To study and understand in detail about the loan facilities provided to the importers and exporters by the banks.
To identify the role of Banks in encouraging Exports by providing finance. To know the Interest rates charged by the banks for various facilities. To study the fee based services provided by banks that are included in trade finance. To see the growth of trade finance in the economy.
This project concentrates on the following areas:
* Exports Finance types, objectives .
* Imports Finance types.
* Factoring and forfeiting concepts in foreign markets.
* Role and objectives and services of EXIM bank.
* Role of Export credit guarantee corporation of India.
* Nature of financing by banks and various interest rates charged by different banks in Mumbai. * Contribution of various banks in trade finance.
The banks were reluctant to provide with information about the rates of interest. Lack of information on the part of employees. These was found in both private and nationalized banks.
Methodology is the means, techniques and frames of references by which researches approach and carry out enquiry on a particular topic. Following methodology was adopted:
NO.| CHAPTER NAME| PAGE NO|
1| INTRODUCTION | 6-7|
2| EXPORT| 8-22|
3| IMPORTS| 23-30|
4| FACTORING AND FORFEITING| 31|
5| EXIM BANK| 32-36|
6| ECGC| 37-44|
7| DIFFERENT INTEREST RATES OFFERED BY BANKS| 45-47|
8| NATURE OF FINANCING BY BANKS| 48-50|
9| RELATIONSHIP BETWEEN NUMBER OF TRANSACTIONS AND INTEREST CHARGES| 51| 10| CONTRIBUTION BY VARIOUS BANKS IN TRADE FINANCE| 52|
11.| CONCLUSION| 53-54|
12| ANNEXURES| 55-56|
Imports and Exports have been an integral part of our economy since a very long time. Trade financing is a way to import and export goods and finance their business. Trade finance is a specific topic within the financial service industry. Today trade finance is a massive billion of dollars of business. Since world trade is increasing the good and commodities are bought and sold, and banks and financial institutions should lend money to finance the purchase of these goods and commodities. Trade finance refers to a wide range of tools that determine how cash, credit, investments and other assets can be used for trade. Banks also play a central role in facilitating trade, both through the provision of finance and bonding facilities and through the establishment and management of payment mechanisms such as telegraphic transfers and documentary letters of credit (L/Cs). Amongst the intermediated trade finance products, the most commonly used for financing transactions is L/Cs, whereby the importer and exporter essentially entrust the exchange process (i.e., payment against agreed delivery) to their respective banks in order to mitigate counterparty risk. Typical trade-related financial services include letters of credit, import bills for collection, import financing, shipping guarantees, letter of credit 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 differs from other forms of credit (e.g., investment and working capital) in several ways.
Trade finance is much different than commercial lending, mortgage lending or insurance. A product is sold and shipped overseas; therefore, it takes longer to get paid. Extra time and energy is required to make sure that buyers are reliable and creditworthy. Also, foreign buyers - just like domestic buyers - prefer to delay payment until they receive and resell the goods. Due diligence and careful financial management can mean the difference between profit and loss on each transaction. All...