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PROJECT ON

OFFSHORE BANKING
BACHELOR OF COMMERCE
BANKING AND INSURANCE
SEMESTER V
ACADEMIC YEAR
2014-2015
SUBMITTED BY
SURAJ RAJBHAR
ROLL NO.43
__________________________________________________________________
VIDYAVARDHINIS
A.V. COLLEGE OF ARTS,
K.M. COLLEGE OF COMMERCE,
E.S.A. COLLEGE OF SCIENCE,
VASAI ROAD (W), DIST-THANE,MAHARASHTRA-401202

CERTIFICATE
This is to hereby certified that Suraj Rajbhar of Third Year
Bachelor of Commerce (Banking & Insurance) (Semester V) (2014-
2015) has completed project on merger and acquisition in banking
industries under the guidance of Prof. BHAVANA CHAUHAN
LAD


____________________ ____________________
COURSE CO-ORDINATOR PRINCIPAL



____________________ ______________________
INTERNAL EXAMINER EXTERNAL EXAMINER







I SURAJ .D. RAJBHAR the student of Third year of B.Com
(BANKING AND INSURANCE) Semester V hereby declare that I have
completed the project on offshore banking.

The information submitted is true and original to the best of my
knowledge.



Signature of student:
Name of student: SURAJ .D. RAJBHAR
Roll no:43
DECLARATION




Milestones achieved in my journey of life never achieved alone,
and this is one expectation. As I complete enlighting journey I would
acknowledge and thanks to guide and companions who help me put my
best foot forward and made this project successful.
I would like to extend my sincere gratitude to PROF .Mrs
PRATIKSHA KHEDEKAR (CODINATOR OF BBI ) and Mrs.
BHAVANA CHAUHAN LAD who guide me into study of
OFFSHOER BANKING. It has indeed a great experience of working
under this valuable advice and guidance provide throughout the making
the project.
I would also like to thanks the principle DR. OF
VIDHAYAVARDINIS VARTAK COLLAGE.
Finally without forgetting. I would like to thanks the
library staff with the right material whenever I required.
SURAJ .D. RAJBHAR
T.Y BBI (Sem .V)

ACKNOWLEDGEMENT







An offshore banking either located in outside country of
residency normally in tax havens. The tax havens is the place where no
tax charge on offshore bank account. An offshore bank is have been set
up with providing an internationally competitive and hassle free
environment for export production. Offshore banking take shape in India
by EXI M policy 2002 by government of India by setting up of a
Especial Economical Zone (SEZ).

Offshore banking has obtain been associated with the underground
economy and originate crime via tax evasion and money laundering. In
term of offshore banking center, the terms of the total deposit s, the
global market is denominated by two keys jurisdiction: Switzerland
and Cayman Island.

The profile of typical offshore banking account generally depends
upon whether the account holder in an individual client or corporate
client, but both have one thing in common. Offshore banking have many
benefit.



EXECUTIVE SUMMARY


TABLE OF CONTENTS


SR NO. PARTICULAR PAGE
NO.
1 INTRODUCATION OF OFFSHORE BANKING
2 REGULATION OF OFFSHORE BANKING
3 OFFSHORE BANK ACCOUNT : INDIAN BANKING
4 OFFSHORE BANKING CONSIDERATION
5 ADVANTAGE AND DISADVANTAGE OF OFFSHORE BANKING
6 OFFSHORE BANKING LEGISLATION
7 OFFSHOR BANKING IN REGULATION ACT AND ITS PROVISION
IN INDIA CONTENTS MADE BY RBI

8 BANKING SREVICE
9 OFFSHORE BANK ACCOUNT


10 BIG OFFSHORE BANK V/S SMALL OF SHORE BANKING


11 QUESTIONAIRE ON THE TOPIC OF OFFSHORE BANKING


12 CONCLUSION
13 BIBLIOGRAPHY

Chapter-1

INTRODUCATION
RESEACH DESIGH
OBJECTIVE
The main objective to select the topic is to know about OFFSHORE BANNKING which is
widely used in todays modern world . Many of the large financial organization
As well as institutions who operates worldwide often hold this account for better management
functions .
Highlights:
Merits and demerits
Regulation of offshore banking
Offshore banking risk etc.
The other purpose to choose this topic is to highlight many aspects which can help to know the
offshore banking , which will certainly prove beneficial.




HYPOTHESIS
Offshore banking is the processing at a faster rate .there are so many benefits if a person
maintain is offshore banking account .also, there are many standardized rules and regulations for
the offshore bank.
This enable them to operate in customized manner and provide quality service to its client
worldwide In future ,it might became compulsory for all the big organization to have an
offshore account .this is because of globalization. Globalization of an economy permits its
citizen to operates internationally and earn maximum gain .in such a situation it is advantage to
have satisfactory knowledge about OFFSHORE BANKING . it is good and helpful to know
about different topic related to banking sector .
Research will particularly be on the basis of the secondary data i.e internet , books, magazines
,articles in the news paper etc. A visit to the ICICI BANK is done which facilitates OFFSHORE
BANKING which forms a part of the survey so that more information about the topic can
gathered .









Offshore bank



An offshore bank is a bank located outside the country of residence of the depositor, typically in
a low tax jurisdiction (or tax haven) that provides financial and legal advantages. These
advantages typically include:
greater privacy (see also bank secrecy, a principle born with the 1934 Swiss Banking
Act)
little or no taxation (i.e. tax havens)
easy access to deposits (at least in terms of regulation)
protection against local, political, or financial instability
Offshore banking has often been associated with the underground economy and
organized crime, via tax evasion and money laundering; however, legally, offshore banking does
not prevent assets from being subject to personal income tax on interest. Except for certain
persons who meet fairly complex requirements. September 11, 2001, there have been many calls
for more regulation on international finance, in particular concerning offshore banks, tax havens,
and clearing houses such as Clear stream, based in Luxembourg, being possible crossroads for
major illegal money flows.

Features of offshore banking
* Offshore banks provide access to politically and economically stable jurisdictions. This may be
an advantage for those resident in areas where there is a risk of political turmoil who fear their
assets may be frozen, seized or disappear.
* Some offshore banks may operate with a lower cost base and can provide higher interest rates
than the legal rate in the home country due to lower overheads and a lack of government
intervention.
* Interest is generally paid by offshore banks without tax deducted. This is an advantage to
individuals who do not pay tax on worldwide income, or who do not pay tax until the tax return
is agreed, or who feel that they can illegally evade tax by hiding the interest income.
* Some offshore banks offer banking services that may not be available from domestic banks
such as anonymous bank accounts, higher or lower rate loans based on risk and investment
opportunities not available elsewhere.
* Offshore banking is often linked to other structures, such as offshore companies, trusts or
foundations, which may have specific tax advantages for some individuals.








Offshore financial centers

In terms of offshore banking centres, in terms of total deposits, the global market is dominated by
two key jurisdictions: Switzerland and the Cayman Islands. A letter by the District Attorney of New
York, Robert M. Morgenthau, published by The New York Times, states that the Cayman Islands
has 1.9 trillion United States dollars on deposit in 281 banks, including 40 of the worlds top 50
banks although numerous other offshore jurisdictions also provide offshore banking to a greater or
lesser degree. In particular, Jersey, Guernsey, and the Isle of Man are known for their well regulated
banking infrastructure.
[15]
Some offshore jurisdictions have steered their financial sectors away from
offshore banking, as difficult to properly regulate and liable to give rise to financial scandal.


List of offshore financial centers
Antigua and Barbuda
Bahamas Barbados
Belize Bermuda
British Virgin Islands
Cayman Islands Channel Islands Cook Islands
Curaao Cyprus
Dominica
Ghana
Isle of Man
Labuan Territory, Malaysia Liechtenstein
Luxembourg
Malta Macau
Mauritius Monaco
Montserrat
Nauru
Panama
Saint Kitts and Nevis
Seychelles
Singapore
Switzerland
Turks and Caicos Islands



Chapter -2
Regulation of offshore banks

In the 21st century, regulation of offshore banking is allegedly increasing, although critics
maintain it remains largely insufficient. The quality of the regulation is monitored by supra-
national bodies such as the International Monetary Fund(IMF). Banks are generally required to
maintain capital adequacy in accordance with international standards. They must report at least
quarterly to the regulator on the current state of the business.



Since the late 1990s, especially following September 11, 2001, there have been a number of
initiatives to increase the transparency of offshore banking, although critics such as the
Association for the Taxation of Financial Transactions for the Aid of Citizens (ATTAC) non-
governmental organization (NGO) maintain that they have been insufficient. A few examples of
these are:

The tightening of anti-money laundering regulations in many countries including most
popular offshore banking locations means that bankers are required, by good faith, to report
suspicion of money laundering to the local police authority, regardless of banking secrecy rules.
There is more international co-operation between police authorities.
In the US the Internal Revenue Service (IRS) introduced Qualifying Intermediary
requirements, which mean that the names of the recipients of US-source investment income are
passed to the IRS.















Chapter -3
Offshore Bank Accounts: Indian Banking

Indian Banking
We have an excellent relationship with all the established Indian Banks in London. We are
happy to introduce you to them to facilitate the establishment of your personal or business bank
accounts. The Banks between them have a host of products and services customized to suit your
financial needs. Benefit from the flexibility in operating the bank accounts or the facilities
offered to Returning Indians and the various deposit schemes available for Non Resident Indians.
All the Indian Banks in the United Kingdom are authorized and regulated by the Financial
Services Authority. They would be members of the Financial Services Compensation Scheme
established under the Financial Services and Markets Act 2000.










Offshore Banking

If you are non-UK resident or non-UK domicile, we can assist you to open and maintain an
offshore private bank account. If you need access to confidential offshore banking, we can help
you establish an account with a reputable Offshore Banks in Switzerland, Seychelles, Isle of Man
or Dubai.

Opening an Offshore Bank Account

I n I ndia The Advantages Of Opening Bank Accounts Offshore Are:

Strong Privacy

Less Restrictive Legal Regulation

Low Or No Taxation (I.E. Tax Havens)

Easy Access To Deposits (At Least In Terms Of Regulation)

Protection Against Local Political Or Financial Instability



Scope of offshore banking
Offshore banking constitutes a sizable portion of the international financial system. Experts
believe that as much as half the world's capital flows through offshore centers. Tax havens have
1.2% of the world's population and hold 26% of the world's wealth, including 31% of the net
profits of United States multinationals. An estimated 13-20 trillion is hoarded away in offshore
accounts.
Some $3 trillion is in deposits in tax haven banks and the rest is in securities held by
international business companies(IBCs) and trusts. Among offshore banks, Swiss banks hold an
estimated 35% of the world's private and institutional funds (or 3 trillion Swiss francs), and the
Cayman Islands (1.9 trillion US dollars in deposits) are the fifth largest banking centre globally
in terms of deposits. However, recent data by the Swiss National Bank show that the assets held
by foreign persons in Swiss bank accounts declined by 28.1% between January 2008 and
November 2009.
Scale of potential tax revenue
Assuming even just the lower estimate of 13 trillion on deposit in offshore accounts, if these
assets earned an average 3% a year in income for their owners taxable at 30%, then the offshore
funds would generate 121 billion in tax revenues. However, keep in mind, these statistics
assume that ZERO tax is paid (i.e. NO ONE pays any tax on their holdings), and that 100% of
those deposits is notionally liable to tax which is not being paid, each of which seems a highly
unlikely scenario.





Ownership
According to Merrill Lynch and Capgemini's World Wealth Report for 2000, one third of the
wealth of the world's high net-worth individualsnearly $6 trillion out of $17.5 trillionmay
now be held offshore. A large portion, 6.3tn, of offshore assets, is owned by only a tiny sliver,
0.001% (around 92,000 super wealthy individuals) of the world's population. In simple terms,
this reflects the inconvenience associated with establishing these accounts, not that these
accounts are only for the wealthy. Most all individuals can take advantage of these accounts.
Money laundering
The IMF has said that between $600 billion and $1.5 trillion of illicit money is laundered
annually, equal to 2% to 5% of global economic output. Today, offshore is where most of the
world's drug money is allegedly laundered, estimated at up to $500 billion a year, more than the
total income of the world's poorest 20%. Add the proceeds of tax evasion and the figure
skyrockets to $1 trillion. Another few hundred billion come from fraud and corruption. "These
offshore centers awash in money are the hub of a colossal, underground network of crime, fraud,
and corruption" commented Lucy Komisar quoting these statist

Offshore customers financial protection
If an offshore jurisdiction does not have effective banking legislation and banking supervision,
the chances that any bank in this particular jurisdiction can go bankrupt and offshore customers
can loose their money are bigger.
Like with due diligence requirements, there are internationally accepted standards on how the
financial supervision of banks should be undertaken. The most popular international document to
refer is Basel Accords, or banking supervision accords Basel I and Basel II issued by the Basel
Committee on Banking Supervision - institution created by the central bank Governors of G10


countries. In practice, these supervision standards attempt to setup rigorous risk and capital
management requirements in order to ensure that a bank holds capital reserves appropriate to the
risk it exposes itself to through lending and investment practices.
Regarding offshore banking supervision, it is important to learn that the guaranteed or insured
deposit amount the authorities of particular jurisdiction will return (like FDIC protection in the
USA) in case of bank's default as well as to know how strong this offshore jurisdiction is to
fulfill the liabilities. When deciding on financial protection issues, the most important is
selecting the right offshore jurisdiction in accordance with these criteria rather than selecting one
particular bank within an offshore jurisdiction. As an example are Switzerland again.
There's no government deposit insurance in Switzerland (except for Swiss postal where all
deposits are fully guaranteed by the Swiss government). But your deposits are probably safer in
any Swiss bank than in most other offshore banks in the world because:
1) Swiss banks normally do not go bankrupt. They have some of the strongest balance sheets
worldwide. Swiss banks are regulated by the Swiss Federal Banking commission, which is the
federal watchdog enforcing very strict rules. Swiss banks can encounter difficulties,
approximately once in a decade, with small savings and loans that loaned too much money on
too little collateral and, perhaps, this is the only risk. It is also important that such banks are
usually bought out by a larger bank;
2) Swiss banks have a private deposits insurance. They have signed an agreement, according to
which will compensate depositors up to Swiss Franks 30,000 of their deposits in a bank if the
bank goes bankrupt; and, in this case, each bank would pay a share of the total compensation
which is counted based on proportion to their size.





Chapter-5
Offshore Banking Considerations

The best offshore bank account for you will depend very much on your personal
circumstances and account requirements - for example whether you are looking for a
bank account, tax solution or an asset protection plan. If you need advice make sure you
get independent assistance and always do full due diligence before moving your assets to
an offshore bank's account.
Any banks you consider should be located in a secure offshore jurisdiction where they are
subject to the regulation, supervision and licensing of an independent statutory body. This
is necessary to ensure the security of funds placed in an account;
You should be sure that the particular offshore bank you are interested in has a reputable
parent company, good reputation and history.
There is much difference in account costs and transaction fees, but many people do not
look at fee structures when opening bank account. This information always remains
available to the customers.
Offshore bank accounts usually come with extra account options and features such as the
ability to conduct transactions in more than one currency, etc., and they are often more
expensive than current accounts in local banks. If you do not need so many extra features,
you can obtain the cheaper variant of the offshore bank account excluding extra features
you do not require.




Chapter-6
Advantages of offshore banking


Offshore banks can sometimes provide access to politically and economically stable
jurisdictions. This will be an advantage for residents in areas where there is risk of political
turmoil, who fear their assets may be frozen, seized or disappear .However it is often argued that
developed countries with regulated banking systems offer the same advantages in terms of
stability.
Some offshore banks may operate with a lower cost base and can provide higher interest
rates than the legal rate in the home country due to lower overheads and a lack of government
intervention. Advocates of offshore banking often characterize government regulation as a form
of tax on domestic banks, reducing interest rates on deposits. However this is scarcely true now;
most offshore countries offer very similar interest rates than those that are offered back home.






Offshore finance is one of the few industries, along with tourism, in which
geographically remote island nations can competitively engage. It can help developing countries
source investment and create growth in their economies, and can help redistribute world finance
from the developed to the developing world. But equally, well resourced and developed
countries such as New Zealand offer a safe and well administered background for these financial
services.
Interest is generally paid by offshore banks without tax being deducted. This is an
advantage to individuals who do not pay tax on worldwide income, or who do not pay tax until
the tax return is agreed, or who feel that they can illegally evade tax by hiding the interest
income.
Some offshore banks offer banking services that may not be available from domestic
banks such as anonymous bank accounts, higher or lower rate loans based on risk and investment
opportunities not available elsewhere.
Offshore banking is often linked to other structures, such as offshore companies, trusts or
foundations, which may have specific tax advantages for some individuals.
Many advocates of offshore banking also assert that the creation of tax and banking
competition is an advantage of the industry, arguing with Charles Tiebout that tax competition
allows people to choose an appropriate balance of services and taxes.







Disadvantages of offshore banking


Offshore bank accounts are sometimes less financially secure. In a banking crisis which
swept the world in 2008, some savers lost funds that were not insured by the country in which
they were deposited. Those who had deposited with the same banks onshore received all of their
money back. In 2009 The Isle of Man authorities were keen to point out that 90% of the
claimants were paid, although this only referred to the number of people who had received
money from their depositor compensation scheme and not the amount of money refunded. In
reality, only 40% of depositor funds had been repaid: 24.8% in September 2009 and 15.2% in
December 2009. Both offshore and onshore banking centres often have depositor compensation
schemes. For example: The Isle of Man compensation scheme guarantees 50,000 of net
deposits per individual depositor, or 20,000 for most other categories of depositor. Potential
depositors should be aware that any deposits over the guaranteed amount are at risk. However,
only offshore centres such as the Isle of Man have refused to compensate depositors 100% of
their funds following Bank collapses. Onshore depositors have been refunded in full, regardless
of what the compensation limit of that country has stated. Thus, banking offshore is historically
riskier than banking onshore.



Offshore banking has been associated in the past with the underground economy and
organized crime, through money laundering. Following September 11, 2001, offshore banks and
tax havens, along with clearing houses, have been accused of helping various organized crime
gangs, terrorist groups, and other state or non-state actors. However, offshore banking is a
legitimate financial exercise undertaken by many expatriate and international workers.
Offshore jurisdictions are often remote, and therefore costly to visit, so physical access
and access to information can be difficult. This problem has been alleviated to a considerable
extent with the advent and realization of online banking as a practical system.
Offshore private banking is usually more accessible to those on higher incomes, because
of the costs of establishing and maintaining offshore accounts. However, simple savings
accounts can be opened by anyone and maintained with scale fees equivalent to their onshore
counterparts. The tax burden in developed countries thus falls disproportionately on middle-
income groups. Historically, tax cuts have tended to result in a higher proportion of the tax take
being paid by high-income groups, as previously sheltered income is brought back into the
mainstream economy.









Chapter-7
Offshore banking legislation



There are many things that are very similar notwithstanding in which offshore jurisdiction the bank
operates, and comparing this part of legislation would be quite senseless. At first, this regards
internationally standardized anti-money laundering measures such as:

Due diligence and record-keeping;
Reporting of suspicious transactions.
However, each country has one or several basic laws to carry out the regulation of offshore
banking industry that describe very important principles regarding:




Offshore banking privacy
Protection of bank customers.
This part of banking legislation is more individual for each jurisdiction and, being directed by a
professional specializing in the legislation of the country of residence and that of some particular
offshore jurisdiction, a potential customer of the offshore bank has to compare the legislations
and choose the jurisdiction that by means of its legislation protects his interests more effectively.
Here, for general overview with this vast issue, we will describe some interesting points of one
or another jurisdiction.











Chapter-8

Offshore banking in regulation act and provisions in India made by
RBI

In exercise of the powers conferred by Section 6, Section 7, Section 8, Section 9 and
Section 47 of the Foreign Exchange Management Act, 1999 (Act 42 of 1999) and all other
powers enabling it in this behalf, the Reserve Bank of India.
PART 1
3. Notwithstanding the status, as an authorized dealer, of the bank setting up the Offshore
Banking Unit, and save as otherwise directed by the Reserve Bank, the Offshore Banking Unit
shall not be regarded as an authorized dealer for the purpose of the Act, rules or regulations made
there under.
4. Save as otherwise provided in these or any other Regulations or directed by the Reserve Bank,
nothing contained in any other Regulations shall apply to an Offshore Banking Unit.
5. Save as otherwise provided in these Regulations or with the permission of the Reserve Bank,
an Offshore Banking Unit shall not conduct any activity or undertake any transaction with
residents in India.






PART II
Transactions which may be undertaken by an Offshore Banking Unit
6. An Offshore Banking Unit may undertake foreign exchange transactions with any authorized
dealer in India only on principal-to-principal basis.
7. An Offshore Banking Unit may undertake transaction in foreign change with a unit located in
Special Economic Zone to the extent the latter is eligible to enter into or undertake such
transaction, within the ceilings and subject to the conditions specified in the Regulations
governing such transaction.
8. Engagement of an Offshore Banking Unit in any of the forms of business specified in sub-
section (1) of section 6 of the Banking Regulation Act, 1949 shall be only in foreign exchange
and shall be subject to these Regulations and the conditions of license issued under the said Act.












Chapter -9
Banking services



It is possible to obtain the full spectrum of financial services from offshore banks, including
Corporate administration:
Management in business and organizations is the function that coordinates the efforts of
people to accomplish goals and objectives using available resources efficiently and effectively.
Management comprises planning, organizing, staffing, leading or directing, and controlling an
organization or initiative to accomplish a goal. Resourcing encompasses the deployment and
manipulation of human resources, financial resources, technological resources, and natural resources.
Management is also an academic discipline, a social science whose object of study is the social
organization





Credit:
Credit the trust which allows one party to provide resources to another party where that
second party does not reimburse the first party immediately (thereby generating a debt), but
instead arranges either to repay or return those resources (or other materials of equal value) at a
later date. The resources provided may be financial (e.g. granting a loan), or they may consist of
goods or services (e.g. consumer credit). Credit encompasses any form of deferred payment.
Credit is extended by a creditor, also known as a lender, to a debtor, also known as a borrower.

Deposit taking:
A deposit account is a savings account, current account, or other type of bank account, at a
banking institution that allows money to be deposited and withdrawn by the account holder.
These transactions are recorded on the bank's books, and the resulting balance is recorded as a
liability for the bank and represents the amount owed by the bank to the customer. Some banks
may charge a fee for this service, while others may pay the customer interest on the funds
deposited.
.

Foreign exchange:
The foreign exchange market (forex, FX, or currency market) is a global decentralized market
for the trading of currencies. The main participants in this market are the larger international banks.
Financial centers around the world function as anchors of trading between a wide range of multiple
types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange
market determines the relative values of different currencies



Investment management and investment custody:
Investment management is the professional asset management of various securities (shares,
bonds and other securities) and other assets (e.g., real estate) in order to meet specified investment
goals for the benefit of the investors. Investors may be institutions (insurance companies, pension
funds, corporations, charities, educational establishments etc.) or private investors (both directly via
investment contracts and more commonly via collective investment schemes e.g. mutual funds or
exchange-traded funds).The term asset management is often used to refer to the investment
management of collective investments, while the more generic fund management may refer to all forms
of institutional investment as well as investment management for private investors. Investment
managers who specialize in advisory or discretionary management on behalf of (normally wealthy)
private investors may often refer to their services as money management or portfolio management
often within the context of so-called "private banking".

Letters of credit and trade finance:
A letter of credit is a document issued by a financial institution, or a similar party,
assuring payment to a seller of goods or services provided certain documents have been
presented to the bank. "Letters of Credit" are documents that prove the seller has performed the
duties specified by an underlying contract (e.g., the sale of goods contract) and the
goods/services have been supplied as agreed. In return for these documents, the beneficiary
receives payment from the financial institution that issued the letter. The letter of credit serves as
a guarantee to the seller that it will be paid regardless of whether the buyer ultimately fails to
pay. In this way, the risk that the buyer will fail to pay is transferred from the seller to the letter's
issuer.




Trustee services:
Trustee (or the holding of a trusteeship) is a legal term which, in its broadest sense, can refer
to any person who holds property, authority, or a position of trust or responsibility for the benefit of
another. Although the strictest sense of the term is the holder of property on behalf of a beneficiary, the
more expansive sense encompasses persons who serve, for example, on the Board of Trustees for an
institution that operates for the benefit of the general public. Also a person in the local government.

Wire- and electronic funds transfers :
Wire transfer or credit transfer is a method of electronic funds transfer from one person or
institution (entity) to another. A wire transfer can be made from one bank account to another bank
account or through a transfer of cash at a cash office.
Different wire transfer systems and operators provide a variety of options relative to the immediacy
and finality of settlement and the cost, value, and volume of transactions. Central bank wire transfer
systems, such as the Federal Reserve's Fed Wire system in the United States are more likely to be real
time gross settlement (RTGS) systems. RTGS systems provide the quickest availability of funds because
they provide immediate "real-time" and final "irrevocable" settlement by posting the gross (complete)
entry against electronic accounts of the wire transfer system operator.

Not every bank provides each service. Banks tend to polarize between retail services and private
banking services. Retail services tend to be low cost and undifferentiated, whereas private
banking services tend to bring a personalized suite of services to the client.




Chapter -10

Offshore Bank Account


Opening bank account offshore can provide privacy and asset protection for you and your
business. To start offshore banking, you may need more information about opening an offshore
bank account. There is no sense in opening a bank account offshore if it is of no use for you, so
you need to understand some general advantages of banking offshore.
With the use of an offshore bank account and depending on account holder's individual personal
circumstances, it is possible to reduce tax liability, increase wealth potential and maximise
privacy. Other benefits are flexibility, ease of access; asset protection, estate planning, better
interest rates and the chance to exploit active business interests on the global scale.
The most important thing is that anyone is free to open an offshore bank account, and it is not
that complicated procedure. However, each individual's circumstances are unique, and a person
should seek direct professional advice before being involved into the offshore world. On this site,
we do not provide any advice, but give the general information.



The main steps/considerations for getting the most appropriate offshore bank account:
selecting offshore Jurisdiction;
selecting offshore Introducer;
Selecting offshore Bank;
selecting offshore Bank Account Type;
Offshore Bank Account opening


Offshore Bank Accounts: Classification
Offshore bank accounts, exactly like onshore, may be classified by different parameters. The first
and the most clear classification principle is personal bank account v/s corporate bank
account. The second principle is by the way how they are utilized, for example, offshore
merchant account, offshore investment account, offshore savings account or offshore
business account. Further we will consider the most popular forms of offshore bank accounts:
Personal offshore bank account - as the name shows this is bank account opened on a physical
person. Normally the client himself is the account holder and beneficial owner of money on the
account. Notwithstanding it is governed by the same banking secrecy laws as other types of
offshore bank accounts, it is the least protected asset protection vehicle. To overcome this
privacy issue without introducing more advanced offshore protection schemes, in some offshore
jurisdictions it is available to open the numbered bank account where bank account title differs
from person's name. Normally it is some combination of numbers and letters, not similar to any
persons name.




Corporate offshore bank account normally is opened on offshore company incorporated in the
same or, more often, in the other offshore jurisdiction. To open corporate bank account, you need
to choose carefully the jurisdiction for opening offshore bank account, as well as the jurisdiction
for offshore company incorporation. Also, it would be important to consider offshore legislation
of both countries and see how it answers the purposes pursued by the establishing of offshore
bank account. The title of such corporate bank account is the name of the company. Normally,
the company name differs from beneficial owner's name thus protecting one's privacy when
sending in and out the money.

Numbered offshore bank account - similar to the way how private offshore bank account is
opened on private person's name, but for numbered offshore account a number or some neutral
word is used instead of person's name in the account title. Numbered accounts are not easy to
open, and there are very few banks providing this kind of service.
Swiss banks are the most known place where to open genuine numbered account. To open
numbered offshore bank account, personal visit to the bank is the must. Customer should
physically go to the bank in Switzerland to go through very serious due diligence procedures,
and be ready to place substantial initial deposit. Also the annual or monthly maintenance costs
are very high. And remember, the numbered offshore bank account is not anonymous since the
bank definitely knows who is the owner of the money on the account.
Other popular types of offshore bank accounts are offshore merchant account providing the
ability to accept credit or debit card payments from customers; offshore savings account,
similar to onshore savings accounts; offshore investment account that provides offshore
investors with wide range of offshore investment opportunities less limited both in terms of risks
and earnings than those for offshore savings account.



Offshore Merchant Account



An offshore merchant account is an account providing the ability to accept credit or debit card payments
from customers for goods and services. An offshore merchant account establishes a relationship between
credit card processor, the bank and business willing to accept the credit card payments. Unlike with
regular merchant account, funds generated from sales and credit card payments are deposited with
offshore bank.

Offshore merchant bank accounts are very popular in various industries starting from mega online
gambling projects and adult industry sites to small businessmen selling some software or unique products
or ideas to everybody in the world through the Internet. As a rule, offshore merchant accounts are
connected with Internet business. When opening offshore merchant account, the offshore bank assigns
unique merchant ID to business. Such offshore merchant account is associated with offshore business
current or checking account.




Offshore savings account


Offshore savings account is similar to onshore savings accounts. The main difference is that interest is
generally paid by offshore banks without tax deducted. From one side, it is an advantage to individuals
who do not pay tax on worldwide income, also to expatriates in particular cases, however every client of
offshore bank should get tax advice before receiving benefits from such arrangements. The most recent
example is the European Union Savings Tax Directive where EU countries agreed to exchange the
information about any customers who earn savings income in one EU State being the residents of another
EU state, as such earnings is subject to withholding tax. Moreover, there are offshore banking
jurisdictions that have agreed to exchange information with EU - for example Andorra, Channel Islands,
Isle of Man, Liechtenstein, Monaco, San Marino, Switzerland, Turks and Caicos Islands. To resume all
above said - offshore savings account is a wise way how to reduce tax burden, but it should be used only
if it is allowed by one's country. So, many countries not only allow to open offshore savings account, but
specially in their laws indicate the sum on which the residents are entitled to have an onshore tax free
savings entitlement in each tax year. This money can be placed in a qualifying investment investment
vehicle, for example, offshore savings account.
Taxation is not the only benefit of offshore savings account, some offshore banks operate with lower
costs and can provide higher interest rates than the rates of onshore banks, due to reduced expenses and
less government intervention.



Offshore investment account






Offshore investment account provides offshore investor with wide range of
offshore investment products to choose from. Unlike offshore savings account, offshore investment
account provides less limited opportunities both in terms of risks and earnings. There are thousands of
offshore investment funds, offshore bonds and other offshore investment vehicles, and most offshore
banks and most offshore banks provide its customers with wide access to them. These offshore
investment instruments are flexible enough to fit around today's changing lifestyles. However with
offshore investment account the customer should be prepared for higher initial investments and less
liquidity of funds placed to such account. Offshore bank will not allow this account to be used as offshore
business account. Too frequent inward and outward transactions may be penalized by additional fees and
penalties. The main difference between offshore and onshore investment accounts is taxation as well as
the fact that offshore banks normally provide wider choice of the investment products. Investor protection
laws are in place in every offshore jurisdiction, and some of them are even more strict than in many
countries not specializing in offshore investment products.
Most people who take advantage of offshore investment & savings accounts are expatriates or those who
live in a tax free country, or those who lead international lifestyle, living, working, and traveling through
multiple locations. For them, saving and investing offshore makes a lot of sense and brings certain
benefits.


Offshore investment account provides offshore investor with wide range of offshore investment products
to choose from. Unlike offshore savings account, offshore investment account provides less limited
opportunities both in terms of risks and earnings. There are thousands of offshore investment funds,
offshore bonds and other offshore investment vehicles, and most offshore banks and most offshore banks
provide its customers with wide access to them. These offshore investment instruments are flexible
enough to fit around today's changing lifestyles. However with offshore investment account the customer
should be prepared for higher initial investments and less liquidity of funds placed to such account.
Offshore bank will not allow this account to be used as offshore business account. Too frequent inward
and outward transactions may be penalized by additional fees and penalties. The main difference between
offshore and onshore investment accounts is taxation as well as the fact that offshore banks normally
provide wider choice of the investment products. Investor protection laws are in place in every offshore
jurisdiction, and some of them are even more strict than in many countries not specializing in offshore
investment products
Most people who take advantage of offshore investment & savings accounts are expatriates or those who
live in a tax free country, or those who lead international lifestyle, living, working, and traveling through
multiple locations. For them, saving and investing offshore makes a lot of sense and brings certain
benefits.










Chapter -11

Big offshore bank v/s small offshore bank

This is another criterion that could be used when selecting the offshore bank.
Bigger offshore banks usually have wider network of branches in different countries and, as a
rule, this: can help speed up some financial services enlarges choice of locations where you can
approach the bank and get offshore banking services without intermediaries could give more
confidence in financial stability can, by means of economy of scale and access to more markets
and financial instruments, reduce some expenses and offer better rates makes it is harder for
overseas authorities to have pressure on large financial institutions while











Smaller offshore banks can:

offer more individual service even if you do not have a multi-million-worth offshore business
react quicker on customers' requests for new or improved services as well as changes in the
offshore banking market sometimes smaller banks offer more banking privacy. Both bigger and
smaller offshore banks have their weaknesses that usually accord with the strong points of the
banks of the opposite size.
To conclude, if a small offshore bank's location is convenient for a customer, if the small
offshore bank is specialising in financial services needed to the customer, and if this bank has
good management and is supported by favorable offshore jurisdictions legislation, in many cases
it is better to bank with the small offshore bank. However, everything depends on customers'
needs that are different as well as on what each offshore bank offers.










1. What are the main features of offshore debit card?



An offshore debit card provides a customer with an option of accessing funds held in the
offshore account in mostly the same way as an onshore debit card would. This card does not
provide any credit facilities, but if you have money on your account, you can take it through
appropriate ATM or purchase goods at shops. The most popular offshore debit cards are Maestro
and VISA Electron. It is important to know that some offshore banks require some security
deposit prior issuing debit card. This security deposit is much smaller than the security deposit
needed for the offshore credit card.




2. What is a difference between secured and unsecured offshore
credit card?

Normally, all offshore credit cards should be secured as far as the offshore bank does not have
access to credit history of all customers located in any country in the world. Credit reports is a
normal method of issuing credit card in your onshore jurisdiction, but it can be very rarely done
in the offshore bank. As the saying goes are You done it get what you done it pay foran normal
practice in the offshore bank is that a customer receives business, gold or even platinum credit
card only upon placing a substantial security deposit at the bank.

3. If I still have to pay taxes why should I bank offshore?
There are many other reasons to bank offshore, apart from minimizing your tax liability. They
include asset protection, estate planning, confidentiality, higher returns, and some others. All
personal data is subject to modern data protection legislation, and there are civil and criminal
penalties for breach of confidentiality and unauthorized disclosure.







QUESTIONAIRE ON THE TOPIC OF OFFSHORE BANKING
1. Do You Provide Offshore Banking.
Ans : Yes . We Provide Offshore Banking
2. Does Every Branch Of Icici Bank Provide Offshore Banking Servicers
Ans ;; No , Icici Branches Which Are Registered Under The Class A And Class B
Categories Of The Bank Provide Offshore Banking Facility .
3. From How Many Branches In The World Do You Carry On Offshore Banking Business
Ans : They Are United Kingdom , United State Of America, Dubai And Gulf Countries .
4. What Service Do You Provide .
Ans: Forex Service And Cash Remittances And Also Other Services Elated To Offshore
Banking .
5. .What Are The Types Of Client Who Open The This Account .
Ans;It Is Mostly The High Worth Individual And Non Resident Indian (Nri).
6. Can Common People Open Offshore Bank Account .
Ans : Yes , But Normally They Dont Because Of The High Amount Involved In
Starting An Offshore Account.
7. Is The Lack Of Awareness One Of The Reason Why People Are Not Going For
Offshore Account.
Ans: Yes , It Can Be Said That Common People Are Not Well Educated About Offshore
Banking .
8. Is It Convenient To Use Offshore Account
Ans : Yes .It Is Very Convenient .
9. What Amount Is Transacted Ina Week.
Ans : On An Average Rs. 2 Lakhs -3 Lakhs Is The Amount Transacted In A Week In
Our Branch.


CHAPTER-12


An offshore banking is the part of international financial system
as half of the capital flow through the offshore banking. People
generally operates their offshore account during vacation as they spend
their holiday an abroad .so they would required foreign currency , which
offshore bank provide .Also a lots of advantages is provided apart from
those like commercial bank privacy .

However it influences crime as full confidentiality about the
account is maintained. Any person can full filling certain criteria can
open an offshore account.

From the project I would like to infer that a wide spectrum of
offshore banking is known .offshore bank make avail of tax exemption
and higher interest in foreign currency .this helps to earn foreign
currency .it became mandatory for businessman and the organization
that have global business

Thus study of offshore banking will help to acquire more
knowledge and certainly have a positive effect in future.




CONCLUSION