As a Licensed MTO Can You Operate A Bank Account Outside In Another Country?

Can a licensed Money Transfer Operator (MTO) have a bank account in another country (jurisdiction) and operate that as a primary bank account? The answer is Yes! (I should actually say it depends, but mostly the answer is a yes). This short video explains why.

Transcript

Hello. My name is Faisal Khan. I am a banking and payment consultant. A lot of people ask me if having a bank account in another country is okay for purposes of operation if you are a money transfer operator? The answer is usually yes. Let me explain.

You know, banking is very difficult to get. If you’re an MTO or an MSB or MTL holder, etc., and you may be that you could be a license holder in the UK, you may have a bank account in the UK, but then you could also have another account in Canada or you could have an account in Hong Kong or China or Japan or Singapore. So the question is, can you use an account in Singapore for purposes of you know, further money transmission, etc.? Let me give you an example. Let’s say you’re an FCA regulated company. You have an account in mainland Europe, you have an account in Paris, and through your contacts, you also happen to get a euro account and a dollar account in a bank in Singapore. Now you have a correspondent tie-up in Canada and the United States who’re doing business with you and when you give them the Singapore bank account information – eyebrows go up and they say, whoa, whoa, whoa, what is this?

Well, they do go up and the thing that they will ask is, is the account in your name? That means is the account title in the name of the actual FCA license holder and you will have to show that. If you can show that the account in Singapore happens to be in the name of the UK FCA license holder then, no problem. You can use that account. The accounts could be anywhere, anywhere in the world, as long as they have a dotted line agreement to the license holder themselves – should not be an issue. Just a simple clarification I wanted to ask because a lot of people misconfuse this thing and say no, no, no, it’s just because your license in the UK, all your bank accounts have to be in the UK. That is not correct. That’s an old age an old way of thinking and the regulators now understand that in this world, in this world of a derisk, a bank derisk society that we live in your primary account may be in the region, but you can also have secondary accounts outside the region and that is okay.

Originating countries don’t give you issues on that. Some countries may give you some slack for it, but then, you know, they are mostly on the receiving countries. So, you know, if you’re, if you’re, let’s say, in Canada, the United States, UK, Ireland, Hong Kong, Japan, Korea, Singapore or the EU, you should, you should be able to operate accounts outside your region and you should not have an issue with it.

If you have any questions or comments, there’s a form in the description below. Fill it out, I’ll be happy to answer your questions. Till next time, have a good one.

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This page was last updated on December 14, 2021.