Cor. Account is an important component of banking calculations

Correspondent, or so-called "Correspondent account", is a kind of calculation on which all types of operations of one bank, made according to the correspondent agreement, are fixed and subsequently displayed. In other words, this concept implies a bank account opened by the credit organization , which is used to form reserve funds or various transfers made by the above-mentioned structure. As a rule, the institutions of the Central Bank of the country and any commercial structures conclude a contract with each other, which serves to account for property owned by them.

Varieties

Like any other financial term, corr. An account is a concept that has several directions. There are three types of calculus: loro, nostro and vostro. Let us consider each of them in detail. So, the first type serves to determine the account, which is opened by the bank, the acting correspondent, the institution that is the respondent. In other words, such a cor. Sberbank's account reflects all the operations of any other organization. These entries are entered in the enterprise's liability. In turn, nostro-cor. The account is the estimate of the respondent institution that concluded the contract with the correspondent bank. For greater clarity, let us consider an example. Two banks (A and B) concluded a correspondent agreement among themselves. In the event that institution A needs to transfer a certain amount, it can use its nostro account in bank B. And vice versa, if there is a need for financial settlements with structure B, all the transactions performed will be reflected in the correspondent loro account of bank A. Simpler Speaking, nostro is our account in another bank, and loro is their account in our bank. When the first two varieties became as clear as possible, you can go to the last type of correspondent accounts - vostro. Its main feature is that it is a contract concluded between the Central Bank and any foreign institution, the calculations for which are made either in local currency or in the money assignments of a third country. This definition is rather complementary, so it can not be found as often as the first two.

Typology

In addition, we can distinguish another classification, according to which correspondent accounts are distinguished, concluded between the commercial and the Central Bank of the country, and between two commercial institutions. The first type occurs when a new bank is created, when its authorized capital is formed. Upon successful completion of this process, the Central Bank issues a license to conduct banking activities, and after the state registration, the existing corr. The account can be used as a form of property accounting and the method of performing settlement transactions. The second type, in turn, implies an agreement between two commercial banks, which establishes a certain order of participation of both structures in financial settlements with customers.

Appointment

It should be noted that cor. The bank account is most often used for money transfers. The currency can be different, but it will still be attributed to one correspondent account. In addition, as mentioned earlier, banks can operate with the above-described calculus to account for their property.

Designation

Like many other financial definitions, the correspondent account allows you to encrypt all the necessary information in numerical notation. The Central Bank of Russia accepted that cor. The account is twenty characters, the first three digits of which traditionally indicate the first order calculus (301), and the last three numbers contain information about the three-digit conditional number of the billing participant. For example, to / with 30101810600000000957.