Correspondent account:
trust in the banking system

01

What opens

Correspondent relationship allows the respondent institution to make payments through an account with the correspondent bank. The product may include BHD or foreign-currency clearing, trade finance, treasury, FX and messaging; The scope of rights is fixed by agreement and limits.

02

Who is it suitable for?

Bank

Valid license and prudential supervision

Payment institution

Only with an acceptable model and appetite correspondent

Non-bank corporate

Regular operating account, not correspondent account

Shell bank

Unacceptable model

Nested access

Disclosed and separately assessed

Payable-through

Requires special controls and approval

03

Search correspondent - not mass mailing

First, a map of currencies, corridors and types of clients is built, then licensed banks with suitable institutional products are selected. Retail presence in Bahrain does not in itself mean correspondent appetite.

04

Institutional due diligence dossier

05

AML/CFT is checked at the system level

Enterprise risk assessment

Clients, products, countries and channels

CDD/EDD

UBO, PEP, source and high-risk approval

Screening

Sanctions, PEP, adverse media and tuning

Monitoring

Scenarios, thresholds, alerts and investigations

Reporting

STR/SAR governance and regulator engagement

Audit

Independent testing, findings and remediation

Training

Role-based programs and records

06

Payment traffic is described numerically

Currencies, monthly quantities and amounts, average and maximum payment, inbound/outbound split, top countries, customer segments, products and high-risk exposure share are provided. The forecast must be explained by the actual customer base.

07

Opening process

1. 01
   Readiness review

   License, governance, AML gaps and traffic model.

2. 02
   Targeting

   Currency corridor and institutional appetite.

3. 03
   RFI / DDQ

   Full questionnaire and evidence room.

4. 04
   Risk decision

   Compliance, credit, legal and senior approval.

5. 05
   Implementation

   Agreement, SWIFT, limits, testing and go-live.

08

After launch

Relationship undergoes transaction monitoring, periodic review and event-driven update. Changes to licenses, owners, management, customer mix, corridors, enforcement or audit findings are reported without waiting for the next questionnaire.

09

If direct counting is premature

Comparisons are made between sponsor model, clearing arrangement, limited currency corridor or technical integration with a licensed partner. The alternative must not mask nested access or bypass licensing restrictions.

10

Readiness for due diligence

1. 01

   Confirm license scope and regulatory standing.

2. 02

   Close critical audit and AML findings.

3. 03

   Prepare Wolfsberg-style DDQ and evidence room.

4. 04

   Calculate traffic by currencies, countries and clients.

5. 05

   Assign owners for compliance, operations and SWIFT.