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Simple English definitions for legal terms
remitting bank
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A quick definition of remitting bank:
A remitting bank is a type of bank that helps people send money to someone else. It's like a messenger that takes the money from one person's bank account and delivers it to another person's bank account. The remitting bank can be the bank of the person sending the money or a bank in the middle that helps transfer the money. It's important to use a remitting bank when sending money to make sure it gets to the right place.A more thorough explanation:
A remitting bank is a bank that pays or transfers an item, such as a check or money order. It can be a payor bank, which is the bank that is asked to pay the amount of a negotiable instrument, or an intermediary bank, which is a bank to which an item is transferred in the course of collection.
For example, if you write a check to your friend and your friend deposits it in their bank, their bank becomes the depositary bank. The check is then transferred to the remitting bank, which is your bank, to pay the amount of the check to your friend's bank. In this case, your bank is the remitting bank.
Another example is when a company sends a wire transfer to a supplier in another country. The company's bank is the remitting bank, which transfers the funds to an intermediary bank in the supplier's country, and then to the supplier's bank, which is the payor bank.
Overall, a remitting bank is responsible for paying or transferring funds to another bank or financial institution, either directly or through intermediaries, to complete a transaction.