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A Summer Project Report On

Study of Trade Finance Opportunities in Export-Import

operations: Problems & Prospects at NKGSB Co-operative Bank


In the fulfillment of the Degree of Master of Management Studies under the University of Mumbai By ChaitikVira [Roll No: 59] Specialization: (Finance)

Under the Guidance of

Prof SuchismitaSengupta (Associate Professor)

Mr. Nirmal Parekh (Asst. Manager)

ArunaManharlal Shah Institute of Management and Research Ghatkopar [W], Mumbai-86 2009-11
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CERTIFICATE

DECLARATION
I hereby declare that the project work entitled A Study of Trade Finance Opportunities in Export-Import operations: Problems & Prospects submitted to the NKGSB Co-op Bank, Girgaum, Mumbai is a record of an original work done by me under the guidance of Mr. Nirmal Parekh, Forex Department, NKGSB, and this project work is submitted in the partial fulfilment of the requirements for the award of the degree of Master in Management Studies at Aruna Manharlal Shah Institute of Management and Research. The results embodied in this thesis have not been submitted to any other University or Institute for the award of any degree or diploma.

Acknowledgement
My sincere gratitude to NKGSB Co-op Bank Ltd for providing me with an opportunity to work in the Banking Sector. I take this opportunity to acknowledge the efforts of all those individuals who have helped me in making the project. First and foremost, I am highly indebted to my Industry guide and Mentor, Mrs Vanita Satam, Chief Manager, NKGSB and Mr. Nirmal Parekh, Forex Department, NKGSB for their guidance and constant supervision as well as for providing necessary information regarding the project & completion of the project. Without their vision and support this project would not have been so beneficial to me in which I had worked. I would also like to express my gratitude to Ms. Sanchita, Ms Shilpa, Ms Shambhavi and Mrs. Poonam Madam, Forex Dept., NKGSB Co-op Bank Ltd, Girgaum Branch for their timely guidance and valuable experience that they shared with me during my project and sincerely appreciate their suggestions, encouragement and approachability from day one through the end and for making the one and half month period a memory to cherish. My heartfelt thanks to my Internal mentor of AMSIMR institute Prof Suchismita Sengupta has given me constant guidance, teaching, support, and encouragement, despite her busy schedule. I gratefully thank our Director and all the faculty members and my friends for adding value to my knowledge base by providing with valuable insights into the completion of this project and sharpening me for the corporate world.

Date: - July 2011

Abstract
During one and half month period, NKGSB bank has given greater opportunity to work with Forex Department and learn how Banks play an important role in Trade Finance activities and also Foreign Exchange currency convertibility transaction. Though the process can be done without banks but for the security of the payment and assurance of the Credit worthiness of the parties banks plays a major role to it. Documentary Credits mainly Letter of Credit is involved in the process of the importing and exporting of goods through Banks, It is a universal process accepted by all the countries dealing in forex and adheresto terms and agreement from WTO and strict guidelines given by Reserve Bank of India for trading in India. My research work depended on the traders who are into this process involved every day for their transaction. I studied that what are their views regarding the LC process and charges relating to it. There are too many banks who are dealing with Forex so there is intense competition among all of them for providing better services to the customers. However the margin or Credit given by all the banks differs from each other. RBI is playing a very important role in maintaining strict guidelines for Banks in India, Traders in India, Traders outside India and Foreign Banks. Since my project states Trade Finance activities and foreign exchange currency dealing especially inward remittance and Outward remittance I have given a new scenario to all the New Traders on how to function in import/export activities and Various Tariffs regarding import/export of goods into India and what all Process has to be followed with what sort of documents, Licenses required.

TABLE OF CONTENT
Chapters Particulars Page No.

Certificate Acknowledgement Table of Contents


LIST OF FIGURES LIST OF TABLES LIST OF ABBREVIATIONS LIST OF APPENDICES Research Design Sources of Data Objectives Scope of the Study

CHAPTER 1:1.1 1.2 1.3

Introduction to project
Introduction to Foreign Exchange Trade Finance as Lifeline of Trade Foreign Exchange Rate Risk; Currency

Risk; FX Related Risk

CHAPTER 2:2.1 2.2 2.3

Company Profile
Overview of banking industry Introduction of NKGSB Bank Mission and Operating Values of

NKGSB Bank 2.7 Forex Department

CHAPTER3 :3.1 3.2

Introduction to LC
Letter of Credit Documentation

CHAPTER 5:CHAPTER 6:CHAPTER 7:CHAPTER 8:8.1 8.2 8.3 8.4 CHAPTER 9:-

Observations & Findings Recommendations & Suggestions Conclusion. Appendices


Appendices 1 Appendices 2 Appendices 3 Appendices 4

Bibliography

List of Tables Table. No. Title Of The Table Pg. No.

List of Figures

Fig. No.

Name Of The Figure

Pg. No.

List of Abbreviation

Abbreviations DGFT EXW FCA CPT CIP DAP DAT DDP EPCG IEC BG EEFC ITC (HS)

Title of the Abbreviation Director General of Foreign Trade Ex Works Free Carrier Carriage Paid To Carriage and Insurance Paid Delivery at Place (Place of Destination) Delivered at Terminal Delivered duty Paid Export Promotion Capital Goods Scheme Import Export Code Bank Guarantee Exchange Earners Foreign Currency Indian Trade Classification (Harmonised System) Classification for Export & Import Items

FIRC BRC

Foreign Exchange Inward Remittance Certificate Bank Realisation Certificate

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List of Appendices

Appendices

Title of the Appendices

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CHAPTER 1
INTRODUCTION
Chapter Highlights

1.1 Background of Research

Research Design
The study type is Descripe because this research helps to find out the main stream of finding out payment process of finance for various import and export transactions.

The Sample
The sample population of the study comprises of 75 banking customers of various banks who trade their core business activities through banking channels such as forex department, SWIFT payment process.

Sources of Data
Primary Data as a collection for

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1.2 Literature Review


This project provides a survey of the literature on TRADE FINANCE theory, from the classical example of comparative advantage to the New Trade theories currently used by many advanced countries to direct industrial policy and trade. An account is provided of the neo-classical brand of reciprocal demand and resource endowment theories, along with their usual empirical verifications and logical critiques. A useful supplement is provided in terms of Staffan Linders theory of overlapping demand, which provides an explanation of trade structure in terms of aggregate demand. Attention is drawn to new developments in trade theory, with strategic trade providing inputs to industrial policy. Issues relating to trade, growth, and development are dealt with separately, supplemented by an account of the neoMarxist versions of trade and underdevelopment.

1.3

Objective of Research/Study
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Study the operation of foreign exchange markets and alternative exchange rate systems. Acquire essential skills for managing foreign exchange risks and operating exposure. Operations for the bank in an informed and effective manner. To utilize new process improvements for operational efficiency. To reduce complexity and time consumption on complicated banking issues. To equip participants with the updated cknowledge for Trade Finance. To equip participants with knowledge of essential banking payment processes that will enable their companies to exploit higher risk markets. To increase participants process efficiency through minimising discrepancies on presentations to banks for payment.

1.4 Methodology of Research / Study


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INTRODUCTION TRADE FINANCE AS AN LIFELINE FOR TRADE


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Trade finance refers to a wide range of tools that determine how cash, credit, investments and other assets can be used for trade. Typical trade-related financial services include letters of credit (L/Cs), import bills for collection, import financing, shipping guarantees, L/C confirmation, checking and negotiation of documents, pre-shipment export financing, invoice financing, and receivables purchase. Trade finance instruments can be structured to include export credit guarantees or insurance. Trade finance facilitates trade by helping overcome the information asymmetry between buyers and sellers, enabling them to trust a system whereby sellers will be paid under certain conditions and buyers will get the products they paid for. Trade finance contributes to international trade in four areas: payment facilitation, risk mitigation, and financing and the provision of information about the status of payments or shipments. Every trade finance transaction involves some combination of these four elements, adjusted to suit the circumstances of a particular market or of a trading relationship. Trade finance is the lifeline of trade because more than 90% of trade transactions involve some form of credit, insurance or guarantee. The financial crisis is striking at the heart of the global economic system. Many normally stable banks are wary of capital depletion and are consolidating balance sheet positions, often in response to regulatory imperatives, thereby limiting the amount of money available to be lent against the reduced capital base. Trade finance is not exempt from this liquidity crunch. Banks make money by taking deposits, some portion of which they are then permitted to lend or invest. The difference between what banks pay out in deposit interest, and what they collect on loans and investments must cover all costs and generate a profit.

Transaction costs are directly related to profitability. The higher the cost of processing a transaction, the lower is the return. This is particularly critical because banks maintain a variety of lines of business some of which are less expensive (and therefore more profitable). Banks can and should make careful choices about where to apply their capital resources to generate returns.

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CHAPTER 2 Banking Sector: An overview


Banking Regulation Act of India, 1949 defines Banking as accepting, for the Purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdraw able by cheques, drafts, and order or otherwise. Most of activities a Bank performs are derived from the above definition. In addition, Banks are allowed to perform certain activities which are ancillary to this business of accepting deposits and lending. A banks relationship with the public, therefore, revolves around accepting deposits and lending money. Another activity which is assuming increasing importance is transfer of money both domestic and foreign from one place to another. This activity is generally known as remittance business in banking parlance. The so called forex (foreign exchange) business is largely a part of remittance albeit it involves buying and selling of foreign currencies. The law governing Banking Activities in India is called Negotiation Instruments Act 1881. The banking activities can be classified as: Accepting Deposits from public/others (Deposits) Lending money to public (Loans) Transferring money from one place to another (Remittances) Acting as trustees Acting as intermediaries Keeping valuables in safe custody Collecting Business Government business

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Define of the Co-operative Banks


A co-operative bank is a financial entity which belongs to its members, who are at the same time the owners and the customers of their bank. Co-operative banks are often created by persons belonging to the same local or professional community or sharing a common interest. Co-operative banks generally provide their members with a wide range of banking and financial services (loans, deposits, banking accounts).

Introduction of Cooperative Bank


Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world. Cooperative banking (for the purposes of this article), includes retail banking, as carried out by credit unions, mutual savings and loan associations, building societies and cooperatives, as well as commercial banking services provided by mutual organizations (such as cooperative federations) to cooperative businesses. Co-operative banks differ from stockholder banks by their organization, their goals, their values and their governance. In most countries, they are supervised and controlled by banking authorities and have to respect prudential banking regulations, which put them at a level playing field with stockholder banks. Depending on countries, this control and supervision can be implemented directly by state entities or delegated to a co-operative federation or central body. Even if their organizational rules can vary according to their respective national legislations, cooperative banks share common features: Customer-owned entities: in a co-operative bank, the needs of the customers meet the needs of the owners, as co-operative bank members are both. As a consequence, the first aim of a co-operative bank is not to maximize profit but to provide the best possible products and services to its members. Some co-operative banks only operate with their members but most of them also admit non-member clients to benefit from their banking and financial services. Democratic member control: co-operative banks are owned and controlled by their members, who democratically elect the board of directors. Members usually have equal voting rights, according to the co-operative principle of one person, one vote. Profit allocation: in a cooperative bank, a significant part of the yearly profit, benefits or surplus is usually allocated to constitute reserves. A part of this profit can also be distributed to the co-operative members, with legal or statutory limitations in most cases. Profit is usually allocated to members either through a patronage dividend, which is related to the use of the co-operatives products and services by each member, or through an interest or a dividend, which is related to the number of shares subscribed by each member. Co-operative banks are deeply rooted inside local areas and communities. They are involved in local development and contribute to the sustainable development of their communities, as their members and management board usually belong to the communities in which they exercise their activities. By increasing banking access in areas or markets where other banks are less present, farmers in rural
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areas, middle or low income households in urban areas - co-operative banks reduce banking exclusion and foster the economic ability of millions of people. They play an influential role on the economic growth in the countries in which they work in and increase the efficiency of the international financial system. Their specific form of enterprise, relying on the above-mentioned principles of organization, has proven successful both in developed and developing countries. The Co-operative banks have a history of almost 100 years. The Co-operative banks are an important constituent of the Indian Financial System, judging by the role assigned to them, the expectations they are supposed to fullfil, their number, and the number of offices they operate. The co-operative movement originated in the West, but the importance that such banks have assumed in India is rarely paralleled anywhere else in the world. Their role in rural financing continues to be important even today, and their business in the urban areas also has increased phenomenally in recent years mainly due to the sharp increase in the number of primary co-operative banks. While the cooperative banks in rural areas mainly finance agricultural based activities including farming, cattle, milk, hatchery, personal finance etc. along with some small scale industries and self-employment driven activities, the co-operative banks in urban areas mainly finance various categories of people for self-employment, industries, small scale units, home finance, consumer finance, personal finance, etc. Some of the co-operative banks are quite forward looking and have developed sufficient core competencies to challenge state and private sector banks.

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FOREX Transaction (through Agent Bank)

Sight L/C KBL 0.15% 1500/0.20% (Minimum one quarter if validity quarter falls then in next 0.15% HDFC 0.15% 1500/0.15%

Usance L/C KBL 0.15% 1500/0.20% (up to HDFC 0.15% 1500/90 days) 0.30% (up to 90 days) (Additional charges for every additional month in excess of 3 months @ 0.075%)

0.275% (upto 120 days)

charged in addition.)

Foreign Exchange Market:


The foreign exchange market exists wherever one currency is traded for another. It is by far the largest market in the world, in terms of cash value traded, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The trade happening in the forex markets across the globe currently exceeds US$1.9 trillion/day (on average). Retail traders (individuals) are currently a very small part of this market and may only participate indirectly through brokers or banks. The foreign exchange market provides the physical and institutional structure through which the money of one country is exchanged for that of another country, the rate of exchange between currencies is determined, and foreign exchange transactions are physically completed. The retail market for foreign exchange deals with transactions involving travelers and tourists exchanging one currency for another in the form of currency notes or travelers cheques. The wholesale market often referred to as the interbank market is entirely different and the participants in this market are commercial banks, corporations and central banks.
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Currency Exchange Rate:


The Exchange rate or FX rate is the rate between two currencies specifies how much one currency is worth in terms of the other. For example an exchange rate of 33 Indian Rupees (IND, Rs.) to the United States Dollar (USD, $) means that IND 33 is worth the same as USD 1. The foreign exchange market is one of the largest markets in the world. By some estimates, about 2 trillion USD worth of currency changes hands every day.

The Spot exchange rate refers to the current exchange rate. The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date.

Functions of foreign exchange market:


The foreign exchange market is the mechanism by which participants Transfer purchasing power between countries, Obtain or provide credit for international trade transactions, and Minimize exposure to the risks of exchange rate changes.

Foreign Exchange Market participants:


The foreign exchange market consists of two tiers: the interbank or wholesale market and The client or retail market.

Five broad categories of participants operate within these two tiers: Bank and nonblank foreign exchange dealers
Banks and a few nonblank foreign exchange dealers operate in both the interbank and client markets. They profit from buying foreign exchange at a bid price and reselling it at a slightly
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higher ask price. Dealers in the foreign exchange departments of large international banks often function as market makers. Currency trading is quite profitable for commercial and investment banks. Small to medium sized banks are likely to participate but not as market makers in the interbank market. Instead of maintaining significant inventory positions, they buy from and sell to large banks to offset retail transactions with their own customers.

Individuals and firms conducting commercial or investment Transactions


Importers and exporters, international portfolio investors, Multi National Enterprises, tourists, and others use the foreign exchange market to facilitate execution of commercial or investment transactions. Some of these participants use the market to hedge foreign exchange risk.

Speculators and arbitragers


Speculators and arbitragers seek to profit from trading in the market itself. They operate in their own interest, without a need or obligation to serve clients or to ensure a continuous market. A large proportion of speculation and arbitrage is conducted on behalf of major banks by traders employed by those banks. Thus banks act both as exchange dealers and as speculators and arbitrages.

Central banks and treasuries


Central bank and treasuries use the market to acquire or spend their countrys foreign exchange reserves as well as to influence the price at which their own currency is traded. They may act to support the value of their own currency because of policies adopted at the national level or because of commitments entered into through membership in joint float agreements.

Foreign exchange brokers


Foreign exchange brokers are agents who facilitate trading between dealers. Brokers charge small commission for the service provided to dealers. They maintain instant access to hundreds of dealers world wide via open telephone lines.

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Foreign exchange transactions


Transactions within the foreign exchange market are executed either on a spotbasis, requiring settlement two days after the transaction, or on a forward or swap basis,which requires settlement at some designated future date. To be successful in the foreign exchange markets, one has to anticipate price changes by keeping a close eye on world events and currency fluctuations.

Currency Codes

USD = US Dollar EUR = Euro JPY = Japanese Yen GBP = British Pound CAD = Canadian Dollar AUD = Australian Dollar NZD = New Zealand Dollar

Emerging Trends in International Trade


Global markets have opened up and trade and financial services are moving freely from one country to other and banking services are becoming more responsive to such rapid changes. Inputs and accessories can sourced from one country, assembling and manufacturing can be done in
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another country, seller may be in third country and the ultimate user or the consignee can be in XYZ countries and lastly the financial institution can be in any other country. This has become possible today since borders are not the barriers for movement of goods or finance or manpower.

If a corporate has a professional edge, they can take up any project abroad whereby they are able to expand their market presence and also expose them to the latest global technology. Imports of capital goods and technology have been made easier with the financial solutions provided by the financial institution. Due to the development of off-shore financial markets, borrower can access cheaper funds from the global market. Financial Institution in the offshore markets provide credit facilities at International market rates based on LIBOR.

Role of Banks:
Banks are offering variety of products to their clients, starting from assisting their client financially for importing accessories or raw materials from any country and funding their working capital requirements for their manufacturing activities and extending credit against their receivables. Under wholesale banking, banks are also offering risk management solutions to corporate clients to mitigate credit protection against the default risk of the buyer, political risk cover for the country exposure and currency risk management against the currency exposure. For Example, if a client wants to expand his production capacity and enlarge his exposure to different countries he may require following financial solutions from his bank: For expansion of their production or manufacturing capacity they may like to avail credit facilities to import/buy capital equipment and to meet modernization expenses. Credit facilities can be medium or long-term requirement and it can be either in home currency or in foreign currency. Their bankers can arrange foreign currency loan at a competitive international interest rates through their foreign correspondent banks abroad.
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For importing equipments or accessories banks can establish letter of credit, standby credit or guarantees or bankers acceptance facility in favour of the overseas supplier. For working capital expense to meet the export obligations, bank can sanction export credit facilities wither by themselves or through any of the global credit agencies like Exim bank. Once manufacturing activities are over and sales process starts banks can offering receivable management solutions. Credit risk insurance is offered by insurance agencies to protect the default risk of the buyers. Instead of involving two agencies, one for allowing credit and another agency for offering insurance for managing credit risk, bank can offer a structured product like factoring or forfeiting. Under this arrangement, bank can allow credit facilities against the receivables and also offer credit protection i.e., insurance against the default of the overseas buyer. Besides, bank can arrange buyers credit to the overseas buyer or line of credit to overseas buyer. Ultimately, the clients are able to reduce the cost of funding by availing the cheapest trade finance from their banks and also able to manage their commercial risks by opting appropriate instruments or by availing appropriate products from the credit agencies.

Foreign Exchange Rate Risk; Currency Risk; FX Related Risk


One of the uncertainties of international trade involves fluctuating exchange rates. The fluctuating value of the currency can affect the payment performance of international customers. Currency exchange rates are influenced by a variety of factors including supply and demand; interest rate differentials; economic news; political events; and government intervention and there is no single entity that regulates or controls the foreign exchange market. Currency movements are of particular concern in emerging markets, where it is difficult to offset exchange rate risk. Emerging markets often have trade deficits that can lead to sudden or frequent devaluation of the currency. In export transactions, buyers and sellers rarely use the same currency, and the relative value of currencies is constantly changing. One of the decisions faced by U.S. exporters will be whether or not to demand payment in U.S. dollars. Depending on whether the sale is denominated in the buyer's currency or the seller's currency, the buyer or the seller may incur additional costs (or lost profits) if
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the relative value of the two currencies change between the time the goods are sold and the time the goods are paid for. For this reason, a decision to accept payment in a foreign currency can harm the seller's profit margin. It is possible to be paid in a foreign currency and offset some or all of the foreign exchange risks by purchasing contracts through banks or other financial institutions that allow the seller to "hedge" against foreign exchange fluctuations.

Foreign exchange rate fluctuation is one of the risks of selling internationally. Some companies expect their credit manager to both monitor and manage this type of risk. Currency exchange rates are influenced by a variety of factors including supply and demand; interest rate differentials; economic news; political events; and government intervention and there is no single entity that regulates or controls the foreign exchange market. Foreign exchange risk relates to uncertainty about changes in foreign exchange rates that can adversely affect the amount of money a seller receives. Here is an example: A creditor company sells goods to a foreign company. The invoice is denominated in the foreign customers local currency. The seller ships the goods today, but will not receive payment for two months. During this 60 day period, the exchange rate fluctuates. When the foreign buyer pays the domestic company for the goods, the exchange rate at the time has changed to the point that the seller receive a lower than expected profit on the sale.

Converability refers to the ease or difficulty associated with exchanging one foreign currency for another. From the perspective of the exporter's credit department dealing with an invoice denominated in the buyers national currency, the seller's credit manager must not only concern themselves with credit risk and sovereign risk, the seller must also be concerned about the ability to convertability of that foreign currency. As a rule, the more difficult it is to convert one currency into another, the less the exporter will receive when the foreign currency has been exchanged for the currency in use in the seller's country. The simplest way for a U.S. based seller to avoid foreign exchange risk is to quote foreign customers in U.S. dollars and require payment in U.S. dollars. This way, all the risks associated with fluctuations in foreign-exchange rates are borne by the buyer. In my opinion, it is important to develop written foreign currency policies and procedures. These policies and procedures should be written with the company goals related to foreign exchange
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management in mind. This document should specify the type(s) of hedging the company will engage in, and indicate the authority levels required to hedge specific amounts of FX risk, or to decide that hedging is not required.

Trade Finance Cycle Primary Players


Buyers are the primary drivers of Trade finance. They are largely responsible for shaping consumer demand for the products they wish to sell. They are also the first in the chain to feel the pressure to reduce costs in a market. The raw material prices keep rising but consumers expect prices to keep falling in this new world of large retail chains. Suppliers need good trade finance in place. As the company that manufactures the goods, they not only feel the current increases in the raw materials, energy, and labor costs but are traditionally hurt the most since they need to bear the brunt of the cost and typically go the longest between the initial outlay for raw materials, overhead, labor and the day they finally get paid for producing the product.

Financing Institutions play the role of lender in global trade finance and offer various types of financing. This includes a number of trade financing services including Letter of Credit, Collections, Stand-by Letter of Credit, Pre and Post shipment finance, Bill Discounting and Purchase, Bank Acceptances.

Transporters or Logistics providers cater to the physical movement of goods, and can provide visibility to all the constituents by updating the transit records of the goods shipped. Their internal systems when integrated to a trade finance solution can give an authenticated record of the goods shipped. Their current location and expected delivery time enables not only buyers and sellers to update their records but will also act as a risk mitigation tool for a financial institution on the finance provided.

Key Challenges
Lack of an integrated platform for all players. High Turnaround time due to delay in physical transport of documents between parties. Difficulty in reconciling positions for Buyers and suppliers due to lack of a dashboard
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which reflects current payables / receivables position, and a history of recent transactions. Value of Market Knowledge: KYC. Risk and Compliance. Cost-containment Pressure High logistics costs. Inefficiencies due to multiple documents and manual system of keeping records.

Benefits for Banks as Financial Institution in Trade Finance


Collaborative relationship Banks can build a stronger collaborative relationship with clients, by widening the scope of their services to cover their customers end-to end Trade Finance. This enables banks to improve their bottom lines, by exploring new revenue streams and provide scope to innovate customized funding solutions.

Enhance customer retention - Customers provided with end-to-end solution which integrates with their internal applications and workflow will become completely attached to the Bank, as any shift of allegiance will shake up their entire procurement & collections processes.

Increased reach & customization - Our solution is a scalable model. With an integrated solution system in place it is possible to build customization across various types of business. It also provides for standardization of specific industry segments which if Bank requires can become a niche player. Expand the product portfolio offered in Trade Finance With a clear visibility of document movement & physical movement of items. It is possible for banks to offer structured financing solutions to their clients. Funding can be staggered to meet the finance requirements at various stages of physical goods flow i.e. Customs clearance, duty payment, freight payment etc.

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Risk Mitigation - The biggest challenge in an open account trade is in confirming the authenticity of transaction, and in obtaining the correct picture of the flow at any given moment. With visibility provided by movement of trade documents through a Banks portal, banks are well assured on these, which reduce their risk exposure.

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Export Letter of Credit Cycle


5. Product
is Shipped

1.

1. 2.
Application Applicant Importer/Buyer

Beneficiary Exporter/Seller

4. 6.
Letter of Credit

Buyer & Seller Agree

Documents

8.
Documents

2.

10. 3. Letter of Credit 7. Documents


Exporters Bank/ Advising Bank

9.

Importers Bank/ Issuing Bank

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Introduction to Swift Payments in Trade Finance:


SWIFT stands for Society for Worldwide Interbank Financial Telecommunication, and is a bank group which has set-up global standards for sending and receiving authenticated instructions for wire transfers and letters of credit. SWIFT is increasingly replacing the tested telex. Some letters of credit are sent by tested telex, and these usually are in a free format without the numbered designations at the left.

Banks around the world have set up testing arrangements with each other on a telex and SWIFT basis. This is the basic level of a correspondent banking relationship to allow the sending of letters of credit and payment under these letters of credit. Most foreign banks have cut back on the number of accounts maintained in the United States to eliminate idle balances and reduce the cost of reconcilement of numerous unnecessary accounts. Foreign banks are increasingly maintaining specialized dollar accounts at selected banks to handle specific kinds of transactions. By setting up specialized accounts for specific kinds of transactions, the foreign banks have greatly simplified their reconciling process and their ability to control these accounts. Presenting conforming documents, specifying that the L/C is available by negotiation, and reimbursement instructions are all important considerations for an exporter being paid on a timely basis. Instructions in a letter of credit may call for the documents to be sent back to the issuing bank for a final examination before

allowing payment to be made. For example, when US banks issue letters of credit, they may require documents to be sent back to the US bank for a final examination before payment is made. Many export letters of credit in favor of US beneficiaries are available by negotiation and allow for TT (tested teletransmission) reimbursement which is done either by an authenticated SWIFT message or a tested telex. If the US bank examining the documents for strict compliance to the terms of the letter of credit per the UCP 500 finds no discrepancies, the US bank can request reimbursement from the issuing banks US correspondent for this purpose (often the issuing banks New York or Los Angeles branch). Since payment is made before the issuing bank sees the
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documents, this method of payment is more risky and in many instances the issuing bank will not authorize TT reimbursement. For example, if payment is made to the beneficiary under TT reimbursement and the issuing bank later does find discrepancies in the documents, the issuing bank can require that the US paying bank return the money (if the importer does not waive the discrepancies). If the export letter of credit does not allow for TT reimbursement and documents are sent back to the issuing bank with drafts to its US reimbursing bank, the examination process at the issuing bank may slow down the payment process. The exporters documents may sit in a stack waiting to be examined and when they are examined, discrepancies may be found which necessitates calling the importer for permission to waive the discrepancies. This waiver may not be made immediately which will also slow down the payment process. Exporters often mistakenly believe that requesting the advising bank to confirm the letter of credit will speed up their payment. However, a confirmation by a US bank is a promise to pay by the US bank in the event the issuing bank does not make payment under the letter of credit when clean (no discrepancies) documents are presented. Thus, the confirmation typically protects the exporter against the issuing bank failing to pay because the issuing bank is bankrupt or adverse economic circumstances have occurred (such as foreign exchange controls). For usance letters of credit where the drafts are drawn on a US reimbursing bank, once the drafts have been accepted by the US bank, the exporter has the credit risk of the US bank. Thus, if an exporter requests a confirmation on a usance letter of credit where the drafts are drawn on a US bank, the confirmation is basically protecting the exporter during the period from the date of issuance on the letter of credit to the date when the time draft is accepted by the US bank. If the time draft were drawn on the issuing bank, the confirmation would still protect the exporter during the acceptance period.

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Chapter -4 4.1 BANK PROFILE

NKGSB was founded by a great visionary Sheth Shantaram Mangesh Kulkarni on 26th September, 1917.

The Bank with a modest beginning in 1917, is now a Multi-State Bank having its area of operation in the States of Maharashtra, Karnataka, Goa, Gujarat and Union territories of Daman, Diu, Dadra and Nagar Haveli.

Today the Bank has 45 branches spread over in the state of Maharashtra, Goa & Karnataka. Mumbai - 28 branches Navi Mumbai Vashi, CBD Belapur&Panvel (3 branches) Maharashtra other than Mumbai - Pune (Kothrud&Aund), Kolhapur (Kolhapur Main & Uma talkies. These are take over of Shahu Co-operative Bank) &Nashik

Goa- Ponda&Panaji Karnataka Karwar- Main. Karwar -Baad, Hubli, Belgaum&Sirsi. Bank opened its 42nd branch, 5th in Karnataka atSirsi on 13th November, 2010 and will shortly be opening branches at Thane, Kalayan and Goregaon (W) during the financial year 2010-11

Over the years, the Bank has consistently shown robust growth both quantitatively and qualitatively. The Bank has not only grown in size of deposits and advances, but has multiplied its net worth making the institution financially sound and fundamentally strong.

The Board of Directors of the Bank consists of well qualified professionals enriched with varied experience in the strategic fields of Finance, Technology, Business and Management.
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Being driven by the co-operative principles, management lays emphasis on profits but with focus on the welfare of our stakeholders.

As a part of good governance practice, the Bank has adopted code of good business principles and accepted the responsibility to ensure that they are observed down the line as a work culture in its true spirit. The business philosophy is based on four core values i.e. pillars of service excellence, customer focus, product innovation and resourceful people.

In terms of our commitment for harnessing the state of art technology, networking all 42 branches counter under Core banking solution, customers can access their accounts and perform banking operations anywhere anytime with value added services.

The Bank has varied Deposit products to suit every needs of customers, so also the bank has occupied a place of pride with those who are financed for offering tailor-made complete credit solutions under one roof packaged at liberal, competitive and flexible terms, let it be personal finance or loan facilities for Short term as well Long term requirement of Small Businessman, Professionals, Small & Medium Enterprises and Corporates.

The Bank has always been in the forefront to add on value to its products and has entered into correspondent relationship and strategic alliances to offer best of the services to its customers efficiently and with convenience such as: Tied-up with Insurance Companies to sell both the insurance products, life insurance with Max New York Life and non-life with Oriential Assurance Co. A member of payment & settlement gateways of RBI through INFINET and RTGS system by way of Electronic Fund Transfer (EFT) and Electronic Cheque Clearing (ECC), which provides instant realization of funds & speedy remittances including Electronic Clearing System (ECS) both account debit & credit. Provides Demand Draft facility under arrangement with private sector bank Amongst few Co-operative banks, having secured License as Authorised Dealer Category II of
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RBI which offers sale and purchase of foreign exchange, foreign remittances, etc. Also caters to Forex business needs through foreign exchange arrangement made with private sector bank. Tied up with UAEXchange for fast inward remittance of foreign exchange. Providing facilities - Pension a/cs, SMS Banking and also iConnect for hassle free payment of taxes. Tied up with NSDL as a Depository Participant offering Demat services at all our branches.

4.2 MANAGEMENT
Board of Directors is composed of eminent, well qualified professionals enriched with varied experience in the strategic fields of Finance, Technology, Business and Management. Being driven by the Co-operative principles, the management lays emphasis on profits but with entire focus on the welfare of stakeholders. As a part of good governance practice, the bank has adopted code of good business principles and accepted the responsibility to ensure that they are observed down the line as a work culture in its true spirit. The business philosophy is based on four core value pillars of service excellence, customer focus, product innovation and resourceful people.

4.3 VISION
A premier co-operative bank

4.4 OPERATING PRINCIPLES


We will make our Customers, Shareholders and Community at large very proud We will always strive to provide Customers the best products and services that leads to their progress and prosperity We shall act with high level of integrity, achieving the set goals with active
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involvement, devotion and commitment of our employees

4.5 FOREX DEPARTMENT


We are pleased to announce that the RBI has granted AD Category II licence to our bank to deal in foreign exchange. To purchase foreign currency notes & travelers cheque from residents & non- residents visiting India We release / remit foreign exchange for the following transactions : Business travel Remittance by tour operators/travel agents to overseas agents/ principals/hotels Fee for participation in global conferences and specialized training Remittance for participation in international events/ competitions (towards training, sponsorship and prize money) Film shooting Medical treatment abroad Disbursement of crew wages Overseas Education Remittance under educational tie up arrangements with universities abroad Remittance towards fees for examinations held in India & abroad and additional score sheets for GRE, TOEFL etc Employment and processing, assessment fees for overseas job applications Emigration and emigration consultancy fees Skills/ credential assessment fees for intending migrants Visa fees Processing fees for registration of documents as required by Portuguese/ other governments, organizations. registration / subscription/ membership fees for International

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Registration / subscription / membership fees to international organizations.

SWOT Analysis Strengths:


Online Services: NEFT, RTGS, Online Login. Advanced Infrastructure: Branches at NKGSB are well equipped that provide the customers with taster banking services. All the computerized machines are located in suitable manner & are very useful to the customers & staff of the bank. Friendly Staff: The staff at NKGSB in all branches is very friendly & help the customers in all cases. They provide faster services along with bonding & personal relationship with the customers. Other Facilities to the Customers & Employees: NKGSB also provides other facilities like drinking water facilities, proper sitting arrangements to the customers. Money Transfer Banking: Newly introduced Money Gram by NKGSB to facilitate all money transfers electronically can be wire transfer through this services, hence provide greater value to customers in preference of time saving.. SMS Banking: NKGSB sends sms to its customers for their new products and services and can be access from any place any where.

Weakness
Banking Hours: Through it has normal Banking Hours from 10am to 6 pm, but still other Banks like ICICI and Bank of Baroda have 8am to 8pm.

Opportunities
Increase in percentage of Returns on increase: The bank should provide higher returns on deposits in comparison of the present situation. This will also upto large extent help the bank earn profits & popularity. Popularity in Investments in Capital Markets: As an on going situation as market capitalization of NKGSB increases, it should increase its investments in capital markets
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such as securities market, mutual fund and insurance.

Threats
Competition from Other already established Nationalized Banks. Competition from Private Banks which provide more Speedy Transactions. Net Services: NKGSB provides all kind of services on-line. There can be a Threat of Hacking. The confidential information of the customers can be leaked easily through the e-mail ids. No Proper Facilities to Uneducated customers: NKGSB provides all services through electronic computerized machines. This creates problems to the less educated people. But this threat falls in the 4th quadrant so its negligible. The company can avoid this threat.

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LETTER OF CREDIT
The key issue of Documentary Requirements/Compliance under a Letter of Credit is critical, as the legal rights to the Goods, their Insurance, their Carriage, or Payment for them is simply transferred from one party to another by delivery/endorsement of these documents.

What are Letters of Credit?


Letters of Credit (also known as Documentary Credits) are one of the most commonly-used and accepted methods of payment in international trade. A Letter of Credit is: A conditional payment undertaking by a bank (the Issuing Bank) On behalf of a Buyer / Importer (the Applicant) To pay a Seller / Exporter (the Beneficiary) A given amount of money Subject to presentation of all specified documents (representing the supply of goods) Within specified time limits Subject to presentation of all agreed documents, at a specified place, conforming precisely to all terms and conditions stipulated in the Letter of Credit Letters of Credits are typically used for exports to customers you have not sold to before, for exceptionally large or custom orders, or for customers/countries that present particular credit risks. Letters of Credit are payable on either of the following bases: At sight i.e. on presentation of documents also known as Documents against Payment (D/P); or At a future date i.e. x days from shipment - this is known as Documents against Acceptance (D/A); this is also sometimes referred to as: Term, Acceptance, Deferred Payment or Usance Credits.

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Legal Principles governing Letters of Credit:


Documentary Credits are governed by the Uniform Customs and Practices for Documentary Credits (UCP 600) issued by the International Chambers of Commerce (ICC). UCP is the universally recognised set of rules governing the use of the documentary credits in international trade (over 90% of the world's banks adhere to this standard). The current revision (UCP 600) came into effect on 1st July 2007.

Parties to a Letter of Credit


While the number of parties can vary according to the type of Credit, typically the main actors in a Letter of Credit transaction are Advising Bank: This is the bank to which the Issuing Bank forwards the Letter of Credit with instructions to advise the Exporter/Beneficiary. Confirming Bank: This is the bank which, at the request of the Issuing Bank, adds its confirmation (guarantee) to the Letter of Credit. It may or may not also be the Advising Bank. Exporter/Seller/Beneficiary: The party that has contracted to sell the goods and stipulated that payment be by Letter of Credit. Importer/Buyer/Applicant: The party that has contracted to buy the goods and who initiates the application for the Letter of Credit. Issuing Bank: The bank that actually issues the Credit on behalf of its client, the Applicant/Importer/Buyer. Transferring Bank: Where applicable, this is the bank that is authorized by the Issuing Bank to transfer all/part of the Letter of Credit to another party at the Beneficiarys request.

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Letters of Credit: Step-by-step


The procedural steps in a Letter of Credit transaction include:

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Process of Contract in Trade Finance:


1) Sale of Contract: Seller and Buyer agree Contract of Sale: Seller stipulates Letter of Credit. 2) Request for Issuance: Buyer applies to his (Issuing) bank for Letter of Credit in favour of Seller/Beneficiary. 3) Issuance: Buyer's bank approves application, issues Credit to Advising/Confirming bank, usually located in Sellers/Beneficiarys country. 4) Advice of L/C: Advising/Confirming bank authenticates Credit, forwards original to Seller/Beneficiary. 5) 6) Delivery of Goods: Seller ships goods Presentation: Seller presents documentary requirements supporting Letter of Credit to

Advising/Confirming Bank. 7) Dispatch of Documents: Advising/Confirming Bank ensures documents comply fully with

Letter of Credit, forwards documents to Issuing Bank. 8) Payment of L/C Amount: Issuing Bank verifies documents in compliance; sends payment to

Advising Bank. 9) Negotiate: Advising / Confirming Bank issues payment to Seller/Beneficiary. 10) Payment: Issuing bank debits Buyers/Applicants Account. 11) Endorsement/Clearing of Goods: Issuing Bank forwards documents to Buyer/Applicant.

Letters of Credit might be employed in any of the following scenarios:


Company policy: Where company policy stipulates the use of Letters of Credit when dealing with certain countries/customers etc. Country practice: Government policy may be that imports from, or exports to, a specified country must be paid on this basis (this is a form of exchange control very common in the Middle East, Asia, and Africa). Country Risk: Country risk can often be much more significant than buyer risk: Credits might be only the acceptable payment method when exporting to countries with a particular risk rating. A bank in the Exporters country confirming the credit can virtually eliminate country risk.
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Buyer Risk: A Letter of Credit may be a pre-condition where doubt exists regarding a potential buyers creditworthiness. Again, a confirmed credit can virtually eliminate buyer risk. Custom Orders: Custom orders (e.g. goods made to order, customised packaging, labellingetc). Letters of Credits would very often be the norm in this scenario as finding an alternative buyer is much more difficult and will further delay payment, while disposing of goods in such circumstances may of necessity be at heavily discounted prices. Order Value: Letters of Credit may be appropriate to deals where the order size is unusually large, particularly relative to the sellers size / turnover, or where the order size is significantly larger than the norm for that company, country or market sector. Cash-flow: Current market conditions may mean that the Sellers cash-flow requirements dictate a Letter of Credit as the only viable payment option. Commodity Practice: What is the usual practice in trading in that particular commodity? Extended terms: In order to be able to offer / facilitate a request from a potential Buyer seeking extended credit terms, the quid pro quo may be a requirement for payment by Letter of Credit. Geographical Distance: Distance can increase risk and may influence/determine the choice of payment method.

Why are they important, especially today? Exporting involves more risk, in addition to significantly impacting cash-flow requirements, due to: The greater number of parties / intermediaries involved Increased Transit Risk - Multimodal Transportation - Greater Distances (e.g Irelands peripherality). However, Transit Risk can be greatly reduced through the use of Letters of Credit as Banks are concerned with documents not goods: With a Letter of Credit, the goods will still be paid for even if damaged in transit, subject to documentary compliance with the Letter of Credit Increased risk of Documentary Disputes Greater risk of disagreement over payment, contractual or quality terms Greater risk of Misunderstanding The fact that export payments take a minimum of five-six months from confirmation of order to receipt of payment: typically three months pre-shipment finance and two-three months post43

shipment finance. The ability to raise (particularly pre-shipment) finance is therefore crucial: it is very common for pre-shipment finance to be arranged on the basis of a Letter of Credit. The global recession has impacted negatively on this timeframe in addition to causing significantly increased Buyer / Country (and bank) Risk, market uncertainty and exchange rate volatility. Buyer credit-risk ratings can become out-of-date (and meaningless) very quickly in this environment. The international aspect of trade also introduces the element of Currency Risk. Irelands recovery from the current recession must be export-led, which inevitably requires the opening up of new/emerging markets and the ensuing risk e.g. China and its emerging middleclass.

Types of Credits and their role in raising finance There are two main categories of Letters of Credit: Documentary and Standby. Subject to presentation of documents in full compliance with all specified terms, Letters of Credits can provide exporters with access to additional options for raising (primarily pre-shipment) finance, while at the same time offering better credit terms to the potential buyer.

Documentary Credits
The main types of Documentary Credits include:

Irrevocable: The Seller should confirm that the Letter of Credit is irrevocable before proceeding any further with negotiations i.e. that it cannot be amended without the prior consent of all parties. The next question then is confirmed or unconfirmed? Unconfirmed: With an Unconfirmed Letter of Credit, payment is guaranteed by the Importers (Issuing) Bank, conditional on the Exporters full compliance with all terms of the Letter of Credit the issue of Country Risk arises here as there is no fallback if the Importers Bank defaults. Confirmed: With a Confirmed Letter of Credit, the payment is guaranteed by the Exporters (Advising/Confirming) Bank in the event of the Importers (Issuing) Bank defaulting, conditional on the Exporter complying with all terms of the Letter of Credit. While this provides an additional level of security by virtually eliminating Country Risk, the Confirming Bank charges a fee for the
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confirmation. Revolving: Used when dealing with a supplier on a regular basis, a Revolving Letter of Credit allows automatic reinstatement at the end of a given period to mirror workflow/growing seasons etc; this form of Credit may also apply to partial shipments. Negotiable: The Issuing Bank nominates the Advising Bank to negotiate a Letter of Credit. The Advising Bank pays the agreed advance to the Beneficiary on presentation of the agreed documentation, and charges interest on the advance until reimbursed by the Issuing Bank.

Assigning / Discounting / Negotiating Letters of Credit Assignment of proceeds of Letters of Credit: This provides access to pre-shipment finance: the Exporters bank issues a Letter of Comfort to the Exporters suppliers indicating bank is authorised to make payment, from the proceeds of the Letter of Credit, directly to the suppliers. This allows suppliers to extend Pre/Post shipment Credit to the exporter.

Discounting Bills of Exchange drawn under Letters of Credit: Discounting Bills of Exchange drawn under a Letter of Credit is one of the most common methods of securing pre-shipment finance. Advances secured by this means are attractive to exporters as they are without recourse and off balance sheet. If drawn on/accepted by banks and drawn for 180 days or less they are called eligible bills, and, as a bank bill, qualify for lower (fine rate of interest) rates of discount.

Negotiation of Bills of Exchange drawn under a Letter of Credit The Exporters bank will look on such a facility as being risk-free and will advance 100% of the bill amount. This is dealt with by means of an interim Negotiation Account, which is cleared on receipt of the bill amount, with all interest/charges arising being debited to the Exporters current account.

Standby Letter of Credit (SLOC) Standby letters of Credit (SLOCs) are bank guarantees of payment, used as "payment of last resort" in the event of the Buyer defaulting (they are also called "non-performing letter of credit"). SLOCs
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offer a safeguard for the seller, by offering a financial remedy if the buyer does not honour his obligations i.e. SLOCs are payable against documents showing the Buyers failure to meet his contractual obligations.

Advantages/Disadvantages
Advantages of using Letters of Credit
Exporters know they have a (conditional) bank guarantee of payment subject to complyiance with all of the terms of the Letter of Credit Exporter can offer better credit terms as a trade-off for Importer agreeing to a Letter of Credit Buyer / Country Risk is virtually eliminated as the Exporters claim changes from being one on the Importer to one on the Issuing / Confirming Bank Transit Risk is virtually eliminated as even if goods are damaged, payment is still forthcoming as banks are concerned with documents not goods The Exporter gains certainty of the payment date and control over the payment process The collection time is minimised as the use of a Letter of Credit accelerates payment Payment is received at the Exporters own bank Improved liquidity: The Exporter can use the Credit as collateral with his suppliers, or to gain access to pre / post shipment financing Exporter can access funds immediately, in addition to existing credit lines, by discounting the Credit The Exporter agrees to be bound by the terms of the Letter of Credit. If the Credit is not issued precisely as agreed, the Exporter is freed from any obligation to ship the goods The Importer is assured that the Exporter is paid only when all terms of the Credit have been met The Importer can normally negotiate more favourable terms when agreeing to payment by Credit
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Reassurance: Buyer cannot introduce changes / new stipulations without the agreement of all parties.

Possible disadvantages of using Letters of Credit


Complexity: Documents must exactly match requirements stipulated in the Letter of Credit The inability of some Importers to open Letters of Credit may inhibit export orders Costs of Letters of Credit can potentially jeopardise sale Credits do not offer protection against the Exporter shipping inferior quality, incorrect quantity etc If an Exporter acts fraudulently, the Importers only recourse is to instigate legal proceedings The Importer must have an existing line of credit with his bank before the bank can issue him with a Letter of Credit - the amount outstanding under each Letter of Credit issued is applied against this line of credit from the date of issuance until final payment. Possibility of forgeries. The Exporter must ensure the he can comply with ALL requirements of the Letter of Credit, documentary and otherwise. It must be considered an appropriate method of payment for the circumstances / transaction.

Essential Checks When the Letter of Credit is Received It is essential to review the Credit as soon as it is received using the following checklist: Is the credit subject to UCP 600? Are the names and addresses of the Applicant and Beneficiary complete and correct? Are there any terms or conditions within the Credit that cannot be met? Ensure no Applicant Documents that are outside control of Beneficiary. If yes, immediate arrangements must be made with the Applicant for the credit to be amended Do the terms cited in the credit precisely match those in the sales contract? Also check that descriptions, names and addresses are consistent in both documents Are description, price and quantity stated in accordance with the terms of the contract? Can the goods be shipped within the stated period? Can the mode of transport specified be used?
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Can shipment be made from the port/airport specified? If part-shipments and transhipment of goods are prohibited, can the full quantity of the goods be exported on a vessel direct from the port of loading to the port of destination? Can the required documentation be obtained? Do any documents need to be legalised? Are the insurance requirements of the credit acceptable? If drawings permitted under the credit, are they payable in Ireland rather than abroad? Can goods be shipped within period specified and documents presented to the bank, within the timeframe allowed from the date of shipment, but in any case before the credit expires?

Table of year on year data of Foreign exchange Reserve of India:-

Particulars

Foreign Exchange Reserve (billion $) 125 127 160 260 245 265 274 310

2004 2005 2006 2007 2008 2009 2010 2011

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Source: SEBI Website 2010

Foreign Currency Swap Rate for Trade Financing of Goods/Services:


Sr. No Foreign Currency Rate for Exchange of one unit of foreign currency equivalent to Indian rupees (For Imported Goods) (For Exported Goods) 47.65 46.20 8.70 64.50 5.85 8.30 72.70 7.00 54.65 36.75 45.50 46.50 44.90 8.40 62.90 5.75 8.05 71.0 6.80 53.05 35.90 44.70

1 2 3 4 5 6 7 8 9 10 11

Australian Dollar Canadian Dollar Danish Kroner EURO Dollar Hong Kong Dollar Norwegian Kroner Pound Sterling Swedish Kroner Swiss France Singapore Dollar US Dollar

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CONCLUSION
In todays changing world, trade finance banks are struggling hard to re-identify their role. Although still there is an important role for traditional trade finance instruments in many geographical markets and at beginning stages of a new trading association between parties in distant locations; it is also undisputed that there is a shift towards open account in certain markets and verticals. In order to compete in the dynamic international trade scenario, today's primary trade finance banks need to offer a full suite of pre-shipment, in-transit and post shipment finance solutions. Trade Finance and Cash management activities are undoubtedly merging within banks, a reflection of the customers own activities. Only those banks that provide holistic products through a complete range of trade finance and open account management solutions not withstanding liquidity management and payment capabilities will be competent to meet the dynamic needs to customers and remain successful in the industry. Whichever be the market of operation, bringing sine qua non success to both buyers and suppliers is the elixir for survival today. The role of the government and other parties involved in trade finance will need to evolve along with the countrys economy. Underlying the functions provided by the different players is the need for a clear and effective legal environment. The commercial legal system must be transparent.

However, the best long-term solution in resolving the constraints in trade financing is to encourage the growth and development of a vibrant and competitive financial system, comprising mainly private sector players.

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BIBLIOGRAPHY
www.Celent.com www.Gtnews.com www.Tradeevolution.com

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