ASSESEMENT OF PRACTICE AND CHALLENGES OF INTERNATIONAL TRADE FINANCE SERVICE OF SELECTED ETHIOPIAN PRIVATE COMMERCIAL BANKS.

Abstract

The study is intended to examine the practice and challenges of international trade finance service of selected Ethiopian commercial bank. Banks play a crucial role in facilitating international trade by providing a wide range of trade service products. The major objectives of the study are to assess the practices and challenges of international trade finance service of selected Ethiopian private commercial banks. The study examines the compliance level of international trade operation against international rules and regulations, examine current practices of international trade operation and to find challenges encountered by selected banks. The study employed descriptive research design to examine the extent to which some selected banks facilitate international trade service operation in line with the rules and regulations. The researcher used questionnaire method to gather the primary data from the employee of banks who were currently working at international banking department in head office level. From the research it has been found out that non-compliance activities occurred on timely revision of the internal procedure, current job knowledge of employees are poor, rules and standards are also not sufficiently and timely available to operators for further reference. the nonpayment practice and non-examination of documents with the allowed period and luck of conducting rigorous assessment on creditworthiness and marketability of the consignment were considered as the challenges. In the study it is recommended that the existing operational manual is amended against the recently changed terms and conditions on the said international governing rules for efficient application of the required standards and creates reasonable awareness to the banking workers, It’s highly recommended to sufficiently avail the operational trainings and awareness creation session on the international governing rules, current observed practices are changing over time, bank practitioners are advised to examine and evaluate their current practices and compliance level against the international governing rules, NBE Directives and other pertinent laws of the land and also Improvement service quality.