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(i) Foreign branches.
They provide full services, and are established when volume of
business is sufficiently large and when low of the land permits it. Foreign branches facilitate
better services to the clients and help the growth of business.
(ii) Subsidiaries and Affiliates.
A subsidiary bank is a locally incorporated bank that is
either wholly or majority owned by a foreign parent and an affiliate bank is one that is only
partially owned but not controlled by its parent. Subsidiaries and affiliates are normally
meant to handle substantial volume of business.
(iii) Correspondent bank.
A correspondent bank is a bank located elsewhere that provides
services on behalf of other bank, besides its normal business. The correspondent banking
system enables a bank’s foreign client to conduct business worldwide through his local bank
or its contacts. The correspondent bank mode is ideal because of its low cost when the
volume of business is small. The possible disadvantage is that the clients may not receive the
required level of services.
(iv) Representative offices.
This is a small service facility staffed b the parent bank personnel
that is designed to assist the foreign clients of the parent bank in dealings with a level of
service greater than that provided through a correspondent relationship.
maurice.mutuku answered the question on April 25, 2019 at 07:20
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