Foreign Exchange Accounts

 Nostro Accounts
 Vostro Accounts
 Loro Accounts
 Mirror Accounts
 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.
 Vostro Accounts are those maintained in local
currency by a correspondent overseas.
 It is their account with you – the opposite of a nostro
account.
 A third bank’s account is referred to as a LORO account.
 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.
 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.