STANDARD CHARTERED BANK

Corporate Banking :

Corporate banking is the broad term given to different banking services that large companies,
governments, or other big institutions need in order to function day to day. In essence, corporate
banking services usually involve high value transactions.

Corporate banking is different from retail banking, in that the former focuses more on corporate
style entities and high value transactions, while the latter is focused on providing financial services
to individual consumers.

Corporate Banking reflects a bank's strengths in providing corporate clients in India, a wide array
of commercial, transactional and electronic banking products. This can be achieved through
innovative product development and a well-integrated approach to relationship management.

The process of credit facilities given to Corporate involves 5 stages:-

Stage 1 Initial calls

Stage 2 Requirements of the Company

Stage 3 Credit Analysis & risk return appetite

analysis.

Stage 4 Structuring

Stage 5 Disbursal

Stage 6 Monitoring
Stage 1

Initial calls

In the first stage a Company approaches the bank or the bank may also approach a client for the
purpose of delivering or receiving Credit facilities.

Stage 2

Requirements of the Company

The requirements of the company are clearly understood by the banks. These include issues like
the amount of credit that is required by the corporate , the purpose of acquiring this facility etc.

Stage 3

Credit Analysis and risk of appetite analysis

A detailed credit analysis is being made where a detailed study about the Company’s background
is done and the possibilities of risks are also analyzed and the risk is being categorized are high,
Medium, Average etc. The extent to which the loan can be given to the bank is also calculated at
this stage.

Stage 4

Structuring

A clear structure of the credit facility is being prepared at this stage.

Stage 5

Disbursal

In this stage the credit facility is being disbursed.

Stage 6

Monitoring

The last stage is where the credit that is being given to the Corporate is being monitored
regularly.

The four C’s of Analysis:

  CREDIT

• Strength of the Company

• Financials of the Company

• Age , Experience & Vintage

• People & Management

• Risks & mitigates.

 COLLATERAL

• Liquidity of the Collateral

• Asset Cover

• Insurance (Where SCB is the loss payee)

 CAPACITY

• Business Model

• Cash Profits / Cash flows.

• Repayment Capacity.

 CHARACTER

• Promoters

• Integrity.
The blue chip companies are offered, a full range of client-focused corporate banking services,
including working capital finance, trade and transactional services, foreign exchange, business- t o-
business payments, trust services, custodial services, commercial lending, and trade finance and
cash management, to name a few. The product offerings are suitably structured taking into
account a client's risk profile and specific needs.

Corporate banking packages that are extended to businesses and government entities can include
a range of other financial services as well. Discounted interest rates are commonly included as
part of the incentive package for entering into a corporate financial arrangement. In addition to
such valuable support services as consultation on investments, help with the details of major
merger & acquisitions and various underwriting services are also included in corporate banking
support.

The advantage of the corporate banking is in this application is the ease of access to the total
financial portfolio, which makes transactions and transfers between accounts much easier.
Corporate banking also has features that allow for efficient transfers of funds, stock ownership
and other financial instruments between financial institutions.

Fund Based assistance:

Term Loans

Corporate Bank offers term loan assistance to the corporates for setting up of projects.
The Bank provides term loan assistance in both rupee and foreign currencies for
Greenfield projects as also for expansion, diversification and modernization. Interest rate
on rupee term loan is fixed or floating based on BPLR plus a fixed spread, as per
creditworthiness of borrower, rating, risk perception, tenure of loan and other relevant
factors. Interest Rate on Foreign Currency Loan is normally floating rate based on LIBOR
plus a fixed spread according to creditworthiness of borrower, rating, risk perception,
tenure of loan and other relevant factors.

Working Capital / Short Term Loans

Banks provides Working Capital facility to the industry to finance day-to-day production &
sales. For production, funds are generally required for purchase of raw materials, stores,
fuel, for payment of labor, power charges, for storing finished goods till they are sold out
& for financing the sales by way of sundry debtors / receivables. The Bankers also
provides short term loan facility for a period of up to 1 year for the purpose of bridging
temporary cash flow mismatches arising due to various reasons like non-realization of
receivables in time, routine capex etc.

Cash Credit

A major part of working capital requirement of any unit would consist of maintenance of
inventory of raw materials, semi finished goods, finished goods, stores and spares etc. In
trading concern the requirement of funds will be to maintain adequate stocks in trade.
Corporate Banks sanction finance against such inventories in the shape of cash credit
facility where drawings will be permitted against stocks of goods. It is a running account
facility deposits and withdrawals are permitted.
They also provide overdraft facility in current account without any security as 'clean
overdraft' for temporary periods to enable the borrower to tide over some emergent
financial difficulty and 'Secured overdraft' facility against fixed deposits, NSC, and other
securities.

Packing Credit to Exporters

Pre-shipment credit also known as Packing credit is loan/ advance granted by Bank to an exporter
for financing the purchase, processing, manufacturing and/or packing of goods prior to shipment.
Packing credit can also be extended as working capital assistance to meet expenses such as wages,
utility payments, travel expenses etc; to companies engaged in export or services.

Requirements

• Exporter should have a 10 digit importer-exporter code number allotted by DGFT

• Exporter should not be in the caution list of RBI

• License/Quota Permit if goods are not freely exportable

• Facilities for exporter as also support manufacturer

• Additional facility for Gold Card holders

Types of Pre-shipment Finance:

• Packing Credit in India Rupee

• Packing credit in Foreign currency (PCFC)

• Advances against receivables from government, like duty drawback

• Advance against Cheques / drafts etc; representing Advance payment

Vendor Financing

Realization of funds tied at various points of the value chain is one of the primary concerns of
those involved in the business of manufacturing & supplying of various kinds of goods. Funds
are required by the manufacturers/suppliers at two stages of the production viz., the
manufacturing stage (Accounts Payable Cycle) and the post-manufacturing stage (Accounts
Receivable Cycle), while in the former, funds are required to acquire the raw-materials, in the
latter it's required for smooth functioning till the produces are sold and realized into cash.
CORPORATE Bank's "Vendor Finance" product is so designed such that all the links in the
value chain always remain adequately funded, thereby leading to a smooth functioning for the
vendor.

Channel Financing/Dealer Financing

Dealers are one of the important channel partners through whom a substantial volume of
business is conducted by most of the manufacturers. CORPORATE Bank's "Dealer
Finance Programme " is designed in such a way such that it leads to a better liquidity
position by providing various facilities to the dealers, thereby improving the overall
business environment.

Bills Discounting

• Banks offer discounting of bills upto original tenor of 180 days

• Bill discounting facility offered as Sale bill discounting or Drawee bill discounting

• Bills under LCs issued by domestic banks/branches (LCBD) under simplified procedure

Invoice Discounting

• Especially useful for OEM / vendors to large corporates

• As an overdraft facility or bill discounting facility

FIFO method for interest calculation

(B) Non-fund based Assistance:

Guarantee Assistance

In international trade, Bank Guarantee is used as a means of securing payment. Corporate bank
act as the issuing bank will pay the guarantee amount to the beneficiary of the guarantee upon
receipt of the claim from the beneficiary.

The various kind of bank guarantees are as follows:

• Bid Bond Guarantee

• Advance payment Guarantee

• Guaranty for warranty obligation

• Payment Guarantee / Loan Guarantee

• Performance Guarantee

• Deferred payment Guarantee

• Shipping Guarantee

• Trade Credit Guarantee

STAND BY LC

Letters of Credit

Corporate banks issue letter of credit which plays an important role in financing the international
trade of the corporate. From financing the suppliers/ vendors to the financing of dealers, banks
structure and customize solutions suited for specific business requirements. Corporate banks act as
the issuing bank that opens the letter of credit on behalf of their clients. The parties to a letter of
credit are usually a beneficiary who is to receive the money, the issuing bank of whom the
applicant is a client, and the advising bank of whom the beneficiary is a client.

The process ofletter of credit is as follows:

A robust network of overseas correspondent banks, cutting edge technology, global connectivity,
modern trade processing platform and team of professionally qualified documentary credit
specialists of the banks all come together as a highly effective package for the clients LC
requirements

Domestic LCs as well as Foreign LCs transmitted over secure network using SFMS and SWIFT
platforms to prevent frauds

Advisory on structuring of complex LCs, especially those related project imports, Commodity
imports, Merchanting Trade etc.
Cash Management Services
The fundamental objective of Cash Management Services (CMS) is "optimization of liquidity
through an
improved flow of funds". In today's highly competitive environment, where time is considered as
money,
deployment of staff to render basic routine tasks does not make economic sense. As a sequel, cash
management today is not what it used to be. Electronic banking, which began as a passive desktop
access to bank balances, is emerging into complex processes of liquidity management through
numerous
techniques.
CMS is one of the thrust areas, which offers innovative and reliable solutions by combining an
efficient
collections and disbursements product, backed by state of the art systems to ensure customized
delivery.
The objectives are to reduce costs, enhance control and optimise returns. New modern technology
advantage helps in consistently delivering superior products, convenient access channels and
efficient
services to corporate customers.
Corporate banks Cash Management Services offer a full range of receivable and payable services.
Payments received from dealers/ distributors and made to suppliers are efficiently processed to
optimise
cash flow position and to ensure effective management of the operations of business.
The products offered under CMS are as follows:

Corporate Banking:

 What is Corporate Banking?

 What happens in the division of Corporate Banking?

 How the Concept of Corporate Banking works?

 How the whole scenario is being monitored?

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Financial Market.- A important segment of the Corporate Banking.

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