The Net value of the funds available gives the amount of liquidity available with the bank. The positive figure shows surplus funds available with the bank and hence deployment of the same. The negative figure shows deficit with the bank and hence borrowing to cover the deficit. 2. High Cost Deposits: These are the bulk deposits available with the bank. As the deposits are in bulk they have a higher interest rate. These deposits must be as low as possible as they interest rate attached to them is high. But these deposits are essential as they have longer maturity hence these deposits must be maintained at a particular level.
3. Ratification: Decisions regarding purchase of CD, CP and other securities in AFS and HTM categories are taken by the investment committee. In case the deals have not been struck or the deals are to be modified then they come under ratification title. It also includes the suggestions by the traders which will be considered by the investment committee. 4. Compliance: Implementation of the decisions taken by the investment committee is included under compliance. It also includes those decisions which have to be executed within a specified period of time or those decisions which were taken in the previous committee meetings and have been implemented.
5. CRR: This part of the report shows the level of CRR maintained. It gives the details of the average CRR to be maintained, the amount of CRR that has been maintained and the balance CRR required. Banks need to maintain minimum 70% of the CRR on daily basis and 100% on the fortnight. UBI maintains CRR on average basis. 6. Depreciation: Depreciation is calculated on Net basis and it is provided for AFS and HFT category. The depreciation amount is either added or subtracted from the provision provided for depreciation. This part of the report also shows the depreciation till date and the depreciation for the previous financial year.
7. Refinance Availed: This column includes the various refinance options available and the amounts of refinance that can be availed by different refinance agents. This refinance amount depends upon the loans and services provided by the bank to different sectors for eg. depending upon the loans and services provided to the small and medium scale industries sector (SME), refinance can be availed by SIDBI. The refinance availed is available at a pre defined rate of interest. The amount from refinance is supposed to be used for banks asset liability miss match.
8. Dealing of various securities: The detail of various securities purchased/ sold in different categories like AFS, HTM, HFT, Non-SLR etc is provided in the report. It also includes the profit/ loss associated with sale of each security. The report also provides the holding price and the selling price associated with each security sold/ purchased. It also provides the yield of the corresponding deals. The report also gives category vise the total profit/ loss associated with the sales of securities.
9. Dealings in Forex: The report gives the details of the forex operations and the value of Indian Rupee in different currencies. The report also compares the current performance of the treasury branch with the last year’s performance and it also gives the forecasted values of for the month. Conclusion/ Recommendations 1. The study gave me an overview of the functioning of a bank’s treasury. I learnt about the significance of a treasury department, the objective of a treasury department and its function in the new evolving banking sector. I also learnt about the risk management department and the various kinds of risks that a bank faces. I gained insight into the daily functioning of a treasury department.
2. In addition to the above, I learnt the dynamics of debt markets in India. The reason for issue of securities by the government, the trend in the debt markets, the process of issuance of the various SLR securities etc. In addition I got an insight into the operations of the markets- the auctioning process, allotment of securities, the clearing process etc as well. Overall the study project added to my knowledge about the banking sector considerably.
The opportunities and insights I got from being a part of the bank’s activities and interacting with the personnel were immense. The recommendations to UBI would be: 1. Integration between the different departments. Because of this the paper work will reduce and it would also avoid multiple entry of same data or operation at different departments. 2. The department was completely dependent on few employees for the some of its integral operations hence absence of such employees affects the treasury operations.
Stock Exchange, Investments and Derivatives- V Raghunathan & Prabina Raji B Treasury Management- ICFAI