A correspondent banking relationship involves one financial institution (the correspondent) providing banking services to another financial institution (the respondent), where both institutions are based in different countries.
Under this arrangement, correspondent banks may provide the respondent bank a wide range of services, including but not limited to: cash management (e.g. interest-bearing accounts in a variety of currencies), international wire transfers, cheque clearing, payable-through accounts and foreign exchange services.
See Correspondent banking relationships and section 5 of the AML/CTF Act