S V SUBRAHMANYAMM Sc., CAIIB,CMA, ACS

TRADE FINANCE –An IntroductionAGENDA INTERNATIONAL TRADE & INHERENT RISKS DEFINITION PLAYERS & STAKE HOLDERS ELEMENTS OF TRADE FINANCE

TF AGENCIES NEED FOR TF COURSE CONTENTS SUMMARY

TF – A Science or a set of activities??

TRADE FINANCE – An IntroductionTRADE

DOMESTICINTERNATIONAL

The nature of relationship between the importer and exporter is critical to

understanding the methods of import-export financing utilized in industry.

INTERNATIONAL TRADE• ROLE OF TF IN INTERNATIONAL TRADE• RISKS IN INTERNATIONAL TRADE

– POLITICAL– LEGAL– COMMERCIAL

International trade is, in principle, not different from domestic trade as the

motivation and the behavior of parties involved in a trade do not change fundamentally

regardless of whether trade is across a border or not.

TRADE FINANCE - DEFINITION• Basically related to 'Domestic as well as

International Trade Transaction'.• Could be related to supply of goods or

services or know-how.• Evolution of Trade Finance• How TF works 

TRADE FINANCE – Players & StakeholdersImporters & ExportersBankers & FinanciersInsurers & Export Credit AgenciesOther Service Providers

TRADE FINANCE - Elements• TRADITIONAL

– LC– BG– BILLS– BONDS– BANK TO BANK REIMBURSEMENTS

TRADE FINANCE - Agencies• Export credit agencies• Insurance agencies• Bilateral & Multi lateral agencies

TRADE FINANCE - Need• Strengthen supplier relationships • secure supplies of key materials • standardizing or extend payment terms• Address funding and risk mitigation needs

– via tailored on and off balance sheet financing solutions in the open-account trade environment

• Improve working capital efficiency – through accelerated cash flows generated by receiving

early payments on a true-sale basis• Strategically manage increasing sales volumes and

internal credit limits against key buyers• Gain visibility into transactions with real-time or

scheduled reporting utilizing our proprietary platform

COURSE CONTENTS- Certification program in Trade finance • Introduction to Trade Finance • Documentary Credits • Letters of Credit • Exchange Rate Maintenance • Forward Contracts • Foreign Bills Remittances • Pre and post shipment credit • Bank GuaranteesFor more details visit www.bfsiacademy.com

SUMMARYKEY BUSINESS PRINCIPLESDEFINTION OF TRADE FINANCETRADE FINANCE AND INTERNATIONAL

TRADETF AND FINANCIAL SECTOR