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Nostro & FX treasury management
ID MOD-082
System SD04
Repo bank-payments
Build status Deployed
Deployed Yes
Last commit ba79a3857b3dbbed3993a5ded9523c95f3d51e16

The nostro and FX treasury management module maintains the bank's correspondent banking positions and manages intraday funding flows across all currency corridors.

Purpose

Cross-border and FX payments require the bank to hold pre-funded balances ("nostro accounts") at correspondent banks in each settlement currency. If a nostro account is underfunded, outward payments in that currency cannot settle. If it is overfunded, the bank holds excess liquidity earning below-market returns. This module manages both risks.

Nostro accounts

The bank holds nostro accounts at correspondent banks for each active currency corridor. Each account has a configured minimum balance (the funding floor) and a target balance. The module monitors the intraday balance of each nostro account in real time via the correspondent bank's balance reporting API or MT940/camt.052 message feeds.

What it does

  • Real-time balance monitoring — receives intraday balance messages from each correspondent and maintains a live nostro position in Postgres
  • Automatic funding triggers — when a nostro balance falls within the funding alert threshold (configurable per currency), the module raises a funding instruction to the treasury team via the operations work queue (MOD-064) and optionally executes an automated funding transfer if the treasury has pre-authorised auto-funding for that corridor
  • Payment gating — when a nostro balance is below the minimum required to fund a queued outward payment, the payment is held in MOD-020 (Pre-payment validation) until the nostro is funded or the treasury manually releases the hold
  • Position dashboard — provides the treasury team with a real-time view of all nostro positions, intraday settlement flows, and projected close-of-day positions across all corridors
  • Integration with reconciliation — feeds intraday nostro movements to MOD-081 (Payment reconciliation engine) for matching against outward payment settlements

Relationship to customer FX

Customer-facing FX conversion (rate lock, spread, conversion execution) is handled by MOD-025 (FX rate lock & conversion). This module operates at the bank's treasury level — it is invisible to customers but is the funding mechanism that makes customer FX payments possible.

Module dependencies

Depends on

Module Title Required? Contract Reason
MOD-004 Multi-currency ledger (NZD/AUD) Required — Nostro balances are maintained in the multi-currency ledger — this module reads and updates currency-split positions.
MOD-085 Market rates ingestion & normalisation Required — FX rate data from market rates ingestion is required for nostro position valuation and cross-currency funding decisions.
MOD-003 Real-time balance engine Required — Real-time nostro balance visibility requires the live balance engine for accurate intraday positions.
MOD-104 AWS shared infrastructure bootstrap Required — AWS shared infrastructure provisioned by MOD-104 (EventBridge buses, S3, KMS, Kinesis, Cognito) is required before this module can be deployed.
MOD-103 Neon database platform bootstrap Required — Neon database and schema provisioned by MOD-103 must exist before this module can read or write Postgres.

Required by

Module Title As Contract
MOD-154 Correspondent banking risk gate Hard dependency —

Policies satisfied

Policy Title Mode How
CLQ-002 Liquidity Risk Management Policy CALC Nostro balances at correspondent banks are included in the liquidity position calculation — LCR and NSFR capture all accessible liquidity pools.
PAY-002 Settlement Risk Policy GATE Outward cross-border payments are blocked if the correspondent nostro account balance is insufficient to fund settlement — overdraft of nostro positions is not permitted.
PAY-008 Payment Routing, Sponsor & Card-Scheme Abstraction Policy AUTO Nostro account positions are reconciled against correspondent bank statements on every settlement cycle — discrepancies are flagged automatically for treasury review.

Capabilities satisfied

Capability Title Mode How
CAP-129 Internal FX nostro management AUTO Maintains real-time nostro account balances across all correspondent bank relationships, triggers funding transfers when balances fall below configured thresholds, and provides a treasury dashboard for intraday position management.

Part of SD04 — Payments Processing Platform Compiled 2026-05-22 from source/entities/modules/MOD-082.yaml