An offshore banking unit (OBU) is a bank shell branch, located in another international financial center.

Offshore banking units (OBUs) refer

to bank branches located outside of its home country, and handling transactions made in foreign currency (known generically as
"eurocurrency") OBUs make it easier for individuals and businesses to bank internationally and establish offshore accounts.Individuals may
choose to keep their money offshore if there is instability in their own country, and they fear losing their investments. Offshore bank
accounts must be declared to the holder's home country for tax reasons; however, some countries allow foreigners to earn capital gains
tax-free Offshore Banking Units are banks established in Special Economic Zones. The SEZ Act provides for setting up offshore banking units
(OBUs), which would be governed by the RBI regulations. The OBUs would also qualify for tax exemption on the lines of the SEZ units and
non-resident Indian deposits in these banks would not attract tax deduction at source on interest income
.
Negative or Unfavourable Trade: India had to import various items like heavy machinery, agricultural implements, mineral oil and metals on
a large scale after Independence for economic growth.
2. Diversity in Exports: Previously, India used to export its traditional commodities only which included tea, jute, cotton textile, leather, etc.
But great diversity has been observed in India’s export commodities during the last few years.
Worldwide Trade: India had trade links with Britain and a few selected countries only before Independence. But now India has trade links
with almost all the regions of the world. India exports its goods to as many as 190 countries and imports from 140 countries.
Maritime Trade: About 95 per cent of our foreign trade is done through sea routes. Trade through land routes is possible with neighbouring
countries only. But unfortunately, all our neighbouring countries including China, Nepal, and Myanmar are cut off from India by lofty
mountain ranges which makes trade by land routes rather difficult.
STATE TRADE Most of India’s overseas trade is done in public sector by state agencies and very little trade is done by individuals.

As per Section 2(c) of FEMA, “Authorised person” means an authorized dealer, money changer, offshore banking unit, or any other person
which is authorized under Section 10(1) of FEMA to deal in foreign exchange or foreign securities.
As per Section 10(1) of FEMA, the Reserve Bank of India (“RBI”), on an application made to it, may authorize any person to deal in foreign
exchange or in foreign securities.
“Authorised Dealer” means a person authorized as an authorized dealer under Section 10(1) of the FEMA Act. RBI can authorize banking as
well as non-banking entities as authorized dealers.
As per Section 10 of FEMA, an authorized person shall comply with all the directions or orders of the RBI while dealing in foreign exchange
or foreign security.
An authorized person shall not engage in any transaction involving any foreign exchange or foreign security which is not in conformity with
the terms of his authorization except with the prior permission of the Reserve Bank.
In case of undertaking any transaction in foreign exchange on behalf of any person, an authorized person shall ask such person to make a
declaration and provide information to ensure that the transaction does not contravene any provisions of FEMA.
If such a person fails to provide such information then the authorized person shall refuse in writing to undertake the transaction. Further,
where such contravention or evasion is contemplated by the person then the authorized person shall report the matter to the RBI.

A transnational corporation (TNC) is defined as a company that operates in two or more countries. They are also called multinationals. In
the business world, a TNC is also an enterprise that undertakes foreign direct investment, possesses or controls revenue-producing
resources in multiple countries, produces goods or services outside of its home country, or engages in international production.
Transnational corporations usually have headquarters in their country of origin. They then open different branches in other countries to
increase the size of their operations. They are typically set up in developing countries for several reasons: cheap labor availability,
availability of raw materials for production functions, and influence on developing countries' governments.
Multinationals are structured differently from standard businesses. This is because of their sheer size and the multiple functions that the
companies have. They are usually run by global management based in the country of origin that controls the activities of all its branches
globally. Below the global leadership is the regional manager for each country that directs the operations in every country individually.
Company structure like this is related to geographical reasons and the need for specialized management for each region.
Transnational companies bring much-needed money into a developing nation. Although most of the profits do return to the company’s
country’s headquarters of origin, the local economy does benefit. By boosting business activities in the country, transnational companies
contribute to economic growth and development. They could also act as growth poles for other similar companies by encouraging them to
locate to that country, thus bringing in even more economic support.

A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in
another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control. Broadly, foreign direct investment
includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans".
FDI is the sum of equity capital, long-term capital, and short-term capital as shown in the balance of payments. FDI usually involves
participation in management, joint-venture, transfer of technology and expertise. Stock of FDI is the net (i.e., outward FDI minus inward
FDI) cumulative FDI for any given period. Direct investment excludes investment through purchase of shares (if that purchase results in an
investor controlling less than 10% of the shares of the company).
Foreign direct investment in India is a major monetary source for economic development in India. Foreign companies invest directly in fast
growing private auspicious businesses to take benefits of cheaper wages and changing business environment of India. Economic
liberalisation started in India in wake of the 1991 economic crisis and since then FDI has steadily increased in India,[1][2] which subsequently
generated more than one crore (10 million) jobs.
Foreign Contribution (Regulation) Act, 2010,
Foreign Contribution (Regulation) Rules, 2011
And other notification/orders etc. issued thereunder from time to time.
FCRA, 1976 repealed after coming of FCRA, 2010
FDI has benefitted India a lot in the development of the country and as per the predictions India will be emerging as a strong economy in
the coming years. Along with FDI, India will be walking on the road of development and serving its people with major developments in the
country.
Depository System
When companies are in need of capital they turn towards capital markets to fulfill their needs. This is because capital markets are the flexible,
major, responsive source of funds. Thus, there is a need to transfer the shares electronically so that it can reduce the paperwork. This is where the
depository
Objectives of the Depository System
It removes the occurrences of forgery, duplicate share certificates, and bad deliveries.
This can increase the liquidity of securities by making a way for easy transfer.
Also, it can avoid the delay caused in the transfer of securities.
Furthermore, it reduces the cost of a transaction for the investors.
It enables withdrawal and surrender from the securities with great ease.
It also maintains a perfect record of the holdings for an investor. This is because all the details are stored in electronic form.
This also provides infrastructure for services in capital markets.
By complying to global standards, it does attract foreign investors.
Securities in dematerialized form
The model adopted in India for depository model helps with the dematerialization of securities. This is similar to the holding of funds in the banks.
Also, the transfer of ownership occurs through simple account transfers. Thus, this method reduces all the risks that are associated with the
paperwork.
Multidepository System
The depository model which is adopted in India has a competitive multi depository system in it. Also, a depository should have been a company
formed under the companies act, 2013.
Furthermore, it should also be granted SEBI registration certificate. Currently, in India, there are two different kinds of depositories. They are NSDL
– National securities depository limited and CSDL – Central depository service limited.
Fungibility
Fungibility, in general terms, is good for interchangeability of assets with other similar assets or goods. The assets that have this property
simplifies the trade and exchange process. As this is an assumption in interchangeability that all the goods are of the same class.
Thus, many diverse assets are considered to be fungible. For the depository system, the securities that are dematerialized does are not identified
using certificate numbers or distinctive numbers. Thus, every security is identified and classified in the same class.
Registered Owner
The ownership for securities us bifurcated between the beneficial owner and registered owner in the depository system. When the securities are
dematerialized, the registered owner is the NSDL.
While the liabilities and ownership, rights remain with the beneficial owner. Also, the duties, rights, and liabilities that are underlying the security
remain with the beneficial owner of the security.

The SARFAESI Act is a law that "regulates the securitisation and reconstruction of financial assets, enforcement of security interests, and
establishment of a central database of security interests based on property rights, as well as things incidental or connected to it."
This Act gives lenders the authority to collect their loans without the need for judicial involvement. Continue reading to know more about
the same!
Here are the features of the Securitisation Act 2002:
Securitisation of financial assets
Assets reconstruction
Securitisation funding
Provisions of SICA dilution
Plate provisions for the boiler
Formation of Special Purpose Vehicles, namely a Reconstruction Company, a Securitisation Company
Enforcing security interests, that is, keeping the assets pledged as the loan’s collateral
The creation of a Central Registry to control and record securitisation transactions
Debts Recovery Tribunals and Debts Recovery Appellate Tribunals
The Debts Recovery Tribunals (DRTs) and Debts Recovery Appellate Tribunals (DRATs) were established under the Recovery of Debts and
Bankruptcy Act (RDB Act), 1993 with the specific objective of providing expeditious adjudication and recovery of debts due to Banks and
Financial Institutions.
At present, 39 Debts Recovery Tribunals (DRTs) and 5 Debts Recovery Appellate Tribunals (DRATs) are functioning across the country. Each
DRT and DRAT are headed by a Presiding Officer and a Chairperson respectively.