[{"data":1,"prerenderedAt":111},["ShallowReactive",2],{"post-what-is-correspondent-banking":3},{"id":4,"title":5,"body":6,"categories":102,"date":103,"description":12,"extension":104,"meta":105,"navigation":106,"path":107,"seo":108,"stem":109,"tags":102,"__hash__":110},"blog\u002Fblog\u002Foutput\u002Fposts\u002F2023-06-30-what-is-correspondent-banking\u002Findex.md","What is Correspondent banking?",{"type":7,"value":8,"toc":95},"minimark",[9,13,16,23,28,44,47,50,59,63,66,85,89,92],[10,11,12],"p",{},"Correspondent banking refers to any financial institution (correspondent bank) providing services to other banks (respondent banks).  A respondent banks can gain access to foreign financial markets by using correspondent banks, rather than setting up branches overseas.",[10,14,15],{},"A common example is where a domestic bank does not contain branches in a certain country. When that bank needs to perform transactions in that country it would use a correspondent bank for access.",[10,17,18],{},[19,20],"img",{"alt":21,"src":22,"title":21},"Correspondent banking","\u002Fimages\u002F2023-06-30-what-is-correspondent-banking\u002Fimage-2.png",[24,25,27],"h2",{"id":26},"how-does-correspondent-banking-work","How does correspondent banking work?",[10,29,30,31,38,39,43],{},"Correspondent banks act as middlemen between different unconnected financial institutions. They will hold accounts of the respondent bank and refer to them as ",[32,33,37],"a",{"href":34,"rel":35},"https:\u002F\u002Fen.wikipedia.org\u002Fwiki\u002FNostro_and_vostro_accounts",[36],"nofollow","Vostro"," or your account but on our books. The respondent bank will refer to the accounts as ",[32,40,42],{"href":34,"rel":41},[36],"Nostro",", or our account on your books.",[10,45,46],{},"Generally speaking, both banks in a correspondent relationship hold accounts for one another for the purpose of tracking debits and credits between the parties.",[10,48,49],{},"Correspondent banks generate a portion of their revenue from bank charges for serving as an intermediary between two unconnected banks.",[10,51,52,53,58],{},"Most international wire transfers are handled through ",[32,54,57],{"href":55,"rel":56},"https:\u002F\u002Fdavegarry.com\u002Fwho-are-swift\u002F",[36],"SWIFT",". If there no working relationship between the originating and beneficiary bank, the originating bank can search the SWIFT network for a correspondent bank that has a relationship with both financial institutions.",[24,60,62],{"id":61},"services-provided-by-a-correspondent-bank","Services provided by a correspondent bank",[10,64,65],{},"A correspondent bank can provide the following services to respondent banks:",[67,68,69,73,76,79,82],"ul",{},[70,71,72],"li",{},"funds transfer",[70,74,75],{},"settlement",[70,77,78],{},"check clearing",[70,80,81],{},"wire transfers",[70,83,84],{},"currency exchange",[24,86,88],{"id":87},"what-are-the-pros-and-cons-of-correspondent-banking","What are the pros and cons of correspondent banking?",[10,90,91],{},"Correspondent banks allow domestic banks access the global financial network without having to setup branches in countries they wish to do business in. Having a correspondent banking relationship allows domestic banks offer a range of services to its customers without having a relationship with the financial institutions at the other end.",[10,93,94],{},"Transactions processed through a correspondent bank can take time and can be costly. Customers usually have to bear these costs.",{"title":96,"searchDepth":97,"depth":97,"links":98},"",2,[99,100,101],{"id":26,"depth":97,"text":27},{"id":61,"depth":97,"text":62},{"id":87,"depth":97,"text":88},null,"2023-06-30","md",{},true,"\u002Fblog\u002Foutput\u002Fposts\u002F2023-06-30-what-is-correspondent-banking",{"title":5,"description":12},"blog\u002Foutput\u002Fposts\u002F2023-06-30-what-is-correspondent-banking\u002Findex","vmOXRt6cdCcz7C_QdKeemrCBDTEfI7zUTzubtOE9DPE",1778189599496]