Course Title: INTERNATIONAL TRADE FINANCE
Course Code: N.A.
Credit Units: 3
Level: Entry level - MBA
# Course Title
1 Course Objectives:
With the rise in global trade, management of international trade finance is becomes
imperative and crucial. The objective of this course is make students understand ways in
which International trade is undertaken, settled and financed. This course provides a
comprehensive overview of the role of various entities engaged in International Trade
and Finance
2 Prerequisites:
MBA in International Business, MBA (G)
3 Student Learning Outcomes:
By the end of the course, the students will:
possess a broad knowledge of the terminologies and procedures used in
International Trade, Finance and Commercial contracts ;
know the channels used to secure finance from International Financial Markets &
Institutions for trade and global business ;
understand international payment systems & regulatory compliances ;
mitigate risks involved in international trade finance
Course Contents/Syllabus: 15% weightage
4 Module 1: An overview of Globalization, International Trade and Finance
Complexities of international trade, Definition and scope of International Trade
Finance
Needs of various entities like exporters, importers, merchants, traders, overseas
representatives, banks, borrowers, lenders, Logistics, Forwarders etc.
International Commercial Terms (INCOTERMS),
Protection against credit, political, economic and transit risks
5 Module II : Global Financial Eco-system 25%weightage
World’s major Financial Markets for Equity, Debt, Foreign Exchange &
Commodities.
International lending institutions World Bank, IMF, ADB, EBRD,
Export-Import Banks, foreign Governments & agencies.
Financing global Trade, Buyers credit, Supplier credit, Role of credit-rating
agencies, ECGC & EXIM Banks.
25% weightage
6 Module III: International Trade Finance and Payment Systems
Modes of Payments in Trade,
Obtaining payments through Documents against Payment, Documents against
Acceptance, Bills of Exchange, Letters of Credit & Stand-by Letters of Credit. Bill
discounting with Banks, Foreign currency cheques, drafts,
Factoring & Forfeiting agencies. Telegraphic transfers (TT’s) & SWIFT. Regulations to
prevent fraud and money laundering. Remittances permitted by RBI for individuals and
corporates.
20% weightage
7 Module IV: International Banking System
Role of International Banks,
Correspondent Banking, Nostro/Vostro Accounts. Bid/Ask rate determination for Bills,
TT’s, Traveler’s Cheques.
Risks of OTC products & ISDA regulations. Availing pre-shipment & post-shipment
finance, Fixed vs. Floating rate borrowing & External Commercial Borrowing (ECB’s).
Payment, settlement and clearing systems in foreign currency including SWIFT, CHIPS,
CHAPS & Electronic banking. RBI Regulatory compliances, late payments & bad debts.
8 Module V: Risk Mitigation Strategies and Trade Facilitation 15% weightage
Transaction Risk, Competitive Risks, Currency Risk Management solutions,
Trade Credit Insurance, Hedge Funds, Private Equity, Pension Funds etc.
Politico-Legal arbitration
Islamic Finance
9 Pedagogy for Course Delivery:
Lectures, Trade Statistics, Discussions, Case study, Group presentation, Field Visit and
Corporate/ Guest Lecture.
10 Assessment/ Examination Scheme:
Theory L/T (%) Lab/Practical/Studio (%) End Term Examination
30% na 70%
Theory Assessment (L&T):
Continuous Assessment/Internal Assessment End Term
Examination
Components Internals Attendance
(Drop down)
Mid-Term
5%
Group
Presentation 10%
Final Test 10%
Weightage (%) 25% 5% 70%
Text & References:
Paul Cowdell and Derek Hyde (Feb 2003) International Trade Finance, Institute of Financial Services
Apte, P. G. (1998), International Financial Management, Tata McGraw Hill
Levi, M. D. (1996), International Finance, McGraw Hill
International.UCPDC-600, International Chamber of Commerce, Paris
V.K. Bhalla (2003) International Financial Management S Chand and Co.
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