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

<strong>Technical</strong> <strong>Guide</strong> on Internal Audit of Treasury Function in Banks
(d) To keep investment portfolio healthy and liquid.
(e) To minimize non-performing investments.
(f) To take advantage of market volatility and trade/arbitrage in permitted
products (including overseas) and avail arbitrage opportunities between
rupee and forex treasury operations.
(g) To invest in tax free instruments as per the tax planning of the bank.
(h) To conduct derivative transactions to hedge bank’s own balance sheet gaps
and exposure of the clients.
(i) To optimize returns from forex operations.
Areas in treasury management
1.8 From the viewpoint of a bank or a financial institution, treasury management
covers the following major areas:
(a) Liquidity risk management
(b) Interest risk management
(c) Currency risk management
(d) Equity risk management
(e) Commodity risk management
(f) Investment management.
4