What is Treasury Management

Collects funds and disburses money.

Managing Funds
Responsibilities fall under the scope of CFO
The CFO’s responsibilities include capital
management, risk management, strategic planning,
investor relations and financial reporting.
Integrated Treasury Department

Domestic ●
Make investment in their own account
SLR, CRR, CP, CD, TB, Bonds &
Treasury
●

Debentures, Equities and various other

derivaties
Operations

Conduct operation on behalf of clients

Forex Treasury
●

●
Spot and forward markets, foreign
exchange swap markets , FCNR and
Operations Nostro Account.
 Integrated Treasury
Objectives

a) Meeting reserve requirements

b) Provision for adequate and timely liquidity

c) Global cash management

d) Optimizing profit by exploiting market opportunities in forex

market, money market and securities market

e) Risk management
Structure of Treasury Department
Function Responsible for

Front office Dealing

Mid-Office Risk management, accounting

and management information

Back office Confirmations, settlement and

reconciliation
 Dealing

settlement
MIS
Bank treasury departments
Money market desk

Foreign exchange or FX desk

Equities Desk

Derivatives Desk
Functions of Treasury Management
Reserve Management & Investment
Cash Management
Liquidity & Funds Management
Risk Management
Asset liability management
Transfer Pricing
Derivative products
Arbitrage
Reserve Management & Investment
Meeting CRR/SLR obligations
a) CRR – 6%
b) SLR – 25%
 Appropriate mix of investment portfolio

Cash Management
Control & care of the cash assets and liabilities of the
organization.
Selection of investment products, investment brokers,
methods of borrowing, cash management information
systems.
Liquidity & Funds Management
Analysis of cash flow arising out of asset liability
transaction
Fund various asset of balance sheet
Policy inputs to strategic planning and yield expected in
credit and investment.

Risk Management
Changes in Interest rates
Increasing NPA’s
Increasing level of disintermediation
Transfer Pricing
Transfer of funds to related party.
Assist in enhancing profits
Performance evaluation

Derivative Products
Develop Interest Rate Swap and other cross currency
derivative products
Hedge bank’s own exposure and also sell to customers

Arbitrage
Risk less profits
 What is Asset Liability Management
An attempt to match : Assets & liabilites

In Terms of : Maturities & interest rate sensitivities

To Minimize: Interest rate risk & Liquidity Risk

 Asset Liability Management

Asset Management Liability Management

How Liquid are assets of banks How easily banks can generate loans from market
ALM
ALM is an integral part of the financial management
process of a bank.
ALM is concerned with strategic balance sheet
management involving risks caused by changes in
interest rate, exchange rates and liquidity position of
the bank.
ALM can be termed as risk management technique
designed to earn an adequate return while maintaining
a comfortable surplus of assets beyond liabilities.
Treasury Management Services
Improve your receivable collection processes
Increase control and management of your
disbursements
Enhance your level of timely and comprehensive
information controls
Maximize your liquidity management
Reduce the potential for fraud and possible monetary
losses to your company
Provide the most advanced information technology
tools available
Thank You