Correspondent Bank

What is a Correspondent Bank?

A correspondent bank is a financial institution that acts as an intermediary in international payment transfers. When your client's bank doesn't have a direct relationship with your Indian bank, the payment is routed through one or more correspondent banks.

How Correspondent Banks Affect Your Payments

Each correspondent bank in the chain may deduct a fee (typically $10-25) from your transfer. This means the amount that arrives in your Indian bank account is less than what your client sent.

For example, on a $5,000 transfer:

• Client sends $5,000
• Correspondent bank deducts $15
• Your bank receives $4,985
• Your bank deducts receiving charges and applies FX markup
• You receive significantly less than $5,000 worth of INR

Why Multiple Banks Are Involved

International SWIFT transfers often require correspondent banks because:

• Not all banks have direct relationships with each other
• Currency conversion may happen at an intermediary bank
• Regulatory requirements in different countries require local bank involvement

How FaiirPe Eliminates This Problem

FaiirPe handles the banking complexity behind the scenes. Your client pays a single amount, and you receive the maximum INR after a flat $19 fee — no surprise correspondent bank deductions.

Related Terms

• SWIFT Transfer — the network correspondent banks operate on
• Wire Transfer — the type of transfer that uses correspondent banks
• FX Markup — another hidden cost in international transfers