Tribhuvan University
Faculty of Management
Office of the Dean
Bachelor of Business Management (BBM)
Course Description
:This course consists of nine units- Introduction of Treasury Management, Treasury Organization and Structure, Sources of Fund, Uses of fund, Major Risk in Treasury Management, Pricing of the Product, Assets Liability Management, Investment Portfolio and Liquidity management and Treasury Management Function in Nepalese Banking Sector.
Course Objective
:To impart the theoretical and conceptual knowledge of the treasury management and potential risk involve in such transaction. It helps to understand different product and policies regarding treasury market in Nepal. Course Description: This course consists of nine units- Introduction of Treasury Management, Treasury Organization and Structure, Sources of Fund, Uses of fund, Major Risk in Treasury Management, Pricing of the Product, Assets Liability Management, Investment Portfolio and Liquidity management and Treasury Management Function in Nepalese Banking Sector.
Course Contents:
Lecture hours show the approximate classroom time allocated to each unit.
Unit 1. Introduction
- Meaning and concept of treasury, Evolution of treasury management , Scope of treasury management, Principles of treasury management, Role and function of treasury department, and emerging trends in Treasury management.
Unit 2. Treasury Organization and Structure
- Organization and structure of treasury departme nt, Concept and function of front office, Back office and mid office, Meaning of dealers, Dealers room, Roles and responsibilities of dealers.
Unit 3. Sources of Fund
- Meaning and concept of sources of funds
- Deposit sources: Fixed and revolving, Interest bearing and non-interest bearing
- Equity capital source s: Reserve and surplus
- and Borrowing sources: Short term vs. long term.
Unit 4. Uses of fund
- Meaning and concept of uses of funds
- Uses of funds: Loan and advances, Credi t products and their features, Interbank lending, Maintaining reserve, Investment: Forex, Treasury bill, Govt. securities, share and debenture, maintaining liquidity.
Unit 5. Major Risk in Treasury Management
- Meaning and concept of Treasury man agement risk, Various types of Treasury management risks: Counterparty default risk, Sovereign risk, Foreign currency risk, Liquidity risk, Market risk, Equity risk, Commodity risk, Derivatives and risk associated with derivative products (in brief)
Unit 6. Pricing of the Product
- Meaning and concept of product pricing, Deposit pricing techniques: Cost plus margin deposit product, Market penetration, Conditional, Relationship, Upscale target pricing.
- Loan pricing, Base interest rate, Risk based pricing.
Unit 7. Assets Liability Management
- Meaning and concept of asset liability management, Maturity mismatch, Interest sensitive assets and liability, Interest rate risk, Determination of interest rate, Interest spread, Gap analysis, Assets liability management committee (ALCO), Roles and responsibility of ALCO.
Unit 8. Investment Portfolio and Liquidity Management
- Meaning and Concept investment portfolio, investment instrument, importance of portfolio, money market instrument: Treasury bills, Open market operation, Interbank transaction, Commercial papers, Capital market instruments: Share, debenture and govt.
- bonds. Liquidity management, Estimation of liquidity, managing mandatory requirement:
- CRR, SLR.
Unit 9. Treasury Management Function in Nepalese Banking Sector
- Treasury management practices in Nepalese banking sectors, Scope, Opportunities and challenges, Foreign Exchange Dealers Association of Nepal (FEDAN) , Roles and responsibilities, Legal provision s and roles o f Nepal Rastra Bank regarding ALM and treasury.
Suggested Readings:
Avadhani V .A.Treasury Management in India. New Delhi: Himalayan Publishing house. Reed, E. W. Commercial bank Management. London: A Harper International Student. Rose, P. S. Commercial Bank management. New York:McGraw-Hill. Thapa, R. B. and Rawal, D. Principles and practices of Nepalese Banking . Kathmandu: Buddha academic enterprises. NRB Publications