PROJECT REPORT ON

SEBI REGULATIONS IN CAPITAL MARKETS

IN PARTIAL FULFILLMENT OF
THE DEGREE AWARDED AT
B.COM (FINANCIAL MARKET)
SEMESTER FIVE

SUBMITTED TO UNIVERSITY OF MUMBAI

FOR THE ACADEMIC YEAR 2015-16

SUBMITTED BY
ABHISHEK NAGRAJ SHETTY
ROLL NO - 40

VIVA COLLEGE OF ARTS, COMMERCE & SCIENCE

VIRAR (WEST)
401303
DECLARATION

I hereby declare that the project, SEBI REGULATION IN CAPITAL

MARKETS is an original work prepared by me and is being submitted to
University of Mumbai in partial fulfillment of, the degree awarded at B.COM
(financial markets) for the academic year 2015-16

Place : Virar Name Abhishek Nagraj Shetty

Date : Signature :
ACKNOWLEDGEMENT

I, Mr. Abhishek Nagraj Shetty, the student of viva college, pursuing my degree
at B.COM (FINANCIAL MARKETS) would like to pay the credits, for all
those who helped me in making this project.
The first in accomplishment of this project is our principal Dr. R.D.Bhagat,
vice- principal Prof. Prajakta Paranjape ,project guide Prof. Suraj Wadhwa,
and course coordinator Prof. Vasanti Shenoy.
I would like to thank all my friends, teachers, non-teachers staff who influence
directly & indirectly in making this project to me.
 TABLE OF CONTENT

Sr. Topic Page

no. No.

1 International Banking 1

2 Role of International Commercial Banks 10

in Developing Countries

3 International Bank Accounts 13

4 International Banking Institutions 20

5 International banking regulations and privacy 25

6 Swiss Banking 27

7 State Bank of India 35

8 Advantages of International Banking 57

9 Disadvantages of International Banking 60

10 Conclusion 64

11 Webliography 65
Introduction

International Banking is a process that involves banks dealing with money and
credit between different countries across the political boundaries. It is also known
as Foreign/International Banking. In another words, International Banking
involves banking activities that cross national frontiers. It concerns the
international movement of money and offering of financial services through off
shore branching, correspondents banking, representative offices, branches and
agencies, limited branches, subsidiary banking, acquisitions and mergers with
other foreign banks. All the basic tools and concepts of domestic bank
management are relevant to international banking. However, special problems or
constraints arise in international banking not normally experience when operating
at home. In particular:

Business activities have to be transacted in foreign languages and under

foreign laws and regulations.
Information on foreign countries needed by a particular bank wishing to
operate internally may be difficult to obtain.
Control and communication systems are normally more complex for foreign
than for domestic operations.
Risk level may be higher in foreign markets.
Foreign currency transaction is necessary.
 International bank managers require a broader range of management skills
than managers who are concerned only with domestic problems.

It is more difficult to observe and monitor trends and activities in foreign

countries.
Larger amounts of important work might have to be left to intermediaries,
consultants and advisers.
International banking deals with all banking transactions-private and
governmental- of two or more countries. Private Banks undertake such
transactions for profit; governments may be for provision of various services.
Reasons for Engaging in International Banking

Banks undertake international operations in order to expand their revenue/profit

base, acquire resources from foreign countries, or diversify their activities.
Specific reasons expanding operations abroad include the saturation of domestic
market; discovery of lucrative opportunities in other countries; desire to expand
volume of operations in order to obtain economy of scale. Further motives for
operating internationally are as follows:

· Commercial risk can be spread across several countries

· Facilitation of international businesses and trade

· Involvement in international banking can facilitate experience curve

effect

· Economies of scope might become available

· Reduce cost of service delivery

· Recognition and reputation

History of International Bank

It is an unfortunate fact that Europeans have always been subjected to

relatively heavy tax burdens. This was as true on the British Isles as it was on the
continent. Faced with the prospect of watching their hard earned assets and wealth
diminish with every out-reach of the tax collector‟s hand, they were ripe for a
solution. And a solution came--the small, island nation state known as the
Channel Islands convinced these frustrated depositors that deposits placed in its
banks could be free from scrutiny and hence the heavy-handed taxation burden.
The Euros were convinced--and soon this service thrived, with other small
jurisdictions becoming savvy to this foreign capital-attracting status and they
began to revamp their banking institutions, adopting sound, pragmatic banking
rules and regulations that eased the potential concerns of investors and depositors.
The International bank was off to a running start!

And soon the term “International banking” became synonymous with any smaller,
haven jurisdiction that offered safe, secure, confidential banking with practical
regulations. Soon the rest of the world was “in the know”, and began to look at
these havens as viable solutions to their needs. Americans, Africans, Asians, etc.,
found these international bank accounts quite useful for a myriad of reasons.
Unlike their banks at home, these international banks were not regularly subjected
to political turmoil or economic strife, and were most welcome for their stability
and asset protection benefits.
In the years since they have come into greater use and thus more visible,
international banking accounts have been unfairly portrayed by the media and by
the larger jurisdictions as the stomping grounds of the criminal underground--a
veritable haven for their illicitly-obtained assets and funds, or the choice locales
for their money-laundering schemes. Money-wise investors and depositors have
long known that these prejudices could not be further from the truth. They know
that international banks can be remarkably effective havens for assets and funds in
need of safe, secure, confidential keeping. They know that these banks can
safeguard their funds from the perils of civil, economic, or political strife in their
home countries. Today, international banks continue to keep their end of the
bargain and continue to provide a safe, confidential haven for those seeking to
safeguard their assets and funds from the perils of undue regulation and taxation.

Many a discriminating depositor has benefited from the safe, confidential, and
low taxation environment that an International banking account has to offer.
While it is important to assess your goals and discuss these with a competent,
experienced agent before leaping into un-chartered waters, there are many
unquestionable benefits provided by establishing an international bank account.
Their reputation among depositors and investors for providing a viable banking
location featuring protection from liability and confidentiality is growing, and
international banks will continue with this hard-earned reputation for asset
protection, tax reduction, depending on your jurisdiction, and superb
confidentiality of deposits.
Modes of International Banking

There are a lot of available methods for entry into international banking
Operations. This include; Correspondent Banks, Representative Offices, Branches
and Agencies, Limited Branches, Subsidiary Banks, Bank Acquisitions and Bank
Mergers.

Correspondent Banks

In order to adequately provide needed international banking services, commercial

banks establish a network of foreign correspondent banks to supplement their own
facilities worldwide. Frequently, the expense of establishing a related banking
entity, such as overseas branch, is not warranted due to the low volume of
transactions concluded for the banks‟ international clients. Therefore, to provide
services while keeping costs minimal, account relationships are developed with
foreign banks to facilitate international payment mechanisms between the
institutions. Deposit accounts are opened at the correspondent banks, which
enable them to make direct payments overseas by means of debiting and crediting
the respective accounts with settlement to be made at a later date. Such accounts
are termed due to (or nostro) accounts and due from (or vostro) accounts on the
bank‟s books. In addition to payment accounts, correspondent bank relationship
facilitates transactions such as letters of credit, documentary collection, foreign
exchange services, and loan services for a bank‟s international clients. Thus, the
correspondent bank relationship gives
the domestic bank a presence in overseas markets, which permits international
transactions to be concluded.

Representative Offices

A representative‟s office is both the most commonly used and the most limited in
function of all foreign banking operating internationally. The international
representative office functions mainly as liaison between correspondent banks and
the parent bank. Representative offices are usually prohibited from engaging in
general banking activities, although they may receive checks for forwarding to the
home office, solicit loans for the home office, and develop customer relations.
However, they may not receive deposits or make loans. Generally, representative
offices serve as the preliminary step to other forms of banking activity since they
are a relatively inexpensive means of establishing a presence in a new location.

Branches and Agencies

Depending upon the extent of services that the institution wishes to offer, either a
branch or an agency may be established. The basic definition of “branch” and
“agency” may be found in the U.S. International Banking Act of 1978. A branch
is any office of a foreign bank at which deposits are received. On the other hand,
an agency is any office at which deposits may not be accepted from citizens or
residents of the U.S. if they are not engaged in international activities, but at
which credit balance may be maintained. Thus, the principal difference between
branches and agencies is that agencies cannot accept deposits for U.S citizens or
residents and can only maintain credit balances related to their international
activities. In addition, agencies cannot engage in either fiduciary or investment
advisory activities with the exception of acting as custodians for individual
customers. Agencies do engage in a variety of activities to finance international
trade, such as the handling of letters of credit. Both agencies and branches are
principally active in international market.

As extensions of the foreign parent bank, branches are generally subject to more
stringent state regulation than agencies due to the more extensive nature of their
operations. The powers of a federal branch are similar in scope of those of a
national bank; these branches possess full deposit-taking, loan, and commercial
banking powers in addition to other trust powers. They are also subject to duties,
restrictions, and limitations similar to those of a national bank organized in the
same area.

Limited Branches

In pursuant to the International Banking Activities, an additional means by which

a foreign bank may participate in foreign banking
market is through a so-called limited federal branch. Basically, this is an office
chartered by the Comptroller of the Currency subject to the condition that the
foreign bank enter into an agreement with the country‟s apex bank or regulatory
authorities restricting the branch‟s deposit-taking activities to those permitted by
law. Since this office may be established outside the foreign bank‟s home state,
they are restricted to deposit taking activities of an international nature.

Subsidiary Banks

Foreign banks gain control of subsidiary banks by establishing new institutions or

by acquiring existing domestic banking institutions and these subsidiaries
generally may engage in a full line of banking activities. With respect to the
designation of a foreign bank subsidiary, the term “bank” and subsidiary” has the
same meaning as those provides by section 2 of the Bank Holding Company Act
(BHCA). A subsidiary bank of a foreign bank may be either a national or a state
bank. State banks are governed by the laws of the state in which they are located,
while national banks are chartered by the Comptroller of the Currency under the
National Bank Act. In United States for example, although foreign ownership is
not restricted, non-U.S. citizens may not form a majority of a national bank‟s
Board of Directors.

Bank Acquisitions
Firms willing to gained access to international banking operations may also adopt
the acquisition approach by acquiring indigenous or domestic banks. However,
the acquisition process is guided by stringent conditions. For instance, Under the
United States Bank Holding Company Act, the Federal Reserve Board must
approve the acquisition of direct or indirect control of a U.S. bank by a domestic
or foreign bank holding company. Various factors are considered in the approval
or denial of a BHC application. These include analysis of the competitive effect
of the acquisition, the acquirer‟s financial and managerial resources, and future
prospects of the bank being acquired, community needs, and the applicant‟s
organizational structure.

Bank Mergers

Bank mergers is another option that is opened to those who whishes to provide
international banking services in foreign countries. There are several reasons for a
foreign bank merging with a domestic bank. For example, this provides an
expedient and economical means of expanding into new markets; it becomes
easier to establish an identity on a state-wide basis; and the bank is able to
continue smooth operations with experienced management and personnel.
 2. Role of International Commercial Banks in

Developing Countries

While in foreign developing countries, international banks besides performing the

usual commercial banking functions play an effective role in their economic
development. These roles include the followings.

Mobilization of Savings for Capital Formation

International commercial banks help in overcoming savings through a network of

branch banking. People in developing countries have low incomes but the banks
induce them to save by introducing varieties of deposit scheme to suit the needs of
individual depositors. They also mobilize idle savings of the few rich. By
mobilizing savings, the banks channel them into productive investments. Thus,
they help in capital formation of a developing country.

Financing Industry

The international commercial banks finance the industrial sector. They provide
short time, medium-term and long-term loans to industries. Besides, they
underwrite the shares and debentures of large scale industries. Thus, they not only
provide finance for industry but also help in developing the capital market, which
is underdeveloped in such countries.
Financing Trade

The international commercial banks help in financing both internal and external
trades. The banks provide loans to retailers and wholesalers to stock which they
deal. They also help in the movement goods from one place to another by
providing all types of facilities such as discounting and accepting bills of
exchange. Moreover, they finance both exports and imports of developing
countries by providing exchange facilities to importers and exporters.

Financing Agriculture

The international commercial banks help the large agricultural sector in

developing countries in a number of ways. They provide loans to traders in
agricultural commodities. They provide finance directly to agriculturists for the
marketing of the modernization and mechanization of their farms, for providing
irrigation facilities and for developing lands. Help in Monetary Policy: The
international commercial banks help in economic development of a country by
faithfully following the monetary policy of the country‟s central bank. In fact, the
central bank depends upon the commercial banks for the success of its monetary
management in keeping with requirement of a developing economy.
Features of international banking

* International banks provide access to politically and economically stable

jurisdictions. This may be an advantage for that resident in areas where there is
a risk of political turmoil who fear their assets may be frozen, seized or
disappear.

* Some international banks may operate with a lower cost base and can
provide higher interest rates than the legal rate in the home country due to
lower overheads and a lack of government intervention.

* Interest is generally paid by international banks without tax deducted. This is

an advantage to individuals who do not pay tax on worldwide income, or who
do not pay tax until the tax return is agreed, or who feel that they can illegally
evade tax by hiding the interest income.

* Some international banks offer banking services that may not be available
from domestic banks such as anonymous bank accounts, higher or lower rate
loans based on risk and investment opportunities not available elsewhere.

* International banking is often linked to other structures, such as

international companies, trusts or foundations, which may have specific tax
advantages for some individuals.
 3. International Bank Account

An Offshore Bank Account

As with any "bank", onshore or offshore, there is one primary deposit account that
is managed by software. It's been hundreds of years since your local bank had a
space reserved on the shelf for 'your money'. Even the largest U.S. national bank
has a primary deposit account and everything is computerized. The same goes for
your offshore bank, you have your financial institution and a deposit account that
is computer managed. We assist you with acquiring and configuration of your
online banking and account management software when you start your offshore
bank. Your bank offshore account is set up and is the transaction center of your
finance company. Depositors, deposit, spend and wire money in and out of the
account through your online system.

How Offshore Bank Accounts Work

When you start an offshore bank, your account will work the same way all bank
accounts do. Below is a diagram showing how your offshore bank account works.
Receiving / Sending Money with Your Offshore Bank

Your primary deposit account with be with a much larger offshore bank in a
jurisdiction that you choose. Just as your local bank, having a single account with
a larger bank, here we are replicating banking infrastructure on a smaller scale for
your offshore bank. With few clients, or rather, low client activity, your single
deposit account can very well be the primary transaction hub. However once you
start increasing the number of depositors and the amount of inbound/outbound
banking activity, it might be necessary to start performing bulk transactions
to/from your offshore bank. This is done through a holding company that has
several offshore bank accounts that are used to perform larger transaction volume.
In the most cases when you start an offshore bank, your transaction frequency will
not require the use of holding companies to manage bulk transfers.

Offshore Bank Accounting

Your offshore bank will be fully managed by the industry leading banking
software. Each client will have secure access to their account and just like all
other types of financial recording, computer systems will automatically account
for everything. Initial deposits will be recorded by client identification and each
transaction will be identified by secure ID and related to the client account. This
is how the actual banking takes place. Client accounts are merely a long list of
transactions that control the access to funds in the master bank deposit account, in
this case, the offshore bank account for your finance company.
International Bank Account Setup

Most international banks will require an eligible introducer. This is someone who
already has a relationship with the bank. InternationalCompany.com is an eligible
introducer for many financial institutions throughout the world.

Common items that may be necessary when setting up international bank

accounts:

Application forms with original signatures Valid

passport copy or driver's license

Banking references

Corporate legal documents

International banks have different requirements. Once the international bank

account has been processed, the confirmation is sent typically via email. At that
time the bank will wait for a wire transfer of initial deposit in order to activate
your new account. Some expenses include opening fee, additional banking cards
(if applicable), courier and other expenses. Again, these will vary between the
international banking account providers.

Once the bank account is active, you typically receive online access to create your
user account and password. You may also receive items such as an easy-to-use
digital signature device, test key table and other enabling tools to access your
account balance and perform transactions quickly, easily, privately and securely.
InternationalCompany.com has helped thousands of customers worldwide set up
international bank accounts and establishes private financial accounts and asset
protection plans. A trusted provider that has relationships with the right
international jurisdictions should conduct these services with you.

International banking service

Once your international bank account has been established, you will enjoy the
luxury of numerous international banking services including:

International platinum debit credit cards, allowing you access to your

money from over 20,000 ATM machines located across the world. Credit
cards can be issued under your international IBC name, affording you
complete privacy when accessing your funds.

Internet access to your account, ability to verify account balances, transfer

funds and make stock purchases. This will enable you to conduct all your
banking affairs from the comfort of your home.
International trading / brokerage accounts for online trading of stocks and
bonds in global International markets.
Corporate checks can be issued in the name of your IBC name with your
IBC name printed on each check operating the same as domestic onshore
checking account.
International Bank Accounts and Security

Banking privacy and security is a major concern. It is a priority that you and your
money are safe. InternationalCompany.com regularly recommends banking
institutions that participate in a central banking system. The system is highly
regulated and implements stringent accounting practices, which provides a
stronger infrastructure and independent oversight for local international banks.
Many institutions provide secure and private international banking accounts to
American and foreign corporations and local government officials. The
institutions provide employment and support the local economy. Because of the
economy's dependence on the financial services sector, the privacy and financial
safety laws are a longstanding and stable. It is critical that all prospective clients
make the right choice of jurisdiction. We perform extensive research on many of
the top international bank account providers and are glad to provide helpful
information to help you make the proper choice.

International banks in some countries participate in mandated financial protection

insurance systems. Security and privacy is taken very seriously. International
banking security and privacy is statutorily enforced, meaning, it's the law, limiting
any information whatsoever to be shared with a third party, including foreign
governments. Naturally, laws permit international bank account providers to share
information in cases of severe criminal acts or terrorism. Banking privacy is not
taken lightly. In Switzerland, for example, any employee violating a customer's
privacy is punished severely by law including stiff fines and jail time.
Here are some jurisdictions that are private banking financial centers:

Antigua
Bahamas
Barbados
Channel Islands (Jersey and Guernsey)
Dominica

Gibraltar

Hong Kong
Isle of Man

Labuan, Malaysia
Liechtenstein
Montserrat
Nauru
Nevis

Singapore
Switzerland

Turks and Caicos Islands

 4. International Banking Institutions

Recommended International Banking Jurisdictions

International Banking Jurisdictions Listed in order: here is a list of the

international banking jurisdictions are the most advantageous for providing
financial safety, privacy, convenience and return on investment.

For initial deposits of over $200,000:

Switzerland
Luxembourg
Lichtenstein
Isle of Man

InternationalCompany.com specializes in bank accounts in Switzerland; please

visit our entire section on Swiss Banking.

For deposits under $200,000, here are the recommended

jurisdictions:

Caribbean (many countries, call for details) Latvia

Banking within European Union Jurisdictions

While the scrutiny may be lower and the confidentiality and privacy higher in the
lower tax haven jurisdictions, potential account holders should note that an
agreement between European Union members (and those falling under its purview
or jurisdiction) known as the European Union Savings Tax Directive 2005 may
adversely affect their privacy if they are subject to it--The EU Tax Directive may
limit the confidentiality and privacy of certain accounts held in international
banks if these banks happen to be situated in a jurisdiction subject to it.

As of this writing, the member countries of the European Union are as follows:
Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France,
Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta,
Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the United
Kingdom

Any jurisdictions that is a commonwealth, governed by, or a consigner of these

nations and their laws is subject to the EU Tax Directive. Others may also
willingly comply, such as Switzerland and the United States.

Stated simply, the EU Savings Tax Directive 2005 is an agreement between the
EU Member States that allows for the exchange of financial or transactional
information. This agreement is known as the “automatic exchange of information
option” and is the hallmark of the Directive.
The International jurisdictions that are not subject to EU laws or directives do not
participate in this agreement and thusly afford depositors of those jurisdictions an
increased level of confidentiality.

Other International Bank Account Jurisdictions

There are many other international jurisdictions that provide many of the same
benefits that the EU versions do, but not bound to the EU Directive. This can be
an extremely important consideration for an investor or depositor looking for a
specific benefit for his funds that just cannot be met by a jurisdiction subject to
EU Directive reporting. Though this is an important consideration, it should not
automatically be assumed that it is always most advantageous to bank in a non-
EU Directive adhering jurisdiction. If a potential depositor meets the initial
deposit amount requirements, has his banking goals in alignment with his bank
and its jurisdiction, then an established international locations such as Switzerland
can be better suited to his needs. However, there are very competent jurisdictions
not subject to the EU Tax Directive with initial deposit requirements vastly lower
than those of the “established” jurisdictions. For example, some jurisdictions like
Panama and Belize can require as little as $500 or $1000 US to start.

Geography

Before the internet explosion of the mid-90, account holders and potential
depositors in international banks would literally have to walk into a bank (or send
an authorized representative to do so) in order to establish an account, transact
funds, or formalize agreements. The old
“lock box and key” method reigned supreme. However, since the mid-90‟s, there
has been a veritable explosion in services heretofore unimaginable in many
service industries worldwide, and this of course includes international banking.
Gone are the days of having to actually walk into the bank--now, most of the
services are a keystroke away, with world wide web access to accounts and funds.
With credit card like debit cards and the advent of electronic funds transfers,
virtual signatures, and the virtually limitless access to the internet, international
banking has been revolutionized into a simpler solution for many individuals and
corporations. No matter if your bank is in the Grand Canyon state or Grand
Cayman, most of the features offered by banks are just a mouse click away.
Assuming that all of the precautions are met and adhered to, the confidentiality of
any deposit or investment is as secure as it‟s ever been.

Additional Banking Information

International banking accounts operate in the same manner as any domestic bank
account. The client receives a bank account debit card or credit card and online
access, wire transfer access and can perform the typical bank account
transactions, plus more. International banks offer many of the same conveniences
and customer service. When selecting your institution it is important that you
choose the provider that is right for your scenario.

Many international banking institutions will allow you to set up a bank account
for as little as a $2500 initial deposit, and in other cases, much less. All of the
recommended international bank account providers are highly regulated and
adhere to strict international
privacy laws. Private accounts typically require a higher initial deposit. However
those are negotiable depending on the overall account goals and projections. Any
provider of international banking accounts that is recommended by
InternationalCompany.com is accessible via phone, fax and email and attentive to
your needs, yet very discreet.

Your international bank account balance will earn interest, usually free of local
taxation in the bank's jurisdiction. Many countries, including the US, tax
worldwide income. The interest rates are usually higher and the fees are
competitive. Many fortune 500 companies, including oil companies take
advantage of international banking. Some of the more popular tax haven
jurisdictions have hundreds of first-rate banks from which to choose. Financial
institutions in private jurisdictions do not report customer account information to
any foreign governments, or theirs, so it is up to the account holder to do so.
InternationalCompany.com establishes thousands of business structures, bank
accounts, privacy and protection plans worldwide. Protecting and growing the
finances of our clients are our biggest concerns.

International Banking institutions offer a wide variety of benefits, when it comes

to privacy Switzerland is hard to beat.
 5. International banking regulations and privacy

Our international bank accounts are situated in countries with strict confidentiality
enforced by law. No information can be given to outside parties, including foreign
governments and tax authorities, regarding your banking activities. There are no
taxes rendered on accounts. Tax avoidance not considered a crime in these
countries. There are no statures in relation to taxation, making it is impossible for
outside litigation to be brought against you and your bank account. Banks will not
even acknowledge the presence of your account.

The international banking sector is regulated far more strictly than banks at home.
Each international bank must hold greater reserves than their domestic
counterparts. All banking deposits are fully insured. As an extra safety measure
all international institutions are rigorously audited by central banks of each
jurisdiction, safeguarding all banking deposits and the international banking
system at large

Where Should an International Bank Account be Established?

It is important that the proper jurisdiction be selected when deciding which

jurisdiction to use as an international banking jurisdiction. The majority of the
international jurisdictions have prudent, sound regulations in place geared towards
safeguarding the deposits and maintaining their confidentiality. However, some
weigh their benefits in taxation, while others in confidentiality, and so forth.
Though they all offer a comparatively confidential and secure environment, it
bears consideration to outline what the banking goals are and then choose the
jurisdiction accordingly. A small minority of the international
jurisdictions does a poor job of managing and regulating their banking
institutions, but the informed investor or advisor will deem these as unsuitable for
themselves or their clients. Further, these poorly organized and run jurisdictions
are often manipulated by illicit depositors and hence prove easy targets of the
FATF (Financial Action Task Force) looking for money laundering or other
criminal activity.
 6. STATE BANK OF INDIA

Profile

Spreading its arms around the world, the SBI‟s International Banking Group
delivers the full range of cross-border finance solutions through its four wings –
the Domestic division, the Foreign Offices division, the Foreign Department and
the International Services division.

The Domestic wing provides services like merchant banking, shipping finance
and project export finance. The Foreign Offices wing offers the entire range of
international trade and industrial finance products, while the Kolkata-based
Foreign Department undertakes treasury and currency operations.

The International Services division renders specialized services like

correspondent banking, global link services and country and bank risk exposure
monitoring. Being India‟s largest and most trusted commercial bank, the SBI
offers you a network of relationships unmatched in strength and span by any other
Indian financial entity.

The bank has a network of 131 offices/branches

in 32countries spanning all time zones. The SBI‟s international

presence is supplemented by a group of Overseas and NRI branches in India and
correspondent links with over 522 leading banks of the
world. SBI‟s international joint ventures and subsidiaries enhance its global
stature.

The bank has carved a niche for itself in Euro land with branches strategically
located in Paris, Frankfurt and Antwerp. Indian banks and corporate are able to
avail single-window Euro services from SBI Frankfurt.

These strengths are reinforced by a dedicated and highly skilled team of

professionals deployed by the bank in each specific segment.

TRADE FINANCE

Introduction

SBI Understand there is much stake involved in Export Import business Global
economic, political situations, anything and every thing that affects you and your
business. SBI offers the trusted financial solution to all your complex Trade
finance related fund needs (both in Indian rupee and foreign currencies).

The gamut of our services include credit for both pre shipment and post shipment
activities.

EXPORT AVENUE

RUPEE EXPORT CREDIT (PRE-SHIPMENT AND POST-

SHIPMENT)
SBI understands and values your Pre shipment and post shipment
commitments…… our trade finance cell offers both Pre shipment and Post
shipment credit in rupee denominated terms to exporters having firm export
orders or confirmed letters of credit. Avail Rupee export credit at most
competitive rates at 449 branches.

Pre-Shipment Export Credit

SBI offers Pre-shipment Credit (Packing Credit) to the exporters, for financing
purchase, processing, manufacturing or packing of goods prior to shipment.

This would mean any loan or advance extended to you by SBI on the basis of:

a) Letter of Credit opened in your favor or in favor of some other person,

by an overseas buyer;
b) a confirmed and irrevocable order for the export of goods from India;
c) any other evidence of an order or export from India having been placed on
the exporter or some other person, unless lodgement of export order or Letter
of Credit with the bank has been waived.

Packing Credit is granted for a period depending upon the circumstances of the
individual case, such as the time required for procuring, manufacturing or
processing (where necessary) and shipping the relative goods. Packing credit is
released in one lump sum or in stages, as per the requirement for executing the
orders/LC.
The pre-shipment / packing credit granted has to be liquidated out of the
proceeds of the bill dawn for the exported commodities, once the bill is
purchased/discounted etc., thereby converting pre-shipment credit into post-
shipment credit.

Post-Shipment Export Credit

SBI extend Post-shipment Credit that is any loan / advance granted or any other
credit provided by SBI for purposes such as export of goods from India.

It runs from the date of extending credit, after shipment of goods to the date of
realization of export proceeds and includes any loan / advance granted on the
security of any duty drawback allowed by the Govt. from time to time. Post-
shipment credit has to be liquidated by the proceeds of export bills received
from abroad in respect of goods exported.

The exporter has the following options at post-shipment stage:

i. To get export bills purchased /discounted / negotiated;

ii. To get advances against bills for collection;

iii. To receive advances against duty drawback receivable from Govt.

The exporter has the option to avail of pre-shipment and post-

shipment credit either in rupee or in foreign currency. However, if the pre-
shipment credit has been availed in foreign currency, the post-shipment credit has
necessarily to be under EBR Scheme since foreign currency pre-shipment credit
has to be liquidated in foreign currency. The details of pre-shipment and post-
shipment credit in foreign currency are mentioned below.

PRE-SHIPMENT CREDIT IN FOREIGN CURRENCY (PCFC)

SBI„s Pre-shipment Credit in Foreign Currency (PCFC) is just what you need,
when you are looking for funds in foreign currency. Avail it to meet your
manufacturing, processing and packing fund requirements at international interest
rates. Just not this, you can also cover the cost of both domestic as well as
imported inputs of SBI‟s PCFC gives you choice of four different currencies in
which to operate the scheme - the US Dollar, Pound Sterling, Euro and the
Japanese Yen. SBI has 64 branches across the country handling the PCFC facility
for your exclusive convenience.

Our Foreign Department, based at Kolkata, is the nodal centre for raising and
deploying international and onshore funds for lending under PCFC.
EXPORT BILL REDISCOUNTING

Introduction

Avail SBI's export bill rediscounting (EBR) for post shipment finance at
international rates of interest. PCFC will be liquidated with the discounting of
bills under EBR scheme.

The foreign currency of the bill will be applied to PCFC in foreign currency and if
there is any surplus of the bill after adjusting to PCFC, the surplus portion will be
converted into Indian rupees and credited to the exporter's CC or Current account.
The EBR advance which is a foreign currency loan will be eventually closed
when the overseas buyer pays the bill and the export proceeds are realized. Take
your pick from any of the four designated currencies: US Dollar, Pound Sterling,
Euro and the Japanese Yen.

Contact any of our 64 forex-intensive branches handling EBR.

IMPORT AVENUE

Letter of Credit

Leverage SBI's reputation and goodwill in the global market! Avail of SBI's
Letters of Credit for your purchases in international and domestic trading
operations.
SBI offers Letters of Credit to facilitate purchase of goods in operations.
international trading Backed by SBI's strong reputation, build better trust in
you will be able to trade and forge business
relationships faster.

The bank's vast network of branches and correspondent banks enables your
enterprise to sustain a seamless flow of business on a wide platform.

Further, the bank's informed trade finance crew can provide you with

sophisticated credit and trade information, and market knowledge,

helping you to extract more value From business.

Since the Bank establishing the Letter of Credit undertakes the responsibility of
honoring the drafts drawn there under, the ability of the importer to meet its
obligation, the integrity of the exporter, the nature of goods, besides observance
of Exchange Control regulations etc. are considered.

Foreign Currency import credit

This is ideal for both Indian importers and their foreign suppliers. SBI offers
credit to foreign suppliers of Indian importers by purchasing the import bill for its
full value through one of the bank's overseas offices. The tenor of this form of
supplier's credit does not exceed 180 days. The supplier gets 100 per cent of the
invoice value immediately, making his deal practically a cash sale.
Importers get credit for a maximum period of 180 days, enabling them to manage
their liquidity better. Further, their interest payables could be lower since
international interest rates are currently lower than domestic rates.

These facilities are useful for import by sellers in the domestic market as well as
export-related import.

Suppliers Credit

Suppliers' Credit essentially represents credit sales effected by the supplier on the
basis of accepted bills or promissory notes with or without a collateral security.
Any credit facility arranged with recourse to the supplier for financing up to 180
days import into India which is not backed up in the form of any
letter/document/guarantee/agreement, etc. issued by the LC opening banks or in
any other manner except normal routine commercial transactions like an LC, can
be treated as a suppliers' credit. The underlying commercial contract between the
exporter and the Indian importer should provide for drawing of usance drafts with
an upper cap of 180 days on the usance period. When documents under such
usance LCs are discounted by our foreign offices and other banks, it is not based
on any mandate/letter of comfort/guarantee given by the LC opening bank in
India either on their own behalf or at the instance of the importer, i.e. the buyer of
goods. Indian importers are free to enjoy a credit period of 180 days on their
imports from the date of shipment provided interest for the period does not exceed
the prime rate for the currency in which the goods are invoiced.
With a view to simplifying the procedure for imports into India, RBI, in
September 2002, decided that the Authorized dealers may approve proposals
received in form ECB for short term credit for financing, by way of Suppliers'
Credit, of import of goods into India, provided.

The credit is being extended for a period of less than 3 years

The amount of credit does not exceed USD 20 million (approx. Rs. 94 crores
now) per import transaction.

The 'all-in-cost' per annum, payable for the credit does not exceed 6 months
LIBOR + 200 basis points.

CORRESPONDENT BANKING

The Correspondent Banking Division develops and maintains relationship with

Banks and Financial Institutions across the Globe. This network Correspondent
Banks forms the foundation for all international operations of SBI.

SBI has correspondent banking relations with around 522 leading banks
worldwide. The bank has deployed a dedicated Correspondent Relations section
to attend exclusively to create, nurture, cultivate and continue relationship in
correspondent banking.

The Correspondent Relations section helps SBI‟s correspondents market and

distributes their products for various applications of the bank and its Customers.
Meanwhile, the bank‟s Foreign Department, based in Kolkata (Calcutta), handles
all operational aspects of correspondent banking, including all matters pertaining
to the exchange of test keys and swift authenticator keys (SAK), appointment of
correspondents, maintenance and reconciliation of Nostro accounts, and treasury
management.

All trade and retail transactions are handled by the vast net work of SBI's
branches. However, only designated branches handle International Banking
activities. Designated branches enjoy delegated authority to receive/pay through
the NOSTRO accounts maintained by the Foreign Department.

The Rupee Vostro accounts of International Banks and Institutions are maintained
and serviced at SBI‟s International Services branch (ISBM) at Mumbai and at
Overseas Branches at Kolkata (Calcutta), Chennai, Cochin, Bangalore and New
Delhi. ACU accounts are also serviced at the overseas branches.

Products and Services

· Creating, nurturing, cultivating and maintaining SBI‟s network of over 522

correspondent relationships.

· Providing support to the correspondents in marketing and distribution of

their products for various applications of the SBI and its clients.

· Complaint Resolution of correspondents.

 · Setting up Standard Settlement Instructions.

SWIFT Channel of SBI (In India)

· Swift Linked Offices

( 146 In Number at Various Locations )

· SWIFT Authenticator Keys are centralized at SOC (Prior

Clearance of FD is required for exchange of SAKs).

· Although FD is SWIFT Linked, messages regarding fund transfers,

Letters of Credit, Guarantees, etc., should not be sent to them. These
should be sent to the branches concerned giving Branch Code No., Name
of the Branch, Name of Beneficiary and Account No.

· Use correct BIC Number of the branch for which the message is
meant (list appended).

· Draw Payment Orders only in currencies mentioned in the

schedule of Agency Arrangements (as agreed upon between SBI and
correspondents).

· Payment Instructions containing all relevant details should be sent

to the branch concerned for execution of the payment order with specific
details as to where cover funds have been provided.

· Cover funds for remittances should be provided to the respective

Nostro account with full details viz., branch name, code number, name of
the beneficiary etc., in accordance with
 the Agency Arrangements. Messages for paying funds into our Nostro
Account without any authenticated payment instruction directly to the
drawee branch result in delay, inconvenience to beneficiary and
embarrassment to remitter. Branches may be advised to get full details
from remitter before sending remittances (please refer to Standard
Settlement Instructions).

· Payments relating to our Associates/ Subsidiaries may not be sent to our

branches as they maintain their own nostro accounts and have their own
arrangements for such payments

MERCHANT BANKING

SBI‟s Merchant Banking Group is strongly positioned to offer perfect financial

solutions to your business. We specialize in the arrangement of various forms of
Foreign Currency Credits for Corporate.

We provide the resources, convenience and services to meet your needs by

arranging Foreign Currency credits through:

• Commercial loans

• Syndicated loans

• Lines of Credit from Foreign Banks and Financial Institutions

• FCNR loans

• Loans from Export Credit Agencies

• Financing of Imports.
We are internationally the most Preferred Bank by Export Credit Agencies for
Guarantees in case of the Indian Clients or Projects.

SBI being an Indian entity has no India exposure ceiling. Our Primary focus is On
Indian Clients. SBI‟s seasoned Team of professionals provides you with
Insightful credit Information and helps you Maximize the Value from the
transaction.

SBI’s PRODUCTS AND SERVICES

1] Arranging External Commercial Borrowings (ECB)

2] Arranging and participating in international loan syndication 3] Loans

backed by Export Credit Agencies
4] Foreign currency loans under the FCNR (B) scheme 5]
Import Finance for Indian corporate

PROJECT EXPORT FINANCE

State Bank of India is an active participant in the area of finance of Project export
activities. These activities will mainly involve financing the fund based and non
fund based requirements of the project exporters.

• Export of engineering goods on deferred payment terms

• Execution of turnkey projects abroad

• Execution of overseas civil construction contracts abroad
• Exports of services are the contracts for export of consultancy, technical
and other services.

Project export contracts are generally of high value and exporters undertaking
them are required to offer competitive terms to be able to secure orders from
foreign buyers in the face of stiff international competition.

Our vast network of branches spread all over the country which are authorized to
handle trade related transactions,substantial presence overseas with
branches/offices in all major commercial centers of the world covering all time
zones and our strong network of correspondent relationship with top ranking
banks in several countries adds to our competitive strengths to facilitate and meet
various requirements of project exporters. More over we also enjoy the
comprehensive credentials in International banking community.

REGULATORY FRAMEWORK

Exchange Control Regulations:

The exchange control regulations relating to Project and Service Exports revised
from time to time are contained in the Memorandum of Instructions on Project
and Service Exports (PEM) issued by Reserve Bank of India. The directions
contained in the PEM are
issued under Section 10(4) and Section 11(1) of the Foreign Exchange
Management Act, 1999 (42 of 1999)

Authority structure for clearance of Project Export proposals:

Reserve Bank of India has laid down the authority structure for clearance of
project export proposals based on the value of contract:

· Contract value up to USD 100 mio– Authorized Dealer

· Contract value above USD 100 mio – Working Group

Thus proposals with contract value up to USD 100 mio can be cleared at State
Bank of India and proposals with contract value above USD 100 mio, the
reference to Working Group is done by SBI as the Sponsoring Bank on behalf of
our customer.

EXPORTER GOLD CARD

State Bank of India has launched "SBI EXPORTERS GOLD CARD SCHEME"
to meet the working capital needs of exporters with good track record and credit
worthiness, subject to their fulfilling the specified eligibility norms. The salient
features of the scheme are as under:
Assessment norms have been simplified and for units with export turnover up to
Rs. 100 crore simplified assessment in terms of Nayak Committee norms will be
made within specified time norm not
exceeding 25 days in case of new sanctions and 15 days in case of renewals.

Further relaxations, subject to certain conditions, in the form of automatic renewal

of limits after the three year tenure as also simplified method for effecting annual
step-up in limits is being examined by the Bank.

sStandby limit of 20% will be sanctioned to all the SBI Exporters Gold Card
holders over and above the sanctioned limit to meet credit demands arising out of
receipt of sudden orders.

Limits sanctioned will be valid for a period of three years.

Interest will be charged at concessional rate from the Gold Card holders. The
present rate for Packing Credit up to 180 days and Post-shipment credit up to 365
days would be 3.75% below the Bank's benchmark Prime Lending Rate. Also,
SBI Gold Card holders will be given preference for grant of packing credit in
foreign currency.

International Credit/Debit cards and Internet Banking facilities shall be extended

to the SBI Exporters Gold Card holders on priority basis.

TREASURY

Profile

India's largest bank is also home to the country's biggest and most powerful
Treasury, contributing to a major chunk of the total turnover in the money and
forex markets. Through a network of state-of-the-art
dealing rooms in India and abroad, backed by the assured expertise of informed
professionals, the SBI extends round-the-clock support to clients in managing
their forex and interest rate exposures.

SBI's relationships with over 700 correspondent banks are also leveraged in
extracting maximum value from treasury operations. SBI's treasury operations are
channeled through the Rupee Treasury, the Forex Treasury and the Treasury
Management Group.

The Rupee Treasury deals in the domestic money and debt markets while the
Forex Treasury deals mainly in the local foreign exchange market. The TMG
monitors the investment, risk and asset-liability management aspects of the Bank's
overseas offices.

Rupee Treasury

The Rupee Treasury carries out the bank‟s rupee-based treasury functions in the
domestic market. Broadly, these include asset liability management, investments
and trading. The Rupee Treasury also manages the bank‟s position regarding
statutory requirements like the cash reserve ratio (CRR) and the statutory liquidity
ratio (SLR), as per the norms of the Reserve Bank of India.

Products and Services

 · Asset Liability Management (ALM): The ALM function
comprises management of liquidity, maturity profiles of assets
and liabilities and interest rate risks.

· Investments: SBI offers financial support through a wide

spectrum of investment products that can substitute the traditional
credit avenues of a corporate like commercial papers, preference
shares, non-convertible debentures, securitized paper, fixed and
floating rate products. SBI invests in primary and secondary
market equity as per its own discretion.

These products allow you to leverage the flexibility of financial markets, enable
efficient interest risk management and optimize the cost of funds. They can also
be customized in terms of tenors and liquidity options.

SBI invests in these instruments issued by your company, thus providing you a
dynamic substitute for traditional credit options. The Rupee Treasury handles the
bank‟s domestic investments.

Trading

The bank‟s trading operations are unmatched in size and value in the domestic
market and cover government securities, corporate bonds, call money and other
instruments. SBI is the biggest lender in call.
Forex Treasury (FX)

The SBI is the country‟s biggest and most important Forex Treasury, both in the
Interbank and Corporate Foreign Exchange markets, and deals with all the
major corporate and institutions in all the financial centers in India and abroad.

The bank‟s team of seasoned, skilled and professional dealers can tailor
customized solutions that meet your specific requirements and extract maximum
value out of each market situation.

The bank‟s dealing rooms provide 24-hour trading facilities and employs state-of-
the-art technology and information systems. SBI‟s relationships with over 700
correspondent banks and institutions across the globe enhance the strength of the
Forex treasury.

The FX Treasury can also structure and facilitate execution of derivatives

including long term rupee-foreign currency swaps, rupee-foreign currency interest
rate swaps and cross currency swaps.

Overseas Treasury Operation

The Treasury Management Group (TMG) is a part of the International Banking
Group (IBG) and functions under the Chief General Manager (Foreign Offices).
As the name implies the department monitors the
management of treasury functions at SBI‟s foreign offices including asset
liability management, investments and forex operations.

Products and Services

· Asset Liability Management (ALM): The ALM function

comprises management of liquidity, maturity profiles of assets and
liabilities and interest rate risks at the foreign offices.

· Investments: Monitoring of investment operations of the foreign

offices of the bank is one of the principal activities of TMG. The main
objectives of investment operations at our foreign offices, apart from
compliance with the regulatory requirements of the host country, are
(a) safety of the funds invested, (b) optimisation of profits from
investment operations and (c) maintenance of liquidity. Investment
operations are conducted in accordance with the investment policy for
foreign offices formulated by TMG.

· The activites include appraisal of the performance of the foreign

offices broad parameters such as income earned from investment
operations, composition and size of the portfolio, performance vis-à-
vis the budgeted targets and the market value of the portfolio.

· Forex monitoring: Monitoring of forex operations of our foreign

offices is done with the objective of optimising of returns while
managing the attendant risks.

· Forex and Interest rate (Foreign Currency) derivatives: TMG

also plays an important role in structuring, marketing,
 facilitating execution of foreign currency derivatives including currency
options, long term rupee - foreign currency swaps, foreign currency
interest rate swaps, cross currency swaps and forward rate agreements.
Commodity hedging is one of the recent activities taken up by TMG.

· Reciprocal Lines: The department is also responsible for maintenance

of reciprocal lines with international banks.

Portfolio Management & Custodial Services

The Portfolio Management Services Section (PMS) of State bank of India has
been set up to handle investment and regulatory related concerns of
Institutional investors functioning in the area of Social Security.

The PMS forms part of the Treasury Dept. of State Bank of India, and is based at
Mumbai.

PMS was set up exclusively for management of investments of Social Security

funds and custody of the securities related thereto. In the increasingly complex
regulatory and investment environment of today, even the most sophisticated
investors are finding it difficult to address day to day investment concerns, such
as

· adherence to stated investment objectives

· security selection quality considerations

· conformity to policy constraints investment returns

The team manning the PMS Section consists of highly experienced officers of
State Bank of India, who have the required depth of knowledge to handle
large investment portfolios and address the concern of large investors. The
capabilities of the team range from Investment Management and Custody to
Information Reporting.

INTERNATIONAL BANKING

SBI OPENS INDIA'S FIRST INTERNATIONAL BANKING UNIT State Bank

of India has opened the first International Banking Unit (OBU) in India at the
SEEPZ Special Economic Zone, New Bank Building, Andheri (East) Mumbai
400,096 on 17th July 2003 - another landmark in the history of India's Financial
Sector.

The OBU will be deemed as an overseas branch of the Bank and undertake
the following activities:

1. Raise funds in convertible foreign currency as deposits and

borrowings from Non Residents sources.
2. Transact in foreign exchange with residents in India who are eligible to enter
into or undertake such transactions in terms of various Rules and Regulations as
framed under Foreign Exchange
Management Act, 1999.

3. Open foreign currency accounts abroad as well as with other OBUs in India

4. Trade in foreign currencies in the overseas market and also with banks in
India where both legs of the transactions are denominated in foreign currencies.

5. Provide customized loan and liability products for the benefit of clients

6. Maintain Special Rupee account with an Authorized Dealer in India out of the
convertible foreign exchange resources for meeting local expenses

7. Buy Rupees from an Authorized Dealer in India to fund the Special Rupee
Account.

USA PATRIOT ACT CERTIFICATION

Following the USA PATRIOT Act and the final rules issued by the U.S.
Department of Treasury, Banks ("Foreign banks") are required to issue
Certification to U.S. banks or broker-dealers in securities ("Covered Financial
Institutions") with which they maintain Correspondent accounts.
For this purpose and as permitted by the final rules, State bank of India has
prepared a Certification for use by any financial institution that needs a USA
PATRIOT Act Certification from State Bank of India or one of its branches. We
kindly request you to use this Certification instead of approaching directly State
Bank of India's branches.

This Certification only covers State Bank of India and its branches and does not
cover its subsidiaries and joint ventures. If the Certification is required from our
subsidiaries and joint ventures, please contact them directly.

8. Advantages of International Banking

International banks can sometimes provide access to politically and

economically stable jurisdictions. This will be an advantage for residents in
areas where there is risk of political turmoil, who fear their assets may be
frozen, seized or disappear. However it is often argued that developed
countries with regulated banking systems offer the same advantages in terms
of stability.

Some international banks may operate with a lower cost base and can
provide higher interest rates than the legal rate in the home country due to
lower overheads and a lack of government intervention. Advocates of
international banking often characterize
government regulation as a form of tax on domestic banks, reducing interest
rates on deposits.

International finance is one of the few industries, along with tourism, in

which geographically remote island nations can competitively engage. It can
help developing countries source investment and create growth in their
economies, and can help redistribute world finance from the developed to the
developing world.

Interest is generally paid by international banks without tax being

deducted. This is an advantage to individuals who do not pay tax on
worldwide income, or who do not pay tax until the tax return is agreed, or
who feel that they can illegally evade tax by hiding the interest income.

Some international banks offer banking services that may not be available
from domestic banks such as anonymous bank accounts, higher or lower rate
loans based on risk and investment opportunities not available elsewhere.

International banking is often linked to other structures, such as

international companies, trusts or foundations, which may have specific tax
advantages for some individuals.

Many advocates of international banking also assert that the creation of

tax and banking competition is an advantage of the industry. Critics of the
industry, however, claim this competition as a disadvantage, arguing that it
encourages a "race to the bottom" in
which governments in developed countries are pressured to deregulate their
own banking systems in an attempt to prevent the off shoring of capital.
 9. Disadvantages of International Banking

International bank accounts are less financially secure. In banking crisis

which swept the world in 2008 the only savers who lost money were those
who had deposited their funds in international branches of Icelandic banks
such as Kaupthing Singer & Friedlander. Those who had deposited with the
same banks onshore received all of their money back. In 2009 However only
international centers such as the Isle of Man have refused to compensate
depositors 100% of their funds following Bank collapses. Onshore depositors
have been refunded in full regardless
of what the compensation limit of that country has stated thus banking
international is historically riskier than banking onshore.

International banking has been associated in the past with

the underground economy and organized crime, through money

laundering. Following September 11, 2001, international banks and tax

havens, along with clearing houses, have been accused of helping various
organized crime gangs, terrorist groups, and other state or non-state actors.

International jurisdictions are often remote, and therefore costly to visit, so

physical access and access to information can be difficult. Yet in a world with
global telecommunications this is rarely a problem for customers. Accounts
can be set up online, by phone or by mail.

International private banking is usually more accessible to those on higher

incomes, because of the costs of establishing and maintaining international
accounts. However, simple savings accounts can be opened by anyone and
maintained with scale fees equivalent to their onshore counterparts. The tax
burden in developed countries thus falls disproportionately on middle-income
groups. Historically, tax cuts have tended to result in a higher proportion of
the tax take being paid by high-income groups, as previously sheltered income
is brought back into the mainstream economy.
 International bank accounts are sometimes touted as the solution to every
legal, financial and asset protection strategy but this is often much more
exaggerated than the reality.

International Banking Myths

International banking comes with a stigma, so many entrepreneurs and business

professionals cringe at the mere mention that their money can be safely kept in an
International bank account. Images of fast, expensive boats, drug kingpins, and
white suits come instantly to mind. This perception, of course, has not been
helped by the proliferation of bad Hollywood movies, television shows, and
negative portrayal in the press--they could not be further from the truth.

The fact is that international financial centers (OFC) or banks, also known as tax
havens, exist mostly for the purpose of providing asset protection, asset growth,
tax reduction, depending on your jurisdiction, and excellent service for foreign
individuals and corporations, large and small, around the world. While not as
glamorous nor exotic as they are so often portrayed, international banking and
financial centers can present real world solutions to many of the issues facing
people looking for asset protection from pending lawsuits, or as a way to mitigate
the ramifications of a local unstable government. To be sure, an international bank
account can also provide asset protection from the ordinary perils of things such
as
divorce, poor market conditions, or extraneous litigation that is so often a marked
consideration in the Western world.

International Bank Accounts, Money Laundering, and

Other Criminal Activity

It would be a misstatement to state that no illicit funds find their way into
International bank accounts--but as we will soon see, that isn‟t really saying
much. In reality, those jurisdictions that the average lay person would least
suspect to be guilty of this or other illegal banking activities have turned out to be
the major money laundering and criminal enterprise-funding centers in the world.
And the United States is chief among them, with an estimate half of all of the
money laundered in the world laundered within its 50 states. This half translates
to a conservatively-achieved estimate of $300 billion US.

Of course, the United States is not the only high-tax, or “large” jurisdiction that is
home to this activity, with other countries such as the UK and Germany sharing in
this dubious distinction.

So although the haven international banking jurisdictions are perceived to be the

ideal locale for the financing of the criminal underworld, the reality is that the
high-tax jurisdictions house the vast majority of these funds, with the low-taxation
havens representing a much smaller percentage overall.

These types of facts, of course, are very rarely ever reported by news and print
media, or by the jurisdictions that are frankly quite embarrassed by these
astonishing figures.
 Conclusion

As a student of BFM I had a great opportunity to do a project of “International

Banking” which was indeed a wonderful experience and has enhanced my
knowledge in banking sector.

This study on International Banking is important not only to an organization,

shareholders, and banking sector but also to an Indian economy as a whole. Due
to globalization and liberalization the economy is opening its door for reforms.
The onset of International banking will undoubtedly accelerate the pace of
structural change within the Indian banking system. The financial institutions as a
system will essentially convert into banking system.
 Webliography

· http://www.offshoreinfo.com/offshore_banks_details.htm

· http://www.offshorecompany.com

· http://www.confidentialbanking.com/

http://www.statebankofindia.com/

http://www.offshorebank.net/

· http://www.sterlingoffshore.com

· http://taxhavenco.com

· http://www.offshorecompany.com

BIBLIOGRAPHY

International Banking And Finance

By O P Agarwal