MA0042-TREASURY MANAGEMENT

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ASSIGNMENT

DRIVE	SPRING 2014
PROGRAM	MBADS – (SEM 4/SEM 6) / MBAN2 / MBAFLEX – (SEM 4)
SUBJECT CODE & NAME	MA0042-TREASURY MANAGEMENT
SEMESTER	4
BK ID	B1813
CREDITS	4
MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Q1. Cash management forms part of the treasury’s core functions either in banks or in corporate institutions. Do you agree? Substantiate your arguments by differentiating bank treasury and corporate treasury.

(Similarities, Differences) 5, 5

Answer.

Yes, I agree with this given statement. Today, treasurers need to extend their boundaries and take up activities such as capital structuring, customers financing, IT integration and risk management. They are also adding value and managing risk by integrating their treasury functions with the finance department. In addition to dealing with payments management, a treasurer’s functions include planning, cash flow monitoring, managing bank accounts and pooling and netting. He should have records of previous recurring expenses and disbursement patterns.

Q2. Analyse how the repo reforms brought changes in the Indian bank’s treasury landscape.

(Explain Indian Repo market reforms)10

Answer.

Indian Repo market reforms

This money market instrument helps in collateralised short-term borrowing and lending through sale or purchase operation in debt instruments. Here the securities are sold by the holders to the investors with an agreement to repurchase them at a predetermined rate and date.

On the other hand, under the reverse repo transactions, securities are purchased with a simultaneous commitment to resell at a predetermined rate and date.

Since 1999, reforms were undertaken to widen the repo market.

Q3. Discuss the role of interbank Mobile Payment services (IMPS) in India

(Explain Interbank Mobile Payment services (IMPS) in India)10

Answer.

Interbank Mobile Payment services (IMPS) in India

Interbank Mobile Payment Service (IMPS) seems to be gradually gaining ground in India as almost all major banks  have extended the service that enables account holders to access accounts and transfer funds using mobile phones. Since February 2012, around 15 banks have extended the IMPS service to their customer and the number of people adopting the service has gone up significantly.

Indian payment services provider Atom Technologies, a subsidiary of Financial Technologies (India) Limited, has introduced Interbank Mobile Payment Service (IMPS) to its service, enabling merchants to make Interbank payments on their mobile phones. The company has been a partner of YES Bank for this initiative.

While the financial details of the deal remained undisclosed, Atom Technologies said some of its clients would be integrating IMPS operations through this

Q4. Assume you are the treasurer of ABC bank. Discuss how bank should ensure liquidity measures and manage the liquidity.

(Explain Liquidity management)10

Answer.

Liquidity management

Liquidity is a bank’s capacity to fund increase in assets and meet both expected and unexpected cash and collateral obligations at reasonable cost. The banks need to avoid unacceptable losses and enhance profit. An effective management of liquidity can increase cash efficiency of a bank by squeezing out the maximum value from its cash resources and optimizing working capital performance. Much will depend on the visibility a bank has on its business transactions.  Similarly, it is important for a bank to get its forecasting right. Overestimating surplus cash may force a bank

Q5. An integrated treasury acts as a centre of arbitrage and hedging activity. Substantiate your reasons.

(Explain integrated treasury)10

Answer.

Integrated treasury

An integrated treasury means a dealing unit that has forex dealing operations and money and funding departments housed in the same premises. Traditional money and funding operations were less evolved, and the diversity of money and capital market instruments we see today were lacking, interest rate movements were tardy and the operations were spread

Q6. Discuss the role played by SAP – Treasury in treasury Management.

(Role of SAP-Treasury) 10

Answer.

Role of SAP-Treasury

Treasury management is responsible for all financial transactions—from deal creation, confirmation and payment file generation via accounting entries. SAP applications simplify the task of the treasurer. It manages debt and investments more effectively, and monitors and manages the full spectrum of financial instruments with greater transparency and control. It streamlines the banking relationships with the treasury and financial risk management, controls and monitors cash, and produce accurate and reliable liquidity forecasts and plans. Treasury

Dear students get fully solved  SMU MBA Spring 2014 assignments

Send your semester & Specialization name to our mail id :

“ help.mbaassignments@gmail.com ”

or

Call us at : 08263069601