International Methods of Payment
Customers of banks are able to effect payments to beneficiaries overseas in a number of different ways, and all of them result in book-keeping transactions between the banks concerned. These could be between a bank and its own international bank — i.e., between National Westminster and National Westminster International — but in addition the banks in the UK have accounts with banks abroad denominated in the currencies of the countries concerned, and similarly the overseas banks have accounts with the UK banks that are denominated in sterling. These relationships with banks abroad have been established through contracts made in the past and the particular banks which a UK bank holds accounts with are known as its ‘correspondent banks’.
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