Nostro and Vostro account normally uses in the foreign exchange transactions of the banks or during currency settlement.
Nostro Account means the overseas account which is held by the domestic bank in the foreign bank or with the own foreign branch of the bank. For example the account held by Bangladesh Bank with bank of America in New York is a Nostro account of the Bangladesh Bank. Vostro Account means the account which is held by a foreign bank with a local bank, so if bank of America maintains an account with Bangladesh Bank it will be a vostro account for Bangladesh Bank. It is a great point that the account which is Nostro for one bank is Vostro for another so when Bangladesh Bank opens a Nostro account with Bank of America, it is a Vostro account for them and vice versa.