Comment on the following: Treasury operations are important in banking due to huge funds involved.

Treasury management means to plan, organise and control cash and borrowings so as to optimise interest and currency flows, and minimise the cost of funds. The treasury function is very important in banking as huge funds are involved. The interest rates are fluctuating and the treasury needs to work on the yield expected in credit and investment decisions with an objective to reduce the volatility of Net Interest Income (NII). With increasing globalization, banks need to closely monitor and manage their foreign exchange exposures. All banks/financial institution should ensure that they try to serve for giving best service in the market operation within code of conduct issued from time to time. It is essential that all staff should be familiar to code of conducts, in professional manner while entering into dealing transactions. Banks/financial institution are responsible for dealing actions of the staff members. They should know their counter party and their credit worthiness before entering into contract. They should take measure of risk control and meet proper legal obligation for each contract to minimize the loss. Therefore it is better to prepare a dealing mandate for each transaction. Banks/financial institutions should observe confidentiality. The transactions should not be dealt in non-market rates. Adequate safeguards should be established to prevent abuse of information by staff members with respect to non-public price-sensitive information.