Question

Give an explanation Regarding International Banking? what it is? and its purpose? and mention the types of international banks? (400-500 words)

Answer 1

International Banking: It is a form of banking whether bank mainly doing business across the globe its main objective is to serve clients across the world. It has presence in different countries and perform banking activites in all of these countries. They perform all the banking activites and mainly do businesses with multinational companies which has many branches and subsidiaries across the globe in that way it provide short and long term financing for them as well as provide financial services like lending , fund transfer, treasury management, asset and liability management, factoring, leasing, loan services, paymnet across foreign clients and many other servies.

Types of International Banks:

1. Correspondent bank: They are mainly responsible for building relationship between two banks in two different countries mainly used by multi national companies to take care of their financial needs like payment of fund and fund transfer. It is a small type only having representative to surve their clients in different countries.

2. Subsidiaries and Affiliates: Subsidiary bank is a type of bank which is owned by its parent bank in different country thus one has to report to the parent bank and all the financial are attached to the parent bank. Though affiliates bank is also has same meaning as subsidiary bank but there is a slight difference that the affiliates bank are independent.

3. Edge Act Bank: Established in US but work in different country. Their business is generally comes under federal charter and work in different country.

4. Offshore Bank: They are independent of regional reguations thus they provide customized and special financial services and products to their clients. Swiss bank is an example of offshore bank. It allows to keep foreign bank account.