11th Class Business Studies Sources Of Business Finance Question Bank Sources Of Business Finance (Long)

  • question_answer
    Write a note on international sources of finance.


    Ans.     (a) Commercial banks: Commercial banks all over the world extend foreign currency loans for business purposes. For e.g. Standard Chartered emerged as a major source of foreign currency loans to the Indian industry. The types of loans and services provided by banks vary from country to country.
    (b) International agencies and Development banks: These bodies provide long and medium term loans and grants to promote the development of economically backward areas in the world. The more notable among them include International Finance Corporation (IFC), EXIM Bank and Asian Development Bank.
    (c) International Capital Markets: Modern organizations including multinational companies depend upon sizeable borrowing in rupees as well as in foreign currency Prominent financial instruments used for this purpose are:
    1. Global Depository Receipts (GDR's)
    2. American Depository Receipts (ADR's)
    3. Foreign Currency Convertible Bonds (FCCB's)

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