What Is The Difference Between A Nostro And A Vostro Account?

Nostro and vostro are Italian terms that describe the same bank account. They’re used when one bank has another bank’s money on deposit.For example, Bank A uses nostro account to refer to its account that’s held by Bank B. Nostro means “our.” It’s a shorthand way of saying, “our money that is on deposit at your bank.” Bank B refers to Bank A’s account that it holds as a vostro account. Vostro means “your,” and it’s a way to say, “your money that is on deposit at our bank.” A vostro account can be either a company’s or an individual’s. Banks in the United Kingdom and the United States often hold a vostro account on behalf of a foreign bank. The vostro account is held in the currency of the country where money is on deposit. A nostro account is the record of the bank whose money is at another bank. Nostro accounts are often used to simplify trade and foreign exchange transactions.