CAIIB · BFM

Introduction to Treasury Management & Treasury Products

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Bank Financial Management — CAIIB.

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What is the primary function of Treasury Management in a bank?

Treasury Management involves managing a bank's liquidity, funding, and financial risk by optimally deploying surplus funds and covering funding gaps while ensuring compliance with regulatory requirements like CRR and SLR.

What is the definition of treasury in banking?

Department managing liquidity, investments, and risk exposure

What are the three main segments of a bank's treasury?

The three main segments are the Domestic Treasury (managing INR-denominated assets and liabilities), Foreign Exchange Treasury (managing forex operations), and Derivatives Desk (managing interest rate and currency derivatives).

What is the primary objective of treasury management?

Optimising returns while managing liquidity and market risk

What is the role of the Front Office in a bank's treasury?

The Front Office is responsible for executing deals, trading, and market operations; it consists of dealers who take positions in money market, forex, and securities markets to generate income.

What is a Money Market instrument?

Short-term debt instrument with maturity up to one year

What is the function of the Middle Office in treasury operations?

The Middle Office is responsible for risk management, setting and monitoring limits, MIS reporting, and ensuring that the Front Office operates within approved risk parameters.

What is the minimum denomination for Commercial Paper in India?

Rs. 5 lakh

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