International Businedd Essay example

3218 Words May 9th, 2013 13 Pages
SAMPLE CASE STUDIES – International Business
Case Study 1 - Documentary Credit M/S Auto India
Introduction M/S Auto India is a public limited company; they manufacture SUVs (sports utility vehicle), in technical collaboration with General Motors of USA. The company has established their manufacturing base at Ranjangaon in Pune. They have acquired an area of 250 acres and the total project cost is estimated at Rs 1500 crores. As per the projections, the company is slated to achieve a 25% market share in the Indian market, within a period of two years. Out of the total project cost, 49% is brought in by General Motors and the rest is tied up with financial institutions, international banks and Indian banks. The working capital is financed
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Advising Bank The American Bank, New York advised the credit to General Motors, Detroit on receipt of the swift transmission. Credit Along with other conditions, the credit clearly stated that the negotiating bank was to forward the documents directly to Global Bank’s head office at Pune. Beneficiary After export of the consignment, General Motors, Detroit presented the documents under the credit to The American bank, New York. Negotiating Bank The American Bank, New York, examined the documents presented by General Motors and determined that they were in compliance with the terms and conditions of the credit. The American bank negotiated the documents and forwarded the documents, as per the credit terms, to the HO of Global Bank in Pune and claimed reimbursement from International bank, New York. Reimbursing Bank International Bank, New York honoured the reimbursement claim by crediting the current account of the American Bank, New York and debiting the account of Global Bank, Pune, in its books. Issuing Bank Head Office Global Bank’s Head Office, at Pune, received the documents and after internal registration of the documents, forwarded the documents to its Pune Branch by inter-office mail.

Issuing Bank Branch On receipt of the documents by the Pune branch of Global Bank, they examined the documents and determined that they were discrepant.

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