Indian banks need to expand their global banking relationship, says report

A first-of-its-kind working paper from Mint Road says Indian banks need to expand their global banking relationship. The study’s focus is on bank-intermediated buyers’ credit, which accounts for over 93 per cent of our cross-border trade credit; it calls for a shift towards the use of global instruments instead of the indigenous Letters of Undertaking (LoU) and Letters of Credit (LoC) even though it may push up the costs involved.
 

While domestic banks account for a significant portion of such credit, its distribution is significantly skewed. Those with a large overseas presence have a higher share