A Nostro account is an account held by a bank in another bank. It allows the customers to deposit money in the bank’s account in another bank. It is often used if a bank has no branches in a foreign country. Nostro is a Latin word that means “ours”.
Let’s presume bank “A” does not have any branches in the Russia, but bank “B” does. Now, to receive the deposits in the Russia, “A” will open a Nostro account with “B”.
Now, if any customers in the Russia want to send money to “A”, they can deposit it into A’s account in “B”. “B” will transfer the money to “A”.
The main difference between a deposit account and a Nostro account is that the former is held by individual depositors while foreign institutions hold the latter.
#Nostroaccount #RBI #UCObank #indusindbank#ukpsc #upsc #samvegias #ukpscmains
