Posted in Finance, Accounting and Economics Terms, Total Reads: 317
Definition: Shell Branch
A branch of an American chartered bank which is located outside the United States and which acts as a booking office for the financial transactions outside USA is known as a shell branch. It is a foreign branch or an offshore banking center that handles overseas transaction for the bank.
Shell branch provides an easy and cheap access to Eurocurrency markets. Ledgers and other records for the branch are generally maintained some other branch, at main office or at domestic headquarters of the bank. Shell branches are often located in offshore banking centers of US banks like in Hong Kong, Panama, Cayman Islands, Bahamans and Singapore.
These branches carry out financial transaction outside the geographical boundaries of US. But the concept transacting at domestic shell branches of US banks is international banking.
Shell branches provide access to Eurocurrency markets without regulatory hindrances. These branches also accept deposits from other offshore banking units and from foreign banks.