Nostro & Vostro Accounts
Mirror accounts banks hold with each other for cross-border transactions.
Detailed Description
Nostro & Vostro Accounts
What is a Nostro account?
A Nostro account is an account that a domestic bank holds in a foreign bank, denominated in the foreign currency.
What is a Vostro account?
A Vostro account is an account that a foreign bank holds in the domestic bank, denominated in the domestic currency.
Why are Nostro and Vostro accounts important for international trade?
They facilitate the smooth movement of funds across borders, allowing businesses to conduct transactions in different currencies efficiently.
How do Nostro and Vostro accounts work together?
Nostro accounts allow domestic banks to hold foreign currency, while Vostro accounts enable foreign banks to manage transactions in the domestic currency.
What regulations affect Nostro and Vostro accounts?
Banks must comply with anti-money laundering (AML) and know your customer (KYC) regulations, as well as regulations from central banks and financial authorities.