What is Trade Finance Importance of Trade Finance Basics of Trade Finance

1. S V SUBRAHMANYAM
M Sc., CAIIB,CMA, ACS

3. TRADE FINANCE –An IntroductionAGENDA
 INTERNATIONAL TRADE & INHERENT RISKS
 DEFINITION
 PLAYERS & STAKE HOLDERS
 ELEMENTS OF TRADE FINANCE
 TF AGENCIES
 NEED FOR TF
 COURSE CONTENTS
 SUMMARY

4. TF – A Science or a set of
activities??

5. TRADE FINANCE – An Introduction
TRADE
DOMESTIC
INTERNATIONAL
The nature of relationship between the importer and
exporter is critical to understanding the methods of
import-export financing utilized in industry.

6. 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.

7. 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

8. TRADE FINANCE – Players &
Stakeholders
Importers & Exporters
Bankers & Financiers
Insurers & Export Credit Agencies
Other Service Providers

9. TRADE FINANCE - Elements
• TRADITIONAL
– LC
– BG
– BILLS
– BONDS
– BANK TO BANK REIMBURSEMENTS

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

11. 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

12. 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 Guarantees
For more details visit www.bfsiacademy.com

13. SUMMARY
KEY BUSINESS PRINCIPLES
DEFINTION OF TRADE FINANCE
TRADE FINANCE AND INTERNATIONAL TRADE
TF AND FINANCIAL SECTOR