''Transaction Banking'' (''TB'') can be defined as the set of instruments and services that a

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

offers to trading partners to financially support their reciprocal exchanges of goods (e.g.trade), monetary flows (e.g., cash), or

commercial paper Commercial paper, in the global financial market, is an unsecured promissory note with a fixed maturity of rarely more than 270 days. In layperson terms, it is like an " IOU" but can be bought and sold because its buyers and sellers have some ...

s (e.g., exchanges). TB allows banks to maintain close relationship with their corporate clients so banks don’t want to be dis-intermediated by other players. Transaction Banking division of a bank typically provides commercial banking products and services for both corporates and

financial institution Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial insti ...

s, including

domestic Domestic may refer to: In the home * Anything relating to the human home or family ** A domestic animal, one that has undergone domestication ** A domestic appliance, or home appliance ** A domestic partnership ** Domestic science, sometimes c ...

and cross-border payments, risk mitigation, international trade finance as well as trust, agency, depositary, custody and related services. It comprises the Cash Management, Trade Finance and Trust & Securities Services businesses. Although instant some business banking depending on 3rd party 3-5 working days others over 10 working days. A number of global trends are leading to a renewed focus on the transaction banking sector. These trends include the globalization of trade, the increasing importance of liquidity management and a heightened emphasis on securing relationships in a world where both competition and clients are becoming more global and sophisticated. Transaction banking is also particularly attractive in the current economic context because it often has relatively low regulatory capital requirements. Demonetization in India in November, 2016 (in which the then existing notes of denomination of Rs.500 and Rs.1000 were demonetized), digital revolution in payment and settlement systems that India witness during 2010-2020, India witnessed in the activities of transnational banking. Banks offered a number of industry and business specific solutions, including end-to-end digital capability for the capital market industry. The ICICI Bank in its Annual Report for the year 2020-21 gave information of such activities under the caption- Transaction Banking'. The Report inter alia, states that "with a focus on capturing the entire 360° banking opportunity, the Bank continues to create best-in-class digital solutions to meet the varied requirements of our customers.... these solutions range from industry shaping initiatives such as the first 'e-bank guarantee with e-stamping' issuance in collaboration with the stateof Uttar Pradesh, thus creating a pathway for complete paperless bank guarantee issuance and advising, and amendments to operational efficiency-enhancing solutions for our customers such as a simplified digital payment solution for 'Multi-state GST'. Customisation at a scale is a key factor in our approach." Citation: https://www.icicibank.com/aboutus/Annual-Reports/2020-21/AR/assets/pdf/ICICI-Bank-Annual-Report-FY2021.pdf.

References

Banking {{Bank-stub