Treasury Management in Banking
June 2024 Examination
1. In March 2022, major Central Banks worldwide started increasing interest rates resulting in
higher Treasury Bill yields and failure of few banks in US (due to selling of Assets to meet
liquidity). Explain the role Treasury Policies & ALCO for liquidity management? (10 Marks)
2. A British MNC in India want to move their Corporate Treasury to Head Office in London
for better liquidity management. Explain what are the considerations when choosing the
location to setup a Corporate Treasury office? (10 Marks)
3. In view of settlement risk and increasing interest rates, explain the following:
a. What is Herstatt risk? (5 Marks)
b. How Assets and Liabilities are considered Rate Sensitive? (5 Marks)