination and full money is received by the beneficiary.
‐ Correspondent Bank : Deutsche Bank Trust Company Americas
‐ Correspondent Bank Account Number : 04‐411‐536
‐ Correspondent Bank Location : New York
‐ Correspondent Bank Swift / BIC Code : BKTRUS33
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10. Contd…(NOSTRO-based Setup)
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11. Contd…(MTO Model)
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12. Contd…(Exchange House Model)
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