A bank which acts as agent for another bank (known as the principal bank/ respondent bank) and offers that bank an account through which it can make payments for its own account and on behalf of its clients. Also, the agent bank accepts deposits and performs banking services for principal banks . In most cases, the two banks are located in different cities or countries. Agent relationships don’t include transactions between banks as principals (i.e., in the wholesale market).
The agent bank is also known as a correspondent bank.
