Correspondent Banking

What is Correspondent Banking?

Correspondent banking is an arrangement where one financial institution provides services on behalf of another in a different location. This network allows banks to conduct business and process payments in regions where they do not have a physical presence.

Why It Matters

• It facilitates international trade by enabling cross-border currency transfers.

• It allows smaller banks to offer global services to their local customers.

• It provides essential liquidity and clearing services in foreign markets.