What is arbitrage?

When an entity taking advantage of two or more markets of a price difference goes for simultaneous purchase and sale of a financial instrument on different markets. This is called the Arbitrage. The trader involved in arbitrage makes profit from the difference of prices at different markets. For example: The exchange rate in London is…

Documentary Collection system in international trade explained

Documentary Collection or bill collection refers to the collection of financial and/or commercial documents. The documentary collection is one of the conventional methods of payment in international trade whereby the seller forwards financial and/or commercial documents to the buyer through his bankers against cash payment or acceptance of a bill of exchange. Unlike a bill…

External Commercial Borrowings (ECB) Policy – Revision

In consultation with Government of India, the Reserve Bank of India liberaised some aspects of ECB policy including policy on Rupee Denominated Bonds (RDB). According to review of the policy, the eligible borrower companies in manufacturing sector can raise Extranal Commercial Borrowings up to USD 50 million or its equivalent with minimum average maturity period…