This project report provides an overview of international banking. It includes sections on the objectives and methodology of the report, as well as chapters covering topics like the advantages and disadvantages of international banking, the role of international banks in developing countries, international bank accounts, and regulations. The report was submitted by Gourav Chhari to the University of Mumbai in partial fulfillment of the requirements for a Bachelor of Financial Markets degree. It analyzes international banking practices and aims to inform students.

1. A PROJECT REPORT
ON
INTERNATIONAL BANKING
Submitted to University Of Mumbai in
Partial Fulfillment
of the requirement of the Degree of
TY BACHELOR OF FINANCIAL MARKET
Under guidance of
PROF. MRS. ARCHANA NAIR
VPM’s
K.G. Joshi College of Arts
N.G. Bedekar College of Commerce
Thane (W)
Academic Year: 2017 – 18
By-
GOURAV CHHARI
Roll No. – 27

2. DECLARATION
I, Gourav Chhari, studying in T.Y. Financial Market hereby declares that I have
done a project on INTERNATIONAL BANKING. As required by University
rules, I state that work presented in this thesis is original in nature and to my
best knowledge, has not been submitted so far to any other university.

3. ACKNOWLEDGEMENT
It gives me great pleasure to declare that my project on “INTERNATIONAL
BANKING” have been prepared purely from the point of view of students
requirements.
This project covers all the information pertaining to “INTERNATIONAL
BANKING”. I tried my best to write project insimple and lucid manner. I have
tried to avoid unnecessary discussions anddetails. At the same time it provides
all the necessary information. I feel that it would be of immense help to the
students as well as all others referring inupdating their knowledge.
I am indebted to our principal Dr. Mrs. Suchitra Naik Ma‘am for giving us such
an amazing opportunity. I am so thankful to our coordinator Mrs. Mrunmayee
Thatte Ma’am and also librarian and my colleagues for their valuable support,
cooperation and encouragement incompleting my project.
Special thanks to Prof. ARCHANA NAIR Ma’am, my internal guide for this
project for giving me expert guidance, full support and encouragement in
completing my project successfully.
PLACE:
DATE:
SIGNATURE OF STUDENT
GOURAV CHHARI
(TYBCOM FINANCIAL MARKET)

4. OBSERVATION
1. 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 canperform the typical bank accounttransactions,
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.
2. 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

5. EXECUTIVE SUMMARY
(A) OBJECTIVE:
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 our economy is opening its door for reforms.
(B) SUB-OBJECTIVE:
While in foreign developing countries, international banks besides performing the
usual commercial banking functions play an effective role in their economic
development.
(C) METHODOLOGY:
PRIMARY DATA: SECONDARY DATA
BOOKS
International Banking
and Finance By
O P Agarwal
http://www.offshoreinfo.com
http://www.statebankofindia.com/
http://www.offshorecompany.com
http://www.offshorebank.net/

6. TABLE OF CONTENT
Sr.
no.
Topic Page
No.
1 InternationalBanking 1
2 Advantages of InternationalBanking
3 Disadvantages of InternationalBanking
4 Role of International Commercial Banks in
Developing Countries
10
5 International Bank Accounts 13
6 International Banking Institutions 20
7 International banking regulations and privacy 25
8 State Bank of India 35
9 Conclusion 64
10 Webliography 65

7. CHAPTER1 .International Banking
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.

8. 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 scopemight become available
• Reduce costof 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 onthe British
Isles as it was on the continent. Faced with the prospect of watching
their hard earned assets and wealth diminish with every outreach of the
tax collector’s hand, they were ripe for a solution. And a solution came-

9. -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 comeinto 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 illicitlyobtained
assets and funds, or the choice locales for their moneylaundering
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

10. 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 ofthe bargain and continue to provide a safe,
confidential haven for thoseseeking 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 accounthas 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 hardearned
reputation for asset protection, tax reduction, depending on your
jurisdiction, and superb confidentiality of deposits.

11. CHAPTER2. 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,

12. 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 ofinternational banking also assertthat 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.

13. CAHPTER 3. 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 onshorereceived 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 ofwhat the compensation limit ofthat 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 costlyto 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

14. opened by anyone and maintained with scale fees equivalent to their
onshore counterparts. The tax burden in developed countries thus falls
disproportionately on middleincome 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 assetprotectionstrategy but this is often much
more exaggerated than the reality.
Modes of International Banking
There are a lot ofavailable 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

15. 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 suchas letters ofcredit, 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,

16. 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 oftheir operations. The powers of a federal branch are
similar in scopeofthose of a national bank; these branches possessfull

17. 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 orregulatory 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 deposittaking 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

18. 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 adoptthe acquisition approachby 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 ofthe bank being acquired,
community needs, and the applicant’s organizational structure.

19. 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.

20. CHAPTER 4. 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. Theseroles 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.

21. Besides, they underwrite the shares and debentures of large scale
industries. Thus, they notonly 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
stockwhich 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 byproviding exchange facilities to
importers and exporters.
Financing Agriculture
The international commercial banks help the large agricultural sectorin
developing countries in a number ofways. They provide loans to traders
in agricultural commodities. They provide finance directly to
agriculturists forthe marketing ofthe 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.

22. 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 costbase
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.

23. CHAPTER 5. 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 spacereserved 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 offshorebank, 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.

25. Receiving / Sending Money with Your Offshore Bank
Your primary depositaccountwith bewith a much larger offshorebank
in a jurisdiction that you choose. Justas yourlocal 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 offshorebank 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.

26. 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 passportcopyordriver's license
Banking references
Corporatelegal 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 awire transfer ofinitial 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 youraccount balance and perform transactions
quickly, easily, privately and securely.

27. 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
conductthese 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.

28. 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.

29. CHAPTER 6. International Banking
Institutions
RecommendedInternational 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 EuropeanUnion 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

30. 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, CzechRepublic, 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

31. Directive. This can be an extremely important consideration for an
investor ordepositorlooking fora 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 depositormeets 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
mid90’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,

32. 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 depositor 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 accountgoals 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

33. 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 ofbenefits, when
it comes to privacy Switzerland is hard to beat.

34. CHAPTER 7. 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

35. all offer a comparatively confidential and secure environment, it bears
consideration to outline what the banking goals are and then choosethe
jurisdiction accordingly. A small minority of the international
jurisdictions does a poorjob 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.

36. CHAPTER 8. STATE BANK OF INDIA
Profile
Spreading its arms around the world, the SBI’s International Banking
Group delivers the full range of cross-borderfinance 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 ofinternational 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

37. 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
SBIUnderstand there is much stake involved in ExportImport 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 bothpre shipment and post
shipment activities.
EXPORT AVENUE
RUPEE EXPORT CREDIT (PRE-SHIPMENTAND
POSTSHIPMENT)
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.

38. 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.

39. Post-Shipment Export Credit
SBI extend Post-shipment Credit that is any loan / advance granted or
any other credit provided by SBI for purposes suchas 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 postshipment
credit either in rupee or in foreign currency. However, if the pre-
shipment credit has been availed in foreign currency, the postshipment
credit has necessarily to be under EBR Scheme since foreign currency
pre-shipment credit has to be liquidated in foreign currency. The details

40. of pre-shipment and post-shipment credit in foreign currency are
mentioned below.
PRE-SHIPMENTCREDITIN 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, processingand packing fund requirements at
international interest rates. Just not this, you can also cover the costof
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 onshorefunds forlending 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.

41. 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 ofthe 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
international trading operations. Backed bySBI's strongreputation, you
will beable to build better trust in 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.

42. 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.
ForeignCurrency 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 centofthe 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.

43. 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 suchusanceLCs are discounted byour foreign offices
and other banks, it is not based on any mandate/letter of
comfort/guarantee given bythe 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

44. 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 correspondentbanking 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 correspondentbanking.
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 ofcorrespondents, 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

45. 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 correspondentrelationships.
• 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).

46. • 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 CodeNo., 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
accordancewith 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).

47. • 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.

48. 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
PROJECTEXPORT 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 ondeferred 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

49. 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 ControlRegulations:
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 ofProjectExport 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

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

51. 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
Postshipment 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

52. 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 supportthrough a wide
spectrum of investment products that can substitute the
traditional credit avenues of a corporatelike 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

53. 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, corporatebonds, call
money and other instruments. SBI is the biggest lender in call.
ForexTreasury (FX)
The SBI is the country’s biggest and mostimportant Forex Treasury,
both in the Interbank and Corporate Foreign Exchange markets, and
deals with all the major corporateand institutions in all the financial
centers in India and abroad.
The bank’s team of seasoned, skilled and professionaldealers 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

54. relationships with over 700 correspondentbanks 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 TreasuryOperation
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 hostcountry, are
(a) safety of the funds invested, (b) optimisation of
profits from investment operations and (c) maintenance

55. of liquidity. Investment operations are conducted in
accordancewith 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& CustodialServices
The Portfolio Management Services Section (PMS) of State bank of
India has been set up to handle investment and regulatory related

56. 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 custodyof 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, suchas
• 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 Custodyto Information Reporting.

57. INTERNATIONALBANKING
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.

58. 5. Provide customized loan and liability products forthe 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
Correspondentaccounts.
Forthis 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.

59. 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 ofthe 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.

60. 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 ofall ofthe 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.

61. CHAPTER 9.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 our
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
segment will essentially convert into banks

62. CHAPTER 10.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