A REGULATIONS, SUPERVISION AND COMPLIANCE OF TREASURY OPERATIONS
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Treasury Investment and Risk Management — Treasury Investment and Risk Management.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
Which RBI master circular governs the investment portfolio and treasury operations of commercial banks?
RBI's Master Circular on Prudential Norms for Classification and Valuation of Investments governs the investment portfolio of banks, laying down rules for HTM, AFS, and HFT categories and their valuation.
What is the role of the Reserve Bank of India Act, 1934 in treasury regulation?
It empowers RBI to regulate currency, credit, and banking operations.
What is the primary regulatory authority overseeing treasury operations of Indian scheduled commercial banks?
The Reserve Bank of India (RBI) is the primary regulatory authority overseeing treasury operations of scheduled commercial banks through its Department of Regulation and Department of Supervision.
What is the significance of the Internal Control System in treasury operations?
It ensures adherence to regulatory limits, policies, and risk controls.
What does the term 'compliance function' mean in the context of bank treasury operations?
The compliance function in treasury operations refers to the independent unit responsible for identifying, assessing, and monitoring compliance with applicable laws, RBI regulations, internal policies, and market codes of conduct governing treasury activities.
What is 'Dealing Room' in a bank treasury and who supervises it?
The front office where trades are executed, supervised by Mid and Back Office.
Under which RBI guideline are banks required to maintain a Liquidity Coverage Ratio (LCR)?
Banks are required to maintain the Liquidity Coverage Ratio (LCR) under RBI's Basel III framework guidelines on liquidity standards, which mandate holding sufficient High Quality Liquid Assets (HQLA) to cover net cash outflows over a 30-day stress period.
What is the significance of 'Daylight Limits' in treasury forex operations?
They cap the maximum forex exposure a dealer can hold during trading hours.
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