This presentation broadly covers Mumbai University MMS Semester IV - Elective - Treasury Management.
It starts with History; factors leading to modern treasury management; main objectives; Integrated treasury; departments of treasury - Front, Middle and Back office.
www.abhijeetdeshmukh.com
This material takes a pragmatic look at how the risks in the Treasury operations of a Bank can best be managed. It identifies the risks in the treasury function of a bank and highlights the need for an ERM approach for optimality.
This presentations chalks out in detail information about ALM in Indian Bank. It starts with the basics of Balance sheet; applicability of ALM in real life; Evolution and then starts with main topics of ALM like structured statement; Liquidity risk, its management; currency risk and finally ends with Interest Risk management.
Links to Video’s in the ppt
Balance Sheet
http://www.investopedia.com/terms/b/balancesheet.asp
NII/NIM
http://www.investopedia.com/terms/n/netinterestmargin.asp
www.abhijeetdeshmukh.com
This material takes a pragmatic look at how the risks in the Treasury operations of a Bank can best be managed. It identifies the risks in the treasury function of a bank and highlights the need for an ERM approach for optimality.
This presentations chalks out in detail information about ALM in Indian Bank. It starts with the basics of Balance sheet; applicability of ALM in real life; Evolution and then starts with main topics of ALM like structured statement; Liquidity risk, its management; currency risk and finally ends with Interest Risk management.
Links to Video’s in the ppt
Balance Sheet
http://www.investopedia.com/terms/b/balancesheet.asp
NII/NIM
http://www.investopedia.com/terms/n/netinterestmargin.asp
www.abhijeetdeshmukh.com
An investment banking is a financial institution that assists individuals, corporations and governments in raising financial capital by underwriting or acting as the client’s agent in the issuance of securities or both
this is a presentation on an introduction to investment banking highlighting the key functions of an investment bank, comparing commercial bank and Investment Bank, highlighting the organizational structure of Investment banks, and Investment banking scenario in india.
An investment banking is a financial institution that assists individuals, corporations and governments in raising financial capital by underwriting or acting as the client’s agent in the issuance of securities or both
this is a presentation on an introduction to investment banking highlighting the key functions of an investment bank, comparing commercial bank and Investment Bank, highlighting the organizational structure of Investment banks, and Investment banking scenario in india.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
This is the most comprehensive presentation on Indian Banking System. It starts with an introduction to the Financial system and role banks plays as Financial Intermediary. Post this the presentation touches on basic of banking like CRR SLR CASE and then money market and instrument cover. There is a comprehensive section of the evolution of Indian Banking system from pre-independence to 2018 in may phases. There is a dedicated section on the structure of Indian Banking system like PSU, Private & Foreign banks, Payment Banks, Small Finance Banks, NBFI, NBFC, AIFI, Co-operative segment. The presentation ends with current banking data as 2018 capturing the growth Deposit, Credit, Interest income & other income for Indian Banks.
Note:
Pls, reach to me on a.v.deshmukh@gmail.com if you wish to host a presentation on this.
History of Indian Capital Markets, structure, SEBI, market concepts - bear and bull markets, stop loss, top-down approach, types of shares - preferential, common equity, hybrid, small mid and large cap, how to read stock quote, PE Ratio and its applications, order FAQ, risks, stock market indices, demat & trading accounts
Merchant Banking - Indian Corporate Market, Clause 49 & Masala BondsAbhijeet Deshmukh
A comprehensive presentation on merchant banking. It starts with Indiann corporate bond market and go on to basics of merchant banking and it digs deep into merchant banking activity. It also has few slides on Clause 49 (Corporate governance) and ends with latest topic Masala Bonds
This is the comprehensive and latest presentation on Indian Corporate Bond market. It starts with basic features, 3 Main pillars of Indian Corp bond market ecosystem & its importance. It then covers Primary Placement, Valuation/MTM as per RBI/FIMMDA norms, Valuation using excel IRR() function with example, Credit rating scales, Market timing & Reporting.
It also covers few topics like ISIN & ends with challenges and Limitation of India corp bond market.
This presentation has two parts RBI & Monetary Policy.
It covers in detail the RBI, its history, preamble, organization structure, objectives, its functions in detail, its subsidiaries and all its publications with their links.
In the second part it covers Monetary Policy from Indian perspective. It starts with definition, Policy process followed in India, Goals, Framework. It covers the instruments of Monetary Policy in detail. It covers the future framework envisaged by RBI. In the last leg it covers the Contractionary & Expansionary monetary policy with their execution challenges.
This presentation covers the Payments systems in India. It starts with Introduction and then cover paper payment systems like Cheque Truncation System (CTS), MICR, CTS 2010. In Electronic payment systems it covers RTGS, IFSC, UTR No, NEFT, IMPS & difference between them. It also covers the limitations of Indian Payment system. In last leg it covers in detail SWIFT in details with latest statistics
This presentation covers Merchant Banking History; Categories; Services provided by them; Methods of placement; underwriting; Issue management & SEBI guidelines.
Government Securities - Classification and ValuationAbhijeet Deshmukh
This presentation in based on RBI Master circular on Government Securities Portfolio and its valuation. The presentation describes in detail 'Held to Maturity', 'Available for Sale' and 'Held for Trading'
www.abhijeetdeshmukh.com
This presentation is on RBI Primary Dealers. It covers history, eligibility, Roles and Obligations; Facilities offered by RBI and Regulatory returns to submitted by PD to RBI. It also covers in detail Underwriting process, MUC (Minimum Underwriting Commission) & ACU (Additional Competitive Underwriting). It also touches few key concepts like Short sale and When Issued.
www.abhijeetdeshmukh.com
This presentation is a comprehensive presentation of Forex Market. It starts with the history of this market from Pre Gold period, Bretton wood till current floating exchange mechanism and in Indian perspective FERA and FEMA. It then gives you an idea on size, width and extent of this market and post that it covers forex exchange, quotes, and numerical. Finally, it covers few topics like Trade Finance, LIBOR, Balance of Payment & Currency Swaps
This presentation is the one stop point to learn about Basel Norms in the Banking
This is the most comprehensive presentation on Risk Management in Banks and Basel Norms. It presents in details the evolution of Basel Norms right form Pre Basel area till implementation of Basel III in 2019 along with factors and reason for shifting of Basel I to II and finally to III.
Links to Video's in the presentation
Risk Management in Banks
https://www.youtube.com/watch?v=fZ5_V4RW5pE
Tier 1 Capital
http://www.investopedia.com/terms/t/tier1capital.asp
Tier 2 Capital
http://www.investopedia.com/terms/t/tier2capital.asp
Basel I
http://www.investopedia.com/terms/b/basel_i.asp
Capital Adequacy Ratio
http://www.investopedia.com/terms/c/capitaladequacyratio.asp
Basel II
http://www.investopedia.com/video/play/what-basel-ii/?header_alt=c
Basel III
http://www.investopedia.com/terms/b/basell-iii.asp
RBI Governor - Raghuram G Rajan on the importance if Basel III regulations
https://youtu.be/EN27ZRe_28A
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
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Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
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2. Treasury Management
Definition of Banking as per Banking Regulation Act 1949 Section 5 B :-
“the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable
on demand or otherwise, and withdrawable by cheque, draft, order or otherwise.”
The department handles the bank's investments in securities, foreign exchange,
asset/liability management, risk management and cash instruments.
The treasury department of a bank is also responsible for balancing and managing the daily
cash flow and liquidity of funds within the bank.
Treasury generally refers to the funds and revenue at the disposal of the bank and day-to-
day management of the same.
The treasury acts as the custodian of cash and other liquid assets.
Definition:
The art of managing, within the acceptable level of risk, the consolidated fund of the bank
optimally and profitably is called Treasury Management.
It is the window through which banks raise funds or place funds for its operations.
3. History of Bank Treasury
Traditionally in 70’s & Early 80’s the Role of Treasury in Indian Banks was confined to following
To ensure CRR (Cash Reserve Reserve) maintenance
SLR maintenance
Investment in GOI & State Government bonds
Forex confined Import & Export Finance & Remittances & Deposits
Market Conditions were :-
Regulated Interest rates (Deposit & Lending rates) by RBI
Regulated RBI auction system for Market Borrowing
Presence of FERA & highly controlled Forex market
No Liquid Money Markets
No Risk Management tools and Derivative Products even for Hedgeing.
4. Factors Leading to Evolution of Banks Treasury
1985 – Committee on Working of Monetary Systems
1987 – Working Group on Money Markets
Above initiated various steps to reform the money market to develop a infrastructure and
instrument to widen and deepen the market which was not reflecting the position of true
liquidity in the system
Discount and Finance House of India (DFHI), a money market maker, was formed to provide
institutional mechanism to market player by dealing in short term money market
instruments like T-Bill & Bill discounting
Introduction of Commercial Paper and Certificate of Deposit
Interest Rate (Bank Deposit and Lending Rates) Regulation was taken off in stages and
completely removed by May 1989
LIC and All India Financial Institutions were allowed in Call and Notice money market as
lenders.
Revised Repo’s were introduced
5. Factors Leading to Evolution of Banks Treasury
Subsidiary General Ledger account (SGL), a demat account for holding Gsec was
introduced
Delivery Vs Payment (DVP) was introduced to streaming online settlement & counterparty
risk of Gsec Deal along with NDS Platform for trading.
RBI introduced transparent and competitive auctions, thus aligning yields to actual market
rates.
RBI introduced monetary liquidity tools like OMO & LAF(Repo)
Post Liberalization, the process of deregulation and financial market liberalization
expedited
Introduction of FEMA in place of FERA
De-regulation of market by shifting to market determined Exchange rates.
Introduction of Derivatives products and permission to Corporates and Banks to use them
for Risk Management.
6. Factors Leading to Evolution of Banks Treasury
Permission to India Corporates to raise funds in International Markets resulting financial
instruments like Global Depository Receipts (GDR); Foreign Currency Convertible Bonds
(FCCB) and External Commercial Borrowing (ECB)
Permission to invest funds mobilized through Foreign Currency Non-Resident (FCNR);
Exchange Earner Foreign Currency Account (EEFC); Resident Foreign Currency Account
(REC) in overseas market. It was the key for Indian Banking system and for integrating the
markets.
Permission to Banks to initiate Cross Currency positions overseas
Allowing Banks to Borrow/Invest overseas 25% initially to now 100% of their unimpaired
Tier I capital as at the close of the previous quarter or USD 10 million (or its equivalent),
whichever is higher, without RBI permission.
“The Investment portfolio was viewed as an alternative to the Credit portfolio,
which was historically source of profit for banks and it resulted in emergence of
specialized Treasury Management”
7. Globalization Lead to
Introduction of FDI, opening of many sectors, FII Inflows as lead to massive cross border
financial inflow and emergence of diverse, deep, liquid and diligent Financial products and
Equity markets.
Distinction between Short term and Long term interest rate is got blur. Corporates can
raise Long term funds at short term rates
Integration of Indian and Global Financial Markets and both got in sync with each other.
Narrow spreads between Bid and Offer rates & Forward rate is a now purely the Inflation
interest rate differential
Interest Rate Volatility accurately captured by the Gsec yields Number of primary dealers
become active players resulted in deepening of debt markets and eliminating counterparty
risks
Customized Financial & Derivative Products Innovations for Trading and Hedging
Emergence of Indian Corporates in Global Markets by acquiring major companies in
overseas markets requiring advisory support like M&A, Merchant banking from Indian
Banks.
8. Objective of Treasury Management
Funds
Management
Profit Center
Liquidity
Management
Asset Liability
& Risk
Management
9. Fund Management
Fund Management is estimating the Liquidity Requirement of a Bank and meeting those in a
Cost Effective manner.
Deployment of Surplus funds
To raise resources at competitive rates from domestic & global markets on current and
forward basis.
Effective manage Forex funds and liabilities
Liquidity Requirement Planning for various periods with acceptable risk tolerance
Effective daily Cash Management / working Capital management due to Deposit inflow
Focusing on increasing CASA Deposits.
Customizing Deposit Products
Investing in various Financial Products from Fund management perspective
10. Liquidity Management
Liquidity Management is the ability of Fund the asset and meet the Financial Obligations
Maintenance of Regulatory Reserves – CRR & SLR – as mandated by RBI on current and
planning basis.
Raising of Tier I & Tier II
Create the Capital Reserves and for NPA’s.
Meeting Capital Adequacy Ratio as per Basel Norms
Maintain the Liquidity Ratio by investing 30 days cash flow in Quality and unencumbered
Short term liquid instruments like CP and CD.
Hedge the Liquidity Risk and have policy framework around it
Managing short term funds across currencies
11. Asset Liability Management
ALM is a monitoring the institutions liquidity profile
Constitute the ALCO (Asset Liability Committee) and draft ALCO Policy with acceptable risk
tolerance
Monthly conduct ALCO meeting and assess Asset Liability mismatches against the risk limit.
Strive for Funding Long term Assets through stable Long term liabilities
Monitor the Liability patterns for Liquidity & maturity perspective and work for quality short
term funds.
Regularly perform Liquidity profile of Investment Portfolio other than Liquid assets.
Hedge against risky proprietary investment products & use derivatives to manage risks in
client’s business
Maintain Transfer Pricing while dealing with own subsidiaries.
12. Profit Center
Profit Center includes all the activities directed towards increasing the profitability of the bank
with laid down Risk framework
Investment – It is done with a Long term perspective. It includes investment in SLR, Non
SLR, Derivatives, Money Market, Equities, Forex. The aim is to earn higher yield than the its
cost of funds.
Proprietary Trading – It is a short term perspective to make trading profit many a time
intra-day profit from underlying temporary movements in the securities and forex market.
For E.g. Gsec trading.
Spreads – Hunting for opportunities of spreads with the intra-securities markets. For e.g.
Bank can borrow short term at 5% and invest is CP for 7%
Arbitrage: Looking out for arbitrage opportunities in Forex market / inter-market
opportunities. For e.g. INR Deposits invested in LIBOR+Spread in US/INR using buy/sell
swaps
Advisory / Customer Services – offer Fee based customized products and advisory servicers
like Merger and Acquisition; Merchant Banking, Derivative structures, Corporate Forex,
Import/Export Finance, Wealth Management & other services
13. Structure of an Integrated Treasury
The treasury department is manned by the front office, mid office, back office and the
audit group. In some cases the audit group forms a part of the middle office only.
The dealers and traders constitute the front office. In the course of their buying and
selling transactions, they are the first point of interface with the other participants in the
market (dealers of other banks, brokers and customers).
They report to their department heads. They also interact amongst themselves to exploit
arbitrage opportunities.
A mid office set up, independent of the treasury unit, responsible for risk monitoring,
measurement analysis and reports directly to the Top management for control.
This unit provides risk assessment to Asset Liability Committee (ALCO) and is responsible
for daily tracking of risk exposures, individually as well as collectively.
The back office undertakes accounting, settlement and reconciliation operations.
The audit group independently inspects/audits daily operations in the treasury
department to ensure adherence to internal / regulatory systems and procedures.
14. Integrated Treasury Structure
Chief / Head
Dealer
Dealer
(Proprietary)
Forex
Money
Market
Investment
Desk
Hedge
Desk
Derivative
Desk
Securities
Trading
Equity
Trading
Advisory
Services
Chief
Risk Officer
Dealer
(Customer)
Forex
Money Market
Securities
Trading
Risk
(Dealing Room)
ALM Support
Group
Compliance
(Dealing Room)
Accounts
Training
Market
Research
Treasury Head
Policy and
MIS
Internal Audit
Market
Risk
15. Integrated Treasury function
SLR/CRR
Equity/MF/Venture
Raising of Tier
II capital.
Derivatives. Foreign
Exchange
Call/Notice/Term
Money, CP, CD,
Front office/Mid
Office./Back
office.
Management/L.A.F
/CB LO/Market
repo/FC Buy sell
swap/ALM
Corporate
Debt
/Debenture.
16. The Treasury Structure
FRONT OFFICE/
DEALING ROOM
BACK OFFICE/
TREASURY
ADMINISTRATION
MID OFFICE/
RISK
MANAGEMENT
17. The Front Office / Dealing Room
The Treasury has a responsibility to manage market risk in accordance with
instructions received from the bank’s ALCO.
The Dealing Room is the brain of the bank which manages Investment Portfolio of the
entire bank.
This is undertaken through the Dealing Room which acts as the bank’s interface to
domestic and international financial markets.
it is the clearing house for such risk and has the responsibility to manage the market
risk taken in all areas of the bank, on behalf of customers, and on behalf of the bank,
within the policies and limits prescribed by the Board and RMC.
For this reason significant authority is given to the Treasurer, and the Dealing Room
staff to commit the bank to market risk.
Thus controls over the activities of these staff are critical to ensure that the bank is
protected from undue market risk.
The dealers has to follow strict Dealing room guidelines and ethics.
18. The Middle Office
The duties and responsibilities of the Middle Office vary from bank to bank.
Middle Office is a relatively new concept in the risk management structure, not all banks
will have formal Middle Office structures.
Middle Offices are in place primarily to provide market risk monitoring, evaluation and
reporting for ALCO and Treasury.
The Middle Office is the first line of review of dealing activities and it provides timely
assessment of dealing activities and consolidated market risk exposures of the bank.
The Middle Office must report to ALCO independent of the Treasury. It is inappropriate
that any access to Middle Office systems is given to Treasury staff.
As the Middle Office is the primary source for market risk analysis in the bank, it is
essential that “segregation of duty” principles are clearly maintained.
Middle Office provides key market risk analysis to Dealing Room management and ALCO,
its reporting line to the ALCO Secretariat must be separate from Treasury to ensure
independent risk evaluation
19. The Back Office
The key controls over market risk activities, and particularly over Dealing Room activities,
are exercised by the Back Office.
It is critical that both a clear segregation of duties and reporting lines are maintained
between Dealing Room staff and Back Office staff, as well as clearly defined physical and
systems access between the two areas.
The Back Office and Middle Office, where present, are also entrusted with the responsibility
of ensuring the timeliness and completeness of data in regard to market risk activities and
providing ALCO and management with verified reports from the bank’s books as defined
in bank policy and procedures.
Monitoring and reporting (including Regulatory Reportinf) of risk limits and usage
including open positions, product usage, counterparty settlement, overall limits and
portfolio limits are the responsibility of the Back Office or Middle Office, where in place.
Control over payments systems, particularly those related to Dealing Room activities is the
responsibility of the Back Office. Under no circumstances should staff with access and/or
authority to the Dealing Room or dealing mechanism have any authority, responsibility or
access to bank payment systems.
20. The Back Office
Reporting prompt resolution of exceptions and excesses are vital responsibilities of the
Back and Middle Offices and key control considerations.
Key controls performed in Confirmation Management are :
The control over confirmations both inward and outward.
All confirmations must be verified by Back Office staff for consistency with Dealing Room
forms and reports. Any follow up of discrepancies between the two (including
confirmations received where no dealer’s record is provided) must be performed
independently by the Back Office in a timely manner.
Confirmations must under no circumstances be sent out by or received by the dealing area.
The control over dealing accounts, vostros (other bank money, held by us) and nostros
(our money, held by the other bank) must also be timely, accurate and discrepancies
followed up independently and in a timely manner.
Revaluations and marking-to-market risk exposures, where required by policy and RBI
directives, must be carried out by the Back Office, for bank records, from rates received
independent of the Dealing Room.
21. Investment Committee
The Investment Committee is constituted in terms of Board approved Investment
Policy every year.
It is also mandated by RBI.
The Committee is headed by the Executive Director. Other members are GM (Credit),
GM (Treasury), GM (MASD), GM (RMD), DGM (Treasury) and AGM/ CMs (Front Office,
Treasury).
The Committee discusses/ reviews the prevailing market conditions, likely trends in the
financial markets, economic scenario, interest rate / liquidity scenario etc. and
accordingly formulates broad investment strategy every day.
The decisions taken by Investment Committee are properly recorded and meticulously
complied with.
22. Statutory Liquidity Ratio (SLR)
Sec 24 of BR Act
Till recently could be stipulated to minimum of 21.5 % of NDTL
Recent Amendment to BR Act has removed the lower ceiling for maintenance of SLR
In Central/ State G.Secs and Other approved Securities, Cash balances with RBI, SBI, &
identified banks, cash in hand & Gold
Approved Securities as mentioned in Sec 5 of BR Act
SLR can be kept more than required
23. Cash Reserve Ratio (CRR)
Under RBI Act Sec 42.
Recent Amendment to RBI Act has removed the lower and upper ceilings for
maintenance of CRR
Presently stipulated at 4.25% of NDTL
CRR kept in Current A/c with RBI at 18 Designated Centers
Daily minimum balance required to be maintained is 70% of average fortnightly
requirement.
For e.g. if total CRR balance required to be maintained is Rs.100 cr per day, then on a
cumulative product basis, banks have to maintain at least Rs.1400 cr during a
reporting fortnight, but on any particular day the balance should not be less than Rs.
70 cr.
RBI is not paying any interest on balances maintained as CRR.