What is a custodian bank?

• A. Banks that specialise in safe custody services looking after portfolios on behalf of fund managers, pension funds and insurance companies.
• B. Banks that issue loans
• C. Banks that manage property portfolios
• D. Banks that offer free credit cards

Answer: (A)

Custodian banks specialize in safekeeping and administration of financial assets for institutional clients. They hold securities on behalf of entities like fund managers, pension funds, and insurance companies, ensuring assets are securely kept in segregated accounts, handling trade settlements, collecting income, processing corporate actions, and providing portfolio reporting. This role focuses on the custody and back‑office support that keeps a portfolio’s ownership and administration correct, rather than lending money, managing real estate, or issuing consumer credit cards.