Companies need money to run and have treasury for the same, taking care of incoming and outgoing money. Corporate treasury works, comprising liability and an asset division. Liability division raises working as well as long-term funds and asset division fulfill the purpose of investment of any surplus fund. The liability group gets the money from different sources and then it is deployed for the asset division. Short term funds are raised when there’s need for liquidity. The surplus of liquidity get invested in asset division and hence, the company ensures no opportunity loss. Two broader divisions are there- Back office and mid office. Keeping a check on interest rates is also an important task of the Treasury, in order to not have uncompetitive products in the market as per the price parity. The corporate treasury, therefore, plays a pivotal role in the functioning of the organization.
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