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Treasury products include a firm’s collections, disbursements, concentration, investment and funding activities all round
Commodities and securities market, transactions are cash based and delivered immediately. Contracts are usually immediately effective.
- Transaction done on the spot
- Delivery in 48 hours (sometimes up to 7 days)
- Sale/purchase against base currency
- Short term financing needs
- Simple product
- Known cost
- Good credit rating with bank
- Pre-determined credit limit
- Application Process
It’s a debt security i.e. a long term financial obligation or secured loan issued through underwriting or auctions by either the government or corporate organisations.
- Long term debt instrument.
- It is listed on the stock exchange and is therefore tradable.
- Government bonds are tax-free
It is a short-term negotiable bill of exchange used by governments to help finance national borrowing requirements, quoted for purchase/sale in the secondary market on an annual percentage yield to maturity. It is also issued at discount.
- Short-term debt instrument.
- Issued at zero coupon rates i.e. no interest paid during the life cycle of the bill.
- Issued in fixed tenures i.e. 91 days, 182 days and 364 days.
- T-bills qualify as liquid assets for the purpose of liquidity ratio computation.
- Used as collateral securities for repurchase transactions.
- Interest received not subject to tax.
Money Market Deposits
Cash transactions made with deposit money banks either secure or non-secure.
- Transaction depends on limit for counter parties.
- Can be secured or unsecured.
- Can be Open Buy-Back or Fixed Buy-Back.
- Simultaneous transfer of funds and securities by both counter-parties.