1. SCHEME OF THE PRESENTATION I- BUERO OF INDIAN STANDARDS i ,
HISTORY ii, BIS: BANKING II-INTERNATIONAL STANDARD ORGANISATION i ,
HISTORY ii, ISO: BANKING III-GATS: WTO IV- ISLAMIC BANKING
STANDARDS V- INTERNATIONAL BANKING STANDARDS i , EU ii, U.S.A
2. BIS I-BUERO OF INDIAN STANDARDS i, HISTORY:The organization
was formerly the Indian Standards Institution (ISI), set up under
the Resolution of the Department of Industries and Supplies ,on 3
September 1946. The ISI was registered under the Societies
Registration Act, 1860. The Buero if Indian standards is the
National Standard Body of India, working under the aegis of
Ministry of Consumer affairs, Food & Public Distribution,
Government of India. It is Established by the Buero of Indian
Standards Act-1986, came in to force on 23 December 1986.
3. * As a corporate body, it has 25 members from Central or
State Governments, industry, scientific and research institutions,
and consumer organizations. Its headquarters are in New Delhi, with
regional offices in Kolkata, Chennai, Mumbai, Chandigarh and 20
branch offices. It also works as WTO-TBT enquiry point for India
*BIS:- As a founder member of International Organization for
Standardization (ISO) continues to take part in international
standardization activities. *BIS- Participates in its policy making
bodies like Committee on Developing Country Matters (DEVCO),
Committee on Conformity Assessment (CASCO), Committee on
Information (INFCO) and Committee on Consumer Policy(COPOLCO).
4. *BIS is also actively involved in the International Electro
Technical Commission (IEC-WTO) and has participation status in 34
Technical Committees. *BIS is also having memorandum of
understanding in the field of standardization, certification and
quality assurance on metrology with the following countries.
Germany China Turkey Mauritius Russian Federation Israel Cuba
5. BIS-INTERNATIONAL RESPONSIBITY:- *BIS holds secretarial
responsibilities for 5 Technical Committees and 5 Subcommittees and
maintains participation status in 51 Technical Committees with
other countries. *BIS has taken a leading role in ISO and its
activities from the time of its very creation. It has also taken
keen interest and Primary member in its policy making committees
like Committee on Conformity Assessment (CASCO), Committee on
Consumer Policy (COPOLCO), Development Committee (DEVCO), Committee
on Information (INFCO) and Committee on Reference Materials
(REMCO). (ISO/TC 50, ISO/TC 56, ISO/TC 113, ISO/TC 120 and ISO/TC
149) and 5 subcommittees (ISO/TC 120/SC 1 & SC 2, ISO/TC 34/SC
7, ISO/TC 113/SC 1 and SC 6).
6. II-BIS-BANKING SECTOR A , Quality management System
Certification Scheme ISO 9001. B, Environmental Management System
Certification Scheme ISO 14001. C, Occupational Health and Safety
Management System Certification Scheme ISO 18001. D, Service
Quality Management System Certification Scheme IS 15700. * India
started adopting Basel accord Capital Standards in Banking sector
from 1992. Basel-III :-Standards set for Indian banks by RBI are
credit positive as they focus on strengthening Tier-I capital. RBI
released final Basel III capitalization standards for Indian banks
that are more conservative than those outlined by the Bank for
International Settlements (BIS). *Indian Oversea Bank (IOB) has
sought capital support of Rs 2,100 crore from the government for
enhancing its capital base and Standardization.
7. III:-ISO INTERNATIONAL STANDARD ORGANISATION * ISO is the
worlds largest developer of voluntary Organization. International
Standards give state of the art specifications for products,
services and good practice, helping to make industry more efficient
and effective. Developed through global consensus, it helps to
break down barriers to international trade. * ISO develops
International Standards. It was founded in 1947, and since then
have published more than 19 500 International Standards covering
almost all aspects of technology and business. From food safety to
computers, and agriculture to healthcare, ISO International
Standards impact all our lives.
8. A standard is a document that provides requirements,
specifications, guidelines or characteristics that can be used
consistently to ensure that materials, products, processes and
services are fit for their purpose. ISO- ensure that products and
services are safe, reliable and of good quality. For business, they
are strategic tools that reduce costs by minimizing waste and
errors, and increasing productivity. They help Banking companies to
access new markets, the level playing field for developing
countries and facilitate free and fair global trade. It has a
membership of 161 National Standards Bodies (NSBs) from varies
countries large and small, industrialized, developing and in
transition, in all regions of the world.
9. ISO ACCES COUNTRIES: Full members ;-(Or member bodies)
influence ISO standards development and strategy by participating
and voting in ISO technical and policy meetings. Full members sell
and adopt ISO International Standards nationally, internationally,
(Countries-144). Correspondent members:-observe the development of
ISO standards and strategy by attending ISO technical and policy
meetings as observers. Correspondent members can sell and adopt ISO
International Standards nationally, ( Countries-45). . Subscriber
members:- keep up to date on ISOs work but cannot participate in
any policy makings. They do not sell or adopt International
Standards nationally, (Countries-4, Antigua, Barbuda, Honduras and
Leo peoples democratic Republic.)
10. IV-ISO:INTERNATIONAL BANKIG SECTOR ISO 20022 was developed
and is maintained by ISO/TC 68, the ISO technical committee
responsible for standardization in the field of banking, securities
and other financial services. This foresight and flexibility is
built into the ISO 20022 standards. One of the standards advantages
is its data dictionary based approach, which enables reuse and
standardization of data across all messages. About half of the 15
million messages that are exchanged on the SWIFT network every day
are -ISO 15022. ISO 8583 is used for almost all credit and debit
card transactions, including ATMs. Several hundred million ISO 8583
messages are exchanged daily between issuing and acquiring
banks.
11. ISO 1004-1:2013 specifies the shape, dimensions, Magnetic
ink character recognition, magnetic signal level, and tolerances
for the E-13B characters which include 10 numerals and four special
symbols printed in magnetic ink and used for the purpose of
character recognition. It describes the various known types of
printing defects and other printing considerations, together with
the tolerances permitted. ISO 4217:2008 is intended for use in any
application of trade, commerce and banking, where currencies and,
where appropriate, funds are required to be described. It is
designed to be equally suitable for manual users and for those
employing automated systems. ISO 6166 defines the structure of an
International Securities Identifying Number (ISIN) in Banking
Sector.
12. New regulatory requirements such as Basel II also
contribute to IT complexity, because by necessity they require
banks to find short-term reporting solutions that couldnt have been
anticipated when the important systems were implemented. Basel II
and Basel III is the regulatory regime to require major overhaul of
banking infrastructures: in the past decade, banks have also
addressed Y2K, Sarbanes-Oxley, and IFRS in all of its regional
variants. EXAMPLE:- ISO/TC 34/SC7.Spices and Condiments ISO/TC 50
.Lac ISO/TC 56 Mica ISO/TC 113Measurement of Liquid Flow an Open
Channel ISO/TC 113/SC 1...Velocity Area Methods ISO/TC 113/SC
6...Sediment Transport
13. V-GATS AND WTO:* GATS-Part IV: Progressive Liberalization,
Article XIX: Negotiation of Specific Commitments:- is an important
element in the international framework that affects the regulation
of every WTO Member countrys financial service sector. However,
except for a limited number of countriesno attempt has been made to
compare WTO commitments to open the domestic banking sector to
foreign banks with actual regulatory practice in a systematic and
comprehensive manner on a cross-country basis. * Services
represents the fastest growing sector of the global economy and
account for two thirds of global output, one third of global
employment and nearly 20% of global trade. * The developing
measures of the degree of openness to foreign banking, based upon
both commitments made and actual regulatory practice, with a view
to assessing the overall extent to which countries open their
borders to foreign banks more than they are legally obliged to do
based upon their WTO commitments. The dataset is also used to
assess the overall extent to which countries discriminate against
foreign banks by regulating them less favorably than domestic
banks.
14. * The General Agreement on Trade in Services (GATS) is the
first and only set of multilateral rules governing international
trade in services. Negotiated in the Uruguay Round, it was
developed in response to the huge growth of the services economy
over the past 30 years and the greater potential for trading
services brought about by the communications revolution. * When the
idea of bringing rules on services into the multilateral trading
system was floated in the early to mid 1980s, a number of countries
were skeptical and even opposed. They believed such an agreement
could undermine governments ability to pursue national policy
objectives and constrain their regulatory powers. The agreement
that was developed, however, allows a high degree of flexibility,
both within the framework of rules and also in terms of the market
access commitments.
15. VI-AAOIFI ACCOUNTING AND AUDITING ORGANIZATION OF ISLAMIC
FINANCE INSTITUTIONS:* Standardization is necessary, and it is
bound to happen. This is because the world is a global village.
Costumers consciousness and competition among Islamic banks will
lead to standardization of Islamic financial Sector. * Financial
Accounting Standard as operating Ijarah, shall be measured using
one of the two methods, * * Recognition of lease income from
investment in real estate; and Disclosures about Ijara and Ijara
Muntahia Bittamleek assets.
16. STANDARD NORMS:* For the purpose of this standard, an
investment in real estate shall be recognized as an asset. A), It
is probable that the future economic benefits that are associated
with the investment in real estate will flow to the entity. B),The
cost of the investment in real estate can be measured reliably.
STATUS QUO:Different Islamic banks offer different products. Some
are deemed unlawful by other Islamic banks. The Shariah procedures
of the same product differ in Islamic banks. Reason: Conflict of
Fatawa (legal opinions of Shariah scholars).
17. * The bankers from East and West gathered in Manama at the
18th Annual World Islamic Banking Conference in November 2011, one
topic was prevalent at nearly all discussion rounds:
standardization. But while Islamic Finance is expanding to new
frontiers such as Uganda, France, Egypt, South Korea and Oman, the
objective to make Shariahcompliant financial products more
standardized appears more and more like a far-fetched daydream. Its
legal environment based on the Napoleonic Civil Code. The French
jurisdiction differs greatly from British Common law or Case law,
the predominant legal framework in England, the centre of Islamic
finance in Europe. London-residing bank calls for more
standardization overlook the individual nature of national
jurisdictions, which still exist even in the 27member states
European Union.
18. SHARIAH SCHOLARS IN CHARGE OF STANDARDIZATION:Challenges:*
Possible fanaticism about some Fiqh schools & opinions. *
Agreeing on the standards on which products to be standardized. *
Possible reliance on loose or controversial standards. Solutions:
Independence of the Shariah scholars involved. Careful selection of
the scholars involved. Selection of Scholars of different Fiqh
schools. Endorsement of the standards by Fiqh academies and
leagues.
19. . Legal challenges resulting from possible conflicts with
local laws. . Different Fiqh opinions may serve or be in conflict
with different laws of certain countries in Domestic levels. When
opting for a particular Shariah rule for sake of standardization,
the most dominant International laws should be taken into
consideration. * Shariah: Day-to-day transaction must not
contravene the standards.
20. BENEFITS OF STANDARDIZATION:- Sound public image.
Elimination of Shariah risk. Cost Reduction. Less legal problems.
More possible cooperation between Islamic banks. Clear way towards
universality of Islamic Banking. * (Not only even Islamic Banks-
For every banks).
21. TYPES OF INTERNATIONAL STANDARD BANKING OFFICES:- *
Correspondent Bank. * Representative Offices. * Foreign Branches. *
Subsidiary and Affiliate Banks. * Edge Act Banks. * Offshore
Banking centers. * International Banking Facilities.
22. THE WORLDS 10 STANDARD BANKS:- Citigroup Mizuho Bank/
Mizuho Corp Bank HSBC Holdings Bank of America JP Morgan Chase
Deutsche Bank Royal Bank of Scotland Group Sumitomo Mitsui Banking
Group Hypo Vereinsbank UFJ Bank Ltd. U.S. Japan U.K. France U.S.
Germany U.K. Japan Germany Japan
23. EUROPEAN BANKING RATIO:- Most Eurocurrency transactions are
interbank transactions in the amount of $1,000,000 and up, Depends
on Common reference rates include. The London Interbank Offered
Rate. The Paris Interbank Offered Rate. The Singapore Interbank
Offered Rate. A new reference rate for the new euro currency,
EURIBOR the rate at which interbank time deposits of are offered by
one prime bank to another.
24. EUROCREDITS: Euro credits are short- to medium-term loans
of Eurocurrency. The loans are denominated in currencies other than
the home currency of the Euro bank. Often the loans are too large
for one bank to underwrite; a number of banks form a syndicate to
share the risk of the loan. Euro credits feature an adjustable
rate. On Euro credits originating in London the base rate is
LIBOR.
25. EURONOTES:- Euro notes are short-term notes underwritten by
a group of international investment banks or international
commercial banks. They are sold at a discount from face value and
pay back the full face value at maturity Level. Maturity is
typically three to six months.
26. U.S -BANKING:- U.S Parent Banks like foreign subsidiaries
because they allow U.S Banks to underwrites Securities. Edge Act
Banks are federally Chartered subsidiaries of U.S that are
physically located in the U.S, and allowed to engage in a full
range of International Banking Activities. The Edge Act was a 1919
Amendment to Sec 25 of the 1914 Federal Reserve Act. The purpose
was to allow U.S Banks to compete International with the Expenses
of setting up operations. As part of the Debt Rescheduling
agreements among the Bank lending Syndicates and the Debtor nation
creditor banks would sell their loans for U.S Dollars at discount
from face value to MNCs desiring value.
27. Standardization of the International Banking Activities of
U.S. Banks * There was pressure on Congress for more extensive
regulation of foreign banks, so as to be fair to domestic banks,
and to ensure the effectiveness of domestic monetary policy. Bank
Standardization Acts in U.S:- * Bank Holding Company Act
Amendments-1970. * International Banking Act-1978. * Depository
Institutions Deregulation and Monetary Control Act-1980. * Foreign
Bank Supervision Enhancement Act-1991.
28. Capital Standards:- Bank capital adequacy refers to the
amount of equity capital and other securities a bank holds as
reserves. There are various standards and international agreements
regarding how much bank capital is enough to ensure the safety and
soundness of the banking system. This crisis followed a period of
economic expansion in the region financed by record private capital
inflows. Bankers from the G-10 countries actively sought to finance
the growth opportunities in Asia by providing businesses with a
full range of products and services. This led to domestic price
bubbles in East Asia, particularly in real estate Sector.
29. OFFSHORE STANDARD BANKING CENTERS:- The IMF recognized, the
Bahamas Bahrain the Cayman Islands Hong Kong the Netherlands
Antilles Panama Singapore As major offshore banking centers.