Correspondent Bank
Definition
- A bank that holds deposits of another bank, usually a smaller bank, and provides various banking services that may not be available to the smaller bank. Major Canadian banks like CIBC, TD Securities and BMO Financial Group provide correspondent banking services for financial institutions within Canada, US and world-wide. One notable example is President's Choice Financial whose correspondent bank is CIBC.
Synonyms
large institution, contributing bank, major bank
Related Terms and Acronyms
- Bank — Definition,
- An institution that acts as a financial intermediary by receiving money from depositors and lenders and also lending to borrowers.
- Bank Holding Company (BHC) — Acronym,
- A company that owns or controls one or more banks or companies associated with banking such as leasing companies, credit companies, etc. It is usually identified by the word Bancorp or Bancshares in the name. The Federal Reserve Board of Governors regulates all bank holding companies.
- Commercial Bank (CB) — Acronym,
- A financial institution that provides a broad range of services, from chequing and savings accounts to business loans and credit cards.
- Onus Item — Definition,
- A payment that is deposited at the same financial institution in which it was drawn or written. For example, a cheque that is written by one bank customer and deposited by the recipient at another branch of the same bank. These items are not cleared between institutions and therefore are not represented in statistics of payments exchanged between financial institutions in the clearings.
- Regional Bank — Definition,
- A bank with a primary market in a regional or metropolitan area but takes deposits from throughout the province in which it is located. Usually called a Credit Union in Canada.
- Syndicated Loans — Definition,
- Loans given to a company that are backed by a group of banks who share the risk of a large transaction. There is usually a lead bank and several participating banks.
