Banking Correspondent Agreement

A banking correspondent agreement can mean one of two different contracts. In international banking it is the agreement between a correspondent bank and a respondent bank that sets out the accounts to be opened, the payment and clearing services offered, fees, cut-off times and the due diligence each side expects, forming the legal basis of a correspondent banking relationship. In financial inclusion, the phrase refers to the contract under which a bank appoints a non-bank, such as a shop, post office or lottery outlet, to carry out simple services on its behalf, including cash deposits, withdrawals and bill payments. Brazil calls these agents correspondentes bancários, and India's Reserve Bank uses the term business correspondents. In that sense the agreement defines permitted services, cash limits, liability, training and monitoring, because the bank remains responsible for what its agents do. Also see branchless banking and banking agents.