Interest Rate Arbitrage
- Evaluation of various forms of working capital funding available & the existing arbitrage opportunity
- Interest rate evaluation as per the Industry & Banking standards
- In case of a requirement of long term funding, analysis of arbitrage between RTL Vs. FCTL
- Evaluation of associated banking charges w.r.t. to funding (processing & disbursement charges etc)
The comparison is done, considering our short to long-term view on the currency, Interest rates and premiums on a very broad level, and accordingly a strategy is devised to reduce the interest rate cost for our clients through the various techniques/mix.
Transaction Cost Evaluation
- Analyzing the various transaction charges levied on companies for various treasury functions offered by the bank. This is compared with respect to the banking & industry standards
- Evaluating the Exchange margins being charged on Spot / Forward transactions and recommending upon the same for optimum levels.
- Looking into various other transaction related charges which might be non recurring but can have a significant impact on the overall bank charges paid during the year
Sanction Letter & Banking Limit evaluation
- Evaluating the various fund & non-fund based limits sanctioned
- Products available to client for meeting working capital & long term needs
- Analyzing the charges levied for sanctioning of limits
- Assessing the covenants mentioned in the sanction letter and suggesting upon the same in case of any unfavorable covenant
- Also suggesting clients on MTM limits & enhancement/reduction of limits
This process would help us in setting optimum limits for the companies and make changes in the arrangements to add significant flexibility and value.
- IFA would assist in FX rate negotiation with your banks on a regular basis through Negotiation Desk™ with proper documented support.
- Back-testing of Forward bookings through state of art international treasury software
This mechanism helps in maintaining complete transparency between the bank and the client. It would help in removing the confusion related to the live inter-bank rates which would lead to significant savings and improved profitability for the corporate. In some cases, we have seen an increase of 25% to 50% of bottom-line.
Treasury Accounting & Taxation
- Advice on hedge Accounting for various foreign currency denominated assets & liabilities for efficient management of taxation related issues
- Advice on Transfer pricing issue
- Cross border taxation & legal formalities
By carrying out these checks IFA has been able to enhance 10%-20% of the bottom-line for various corporate houses