Académique Documents
Professionnel Documents
Culture Documents
!1
(C) COPYRIGHT 2012-2014. ALL RIGHT RESERVED. FAISAL KHAN & COMPANY.
!
In the event a direct relationship is not available, banks have arrangements with
! !
So for example, if Sunbank out of Orlando Florida (US) needs to send money to Mr. XYZ at Askari Bank in Lahore (Pakistan), the two banks here: Sunbank and Askari Bank certainly do not have a working arrangement. Via SWIFT Sunbank can easily see that Askari Bank has an arrangement with Deutsche Bank NYC as a direct arrangement. IF Sunbank has a direct arrangement with Deutsche Bank - via a Nostro Account, they will simply send an instruction and the money to Deutsche Bank and and then Deutsche Bank NYC will accept the
!2
(C) COPYRIGHT 2012-2014. ALL RIGHT RESERVED. FAISAL KHAN & COMPANY.
funds, minus its correspondent banking fees, and forward the money to Deutsche Bank (Karachi).
! !
If Sunbank does not have a direct arrangement, they will ask Deutsche Bank for the bank account used for on-ward funds transfer and simply do a local wire transfer (ACH) which can take up to 2 days to clear. Because Askari Bank and Deutsche Bank (Pakistan) have an arrangement, the funds come into the nostro account of Askari Bank in Deutsche Bank Pakistan. Askari Bank now has your money from Sunbank Orlando Florida. At the end-of-theday settlement of Nostro account, the incoming money is transferred into the appropriate central account of Askari Bank and which will then do a FT (Funds Transfer) of the money to your account.
! ! !
In this case, Deutsche Bank (Pakistan) may deduct correspondent bank fees and your bank may do the same. All in all, it is not unusual for mid-bank deductions to be in the vicinity of US$ 25 to say US$ 75 per transaction. Reporting - is a very essential element of wire transfer business. Depending on the country (each has its own set of requirements), such reporting includes essentially: KYC (Know Your Customer) Report Source of Funds Reporting (if Cash was induced into the source end of the AML (Anti-Money Laundering) Report (specifically velocity checks) SAR/CTR (Suspicious Activity Report / Currency Transaction Report) OFAC (Office of Foreign Assets Control - predominantly practiced by the
transactions)
US) and in other countries they may have their own check lists to see if the funds are being transferred To/From people on a given checklist. Threshold Reporting (reporting on amounts that exceed a specific monetary Workers Remittance Reporting. value in a given number of days, usually US$ 10,000 in the last 30-day window)
!3
(C) COPYRIGHT 2012-2014. ALL RIGHT RESERVED. FAISAL KHAN & COMPANY.
Any other reporting as required by law or internal policies in the country the
! !
Some references: NOSTRO & VOSTRO Accounts Society for Worldwide Interbank Financial Telecommunication (SWIFT) eHow - How Does International Wire Transfer Work The Answer Bank - What is a SWIFT Payment? SWIFT - List of Messages (PDF)
!4