INTERNATIONAL BANKING

International Bank

An international bank is a financial entity that

offers financial services, such as payment accounts
and lending opportunities, to foreign clients.

These foreign clients can be individuals and

companies, though every international bank has its
own policies outlining with whom they do
business.
 Foreign Exchange
Foreign exchange market is that market in which national
currencies are traded for one another.

 The major participants in this market are commercial banks,

forex brokers, and authorized dealers and the monetary
authorities.

 Besides, transfer of funds form one country to another ,

speculation is an important dimension of foreign exchange
market.

Its where money in one currency is exchanged for another.

A foreign exchange transaction is an agreement between a
buyer and a seller that a fixed amount of one currency will be
delivered for some other currency at a specified date.

The Foreign Exchange Market provides: The physical and

institutional structure through which the money of one
country is exchanged for that of another country.

Banks facilitate forex transactions for clients and conduct

speculative trades from their own trading desks. When banks
act as dealers for clients, the bid-ask spread represents the
bank's profits. Speculative currency trades are executed to
profit on currency fluctuations.
 NRI Accounts

NRI accounts are maintained by banks which hold authorized

dealers' licenses from the Reserve Bank of India.

An Indian Citizen who stays abroad for employment/carrying

on business outside India or stays abroad under circumstances
indicating an intention for an uncertain duration of stay abroad
is a nonresident.

EXAMPLE: Persons posted in U.N. Organizations and

Officials deputed abroad by Central/State Governments and
Public Sector undertakings on temporary assignments are also
treated as non-residents. 
 Types of NRIs accounts

1. Non Resident (External) Rupee Account (NRE account)

2. Non Resident (Ordinary) Rupee Account (NRO account)
3. Foreign Currency (Non Resident) Account (FCNR
account)
 Foreign Currency Loans
A foreign currency loan means that you borrow money in a
foreign currency, for example Swiss francs, and you have to
repay the loan in this currency as well.

Foreign currency loan refers to the loan granted by the bank

through the self-raising foreign currency fund.

It covers a comprehensive range of usage with main use of

meeting customer's demands for foreign currency financing,
including enterprises' demands for working capital and for
fixed asset investment.
 Currency Type

Five types including USD, EUR, GBP, JPY, HKD.

Interest Rate

The lending interest rate can apply either floating rate or fixed
rate. If required, the rate can be swapped from floating rate to
fixed rate.

Charges

All fees concerning foreign currency loan should be charged

according to the loan contract.
 ECGC
Export Credit Guarantee Corporation of India Limited.

• ECGC is essentially an export promotion organization,

seeking to improve the competitiveness of the Indian exports by
providing them with credit insurance covers.

• Established in the year 1957 by the Government of India.

• The Export Credit Guarantee Corporation of India Limited is

a company wholly owned by the Government of India based in
Mumbai, Maharashtra .

• It provides export credit insurance support to Indian exporters

and is controlled by the Ministry of Commerce.
 Role of ECGC

• Provides a range of credit risk insurance covers to exporters

against loss in export of goods and services.

• Offers guarantees to banks and financial institutions to enable

exporters obtain better facilities from them.

• Provides Overseas Investment Insurance to Indian companies

investing in joint ventures abroad in the form of equity or loan.

• Economic difficulties or balance of payment problems may

lead a country to impose restrictions on either import of certain
goods or on transfer of payments for goods imported
• Offers insurance protection to exporters against payment risks

• Provides guidance in export-related activities

• Makes available information on different countries with its

own credit ratings

• Makes it easy for exporters to obtain export finance from

banks/financial institutions

• Assists exporters in recovering bad debt

• Provides information on credit-worthiness of overseas buyers

 EXPORT-IMPORT BANK OF INDIA

 Also known as EXIM bank of India.

 Set up in 1982 under the Export-Import Act, 1981.

 Established with a mandate not only to enhance the exports

from India, but also to integrate the country’s cross-border
foreign trade and investment.
 OBJECTIVES

For providing financial assistance to exporters and importers, and

for functioning as the principal financial institution for
coordinating the working of institutions engaged in financing
export and import of goods and services with a view to promoting
the country’s international trade.

To act on business principles with due regard to public interest.

• The management of the EXIM bank is done by a board, headed

by the Managing Director. There are 17 other Directors on the
board. The whole paid-up capital of the bank (100 cores currently)
is subscribed by the Central Government exclusively.
 Functions of the EXIM Bank

1. Finances import and export of goods and services from

India

2. It also finances the import and export of goods and

services from countries other than India.

3. It finances the import or export of machines and

machinery on lease or hires purchase basis as well.

4. Provides refinancing services to banks and other

financial institutes for their financing of foreign trade

5. EXIM bank will also provide financial assistance to

businesses joining a joint venture in a foreign country.
6. The bank also provides technical and other assistance to
importers and exporters. The EXIM bank will provide
guidance and assistance in administrative matters as well.

7. Undertakes functions of a merchant bank for the importer

or exporter in transactions of foreign trade.

8. Will also underwrite shares/debentures /stocks/ bonds of

companies engaged in foreign trade.

9. Will offer short-term loans or lines of credit to foreign

banks and governments.

10. EXIM bank can also provide business advisory services

and expert knowledge to Indian exporters in respect of
multi-funded projects in foreign countries
THANK YOU