Treasury Management-A Synoptic View
Treasury management is an important aspect of the functions discharged by the head of the finance department of any organization. And the efficiency and skills with which this function is discharged is very vital for it. What is the import of the term “treasury”. In a strictly literal sense it means the treasure or valuables of the government. It consists of the coins and currencies which are the medium of financial transactions. Treasury is the agency where the revenue receipts of the government were collected and deposited and the payments are disbursed. There was very little problem in managing the treasury functions of the government as the size and nature of the operation were small and simple in the earlier phase .In recent times the nature of treasury functions have become more complex and the size too has grown enormously. In India both the central government and state government have their respective treasuries.
As stated earlier with the enormous growth in revenue and the corresponding rise in expenditure, the government treasury, which is a centralized agency started finding it increasingly difficult to manage the affairs efficiently and appointed State Bank of India and other Public Sector Banks to perform some of the treasury functions. Thus, you may be aware that payments of all taxes both direct and indirect are routed through banks nowadays which they collect on behalf of the government. Similarly these banks also make payments on behalf of the government through accounts maintained by various government departments.
The treasury function which started at the government is now replicated at the corporate level too. There emerged in the scene large corporate houses with operations in all parts of the country and outside and they have collections of funds from all these operational units at various locations and disbursements obligations too. And the opportunities to make profit out of efficient funds deployment collected in the form of currency, cheques and other liquid instruments are tremendous . When we speak about treasury management it is nothing but a reference to those activities which involve collection of all inflows and management of outflows which is an important tool for overall fund management. Thus the typical functions of a treasury manager consists in making available funds in right quantity and in right time and deploying it in right time and in right quantity which aim at making profits from availability and deployment of funds.
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