All about Business and management

September 12, 2007

Role of Commercial banks in International business

Filed under: International Business — Jagdish Hiray @ 9:04 am

            Banking section plays important role in internalation business. Today almost all major banks have offices in major cities around the world. Many banks have formed colloboration 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 individual banks offer services like foreign exchange, traveler’s check, electronics transfer. For businesses bank plays ar ole of trusty agent by offering servics like ‘Documentary Collection’ and ‘Letter of Credit’. 

           One of the problem international businesses encountering doing business internationally is lack of trust. With the help financial devices commercial banks are able for a bond of trust between internalional 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 methog of doing international transactions. Some banks and government agencies offer export credit insurance to businesses. In some cases, exporter has to forgo a letter of credit, in such cases banks offer export credit insurance. 

           Foreign exchange market is another area where international commercial banks play vital role.            Foreign exchange market serves two main functions, convert the currency of one country into the currency of another and provide some insurance against foreign exchange risk. Multinational corporations constantly need various currencies for their operations and to hedge against foreign exchange risk. International banks provide foreign exchange services to their commercial business clients to complete their business transactions. These banks act as a broker between commercial customer and foreign exchanges around the world. International businesses receive payments in foreign currencies for their export, the income it receives from foreign investments and income received from licensing agreements with foreign firms. Internations business use foreign exchange market to pay foreign firms for its products and services and when it makes direct investment in foreign country. International banks play major roles in these transactions.

            Many commercial banks offers short as well as long term loan finaning to internaltional businesses. Many countries have form banks backed by government fundings to provide fundings for exporters and importers. In United States, Export-Import bank, an independent agency of the US government, provides financial aid to faciliate export and import of goods. Eximbank also guarantees repayment of loans US commercial banks make to foreign borrowers for purchasing US exports. 

           Banking sector plays vital role of catalysts in international market. Due to technology advances in banking sector, communciation gap and delays in international business have really narrow down a lot. 

Advertisements

4 Comments »

  1. […] post by Jagdish Hiray Filed under Uncategorized by . Permalink • Print […]

    Pingback by Role of Commercial banks in International business | Forex Advisor — September 20, 2007 @ 9:56 am | Reply

  2. Sony tv repair Toronto…

    Good blog on B O Electronics Segment Indicators by Dirk It is very informative but I don’t fully agree with it as I have read other online views on the same. It was good to spend evening going through internet on Sunday . I’ll visit again to read mor…

    Trackback by Sony tv repair Toronto — March 18, 2012 @ 5:05 am | Reply

  3. Hiya! Quick question that’s totally off topic. Do you know how to make your site mobile friendly?
    My web site looks weird when viewing from my iphone4. I’m trying to
    find a theme or plugin that might be able to fix this problem.
    If you have any recommendations, please share. Thank you!

    Comment by forex trading — January 17, 2014 @ 3:11 am | Reply

  4. This design is spectacular! You definitely know how
    to keep a reader entertained. Between your wit and your
    videos, I was almost moved to start my own blog (well, almost…HaHa!) Excellent
    job. I really loved what you had to say, and more
    than that, how you presented it. Too cool!

    Comment by Ingifts Freaky-Monster SchlüSselanhäNger — July 6, 2014 @ 9:27 pm | Reply


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: