Subsidiary Bank

Subsidiary banks are typically the type of banks that are originally owned by a foreign parent bank but are incorporated in a different host country. Subsidiary banks in general operate under the policies held by the host country. There are significant numbers of these types of banks present in countries across the globe. Subsidiary banks are mostly preferred by the citizens of the country where they are held. Conventionally the banks have the ability to endorse securities for its customers. However there are certain drawbacks that must be considered, that are encountered with subsidiary banks. One such disadvantage includes the accumulation of the sum of the loan that the subsidiary branch of the bank makes with respect to its parent bank. The amount of the loan that the subsidiary banks can make typically is smaller in amount than that of its original branch service providers.

The setting up of a subsidiary bank primarily depends on the function that the offices perform in the particular host country. For instance, if a bank based in the United States intends to endorse security in Canada, it would undertake initiatives to inaugurate a subsidiary bank over there. Otherwise if the parent bank wishes to confer loans to the Canadian companies, it should set up a foreign branch bank.

Subsidiary Banks in Canada

The banking sector of Canada operates under certain regulations under which all the banks located within the country operate. Under the bank Act of Canada there are three distinct types of act lists, under which the banks are classified. The subsidiary banks operate under the schedule II Act and are incorporated with certain policies with respect to which they function. Some of the subsidiary banks situated in Canada include the AMEX Bank of Canada, HSBC Bank Canada, Citibank Canada, ICICI Bank Canada, ING Bank of Canada and several others. These are widely popular among the residents of the country, especially among the immigrant population. The services of the HSBC bank of Canada are extensively used by the Chinese population based in the country.

Subsidiary Banks in the United Kingdom

The city of London of the United Kingdom holds the maximum number of foreign banks if compared with the entire United Kingdom. A number of subsidiary situated within the city include the American Express Bank Ltd, Bank of America, Bank of China, Bank of East Asia Ltd, Bank of Montreal, Zurich TC Ziraat Bankasi AS, State Bank of India, Qatar National Bank SAQ, Turkiye Is Bankasi AS, The Toronto-Dominion Bank, Shanghai Commercial Bank and the other countless number of banks.

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