Global payments
Posted on Jan 14, 2026
Subscribe to our newsletter
Get the latest updates, insights, and tips delivered straight to your inbox.
Talk to an expert today!
Quick Summary
A Vostro account is an account that a foreign bank holds with a domestic bank in the domestic bank’s local currency.
A Vostro account is primarily used for international transactions, trade settlement, and forex operations.
Vostro account forms the backbone of the intermediary banking system.
In India, Vostro accounts operate under the RBI guidelines and are commonly maintained in INR.
While a Vostro account is essential for banks, businesses today prefer modern fintech payment platform solutions.
What is a Vostro account?
A vostro account is a domestic account that a foreign bank opens and maintains in the domestic country within the domestic bank. The term Vostro comes from Latin, and it means “your money with us”. From a domestic bank's perspective, the funds are held domestically to facilitate transactions but belong to the foreign bank.
In the banking world, a Vostro account holds great importance. This is because they allow foreign banks to conduct transactions in countries where they do not hold any physical presence. This makes the Vostro account a cornerstone for facilitating cross-border transactions.
How does a Vostro account work?
A vostro account refers to a domestic bank account that a foreign bank opens within a domestic bank in a domestic bank’s local currency.
To understand how a Vostro account works, here are a few steps that would help you understand the process:
Step-by-step working of a Vostro account:
Account opening in a domestic bank
The foreign bank opens up an account within the domestic bank to conduct transactions in that country.
Local currency maintenance
The Vostro account is maintained in the local currency of the domestic bank. In India, this means that the account is held in INR currency.
Transaction processing
Payments that are related to global trade, like import, export, remittances, or forex transactions, are moved through a Vostro account.
Settlement and Reconciliation
The domestic bank processes and settles transactions on behalf of the foreign bank. This ensures correct compliance and regulations.
Example: If a US-based bank needs to settle payments for Indian exporters, it may open a Vostro account with an Indian bank in INR. Payments are then settled through this account, reducing friction in cross-border transactions.
What are the benefits of a Vostro account?
A Vostro account plays a crucial role and serves many advantages in the cross-border transaction system. Here are a few advantages of a Vostro account:
Faster international transaction settlement
With the facility of Vostro accounts, international transactions are processed locally. This reduces delays caused by multiple intermediaries.
Access to local currency
Foreign banks can hold and manage funds in the domestic currency. This improves liquidity management.
Support for international trade
Vostro accounts are essential for handling import-export payments and trade finance operations.
Efficient correspondent banking
Banks can offer international services without setting up branches in every country.
What are the common uses of a Vostro account?
A Vostro account is widely used across various international banking and trade scenarios.
Forex transaction
Banks use Vostro accounts to manage foreign exchange inflows and outflows. This supports currency conversion and settlement processes.
Cross-border remittances
Vostro account facilitates international money transfer between banks and financial institutions.
Correspondent banking
Vostro accounts allow banks to provide services in countries where they do not have a direct banking presence.
Trade finance operation
A Vostro account supports letter of credit, bank guarantees, and documentary collections, which are important for international trade risk management.
In India, Vostro accounts play a significant role in supporting exporters, importers, and multinational trade flows.
What is the difference between a Nostro and a Vostro account?
First, let's understand what a Vostro and a nostro account are, and then we can understand the difference between these accounts:
Nostro Account
Nostro means “ours” in Italian.
A Nostro account is an account a domestic bank holds with a foreign bank, denominated in the foreign bank’s currency.
Example:
If HDFC Bank (India) opens a USD account with Citibank (USA), that’s HDFC’s Nostro account — “our account with you.”
Purpose:
It helps Indian banks make foreign currency payments, receive funds, and handle forex settlements easily.
Vostro Account
Vostro means “yours.”
A Vostro account is the opposite of a Nostro account — it’s an account that a foreign bank holds with a domestic bank, in the domestic currency.
Example:
Citibank (USA) maintains an INR account with HDFC (India). For HDFC, this is a Vostro account — “your account with us.”
Purpose:
It allows foreign banks to manage local currency payments and deposits within another country.
Basis | Nostro Account | Vostro Account |
Meaning | Our money with you | Your money with us |
Account Holder | Domestic bank | Foreign bank |
Currency | Foreign currency | Local currency |
Purpose | Manage foreign funds | Manage local settlements |
Simply put, a Nostro account represents a bank’s money held abroad, while a Vostro account represents a foreign bank’s money held locally.
How Infinity Simplifies International Payments
Vostro accounts are designed to reduce intermediaries in cross-border banking.
By allowing foreign banks to hold funds locally with domestic banks, Vostro accounts enable direct settlement in local currency. This eliminates the need for multiple routing layers and unnecessary currency conversions.
However, while Vostro accounts simplify settlement at the banking level, businesses often don’t experience this efficiency firsthand. Traditional systems built around Vostro infrastructure can still feel slow due to manual processes, fragmented workflows, and limited visibility into fees and exchange rates.
This is where Infinity bridges the gap between banking infrastructure and business experience.
How does Infinity leverage Vostro-based banking rails?
Infinity is built on established global banking rails, including Vostro account networks, which enable more direct, streamlined international payments. By leveraging these underlying structures digitally, Infinity helps reduce dependency on long correspondent chains and delivers the efficiency of Vostro accounts directly to businesses.
With Infinity, businesses benefit from:
Fewer intermediaries in payment flows, leading to faster settlements
Direct access to local and global banking networks, without dealing with correspondent complexities
Clear, upfront foreign exchange pricing, with no hidden margins
Digitised compliance and documentation, reducing manual effort and delays
A unified platform to collect, convert, and manage international payments
Infinity transforms the traditional Vostro-backed payment process into a faster, more transparent, and business-friendly experience.
As a result, Infinity is particularly well-suited for exporters, freelancers, SaaS companies, and startups in India that need reliable international payment solutions without the friction of conventional banking processes.
FAQs on Vostro account
What is a Vosteo account?
A Vostro account is an account that a foreign bank holds with a domestic bank in the domestic bank’s local currency.
What maintains a Vostro account?
A Vostro account is maintained by the domestic bank on behalf of a foreign bank.
Is a Vostro account maintained in INR in India?
Yes, in India, Vostro accounts are typically maintained in Indian Rupees (INR).
What is the difference between a Nostro and a Vostro account?
A Nostro account is “our money with a foreign bank,” while a Vostro account is “a foreign bank’s money with us.”
Are Vostro accounts still relevant today?
Yes, Vostro accounts continue to be widely used in international banking, especially for trade and correspondent banking.
