International Banking & Foreign Exchange Management
1. Many Indian Companies are not listed in US stock market because the procedure of listing is not easy, what are the other ways to raise capital in USD? Explain their types in details.
2. Foreign exchange exposure is said to exist for a business or a firm when the value of its future cash flows is dependent on the value of foreign currency / currencies. If a British firm sells products to a US Firm, cash inflow of British firm is exposed to foreign exchange and in a case of the US based firm cash outflow is exposed to foreign exchange. What are the different types of exposure in foreign Exchange transaction? How to reduce it? (10 Marks) 3. Punjab National Bank on Monday detected fraudulent transactions worth Rs 11,300 crore at its Brady House branch in Mumbai. The PNB in its cautionary note to other public and private sector banks said that the suspected fraud was carried out by the perpetrators in collusion with the staff. It went on to explain the modus operandi of the scam and said: “It was found through SWIFT trail that one junior level branch official unauthorisedly and fraudulently issued Letters of Undertaking (LoU) on behalf of some companies belonging to Nirav Modi Group for availing buyers’ credit from overseas branches of Indian Banks.” It further said that none of the transactions were routed through the Core Banking Solution or CBS system, thus avoiding early detection of fraudulent activity. a. What is the CBS that the bank official bypassed to issue fake LoU by using SWIFT?
b. What was the role of Punjab National Bank‘s Officials in this fraud? How they use NOSTRO account of Punjab national Bank?