Treasury Introduction

TEMENOS EDUCATION CENTRE

NOTICE 
These training materials are the copyrighted work of Temenos Headquarters SA and other companies in the TEMENOS group of
companies (The Copyright Owner). The training materials contain protected logos, graphics and images.  Use of the training
materials is restricted solely for use by licensed end users, partners and employees. Any un-licensed reproduction by any means,
redistribution, editing, transformation, publishing, distribution, or public demonstration of the training materials whether for
commercial or personal gain is expressly prohibited by law, and may result in severe civil and criminal penalties. Violators will be
prosecuted to the maximum extent possible. Such training materials shall not be represented, extracted into or included in part, or in
whole, as part of any other training documentation without the express permission of the Copyright Owner, which must given in
writing by an authorised agent of the Copyright Owner to be valid. Where such permission is given a clear and prominent notice
must be displayed on any and all documentation accrediting the Copyright Owner with having copyright over the materials.  End-
user licenses will in no event contain permissions extending the use of these training materials to third parties for commercial
training purposes.

Without limiting the foregoing, copying or reproduction of the training materials in part or in whole to any other sever or location for
further reproduction or redistribution is expressly prohibited, unless such reproduction is expressly licensed by the Copyright Owner.
Copyright © 2010 Temenos Headquarters SA
Treasury Introduction - Objectives

To understand the

 Overview of Treasury related modules in T24

 Functionalities of T24 core tables associated with Treasury related modules

2
Forex Market

 Foreign Exchange market is an over the counter Financial market for

trading of currencies.

 Buying and selling of currencies against other currencies

 Players are Large banks, central banks and other Financial Institutions

Slide 3
Treasury - Overview

Treasury
Own Funds Hedging for Others -
management Customers / Departments

Spot
Interest rate Swap
Forward
Forex Swaps Currency Interest Rate Swap
Single rate option
Multi rate option
Currency Swap Repurchase (REPO) /
Repurchase Resale (RESO) of
Money Market Agreements Bond, Gilt, Equity etc
Deposits
(REPOs)
Takings
Loans Futures & Options
Future
Placements
Rate Derivatives
Agreements
Portfolio of Equity and / or
Trading FRA (FRAs)
Debt instruments
Hedging FRA Securities

4
Dealing Room - Typical Structure

DEALING ROOM

FOREX MONEY MARKET TREASURY

SPOT FWDS CASH CDs FRAs SWAPS

DEALER DESKS DEALER DESKS DEALER DESKS

Forex position
CURRENCY POSITION Cash flow position
Interest Gap position

In desired Time buckets

TOM, CAL, SPT,
7 Days, 15 Days,
1 Month …

5
Direct and Brokered Deals

NOSTRO PAYMENTS & CONFIRMATIONS

POSITION

ORGANISATION COUNTERPARTY

COMMISSION COMMISSION
BROKER
Brokerage
Account

VOICE ELECTRONIC

6
Deals - Overview

DEAL INPUT

LIMITS
POSITIONS TOLERANCE

DEAL
AUTHORISED

ACCOUNTS DELIVERY

ENQUIRIES REPORTS PAYMENTS ADVICES

7
Forward Deals Revaluation

Deal date Currency Position

Local Foreign
Currency Currency
equivalent

Daily Revaluation
Local
Currency
Local
equivalent Daily loss taken to
Currency
bank’s P & L.
equivalent
Local Profit optionally
Currency taken to P & L
equivalent

Delivery date Mark to

market gives
Un realised
Local
Foreign
Profit / Loss
Currency
Currency
equivalent

8
Treasury Work Stream

B a n k T re a s u re r

Forex
H e a d F r o n t O f f ic e H e a d B a c k O f f ic e

H e a d M id d le O f f ic e
Money
Market

Swap
FRA

PM

9
Core Dependencies

GEOGRAPHICAL CURRENCY BASIC.RATE. DEPARTMENTAL.

BLOCK
LANGUAGE DATE INDUSTRY SECTOR
MARKET TEXT LEVEL

DEPT.
COUNTRY
ACCT.OFFICER

CUSTOMER.
CURRENCY. STATUS
REGION
PARAM
TARGET

RELATION
HOLIDAY CURRENCY

FORWARD PERIODIC BASIC DEALER

CUSTOMER
RATES INTEREST INTEREST DESK

CORE
FINANCIAL STATIC
CUSTOMER

10
Dates Calculation

GEOGRAPHIC.BLOCK COUNTRY

System Date 2nd.. Local country US.

REGION
Holiday tables for US and GB as above.

HOLIDAY Spot defined as 2 days.

Spot date for USD / GBP is 6th

11
Currency Related

• Numeric Ccy Code COUNTRY

• Decimal Places for • Upto 99 markets to
rounding all calculations quote different rates
• Interest Day Basis CURRENCY.PARAM • Consolidated into 9
• Precious Metal markets
• Equivalent Currencies
• Country Code
• Base Ccy Rank CURRENCY CURRENCY.MARKET

• Bid and Offer rates for

FORWARD.RATES
different periods
• Interest tolerance for MM
For each Currency & Market, forward exchange
rates as premium / discount to the Spot rate for • Used for automatic roll over
different Rest periods. To get the Rest date, and Interest revaluation
value in Rest period is added to SPOT date.
Used for Tolerance check and Rebate revaluation PERIODIC.INTEREST

12
Currency Related – RANK.BASE.CURRENCY

Slide 13
Currency Set-up

Exchange Rate
Exchange Rates

Number of units of Home currency Number of units of Foreign

per unit of Foreign currency currency per unit of home currency
For E.g.., In US, a direct quote for For E.g.., In US, a direct quote for
the Canadian dollar would be the Canadian dollar would be
US$ 0.8504 = C$ 1 US$ 1 = C$ 1.7517

Slide 14
Currency Set-up

 Quotation Pips
 Indicates decimal displacement of a PIP
Spot rate is 1.5. 3 Month Forward is 1.4925. If Quotation Pip is 4, then
forward is at a discount of 75

 Days Delivery
 Indicates the number of working days, in advance of the Value Date,
required for pay/receive instructions

 Percentage rate tolerance allowed

 Default rate allowance for any Currency is specified in Company record.

 Precious metal
 Identifies whether currency code used is precious metal or not
 If bullion is proposed to be handled, then should be marked as Yes. This
helps produce suitable delivery messages

15
Currency Set-up

 Currency market wise Exchange Rates

 Buy / Sell rate or Mid rate mechanism specified in Company record will be
followed for all currencies
 Treasury and Customer spreads
• On the market rate of a currency, it is possible to add a spread to work
out the Treasury rates and another spread for the marketing / handling
department to finally arrive at the Customer / Contract rates
• These rates could be different for transactions of small value amounts.
And medium value are amounts which are above small amounts but
less than the negotiable amount
• Quotation or use of a rate, other than the Customer Buy/Sell rate, will
only affect the profit margin of the marketing area
 Negotiable amount
• Defines the amount above which the exchange rate is to be used and
must be obtained from a dealer
 Revaluation rate for Spot contract

16
Currency Set-up

 Minimum rounding amount

 The system normally rounds off calculations to the number of decimals

specified. If a different rounding is desired, then MIN.ROUND.AMOUNT
Field could be used

 For e.g., If specified as 5, then 1788.32 will be rounded off to 1790

 Cash only rounding rules

• Option to round off transactions done ONLY through Teller application

 Rounding type
• Currently, only Natural rounding off option is available for Cash and
other transactions at Currency table level

17
DEALER.DESK

 DEALER.DESK table allows the bank to specify how its dealing room
activity is organised
 Could be set up at any level from branch, to department, to Currency, to
product or even to individual traders

 Dealer desk is used as part of the key to POSITION file. This enables
the bank to view their currency position by dealer desk, if required and
to book the revaluation Profit/Loss at dealer desk level

 DEALER.DESK Id can be attached to USER profile for automatic

default while using an Application by User

18
DEALER.DESK Fields

• Id
2 digit Alpha Numeric
Ranges A-Z, a-z, and 0-9

• DEPT.FOR.REVAL
Dept (Profit Center) to which P & L due to
revaluation to be allocated
Dept to be pre defined in DEPT.ACCT.OFFICER

• APPLICATION, FIELD.NUMBER, DEF.VALUE

Applications where this DEALER. DESK proposed
to be used. For default information only
CURRENCY.MARKET, CR / DR.REVAL.CATEG
It is possible to use different Category codes for
Revaluation for different markets
SPLIT.POSITIONS to YES
For FX transactions in cross currencies,
on value date Original Position records in
cross currencies are split into New Position
records as Buy currency against LCY and 
Sell currency against LCY

19
Workshop - 1

 Use Admin Menu > Treasury Administration > Forex > Param/Data >
Dealer. Desk

 Set up your own DEALER.DESK with 4 modules :

 Foreign Exchange (FOREX Field 4)
 Money Markets (MM.MONEY.MARKET Field 76)
 FRA (FRA.DEAL Field 2)
 Swaps (SWAP Field 3)
 Mention DEF.VALUE Field with the record id of your dealer desk

 Use Command Line

 Attach the DEALER.DESK number to your USER profile

20
Workshop -1 Solution

21
BROKER

 For transactions in Money Market, FRA and Swap in Treasury

operations and in Trade Finance, LD and Fiduciaries, it is possible to
calculate and pay brokerage as per conditions set up in Broker Table

 Brokerage could be paid into Broker’s account, or to be kept in an

internal account specified in ACCOUNT.CLASS for Broker with a suffix
as Broker Sub-Div

 Broker’s commission may vary from broker to broker as per agreed

terms
 In T24, broker’s commission could be specified Application wise, Category
wise, Period wise, Currency wise, for bank and non bank deals, with 3
different types of calculation such as Fixed, Period and Present value.
 FIXED basis ignores the period of contract. Present value is primarily used
for calculation of interest rate swap contracts.

22
BROKER

Broker Id should be a pre-defined

Customer record

If Payment Account is left blank, amount gets credited

to Internal Account defined in ACCOUNT.CLASS

Time is used to match separate time periods for

term of deals to mention different rates - 0D for
Call / Notice and then nD, nM or nY. System
looks for exact match or null value field to do
Automatic calculation. If no value is entered
then, all terms will be matched successfully

For Bank / Non Bank Comm., FT.CHARGE.TYPE /

FT.COMMISSION.TYPE can be used

23
Workshop - 2

 Use User Menu > Customer > Individual Customer

 Create customer record for yourself

 Use Admin Menu > Treasury Administration > Treasury General >
Update Broker
 Create a broker record using the customer record created earlier to deal
with MM and SWAP deals
 In the case of MM, make the brokerage payable at different rates for Bank
and non bank deals (calculation type is fixed)
 In the case of Swaps, make the brokerage payable only for non bank deals
(calculation type is periodical)

24
Workshop - 2 Solution

25
Limits - Important Feature for Treasury

 Clean Risk
 For FX Limit Reference products, Clean risk amount can be specified
additionally, to stipulate maximum value of contracts that may mature on
any single delivery date
 Also known as Delivery risk
 Dates of clean risk excesses recorded in Limit

 Time Banding
 For TB Limit Reference products, possible to additionally indicate limit
amounts for different time periods (Mostly for MM, LD, SC)

26
Limits - Important Feature for Treasury

 Limit Percentage
 In Limit Reference, it is possible to specify a percentage value and the Limit
would be affected only to this extent of the contract value
 Mostly used in FRAs, Swaps and other Derivative products

 Netting
 NET.OUTSTANDING Field in LIMIT.PARAMETER enables netting of FX
transactions of same delivery date, counterparty and pair of currencies but
opposite buy sell sign
 Clean risk can never be netted off

27
Workshop - 3

 Use User Menu > Customer > Individual Customer

 Create customer record for yourself

 Use User Menu > Retail Operations > Account> Open Savings Account
- Local
 Create one USD and GBP account for your customer

28
Workshop - 3 Solution

1 2

5
4

29
Workshop - 4

 Use User Menu > Credit Operations > Limits > Limit Menu >Create
Unsecured Limit

 Set the following limits for your customer

 MM placement product limit of USD 2 million

 FRA product limit of USD 1M

 FX product limit of USD 10 million with a clean risk of USD 2M

 Observe the limit percentage for the different products under this

30
Workshop - 4 Solution

1 2

3 4

31
Slide 32
Summary

 At the end of this session, you would now able to

• Create Customer, Dealer Desk, Broker and issue limits to customer

Understand the functionalities of T24 core tables associated with Treasury
related modules

33
Thank You
TEMENOS EDUCATION CENTRE

NOTICE 
These training materials are the copyrighted work of Temenos Headquarters SA and other companies in the TEMENOS group of
companies (The Copyright Owner). The training materials contain protected logos, graphics and images.  Use of the training
materials is restricted solely for use by licensed end users, partners and employees. Any un-licensed reproduction by any means,
redistribution, editing, transformation, publishing, distribution, or public demonstration of the training materials whether for
commercial or personal gain is expressly prohibited by law, and may result in severe civil and criminal penalties. Violators will be
prosecuted to the maximum extent possible. Such training materials shall not be represented, extracted into or included in part, or in
whole, as part of any other training documentation without the express permission of the Copyright Owner, which must given in
writing by an authorised agent of the Copyright Owner to be valid. Where such permission is given a clear and prominent notice
must be displayed on any and all documentation accrediting the Copyright Owner with having copyright over the materials.  End-
user licenses will in no event contain permissions extending the use of these training materials to third parties for commercial
training purposes.

Without limiting the foregoing, copying or reproduction of the training materials in part or in whole to any other sever or location for
further reproduction or redistribution is expressly prohibited, unless such reproduction is expressly licensed by the Copyright Owner.
Copyright © 2010 Temenos Headquarters SA