Nostro accounts with debt balances are considered cash. Conversely, Vostro accounts with balances are considered debts. Computerized accounting allows simple coordination of Nostro and Vostro accounts by simply using «O» or «-» characters in the respective accounting systems of banks. Nostro and Vostro (from Italian, Nostro and Vostro; English, «our» and «your» are accounting terms that are used to distinguish an account for another company from an account that another company holds. The companies involved are usually banks. A Nostro AccountUn Nostro account is a bank account that holds a bank with a foreign bank in the currency of the country where the money is held. The term «nostro» is a bank account that holds funds in the currency of the foreign country whose strike company is run by that corresponding company. «Nostro» is Latin and translates «our» and is used to facilitate international trade in different currencies and currencies. A Nostro account is used for the client to keep an overview of his funds held internationally in the country`s currency. CFI is the official provider of the Certified Banking – Credit Analyst (CBCA) ™CBCA™ certificationThe certified Banking and Credit Analyst (CBCA) accreditation ™ is a global standard for credit analysts who cover finance, accounting, credit analysis, cash flow analysis, contract modeling, credit repayments and much more. Certification program designed to turn everyone into a top-notch financial analyst. The terms nostro and vostro are mainly used by banks when a bank holds money in another bank (on a correspondence account often called the Nostro or Vostro account). Both banks must keep records of the amount of money kept by one bank in the name of the other.
To distinguish the two data sets from the same balance and a set of transactions, banks designate accounts as nostro and vostro. From the point of view of the bank whose money is held by another bank, the two banks of the company must account for the amount that is stored by one bank in the name of the other. The terms Nostro and Vostro are used to distinguish the two sets of accounting documents held by each bank. Because the balance of a nostro/vostro account can change from one report reference date to another- for example. B from «nostro» to «vostro» and return – the account is not subject to the anaCredit coverage of all reference data. See also Nostro/Vostro accounts between different institutional units of the same credit institution For these accounts, the national bank acts as a custodian or manages the accounts of a foreign counterpart. These accounts are used to facilitate the billing of foreign currencies and transactions. European Central Bank. «Coverage of nostro/vostro accounts.» Access on March 16, 2020.
A Nostro account is a reference used by bank A to refer to «our» account managed by Bank B. Nostro is an ephemeral way of talking about «our money that is deposited with your bank.» A Vostro account is a record of money held by a bank or owed by a third party (an individual, a company or a bank) to a bank. For example, if a European insurance company contacted a Canadian bank to manage its funds or clients` funds, the Canadian bank would open a Vostro account for the European insurance company. In the end, the holding bank would decide and open the Vostro account. For the Nostro and Vostro accounts, the national bank, the bank that manages the account, acts as a janitor for the account and is sometimes referred to as a «bank of intermediaries».