INTRODUCTION TO TREASURY MANAGEMENT
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Bank Financial Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary function of a bank's treasury department?
The treasury department manages the bank's liquidity, funds, and investments to optimize returns while ensuring regulatory compliance and risk management.
What is the 'dealing room' in a bank's treasury setup?
The room where dealers execute money market and forex deals.
Which regulatory body prescribes guidelines for treasury operations of Indian banks?
The Reserve Bank of India (RBI) prescribes guidelines for treasury operations, including investment policies, SLR/CRR maintenance, and forex management.
What is the 'Net Demand and Time Liabilities' (NDTL) used to compute?
NDTL is the base for calculating CRR and SLR requirements.
What does the term 'ALM' stand for in the context of treasury management?
ALM stands for Asset-Liability Management, which involves matching the maturities and interest rate sensitivities of assets and liabilities to manage risk.
What is a 'vostro account' in treasury operations?
A foreign bank's account held in domestic currency with a local bank.
What is the 'front office' responsible for in a treasury setup?
The front office is responsible for executing trades and transactions in money markets, forex markets, and securities markets on behalf of the bank.
What does 'Sovereign Risk' mean in the context of treasury investments?
Risk that a foreign government may default on its obligations.
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