What are Vostro accounts?

Russia has become the 5th largest exporter to India. India’s import from Russia skyrocketed to $21.34 billion in the April-September period. Amid rising exports, the Reserve Bank of India has allowed the opening of nine Vostro accounts with Indian lenders. In July, the RBI unveiled a mechanism for the settlement of international trade in Indian rupee. Before delving any further, let us understand as to what are Vostro accounts? How will it help in the internationalization of rupee trade? Hamsini Karthik explains.