When one bank holds an account at another bank, both banks book the same account, just from opposite viewpoints. The bank that owns the money calls it a nostro account ('ours' at the other bank, usually in a foreign currency). The bank holding that money for it calls the same account a vostro ('yours' held with us). It's a labeling convention, not two separate pots: every credit to one side is the matching debit on the other. These balances are where cross-border money actually sits and moves.
In a flow
Cross-border settlement happens by moving balances in these accounts. When your bank's correspondent pays out abroad, it debits your bank's nostro balance held there; from the correspondent's books that same account is a vostro. The money leg is the change in that balance, the SWIFT message just tells the correspondent to make it.
Common misconceptions
Myth: Nostro and vostro are two different accounts.
Reality: They're the same account described from two sides. 'Nostro' is the owning bank's view of its money held elsewhere; 'vostro' is the holding bank's view of that same balance.
Myth: Foreign-currency payments move money instantly across borders.
Reality: What typically moves is a balance in a nostro/vostro account at a correspondent. If that account lacks funds or available credit in the right currency, the payment may not settle until it does.
Related terms
See it in a guide
Sources
- Correspondent banking and account relationships ↗ · BIS / CPMI. Structure of nostro/vostro relationships in correspondent banking.
- Cross-border payments and messaging ↗ · SWIFT (operator)
Educational, plain-English explainers. Not legal, compliance, tax, or financial advice. These cover fundamentals, not current fees, limits, or rates (which change). Rails and parties vary by program and country, so verify specifics against primary sources. Last reviewed June 2026.