treasury management-shruti
TRANSCRIPT
-
7/28/2019 Treasury Management-shruti
1/17
TreasuryManagement
-
7/28/2019 Treasury Management-shruti
2/17
-
7/28/2019 Treasury Management-shruti
3/17
Most banks have whole departments devoted to
treasury management and supporting their
clients' needs in this area. Until recently, large
banks had the stronghold on the provision oftreasury management products and services.
However, smaller banks are increasingly
launching and expanding their treasury
management functions and offerings
-
7/28/2019 Treasury Management-shruti
4/17
Bank Treasuries
Bank Treasuries may have the following departments-
A Fixed Income or Money Market desk that is devoted to buying and
selling interest bearing securities A Foreign exchange or "FX" desk that buys and sells currencies
A Capital Markets or Equities desk that deals in shares listed on the stock
market.
-
7/28/2019 Treasury Management-shruti
5/17
For non-banking entities, the terms Treasury Managementand Cash Management are sometimes used interchangeably,while, in fact, the scope of treasury management is larger. In
general, a company's treasury operations comes under thecontrol of the CFO, Vice-President Director of Finance orTreasurer, and is handled on a day to day basis by theorganization's treasury staff, controller, or comptroller.
-
7/28/2019 Treasury Management-shruti
6/17
What is Treasury Management
Collects funds and disburses money.
Managing Funds
Responsibilities fall under the scope of CFO
The CFOs responsibilities include capital
Management, risk management, strategic planning,
Investor relations and financial reporting
-
7/28/2019 Treasury Management-shruti
7/17
Objectives of the Treasury
To take advantage of the attractive trading and arbitrageopportunities in the bond and Forex markets
To deploy and invest the deposit liabilities, internal generation andcash flow from maturing assets for maximum return on a current
and forward basis consistent with the banks risk policies appetite To fund the balance sheet on current and forward basis as cheaply
as possible taking in to account the marginal impact of these actions
To maintain statutory reserves- CRR and SLR- as mandated by theRBI on current and forward planning basis
To identify and borrow on the best terms from the market to meetthe clearing deficit of the bank
-
7/28/2019 Treasury Management-shruti
8/17
Function of Treasury Management
The function of treasury mgt is concerned with both macro and microfacets of the economy
At the macro level, the pumping in and out of cash, credit and other
financial instruments are the functions of the government and businesssectors, which borrow from the public
These two sectors spend more than their means and have to borrow infinance their ever-growing operations. They accordingly issue securitiesin the form of equity or debt instruments.
-
7/28/2019 Treasury Management-shruti
9/17
The latter are securities including promissory notes and treasury billswhich are redeemable after a stipulated time period.
Such borrowings for financing the needs of the government and thebusiness sector are met by surplus funds and savings of the householdsector and the external sector. these two sectors have a surplus of
incomes over expenditure. The micro units utilize these surpluses and build up their capacities
for production of output and this leads to the productive system anddistribution and consumption systems.
-
7/28/2019 Treasury Management-shruti
10/17
Responsibility of a Treasurer
Balance Sheet Management:
Liquidity management
Projection for a twelve month on a monthly basis
If projection fails bank will have to finance long term liability with short term
borrowing i.e. call money market Asset Liability Management
Not just volume but the quality also matters
Capital is needed to maintain Capital Adequacy Ratio
Transfer Pricing Balance between asset and liability
Reserve Management and Investments
-
7/28/2019 Treasury Management-shruti
11/17
SCOPE
Unit level- The performance of production, marketing and HRD functions isdependent upon the performance of the treasury department. the lubricant forday-to-day functioning of a unit is money or funds and these funds are arrangedby the treasury manager.
Domestic level- The scope is to channelise the savings of the community intoprofitable investment avenues. This job is performed by the commercial banks. TMis a crucial activity in banks and financial institutions as they deal with the funds,borrowings and lending and investments.
International level- Is concerned with management of funds in the foreigncurrencies.
-
7/28/2019 Treasury Management-shruti
12/17
ROLES OF THE TREASURY MANAGER
Originating roles
Supportive roles
Leadership roles
Watchdog roles
Learning roles Informative roles
-
7/28/2019 Treasury Management-shruti
13/17
RESPONSIBILITES OF THE TREASURY
MANAGER
Compliance with statutory guidelines
Equal treatment to all departments Ability to network
Integrity and impartial dealings
Willingness to learn and to teach.
-
7/28/2019 Treasury Management-shruti
14/17
TOOLS OF TREASURY
MANAGER
Analytic and planning tools
Zero based budgeting
Financial statement analysis
-
7/28/2019 Treasury Management-shruti
15/17
ENVIRONMENT FOR TREASURY
MANAGEMENT
Legal environment: refers to the legislations,which govern corporate functioning.
Regulatory environment: regardingemployment, wages, land laws, promotionof units and closure of units etc.
Financial environment: pertains to policiesregarding monetary and fiscal control,
financial supervision, exchange control etc.
-
7/28/2019 Treasury Management-shruti
16/17
Present status of Treasury Management
in IndiaTreasury management is still in its infancy in India. It is still consideredas a sub function of the financial management. In most of thecompanies, it is the finance manager which is also taking care of the
treasury function. Treasury operations are carried out professionallyand systematically by some banks and financial institutions. The firststage of evolution in treasury management is the establishment of atreasury function. The second stage is running it as a profit center. InIndia, treasury operations at the micro level are expected to grow at a
fast pace with increasing integration of the Indian economy with theworld economy
-
7/28/2019 Treasury Management-shruti
17/17