Correspondent Account KYC Toolkit : A Guide to Common Documentation Requirements
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, launched the Global Trade Finance Program (GTFP) in 2005. Under this program, IFC guarantees the payment risk of counter-party banks in emerging markets re...
Main Author: | |
---|---|
Language: | English en_US |
Published: |
Washington, DC
2015
|
Subjects: | |
Online Access: | http://documents.worldbank.org/curated/en/2009/10/23974312/correspondent-account-kyc-toolkit-guide-common-documentation-requirements http://hdl.handle.net/10986/21560 |
Summary: | The International Finance Corporation
(IFC), the private sector arm of the World Bank Group,
launched the Global Trade Finance Program (GTFP) in 2005.
Under this program, IFC guarantees the payment risk of
counter-party banks in emerging markets related to a variety
of underlying trade instruments. The GTFP also provides
technical assistance to banks, with a focus on institutional
capacity building in the broad areas of Trade Finance and
International Trade Operations. Trade is a fundamental
component in a country s growth and development and this has
been especially true for emerging markets. The IFC with its
mandate to support the private sector within developing
countries actively works to facilitate cross-border trade
through its trade finance program. Under the GTFP, IFC can
provide guarantees covering up to 100 percent of a
transaction value thus facilitating the parties involved
with the trade transaction to close the deal despite
challenges they may have encountered with credit limits,
country exposure constraints, etc. The underlying framework
between these financial institutions is normally a
correspondent banking relationship1, or, at a minimum, the
completion of a Know Your Customer ( KYC ) compliance file
which needs to be in place for the documentary credit or
other trade instrument to be issued, confirmed or
negotiated. From its work in developing economies, IFC has
found that many banks encounter difficulties in establishing
correspondent banking relationships. Some of the
difficulties involve inadequate or poor information being
provided by the Applicant Bank to support the application to
the potential correspondent. The guidelines presented
herein, which draw upon the results of research undertaken
with local, regional and international banks participating
in the GTFP, are designed to inform banks of international
best practice standards with regard to the information
needed to support an application for a correspondent banking
relationship or to respond to a request from a bank related
to its internal KYC compliance procedures. By improving the
content and delivery of such information, an Applicant Bank
presents itself in a professional manner and may reduce the
time taken for the application to be processed. |
---|