Introduction To Multinational Banking

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Introduction To Multinational Banking

  1. 2. <ul><li>An organization, usually a corporation, chartered by a state or federal government, which does most or all of the followings: receives demand deposits and time deposits, honors instruments drawn on them, and pays interest on them; discounts notes, makes loans, and invests in securities; collects checks, drafts, and notes; certifies depositor's checks; and issues drafts and cashier's checks . </li></ul>
  2. 3. <ul><li>Engaging in the business of keeping money for savings and checking accounts or for exchange or for issuing loans and credit etc. </li></ul><ul><li>Transacting business with a bank; depositing or withdrawing funds or requesting a loan etc. </li></ul>
  3. 4. <ul><li>A multinational corporation (or transnational corporation) (MNC/TNC) is a corporation or enterprise that manages production establishments or delivers services in at least two countries </li></ul>
  4. 5. <ul><li>Multinational banks (MNBs), by definition, are those that physically operate in more than one country. </li></ul><ul><li>For instance, Citibank operates offices in more than 90 countries around the world </li></ul>
  5. 6. <ul><li>International banks engage in cross-border operations and do not set up operations in other countries. </li></ul><ul><li> A Bank of America loan to a bank in Poland is considered international banking. </li></ul>
  6. 7. <ul><li>Top ten banking groups in the world ranked by shareholder equity ($m) </li></ul>
  7. 11. <ul><li>Regulatory environment </li></ul><ul><li>Technological Changes </li></ul><ul><li>Financial Innovation </li></ul><ul><li>Growing diversity </li></ul><ul><li>Economies of scale </li></ul>
  8. 12. <ul><li>What is an organizational Structure?? </li></ul><ul><li>The way in which a firm has arranged its lines of authority and communication, and allocated duties and responsibilities; the structure may be of a divisional, geographic or functional kind or some combination of these. </li></ul>
  9. 14. <ul><li>An informal linkage between banks and different countries is set up when bank maintain correspondent accounts with each other. </li></ul><ul><li>Facilitate international payments and collection for customers. </li></ul><ul><li>Correspondent --- Mail or Cable communications </li></ul>
  10. 15. STATE BANK OF INDIA BANK OF AMERICA A/C OF BANK OF AMERICA A/C OF STATE BANK OF INDIA
  11. 17. <ul><li>To provide their customers help from their own personnel on the spot in foreign countries </li></ul><ul><li>These are not offices for accepting deposits and loans </li></ul><ul><li>To provide information about local business practice and conditions – creditworthiness of local customers </li></ul><ul><li>These are small and appearance of an ordinary office rather than a bank </li></ul>
  12. 18. <ul><li>An agency is like a full fledge bank in every respect except that it does not accept deposits. </li></ul><ul><li>Deals in local money markets, foreign exchange markets, arrange loans, clear bank drafts/cheques and channel foreign funds in to financial markets. </li></ul><ul><li>Arrange long term loans for customers. </li></ul>
  13. 19. <ul><li>Foreign banks are operating banks like local banks except that the director and owners tend to reside elsewhere. </li></ul><ul><li>Local banking rules and rules at home. </li></ul><ul><li>Books are incorporated with parent bank. </li></ul><ul><li>Fast clearance of cheques </li></ul>
  14. 20. <ul><li>A foreign subsidiary is a locally incorporated bank that happen to be either completely or partly by a foreign parent. </li></ul><ul><li>Foreign subsidiaries do all type of banking business </li></ul>
  15. 21. <ul><li>Consortium banks are joint venture of larger commercial banks . </li></ul><ul><li>Primarily concerned with investment , arrangement of loans and underwrite stock and bonds. </li></ul>
  16. 23. <ul><li>Source: Report on trend and progress of banking in India 2006-07, RBI publication </li></ul>
  17. 24. Source: Report on trend and progress of banking in India 2006-07, RBI publication

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