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INTRODUCTION :-

The international linkage from India is supported by a large Indian network through
Integrated Treasury Branch and Authorised Forex Branches. Our other branches in India
also provide international banking facilities through the Authorised Branches of our
bank.This international network is further augmented by correspondent arrangements
with leading Banks at all important world centres in various countries.Thus UCO has a
true global presence and can offer a variety of international banking products, services
and financial solutions to all cross-section of clients, tailor-made to their banking
requirements through one of the best international banking relationship networks both in
terms of strength and spread.

International funds transfer and the associated foreign exchange require the co-ordination
of the payments process across national boundaries. Historically a dominant business
standard emerged called the Society for World-wide International Funds Transfer
(SWIFT). This relies on co-operation between all banks within this society and there is an
accepted code of conduct covering the expected behaviour of each bank. To support the
SWIFT standard complex networks of correspondent banking relationships have evolved
and it is common for even a fairly small bank in one country to have hundreds of such
arrangements with banks around the world. Based on original case research in Europe
and America, the current array of banking structures are analysed with respect to business
network theory from the strategy and IT literatures. It is demonstrated that the apparent
diversity between different banks can be simplified by considering generic international
banking structures.

The cooperative efforts of the major international financial institutions have included the
formulation of international standards in several areas in which the international financial
system is concerned. These include: (1) data dissemination; (2) fiscal, monetary, and
financial policy transparency; (3) banking regulation and supervision; (4) securities and
insurance regulation; (5) accounting, auditing, and bankruptcy; and (6) corporate
governance.
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Definition of international banking activities :-

In this report, we define international banking as intermediation activity that falls into one
of the following categories. The extension of credit by a bank headquartered in a
particular country to residents of another country can occur via: (i) cross-border lending;
(ii) local lending by affiliates established in the foreign country; or (iii) lending booked
by an affiliate established in a third country (eg an international financial centre). In
addition, the BIS international banking statistics on a residency basis include the
extension of credit by a bank headquartered in a particular country to residents of the
same country but in a foreign currency. The underlying financial instruments could be
loans, deposits or securities as well as derivatives contracts and contingent facilities.

The rise of international banking since the 1980s :-

International banking activity, after growing strongly in the past decades, further
accelerated in the years before the financial crisis. Measured by the expansion of cross-
border lending and the local claims of foreign banks, the scale of international banking
changed dramatically between 1985 and 2009 (Graph 1). Total international bank lending
as a share of GDP ± a proxy for the globalisation of banking activity ± rose gradually (by
4% annually) from the mid-1980s to the early 2000s, before accelerating sharply in the
years that followed. The measure almost doubled between 2002 and 2008 and, even
though its growth was interrupted by the recent financial crisis, it still remains near peak
levels.

Defination:-

International banking is the process in which financial institutions allow foreign clients---
both companies and individuals---to use their services. Perhaps the most talked-about
international banks are located in Switzerland. However, many other countries have fully
developed international banking infrastructures. Many individuals and companies
participate in international banking to minimize (or evade) their tax liability. This
strategy, however, has certain disadvantages. In addition, several international
organizations have made recent efforts to curb the use of international banks as tax
havens.
åong-term issues in international banking:-
International banking has been an important driver of financial globalisation and
integration, thus contributing to welfare gains over time and across countries. During the
recent crisis, however, the plight of many internationally active banks epitomised the
fragility of the financial system. This underscored the importance of a proper
understanding of the drivers and effects of cross-border intermediation.

This report - prepared by a Study Group chaired by Hans-Helmut Kotz, formerly of the
German Bundesbank - documents general trends in the historical evolution of
international banking, discusses various drivers of this evolution and examines the impact
of international banking on financial stability and the macroeconomy. It also analyses
possible future developments in cross-border intermediation, paying particular attention
to the interplay between market- and bank-based activities.

The role of IFIs in the changing market place11 In general terms the objectives of IFIs
have always been poverty alleviation, economic growth and protection of the
environment.12 Traditionally, IFIs have
promoted these objectives by working with governments and government
agencies. This reflects the ideas and the capital structures which prevailed at
the time of their creation. Broadly speaking, the IFIs have pursued these
objectives with loans for public sector projects or programmes, technical
assistance, and policy-based lending. IFI loans have generally been made to,
or guaranteed by, the borrowing states.

The EBRD is different from the other IFIs. Its later foundation and the special
circumstances of this foundation pointed to a rather specific objective, namely
to foster the transition of its countries of operations to open market
economies. The founders took it that the transition would indeed raise living
standards over time as well as expanding basic choices and rights of the
population. In the new economic environment, the importance of IFIs and bilateral aid as
sources of funds has decreased. While private flows are rising, official flows
are constrained by tight budgets following fiscal laxity in the 1970s and 1980s.
As budgets get squeezed, official aid, both bilateral and multilateral, has been
a vulnerable target. Furthermore, the collapse of centrally planned economies
and the poor performance of heavily distorted economies in Africa, Latin
America and the Middle East have led to a re-examination of the role of the
state in economic development. As a result, there is a growing understanding
among developing countries that to achieve market-oriented economic
growth, they must create the conditions in which a strong private sector can
flourish.
Since the importance of IFIs as a source of funds has decreased while the
potential role of the private sector has increased, a central challenge for IFIs
is to find ways of fostering development through expanding opportunities for
the private sector. They should view the private sector as a prime x
 for
the achievement of development goals. In so doing they must seek to ensure
that the poor participate in the growth process and that growth is
environmentally sustainable. There are two complementary ways in which the
IFIs can pursue these objectives:
i) they can help governments create the conditions for the right kind of
market-oriented growth;
ii) they can become participant investors, working with the private sector to expand and
improve private capital flows.

The first of these embodies some of the more traditional IFI roles. This
involves promoting macroeconomic stability and ensuring the provision of the
necessary physical, institutional, legal and regulatory infrastructure. While
these basics are crucial to investment and growth, participation in growth
requires adequate provision for health and education, which in turn enhance
growth itself. Poverty alleviation, however, calls for more than fostering
participation. It also involves protecting those who are not in a position to
provide for themselves by establishing a social safety net. In the past, the
IMF, the World Bank and regional IFIs have played a major role in the
establishment of macroeconomic stability, in the assistance with tax, legal
and sectoral reform and in the creation of a social safety net through policybased
lending.13 These are all areas that continue to be important for marketoriented
growth.

The second approach represents territory that has been less well explored by
the IFIs. The IFIs must ask how they can assist more directly in establishing
the conditions for the expansion of the private sector. In doing so, they must
recognise the increasing - and understandable - reluctance of governments to
provide sovereign guarantees; a reluctance that stems from the pressures on
public finances and the requirement for hard budget constraints if marketbased
incentives are to function effectively. While recognising that there will
be important projects (particularly environmental and some infrastructure) for
which sovereign guarantees will be necessary, the IFIs should support this
resolve and avoid sovereign guarantees wherever possible. This means the
IFIs must find new ways of operating; ways that harness private sector
finance for broader development goals. The way to do this is for IFIs to work

 




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International banks are governed by the International Financial Services Act, Cap 325 and are
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Xc Receive foreign funds through:

Ãc The acceptance of foreign money deposits payable upon demand or after a

fixed period or after notice
Ãc The sale or placement of foreign bonds, foreign certificates, foreign notes
or other foreign debt obligations or other foreign securities
Ãc Any other similar activity involving foreign money or foreign securities

Xc Use the foreign funds so acquired, either in whole or in part, for:

Ãc Loans, advances and investments

Ãc The activities of the international bank for its account of or at its risk
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other foreign debt obligations or other foreign securities
Ãc Any other similar activity involving foreign money or foreign securities

Xc Accept in trust from persons resident outside of Barbados or from prescribed

persons

Ãc Amounts of money in foreign currencies or securities or both

Ãc Foreign personal or foreign movable property
Ãc Foreign real or foreign immovable property
THE BANK FOR INTERNATIONAå SETTåEMENTS:-


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‰RODUCTS OFFERED TO THE EX‰ORTERS / IM‰ORTERS:-

RU‰EE EX‰ORT CREDIT (‰RE & ‰OST-SHI‰MENT)

Rupee denominated pre & post-shipment credit for exporters having firm export order /
confirmed letter of credit on most competitive rates.

A. PRE-SHIPMENT EXPORT CREDIT

Credit for financing purchase, processing, manufacturing or packing of goods prior to

shipment. The period of credit depends on the time of procurement till the shipment of
goods. It has to be liquidated by proceeds of bill drawn against the exported goods.

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B. POST-SHIPMENT EXPORT CREDIT

Credit against export of goods from India which has to be liquidated by export proceeds
received from abroad. At post-shipment stage the exporter may opt for :-

(i)c Purchase / discount / Negotiation of the export bills

(ii) Sending the export bills on collection basis.

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FOREIGN CURRENCY EX‰ORT CREDIT ( ‰RE & ‰OST-

SHI‰MENT)

c . PRE-SHIPMENT CREDIT IN FOREIGN CURRENCY (PCFC) c

Foreign currency denominated credit at internationally competitive rates (LIBOR ±

linked) at pre-shipment stage.

B. EXPORT BILL REDISCOUNTING (BRD / EBR)

Credit denominated in foreign currency at post-shipment stage at internationally

competitive rates (LIBOR ± linked). PCFC drawals have to be liquidated by the proceeds
of bills taken under the BRD and any surplus remaining may be credited to cash-credit /
current a/c of the exporter.

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EXAMPLES:-

The results of Quarterly åocational International Banking Statistics and

Semi-annual Consolidated International Banking Statistics in Japan
(end-June 1998)

October 29, 1998

Bank of Japan

The Bank for International Settlements (BIS) collects the data from the participating
central banks and releases the aggregated data on the quarterly and semi-annual
international banking statistics. The Bank of Japan, which is responsible for aggregating
Japanese figures and reporting them to the BIS, is now in a position to enhance the
publication of these statistics in Japan by,

1) publishing data pertaining to Japan,

2) publishing data in more detail than that released by the BIS,

3) publishing in advance of the release by the BIS,

4) publishing new data on an "ultimate risk" basis in addition to the data on a "transfer
risk" basis in the Semi-annual Consolidated International Banking Statistics

Quarterly åocational International Banking Statistics:-

(Outline of Statistics)

Collection of data by the Bank for International Settlements (BIS) started in the first half
of 1970s. The BIS aggregates the data obtained from the participating central banks of 18
developed countries and 6 offshore centres, and publishes global data quarterly. The data
is widely used to analyze global money flow through the international banking sector.
The Bank of Japan is today releasing the results of the statistics pertaining to Japan.

Reporting banks

Reporting banks are those banks that are located in Japan and authorized to conduct
business in the Japan Offshore Market. Some 220 banks are included in this
classification. "Banks located in Japan" includes the affiliates of foreign-owned banks
located in Japan, and excludes the affiliates of Japanese banks located abroad.
Term

‘uarterly (end-March, June, September and December)

Reporting business

All balance-sheet positions which represent financial assets or liabilities vis-à-vis non-
residents in any currencies are to be reported. Positions through interoffice accounts are
also included. Balance-sheet positions representing financial assets or liabilities vis-à-vis
residents in foreign currencies are reported separately for reference.

‰ublication by the BIS

Regarding the individual reporting countries' and offshore centres' data, the data provides
a breakdown of counterparties, into banks and non-banks, and of currency, into domestic
and foreign currency. However, a breakdown of country residence of the counterparties is
not available.

Semi-annual Consolidated International Banking Statistics:-c

(Outline of Statistics)

Collection of data by the Bank for International Settlements (BIS) started in mid-1980s.
The BIS aggregates the data obtained from the participating central banks of 18
developed countries, and publishes global data semi-annually. The data is widely used to
recognize the country-risk exposure of major individual nationality banking groups. The
Bank of Japan is today releasing the results of the statistics pertaining to Japan.

Reporting banks

Reporting banks are those banks authorized to conduct business in the Japan Offshore
Market having their head offices located in Japan and having their affiliates abroad. Some
50 banks are included in this classification.

Term :-Semi-annually (end-June and end-December)

Reporting business

Consolidated asset positions of all balance-sheet items on the cross-border claims of head
office, branches, and affiliates in any currencies and the local claims of foreign affiliates
in non-local currencies are to be reported. Positions through interoffice accounts are
excluded. Local currency positions of foreign affiliates with local residents are reported
separately for reference.
‰ublication by the BIS

Regarding the individual reporting countries' data, the data includes a breakdown of
country residence of the counterparties. However, a breakdown of counterpaties and of
maturities is not available.

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