banking and wealth management
TRANSCRIPT
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Banking and Wealth
Management
Treasury Management
By: Nokesh Hirendra Lele
Roll: 04
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Integrated Treasury
Integrated Treasury refers to integration of moneymarket, securities market and foreign exchangeoperations.
a. Meeting reserve requirementsb. Efficient merchant services
c. Global cash management
d. Optimizing profit by exploiting market opportunities in forex
market, money market and securities market
e. Risk management
f. Assisting bank management in ALM
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Treasury
Function Responsible ForFront office DealingMid-Office Risk management, accounting and
management informationBack office Confirmations, settlement and reconciliation
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Functional Representation
Dealing
SettlementMIS
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Investment Options
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Money Market
Certificate of Deposit (CD)
Commercial Paper (C.P)
Inter Bank Participation Certificates
Inter Bank term Money
Treasury Bills
Call Money
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Features of CD
CDs can be issued by all scheduled commercialbanks except RRBs
Minimum period 15 days
Maximum period 1 yearMinimum Amount Rs 1 lac and in multiples of
Rs. 1 lac
CDs are transferable by endorsement
CRR & SLR are to be maintained
CDs are to be stamped
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Commercial Paper
Commercial Paper (CP) is an unsecured money market instrument
issued in the form of a promissory note.
Who can issue Commercial Paper (CP)
Highly rated corporate borrowers, primary dealers (PDs) and
satellite dealers (SDs) and all-India financial institutions (FIs)
CP can be issued for maturities between a minimum of 15 days
and a maximum upto one year from the date of issue.
If the maturity date is a holiday, the company would be liable to
make payment on the immediate preceding working day.
CP is issued to and held by individuals, banking companies, other
corporate bodies registered or incorporated in India and
unincorporated bodies, Non-Resident Indians (NRIs) and Foreign
Institutional Investors (FIIs).
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REPO
It is a transaction in which two parties agree to sell and
repurchase the same security. Under such an agreement the sellersells specified securities with an agreement to repurchase thesame at a mutually decided future date and a price
Uses of Repo
It helps banks to invest surplus cashIt helps investor achieve money market returns with sovereign risk.
It helps borrower to raise funds at better rates
An SLR surplus and CRR deficit bank can use the Repo deals as aconvenient way of adjusting SLR/CRR positions simultaneously.
RBI uses Repo and Reverse repo as instruments for liquidity
adjustment in the system
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Call Money Market
The call money market is an integral part of the Indian Money
Market, where the day-to-day surplus funds (mostly of banks) aretraded. The loans are of short-term duration varying from 1 to 14days.
The money that is lent for one day in this market is known as "Call
Money", and if it exceeds one day (but less than 15 days) it isreferred to as "Notice Money".
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Demand and Time Liabilities
Main components of DTL are: Demand deposits (held in current and savings
accounts, margin money for LCs, overdue fixeddeposits etc.)
Time deposits (in fixed deposits, recurring deposits,reinvestment deposits etc.)
Overseas borrowings
Foreign outward remittances in transit (FC liabilitiesnet of FC assets)
Other demand and time liabilities (accrued interest,credit balances in suspense account etc. )
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SLR
SLR is to be maintained in the form of thefollowing assets:
Cash balances (excluding balances maintained for CRR)
Gold (valued at price not exceeding current market
price)
Approved securities valued as per norms prescribed byRBI.
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Thank You