Correspondent Banking

Correspondent banking is a foundational service in global finance where one financial institution, the correspondent bank, provides payment and other banking services to another financial institution, the respondent bank, typically in a different country, enabling cross-border transactions, foreign exchange, and trade finance. This relationship, established through a formal agreement, is the backbone of the traditional international payment system, facilitating trillions of dollars in transactions annually by granting the respondent bank access to the correspondent's local market and currency clearing systems.