Foreign exchange banks are banks specializing in foreign exchange business and international settlement. Its main business is: dealing in foreign exchange trading and exchange, handling foreign trade settlement, providing foreign exchange credit and guarantee for domestic importers and exporters, and issuing securities abroad.
Foreign exchange banks play the role of organizing and creating the foreign exchange market. Foreign exchange banks are usually commercial banks, which can be domestic banks specializing in foreign exchange, domestic banks concurrently engaged in foreign exchange business or branches of foreign banks in their own countries. Foreign exchange banks are the most important participants in the foreign exchange market, and their foreign exchange transactions constitute the main part of foreign exchange market activities.
The foreign exchange business handled by designated foreign exchange banks includes:
1. remittance business, such as outward remittance, inward remittance, sales of tourist letters of credit, purchase of various clean tickets, payment of traveler's checks, etc.
2. Settlement business, such as export bill, letter of credit development, export collection, import collection, etc.
3. Foreign currency deposit and loan business, such as accepting foreign exchange deposits, overdrafts, foreign exchange loans and guarantees.
4. Foreign currency trading business, such as buying and selling foreign coins or banknotes, buying and selling foreign securities, buying and selling spot forward foreign exchange, etc.
5. Other foreign exchange businesses designated and entrusted by the central bank, such as import and export visas, overseas travel remittance, news remittance, remittance of overseas students, etc.
Designated foreign exchange banks are also called authorized foreign exchange banks. Banks designated by the central bank to handle foreign exchange business. It is an intermediary in the foreign exchange market. In addition to buying and selling foreign exchange on behalf of customers and providing services, you can also buy and sell foreign exchange according to your own interests to obtain foreign exchange profits. In countries that implement foreign exchange control, foreign exchange banks must be approved by the competent foreign exchange authorities before they can handle foreign exchange business.
With its own foreign exchange funds, the bank promises to domestic and foreign creditors or other beneficiaries that when the debtor fails to pay the foreign exchange debt as agreed in the contract, the guarantor will perform the obligation of paying the foreign exchange debt on his behalf.
Foreign exchange guarantee includes domestic foreign exchange guarantee and foreign exchange guarantee. Domestic foreign exchange guarantee: refers to the foreign exchange guarantee issued by the bank to domestic creditors or other beneficiaries; Foreign exchange guarantee: refers to the foreign exchange guarantee issued by banks to overseas creditors or other beneficiaries and domestic and foreign financial institutions.