What is an Intermediate Bank?

An Intermediate Bank, also known as 'Corresponding Bank', is the one that acts between the originator’s bank and beneficiary’s bank. This bank accepts money from the original bank before crediting it to the beneficiary, who will receive it. Its role is to assist the transaction not to keep the cash. It assists original banks that are small and comes into play when the currency of the country where recipient is located is not the native country. For example: If you send money from US to India, corresponding bank will participate in transferring INR in the beneficiary’s bank, for which it which charge some fees. This is the reason why we find a difference in the amount of money received, which is less the amount of money transferred.

You can use banks that make direct transfer, to avoid additional charges caused by intermediate banks. You may even pay the extra fees for it.