Accounts and balances
Every account a bank holds, and what a balance really means
Accounts and balances: every account a bank holds, including nostro, vostro and loro accounts, and what a balance really means.
What You Can Do After This Chapter
Learning objective. Learner explains the account taxonomy, including nostro, vostro, suspense, settlement, clearing, transit and wash accounts, and states what each account holds and who can move it. Learner distinguishes ledger balance from available balance and value date from booking date, and explains how settlement and clearing accounts sit between banks.
Practical assessment. Learner receives an account statement showing a ledger balance and a lower available balance, then explains the difference, identifies the committed funds, and corrects an interest error caused by confusing value date and booking date. Learner also maps the nostro, vostro and settlement accounts for a cross-border payment.
Expected deliverables.
- Account taxonomy table
- Ledger versus available balance worked example
- Value date versus booking date note
- Account map for a cross-border payment
Completion criterion. Learner explains the balance difference correctly, fixes the value date error, and maps the nostro, vostro and settlement accounts accurately.