A SUMMER TRAINING PROJECT REPORT ON

TRADE FINANCE
AT UNION BANK OF INDIA

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF Master of Management Studies UNIVERSITY OF MUMBAI

UNDER THE GUIDANCE OF S. MULE

SUBMITTED BY K.J.GANESH

DEPARTMENT OF MANAGEMENT STUDIES

SHAH & ANCHOR KUTCHHI ENGINEERING COLLEGE CHEMBUR, MUMBAI 400 088

MMS 2009-2011

ACKNOWLEDGEMENT
I would like to express my gratitude to all those who made it possible for me to complete this project. I begin by thanking Prof. Vinit Kotak & Prof. Rama Iyer for giving me opportunity to carryout my summer internship at Union Bank of India. I am highly indebted to Mr. S. Mule, Chief Manager, FOREX Dept., MSM Branch and project guide, for providing me with the necessary information and also for the support extended out to me in the completion of this report. I further would like to thank Mr. R.Pawar, Senior Manager, FOREX Dept & Mr. Anand Rathi, Asst. Manager, MSM (Credit) for their valuable suggestions & giving necessary directions for doing this project to the best of my abilities. I would also want to thank all the officers of the Foreign Exchange Department who supported me in this duration. I thank them all for their help, support & efforts. I also want to specially thank Smt. Padma Neelkantan, Chief Manager, FGMO Dept. for this opportunity. Last but not the least, I would like to thank my parents for their constant support & encouragement in all the endeavors of my life.

EXECUTIVE SUMMARY
This project undertaken is to study various aspects related to Trade Finance. The project emphasizes on understanding the procedure and norms used by Union Bank of India for Foreign Exchange. International finance is helpful for those who wish to seek import-export businesses. This project highlights the various bank operations done for international finance. The project gives an overview of the Indian Banking Industry with a snapshot of the performance of the major banks & Forex market scenario in India. The process of trade finance starts with understanding the need of loan to the borrower i.e. for which purpose the loan is required. It includes Fund based facilities provided by bank in Trade Finance such as Pre shipment and post shipment credit both in rupee & foreign currency and Non-Fund Based facilities like Letter Of Credit. The Export & Import finance facilities have been discussed in details including disbursement of advances, assessment of documentation, mode of payment upto realization of bills. Banks need to follow guidelines issued by RBI, FEDAI, Banks own circular etc. while carrying out FOREX operations & role played by ECGC in international trade. For India to be a major player in world trade, an all encompassing, and comprehensive view needs to be taken for the overall development of the countrys foreign trade. While increase in the exports is of vital importance, we have also to facilitate those imports which are required to stimulate our economy.

TABLE OF CONTENT
SR NO. 1 1.1 1.2 1.3 1.4 1.5 2 2.1 2.2 2.3 2.4 3 3.1 3.2 3.3 3.4 3.5 3.6 4 4.1 4.2 4.3 5 6 7 CHAPTER INTRODUCTION Overview of Indian Economy Overview of Banking Sector in India FOREX Market Overview of Union Bank of India Overview of the Project INTERNATIONAL TRADE Letter of Credit FEDAI ECGC DGFT India EXPORT Introduction about Export Types of Export Types of Foreign Currency Accounts for Exporters Pre-Shipment Finance Post Shipment Finance Crystallization of Export Bills IMPORT Introduction about Import Import Finance Crystallization of Import Bills REMITTANCES R-RETURNS CONCLUSION & RECOMMENDATION 59 63 73 74 75 78 32 34 39 44 52 57 19 27 29 30 1 3 5 10 17 PAGE NO.

LIST OF TABLES & FIGURES GLOSSARY BIBLIOGRAPHY

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