What are Nostro and Vostro Account

Vinish Parikh April 19, 2010

Both Nostro and Vostro account are normally used in the context of foreign exchange transactions done by the banks or during currency settlement. Let’s look at what they both mean.

Nostro Account – It is the overseas account which is held by the domestic bank in the foreign bank or with the own foreign branch of the bank. For example the account held by state bank of India with bank of America in New York is a Nostro account of the state bank of India.

Vostro Account – It is the account which is held by a foreign bank with a local bank, so if bank of America maintains an account with state bank of India it will be a vostro account for state bank of India.

From the above one can see that the account which is Nostro for one bank is Vostro for another so when SBI opens a Nostro account with Bank of America, it is a Vostro account for them and vice versa.

Comments on this entry are closed.

  • Abhilash H Das Link

    thi is a simple solution to understand those complicated things.Tanx

    • Rohit Link

      excellent answer

  • Mungah wangare Link

    Thnx 4 da simplification.

  • silamabarasan Link

    awesome explanation 🙂

  • Deepthi Link

    explained well.. thanks

  • Aman awasthi Link

    very simple explain that’s good

  • K R Natarajan Link

    Complex topic explained in a very simple manner

    • Vinish Parikh Link

      Thanks for liking the content

  • ritu garg Link

    before it I was unaware of these two terms. Even I could not clear my doubt on other site but now I am totally satisfied with this explaination. thankyou so much.

    • Vinish Parikh Link

      Thank you, i always try to explain difficult terms of finance in a easier way and when visitors like you give these type of comments it makes me so happy.

  • praveen Link

    Hi, This is really the Very Simple explanation I ever seen on Nostro & Vostro Account. Really it helps anydody to understand the First step of Nostro and Vostro Accounts. Thanks a lot for giving such simple explation. Thanks, Praveen

  • MIRZA Link

    Thanks Dude, the simplest answer that can be for NOSTRO & VOSTRO A/C…. Great.

  • Dany Malabar Link

    Kindly provide with a few scenarios illustrating nostro and vostro taking 2 banks.

  • Archit Parikh Link

    Hi, I was very confused about the concept of Nostro & Vostro. I had visited so many sites to get the proper solution, But i didnt get the proper solution as i want. But after read your answer i totally undrestand what is nostro & vostro. The way explain this thing is very easy to undrestand for people like me. Thank you very much.