Things to keep in mind while choosing your AD Bank for export-import transactions

Effective participation in international trade is intrinsically linked to the economic development of any country and more so for developing nations. It not only generates employment opportunities but also provides a wide pool of goods and services for customers to choose from. As per the Department of Commerce, Ministry of Commerce and Industry, the overall exports (merchandise and services combined) in June 2022 are estimated to be USD 64.91 billion, exhibiting a positive growth of 22.95% over the same period last year.

The Indian government is proactively taking numerous steps to boost exports and increase India's share in global trade to 10% and taking the country's share of exports in GDP to about 25%. India’s total exports to GDP was 18.7% in 2020-21. In fact, India’s exports are expected to gain faster momentum on the back of investments under the production-linked incentive (PLI) scheme and RODTEP schemes of the Government. But in order to facilitate cross-border trade, it is crucial for businesses involved in import and export of goods and services to choose an appropriate Authorised Dealer Bank (AD Bank) which makes the cross-border transactions seamless.

Involvement of banks in facilitation of trade is very crucial in terms of meeting a range of short-term to medium-term trade financing requirements, streamlining of the whole export – import process and reduction of financial risks. Therefore, the decision to choose an AD Bank has to be made post evaluation of certain important parameters.

Here are key parameters that any entity engaged in cross border remittances, including export-import transactions, must keep in mind when choosing an AD Bank.

1. Choose a bank with extensive international footprint
The decision to choose an authorised dealer bank for your export – import transactions needs to be based on trust and an exporter must look for a banking partner that you are comfortable engaging with. A bank with strong international presence makes the cross-border remittances simpler, faster, and cost-efficient. ICICI Bank has a wide international footprint.. It has subsidiaries in the United Kingdom and Canada. It also has branches in the United States, Singapore, Bahrain, Hong Kong Dubai International Finance Centre and representative offices in the United Arab Emirates, China, South Africa, Bangladesh, Malaysia and Indonesia. ICICI Bank also has a wide correspondent network of foreign banks across countries and maintains Nostro accounts in more than 30 currencies,

2. Choose a bank with a safe and secure digital online platform with customised cross-border solutions
Just like the world is migrating towards a digital economy, likewise banking and trade transactions are also now being digitised.

An AD Bank with maximum trade digital solution is the best bet to go with as it reduces paper work for the exporter – importer and thus enables them to save time and focus more on their business requirements.

ICICI Bank digital platform – Trade Online is one such one-stop solution for all trade needs. It’s faster and paperless with no need to make branch visit to submit trade transactions. The best part: it allows you to schedule future dated transactions as well.

ICICI Bank also offers InstaBIZ – the mobile app for business banking transactions on the move. All business banking transactions including trade transactions can be initiated while you are on the go.

3. Simplified process for trade transactions and support for regulatory compliance
Cross-border transactions are subject to various regulations and documentation. In order to ensure that all the regulations are duly complied with, an AD Bank with robust and simplified trade transactions process will ensure seamless processing of trade transactions and comply with all regulations at the same time. ICICI Bank has a dedicated team to support regulatory compliance needs for both trade and capital account transactions like Foreign Direct Investment, Overseas Direct Investment, etc.

4. Transaction processing time
Time is the essence in any trade transaction to avoid any penalty/ demurrage charges and ensures that the funds/ documents reaches the beneficiary/ exporter/ importer on time. ICICI Bank’s unique offering like processing of inward remittances in less than one hour, issuance of bank guarantees in 3 hours and outward remittance within 5 hours are some of the benefits that ensure that customer transactions are processed within the defined turnaround time.

5. Range of trade offerings
As an exporter/ importer, you need various facilities from banks, which would help you to compete in international markets and give you ample time to focus on your business rather than on banking activities. Digital products offered by ICICI Bank like online export bill lodgement, digital export and import bill regularisation, facility to book exchange rates on the go, specific trade accounts to lower your transaction cost, one view dashboards, are some of the unique offerings from ICICI Bank.

Conclusion:
Banks have a critical role to play in cross-border trade as they provide financial services and reduce the risk associated with export and import through different services and solutions they provide. Given their significance, an exporter/ importer should carefully evaluate potential banking partners against a set of key criteria, some of which are stated above. Choosing the right banking partner ensures smooth transactions for both buyers and sellers.