Amit Saraff: Treasury Mid Office Professional at a Premier Bank

In conversation with Amit Saraff, Assistant Vice President, Treasury Mid Office at HDFC Bank. Before working at HDFC Bank, he worked as an Assistant Manager at ICICI Bank Limited. We would like to understand the role and responsibilities of a Treasury Mid Office Professional at a premier bank from him.

 

1. Describe your work and work profile in a very simple manner?

   

Treasury business is core to the banking or any organization. However, it is a niche area and not much is known or discussed to the people outside the treasury business. Briefly speaking, a typical banking treasury function carries out three businesses, which are :

Managing Funds :

This typically includes deploying excess funds available to the bank, sourcing funds required by other businesses of the bank, management of asset and liability gap and maintaining SLR / CRR.

Client requirement of Forex and Derivatives :

This includes catering to the client requirement for forex and derivatives transactions; it also includes which client might enter for covering its currency or interest rate risk or trading purposes, etc.

Proprietary Trading :

Trading: Banks play the role of the market maker for forex and derivatives transactions. Further a bank also takes a view based long / short position into currency or interest rates markets to make trading gains.
The above-mentioned functions are carried out by the Treasury Front Office.
In addition to the Front Office, there are two departments in a typical treasury set up which are associated with the treasury function; these departments provide career opportunities to the finance candidates.

These departments are :

Risk management and monitoring unit :

Treasury business is highly sensitive to the volatility in the financial market variables like exchange rate, interest rate, etc. The risk unit of the bank is responsible for framing risk policies and daily monitoring to ensure that risk taken by the treasury Front Office is within the approved risk appetite of the bank. Typically, this profile involves reviewing the treasury products (investments, forex, derivatives, money market instruments, etc.) and identifying risk associated with them, measuring the risk and aligning the risk within the overall risk appetite of the bank.

Treasury Operations aka Treasury Back-Office :

This department supports treasury business by carrying out transaction settlement, accounting, counterparty confirmation, reconciliations, etc. It is a very important function and any mistakes with the execution may result in reputational and financial loss.

 

To summarise finance stands for, raising of capital and then deployment of funds in the organisation thereby allowing the company to grow within the governance and execution framework.

 

2. Can you share your Daily Routine with us?

I am in Treasury risk and my daily function involves reviewing the position (I.e. trading activity done by Front Office and the portfolio) and monitoring various types of risks associated with it. We also measure PL generated by Treasury activities. Reporting these risks and PL numbers to senior management is an essential part of our work profile.
In case, the risk is higher than the defined risk appetite of the bank, we raise the same for immediate action to cut down the position. Treasury business and the related market is very dynamic and it requires almost online monitoring.
There is a team of 40 people, who work under me for the purpose.

 

3. How did you reach this stage in your career?

After completing my CA in Nov 2003, I started my career in the internal audit of a steel manufacturing company as a team member of a CA firm. It took a bit of time I realize that an audit is not my cup of tea.
Then in 2006, to change my profile, I joined CFA and as I completed my level one, I got the opportunity in ICICI Bank Treasury vertical. Therein I was looking operation part of the treasury.
After completion of the third level of CFA, I joined the HDFC Bank Treasury Mid Office (which is part of the risk management group and is responsible for risk monitoring and evaluation) in Nov 2008. It has given me the opportunity to understand all the dynamics of the business. Constant learning and application of knowledge in the work have helped me to reach the top of the Treasury Mod Office.

 

4. What skills should a candidate possess if he wants to take up a profession similar to yours?

The skillset for the job includes good hold over numbers, quick decision- making power, good communication and negotiation skills, sound knowledge of financial market and products, etc.

 

5. What are the Pros & Cons of your profession?

Pros :

• • Treasury is a niche area that requires specific knowledge of the field. It is interesting as it tests your IQ and it's dynamic. Easy to move up the ladder if you are focused. Comparatively, it is a field which ensures better compensation, especially if you are in Front Office.

Cons :

• • It might be difficult to move from the Treasury to the general management role considering its unique nature.

 

6. What is the best way to bag a job similar to yours?

This profile is attractive for those who have an in-depth knowledge of the financial market and its variables, a sound hold over numbers including valuation and risk of financial products and regulatory guidelines associated with the treasury business.
Hence, education in the field of Finance – CA, CFA, MBA, FRM, but along with that good interpersonal and technical skills, being well-read about the industry to crack the interviews can land you in this field.

 

7. What advice would you give to the freshers who are willing to venture into this line?

Due to the complexity of the treasury business, it requires people who have good knowledge of treasury products and its operational aspects, regulatory guidelines associated with the treasury.
Treasury profile is a very niche one, even though you might have lots of opportunities to grow with time, it might be difficult to move into the other business segments with this profile. Corporate treasuries also provide a lot of career opportunities, which typically involve fund management, hedging currency and interest rate risk arising in the core business and finance, etc.

 

Final Notes

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