Offshore banking unit (OBU),
Definition of Offshore banking unit (OBU):
Branch of a foreign bank located in an offshore financial center (OFC). It may accept deposits from other foreign banks and OBUs and make Eurocurrency loans, but may not accept deposits from (or make loans to) the residents of the country in which it is located. OBUs are otherwise unrestricted in their legitimate activities, and are free from the monetary controls of the country of location.
Local monetary authorities and governments do not restrict OBUs' activities; however, they are not allowed to accept domestic deposits or make loans to residents of the country, in which they are physically situated. Overall OBUs can enjoy significantly more flexibility regarding national regulations.
An offshore banking unit (OBU) is a bank shell branch, located in another international financial center. For instance, a London-based bank with a branch located in Delhi. Offshore banking units make loans in the Eurocurrency market when they accept deposits from foreign banks and other OBUs. Eurocurrency simply refers to money held in banks located outside of the country which issues the currency. .
How to use Offshore banking unit (OBU) in a sentence?
- Individuals may choose to keep their money offshore if there is instability in their own country, and they fear losing their investments.
- Offshore banking units (OBUs) refer to bank branches located outside of its home country, and handling transactions made in foreign currency (known generically as "eurocurrency").
- Offshore bank accounts must be declared to the holder's home country for tax reasons; however, some countries allow foreigners to earn capital gains tax-free.
- OBUs make it easier for individuals and businesses to bank internationally and establish offshore accounts.
Meaning of Offshore banking unit (OBU) & Offshore banking unit (OBU) Definition