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INTRODUCTION TO TREASURY MANAGEMENT-II
What is the primary objective of Treasury Management in a bank?
The primary objective is to manage the bank's liquidity, profitability, and risk arising from its balance sheet positions while ensuring compliance with regulatory requirements such as CRR, SLR, and ALM guidelines.
What is the 'Investment Fluctuation Reserve' (IFR) and why do banks maintain it?
Buffer reserve to absorb MTM losses on AFS and HFT portfolios.
What does the term 'Transfer Pricing' mean in the context of bank treasury?
Transfer pricing is the internal rate at which funds are transferred between the treasury and business units of a bank, ensuring each unit is charged or credited fairly for the cost or benefit of funds.
What is the 'Statutory Liquidity Ratio' (SLR) and how does it relate to treasury?
Mandatory investment in approved securities, managed primarily by treasury.
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