Answer to Question #265152 in Accounting for Kajal

Question

Historically, only larger Banks had the strength of providing Treasury products &

services. Now even smaller banks are into it in a strong way. Enumerate and describe at

least 5 purposes for which a Bank Treasury exists

Answer 1

1.To avoid uncontrolled indebtedness, Bank Treasury assists in debt management through legal and budgetary measures.

2.Aids with financial planning and attention, such as budget implementation and cash flow projections.

3.Assists in the management of government bank accounts; the Treasury should be in charge of all central government bank accounts.

4.Cash balances and Treasury single accounts should be centralized in order to reduce borrowing costs and increase interest-bearing deposits. Operating cash balances should be kept to a minimum.

5.Cash flow management, to reduce the period between when cash is received and when it is accessible to carry out expenditure progr ams.