what is Subsidiary bank

Question

State what is meant by Subsidiary bank.

Answer 1

Subsidiary bank is locally incorporated bank which is either completely owned or owned in the major part by foreign subsidiary.  An affiliate bank is one which is partly owned, however not controlled through its foreign parent.  Both the affiliate and subsidiary banks operate under banking laws of country into which they are incorporated.  U.S. parent banks find the subsidiary and affiliate banking structures desirable since they are permitted in order to engage within the security underwriting.