Beruflich Dokumente
Kultur Dokumente
Date: 15-2-09
Roll no. : 10
CONTENTS
1) Introduction
2) The banking
3) The Commercial Role
4) The Concept of International Banking
5) The Importance
6) Organizational Forms of International Banking
7) International Product and Services in INDIA
8) The Reason Behind the Growth of International Banking
9) The Considering Point
INTRODUCTION
• To understand that concept one must have to clear idea about the BANK
and its activities
THE BANKING
• The business of banking has been defined under section 5(b) of the Banking
Regulation Act, 1949 as “Accepting, for the purpose of lending or
investment of deposits of money from the public, repayable on demand or
otherwise and withdraw able by cheque, draft, and order or otherwise”.
– . Accepting of Deposits
– . Lending of Money
• Currency exchange
• Before World War I when European banks dominated the world capital
market, during the period 1940-1960, regulatory control on capital flow
and convertibility of the currencies reduced the importance of international
banking. From 1960 onwards globalization of capital market started and it
helps in expansion of international banking in today's scenario.
• If you want to make a payment abroad, you will have to deal through a
bank operating on international level.
• Banks around the world are centers for money transfer business. Dealers in
securities or exporters and importers make use of services of international
banks.
International banks are linked together in various formal and informal ways
from simple holding account with each other, correspondent accounts-to
common ownership.
1. Correspondent Banking:
2. Resident Representatives:
3. Bank Agencies:
An agency is like a full-fledged bank in every respect except that it does not
handle ordinary retail deposits. The agencies deal in the local money
markets and in the foreign exchange markets, arrange loans, clear bank
drafts and checks, and channel foreign funds into financial markets.
Agencies also often arrange long-term loans for customers and act on
behalf of the home office to keep it directly involved in the important
foreign financial markets.
4. Foreign Branches:
Foreign branches are operating banks like local banks. Generally, foreign
branches are subject to both local banking rules and the rules at home, but
because they can benefit from loopholes, the extra tier of regulations is not
necessarily onerous. The books of a foreign branch are incorporated with
those of the parent bank, although the foreign branch will also maintain
separate books. The foreign branch can offer a great advantage over the
lengthy clearing that can occur via correspondents.
6. Consortium Banks:
Consortium banks are joint ventures of the larger commercial bank. They
can involve half a dozen or more partners from numerous countries. They
are primarily concerned with investment, and they arrange large loans and
underwrite stocks and bonds. Consortium banks are not concerned with
taking deposits and they deal only with large corporations or perhaps
governments. They will take equity positions-part ownership of an
investment-as well as make loans, and they are frequently busy arranging
takeovers and mergers.
INTERNATIONAL PRODUCTS AND SERVICES – IN INDIA
The international banking services in India are provided for the benefit of Indian
customers, corporate, NRIs, Overseas Corporate Bodies, Foreign Companies/
Individuals as well as Foreign Banks etc.
1. NRI Banking
3. Finance/Services to Exporter
4. Finance/Services to Importers
5. Remittances
• Returning Indians for permanent settlement, after staying abroad for not
less than one year,
• can retain their savings in foreign currency in a RFC account
• Get the proceeds of FCNR (B)/NRE Deposits credited to this account
• Get the earnings out of dividend/sale proceeds of assets left abroad as well
as pension received from overseas credited in this foreign currency account
• Where non-resident Indian receives income in India, he can open a NRO a/c
with such funds.
2. FOREIGN CURRENCY LOANS
• The foreign currency denominated loans in India are granted out of the pool of
foreign currency funds of the Bank in FCNR(B) Deposit etc. accounts
• These loans are denominated in foreign currency such as US Dollars and are
offered as short term loans.
3. FINANCE/SERVICES TO EXPORTERS
• Many banks provide both pre and post shipment credit to the Indian
exporters through Rupee Denominated Loans as well as foreign currency
loans in India. Exporters having firm export orders or confirmed L/C from a
bank are eligible to avail the export credit facilities.
Rupee Export Credit is available generally for a period of 180 days from the
date of first disbursement. In deserving cases extension may be permitted
within the guidelines of RBI.
• Bank offers PCFC in the foreign currency to the exporters enabling them to
fund their procurement, manufacturing/processing and packing
requirements. These loans are available at very competitive international
interest rates covering the cost of both domestic as well as import content of
the exports.
PCFC is generally available for a period of 180 days from date of first
disbursement. In deserving cases extension may be permitted within the
guidelines of RBI.
e) Bank Guarantees:
4. FINANCE/SERVICES TO IMPORTERS
b) Letter of Credit:
• L/C facility is for the purchase of goods/services etc. fulfills the requirements
of all importers to arrange a reliable supply. Bank offers this facility to
importers in India within the ambit of FEMA and Exim policy of Govt. of India.
Bank uses state of the art SWIFT network to transmit L/Cs and with a
worldwide network of correspondents and overseas branches facilitates
prompt & efficient services to the importers.
L/C facility is granted to the importers on satisfying credit exposure norms of
the Bank.
c) Financing of import
d) Bank Guarantees:
5. REMITTANCES
• India’s banking sector is growing at a fast pace. It has become one of the
most preferred banking destinations in the world. Indian markets provide
growth opportunities, which are unlikely to be matched by the mature
banking markets around the world.
• International banking operations have made the bank regulators realize the
necessity of establishing a well – defined set of ground rules for the safe
operation of all banks. international organizations are placing a lot of
emphasis on the development and implementation of international
standards and principles