Georgia - U.S. Banks and Local Correspondent Banks (2024)

FAQs

What is a US correspondent bank? ›

A correspondent bank is a third-party financial institution that acts as an intermediary between domestic and international banks. Correspondent banks effectively act as an agent of a foreign bank to conduct business transactions with the domestic bank on its behalf.

Example: If a person in India wants to send money to someone in the USA, their local bank in India might not have a presence in the USA. In such cases, a correspondent bank in the USA will facilitate this transaction on behalf of the Indian bank.

Correspondent banks act as third parties to facilitate payments between international and domestic banks. Transactions such as international wire transfers, global investments and currency exchanges are often aided by correspondent banks.

High fees: Correspondent banking relationships can involve high fees, particularly for small and medium-sized financial institutions. Complexity: Correspondent banking relationships can involve multiple parties, making it difficult to manage risks and ensure compliance.

Attract new business, increase profits, and function more efficiently by working with a correspondent bank that offers the advice and expertise you need to stay competitive. We maintain one of the largest correspondent bank networks in the U.S. and overseas.

Correspondent banking is a partnership between two banks, often from different countries, where one bank provides services on behalf of another bank. In this arrangement, the bank offering the services is called the "correspondent bank," while the bank receiving them is the "respondent bank."

A person or entity has an account at an issuing bank. The issuing bank then uses a correspondent or intermediary bank to complete the process of moving funds to a beneficiary bank. In some countries, correspondent banks are simply a type of intermediary bank.

Lack of due diligence: Fraudsters are able to capitalize on inadequate KYC and customer identification, weak transaction monitoring, and insufficient risk assessments by correspondent banks to allow illicit funds to flow undetected.

What Is a Correspondent Bank? A correspondent bank is a financial institution that provides services to another one—usually in another country. It acts as an intermediary or agent, facilitating wire transfers, conducting business transactions, accepting deposits, and gathering documents on behalf of another bank.

When making International Money Transfers (IMTs), we use correspondent banks to help move money between countries to enable funds to be received by the beneficiary bank (the recipient's bank). These beneficiary banks may deduct fees from the amount sent to your recipient.

How much do correspondent bank charges? ›

How much can I be charged in correspondent fees? The amount that other banks can charge you will vary, but we estimate anywhere between 15 and 50 USD or equivalent. The fee might be higher depending on the bank.

Criminals transfer money between accounts held at different correspondent banks or make numerous cross-border transactions, making it difficult to trace the original source of the funds. Smurfing: Money launderers may employ smurfing, also known as structuring, to evade suspicion.

Because it facilitates cross-border transactions, including in developing economies and emerging markets. But there is a glaring problem. Money launderers target the correspondent banking system because of its weaknesses, such as a web of complex transaction chains and a convenient (for criminals) lack of transparency.

A person or entity has an account at an issuing bank. The issuing bank then uses a correspondent or intermediary bank to complete the process of moving funds to a beneficiary bank. In some countries, correspondent banks are simply a type of intermediary bank.

A correspondent bank is a go-between for two different respondent banks in an international financial transaction. A beneficiary bank is the bank that receives money from a sender bank through a third-party intermediary bank.

Risks associated with correspondent banking

Correspondent banks may have no pre-existing relationships with parties with which the respondent transacts, making them vulnerable to corruption and money laundering.