Multi national banking

1. Multi national banking

2. MNB’sare those that physically operate in more than one country. • City bank operates offices in morethan 90 countries around the world.

3. Reasons • Regulatory environment • Technological changes • Financial innovation • Growing diversity • Economies of scale

4. Organisational structure • Correspondent banking • Resident representative • Bank agencies • Foreign branches • Foreign subsidiaries and affliates • Consortium banks

5. Correspondent banking • An informal linkage between banks and different countries is set up when bank maintain correspondent account with each other.f • Facilitate international payments and collection for customers • Correspondent-mai l or cable communucation

6. working Bank of america sbi a/c of sbi a/c of bank of america

7. Importance • Helping customers having business abroad • No need to maintain any office and man power • Extension of business to customers

8. Resident representatives • To provide their customers help from their own personnel on the spot in foreign countries. • To provide information about local business practice and conditions-credit worthiness of local customers. • These are small and appearance of an ordinary office rather than a bank.

9. Bank agencies • An agency is like a full fledge bank in every respect except that it does not accept deposits. • Deals in local money markets, foreign exchange markets ,arrange loans, clear bank drafts/cheques and channel foreign funds in to financial markets. • Arrange long term loans for customers.

10. Foreign branches • Foreign banks are operating banks like local banks except that the director and owners tend to reside else where. • Local banking rules and rules at home. • Books are incorporated with parent bank. • Fast clearance of cheques.

11. Foreign subsidiaries and affiliates • A foreign subsidiary is a locally incorporated bank that happen to be either completely or partly by a foreign parent. • Foreign subsidiaries do all type of banking business.

12. Consortium banks • Consortium banks are joint venture of larger commercial banks. • Primarily concerned with investment, arrangement of loans and underwrite stock and bonds.