Page 41 - Banking Finance July 2022
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ARTICLE












          TREASURY :




          NEW PROFIT




          CENTRE OF





          BANKS










          Backdrop:                                           skills  work in it. In  this  article,  we  will provide  a  brief
                                                              overview of these treasury operations and also learn how
          We know that main business of any bank is accepting deposit
                                                              this department has evolved as a profit making machine for
          from its customers and lend it at a higher rate to generate
                                                              most of these banks in our country.
          income. But in last 20 years or so banking business has
          crossed many boundaries and ventured into many different
          kind of business to make profit.  For executing so many  Bank Treasury in Initial Days:
          different activities, banks have recruited huge manpower  Traditionally, the role of the Treasury in Indian banks was
          and they work in different departments across different  limited to ensuring the maintenance of the RBI stipulated
          offices.                                            norms for Cash Reserve Ratio (CRR) which mandates that a
                                                              minimum proportion of defined demand and time liabilities
          However, amongst  the  various departments  present in  be kept as deposit with the central bank without any return
          banks,  treasury  is  one  among  the  most  important  and Statutory Liquidity Ratio (SLR) which obliges banks to
          department and at the same time the least understood one.  invest a specified percentage of their liabilities in notified
          In most of the banks, treasury is attached to their corporate  securities issued by the Government of India  and State
          offices and people with highly specialized knowledge and  Governments with some returns attached to it.

                                                              Earlier, treasury's activities in foreign exchange were also
                               About the author
                                                              confined  to  meeting  merchants'  and  customers'
                         Nilotpal Banerjee                    requirements  for  imports,  exports,  remittances  and
                         Chief Manager (Faculty)              deposits. Furthermore, Indian Money Market was also not
                         Staff Training Centre, Powai
                                                              structured and easily accessible. Therefore, hardly any banks
                         Mumbai
                                                              were dealing is this market. Following the recommendations

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