DR. D.Y.PATIL UNIVERSITY, DEPARTMENT OF MANANGEMENT

Synopsis

On

TREASURY MANAGEMENT

Submitted to:Prof. Roopali

Submitted by:Mota Vivek

MBA – core (Finance)

Synopsis Approval Form:-

Date of Submission: - 20/01/2011

Name of Students: - Roll no:

Vivek Mota 09057

Approved: -________ Not approved: -________

Remarks:-

Signature of Guide:-

CHAPTERIZATION

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1 Executive Summary

2 Objective of the study

3 Research methodology

4 Literature review

5 Data Analysis and Interpretation

6 Conclusion

7 Recommendations

8 Limitations

9 Bibliography

10 Annexure

EXECUTIVE SUMMARY

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If cash is the lifeblood of any organization, the treasury is the

heart where all cash of the bank is circulated. In general terms and

from the perspective of commercial banking, treasury refers to the

fund and revenue at the possession of the bank and day-to-day

management of the same. Idle funds are usually source of loss, real

or opportunity cost and, thereby need to be managed, invested, and

deployed with intent to improve profitability. There is no profit or

reward without attendant risk. Thus treasury operations seek to

maximize profit and earning by investing available funds at an

acceptable level of risks. Returns and risks both need to be

managed. Interest income from investments has overtaken interest

income from loans/advances. The special feature of such bloated

portfolio is that more than 75% to 80 % of it is invested in government

securities.

Conventionally, the treasury function was confined to funds

management maintaining adequate cash balances to meet day – to –

day requirements, deploying surplus funds generated in the

operations, and sourcing funds to bridge occasional gaps in cash

flow. In the context of a bank, the treasury is also responsible to meet

reserve requirements, viz. holding with reserve bank on India

minimum cash balances required as per cash reserve ratio (CRR)

and investing funds in approved securities to the extent required

under Statutory Liquidity Ratio (SLR). Thus, Treasury function was

essentially liquidity management, and form an organizational point of

view, Treasury was considered as a service centre.

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To date, liquidity management continues to be an important

function of treasury. However, owing to economic reforms and

deregulation of markets over the last decade, the scope of treasury

has expanded considerably. Treasury has since evolved since as a

profit centre, with its own trading and investment activity. Treasury

connects core activity of the bank (deposit taking and lending) with

the financial markets – which is all true of corporate treasuries in non-

banking companies – by continuously accessing the markets for

lending, borrowing, investing and trading in financial assets. And

owing to the interface with markets, managing market risk for the

entire banks has become an integral part of treasury.

The treasury plays an active role in asset-liability management, and

with is constant exposure to markets, is well placed to advise the

management of bank in internal decisions, say in product pricing and

strategic investments.

OBJECTIVE OF THE STUDY

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The objective of undertaking a project on Treasury

Management operations in banks is to have in-depth

knowledge about the meaning of Treasury Management.

To know about the functions, organizational structure and

objective of Treasury Management in Banks.

To understand the elements of Treasury Management and the

functions of treasurer.

To have a broader view on nature of treasury assets & liabilities

and to know what are their products and services involved in

Treasury Management.

To understand the risk associated with Treasury Management

and their mitigation.

To know what are the RBI guidelines formulated for Treasury

Management.

RESEARCH METHODOLOGY

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The Research Methodology includes primary data and

secondary data. This data is generated specifically for the purpose of

working out this project. This data means the first hand information,

which would be collected through various sources e.g. interviews,

schedules, Formal/Informal information. Primary data would be

collected through direct interaction with bankers.

This project is basically interdependent on secondary data i.e.

the data would be collected through company website, magazines,

books, internet and newspapers. The secondary data would be

consisting of mechanism of banks, the products and services offered

in India.

Research study will be conducted with structured questionnaire by

interviewing the managers of targeted bankers. The type of research

to be used for the study would be Survey Research Technique.

Primary data: Primary data will be collected through structured

questionnaire which will be given to personnel’s i.e. managers

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of banks. The questionnaire will contain both close ended and

open ended questions.

Secondary data: Secondary data will be collected through

internet, journals which contain information about the previous

research conducted on same topic.

Sampling method: Random sampling method will be for

selection of consumers for more relevant data.

Sample Size: A Sample Size of about 50-100 would be

interviewed for this study.

LIMITATIONS OF THE RESEARCH STUDY

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The research will be conducted in limited area and the sample

size is also limited, hence the results will only suggestive.

The limited time period for the research.

The response from the bankers might not be complete or

improper, so the results will be more of suggestive type.

The project mainly comprises of secondary data as it may

happen that during the time of collecting primary data the

managers may not be willing to provide their financial and

operational details with their respective clients.

BIBLIOGRAPHY

INTERNET

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www.indiainfoline.com

www.investopedia.com

www.treasury-management.com

www.financialexpress.com

BOOK

Treasury Management

- Indian Institute of Banking & Finance (Taxman)

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