Wednesday, March 20, 2013

Guest Lecture by Mr.Shanoj Subramanian


Every business involved in international trade is exposed to some form of risk. An exporter needs to be ensured that he is paid for the goods that he provides. An importer, on the other hand, needs to be paid only for the goods that he agreed to purchase. There are a number of factors that can jeopardize the success of dealings. Hence banking has a huge role in managing risks and helping international trade.

Thus, to throw some more light on the same SIMSREE students had an opportunity on 16th March 2013, to welcome Mr.Shanoj Subramanian, Head, Trade Products and Services, Dhanalakshmi Bank Ltd.


He firstly explained the various banking activities, and the important terms like savings deposit, term deposits; the various accounts like the current account, Non-Residential external account, Non-residential ordinary account, foreign currency non residential account and the differences between them. Then he explained the difference between fund based lending and non-fund based lending. He said that fund based lending is exchange of money and in the beginning it might be a cash credit for capital purchase for a particular tenure, usually in retail segment. In case of non fund based lending, the lending bank does not commit any physical outflow of funds. As such, the funds position of the lending bank remains intact.

Then he told us the reasons of cross border trade, i.e. potential market outside the country, competitive advantage, scarcity/availability of resources in some countries, globalization and liberalization. Then he gave us an insight on the various processes and players in this sector; i.e. Insurance for risk mitigation, customs for regulations, SWIFT/Banks for payment platforms, handling of documents, payment guarantee and financing.

Then we the students were informed about the details of flow of trade and risks involved. Trade settlement methods , Regulations, documents required, letters of credit were also taught. Sir, in a short time covered a lot of topics and the session was highly beneficial and the students learnt a lot. We look forward to such sessions.

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