03 Jan

Nostro, Vostro & Loro Accounts | CA Final SFM


Nostro (translated from Italian) means our.

It’s a way of saying, “Our money that is on deposit at your bank”.

Nostro is an accounting term used to describe an account another entity (Bank) holds.


Nostro Account :

Nostro account refers to an account that a domestic (Indian) bank holds in a foreign currency in a foreign bank, frequently used to facilitate foreign exchange and trade transactions.

For example,

If a domestic bank like Bank of India has a US Dollar account with ICICI Bank, then such account is called as NOSTRO Account.



The term Vostro translated from Italian means yours, as in your account.

It’s a way to say, “Your money that is on deposit at our bank”.


Vostro Account:

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

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’.


Loro Accounts:

Loro accounts are generally held by a 3rd party bank, other than the account maintaining bank or with whom account is maintained.

For example

BOI wants to transact with HSBC, but doesn’t have any account, while SBI maintains an account with HSBC in U.K. Then BOI could use SBI account.

Latest Posts

Tips by CA Harish Wadhwani (Scored 93 marks in SFM)

Congratulations…!! CA Harish Wadhwani for scoring 93 marks in SFM (CA Final)

Securitization CA Final SFM (Strategic Financial Management)

Securitization CA Final SFM Securitisation a chapter in Strategic Financial Management (SFM). This is an important chapter from the CA Exam point of view as well. The concept has been explained with a comprehensive example, to make sure the concepts are very clear. It mainly talks about Debt Securitisation, Mortgage-Backed Securities, Securitisation Process, Credit Rating Continue reading

Things you should do before your CA Final Exams

Things you should do before your CA Final Exams Clearing CA Final Exam is clearly not a simple cake walk. You need to be extremely committed to attending your CA final coaching classes. As the subjects are numerous, you need to study your lessons as and when they’re taught your respective CA final Coaching class. Continue reading

CA Final SFM, quick preparation tips

CA final SFM has a few topics which carry a fine weight-age in each trial which are Foreign Exchange Risk Management, Capital Budgeting, Derivatives, and Portfolio Management. But in its place of starting with a topic keeping huge concepts start with a bit lighter note and extremely interesting niche i.e. Bold Valuation. Thereafter full acquisition Continue reading

Two Way Quotes | Forex | CA Final SFM

 A Two way Quote indicates a set of two different rates of exchange known as Bid Rate and Ask Rate. In a Two Way Quotes, the rate at which bank will buy the currency and the customer will sell the currency is known as Bid Rate. The rate at which bank will sell the Continue reading

What is an Exchange Rate | Direct Quote & Indirect Quote

 Exchange Rate A rate at which one currency can be exchanged with the other. It is a rate at which one currency expressed in terms of the other. It is a rate at which a currency can be bought or sold. Direct Quote & Indirect Quote

Corporate Valuation Basics | CA Final SFM

 Need for Corporate Valuation Along with the enterprise growth, number of stakeholders also grows. Presentation of annual financial statements becomes. Curiosity of the stakeholders to understand the ‘true worth’ of their enterprise becomes translated to the concept of ‘valuation’. The market analysts, financial intermediaries, and the academicians, also attempt to apply their valuation approaches Continue reading

Interest Rate Futures | Derivatives | CA Final SFM

 When Forward Interest Rate Agreements are regulated through the “Exchange”, it will become Interest Rate Futures. However, the mechanism of IRF is different from FRA. The system is designed in a manner that interest rate is made up as a marketable product. The following example, will clarify as to how interest rate futures are Continue reading