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Trade Financing plays an important role in facilitating traders’ transactions between buyers and sellers.  It is a form of short term bank financing facility to help buyers / sellers in managing their cash flow in the short term.   Trade Financing is as old as banking itself and is the largest income earning department in the bank, by far.  It generates the following income:  fee; interest; foreign exchange and interest-free balances, just to name a few.

Therefore, there is little wonder why banks give priority to promoting Trade Financing facilities, but sad to say, the expertise in this area of banking is dwindling due to the preference of ‘regionalizing’ or ‘centralizing’ trade related activities in the name of control, standardization and cost savings.

The people who are deemed more important than those in the Trade Centers are, of course the Sales or Credit and Marketing Officers, whose responsibility is to introduce the various trade financing products to their trading customers and to service them professionally. It is obvious that they themselves must be well equipped with a thorough knowledge of what Trade Financing is all about and how to dispense the services / facilities involved, efficiently.

They must be able to handle all the prospective customers’ questions relating to trade financing but very often they prefer not to bring up the matter for fear that the prospect may ask questions which he/she cannot handle.

New developments in the trade financing arena don’t occur very frequently but relevant staff who are assigned to get the bulk of the Bank’s profit/income must be well trained / refreshed / updated periodically through regular training courses so that they can provide excellent services, beat competition and avoid / detect possible fraudulent practices.

  • By attending this course, it provides you with the knowledge and equips you with the comprehensive skills and framework for understanding the fundamentals of the trade finance products and services available to international trade and domestic trade customers. The course will cover the various types of trade finance used in financing available for the banking customers.

Module 1: Fundamental of Trade Finance – Basic Level (2 days)

  • International Trade – Definition, Parties involved in international trade and financing tools
  • Types of Document in International Trade
  • Commercial / Official / Insurance / Transport documents/Bankers
  • Common Trade Terms in International Trade & frequently used Incoterms
  • Methods of Payment in International Trade
    • Clean Payment
    • Open Account
    • Documentary Collection
    • Documentary Credit
  • General Overview of the Tools in facilitating International Trade instruction and procedures
    • LC/TR/BA/ECR Pre & Post /FX/Rémittences
  • Documentary Collection
    • Collection instruction and procedures
    • Advantages and risks to buyer/seller
  • Documentary Credit
    • Mechanics of documentary credit
    • Types of documentary credit
  • Trade Financing Facilities
    • Import / Export Financing
  • Practical Aspect of Trade Financing tools
    • Types of Guarantees and Performance Bond


Module 2: Advance Trade Finance Operations – (1 day)

  • Practical aspect of the Overview of Trade Finance Operations
    • Daily operations modus operandi
    • Trade Finance system – best practices
    • What are the sub-units in the trade operations?
    • Importance of trade operations to the business units & bank’s customers
  • Full incoterms used in International trade and its relevance
  • UCP 600 rules and guidelines
  • International Trade Compliance and Disputes
  • LC/TR/BAs, Pre & Post ECR, BEP and CBP operation cycle from issuing, negotiation, handle discrepancies and settlement
  • SBLC in details
  • Guarantees and Performance Bond issuance operations


Module 3: Trade Finance Fraud: Understanding Threats and Reducing Trade Financing Risks (2 days)

  • Types of fraud risks in trade finance: External & Internal fraud
    • Fake trades
    • Rocks in the box
    • Impersonation fraud
    • Authenticity
    • Money laundering
    • Bank account fraud
  • Internal fraud
    • Booking of fake trades, customers and shipments
    • Issuance fraudulent trade documents
    • Covering up error and mistakes
  • Fraudsters in trade  
    • How a determined fraudster will get a victim
    • Low Value, High Volume Serial Fraudster
  • Variations of Fraud against the
    • Buyers
    • Sellers
    • Banks
    • Third Party – e.g. Insurance Company Shipping company etc
  • Integrity of Documents in Trade 
    • Bills of Lading
      • How secure is the bill of lading?
      • Pre-dated Bills of Lading
      • Switched Bills of Lading
      • Owners’ and Charterers’ Bills of lading
      • Containerization 
    • Warehouse receipts (Godown warrants)
    • Local delivery orders
    • Letters of Indemnity
  • Fraud in Payment System
    • Traders as financiers
    • Is an L/C a blank cheque
    • Standby L/C – case of fraudulent standby seller
  • Electronic Documentation
    • Digital Trading – vulnerabilities
    • Shipping documents in electronic form
    • Electronic bills of lading
  • Ways to Minimizing Frauds


Module 4: (Optional) – Structuring of Trade Lines in Lending ( 2 days) 

  • Loan structuring in Lending
    • Types of loan structuring: Term Loan, Working Capital Financing, Project Financing, Transactional Financing & Vendor Financing
    • Structuring based on the borrower’s financing statements
    • Structuring based on customer cashflow requirements
  • How to calculated and structure trade finance products and services in lending
    • Calculation of WCF
    • Determining LC, TR, BAs, SBLC, General Financing (OD), Term Loan financing
    • Other structuring financing on transactional, project and vendor financing
    • Wallet Sizing
    • Size up the wallet
  • Credit issues in Loan structuring
    • Short term facilities
    • Long term facilities
  • Factors affecting the pricing of loan facilities
    • Statutory, funding, operating costs and possible loan losses
    • Anciliary income – wallet sizing & size of wallet
    • Types of facilities
    • ROE, Competitive pressures
    • Fixed rates and floating rate pricing
    • What is Credit Risks in Lending?
    • Credit Risk Identification
  • New to Credit, sales personnel
  • Branch Manager
  • Trade Finance operations staff

Get in touch

+6012-215 9885
B-­04­-43, Blok B, Pusat Perdagangan Ekoflora, Jalan Ekoflora 7/1, Taman Ekoflora, 81100 Johor Bahru, Johor, Malaysia.

29-1, Jalan 2a/27a, Seksyen 1 Wangsa Maju, 53300 Kuala Lumpur, Malaysia.

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