Treasury & Funds Management Course

1. Treasury & Funds Management - AW
Mohammad Ali Jinnah University, Karachi
Spring 2023 – Sunday – 11:45 AM - 02:45 PM (CF-C1)
Course Instructor: Dr. S. M. Noaman Ahmed Shah
Google Classroom Code: mgvdoma

2. Need for a Treasury Department
• Bank’s daily activities commence when
business transactions are recorded with Cash
and Treasury Departments
• Cash department deals in the physical
movement of currency whereas the Treasury
handles book-based transactions
Session 1 2
TFM-SP2023

3. Need for a Treasury Department
• Transactions
– All Customers Cheque Payments/Receipts are Reported to
Treasury as One Consolidated Clearing Figure
– All Import/Export Document Bookings are Reported
Immediately
– All Deposit Movements are accounted for Banks Statutory
Liquidity Ratios, maintained as per local rules
– Funds are managed through SBP Current Account in PKR
and All Nostro Accounts Abroad
– Strict Adherence to SBP Guidelines on Daily Basis for Forex
Open Position
Session 1 3
TFM-SP2023

4. Need for a Treasury Department
• Primarily responsible for
– Maintaining the Statutory Requirements of a
bank
– Managing bank’s liquidity through its Money
Market (MM) operations
– Foreign Exchange (FX) operations
Session 1 4
TFM-SP2023

5. Financial Markets
• What is a market?
• Financial Markets generate prices whenever
securities are bought and sold.
• In Forex Market, dealers are trading in foreign
currencies.
• Markets do not exist in isolation.
• Forex Market exists in correlation with Money
Market.
Session 1 5
TFM-SP2023

6. Money Market (MM)
• MM is a whole-sale market for short-term, highly
liquid securities.
• It serves as an avenue through which banks and
financial institutions offload their excess liquidity or
meet their short-term funding requirements.
• To the government an organized MM represents a
means for it to implement its monetary policies in an
efficient manner.
• It provides government with a liquid market for
securities through which it can finance its own
borrowing requirements.
• Include money and near money (e.g. Cash, T/Bills).
Session 1 6
TFM-SP2023

7. Players in the MM
• Commercial Banks (and NBFIs)
• Central Banks
• Corporations
• Individuals
Session 1 7
TFM-SP2023