Vostro and Nostro accounts
The terms nostro and vostro are used, mainly by banks, when one bank keeps money at another bank. Both banks need to keep records of how much money is being kept by one bank on behalf of the other. In order to distinguish between the two sets of records of the same balance and set of transactions, banks refer to the accounts as nostro and vostro . Speaking from the point of view of the bank whose money is being held at another bank: A nostro is our account of our money, held by the other bank A vostro is our account of other bank money, held by us A vostro account is the same as any other bank account. It is a record of money held by a bank or owed to a bank by a third party (an individual, company or bank). The nostro account is a way of the bank whose money it is, keeping track of how much is being held by the other bank. It is similar to an individual keeping a detailed record of every payment in and out of his or her bank account so that she/he knows
