Bankers for Banks

[Aviator]

I have noted that whenever I am getting payment from a bank, they give a cheque from another bank. Like of Equity is paying you, they give you a Stanchart check. Does it mean that banks hold accounts in other banks? Why can't they hold their own money?

Something else I have noted is that a bank can pay you via check exceeding 999999 and the check goes through.
@Okiya tuelezee.

 

[Okiya]

I have noted that whenever I am getting payment from a bank, they give a cheque from another bank. Like of Equity is paying you, they give you a Stanchart check. Does it mean that banks hold accounts in other banks? Why can't they hold their own money?

Something else I have noted is that a bank can pay you via check exceeding 999999 and the check goes through.
@Okiya tuelezee.

Yes, banks can have accounts in other banks. But it doesn't make sense for a bank of Equity size to have an account in Stanchart. Usually it's a very small bank having an account in a bigger bank

 

[Aviator]

Yes, banks can have accounts in other banks. But it doesn't make sense for a bank of Equity size to have an account in Stanchart. Usually it's a very small bank having an account in a bigger bank

What's the logic behind it? Is it a legal requirement?

 

[Okiya]

What's the logic behind it? Is it a legal requirement?

Ebu google nesting correspondent banking

 

[mZENDE]

Akin to kiting

 

[StewMaker]

Ebu google nesting correspondent banking

Explain in laymans language

 

[Awesome]

Google Nostro and Vostro accounts.

 

[uwesmake]

Citi Bank ndo hufanya io maneno kwa zile organisations hutransact huge volumes of money