Nostro Account

Nostro account is a term used in international banking to describe the account that a foreign bank maintains with its correspondent bank in a particular country. It’s like a sub-account that specifically holds funds for a particular foreign bank.

Here’s a breakdown of the term:

• Nostro: meaning “our own” in Latin.
• Account: a financial account.
• Correspondent bank: a bank that acts as an intermediary between banks in different countries.

Nostro accounts are important because they simplify international payments. Instead of setting up separate accounts for each foreign bank, a single nostro account can be used to send and receive funds from multiple foreign banks.

Here are some key points about nostro accounts:

• Multiple correspondents: A single nostro account can be linked to multiple correspondent banks.
• Local currency: The nostro account holds funds in the local currency of the country where the correspondent bank is located.
• Foreign currency: You can still send and receive foreign currency through a nostro account, but it might involve additional fees.
• Fee structure: The fees for using a nostro account vary depending on the banks involved and the amount of money being transferred.

Overall, the norest account is a key concept in international banking that simplifies the process of sending and receiving money between banks in different countries.