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.

many other countries have fully developed international banking infrastructures. Perhaps the most talked-about international banks are located in Switzerland. deposits or securities as well as derivatives contracts and contingent facilities. The underlying financial instruments could be loans. before accelerating sharply in the years that followed. However. even though its growth was interrupted by the recent financial crisis. 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. Many individuals and companies participate in international banking to minimize (or evade) their tax liability. This strategy. has certain disadvantages. Defination:International banking is the process in which financial institutions allow foreign clients--both companies and individuals---to use their services. the scale of international banking changed dramatically between 1985 and 2009 (Graph 1). Measured by the expansion of crossborder lending and the local claims of foreign banks. The extension of credit by a bank headquartered in a particular country to residents of another country can occur via: (i) cross-border lending. we define international banking as intermediation activity that falls into one of the following categories. In addition. it still remains near peak levels. (ii) local lending by affiliates established in the foreign country. several international organizations have made recent efforts to curb the use of international banks as tax havens. however. The measure almost doubled between 2002 and 2008 and. 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.Definition of international banking activities :In this report. after growing strongly in the past decades. . or (iii) lending booked by an affiliate established in a third country (eg an international financial centre). The rise of international banking since the 1980s :International banking activity. In addition. further accelerated in the years before the financial crisis.

The role of IFIs in the changing market place11 In general terms the objectives of IFIs have always been poverty alleviation. Broadly speaking. paying particular attention to the interplay between market. namely to foster the transition of its countries of operations to open market economies. the importance of IFIs and bilateral aid as sources of funds has decreased. there is a growing understanding among developing countries that to achieve market-oriented economic growth. the IFIs have pursued these objectives with loans for public sector projects or programmes. the collapse of centrally planned economies and the poor performance of heavily distorted economies in Africa. It also analyses possible future developments in cross-border intermediation. 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. both bilateral and multilateral. The EBRD is different from the other IFIs. however.prepared by a Study Group chaired by Hans-Helmut Kotz. Furthermore. economic growth and protection of the environment. .and bank-based activities. has been a vulnerable target.12 Traditionally. thus contributing to welfare gains over time and across countries. This reflects the ideas and the capital structures which prevailed at the time of their creation.Long-term issues in international banking:International banking has been an important driver of financial globalisation and integration. technical assistance. official aid. This report . IFI loans have generally been made to. Latin America and the Middle East have led to a re-examination of the role of the state in economic development. As budgets get squeezed.documents general trends in the historical evolution of international banking. the borrowing states. they must create the conditions in which a strong private sector can flourish. or guaranteed by. formerly of the German Bundesbank . official flows are constrained by tight budgets following fiscal laxity in the 1970s and 1980s. While private flows are rising. and policy-based lending. Its later foundation and the special circumstances of this foundation pointed to a rather specific objective. This underscored the importance of a proper understanding of the drivers and effects of cross-border intermediation. As a result. the plight of many internationally active banks epitomised the fragility of the financial system. discusses various drivers of this evolution and examines the impact of international banking on financial stability and the macroeconomy. During the recent crisis. In the new economic environment. IFIs have promoted these objectives by working with governments and government agencies.

legal and regulatory infrastructure. The IFIs must ask how they can assist more directly in establishing the conditions for the expansion of the private sector. 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. The second approach represents territory that has been less well explored by the IFIs. They should view the private sector as a prime vehicle for the achievement of development goals.Since the importance of IFIs as a source of funds has decreased while the potential role of the private sector has increased.and understandable . a reluctance that stems from the pressures on public finances and the requirement for hard budget constraints if marketbased incentives are to function effectively. which in turn enhance growth itself. In so doing they must seek to ensure that the poor participate in the growth process and that growth is environmentally sustainable. in the assistance with tax. they must recognise the increasing . however. ii) they can become participant investors. participation in growth requires adequate provision for health and education. 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. institutional. calls for more than fostering participation. While these basics are crucial to investment and growth. The way to do this is for IFIs to work in partnership with the private sector and to become participants in the investment process. In the past.reluctance of governments to provide sovereign guarantees. the IMF. The first of these embodies some of the more traditional IFI roles.13 These are all areas that continue to be important for marketoriented growth. ways that harness private sector finance for broader development goals. It also involves protecting those who are not in a position to provide for themselves by establishing a social safety net. legal and sectoral reform and in the creation of a social safety net through policybased lending. . a central challenge for IFIs is to find ways of fostering development through expanding opportunities for the private sector. Poverty alleviation. This involves promoting macroeconomic stability and ensuring the provision of the necessary physical. the World Bank and regional IFIs have played a major role in the establishment of macroeconomic stability. This means the IFIs must find new ways of operating. working with the private sector to expand and improve private capital flows. In doing so.

Cap 325 and are authorized under the Act to:  Receive foreign funds through: o o o The acceptance of foreign money deposits payable upon demand or after a fixed period or after notice The sale or placement of foreign bonds. for: o o o o Loans. notes or other foreign debt obligations or other foreign securities Any other similar activity involving foreign money or foreign securities  Accept in trust from persons resident outside of Barbados or from prescribed persons o o o Amounts of money in foreign currencies or securities or both Foreign personal or foreign movable property Foreign real or foreign immovable property . foreign notes or other foreign debt obligations or other foreign securities Any other similar activity involving foreign money or foreign securities  Use the foreign funds so acquired. either in whole or in part. foreign certificates.International banks are governed by the International Financial Services Act. advances and investments The activities of the international bank for its account of or at its risk The purchase or placement of foreign bonds. foreign certificates.

and the sufficient supply thereof. in its main function. because the latter suggests the BIS is some sort of debating shop. I say protocol because they are certainly not expressing their 'real' power through the eyes of the media lens. so it is a smokescreen and seems to be way beyond the wit of the G20 ministers. BIS. is for the settlement of transactions among central banks of participating economies. La la land«. Now this is were it gets strange. The same protocol is acted out by the Chairman of the BIS as that of the Federal Reserve. The Committee is made up of ministers sent from each G20 country. thus determining the lending ability of the particular central bank. The organisation of this bank is very similar to that of the Federal Reserve System in the US. located in BaselSwitzerland. but a very important function is also under the wing of have a very powerful tier of control over every economy within the web. and therefore its capital value. the bank that banks would go to«. is controlled by the Basel Committee. setting the standards at which a banks assets. all the while each G20 nation is in the hands of the World Bank by definition of the fact they all borrow from the World Bank and it¶s International Monetary Fund. The BIS says of itself : The Bank for International Settlements (BIS) is an international organisation which fosters international monetary and financial cooperation and serves as a bank for central banks. a giant of a financial Leviathan to force all competition to its will. are fixed. of course this is bound to be so given the same families operate both. to borrow money. That is power indeed over a single bank. can be played with ease with such influence and to those outside the web.THE BANK FOR INTERNATIONAL SETTLEMENTS:This was created to act as the world central bank. The BIS fulfils this mandate by acting as :  A forum to promote discussion and policy analysis among central banks and within the international financial community  A centre for economic and monetary research . but to have this influence over many central banks«. The BIS. Also BIS has as its responsibility the coordination and distribution of currency. who rises«who falls.

reflecting expanding world trade. This phase also coincided with the growth of syndicated bank lending and the expansion of currency and interest-rate derivatives markets that enhanced banks¶ scope to expand their geographical reach in both funding and lending. punctuated by episodes of consolidation.Rapid expansion of the international banking industry:The international banking industry has witnessed phenomenal growth and financial innovation over the past two decades. securitization has contributed to a shift in regulatory or oversight responsibility from official agencies to the private marketplace. ‡ The increased securitization of credit in recent years. international banking has gone through three distinct phases in the post±World War II era: ‡ The establishment of the Eurocurrency market in the late 1950s and early 1960s. ‡ The growing role of banks in Japan in the 1980s as the Japanese government attempted to open its markets and promote the international role of yen. facilitated by the originateand-distribute model of bank lending on the one hand and by rapid growth in the market for asset-backed structured financial products (such as collateralized debt obligations) and development of the credit derivatives market on the other. which prompted national banks to establish offices abroad to service the overseas business of their clients. Looking back. As measured by foreign assets of banks reporting to the BIS. and the assimilation of transition economies into global banking system (figure below). international banking activity expanded at a very fast pace over the past decade. the rise of multinational firms. growth in financing of global payments imbalances. The spread of modern international banking is conventionally traced to the establishment of the Eurocurrency market in the late 1950s and early 1960s. stimulated initially by prevailing capital controls and restrictions on international transactions in the United States andWestern Europe. From a public policy perspective. including credit rating agencies and security underwriters . initially in London and then in other European financial centers.

A. 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. manufacturing or packing of goods prior to shipment. PRE-SHIPMENT CREDIT IN FOREIGN CURRENCY (PCFC) Foreign currency denominated credit at internationally competitive rates (LIBOR ± linked) at pre-shipment stage. The period of credit depends on the time of procurement till the shipment of goods. B. FOREIGN CURRENCY EXPORT CREDIT ( PRE & POSTSHIPMENT) A. At post-shipment stage the exporter may opt for :(i) (ii) Purchase / discount / Negotiation of the export bills Sending the export bills on collection basis. POST-SHIPMENT EXPORT CREDIT Credit against export of goods from India which has to be liquidated by export proceeds received from abroad.PRODUCTS OFFERED TO THE EXPORTERS / IMPORTERS:RUPEE EXPORT CREDIT (PRE & POST-SHIPMENT) Rupee denominated pre & post-shipment credit for exporters having firm export order / confirmed letter of credit on most competitive rates. It has to be liquidated by proceeds of bill drawn against the exported goods. PRE-SHIPMENT EXPORT CREDIT Credit for financing purchase. . EXPORT BILL REDISCOUNTING (BRD / EBR) Credit denominated in foreign currency at post-shipment stage at internationally competitive rates (LIBOR ± linked). processing. B.

EXAMPLES:The results of Quarterly Locational International Banking Statistics and Semi-annual Consolidated International Banking Statistics in Japan (end-June 1998) October 29. which is responsible for aggregating Japanese figures and reporting them to the BIS. The BIS aggregates the data obtained from the participating central banks of 18 developed countries and 6 offshore centres. The data is widely used to analyze global money flow through the international banking sector. 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 Locational International Banking Statistics:(Outline of Statistics) Collection of data by the Bank for International Settlements (BIS) started in the first half of 1970s. and publishes global data quarterly. The Bank of Japan is today releasing the results of the statistics pertaining to Japan. 3) publishing in advance of the release by the BIS. 1) publishing data pertaining to Japan. . and excludes the affiliates of Japanese banks located abroad. "Banks located in Japan" includes the affiliates of foreign-owned banks located in Japan. Reporting banks Reporting banks are those banks that are located in Japan and authorized to conduct business in the Japan Offshore Market. 2) publishing data in more detail than that released by the BIS. 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. is now in a position to enhance the publication of these statistics in Japan by. The Bank of Japan. Some 220 banks are included in this classification.

Some 50 banks are included in this classification. Local currency positions of foreign affiliates with local residents are reported separately for reference. 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. the data provides a breakdown of counterparties. . September and December) Reporting business All balance-sheet positions which represent financial assets or liabilities vis-à-vis nonresidents in any currencies are to be reported. Balance-sheet positions representing financial assets or liabilities vis-à-vis residents in foreign currencies are reported separately for reference. Positions through interoffice accounts are excluded. branches. The Bank of Japan is today releasing the results of the statistics pertaining to Japan. a breakdown of country residence of the counterparties is not available. Publication by the BIS Regarding the individual reporting countries' and offshore centres' data. The data is widely used to recognize the country-risk exposure of major individual nationality banking groups. and affiliates in any currencies and the local claims of foreign affiliates in non-local currencies are to be reported. and of currency. and publishes global data semi-annually. June. Positions through interoffice accounts are also included. into domestic and foreign currency. However. Semi-annual Consolidated International Banking Statistics:(Outline of Statistics) Collection of data by the Bank for International Settlements (BIS) started in mid-1980s.Term Quarterly (end-March. The BIS aggregates the data obtained from the participating central banks of 18 developed countries. into banks and non-banks. 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.

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

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