What is vostro account in SAP FS-LOC-RU - Localization of Banking in Russia?

SAP Term: vostro account

• Component: FS-LOC-RU

• Component Name: Localization of Banking in Russia

• Description: An account that a correspondent bank holds on behalf of another bank. A vostro account is an account in which a bank acts as custodian of another bank's account. A vostro account is also known as a loro account. &Example& Assume that bank A receives the payment of a credit card bill that bank B issued. Bank A holds a vostro account for bank B to be able to make the payment of this credit card bill for bank B.

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• Key Concepts: 
  A vostro account is a type of bank account used in Russia. It is a local currency account held by a foreign bank in the name of its customer, usually a Russian company. The account is used to facilitate payments between the foreign bank and its customer. 
  
  How to use it: 
  The vostro account is used to facilitate payments between the foreign bank and its customer. The foreign bank can transfer funds from its own accounts to the vostro account, and the customer can then use the funds in the vostro account to make payments to other parties. 
  
  Tips & Tricks: 
  When setting up a vostro account, it is important to ensure that all necessary documents are in place, such as a power of attorney and other legal documents. Additionally, it is important to ensure that the foreign bank has sufficient funds in its own accounts to cover any payments made from the vostro account. 
  
  Related Information: 
  The FS-LOC-RU Localization of Banking in Russia component of SAP software provides functionality for managing vostro accounts. This includes features such as creating and managing vostro accounts, transferring funds between accounts, and reconciling payments. Additionally, this component provides reporting capabilities for tracking and analyzing payments made from vostro accounts.