The full form of TB in banking is Transaction Banking.
Transaction Banking (TB) encompasses a range of services and instruments offered by banks to businesses and their trading partners to facilitate financial transactions related to their commercial activities. These activities include the exchange of goods (trade), the flow of money (cash), and commercial papers.
Key Aspects of Transaction Banking
Here's a more detailed breakdown of Transaction Banking:
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Definition: According to available information, Transaction Banking (TB) is defined as the set of instruments and services that a bank offers to trading partners to financially support their reciprocal exchanges of goods (e.g.trade), monetary flows (e.g., cash), or commercial papers (e.g., exchanges).
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Core Functions: TB revolves around managing and facilitating the everyday financial transactions of businesses.
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Services Offered: Banks offer various services under TB, including:
- Cash Management: Optimizing cash flow, managing liquidity, and facilitating payments.
- Trade Finance: Providing solutions for international trade, such as letters of credit, export financing, and supply chain finance.
- Payments: Handling domestic and international payments, including wire transfers, ACH transactions, and other electronic payment methods.
- Working Capital Management: Helping businesses optimize their working capital cycle.
