Assignment On:

International Trade Payment and Finance with Special Reference to Bangladesh

Course Title: International Business
Course Code- BUS 510

Prepared To: Mr. Ahsan Habib Faculty of BRAC Business School.

Prepared By: Md. Mahabubur Rahaman Program- MBA ID- 10364038 Section - 1

Submission Date- 24th December, 2011.

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Introduction

The international trade activities are grown day by day. This trend is attributable to the increased globalization of the world economies and the availability of trade payment and finance from the international banking community.

Although banks also finance domestic trade, their role in financing international trade and payment system is more critical due to the additional complications involved. First, the exporter might question the importer’s ability to make payment. Second, even if the importer is creditworthy, the government might impose exchange controls that prevent payment to the exporter. Third, the importer might not trust the exporter to ship the goods ordered. Fourth, even if the exporter does ship the goods, trade barriers or time lags in international transportation might delay arrival time. Financial managers must recognize methods that they can use to make payment and finance international trade so that they can conduct exporting or importing in a manner that maximizes the value of a business.

In any international trade transaction, credit is provided by either the exporter, the importer, one or more financing institutions, or any combination of these. The supplier may have sufficient cash flow to finance the entire trade cycle, beginning with the production of the product until payment is eventually made by the buyer. In some cases, the exporter may