Post on 14-Apr-2018
transcript
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
1/15
NAME: ASAD ULLAH JATOI
TOPIC: ROLE OF BANKING IN
INTERNATIONAL BUSINESS
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
2/15
ROLE OF BANKING IN
INTERNATIONAL BUSINESS
Foreign Exchange
Corporate Finance Miscellaneous Banking Services
Role of Commercial banks in
International business
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
3/15
FOREIGN EXCHANGE
Headline Definition Explains
In order to facilitate international trade anddevelopment, commercial banks convert and tradeforeign currencies. When a company is doing business in
another country it may be paid in the currency of thatcountry.
While some of these revenues will be used to payworkers in that country and for administrative expensesuch as office rent, utilities and supplies, the company
may need to purchase goods from a neighboring countryin that country's currency, or convert cash to its nativecurrency for return to the home office.
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
4/15
FOREIGN EXCHANGE
Headline Definition Explains Definition of 'Foreign Exchange'
The exchange of one currency for another, or the
conversion of one currency into another currency.
Foreign exchange also refers to the global market
where currencies are traded virtually around-the-clock.
The term foreign exchange is usually abbreviated as
"foreign and occasionally as "FX."
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
5/15
FOREIGN EXCHANGE
Headline Definition Explains Explains 'Foreign Exchange'
Foreign exchange transactions encompass everythingfrom the conversion of currencies by a traveler at anairport kiosk to billion-dollar payments made bycorporate giants and governments for goods andservices purchased overseas.
Increasing globalization has led to a massive increasein the number of foreign exchange transactions in
recent decades. The global foreign exchange market isby far the largest financial market, with average dailyvolumes in the trillions of dollars.
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
6/15
Currency swap arrangement with Turkey comes into
force
Example
KARACHI: A three-year bilateral Currency SwapArrangement (CSA) between the State Bank of Pakistan
(SBP) and the Central Bank of the Republic of Turkey
(CBRT) has been implemented from Tuesday, amounting
to $1 billion in equivalent local currencies. This currency swap agreement and an expected
agreement with China will help increase regional trade,
he added. The SBP should actively pursue similar
agreements with Saudi Arabia and Malaysia, from wherewe import a large amount of crude and palm oil, to ease
pressure from its foreign reserves, he concluded.
The News September 5, 2012
Indonesian Rupiah to US Dollar History
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
7/15
CORPORATE FINANCE
Headline Definition Explains Companies always need to borrow money to cover purchases
of raw materials, machinery parts, inventory and/or payroll.Banks with overseas branches or affiliates can simplify theprocess of corporate finance throughout a company'sorganization by consolidating the transaction procedures,
reporting and record keeping. It is much easier for a company manager to do business in
her own language with a banker located near by who handlesher global business finance needs than it would be for her todevelop banking relationships in every country where she
does business. Her international commercial bank can alsoprovide referrals to professional service firms in othercountries, as well as arrange introductions to other companiesappropriate as customers or for strategic partnerships.
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
8/15
CORPORATE FINANCE
Headline Definition Explains Definition of 'Corporate Finance'
1) The financial activities related to running a corporation.
2) A division or department that overseas the financialactivities of a company. Corporate finance is primarilyconcerned with maximizing shareholder value through long-term and short-term financial planning and theimplementation of various strategies. Everything from capitalinvestment decisions to investment banking falls under thedomain of corporate finance.
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
9/15
CORPORATE FINANCE
Headline Definition Explains Explains 'Corporate Finance'
Among the financial activities that a corporate finance
department is involved with are capital investment decisions.
Should a proposed investment be made? How should the
company pay for it; with equity or with debt, or combination
of both? Should shareholders be offered dividends on their
investment in the company? These are just some of the
questions a corporate financial officer attempts to answer on
a consistent basis. Short-term issues include the management ofcurrent assets
and current liabilities, inventory control, investments and
other short-term financial issues. Long-term issues include
new capital purchases and investments.
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
10/15
MISCELLANEOUS BANKING SERVICES
Heading Picture Corporate checking accounts, currency specific
credit cards and lock boxes are also offered bycommercial banking to help make foreign tradepossible for a company.
Lock boxes are particularly helpful for collectingpayments from overseas customers andreporting receipts daily for cash managementpurposes. Currency-specific credit cards are also
important in eliminating the cost of crosscurrency purchasing, which normally is done atexpensive valuation levels.
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
11/15
MISCELLANEOUS BANKING SERVICES
Headline Picture
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
12/15
Role of Commercial banks in International business
Headline Definition Explains
Banking section plays important role in internationalbusiness. Today almost all major banks have offices inmajor cities around the world. Many banks haveformed collaboration with banks in other countries to
better serve their international business community. Banks form a bond of trust between buying and selling
transactions in international market. For individualbanks offer services like foreign exchange, travelers
check, electronics transfer. For businesses bank plays arole of trusty agent by offering services likeDocumentary Collection and Letter of Credit.
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
13/15
Role of Commercial banks in International business
Headline Definition Explains
Banking section plays important role in internationalbusiness. Today almost all major banks have offices inmajor cities around the world. Many banks haveformed collaboration with banks in other countries to
better serve their international business community. Banks form a bond of trust between buying and selling
transactions in international market. For individualbanks offer services like foreign exchange, travelers
check, electronics transfer. For businesses bank plays arole of trusty agent by offering services likeDocumentary Collection and Letter of Credit.
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
14/15
Role of Commercial banks in International business
Headline Definition Explains
One of the problem international businesses encountering doingbusiness internationally is lack of trust. With the help financial
devices commercial banks are able for a bond of trust between
internationals buyers and sellers. In commercial methods like
Commercial Collection and Letter of Credit banks act as agents to
handle payments as well as relevant documents. Letter of Credit is
most wide acceptable and used method of doing international
transactions. Some banks and government agencies offer export
credit insurance to businesses. In some cases, exporter has to for
go a letter of credit, in such cases banks offer export credit
insurance.
Banking sector plays vital role of catalysts in international
market. Due to technology advances in banking sector,
communication gap and delays in international business have really
narrow down a lot.
7/30/2019 ROLE OF BANKING IN INTERNATIONAL BUSINESS
15/15