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  

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

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

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

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

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

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

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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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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Contd…(NOSTRO-based Setup) 

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Contd…(MTO Model) 

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Contd…(Exchange House Model) 

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