Useful for faculty at JAIIB

1. A R Mankodi
Faculty- NIIT IFBI (PGDB)
GLS University
AHD University
JAIIB-CAIIB
URICM
IBPS
Director- Karnavati Coop Bank
Ex CEO- Guj State Coop Union
Ex DGM- A D C Bank
AMCO Bank
Secretary-Bankers’ Club
Universal-International Banking
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2. What is universal Banking?
• It is providing all banking products like liability
products, assets products, insurance,, Mutual
Fund, Broking, commodity broking, Merchant
Banking, Debt instruments, Advisory or portfolio
management service, gold/bullion to wholesale
or retail segment at one stop.
• This provide opportunity to earn more revenue
by cross sale or fee base income.
• Customer is also benefited by saving on time and
availability of know how. This fulfill need/wants
• With satisfaction an speed.
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3. International Banking
• Each country needs to sale its surplus production
or services to other country who may have deficit.
Because no country is self sufficient on one or
other segment, each to buy or sale something
• This provide opportunity to people, Govt. to invest
capital and labour globally and earn interest,
profit, dividend, royalty etc.
• Banks provide platform for settlement/banking
via international Forex market.
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4. Needs
Exporter
• Export Packing Credit(EPC)
• LC negotiation/Advice/Discount
• Bill Purchase/Discount
• Bill Collection Service
• Bank Guarantees
• Rupee Advance against Bill
• Suppliers Credit Post sale
Importer
• Bill Collection Service
• Direct Import Bill-
Payment
• Advance Payment –
Supplier
• Import LC
• Buyer –Suppler credit
• Bank Guarantee
EEFC: Exchange earners foreign currency account
Inward Remittance Service
Outward Remittance
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5. Depository Receipts
• It is a NI that is traded on local exchange but represent
security of foreign listed company
• DR is a physical certificate which allow investor to hold shares
of equity of other country.
• ADR – Since 1920 American Depository Receipt
in NYSE is traded
• GDR – It is global DR like European DR International
DR. This is traded in European Market
Both ADR and GDR are usually in Dollar but can be denominated
in EUROs too
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6. How it Works?
• If a company wished to list its share or debt security
already publically traded on some foreign exchange, it will
have to meet with certain criteria of exchange. Then it will
be listed as DR. IPO also can be DR It can be publically
traded or on counter too.
• If a foreign broker wants to trade DR of Indian co., he will
first buy from local market through representative. Then
have them delivered to local custodian bank of depository.
Then depository bank abroad will issue ADR to broker. Now
traded.
• Based on ADR ratio it can be issued for one or more share
of company and price would be in equivalent value in
Dollar.
• Investor gets all rights like voting, dividend etc. Rights are
stated on ADR certificate.
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7. Benefits
Company
• Can raise capital in
global Market
• Added liquidity will
boost image
• Investment in home
country available to
expatiates
Investor
• Investor can expand
portfolio
• Diversification of
investment
• Higher earnings and
returns
• Comfort on regulatory
era
• Forex rate benefit.
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8. P Notes
• This is known as participatory note.
• It provide non- Indians or non NRI or entity to participate in Indian
market through SEBI registered Foreign Institutional Investor (FII)
and its local arm
• It is like a contract note. A derivative in nature.
• FII issue P note to inventor after holding underlying securities
which are listed or would be listed on Indian exchange.
• Identity of beneficiary owner not known
• On Laheri Committee recommendation 2004 SEBI allows only those
FII who are regulated by their regulators
• Investor should under go KYC by its FII
• FII can not issue p note to NRI or PIO or OCB to prevent money
laundering.
• FII are required to report SEBI on monthly basis status and on
quarterly basis on investments. 8/9