Correspondence Bank

The term correspondent bank refers to a financial institution that provides services to another usually in another country. It acts as an intermediary or agent, facilitating wire transfers, conducting business transactions, accepting deposits, and gathering documents on behalf of another bank. Correspondent banks are most likely to be used by domestic banks to service transactions that either originate or are completed in foreign countries. 

Berhan banks generally use correspondent banks to gain access to foreign financial markets and to serve international clients without having to open branches abroad.