AKTU Treasury Management in Banking (BMBF404) Syllabus PDF – MBA (Banking & Financial Services) 4th Semester

Course Objectives

1. Understand the fundamental concepts and principles of treasury management in the banking sector, including its role in financial institutions and its impact on profitability.
2. analyse different money market instruments and fixed income securities used in treasury operations, including their valuation, pricing, and yield curve analysis.
3. Evaluate foreign exchange management techniques employed by banks to manage currency risk through derivatives and hedging strategies.
4. Examine liquidity management and cash management techniques in banking, including cash flow forecasting, working capital management, and liquidity optimization.
5. Assess risk management practices and regulatory compliance requirements in treasury operations, including identification and management of financial risks and Basel III framework compliance.

Course Content

Module I: Introduction to Treasury Management (8 Hours)

Overview of Treasury Management; Meaning, Concept and Importance of Treasury Management in Banking; Role of Treasury in Financial Institutions; Impact of Treasury Operations on Bank Profitability; Functions and Responsibilities of Treasury Department in Banks; Structure and Organization of Bank Treasury; Front Office, Middle Office and Back Office Functions; Regulatory Framework for Treasury Operations; Risk Management in Treasury Operations.

Module II: Money Markets and Fixed Income Securities (8 Hours)

Concept and Structure of Money Market; Money Market Instruments; Treasury Bills; Commercial Papers; Certificates of Deposit; Call Money Market; Repurchase Agreements (Repo); Fixed Income Securities; Bonds; Government Securities; Corporate Bonds; Features and Classification of Fixed Income Instruments; Yield Curves; Bond Pricing;

Valuation of Fixed Income Securities; Yield Measurement and Interest Rate Sensitivity.

Module III: Foreign Exchange Management (8 Hours)

Overview of Foreign Exchange Markets; Participants in Foreign Exchange Markets; Foreign Exchange Operations in Banks; Exchange Rate Mechanism; Foreign Exchange Risk Management; Types of Foreign Exchange Exposure; Hedging Techniques; Currency Derivatives; Forward Contracts; Futures Contracts; Options; Swaps; Managing Exchange Rate Fluctuations in International Trade; Role of Treasury in Forex Management.

Module IV: Liquidity and Cash Management (8 Hours)

Liquidity Management in Banking and Financial Institutions; Importance of Liquidity Management; Cash Flow Forecasting; Working Capital Management; Cash Position Management; Cash Pooling; Cash Concentration; Cash Positioning Strategies; Liquidity Planning and Optimization; Asset Liability Management (ALM); Liquidity Risk Management.

Module V: Risk Management and Compliance in Treasury Operations (8 Hours)

Financial Risks in Treasury Operations; Identification and Measurement of Risks; Interest Rate Risk; Credit Risk; Market Risk; Operational Risk; Risk Measurement Techniques; Value at Risk (VaR); Basel III Framework and its Impact on Treasury Risk Management; Regulatory Compliance; Internal Controls; Treasury Audit; Reporting Requirements;

Corporate Governance in Treasury Operations.

Suggested Readings

1. Indian Institute of Banking & Finance (IIBF); Treasury, Investment and Risk Management; IIBF Publications.
2. Datey, V. S.; Treasury and Risk Management: Concepts and Applications.
3. Seelig, Steven C.; Treasury Management: A Practitioner’s Guide.
4. Bragg, Steven M.; Treasury Management: The Practitioner’s Guide.
5. Myint, Stanley & Famery, Fabrice; The Handbook of Corporate Financial Risk Management.
6. Hull, John C.; Risk Management and Financial Institutions; Wiley.
7. Mishkin, Frederic S.; The Economics of Money, Banking and Financial Markets; Pearson Education.

Course Outcomes