The functions of Foreign exchange dealing are highly specialized and complex in nature. The activities are therefore, been singled out for intense management attention. During the last couple of years, financial markets have undergone numerous changes with introduction of several exotic products and innovations by way of a range of new dealing platforms of service providers and counterparties as well. With shrinking margin elsewhere foreign exchange dealing operation has emerged as a major source of earning for banks, worldwide. Furthermore, this is also being used to insulate the operations of Banks from currency value and interest rate fluctuations.
Treasury is responsible for facilitating and managing the foreign currency business as a whole for the Bank. The major function of Foreign Exchange Desk is to manage the FC liquidity on behalf of the branches for imports, exports, remittances and other receipts-payments in foreign exchange. This desk is engaged in buying-selling, borrowing-lending of foreign currencies with the clients and also in the interbank market and with foreign correspondences as per necessity. The desk is also engaged in dealing/trading in different derivatives products in Foreign Currency like Outright, Spot, Forward, SWAP, Cross Currency Dealing etc. for the purpose of an arbitrage /profit making for the bank.
- Spot foreign exchange
- Forward foreign exchange
- Currency swap (Plain Vanilla and Cross Currency Swap)
- Interest Rate Swap (Plain Vanilla, Collar, Cap etc.)
- Forward rate agreement
- Overnight FC deposits/placement
- FC Term deposits/placement
- FX options (Plain Vanilla, Range forward, etc.)
- Hedging- Commodity trading and hedging (Swap, Collar, Put, Cap etc.)