Emergence of Liquid Fund as a Prominent Option for Treasury Management Executive Summary
Emergence of Liquid Fund as a Prominent Option for Treasury Management
Executive Summary
All organisations maintain current accounts in banks to ensure prompt deposit and withdrawal of money, while the money in the current account does not fetch any return. With increase in competition and squeezing of profit margins, measures were required to utilize the money lying idle in the current account without hampering the prompt flow of money.
Liquid funds provide the solution for utilization of the idle money in a tax effective way along with easy withdrawal and deposit of funds. An investor can invest money in this fund for any period of time, minimum being a day. The money is invested in call money market where the liquidity is very high along with a high safety of the principal.
The objective of the project was to find out the viability of the Liquid Funds as a substitute to current account along with achieving of sales target.
Principal Mutual Funds is a subsidiary of Fortune 500 Company, Principal Financial Group of USA, it started its operations in India in the year 2000 as an asset management company and it plans to venture in pension funds as and when the industry is open to private sector by the regulatory authorities.
Institutions having idle cash are the potential investors; hence software companies were the most obvious prospects as they have a considerable time gap between the receipts and the payments. Cooperative societies are also a source for investments, as they require a higher safety of their principal amount and are also bound by the Cooperative Society Act. Companies from other fields who were likely to have surplus cash flow were also chosen. High Net Worth individuals were also considered as potential investors as they hold large amounts in liquid form before they invest it in a long term scheme or any suitable venture. Financial decisions are taken mainly by the Chief Financial Officer and sometimes the Chairman or the Chief
Executive Summary
All organisations maintain current accounts in banks to ensure prompt deposit and withdrawal of money, while the money in the current account does not fetch any return. With increase in competition and squeezing of profit margins, measures were required to utilize the money lying idle in the current account without hampering the prompt flow of money.
Liquid funds provide the solution for utilization of the idle money in a tax effective way along with easy withdrawal and deposit of funds. An investor can invest money in this fund for any period of time, minimum being a day. The money is invested in call money market where the liquidity is very high along with a high safety of the principal.
The objective of the project was to find out the viability of the Liquid Funds as a substitute to current account along with achieving of sales target.
Principal Mutual Funds is a subsidiary of Fortune 500 Company, Principal Financial Group of USA, it started its operations in India in the year 2000 as an asset management company and it plans to venture in pension funds as and when the industry is open to private sector by the regulatory authorities.
Institutions having idle cash are the potential investors; hence software companies were the most obvious prospects as they have a considerable time gap between the receipts and the payments. Cooperative societies are also a source for investments, as they require a higher safety of their principal amount and are also bound by the Cooperative Society Act. Companies from other fields who were likely to have surplus cash flow were also chosen. High Net Worth individuals were also considered as potential investors as they hold large amounts in liquid form before they invest it in a long term scheme or any suitable venture. Financial decisions are taken mainly by the Chief Financial Officer and sometimes the Chairman or the Chief