NAGINDAS KHANDWALA COLLEGE PROJECT REPORT ON

INTERNATIONAL BANKING

SUBMITTED BY
DIMPLE A LUKHA

T.Y.B.Com
FINANCIAL MARKET (SEMESTER VIth)

SUBMITTED TO

UNIVERSITY OF MUMBAI
PROJECT GUIDE
PROF. KAVITA SHAH

ACADEMIC YEAR

2011 2012

Malad Kandivali Education Societys Nagindas Khandwala College of Commerce Arts and Management Studies And Shantaben Nagindas Khandwala College of Science

PROJECT REPORT

INTERNATIONAL BANKING SUBMITTED BY DIMPLE A LUKHA T.Y.B.Com. FIANACIAL MARKET (SEMESTER VITh) SUBMITTED TO UNIVERSITY OF MUMBAI PROJECT GUIDE PROF. KAVITA SHAH ACADEMIC YEAR 2011 - 2012

DECLARATION

MISS.DIMPLE

LUKHA

from

NAGINDAS

KHANDWALA COLLEGE student of T. Y. BCOM FIANCIAL MARKET (SEM VI) here by submitted my project on INTERNATIONAL BANKING

I also declare that this project which has been the partial fulfillment of the requirement of the degree of T. Y. B. Com (Financial market) of the Mumbai University has been result of my own efforts. Signat ure of student DIM PLE A LUKHA

ACKNOWLEDGEMENT

I gratefully acknowledge and express deep appreciation to many people who have made this project possible and visible. Many thanks to our guide Prof. KAVITA SHAH seems pretty small compared to the months of tremendous support and indulgence he gave. Her review, comments, corrections and suggestions have enormously enriched my project.

Without cheerful support and motivation of our Professional Course Coordinator Prof. KAVITA SHAH and Librarian Mr. Santosh C. Hulagabali this project would not have seen the light of the day. I am also grateful to our Principal Ancy Jose.

It gives me immense pleasure to present this project in the course of financial market, and I also would like to share the credit with our librarian Mr. Santosh C. Hulagabali for her valuable tips in this

project and understanding the concept of International Banking

EXECUTIVE SUMMARY

(A)

OBJECTIVE:

This study on International Banking is important not only to an organization, shareholders, and banking sector but also to an Indian economy as a whole. Due to globalization and liberalization our economy is opening its door for reforms. (B) SUB-OBJECTIVE:

While in foreign developing countries, international banks besides performing the usual commercial banking functions play an effective role in their economic development.

(C) METHODOLOGY:

PRIMARY

DATA: SECONDARY DATA

BOOKS International Banking and Finance By http://www.offshoreinfo.com

O P Agarwal
http://www.statebankofindia.com/ http://www.offshorecompany.com http://www.offshorebank.net/

TABLE OF CONTENT Sr. no.

1 2

Topic International Banking

1

Page No.

Role of International Commercial Banks 10 in Developing Countries

3 4 5 6 7 8 9 10 11

International Bank Accounts International Banking Institutions International banking regulations and privacy Swiss Banking State Bank of India Advantages of International Banking Disadvantages of International Banking Conclusion Webliography

13 20 25 27 35 57 60 64 65

1.International Banking

Introduction
International Banking is a process that involves banks dealing with money and credit between different countries across the political boundaries. It is also known as Foreign/International Banking. In another words, International Banking involves banking activities that cross national frontiers. It concerns the international movement of money and offering of financial services through off shore branching, correspondents banking, representative offices, branches and agencies, limited branches, subsidiary banking, acquisitions and mergers with other foreign banks. All the basic tools and concepts of domestic bank management are relevant to international banking. However, special problems or constraints arise in international banking not normally experience when operating at home. In particular: Business activities have to be transacted in foreign languages and under foreign laws and regulations. Information on foreign countries needed by a particular bank wishing to operate internally may be difficult to obtain. Control and communication systems are normally more complex for foreign than for domestic operations. Risk level may be higher in foreign markets. Foreign currency transaction is necessary.

 International bank managers require a broader range of management skills than managers who are concerned only with domestic problems. It is more difficult to observe and monitor trends and activities in foreign countries. Larger amounts of important work might have to be left to intermediaries, consultants and advisers. International banking deals with all banking transactions-private and governmental- of two or more countries. Private Banks undertake such transactions for profit; governments may be for provision of various services.

Reasons for Engaging in International Banking

Banks undertake international operations in order to expand their revenue/profit base, acquire resources from foreign countries, or diversify their activities. Specific reasons expanding operations abroad include the saturation of domestic market; discovery of lucrative opportunities in other countries; desire to expand volume of operations in order to obtain economy of scale. Further motives for operating internationally are as follows: Commercial risk can be spread across several countries Facilitation of international businesses and trade Involvement in international banking can facilitate experience curve effect Economies of scope might become available Reduce cost of service delivery Recognition and reputation

History of International Bank

It is an unfortunate fact that Europeans have always been subjected to relatively heavy tax burdens. This was as true on the British Isles as it was on the continent. Faced with the prospect of watching their hard earned assets and wealth diminish with every outreach of the tax collectors hand, they were ripe for a solution. And a solution came--the small, island nation state known as the Channel Islands convinced these frustrated depositors that deposits placed in its banks could be free from scrutiny and hence the heavy-handed taxation burden. The Euros were convinced--and soon this service thrived, with other small jurisdictions becoming savvy to this foreign capital-attracting status and they began to revamp their banking institutions, adopting sound, pragmatic banking rules and regulations that eased the potential concerns of investors and depositors. The International bank was off to a running start! And soon the term International banking became synonymous with any smaller, haven jurisdiction that offered safe, secure, confidential banking with practical regulations. Soon the rest of the world was in the know, and began to look at these havens as viable solutions to their needs. Americans, Africans, Asians, etc., found these international bank accounts quite useful for a myriad of reasons. Unlike their banks at home, these international banks were not regularly subjected to political turmoil or economic strife, and were most welcome for their stability and asset protection benefits.

In the years since they have come into greater use and thus more visible, international banking accounts have been unfairly portrayed by the media and by the larger jurisdictions as the stomping grounds of the criminal underground--a veritable haven for their illicitlyobtained assets and funds, or the choice locales for their moneylaundering schemes. Money-wise investors and depositors have long known that these prejudices could not be further from the truth. They know that international banks can be remarkably effective havens for assets and funds in need of safe, secure, confidential keeping. They know that these banks can safeguard their funds from the perils of civil, economic, or political strife in their home countries. Today, international banks continue to keep their end of the bargain and continue to provide a safe, confidential haven for those seeking to safeguard their assets and funds from the perils of undue regulation and taxation. Many a discriminating depositor has benefited from the safe, confidential, and low taxation environment that an International banking account has to offer. While it is important to assess your goals and discuss these with a competent, experienced agent before leaping into un-chartered waters, there are many unquestionable benefits provided by establishing an international bank account. Their reputation among depositors and investors for providing a viable banking location featuring protection from liability and confidentiality is growing, and international banks will continue with this hardearned reputation for asset protection, tax reduction, depending on your jurisdiction, and superb confidentiality of deposits.

Modes of International Banking

There are a lot of available methods for entry into international banking Operations. This include; Correspondent Banks, Representative Offices, Branches and Agencies, Limited Branches, Subsidiary Banks, Bank Acquisitions and Bank Mergers.

Correspondent Banks
In order to adequately provide needed international banking services, commercial banks establish a network of foreign correspondent banks to supplement their own facilities worldwide. Frequently, the expense of establishing a related banking entity, such as overseas branch, is not warranted due to the low volume of transactions concluded for the banks international clients. Therefore, to provide services while keeping costs minimal, account relationships are developed with foreign banks to facilitate international payment mechanisms between the institutions. Deposit accounts are opened at the correspondent banks, which enable them to make direct payments overseas by means of debiting and crediting the respective accounts with settlement to be made at a later date. Such accounts are termed due to (or nostro) accounts and due from (or vostro) accounts on the banks books. In addition to payment accounts, correspondent bank relationship facilitates transactions such as letters of credit, documentary collection, foreign exchange services, and loan services for a banks international clients. Thus, the correspondent bank relationship gives

the domestic bank a presence in overseas markets, which permits international transactions to be concluded.

Representative Offices
A representatives office is both the most commonly used and the most limited in function of all foreign banking operating internationally. The international representative office functions mainly as liaison between correspondent banks and the parent bank. Representative offices are usually prohibited from engaging in general banking activities, although they may receive checks for forwarding to the home office, solicit loans for the home office, and develop customer relations. However, they may not receive deposits or make loans. Generally, representative offices serve as the preliminary step to other forms of banking activity since they are a relatively inexpensive means of establishing a presence in a new location.

Branches and Agencies

Depending upon the extent of services that the institution wishes to offer, either a branch or an agency may be established. The basic definition of branch and agency may be found in the U.S. International Banking Act of 1978. A branch is any office of a foreign bank at which deposits are received. On the other hand, an agency is any office at which deposits may not be accepted from citizens or

residents of the U.S. if they are not engaged in international activities, but at which credit balance may be maintained. Thus, the principal difference between branches and agencies is that agencies cannot accept deposits for U.S citizens or residents and can only maintain credit balances related to their international activities. In addition, agencies cannot engage in either fiduciary or investment advisory activities with the exception of acting as custodians for individual customers. Agencies do engage in a variety of activities to finance international trade, such as the handling of letters of credit. Both agencies and branches are principally active in international market. As extensions of the foreign parent bank, branches are generally subject to more stringent state regulation than agencies due to the more extensive nature of their operations. The powers of a federal branch are similar in scope of those of a national bank; these branches possess full deposit-taking, loan, and commercial banking powers in addition to other trust powers. They are also subject to duties, restrictions, and limitations similar to those of a national bank organized in the same area.

Limited Branches
In pursuant to the International Banking Activities, an additional means by which a foreign bank may participate in foreign banking

market is through a so-called limited federal branch. Basically, this is an office chartered by the Comptroller of the Currency subject to the condition that the foreign bank enter into an agreement with the countrys apex bank or regulatory authorities restricting the branchs deposit-taking activities to those permitted by law. Since this office may be established outside the foreign banks home state, they are restricted to deposit taking activities of an international nature.

Subsidiary Banks
Foreign banks gain control of subsidiary banks by establishing new institutions or by acquiring existing domestic banking institutions and these subsidiaries generally may engage in a full line of banking activities. With respect to the designation of a foreign bank subsidiary, the term bank and subsidiary has the same meaning as those provides by section 2 of the Bank Holding Company Act (BHCA). A subsidiary bank of a foreign bank may be either a national or a state bank. State banks are governed by the laws of the state in which they are located, while national banks are chartered by the Comptroller of the Currency under the National Bank Act. In United States for example, although foreign ownership is not restricted, non-U.S. citizens may not form a majority of a national banks Board of Directors.

Bank Acquisitions

Firms willing to gained access to international banking operations may also adopt the acquisition approach by acquiring indigenous or domestic banks. However, the acquisition process is guided by stringent conditions. For instance, Under the United States Bank Holding Company Act, the Federal Reserve Board must approve the acquisition of direct or indirect control of a U.S. bank by a domestic or foreign bank holding company. Various factors are considered in the approval or denial of a BHC application. These include analysis of the competitive effect of the acquisition, the acquirers financial and managerial resources, and future prospects of the bank being acquired, community needs, and the applicants organizational structure.

Bank Mergers
Bank mergers is another option that is opened to those who whishes to provide international banking services in foreign countries. There are several reasons for a foreign bank merging with a domestic bank. For example, this provides an expedient and economical means of expanding into new markets; it becomes easier to establish an identity on a state-wide basis; and the bank is able to continue smooth operations with experienced management and personnel.

2. Role of International Commercial Banks in Developing Countries

While in foreign developing countries, international banks besides performing the usual commercial banking functions play an effective role in their economic development. These roles include the followings.

Mobilization of Savings for Capital Formation

International commercial banks help in overcoming savings through a network of branch banking. People in developing countries have low incomes but the banks induce them to save by introducing varieties of deposit scheme to suit the needs of individual depositors. They also mobilize idle savings of the few rich. By mobilizing savings, the banks channel them into productive investments. Thus, they help in capital formation of a developing country.

Financing Industry
The international commercial banks finance the industrial sector. They provide short time, medium-term and long-term loans to industries. Besides, they underwrite the shares and debentures of large scale industries. Thus, they not only provide finance for industry but also help in developing the capital market, which is underdeveloped in such countries.

Financing Trade
The international commercial banks help in financing both internal and external trades. The banks provide loans to retailers and wholesalers to stock which they deal. They also help in the movement goods from one place to another by providing all types of facilities such as discounting and accepting bills of exchange. Moreover, they finance both exports and imports of developing countries by providing exchange facilities to importers and exporters.

Financing Agriculture
The international commercial banks help the large agricultural sector in developing countries in a number of ways. They provide loans to traders in agricultural commodities. They provide finance directly to agriculturists for the marketing of the modernization and mechanization of their farms, for providing irrigation facilities and for developing lands. Help in Monetary Policy: The international commercial banks help in economic development of a country by faithfully following the monetary policy of the countrys central bank. In fact, the central bank depends upon the commercial banks for the success of its monetary management in keeping with requirement of a developing economy.

Features of international banking

* International banks provide access to politically and economically stable jurisdictions. This may be an advantage for that resident in areas where there is a risk of political turmoil who fear their assets may be frozen, seized or disappear. * Some international banks may operate with a lower cost base and can provide higher interest rates than the legal rate in the home country due to lower overheads and a lack of government intervention. * Interest is generally paid by international banks without tax deducted. This is an advantage to individuals who do not pay tax on worldwide income, or who do not pay tax until the tax return is agreed, or who feel that they can illegally evade tax by hiding the interest income. * Some international banks offer banking services that may not be available from domestic banks such as anonymous bank accounts, higher or lower rate loans based on risk and investment opportunities not available elsewhere. * International banking is often linked to other structures, such as international companies, trusts or foundations, which may have specific tax advantages for some individuals.

3. International Bank Account

An Offshore Bank Account As with any "bank", onshore or offshore, there is one primary deposit account that is managed by software. It's been hundreds of years since your local bank had a space reserved on the shelf for 'your money'. Even the largest U.S. national bank has a primary deposit account and everything is computerized. The same goes for your offshore bank, you have your financial institution and a deposit account that is computer managed. We assist you with acquiring and configuration of your online banking and account management software when you start your offshore bank. Your bank offshore account is set up and is the transaction center of your finance company. Depositors, deposit, spend and wire money in and out of the account through your online system. How Offshore Bank Accounts Work When you start an offshore bank, your account will work the same way all bank accounts do. Below is a diagram showing how your offshore bank account works.

Receiving / Sending Money with Your Offshore Bank Your primary deposit account with be with a much larger offshore bank in a jurisdiction that you choose. Just as your local bank, having a single account with a larger bank, here we are replicating banking infrastructure on a smaller scale for your offshore bank. With few clients, or rather, low client activity, your single deposit account can very well be the primary transaction hub. However once you start increasing the number of depositors and the amount of inbound/outbound banking activity, it might be necessary to start performing bulk transactions to/from your offshore bank. This is done through a holding company that has several offshore bank accounts that are used to perform larger transaction volume. In the most cases when you start an offshore bank, your transaction frequency will not require the use of holding companies to manage bulk transfers. Offshore Bank Accounting Your offshore bank will be fully managed by the industry leading banking software. Each client will have secure access to their account and just like all other types of financial recording, computer systems will automatically account for everything. Initial deposits will be recorded by client identification and each transaction will be identified by secure ID and related to the client account. This is how the actual banking takes place. Client accounts are merely a long list of transactions that control the access to funds in the master bank deposit account, in this case, the offshore bank account for your finance company.

International Bank Account Setup Most international banks will require an eligible introducer. This is someone who already has a relationship with the bank. InternationalCompany.com is an eligible introducer for many financial institutions throughout the world. Common items that may be necessary when setting up international bank accounts:

Application forms with original signatures Valid passport copy or driver's license Banking references Corporate legal documents banks have different requirements. Once the

International

international bank account has been processed, the confirmation is sent typically via email. At that time the bank will wait for a wire transfer of initial deposit in order to activate your new account. Some expenses include opening fee, additional banking cards (if applicable), courier and other expenses. Again, these will vary between the international banking account providers. Once the bank account is active, you typically receive online access to create your user account and password. You may also receive items such as an easy-to-use digital signature device, test key table and other enabling tools to access your account balance and perform transactions quickly, easily, privately and securely.

InternationalCompany.com has helped thousands of customers worldwide set up international bank accounts and establishes private financial accounts and asset protection plans. A trusted provider that has relationships with the right international jurisdictions should conduct these services with you. International banking service Once your international bank account has been established, you will enjoy the luxury of numerous international banking services including:

International platinum debit credit cards, allowing you access to your money from over 20,000 ATM machines located across the world. Credit cards can be issued under your international IBC name, affording you complete privacy when accessing your funds. Internet access to your account, ability to verify account balances, transfer funds and make stock purchases. This will enable you to conduct all your banking affairs from the comfort of your home. International trading / brokerage accounts for online trading of stocks and bonds in global International markets. Corporate checks can be issued in the name of your IBC name with your IBC name printed on each check operating the same as domestic onshore checking account.

International Bank Accounts and Security Banking privacy and security is a major concern. It is a priority that you and your money are safe. InternationalCompany.com regularly recommends banking institutions that participate in a central banking system. The system is highly regulated and implements stringent accounting practices, which provides a stronger infrastructure and independent oversight for local international banks. Many institutions provide secure and private international banking accounts to American and foreign corporations and local government officials. The institutions provide employment and support the local economy. Because of the economy's dependence on the financial services sector, the privacy and financial safety laws are a longstanding and stable. It is critical that all prospective clients make the right choice of jurisdiction. We perform extensive research on many of the top international bank account providers and are glad to provide helpful information to help you make the proper choice. International banks in some countries participate in mandated financial protection insurance systems. Security and privacy is taken very seriously. International banking security and privacy is statutorily enforced, meaning, it's the law, limiting any information whatsoever to be shared with a third party, including foreign governments. Naturally, laws permit international bank account providers to share information in cases of severe criminal acts or terrorism. Banking privacy is not taken lightly. In Switzerland, for example, any employee violating a customer's privacy is punished severely by law including stiff fines and jail time.

Here are some jurisdictions that are private banking financial centers:

Antigua Bahamas Barbados Channel Islands (Jersey and Guernsey) Dominica Gibraltar Hong Kong Isle of Man Labuan, Malaysia Liechtenstein Montserrat Nauru Nevis Singapore Switzerland Turks and Caicos Islands

4. International Banking Institutions

Recommended International Banking Jurisdictions International Banking Jurisdictions Listed in order: here is a list of the international banking jurisdictions are the most advantageous for providing financial safety, privacy, convenience and return on investment. For initial deposits of over $200,000:

Switzerland Luxembourg Lichtenstein Isle of Man specializes in bank accounts in

InternationalCompany.com

Switzerland; please visit our entire section on Swiss Banking. For deposits under $200,000, here are the recommended jurisdictions:

Caribbean (many countries, call for details) Latvia

Banking within European Union Jurisdictions While the scrutiny may be lower and the confidentiality and privacy higher in the lower tax haven jurisdictions, potential account holders should note that an agreement between European Union members (and those falling under its purview or jurisdiction) known as the European Union Savings Tax Directive 2005 may adversely affect their privacy if they are subject to it--The EU Tax Directive may limit the confidentiality and privacy of certain accounts held in international banks if these banks happen to be situated in a jurisdiction subject to it. As of this writing, the member countries of the European Union are as follows: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom Any jurisdictions that is a commonwealth, governed by, or a consigner of these nations and their laws is subject to the EU Tax Directive. Others may also willingly comply, such as Switzerland and the United States. Stated simply, the EU Savings Tax Directive 2005 is an agreement between the EU Member States that allows for the exchange of financial or transactional information. This agreement is known as the automatic exchange of information option and is the hallmark of the Directive.

The International jurisdictions that are not subject to EU laws or directives do not participate in this agreement and thusly afford depositors of those jurisdictions an increased level of confidentiality. Other International Bank Account Jurisdictions There are many other international jurisdictions that provide many of the same benefits that the EU versions do, but not bound to the EU Directive. This can be an extremely important consideration for an investor or depositor looking for a specific benefit for his funds that just cannot be met by a jurisdiction subject to EU Directive reporting. Though this is an important consideration, it should not automatically be assumed that it is always most advantageous to bank in a non-EU Directive adhering jurisdiction. If a potential depositor meets the initial deposit amount requirements, has his banking goals in alignment with his bank and its jurisdiction, then an established international locations such as Switzerland can be better suited to his needs. However, there are very competent jurisdictions not subject to the EU Tax Directive with initial deposit requirements vastly lower than those of the established jurisdictions. For example, some jurisdictions like Panama and Belize can require as little as $500 or $1000 US to start. Geography Before the internet explosion of the mid-90, account holders and potential depositors in international banks would literally have to walk into a bank (or send an authorized representative to do so) in order to establish an account, transact funds, or formalize agreements. The old

lock box and key method reigned supreme. However, since the mid90s, there has been a veritable explosion in services heretofore unimaginable in many service industries worldwide, and this of course includes international banking. Gone are the days of having to actually walk into the bank--now, most of the services are a keystroke away, with world wide web access to accounts and funds. With credit card like debit cards and the advent of electronic funds transfers, virtual signatures, and the virtually limitless access to the internet, international banking has been revolutionized into a simpler solution for many individuals and corporations. No matter if your bank is in the Grand Canyon state or Grand Cayman, most of the features offered by banks are just a mouse click away. Assuming that all of the precautions are met and adhered to, the confidentiality of any deposit or investment is as secure as its ever been. Additional Banking Information International banking accounts operate in the same manner as any domestic bank account. The client receives a bank account debit card or credit card and online access, wire transfer access and can perform the typical bank account transactions, plus more. International banks offer many of the same conveniences and customer service. When selecting your institution it is important that you choose the provider that is right for your scenario. Many international banking institutions will allow you to set up a bank account for as little as a $2500 initial deposit, and in other cases, much less. All of the recommended international bank account providers are highly regulated and adhere to strict international

privacy laws. Private accounts typically require a higher initial deposit. However those are negotiable depending on the overall account goals and projections. Any provider of international banking accounts that is recommended by InternationalCompany.com is accessible via phone, fax and email and attentive to your needs, yet very discreet. Your international bank account balance will earn interest, usually free of local taxation in the bank's jurisdiction. Many countries, including the US, tax worldwide income. The interest rates are usually higher and the fees are competitive. Many fortune 500 companies, including oil companies take advantage of international banking. Some of the more popular tax haven jurisdictions have hundreds of first-rate banks from which to choose. Financial institutions in private jurisdictions do not report customer account information to any foreign governments, or theirs, so it is up to the account holder to do so. InternationalCompany.com establishes thousands of business structures, bank accounts, privacy and protection plans worldwide. Protecting and growing the finances of our clients are our biggest concerns. International Banking institutions offer a wide variety of benefits, when it comes to privacy Switzerland is hard to beat.

5. International banking regulations and privacy

Our international bank accounts are situated in countries with strict confidentiality enforced by law. No information can be given to outside parties, including foreign governments and tax authorities, regarding your banking activities. There are no taxes rendered on accounts. Tax avoidance not considered a crime in these countries. There are no statures in relation to taxation, making it is impossible for outside litigation to be brought against you and your bank account. Banks will not even acknowledge the presence of your account. The international banking sector is regulated far more strictly than banks at home. Each international bank must hold greater reserves than their domestic counterparts. All banking deposits are fully insured. As an extra safety measure all international institutions are rigorously audited by central banks of each jurisdiction, safeguarding all banking deposits and the international banking system at large Where Should an International Bank Account be Established? It is important that the proper jurisdiction be selected when deciding which jurisdiction to use as an international banking jurisdiction. The majority of the international jurisdictions have prudent, sound regulations in place geared towards safeguarding the deposits and maintaining their confidentiality. However, some weigh their benefits in taxation, while others in confidentiality, and so forth. Though they all offer a comparatively confidential and secure environment, it bears consideration to outline what the banking goals are and then choose the jurisdiction accordingly. A small minority of the international

jurisdictions does a poor job of managing and regulating their banking institutions, but the informed investor or advisor will deem these as unsuitable for themselves or their clients. Further, these poorly organized and run jurisdictions are often manipulated by illicit depositors and hence prove easy targets of the FATF (Financial Action Task Force) looking for money laundering or other criminal activity.

6. STATE BANK OF INDIA

Profile Spreading its arms around the world, the SBIs International Banking Group delivers the full range of cross-border finance solutions through its four wings the Domestic division, the Foreign Offices division, the Foreign Department and the International Services division. The Domestic wing provides services like merchant banking, shipping finance and project export finance. The Foreign Offices wing offers the entire range of international trade and industrial finance products, while the Kolkata-based Foreign Department undertakes treasury and currency operations. The International Services division renders specialized services like correspondent banking, global link services and country and bank risk exposure monitoring. Being Indias largest and most trusted commercial bank, the SBI offers you a network of relationships unmatched in strength and span by any other Indian financial entity. The bank has a network of 131 offices/branches

in 32countries spanning all time zones. The SBIs international presence is supplemented by a group of Overseas and NRI branches in India and correspondent links with over 522 leading banks of the

world. SBIs international joint ventures and subsidiaries enhance its global stature. The bank has carved a niche for itself in Euro land with branches strategically located in Paris, Frankfurt and Antwerp. Indian banks and corporate are able to avail single-window Euro services from SBI Frankfurt. These strengths are reinforced by a dedicated and highly skilled team of professionals deployed by the bank in each specific segment. TRADE FINANCE Introduction SBI Understand there is much stake involved in Export Import business Global economic, political situations, anything and every thing that affects you and your business. SBI offers the trusted financial solution to all your complex Trade finance related fund needs (both in Indian rupee and foreign currencies). The gamut of our services include credit for both pre shipment and post shipment activities. EXPORT AVENUE RUPEE EXPORT CREDIT (PRE-SHIPMENT AND POSTSHIPMENT) SBI understands and values your Pre shipment and post shipment

commitments our trade finance cell offers both Pre shipment and Post shipment credit in rupee denominated terms to exporters having firm export orders or confirmed letters of credit. Avail Rupee export credit at most competitive rates at 449 branches. Pre-Shipment Export Credit SBI offers Pre-shipment Credit (Packing Credit) to the exporters, for financing purchase, processing, manufacturing or packing of goods prior to shipment. This would mean any loan or advance extended to you by SBI on the basis of: a) Letter of Credit opened in your favor or in favor of some other person, by an overseas buyer; b) a confirmed and irrevocable order for the export of goods from India; c) any other evidence of an order or export from India having been placed on the exporter or some other person, unless lodgement of export order or Letter of Credit with the bank has been waived. Packing Credit is granted for a period depending upon the circumstances of the individual case, such as the time required for procuring, manufacturing or processing (where necessary) and shipping the relative goods. Packing credit is released in one lump sum or in stages, as per the requirement for executing the orders/LC.

The pre-shipment / packing credit granted has to be liquidated out of the proceeds of the bill dawn for the exported commodities, once the bill is purchased/discounted etc., thereby converting pre-shipment credit into post-shipment credit.

Post-Shipment Export Credit

SBI extend Post-shipment Credit that is any loan / advance granted or any other credit provided by SBI for purposes such as export of goods from India. It runs from the date of extending credit, after shipment of goods to the date of realization of export proceeds and includes any loan / advance granted on the security of any duty drawback allowed by the Govt. from time to time. Post-shipment credit has to be liquidated by the proceeds of export bills received from abroad in respect of goods exported. The exporter has the following options at post-shipment stage:

i. To get export bills purchased /discounted / negotiated; ii. To get advances against bills for collection; iii. To receive advances against duty drawback receivable from Govt.

The exporter has the option to avail of pre-shipment and post-

shipment credit either in rupee or in foreign currency. However, if the pre-shipment credit has been availed in foreign currency, the postshipment credit has necessarily to be under EBR Scheme since foreign currency pre-shipment credit has to be liquidated in foreign currency. The details of pre-shipment and post-shipment credit in foreign currency are mentioned below.

PRE-SHIPMENT CREDIT IN FOREIGN CURRENCY (PCFC) SBIs Pre-shipment Credit in Foreign Currency (PCFC) is just what you need, when you are looking for funds in foreign currency. Avail it to meet your manufacturing, processing and packing fund requirements at international interest rates. Just not this, you can also cover the cost of both domestic as well as imported inputs of SBIs PCFC gives you choice of four different currencies in which to operate the scheme - the US Dollar, Pound Sterling, Euro and the Japanese Yen. SBI has 64 branches across the country handling the PCFC facility for your exclusive convenience.

Our Foreign Department, based at Kolkata, is the nodal centre for raising and deploying international and onshore funds for lending under PCFC.

EXPORT BILL REDISCOUNTING

Introduction Avail SBI's export bill rediscounting (EBR) for post shipment finance at international rates of interest. PCFC will be liquidated with the discounting of bills under EBR scheme. The foreign currency of the bill will be applied to PCFC in foreign currency and if there is any surplus of the bill after adjusting to PCFC, the surplus portion will be converted into Indian rupees and credited to the exporter's CC or Current account. The EBR advance which is a foreign currency loan will be eventually closed when the overseas buyer pays the bill and the export proceeds are realized. Take your pick from any of the four designated currencies: US Dollar, Pound Sterling, Euro and the Japanese Yen. Contact any of our 64 forex-intensive branches handling EBR.

IMPORT AVENUE
Letter of Credit

Leverage SBI's reputation and goodwill in the global market! Avail of SBI's Letters of Credit for your purchases in international and domestic trading operations.

SBI offers Letters of Credit to facilitate purchase of goods in international trading operations. Backed by SBI's strong reputation, you will be able to build better trust in trade and forge business relationships faster. The bank's vast network of branches and correspondent banks enables your enterprise to sustain a seamless flow of business on a wide platform. Further, the bank's informed trade finance crew can provide you with sophisticated credit and trade information, and market knowledge, helping you to extract more value from business.

Since the Bank establishing the Letter of Credit undertakes the responsibility of honoring the drafts drawn there under, the ability of the importer to meet its obligation, the integrity of the exporter, the nature of goods, besides observance of Exchange Control regulations etc. are considered. Foreign Currency import credit

This is ideal for both Indian importers and their foreign suppliers. SBI offers credit to foreign suppliers of Indian importers by purchasing the import bill for its full value through one of the bank's overseas offices. The tenor of this form of supplier's credit does not exceed 180 days. The supplier gets 100 per cent of the invoice value immediately, making his deal practically a cash sale.

Importers get credit for a maximum period of 180 days, enabling them to manage their liquidity better. Further, their interest payables could be lower since international interest rates are currently lower than domestic rates. These facilities are useful for import by sellers in the domestic market as well as export-related import.

Suppliers Credit
Suppliers' Credit essentially represents credit sales effected by the supplier on the basis of accepted bills or promissory notes with or without a collateral security. Any credit facility arranged with recourse to the supplier for financing up to 180 days import into India which is not backed up in the form of any letter/document/guarantee/agreement, etc. issued by the LC opening banks or in any other manner except normal routine commercial transactions like an LC, can be treated as a suppliers' credit. The underlying commercial contract between the exporter and the Indian importer should provide for drawing of usance drafts with an upper cap of 180 days on the usance period. When documents under such usance LCs are discounted by our foreign offices and other banks, it is not based on any mandate/letter of comfort/guarantee given by the LC opening bank in India either on their own behalf or at the instance of the importer, i.e. the buyer of goods. Indian importers are free to enjoy a credit period of 180 days on their imports from the date of shipment provided interest for the period does not exceed the prime rate for the currency in which the goods are invoiced.

With a view to simplifying the procedure for imports into India, RBI, in September 2002, decided that the Authorized dealers may approve proposals received in form ECB for short term credit for financing, by way of Suppliers' Credit, of import of goods into India, provided. The credit is being extended for a period of less than 3 years The amount of credit does not exceed USD 20 million (approx. Rs. 94 crores now) per import transaction. The 'all-in-cost' per annum, payable for the credit does not exceed 6 months LIBOR + 200 basis points.

CORRESPONDENT BANKING
The Correspondent Banking Division develops and maintains

relationship with Banks and Financial Institutions across the Globe. This network Correspondent Banks forms the foundation for all international operations of SBI. SBI has correspondent banking relations with around 522 leading banks worldwide. The bank has deployed a dedicated Correspondent Relations section to attend exclusively to create, nurture, cultivate and continue relationship in correspondent banking. The Correspondent Relations section helps SBIs correspondents market and distributes their products for various applications of the bank and its Customers.

Meanwhile, the banks Foreign Department, based in Kolkata (Calcutta), handles all operational aspects of correspondent banking, including all matters pertaining to the exchange of test keys and swift authenticator management. All trade and retail transactions are handled by the vast net work of SBI's branches. However, only designated branches handle International Banking activities. Designated branches enjoy delegated authority to receive/pay through the NOSTRO accounts maintained by the Foreign Department. The Rupee Vostro accounts of International Banks and Institutions are maintained and serviced at SBIs International Services branch (ISBM) at Mumbai and at Overseas Branches at Kolkata (Calcutta), Chennai, Cochin, Bangalore and New Delhi. ACU accounts are also serviced at the overseas branches. keys (SAK), appointment of correspondents, maintenance and reconciliation of Nostro accounts, and treasury

Products and Services

Creating, nurturing, cultivating and maintaining SBIs network of over 522 correspondent relationships.

Providing support to the correspondents in marketing and distribution of their products for various applications of the SBI and its clients.

Complaint Resolution of correspondents.

Setting up Standard Settlement Instructions.

SWIFT Channel of SBI (In India)

Swift Linked Offices SWIFT Authenticator Keys are centralized at SOC (Prior

( 146 In Number at Various Locations )

Clearance of FD is required for exchange of SAKs). Although FD is SWIFT Linked, messages regarding fund

transfers, Letters of Credit, Guarantees, etc., should not be sent to them. These should be sent to the branches concerned giving Branch Code No., Name of the Branch, Name of Beneficiary and Account No. Use correct BIC Number of the branch for which the

message is meant (list appended). Draw Payment Orders only in currencies mentioned in

the schedule of Agency Arrangements (as agreed upon between SBI and correspondents). Payment Instructions containing all relevant details

should be sent to the branch concerned for execution of the payment order with specific details as to where cover funds have been provided. Cover funds for remittances should be provided to the

respective Nostro account with full details viz., branch name, code number, name of the beneficiary etc., in accordance with

the Agency Arrangements. Messages for paying funds into our Nostro Account without any authenticated payment instruction directly to the drawee branch result in delay, inconvenience to beneficiary and embarrassment to remitter. Branches may be advised to get full details from remitter before sending remittances (please refer to Standard Settlement Instructions). Payments relating to our Associates/ Subsidiaries may

not be sent to our branches as they maintain their own nostro accounts and have their own arrangements for such payments MERCHANT BANKING SBIs Merchant Banking Group is strongly positioned to offer perfect financial solutions to your business. We specialize in the arrangement of various forms of Foreign Currency Credits for Corporate. We provide the resources, convenience and services to meet your needs by arranging Foreign Currency credits through: Commercial loans Syndicated loans Lines of Credit from Foreign Banks and Financial Institutions FCNR loans Loans from Export Credit Agencies Financing of Imports.

We are internationally the most Preferred Bank by Export Credit Agencies for Guarantees in case of the Indian Clients or Projects. SBI being an Indian entity has no India exposure ceiling. Our Primary focus is On Indian Clients. SBIs seasoned Team of professionals provides you with Insightful credit Information and helps you Maximize the Value from the transaction.

SBIs PRODUCTS AND SERVICES 1] Arranging External Commercial Borrowings (ECB) 2] Arranging and participating in international loan syndication 3] Loans backed by Export Credit Agencies 4] Foreign currency loans under the FCNR (B) scheme 5] Import Finance for Indian corporate PROJECT EXPORT FINANCE State Bank of India is an active participant in the area of finance of Project export activities. These activities will mainly involve financing the fund based and non fund based requirements of the project exporters. Export of engineering goods on deferred payment terms Execution of turnkey projects abroad Execution of overseas civil construction contracts abroad

 Exports of services are the contracts for export of consultancy, technical and other services. Project export contracts are generally of high value and exporters undertaking them are required to offer competitive terms to be able to secure orders from foreign buyers in the face of stiff international competition. Our vast network of branches spread all over the country which are authorized to handle trade related transactions,substantial presence overseas with branches/offices in all major commercial centers of the world covering all time zones and our strong network of correspondent relationship with top ranking banks in several countries adds to our competitive strengths to facilitate and meet various requirements of project exporters. More over we also enjoy the comprehensive credentials in International banking community.

REGULATORY FRAMEWORK

Exchange Control Regulations:

The exchange control regulations relating to Project and Service Exports revised from time to time are contained in the Memorandum of Instructions on Project and Service Exports (PEM) issued by Reserve Bank of India. The directions contained in the PEM are

issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) Authority structure for clearance of Project Export proposals: Reserve Bank of India has laid down the authority structure for clearance of project export proposals based on the value of contract:

Contract value up to USD 100 mio Authorized Dealer

Contract value above USD 100 mio Working Group Thus proposals with contract value up to USD 100 mio can be cleared at State Bank of India and proposals with contract value above USD 100 mio, the reference to Working Group is done by SBI as the Sponsoring Bank on behalf of our customer.

EXPORTER GOLD CARD State Bank of India has launched "SBI EXPORTERS GOLD CARD SCHEME" to meet the working capital needs of exporters with good track record and credit worthiness, subject to their fulfilling the specified eligibility norms. The salient features of the scheme are as under: Assessment norms have been simplified and for units with export turnover up to Rs. 100 crore simplified assessment in terms of Nayak Committee norms will be made within specified time norm not

exceeding 25 days in case of new sanctions and 15 days in case of renewals. Further relaxations, subject to certain conditions, in the form of automatic renewal of limits after the three year tenure as also simplified method for effecting annual step-up in limits is being examined by the Bank. sStandby limit of 20% will be sanctioned to all the SBI Exporters Gold Card holders over and above the sanctioned limit to meet credit demands arising out of receipt of sudden orders. Limits sanctioned will be valid for a period of three years. Interest will be charged at concessional rate from the Gold Card holders. The present rate for Packing Credit up to 180 days and Postshipment credit up to 365 days would be 3.75% below the Bank's benchmark Prime Lending Rate. Also, SBI Gold Card holders will be given preference for grant of packing credit in foreign currency. International Credit/Debit cards and Internet Banking facilities shall be extended to the SBI Exporters Gold Card holders on priority basis. TREASURY Profile India's largest bank is also home to the country's biggest and most powerful Treasury, contributing to a major chunk of the total turnover in the money and forex markets. Through a network of state-of-the-art

dealing rooms in India and abroad, backed by the assured expertise of informed professionals, the SBI extends round-the-clock support to clients in managing their forex and interest rate exposures. SBI's relationships with over 700 correspondent banks are also leveraged in extracting maximum value from treasury operations. SBI's treasury operations are channeled through the Rupee Treasury, the Forex Treasury and the Treasury Management Group. The Rupee Treasury deals in the domestic money and debt markets while the Forex Treasury deals mainly in the local foreign exchange market. The TMG monitors the investment, risk and asset-liability management aspects of the Bank's overseas offices.

Rupee Treasury The Rupee Treasury carries out the banks rupee-based treasury functions in the domestic market. Broadly, these include asset liability management, investments and trading. The Rupee Treasury also manages the banks position regarding statutory requirements like the cash reserve ratio (CRR) and the statutory liquidity ratio (SLR), as per the norms of the Reserve Bank of India.

Products and Services

 Asset Liability Management (ALM): The ALM function comprises management of liquidity, maturity profiles of assets and liabilities and interest rate risks. Investments: SBI offers financial support through a wide spectrum of investment products that can substitute the traditional credit avenues of a corporate like commercial papers, preference shares, non-convertible debentures, securitized paper, fixed and floating rate products. SBI invests in primary and secondary market equity as per its own discretion. These products allow you to leverage the flexibility of financial markets, enable efficient interest risk management and optimize the cost of funds. They can also be customized in terms of tenors and liquidity options. SBI invests in these instruments issued by your company, thus providing you a dynamic substitute for traditional credit options. The Rupee Treasury handles the banks domestic investments.

Trading

The banks trading operations are unmatched in size and value in the domestic market and cover government securities, corporate bonds, call money and other instruments. SBI is the biggest lender in call.

Forex Treasury (FX)

The SBI is the countrys biggest and most important Forex Treasury, both in the Interbank and Corporate Foreign Exchange markets, and deals with all the major corporate and institutions in all the financial centers in India and abroad. The banks team of seasoned, skilled and professional dealers can tailor customized solutions that meet your specific requirements and extract maximum value out of each market situation. The banks dealing rooms provide 24-hour trading facilities and employs state-of-the-art technology and information systems. SBIs relationships with over 700 correspondent banks and institutions across the globe enhance the strength of the Forex treasury. The FX Treasury can also structure and facilitate execution of derivatives including long term rupee-foreign currency swaps, rupeeforeign currency interest rate swaps and cross currency swaps.

Overseas Treasury Operation The Treasury Management Group (TMG) is a part of the International Banking Group (IBG) and functions under the Chief General Manager (Foreign Offices). As the name implies the department monitors the

management of treasury functions at SBIs foreign offices including asset liability management, investments and forex operations. Products and Services

Asset Liability Management (ALM): The ALM function

comprises management of liquidity, maturity profiles of assets and liabilities and interest rate risks at the foreign offices.

Investments: Monitoring of investment operations of the

foreign offices of the bank is one of the principal activities of TMG. The main objectives of investment operations at our foreign offices, apart from compliance with the regulatory requirements of the host country, are (a) safety of the funds invested, (b) optimisation of profits from investment operations and (c) maintenance of liquidity. Investment operations are conducted in accordance with the investment policy for foreign offices formulated by TMG. The activites include appraisal of the performance of the foreign offices broad parameters such as income earned from investment operations, composition and size of the portfolio, performance vis--vis the budgeted targets and the market value of the portfolio.

Forex monitoring: Monitoring of forex operations of our

foreign offices is done with the objective of optimising of returns while managing the attendant risks.

Forex and Interest rate (Foreign Currency) derivatives:

TMG also plays an important role in structuring, marketing,

facilitating execution of foreign currency derivatives including currency options, long term rupee - foreign currency swaps, foreign currency interest rate swaps, cross currency swaps and forward rate agreements. Commodity hedging is one of the recent activities taken up by TMG.

Reciprocal Lines: The department is also responsible for

maintenance of reciprocal lines with international banks.

Portfolio Management & Custodial Services

The Portfolio Management Services Section (PMS) of State bank of India has been set up to handle investment and regulatory related concerns of Institutional investors functioning in the area of Social Security. The PMS forms part of the Treasury Dept. of State Bank of India, and is based at Mumbai. PMS was set up exclusively for management of investments of Social Security funds and custody of the securities related thereto. In the increasingly complex regulatory and investment environment of today, even the most sophisticated investors are finding it difficult to address day to day investment concerns, such as adherence to stated investment objectives security selection quality considerations conformity to policy constraints

 investment returns The team manning the PMS Section consists of highly experienced officers of State Bank of India, who have the required depth of knowledge to handle large investment portfolios and address the concern of large investors. The capabilities of the team range from Investment Management and Custody to Information Reporting.

INTERNATIONAL BANKING SBI OPENS INDIA'S FIRST INTERNATIONAL BANKING UNIT State Bank of India has opened the first International Banking Unit (OBU) in India at the SEEPZ Special Economic Zone, New Bank Building, Andheri (East) Mumbai 400,096 on 17th July 2003 another landmark in the history of India's Financial Sector. The OBU will be deemed as an overseas branch of the Bank and undertake the following activities: 1. Raise funds in convertible foreign currency as deposits and borrowings from Non Residents sources. 2. Transact in foreign exchange with residents in India who are eligible to enter into or undertake such transactions in terms of various Rules and Regulations as framed under Foreign Exchange

Management Act, 1999. 3. Open foreign currency accounts abroad as well as with other OBUs in India 4. Trade in foreign currencies in the overseas market and also with banks in India where both legs of the transactions are denominated in foreign currencies. 5. Provide customized loan and liability products for the benefit of clients 6. Maintain Special Rupee account with an Authorized Dealer in India out of the convertible foreign exchange resources for meeting local expenses 7. Buy Rupees from an Authorized Dealer in India to fund the Special Rupee Account.

USA PATRIOT ACT CERTIFICATION

Following the USA PATRIOT Act and the final rules issued by the U.S. Department of Treasury, Banks ("Foreign banks") are required to issue Certification to U.S. banks or broker-dealers in securities ("Covered Financial Institutions") with which they maintain Correspondent accounts.

For this purpose and as permitted by the final rules, State bank of India has prepared a Certification for use by any financial institution that needs a USA PATRIOT Act Certification from State Bank of India or one of its branches. We kindly request you to use this Certification instead of approaching directly State Bank of India's branches. This Certification only covers State Bank of India and its branches and does not cover its subsidiaries and joint ventures. If the Certification is required from our subsidiaries and joint ventures, please contact them directly.

8. Advantages of International Banking

International banks can sometimes provide access to politically

and economically stable jurisdictions. This will be an advantage for residents in areas where there is risk of political turmoil, who fear their assets may be frozen, seized or disappear. However it is often argued that developed countries with regulated banking systems offer the same advantages in terms of stability.

Some international banks may operate with a lower cost base

and can provide higher interest rates than the legal rate in the home country due to lower overheads and a lack of government intervention. Advocates of international banking often characterize

government regulation as a form of tax on domestic banks, reducing interest rates on deposits.

International finance is one of the few industries, along

with tourism, in which geographically remote island nations can competitively engage. It can help developing countries source investment and create growth in their economies, and can help redistribute world finance from the developed to the developing world.

Interest is generally paid by international banks without tax

being deducted. This is an advantage to individuals who do not pay tax on worldwide income, or who do not pay tax until the tax return is agreed, or who feel that they can illegally evade tax by hiding the interest income.

Some international banks offer banking services that may not

be available from domestic banks such as anonymous bank accounts, higher or lower rate loans based on risk and investment opportunities not available elsewhere.

International banking is often linked to other structures, such

as international companies, trusts or foundations, which may have specific tax advantages for some individuals.

Many advocates of international banking also assert that the

creation of tax and banking competition is an advantage of the industry. Critics of the industry, however, claim this competition as a disadvantage, arguing that it encourages a "race to the bottom" in

which governments in developed countries are pressured to deregulate their own banking systems in an attempt to prevent the off shoring of capital.

9. Disadvantages of International Banking

International bank accounts are less financially secure. In

banking crisis which swept the world in 2008 the only savers who lost money were those who had deposited their funds in international branches of Icelandic banks such as Kaupthing Singer & Friedlander. Those who had deposited with the same banks onshore received all of their money back. In 2009 However only international centers such as the Isle of Man have refused to compensate depositors 100% of their funds following Bank collapses. Onshore depositors have been refunded in full regardless

of what the compensation limit of that country has stated thus banking international is historically riskier than banking onshore.

International banking has been associated in the past with

the underground economy and organized crime, through money laundering. Following September 11, 2001, international banks and tax havens, along with clearing houses, have been accused of helping various organized crime gangs, terrorist groups, and other state or non-state actors.

International jurisdictions are often remote, and therefore costly

to visit, so physical access and access to information can be difficult. Yet in a world with global telecommunications this is rarely a problem for customers. Accounts can be set up online, by phone or by mail.

International private banking is usually more accessible to those

on higher incomes, because of the costs of establishing and maintaining international accounts. However, simple savings accounts can be opened by anyone and maintained with scale fees equivalent to their onshore counterparts. The tax burden in developed countries thus falls disproportionately on middleincome groups. Historically, tax cuts have tended to result in a higher proportion of the tax take being paid by high-income groups, as previously sheltered income is brought back into the mainstream economy.

International bank accounts are sometimes touted as the

solution to every legal, financial and asset protection strategy but this is often much more exaggerated than the reality.

International Banking Myths

International banking comes with a stigma, so many entrepreneurs and business professionals cringe at the mere mention that their money can be safely kept in an International bank account. Images of fast, expensive boats, drug kingpins, and white suits come instantly to mind. This perception, of course, has not been helped by the proliferation of bad Hollywood movies, television shows, and negative portrayal in the press--they could not be further from the truth. The fact is that international financial centers (OFC) or banks, also known as tax havens, exist mostly for the purpose of providing asset protection, asset growth, tax reduction, depending on your jurisdiction, and excellent service for foreign individuals and corporations, large and small, around the world. While not as glamorous nor exotic as they are so often portrayed, international banking and financial centers can present real world solutions to many of the issues facing people looking for asset protection from pending lawsuits, or as a way to mitigate the ramifications of a local unstable government. To be sure, an international bank account can also provide asset protection from the ordinary perils of things such as

divorce, poor market conditions, or extraneous litigation that is so often a marked consideration in the Western world.

International Bank Accounts, Money Laundering, and Other Criminal Activity

It would be a misstatement to state that no illicit funds find their way into International bank accounts--but as we will soon see, that isnt really saying much. In reality, those jurisdictions that the average lay person would least suspect to be guilty of this or other illegal banking activities have turned out to be the major money laundering and criminal enterprise-funding centers in the world. And the United States is chief among them, with an estimate half of all of the money laundered in the world laundered within its 50 states. This half translates to a conservatively-achieved estimate of $300 billion US. Of course, the United States is not the only high-tax, or large jurisdiction that is home to this activity, with other countries such as the UK and Germany sharing in this dubious distinction. So although the haven international banking jurisdictions are perceived to be the ideal locale for the financing of the criminal underworld, the reality is that the high-tax jurisdictions house the vast majority of these funds, with the low-taxation havens representing a much smaller percentage overall. These types of facts, of course, are very rarely ever reported by news and print media, or by the jurisdictions that are frankly quite embarrassed by these astonishing figures.

Conclusion
As a student of BFM I had a great opportunity to do a project of International Banking which was indeed a wonderful experience and has enhanced my knowledge in banking sector. This study on International Banking is important not only to an organization, shareholders, and banking sector but also to an Indian economy as a whole. Due to globalization and liberalization our

economy is opening its door for reforms. The onset of International banking will undoubtedly accelerate the pace of structural change within the Indian banking system. The financial institutions as a segment will essentially convert into banks.

Webliography

http://www.offshoreinfo.com/offshore_banks_details.htm http://www.offshorecompany.com http://www.confidentialbanking.com/ http://www.statebankofindia.com/

http://www.offshorebank.net/ http://www.sterlingoffshore.com http://taxhavenco.com http://www.offshorecompany.com

Bibliography
International Banking and Finance

By O P Agarwal