The 3 Fundamental Treasury Concepts: Bank Relationships

29-11-2022 | Vasu Reddy | treasuryXL | LinkedIn |

The 3 fundamental treasury concepts being discussed currently include Working Capital Management, Bank Relationships and Treasury Transfer Pricing which are pivotal pillars for effectively and efficiently optimizing cash, liquidity,  funding and managing risk for any Treasury function to support the achievement of the organizations business objectives and strategy. In the second blog of a series of 3, Vasu Reddy explains the best practices and benefits of Bank Relationships.

Strong Bank relationships (including Central Banks) are key to operating successfully in any country- locally, regionally or Globally.

When selecting and maintaining bank relationships, it is key to include partners with strong track record including:

  • Strong Bank Credit rating  – BBB+ to  AA+
  • Strong Bank Balance sheet, assets size and Cash Reserves,
  • Strong Ethics, Governance, Compliance
  • Bank Geographical Footprint
  • Huge Product knowledge, expertise and offering
  • Strong Service capability and rapid response times
  • Competitive Pricing and transparency
  • Being a trusted advisor – including investment banking, FX, etc.
  • Advanced  technology and systems and Project support
  • Managing confidentiality of information and conflicts of interest
  • Strong Relationship with Central Bank for Advocation
  • Going above and beyond for client during drastic times– providing credit sufficient lines
  • Accepting Clients standardized documentation in different countries due to regional      relationship
  • Ease of doing business – bank account opening, KYC onboarding, Projects, system implementation,  integration with  ERP, TMS, RFP’s, RFQ’s , legal issues, etc.

More key considerations are:

– Size of Corporate/business

– Credit rating/balance sheet size

– Growth Plans – M&A, etc.

– # of bank relationships

-# of bank accounts

-# of Legal Entities

-Bank interaction, performance and evaluation


Maintain a good central bank relationship is key”  Vasu Reddy

What are the benefits of good bank relationships?

  • Smooth Business operation with no disruption resulting in improved cash flow, profits and reduced costs
  • Management able to focus on business growth and sustainability
  • Minimal bank law compliance risks
  • Able to pivot easily during macro-economic cycles – surviving recessions, political risks, etc.


Thank you for reading!


Vasu Reddy

Corporate Treasury, Finance Executive