The document discusses correspondent banking and offshore banking, explaining that correspondent banks facilitate international services such as money transfers and currency exchange for other banks, while offshore banking units operate outside their home country and primarily handle transactions in foreign currency. Advantages of correspondent banking include rapid fund movement and assistance with securities, whereas offshore banking offers higher service levels and access to international investment opportunities. The key differences lie in their currency dealings and account opening eligibility, with correspondent banks servicing both residents and non-residents, while offshore banks cater specifically to foreigners.

1. ASSIGNMENT
INTERNATIONAL BANKING
& FOREX MANAGEMENT
BY-ANIKET
MRIGANK
SAHIL

2. Question:
What is correspondent banking & off shore banking.
What are the advantages and difference between two.
Answer:
CORRESPONDENT BANKING:
 Correspondent banks are those banks in a country that
are set up to provide services for another bank or
financial institution in a foreign country.
 The services provided by a correspondent bank
include money transfers, currency exchange, trade
documentation and business transactions.

3. Advantages:
 Rapid Movement of Funds:
In this cheques of country banks are cleared and collected without much delay.
Thus there is a rapid movement of funds from one area to the other. This
system facilitates trade and industry.
 Help in Dealing in Securities:
Correspondent city banks help the country banks in the buying and selling of
securities.
 Help in Providing Finance:
Such banks also help the country banks in financing loans and advances by
providing them funds.
 Help in Foreign Exchange Transactions:
They facilitate foreign exchange transactions of their correspondent banks.
 Increase in Mobility of Credit:
They increase the geographical mobility of credit when business is transacted
from one area to the other through these banks.

4. OFFSHORE BANKING:
 An offshore banking unit (OBU) is a bank shell branch,
located in another international financial center.
 Offshore banking units (OBUs) refer to bank branches
located outside of its home country, and handling
transactions made in foreign currency.
 It can accept deposit from NRIs, foreign banks & OBUs.
 It can sanctioned loan.
 For Example:
A London-based bank with a branch located in Delhi.

5. Advantages:
 Enjoying the highest service levels
 Having convenient and accessible access to
funds
 So you can access international investment
opportunities
 To benefit from foreign exchange services
 For superior lending and credit facilities

6. Difference:
BASIS OFFSHORE
BANKING
CORRESPONDENT
BANKING
Dealing
Currency
Offshore banks only
deals with foreign
currency.
Correspondent bank deals
with domestic and foreign
currency.
Account
Open
Offshore provides
account open for
foreigners only.
Correspondent bank
provides account open for
both resident in India and
Non Resident in India.