With an exciting range of markets to participate in, the treasurer is increasingly finding it difficult to maximize his returns on investments. The article provides the treasurers' dilemma in such a maze of financial market with suitable illustrations.

The major banks were nationalized in 1969 to serve the social needs of the economy. This move sterilized the commercial aspects of the banks and the zeal of the bank officers in such a way that the profitability of the banks took a beating. Some of the erstwhile profitable banks became loss making banks and some even became sick. The case of Indian Bank exemplifies the malaise prevalent in the system where favors were given to certain parties with political connections while sanctioning credit facilities. This resulted in the rise of Non-Performing Assets (NPAs) leading to the slow deterioration in the finances of the bank.

But over the years, the role of the treasurer underwent radical changes that in turn, improved the financial clout of the banks. The foreign exchange crisis of 1991 forced India to approach the International Monetary Fund (IMF) for assistance. The IMF stipulated some strict conditions while sanctioning the loan. One of such guidelines pertained to the freeing of the banks from the tight fists of government control. The banks were given some leeway to operate freely subject to certain limits. The dealers were woken up from their deep slumber which they were used to and which was reminiscent of their yester years when their role was limited only to provide funds to the treasury. Presently, one of the major sources of revenue for the profitable banks is the treasury operations. In fact, some banks are reporting profits only because of their treasury operations, while their normal lending activity has resulted in a loss for the bank.

Treasury Management Magazine, Treasury Management, Financial Markets, Non-Performing Assets, NPAs, International Monetary Fund, IMF, Gross Domestic Products, Stock Markets, Technical Analysis, Commodity Exchanges, World Trade Organization, WTO, Bombay Stock Exchange, BSE, Foreign Institutional Investors, FIIs, Reserve Bank of India, RBI.