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1. ADRs are denominated only in US dollars. 

2. They are issued only to investors who are American residents. 

3. The depository bank should be located in US.

1. FCCB is issued by an Indian company in foreign currency. 

2. These are listed and traded in foreign stock exchange and similar to the debenture. 

3. It is a convertible debt instrument. It carries interest coupon. It is unsecured.

4. It gives its holders the right to convert for a fixed numbers of shares at a pre – determined price. 

5. It can be converted into equity or depository receipt after a certain period.

1. Exploiting Natural Resources : The FDI Companies deplete natural resources like water, forest, mines etc. As a result such resources are not available for the usage of common man in the host country.

2. Heavy Outflow of capital : Foreign companies are said to take away huge tunes in the form of dividend, royalty fees etc. This causes a huge outflow of capital from the host country.

3. Not Transferring Technology : Some foreign enterprises do not transfer the technology to developing countries. They mostly transfer second hand technology to the host country.

1. Achieving Higher Growth in National Income Developing countries get much needed capital through FDI to achieve higher rate of growth in national income.

2.International Finance Help in Addressing BOP Crisis FDI provides inflow of foreign exchange resources into a country. This helps the country to solve adverse balance of payment position.

3. Faster Economic Development FDI brings technology, management and marketing skills along with it. These are crucial for achieving faster economic development of developing countries.

4. Generating Employment Opportunities: FDI generates a lot of employment opportunities in developing countries, especially in high skill areas.

5. Encouraging Competition in Host Countries Entry of FDI into developing country promotes healthy competition therein. This leads to enterprise in developing countries operating efficiently and effectively in the market. Consumers get a variety of products of good quality at market determined price which usually benefits the customers.

(a) International finance

Modem organisations including multinational companies depend upon sizeable borrowings in rupees as well as in foreign currencies. Prominent financial instruments used for this purpose are Depository Receipts.

ADRs are issued in The USA .

1. International finance helps in calculating exchange rates of various currencies of nations and the relative worth of each and every nation in terms thereof.

2. It helps in comparing the inflation rates and getting an idea about investing in international debt securities.

3. It helps in ascertaining the.economic status of the various countries and in judging the foreign market.

(b) Foreign Currency Convertible Bond

Foreign currency convertible bond is a special type of bond issued in the currency other than the home currency. In other words, companies issue foreign currency convertible bonds to raise money in foreign currency.

(b) a depositary receipt

A depository receipt is a negotiable financial instrument issued by a bank to represent a foreign company’s equity shares or securities. They are issued to attract a greater amount of investment from other countries.

GDR is an instrument issued abroad by a company to raise funds in some foreign currencies and is listed and traded on a foreign stock exchange.