Treasury

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Treasury services offered by Banks are many but the primary focus lies on currency trading wherein customer request the Bank to provide a conversion rate for their currency from USD to AED or from AED to INR.

Other services offered by treasury are short term loans provided to other Banks at a high rate of interest, forwarding, hedging, derivatives and dealing in commodities. From a customer point of view it is difficult to understand if the rate provided by the Bank is a buying rate or a selling rate. It will be difficult to understand this difference if the customer chooses to think the rate from its own perspective,  rather it will be easier to understand this from a Banks perspective.

If you have an account in AED which is the currency used in UAE and want to transfer the money in INR, the Bank will provide the rate as per the customer profile and this rate would be a selling rate since the Bank is selling INR. In simple terms if a remittance is being sent the selling rate provided by the Bank applies and if a remittance is received as an inward credit to the account the buying rate applies. This becomes confusing if the rate is calculated from a customer's point of view as the buying rate for a Bank becomes the selling rate for the customer and the selling rate for a Bank becomes the buying rate. Also every currency has a buying and a selling rate and the buying rate is always less than the selling rate to make a profit (This is prevalent across all markets and segments).

Apart from currency trading, Bank involves itself in commodity trading as well such as Gold trading, Silver trading and other commodities that their traded in markets. Bank acts as an agent on behalf of the customer and provides periodic feedback in terms of the performance of these commodities. Investment Bankers keeps track of the market changes and educates and advises customers accordingly.