The analytical part includes the details of export and import process, mechanisms involvement of parties in export and import business etc.
On the basis of the analysis interpretation has been made regarding the business trend of export and import. Some precautionary measures are recommended to overcome the short comings of the bank to improve the business transaction in the near future. There are some also findings which will help the bank to judge the finance proposal from the point if risk and profitability.
1.0 Introduction
International trade, even more so than domestic trade, is carried out mostly on a credit basis. Trade across national borders involves loans, advances, and guarantees of payment that brings third parties like bank, into a trade transaction. Beside commercial banks, government is often involved since low-cost financing is used as a means of stimulating exports. Banks and government are not the only institutions that finance international trade. Banks account for the major share of trade finance, but they specialize in short term, unsecured loans. Other institutions are specializing in higher-risk loans that must be secured by a pledge of the borrowers asset as collateral. But commercial banks dominate the financing of world trade. Banks have a varied assortment of financing alternatives available that allow them to competed for almost any type of financing deal. These alternatives include short-term unsecured loans with a borrowing period of up to one year; letter of credit, which are guarantees that an importer will make payment to an exporter; financing of foreign receivables, wherein exporter receive financing by pledging the money to be received from importers as collateral; and longer-term loans,