NOSTRO and VOSTRO accounts
From banking perspective Nostro and Vostro accounts are bank’s accounts with other banks. These accounts serve the purpose of clearing when the banks act as custodians. Let us now define these accounts:
Nostro/Vostro: Nostro accounts are those accounts held by banks with another bank. Sample scenario would be when Citibank India has an account with HSBC india, then this account is a Nostro for Citibank. But this same account is said to be a Vostro account for HSBC.
Every bank maintains Nostro accounts with other banks to serve the purpose of fund transfer in case of clearing and settlement. This is also in case of investment banks that act as global and local custodians for individuals and high net-worth investers.
For further information please write to us at: arun.vijayaraghavan@focustesting.com
Thanks,
Arun
Arun Vijayaraghavan is a Senior QA working for one of the world's largest Investment Banks. Arun has extensive experience in Retail Banking, Investment banking and non-life insurance domains.
