Exchange Bank
Exchange banks play a crucial role in the global financial system by facilitating international trade and currency exchange. They provide various services to individuals and businesses involved in cross-border transactions.

Meaning
An exchange bank is a financial institution that specializes in foreign exchange services. It helps clients convert one currency into another, facilitates international money transfers, and provides services related to international trade finance.

Objectives
1. Facilitating Currency Exchange: Exchange banks help individuals and businesses convert one currency into another for various purposes such as travel, investment, or trade.
2. International Money Transfers: They enable customers to transfer money across borders quickly and efficiently.
3. International Trade Finance: Exchange banks offer services like letters of credit, trade finance, and foreign exchange hedging to facilitate international trade transactions.

Function
1. Currency Exchange: Exchange banks buy and sell foreign currencies at market rates to meet the needs of their customers.
2. International Money Transfers: They provide remittance services for individuals sending money to family members in other countries or for business transactions.
3. Trade Finance: Exchange banks help businesses manage the risks associated with international trade by offering services like letters of credit and trade finance solutions.
4. Hedging: They assist clients in managing currency risk through hedging strategies to protect against fluctuations in exchange rates.