Wholesale banking what is

Wholesale banking is the practice of borrowing and lending money between large institutions. When we think of a bank, a local bank teller probably comes to mind, a person with whom we can carry out savings, checking, and borrowing needs.

We are thinking of a retail bank, which offers relatively small scale services to individuals or medium to small businesses. For large institutions, government departments, local governments, and huge corporations with considerably larger financial needs, wholesale banking basically offers these same services, generally at a much lower base price compared to what is charged in retail transactions.

For a giant corporation that carries out a very high number of financial transactions each day, with large sums of money in many of those transaction, retail banks for would never satisfy its needs properly. For example, a person with a bank account in a retail bank may pay up to ten percent of his balance to maintain his checking account.

Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Your Money. Personal Finance. Your Practice. Popular Courses. Personal Finance Banking. What Is Wholesale Banking? Key Takeaways Wholesale banking refers to banking services sold to large clients, such as corporations, other banks, and government agencies.

Typical services sold are mergers and acquisitions, consulting, currency conversion, and underwriting. Wholesale banking is the opposite of retail banking, which services individuals and small businesses. Most standard banks offer wholesale banking services in addition to traditional retail banking services. Related Terms Retail Banking Retail banking consists of basic financial services, such as checking and savings accounts, sold to the general public via local branches.

Understanding Commercial Banks A commercial bank is a financial institution that accepts deposits, offers checking and savings account services, and makes loans. Microfinance Definition Microfinance is a banking service that is provided to unemployed and low-income individuals who have no other means of gaining financial services.

Prime Brokerage Prime brokerage refers to a complex group of financial services that some brokers may offer to special clients such as hedge funds and large investors. Bank A bank is a financial institution licensed as a receiver of deposits and can also provide other financial services, such as wealth management. The main difference between Wholesale banking and corporate banking is that Wholesale banking provides financial services to other banks and non-banking financial institutions like government bodies, investors, small and large corporations.

On the other hand, corporate banking is a subset of wholesale banking that provides financial services to only corporate companies, whether they are private or government. Wholesale Banking provides services to those companies and banks that maintain strong financial statements. It provides services like cash management, intermediary services, and payment services, inter-banking between two or more banks, syndicated lending, and pension funding.

It operates in both local and international markets. Wholesale Banking consists of three segments one is commercial banking, corporate banking , and investment banking. Corporate banking is one of the segments of wholesale banking that targets only large corporations. It provides all the services of wholesale banking and commercial banking to large or multinational companies. It maintains a good relationship with the corporate clients and supports them in their large projects and development strategies.

Wholesale banking is a financial institute that circulates money among lenders and borrowers. The customers of wholesale banks are other banks, government institutes, small, medium, and large companies, and other individual customers. The wholesale banks have different divisions that handle different levels of customers, such as commercial banking channel that handles individual customers and small companies, corporate banking channel that handles medium-sized cooperates and government bodies, and investment banking channel that handles multinational companies.

Wholesale banking offers various services to its customers like small deposits, loans, huge credits, long-term loans, mergers, and acquisitions.

It helps corporations to make profitable financial decisions, and it also adds extra security to the deposits made by the customers. Employees of the wholesale banks are paid higher salaries based on their roles, and customers are given higher rates of returns based on their investment amounts.