Correspondent bank

How it is used

Used in international payments, trade finance and compliance. Banks hold accounts with their correspondents: a nostro account is 'our account with you', a vostro account 'your account with us'. A dollar payment usually passes through a US correspondent bank. Because of AML risks, these relationships need careful due diligence.

Example sentences

1. The payment is on hold at our correspondent bank in New York for a compliance check.

2. We have correspondent bank relationships with more than 1,000 banks worldwide.

Common collocations

• correspondent banking
• correspondent network
• nostro account
• vostro account

Related terms

• wire transferAn electronic transfer of money from one bank account to another, often between different banks or countries.
• SWIFT codeA code of 8 or 11 letters and numbers that identifies a specific bank, and sometimes a branch, in international payments. It is also called a BIC.
• letter of creditA bank's written promise to pay the seller in an international sale, provided that the seller presents the required documents, such as the bill of lading and invoice.
• AMLShort for anti-money laundering: the laws, controls and procedures that banks use to prevent, detect and report money laundering.
• due diligenceA careful investigation of a company, deal or customer before an agreement, to check the facts and find any risks or legal and financial problems.

More terms: Banks & Institutions

• central bank
• branch
• retail banking
• commercial bank
• corporate banking
• SME
• credit bureau
• relationship manager
• teller
• head office
• investment bank
• private banking