Need - International Finance, Interdisciplinary issues in Indian Commerce Video Lecture | Interdisciplinary Issues in Indian Commerce - B Com

International finance finance is the
money available to spend on business
needs need for finance is felt at each
and every stage of business right from
the moment someone thinks of a business
idea till it becomes a reality finance
is needed as the business expands need
for finance also grows B it's the
expansion of the existing business or j
to day running of a business need for
finance is cine qin all the main reasons
of business needs finance are to start a
business finance expansions to
production capacity develop and market
new products enter new markets take over
or acquisition moving to new premises
pay for the day-to-day running of
business a business can raise funds from
various sources each source has unique
characteristics which must be properly
understood so that the best available
source of raising funds can be
identified
with the opening up of the economy and
business operations becoming global
Indian companies have access to funds in
the global capital market let us now
understand the term international
finance in detail International Finance
is the examination of institutions
practices and analysis of cash flows
that move from one country to another
there are different sources of
international finance commercial banks
international agencies and Development
Bank's international capital markets
commercial bank a commercial bank is an
institution which accepts deposits makes
business loans and offers related
services they are primarily concerned
with receiving deposits and lending to
businesses international agencies and
Development Bank's international
agencies and Development Bank's invest
directly in companies and guarantee
loans to private investors these are
mainly set up with a motive to finance
private sector projects and companies
located in the developing world to
mobilize financing to help private
companies in the developing world enter
the international financial markets to
promote the development of the
underdeveloped and developing countries
by providing long and medium term loans
International Capital Markets use some
salient financial instruments to solve
the capital requirements of companies
global depository receipt or GDR a
negotiable bank certificate issued in
more than one country for shares in a
foreign company these shares are held by
a foreign branch of an international
bank American depository receipt or ADR
a negotiable certificate issued by US
bank representing a specified number of
shares of a non-us company that treats
in the US financial markets foreign
currency convertible debentures or FCC
be a type of convertible bond issued in
a currency different from the company's
domestic currency in other words the
money being raised by the issuing
company is in the form of a foreign
currency
difference between GDRs and a DRS both
ad ours and GTRs are Depositary Receipts
and claim the ownership of shares of a
company the only difference is the
location of the markets they are traded
in global depository receipts can be
traded in any Stock Exchange other than
the stock exchange of the United States
of America American depository receipt
is permitted for sale only in the stock
exchange of the United States of America
to summarize in line with a trend of
globalization more and more firms are
expanding their businesses in countries
other than their own countries this is
not just export and import business
operations like these can be handled
without the need for international
finance multinational firms today spread
their manufacturing operations in
multiple countries for these they need
to raise funds in many different
countries even companies that operate in
their home countries are now tapping
equity and investment from investors in
other countries