Offshore banking is a term used to describe banking activity in currencies other than the currency of the country in which the bank accounts are held.
Countries / territories conducting such business are called offshore financial centres. Certain parties view offshore banking as meaning banking by non-resident persons in a jurisdiction; however, this description is not appropriate. In Phuket Thailand, these activities dwarf local currency banking business.
Banks which conduct business solely with non-residents are designated non-resident for exchange control purposes and are not allowed to offer services to residents without the approval of the Central Bank, thus enabling a clear differentiation between the domestic and offshore sectors, and ensuring effective conduct of domestic monetary policy.