International Banking and

Money Market

International Financial Management (MB0423)

Presenting To: Dr Rajesh Kiri
 Rutvik Raval IU2152000029
By: Group 2
What is International Banking?
● International banking is like any other banking service, but it takes place across
different nations or internationally.
● To put it another way, it is an arrangement of financial services by a residential
bank of one country to the residents of another country.
● Most multinational companies and individuals use this banking facility for
transacting. International banking forms a major part of the international
financial market.
● Suppose
○ Microsoft, an American company, is functioning in London. It is in need of
funds to meet its working capital requirements. In such a scenario,
Microsoft can avail of the banking services in the form of loans, overdrafts,
or any other financial service through banks in London. Here, the
residential bank of London shall be giving its services to an American
company.
○ Therefore, the transaction between them is said to be a part of an
international banking facility.
Benefits of ● Flexibility

International ● Accessibility
Banking
● International Transaction

● Accounts Maintenance
International Banking - Services
Offered
● International Banks do everything domestic banks do and:
○ Arrange trade financing
○ Arrange foreign exchange
○ Offer hedging services for foreign currency receivables and payables
through forward and option contracts
○ Offer investment banking services (where allowed)
■ Borrow or lend in Eurocurrency market
■ Underwrite Eurobonds and foreign bonds
 ● Correspondent banks
Types of
International ● Edge act banks

Banking ● Off-shore banking centre

● Subsidiaries

● Foreign branch bank

Types of Risks ● Currency risk

● Political risk

● Reputation risk

● Systematic risk
What is Money Market?
● Money market basically refers to a section of the financial market where
financial instruments with high liquidity and short-term maturities are traded.
● Money market has become a component of the financial market for buying and
selling of securities of short-term maturities, of one year or less, such as treasury
bills and commercial papers.
Importance of Money Market
● Financing trade

● Financing industry

● Profitable investment

● Self-sufficiency of commercial bank

● Help to central bank

 ● Government
Players of money
● Reserve bank of India
market
● Commercial bank

● Financial institution

● Corporate firms

● Dealers
Money Market Instruments
● Call money market ● Certificate Of Deposits

● Commercial paper ● Money Market Mutual Funds

● Treasury bills ● The Repo Market

● Discount And Finance House Of
● Commercial bills India
Thank you!