Technical Guide on Internal Audit of Treasury ... - CAalley.com

<strong>Technical</strong> <strong>Guide</strong> on Internal Audit of Treasury Function in Banks
Cash Flow at Risk
Cash Position
Centralised Funds
Management System (CFMS)
The Cash Flow at Risk approach answers
the question of how large the deviation
between actual cash flow and the planned
value (or that used in the budget) is due to
changes in the underlying risk factors.
Cash Position in foreign exchange deals
with all the transactions effecting Nostro
account, funding of Nostro (in case of
overdraft), utilization of surplus cash
balance in Nostro and deployment of funds
so as to ensure optimum utilization.
Examples are delivery under forward
contracts, inward /outward telex transfer,
etc. It is also called fund position.
The Centralised Funds Management
System (CFMS) provides for a centralised
viewing of balance positions of the account
holders across different accounts
maintained at various locations of the RBI.
Collar Option A protective options strategy that is
implemented after a long position in a stock
has experienced substantial gains. It is
created by purchasing a “put option” while
simultaneously writing a “call option.” (also
known as “hedge wrapper”)
Cost of Carry
Cross Hedge
Credit Information Bureau of
India Ltd. (CIBIL)
Expenses incurred while a position is being
held, for example, interest on securities
bought on margin, dividends paid on short
positions, and other expenses.
Hedging a cash market position in a futures
or option contract for a different but pricerelated
commodity.
India’s first credit information bureau- is a
repository of information, which contains the
credit history of commercial and consumer
x