Correspondent Banking
Definition
A relationship in which one bank (the correspondent) provides services such as clearing and settlement to another bank (the respondent), allowing the respondent's customers to access markets and payment systems they cannot reach directly.
Related terms
- Beneficial Owner
- The natural person who ultimately owns or controls a legal entity or arrangement, as distinct from the nominee or registered owner. Anti-money-laundering...
- Customer Due Diligence (CDD)
- The process of identifying and verifying the identity of a customer and their beneficial owner, understanding the purpose of the business relationship,...
- Enhanced Due Diligence (EDD)
- A heightened set of CDD measures applied to higher-risk customers or relationships, including PEPs, high-risk jurisdictions, and certain business types. EDD typically...
- Politically Exposed Person (PEP)
- An individual who holds or has held a prominent public function, including senior government officials, judges, military officers, and their close family...
- Suspicious Activity Report (SAR) / STR
- A confidential report filed by a reporting entity to the national Financial Intelligence Unit when a transaction or pattern gives rise to...
Explained in
- AML Compliance: KYC, CDD, and Suspicious Activity ReportingA relationship in which one bank (the correspondent) provides services such as clearing and settlement to another bank (the respondent), allowing the responden...