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Anil Menon on Treasury department

30 August 2009 5 Comments

Hi all,

I take immense pleasure to invite a special guest – Anil Menon R, to Coffee With Sundar – Season 2. Welcome Sir!

He is a Production Engineer with a Masters in Management from Bajaj. Subsequently he worked for SBICAPS for 6 years in the areas of Treasury, Project Finance and OTC. He then switched over to SP Jain and he is currently an international faculty for the Dubai and Singapore campus. He is also associated with Confederation Of Indian Industry, BSE, HDFC, Wartsila, Deustche Bank as a consultant/ trainer. His areas of interest are Financial Restructuring Valuation and Financial Markets.

Coffee With Anil Menon

Me: Hello Anil! Welcome to the Coffee with Sundar – Season 2!
AM: Hello Sundar! Glad to be on the show.

Me: You have mentioned that you passed out of Jamnalal Bajaj and joined SBICAPS where you worked for 6 years in the area of Treasury, Project Finance & OTC. Can you speak in brief about treasury? What is treasury all about? Can you explain in detail about treasury’s role in an organization?

AM: Treasury role is to invest surplus funds at good returns. Also if an organization is short of funds they have to raise funds at lowest possible rates. It is an important role as it has a bearing on the profitability of the firm.

Me: Where in the organization structure would treasury come? Does it typically report to CFO etc? How is the performance measured for a treasury?

AM: Treasury typically reports to CFO. However it may vary with each organization. The performance of Treasury managers is on basis of risk adjusted returns. It is to be noted that highest returns need not be the best it has to be viewed in light of the risks taken by the treasurer.

Me: What is the role of new joinee? How does his career grow in the field of treasury?
AM: A new joinee may start with MIS or as a part of the deal team. They are given mandates only after they gather sufficient experience. He may grow to head treasury and finally the Company.

Me: How does treasury department identify risks?
AM: The normal techniques of VAR (Value AT Risk), ETL (Expected Tail Loss) is used. Though there are standard models, nowadays Corporate are increasingly turning to customized models.

 Me: What are the characteristics of a high performing treasury team? 
AM: As explained above the characteristics of high performing treasury team is to give consistent returns with optimal risk.
Me: From your experience, can you share some of the most exciting experiences or anecdotes as a part of treasury team?

AM: Handling Resurgent Bond Issue of SBI was the most challenging experience. The issue was in response to the sanctions imposed on India after the Pokran nuclear tests. India’s credit rating was downgraded and fund raising became difficult. We pulled off an intense fund gathering exercise successfully in 20 odd days. SBI gathered a huge corpus from NRI subscription. Needless to say the credit rating of India was restored after this successful issue.

Me: What do you find the most frustrating and biggest challenges about your role?
AM: The market sentiments change overnight. This is the most frustrating part of the job. However this is what makes the role very dynamic and challenging.

Me: What do you see as the emerging issues for treasury in the near future? How has this changed in the past 1 year or so?
AM: The coming times are going to see more volatility for sure. Treasurers have to fully appreciate the uncertain environment under which we function. Indian markets being increasingly globally integrated will witness intense competition. This is where young treasurers can make the mark. Apart from good analytical skills, networking and working long hours under pressure is an absolute necessity.

Thank you Sir. This was indeed useful to understand treasury functions.