OFFSHORE FINANCIAL CENTRE AND

INTERNATIONAL BANKS

Introduction

Banking, the business of providing financial services to consumers and businesses.

The basic services a bank provides :are checking accounts, which can be used

like money to make payments and purchase goods and services; savings accounts and time deposits that can be used to save money for future use;

Contd….

loans that consumers and businesses can use to purchase goods and services; and basic cash management services such as check cashing and foreign currency exchange.

A broader definition of a bank is any

financial institution that receives, collects, transfers, pays, exchanges, lends, invests, or safeguards money for its customers.

Economic role of banksBanking is like any other form of economic activity.

Like other economic agents, banks are both dealers and producers. They are dealers, in the sense that they bring together lenders and borrowers, and they are producers as they transform raw base money or cash issued by the government into more convenient checks or demand deposits, which have greater security than cash, and also they transform short-term deposits into longer-term loans. In the process they do the financial intermediation and maintain liquidity in the system.

 

International banking operationsInternational banking operations are

essentially to facilitate the movement of goods across the political boundary of countries.

Banking system came along with the development of money as an institution.

The transaction of commodities across countries required financial intermediation in the international level and thus international banking business was born.

OFFSHORE FINANCIAL CENTRES

An offshore financial centre (or OFC), although not precisely defined, is usually a small, low-tax jurisdiction specialising in providing the corporate and commercial services to non-residents in the form of offshore companies and the investment of offshore funds.

 

Panama: an Offshore Center

Panama is an independent republic with a very liberal tax laws.

There are a large number of local and foreign financial institutions and also a large spectrum of legal and accounting expertise.

The banking secrecy is protected by various laws. There is no tax on offshore business and its legal system is well established.

The Isle of Man : Offshore Financial CentreThe Isle of Man is outside the sovereign

jurisdiction of United Kingdom. It is in the centre of Irish Sea and eighty miles away from Manchester.

The well established company laws of the island allow a variety of corporate vehicles including

companies limited by guarantee and hybrid companies, and also companies limited by share capital.

Contd…… Companies that are not owned by the

residents of the Isle of Man (IM) and those that conduct their business completely outside the IM, even if they may have an office there, are granted exemption from all IM income taxes.

Leading international banksWorld bankHSBCStandard chartered bankCity bankAbn-amro bankBank of Ceylon

Contd….BNP pabris bankJP morgan chase bankAmerican Express bankDeutsche Bank

WORLD BANK

The World Bank, also known as the International Bank for Reconstruction and Development has been assisting developing nations since its creation out of Bretton Woods agreement in 1944.

The World Bank Group is made up of five organizations:

 The International Bank for Reconstruction and

Development (IBRD).

 

Contd……The International Development

Association (IDA).The International Finance Corporation

(IFC).The Multilateral Investment Guarantee

Agency (MIGA).The International Centre for the

Settlement of Investment Disputes (ICSID).

 Headquarters: Washington, DC and more

than 100 offices around the worldEstablished: July 1, 1944 by a conference

of 44 governments in Bretton Woods, New Hampshire, USA

Membership: 184countries. 

WHO RUNS THE WORLD BANK?

 The World Bank is run like a cooperative, with

their member countries as shareholders. The number of shares a country has is based roughly on the size of its economy. The United States is the largest single shareholder, with 16.41 percent of the votes, followed by Japan 7.87 percent, Germany 4.49 percent, the United Kingdom 4.31 percent and France 4.31 percent. The rest of the shares are divided among the other member countries.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

The International Bank for Reconstruction and Development IBRD provides loans and development assistance to middle income countries in Latin America, Asia, Africa and Eastern Europe. IBRD gets most of its funds by selling bonds in international capital markets.

HSBC (HONG-KONG AND SHANGHAI BANKING CORPORATION)

A BRIEF BACKGROUND TO THE HSBC GROUP:

With total assets in excess of USD 696 billion and more than 9500 offices in 79 countries and territories, HSBC is one of the world's leading international banking and financial services organizations, providing consumer, commercial, investment banking and insurance services throughout Asia Pacific, Europe, the Americas, the Middle East and Africa.

The Hong Kong and Shanghai Banking Corporation Limited, which was established in Hong Kong and Shanghai in 1865.

HSBC Corporate and Institutional Banking provides domestic and regional services solutions to blue chip companies throughout the world. Services include a comprehensive range of banking solutions,

Contd……including commercial short-to-medium term

lending, structured finance and transaction banking.

HSBC Personal Financial Service provides a wide range of personal banking products and services through its branch network in 79 countries

and territories across the globe.

Some important functions:

INSTITUTIONAL BANKINGTREASURY AND CAPITAL

MARKETSCUSTODY AND CLEARING

STANDARD CHARTERED

Standard Chartered was formed in 1969 through a merger of two banks: The Standard Bank of British South Africa, founded in 1863, and the Chartered Bank of India, Australia and China, founded in 1853

It has network of over 1,700 branches and outlets

focuses on consumer, corporate, and institutional banking, and on the provision of treasury services

More focus on technology and telecommunication (ATM Network, APS, Quality System)

AMERICAN EXPRESS BANK Established in 1850 in New York, American

Express Company was among the first and most successful express delivery businesses to arise during the rapid westward expansion of the United States.

American Express Bank has presence in over 150 countries.

American Express India was established in 1921 providing high quality travel and financial services

American Express in India is the largest company to have wide network of travel locations in the country.

American Express Travels has entered into a Memorandum of Understanding (MoU) with Department of Post to enable the designated Speed Post offices in distributing and encashing American Express Travelers Cheques.

American Express Travelers Cheques are available in the following currencies:

Australian DollarCanadian DollarEuroJapanese YenSaudi RiyalPound SterlingUS Dollar

Products and servicesINVESTMENT PRODUCTSFOREIGN EXCHANGE & TREASURYCREDIT AVAILABILITYINSURANCEDEPOSITS

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