What are nostro and vostro accounts?
A nostro account is a bank's own account held at another bank, usually abroad and in that country's currency; a vostro account is the same account seen from the side of the bank that holds it. Example (invented, for illustration only): a Mexican bank keeps US dollars in an account at a New York bank; the Mexican bank calls it its USD nostro, and the New York bank calls it a vostro account held for the Mexican bank.
- Nostro and vostro describe one account from two sides: the bank that owns the money and the bank that holds it.
- Banks hold nostro accounts in foreign currencies so they can send and receive payments in those currencies through correspondent banks.
- India's Special Rupee Vostro Account is a rupee account an Indian bank opens for a correspondent bank of a partner country.
- The CPMI reported that correspondent banking relationships, which rest on these accounts, fell by about 25% between 2011 and 2020.
How nostro and vostro accounts work
To pay a supplier in a foreign currency, a bank needs money in that currency's banking system. It gets there by holding an account at a bank in that country. From its own side, the account is its nostro: our money, held with you. From the holding bank's side, it is a vostro: your money, held with us.
| Term | Meaning | In the example |
|---|---|---|
| Nostro | Our account, held at your bank | The Mexican bank's USD account in New York, in the Mexican bank's books |
| Vostro | Your account, held at our bank | The same account, in the New York bank's books |
| Correspondent bank | The bank that holds the account and settles payments | The New York bank |
| Respondent bank | The bank that owns the account | The Mexican bank |
Source: Helm Editorial Team; the example is invented. As published on 29 October 2026.
When a US customer pays the Mexican bank's client in dollars, the payment settles in the United States into the Mexican bank's nostro account. The Mexican bank then credits its client's account in Mexico. The money itself never crosses the border; the two banks' records change.
Where a business meets nostro and vostro accounts
Businesses rarely see these accounts by name, but they explain several things a finance team does see. They explain why a dollar payment between two countries outside the United States still depends on US business days, why a bank sometimes asks for its "correspondent" details on a payment, and why some payments pass through several banks.
They also appear in trade policy. In India, CBIC Circular No. 202/14/2023-GST of 27 October 2023 addresses the rule in India's IGST Act that a service counts as an export only where payment is received in convertible foreign exchange or in rupees wherever the RBI permits. It confirms that rupee payments from a Special Rupee Vostro Account, a rupee account an Indian bank opens for a correspondent bank of the partner country, meet that condition. Here the vostro account is in the domestic currency, so the foreign bank's customers can pay Indian businesses in rupees.
Common misunderstandings
- Thinking nostro and vostro are two accounts. They are one account, named from each bank's side.
- Assuming the money moves abroad. In a cross-border payment, balances change in nostro and vostro accounts; the currency stays in its home system.
- Confusing a vostro account with a customer's foreign currency account. Nostro and vostro accounts belong to banks, not to their business customers.
- Expecting every bank to have a nostro in every currency. Banks without one route through a correspondent bank that has.
Related terms and how Helm handles it
The bank holding the vostro account is the correspondent bank, and when it passes payments along it acts as an intermediary bank. Correspondent banking has been shrinking: the CPMI reported a fall of about 25% in relationships between 2011 and 2020. Our guide to intermediary bank fees shows what this means for a payment.
Helm gives your company USD account details in its own name that receive ACH, Fedwire and SWIFT, so US customers can pay as a domestic transfer rather than through a correspondent chain.
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USD, EUR and GBP accounts in your company's name, with a named account manager.
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What is a nostro account?
A bank's own account held at another bank, usually abroad and in that country's currency. Banks use them to settle payments in that currency.
What is a vostro account?
An account a bank holds on behalf of another bank. It is the same account as the other bank's nostro, seen from the holding bank's side.
Why do banks need nostro accounts?
To settle payments in a foreign currency. A bank without access to that currency's payment system holds an account with a correspondent bank that has it.
What is a Special Rupee Vostro Account?
A rupee account an Indian bank opens for a correspondent bank of a partner country. CBIC Circular No. 202/14/2023-GST confirms that rupee payments from one meet the payment condition for treating a service as an export under the IGST Act.
Can a business open a nostro account?
No. Nostro and vostro accounts are accounts between banks. A business holds its own foreign currency account with its bank or provider.
References
- Bank for International Settlements: Correspondent banking trends persisted in 2020, even as payment landscape changed, new data show (13 December 2021)
- CBIC: Circular No. 202/14/2023-GST on export of services and Special Rupee Vostro Accounts (27 October 2023)
- Swift: MT 103 Single Customer Credit Transfer, Message Reference Guide, Standards MT November 2021 (copy published by BNZ)
This guide is general information for businesses, not financial, legal or tax advice. Rules, fees and timings were checked against the sources listed on the review date and may change.