what is an offshore banking unit obu 
an offshore banking unit obu is a bank shell branch located in another international financial center for instance an offshore banking unit could be a london based bank with a branch located in delhi offshore banking units make loans in the eurocurrency market when they accept deposits from foreign banks and other obus eurocurrency simply refers to money held in banks located outside of the country which issues the currency local monetary authorities and governments do not restrict obus activities however they are not allowed to accept domestic deposits or make loans to residents of the country in which they are physically situated overall obus can enjoy significantly more flexibility regarding national regulations understanding offshore banking unitsobus have proliferated across the globe since the 1970s they are found throughout europe as well as in the middle east asia and the caribbean u s obus are concentrated in the bahamas the cayman islands hong kong panama and singapore in some cases offshore banking units may be branches of resident and or nonresident banks while in other cases an obu may be an independent establishment in the first case the obu is within the direct control of a parent company in the second even though an obu may take the name of the parent company the entity s management and accounts are separate some investors may at times consider moving money into obus to avoid taxation and or retain privacy more specifically tax exemptions on withholding tax and other relief packages on activities such as offshore borrowing are occasionally available in some cases it is possible to obtain better interest rates from obus offshore banking units also often do not have currency restrictions this enables them to make loans and payments in multiple currencies often opening more flexible international trade options 