Page 147 - DCOM208_BANKING_THEORY_AND_PRACTICE

Banking Theory and Practice

Notes Treasury management can be described as the management of cash, funds, currency, bank
and financial risk. That’s why it is an imperative tool of finance. Cash inflows and outflows
are checked by finance manager.

8.6 Keywords

Benchmark Prime Lending Rate (BPLR): The BPLR is the interest rate that commercial banks
charge their most credit-worthy customers.

Core Banking Solutions: Core banking is a term used to describe the services provided by a
group of interconnected bank branches.
Export-Import Banks: It is the principal financial institution in the country for coordinating the
working of institutions engaged in financing exports and imports.
Floating Rate Certificates of Deposits (FRCDs): A floating rate certificate of deposit issued by a
bank that pays a monthly, quarterly, semi-annual, or annual coupon based on a floating interest
rate.

Floating Rate Notes (FRN): A floating rate note, often called an FRN or “floater”, is a debt
instrument that pays a floating interest rate.
Lease: A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner)
for use of an asset.
London Interbank Bid Rate (LIB/D): The average interest rate which major London banks
borrow Eurocurrency deposits from other banks.

Technical Consultancy Organization (TCO): Technical Consultancy Organisations (TCOs) were
created for facilitating technical consultancy for industrial projects.

8.7 Review Questions

1. Write short note on corporate banking.

2. What kinds of services are offered by corporate banking?
3. What do you understand by retail lending schemes?
4. Briefly describe saving accounts.

5. Define merchant banking. Explain significance and its functions.
6. What type of loans is issued on foreign currency?
7. What do you mean by treasury management?
8. Write an essay on the objectives and functions of treasury management.
9. Describe portfolio management.

10. What activities are included in corporate counselling?

Answers: Self Assessment

1. False 2. False
3. True 4. True
5. Finance 6. currency risk
7. liquidity 8. False

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