Rails & networks
What is Nostro account?
A nostro account is an account a bank holds in a foreign currency at another bank abroad — 'our account with you'. Banks use nostro accounts to hold foreign-currency liquidity and settle cross-border payments. The same account is a vostro account from the other bank's perspective.
Nostro/vostro balances are what get debited and credited as a correspondent payment moves through intermediaries. Managing nostro liquidity across many currencies and counterparties is a major cost and operational burden that local-rail orchestration helps reduce.