{"id":23887,"date":"2025-08-22T16:31:09","date_gmt":"2025-08-22T11:01:09","guid":{"rendered":"https:\/\/blog.razorpay.in\/blog\/?p=23887"},"modified":"2026-01-09T14:22:13","modified_gmt":"2026-01-09T08:52:13","slug":"nostro-account","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/nostro-account\/","title":{"rendered":"Nostro Account: Meaning, Charges, and Real Examples in Indian International Banking"},"content":{"rendered":"

Receiving money from another country should be a simple affair. Yet for many Indian freelancers, exporters, and businesses, it often comes with a set of confusing questions. Why did a payment take five days to arrive? Why is the final credited amount slightly less than what was sent? What do terms like ‘intermediary bank’ or ‘correspondent bank’ even mean?<\/span><\/p>\n

This feeling of uncertainty arises because international payments don’t travel in a straight line from your client’s bank to yours. They move through a carefully structured global network built for safety and compliance.<\/span><\/p>\n

At the very heart of this system is a fundamental tool you’ve likely never dealt with directly, but which impacts every foreign payment you receive: the <\/span>Nostro Account<\/b>.<\/span><\/p>\n

Understanding what a Nostro account is, how it works, and why it exists is the key to demystifying international payments. This guide will explain it all in simple terms, helping you understand the complete journey of your money from abroad to your Indian bank account.<\/span><\/p>\n

What is a Nostro Account?<\/b><\/h2>\n

A Nostro account is a bank account that a domestic bank (like SBI in India) holds with a foreign bank (like Chase Bank in the US), denominated in the currency of that foreign country.<\/span><\/p>\n

The term <\/span>Nostro<\/b> comes from the Latin word for “ours.” So, when an Indian bank refers to its Nostro account, it\u2019s literally saying:<\/span><\/p>\n

“This is our account that we hold with your bank.”<\/b><\/p>\n

For example, HDFC Bank holding a US Dollar account with Citibank in New York is HDFC’s Nostro account. This account allows HDFC to handle USD transactions for its Indian customers without needing a physical branch in the United States. It’s like having a dedicated wallet for foreign currency, kept safely with a partner bank abroad.<\/span><\/p>\n\n\n\n
Did You Know? The Other Side of the Coin<\/b><\/p>\n

What does the foreign bank (Citibank, in our example) call this account? They call it a <\/span>Vostro<\/b> account. Vostro is Latin for “yours.” So, from their perspective, it’s “your account held with us.”<\/span><\/p>\n

It\u2019s the very same account, just viewed from two different perspectives. <\/span>Nostro = Our<\/b> account with you. <\/span>Vostro = Your<\/b> account with us.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Purpose of Nostro Accounts in Business and Banking<\/b><\/h2>\n

So, why do banks go through the trouble of setting up these accounts? Nostro accounts are the backbone of international trade<\/a> and finance. They serve several critical functions:<\/span><\/p>\n