Module: | MODULE A: INTERNATIONAL BANKING
Q226: Consider the following statements regarding the International Trade Finance Services platform established in the smart city:
Statement 1: The platform functions as a unified electronic exchange that facilitates cross-border factoring and forfaiting services, allowing global exporters to convert their international trade receivables into immediate cash.
Statement 2: To strictly protect domestic financial stability, only domestic Indian banks and their offshore units are permitted to act as financiers on this electronic platform.
Which of the statements given above is or are INCORRECT?
Statement 2: To strictly protect domestic financial stability, only domestic Indian banks and their offshore units are permitted to act as financiers on this electronic platform.
Which of the statements given above is or are INCORRECT?
✅ Correct Answer: B
The question requires identifying the incorrect statement.
Statement 1 is a correct statement.
The International Trade Finance Services platform was launched specifically to address the massive global trade finance gap.
It acts as an electronic marketplace where exporters and importers can auction their cross-border trade receivables through established financial mechanisms like factoring and forfaiting.
Statement 2 is the incorrect statement.
The core structural purpose of the platform is to attract vast international liquidity.
Therefore, participation as a financier is absolutely not restricted to domestic Indian banks.
Global banks, foreign financial institutions, and specialized international factoring companies are highly encouraged and authorized to onboard the platform and provide competitive foreign currency financing directly to traders.
Statement 1 is a correct statement.
The International Trade Finance Services platform was launched specifically to address the massive global trade finance gap.
It acts as an electronic marketplace where exporters and importers can auction their cross-border trade receivables through established financial mechanisms like factoring and forfaiting.
Statement 2 is the incorrect statement.
The core structural purpose of the platform is to attract vast international liquidity.
Therefore, participation as a financier is absolutely not restricted to domestic Indian banks.
Global banks, foreign financial institutions, and specialized international factoring companies are highly encouraged and authorized to onboard the platform and provide competitive foreign currency financing directly to traders.