J. Sifri Consulting Services

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Combating Organized Commercial Crime 
      
A.     Fraud is the most destructive illegal act banks face. Not only does it
constitute a direct cost to the bank, it also entails large expenses for legal pursuits, investigation fees and cost of executives' time spent on handling fraudulent transactions. Furthermore, fraud has devastating negative effects, that can't be expressed in terms of money, on the bank's reputation, public trust and staff morale.

C.     The most common type of fraud is the commercial fraud. In some countries, banks incur billions of dollars every year in fraudulent LCs. In 2001, Saudi Arabia alone suffered a loss of over 4 billion dollars worth of fraudulent trade finance transactions.

Who should attend

Senior Non-Executive Staff with at least one year’s experience in Trade Services. Also Credit Staff who have no experience of bills.

Course Objectives

To acquaint staff with the general principles relating to customer’s Import and Export finance requirements and to enable them to understand Bills related operations.

Course Covers

Posted by Petra at 12:26 AM | Permalink

Who should attend

Staff from Trade Services Department who have previously attended Practical Bills Course.

Workshop objectives

To provide a thorough understanding of:

A. Uniform Customs and Practice for Documentary Credits, 2007 revision, ICC publication 600.

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General Description

A 5 days intensive course detailing particularly the traditional and, to a lesser extent alternative trade financing products that the Bank provides and an assessment of the risks involved in the structuring of trade related facilities.

Who Should Attend

Executives/officers in credit – related roles who require an understanding of Corporate customers’ trade cycles and the specific characteristics and risks involved in the provision of trade finance facilities.

Course Objectives

·                       To understand the importance of trade related services to the bank as well as current bank policy.

·                       To understand the practical nature of the Bank’s traditional trade products, their pricing and the risks involved in their provision to corporate customers.

·                       To understand and identify customers' trade finance needs and problems and also to understand customers’  trade cycle and related working capital requirements.

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JSCS announces the commencement of  "The ISP98 Rules of Practice and the Standby Letters of Credit Training Course". This is an In-house training program for letters of credit practitioners.

The Course Objectives:-

A.      To gain an awareness of the wide use of Standby LCs by banks.

B.       To understand the different types and uses of Standby LCs.

C.      To understand the sound application of the ISP98 rules  in day to day banking operations.

D.      To understand and appreciate the operational risks of Standby LCs.  

Issues Covered:-

A. Standby Letters of Credit – Introduction and Definitions.

B. Types and Uses of Standby Documentary Credits.

C. Roles and Responsibilities of Parties to the Standby Credit. 

D. Sound Application of the ISP98 Rules of Practice in Day-to-Day Banking Operations.

F. Checking Documents of A Standby LC Presentation.

G. Handling Presentation and Settlement.

H. Bank to Bank Reimbursements.

Duration: 3 Days (15 Training hours)      Trainees: The Minimum number  15/Course.

Material: The Book “Standby Letters of Credit A Comprehensive Guide”.

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Posted by Petra at 05:49 AM | Permalink

The trade services department is the heart of every commercial bank. It is said, and accurately so, the continuity of the bank is dependent on the soundness of its trade services operations. 

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The ICC's Banking Commission has approved the new UCP600 on the 25th October 2006. The UCP 600 will come in force on the 1st day of July 2007.

In responding to the needs of  different banks for a comprehensive training on the implementation of the UCP 600, we have developed the new in house training course "Implementing the UCP 600".

General Description

The Course duration is two days (12 hours) and it covers the following:

• The Letters of Credit Mechanism
  
• Roles and Responsibilities of Parties to the LC Transaction under UCP600
  
• Letters of Credit Operations and the Application of the UCP600
  

The final session of the course will include an assessment for the participants to evaluate the post training needs from a practical point of view.   

Post Training Follow Up

To ensure that practitioners are proficient in applying the UCP600 provisions to letters of credit operations, participants are entitled to free consultation in the aftermath of the course. All technical questions on the topics covered by the course can be addressed to the trainer or any of JSCS trade finance expert.

Participants The minimum number of trainees in each course is 12. 

For any more details on this course, do email us and we will respond to you immediately.

  

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Posted by Petra at 12:07 AM | Permalink

An independent external trade finance audit is necessary for the banks protection, not only does it safeguard the bank from illegal and negligent practices, an external audit also provides the management with information about the efficiency of the procedures, structure, limits of authority … etc. Furthermore, an independent external trade finance audit is the exemplary means to protect the bank from organized commercial crime and prevent fraud.

Numerous recent cases around the world indicate that fraudsters often depend on an inside member of the bank’s staff in perpetrating their fraud. This explains the reason for which global banks constantly rotate or replace their staff within a maximum of two years from the date of commencement of the job by the holder.

Being an internationally recognized trade finance experts, our office can perfectly and discretely audit your trade finance operations and submit findings to the bank’s management that will enable your audit committee to complete the following roles:-

1. Monitor the bank’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

2. Recommending to the bank’s top management appointment of new trade finance staff or rotation of existing ones including the replacement or removal  of the external and/or internal auditors.

3. Reviewing the annual financial statements before submission to the Board for approval, with particular emphasis on changes in accounting policies and practices and the justifying causation.

4. Controlling major accounting entries - involving management projections of future transactions  and significant adjustments made in the financial statements arising out of audit findings.

5. Ensuring compliance with the legal requirements relating to financial statements and disclosure.

6. Reviewing the interim balance sheets of the bank before submission to the Board for approval.

7. Reviewing performance of statutory and internal auditors in addition to the adequacy of the internal control system.

8. Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority to report structure coverage and frequency of Internal Audit.

The terms of reference, set by the bank, may be presented to us with additional accountabilities including training of the bank’s junior auditors.

We are committed to total client confidentiality in all circumstances and therefore, we only discuss our audit reports and the findings stated therein with the bank’s Chairman, CEO or any other executive to whom such responsibility is delegated by the authorized members of the executive committee.

For a detailed proposal, please send us an email using the contact us page of our website.

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Posted by Petra at 10:49 PM | Permalink

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The audit department protects the bank from illegal and/or negligent practices. It also provides the management with information on the efficiency of automation, procedures, structure, limits of authority and other operational controls. 

JSCS structure audit departments equipped with full technical and banking knowledge to audit:

·                       Retail banking operations
·                       Corporate banking operations
·                       Trade finance department
·                       Treasury departments
·                       Accounting entries
·                       Accounting and financial control department
·                       Cables department
·                       Human resources department
·                       Automation support department
·                       Services department
·                       Securities and investment departments
·                       Legal department

Posted by Petra at 09:58 PM | Permalink

JSCS places a system for the management of assets and liabilities. Such system constitutes the means by which a bank management can perform the following vital tasks:

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Only if extended within accurately placed parameters, do the personal loans generate vast profits. On the other hand, the delinquency ratio may accelerate in high velocity causing sever losses if personal loans are extended haphazardly.

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The past 10 years had witnessed a radical change in the methods by which major banks conducted their retail operations. The banks' focus was shifted towards creating an environment where their customers are served at the highest international standards. Customers' needs permeated all levels and functions in the bank.

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Banks normally provide credit in the form of overdrafts, loans, bills discounted, or import and export finance.  The process of extending any of the said forms  to corporate borrowers passes through two distinctive phases; the credit decision making process (account relationship management) and the banks' internal operations. 

The Account Relationship Management

Making a sound decision to extend credit to a corporate customer is a complex process. This is because corporate customers are normally engaged in a wide range of activities and are effected by a host of external and internal factors that have direct impact on their ability to meet financial obligations.

The credit decision making should, therefore, be directed by an internal lending policy that takes into account such factors and aims to protect the bank's assets, preserve its reputation and optimize the relationship profitability.     

In order to allow the account relationship managers to effectively and authoritatively negotiate with their targeted corporate customers, terms acceptable to the bank, an "Account Relationship Management Acceptance Criteria" or the so called "Credit Guidelines" should be internally placed and distributed to every credit manager/officer.   These guidelines set the minimum acceptance standards, in simple words, the guidelines are aimed to let the account relationship managers/officers know exactly what they should be selling, to whom, at what price and under which conditions (securities and other terms).

Based on the credit guidelines, the account relationship executive will have to submit a credit proposal evaluating the whole relationship. The Credit Evaluation process must be done systematically and within acceptable standards to maintain a  high quality credit portfolio.  

The preparation of the credit proposal must be guided by common sense and sensible judgment. The amount of details the proposal should contain naturally depends on several elements, namely the size and strength of the customer, the size of the bank's current and proposed exposure, the socio political environment, the economy, the industry  and the bank's position in relation to other creditors.

   
In conclusion, the bank must place a system of credit evaluation that is based on assessment of historical, current and projected elements stated hereunder:

a. Financial Analysis; Sales, Profitability, Performance, Funds Flow, working Capital Management, liquidity, balance sheet conditions...etc.

b. Operating Analysis (Operating Risks); Owners, Management, Company, Industry, Markets.

In summary, the credit proposal (review) must highlight the Financial Risks and   Operating Risks. It should state the magnitude and likelihood of such risks i.e. "What if" scenarios, and how will they be managed?  

Most global banks maintain their credit evaluating standards in an internal "Instruction Manual" containing the bank's management instructions regarding each and every aspect of the credit extension or review process. It sets the management standard of credit evaluation to eliminate risks and prevent the decline in profit margins on credit facilities.       

Corporate  Banking Operations

The bank mostly lend against appropriate tangible securities such as deposits, shares, debentures, property, guarantees supported by tangible securities, life policies, goods, gold or other precious metal.   The bank may also lend against intangible securities such as unsupported guarantees or assignment of sums due to the borrower by third parties.

It is essential that the bank follows the proper procedures in order to obtain good title when taking a security. There is a difference between possession and ownership.  

The various forms of documents used for obtaining different types of security are also important. Inadequate documentation may well cause losses to the    is is particularly true for the Trade Financing documentation and the Securities Agreement relating to goods.

The bank must also follow proper procedures to realise securities otherwise losses may be incurred.

The corporate operations division are normally responsible for maintaining securities documentation and updating the customers' mandates with fresh account documentation, account statements, financial statements and relationship reviews.

Handling and treatment of delinquent accounts is also an important area of operations. Grading of  bad and doubtful debts for an effective recovery process is important. An effective delinquency policy is essential to avoid unnecessary financial losses.

Banks take risks in extending credit facilities to their customers, it is vital that they be able to see such risks as clearly as possible and weigh them up with care and intelligence. One popular method of measuring the banks' exposure to risk and expressing this risk in cash terms is the Cash Risk Calculation method.


Please contact us for a detailed proposal on our Corporate Banking Services.

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Posted by Petra at 06:24 PM | Permalink

The merchants, who normally are the perfect targets for the private banking departments, mainly care about the standards of trade finance services. It is the bank that masters the trade services is the one that always wins the merchants' businesses. For this reason, global banks have made their trade service departments their utmost priority. Today credit executives have seized to sell credit (Loans and ODs), in fact loans and ODs are merely used as inducements to attract new relationships with merchants who utilize trade finance products.

Unlike any other banking products, the LC is deemed to be one unit. The simplest of discrepancies can lead to the loss of the total value of the LC.

LCs operations are mighty complex, and so meticulous to the extent that all banks exert rigorous efforts to create an operational environment conducive to achieving optimum efficiency, full control and exemplary customer service. Adopting the international standard banking practice as instituted by the ICC is a prerequisite to initiating competitive service that will enable local and regional banks to compete against banks such as the HSBC, CitiBank, Standard Chartered…etc. A SYSTEM OF OPERATIONS that constitutes of numerous components is what needed to reach the desired standards.  

In this context, I would point out that we, at JSCS, are specialized in this technical field. We can literally create a trade finance center that operates at standards parallel to the standards adopted by top international banks in any where in the world. 

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Getting into custody is not easy; it requires investments in systems and development of a specialised cadre capable of meeting the different needs and changing  demands of fund managers and investors (customers).

What is a custodian? A custodian is a keeper and a care taker. In our profession, it is the bank that performs a multitude of functions in order to assist the fund manager (the investment decision maker), in executing its SECURITIES sales and purchase orders (settlements), safekeeping such securities, collecting its revenues, reporting corporate actions...and other services that will be addressed later.

The essence of this definition is that the global custodian carries out the duties of a master record-keeper rather than just being the actual caretaker, of the securities.

For a pre agreed  charge, the global custodian agrees to handle all operational concerns that occurs after the investment decision is made i.e. dealing with "post - trade" aspects of the investment, thus allowing the investment manager to get on with the job of managing the fund.  

For the charge received, the global custodian typically provides the following package of services to the fund manager.

• Safekeeping
• Foreign Exchange
• Settlement
• Custodian Services
• Corporate Action Processing
• Income Collection
• Multi-Currency Accounting
• Stock Lending
• Tax Reporting and Reclamation
• Cash Management
• Portfolio Reporting and Valuation
• Proxy Voting

Establishing a strong custody services can mean the difference between forging ahead and falling behind; the difference between remaining local or regional and emerging global.

With JSCS securities experts, you can rest assured you made the right choice in contracting us to establish or review your securities operations. We're proud of our profound knowledge in this domain because it is a direct reflection of our dedication and commitment to custody services in particular and banking operations in general. Our custodial services include putting in place a system of operations for settlement, securities registration, safekeeping, income processing, corporate actions, proxy voting, cash management, and real time trade and portfolio reporting.

More specifically, we can assist in establishing a Securities Department with sophisticated automation, soundly placed procedures and well trained staff to achieve the following accountabilities:-

Efficient settlement

To guarantee accurate and timely movement of securities and funds associated with trading it.
Serving investment managers at the highest standards can be achieved with a feasible securities system provided staff receive  a specialised training.  

Securities safekeeping

To provide a secure facility for the safekeeping of your clients' stocks, bonds, notes and other securities — in both physical and book-based environments. Furthermore, to ensure that clients' assets are held securely and recorded accurately on your custody system.

Income processing

To process the income generated by the investments of your clients. You will be able to efficiently collect interest and dividends on securities in custody, and offer contractual income processing on securities. An Income Entitlement Help Desk will be staffed by knowledgeable professionals, supporting all your  clients' income inquiry needs.

Corporate actions

To keep your clients up to date on corporate action activity affecting their securities held in your custody. They must receive timely corporate action notices about rights, warrants, conversions, name changes, stock splits, and other corporate action types. You notification procedures will focus on control and optimum information turnaround so that your clients  have the maximum time possible to submit an informed response. You must  promptly act on your clients instructions with respect to voluntary corporate actions.

Proxy voting

To notify your clients  on upcoming meetings for which they may cast their vote via SWIFT, fax, telephone, mail or the Internet. To also provide front line service support through a Corporate Actions Help Desk, to be staffed by a team of dedicated specialists.

The combination of our team of knowledgeable professionals and an adequate technology we can come into a relationship that will most assuredly help you to establish and build up your custody business.

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