Vostro Accounts

Banking Awareness Study Notes on Vostro Accounts

Vostro account refers to an account that a foreign bank holds in INR in a bank that is based in India.

VOSTRO Account means YOUR account with US.

For example,

If a foreign bank like Deutsche Bank has an INR account with Bank of Baroda, then such account is called as VOSTRO Account.

Let’s say, HDFC Bank in India, wants to make and receive payments in US Dollars, in the US. It will tie up with, say, Citibank in the US. Citibank will act as its representative or ‘correspondent’ bank. HDFC Bank will have an account in Citibank, US – its USD receipts and payments will happen from this account. This account is HDFC’s ‘Nostro’ account and Citibank’s Vostro ‘account’.