Navigating Treasury Opportunities and Risks in a Volatile Market
As financial institutions navigate currency fluctuations, tighter regulatory expectations, and increasingly interconnected payment systems, treasury operations are becoming central to financial resilience and business performance. Vaibhav Girmil brings more than a decade of experience at Punjab National Bank and Sumitomo Mitsui Banking Corporation to this evolving landscape. His work spans setting up treasury operations, managing foreign exchange and derivatives, overseeing NOSTRO/VOSTRO reconciliations, and working within regulatory frameworks governed by RBI, IFSCA, and CCIL. His experience at GIFT City, particularly in integrating settlement infrastructure such as CCIL FCSS, automating processes, and developing structured finance solutions, offers a practical view of how treasury capabilities are built and strengthened. This article examines the operational decisions that shape effective treasury management, from maintaining liquidity under volatile market conditions to managing financial exposures and adapting to regulatory change. Drawing on his experience, Mr. Girmil explores how automation can reduce manual dependencies, how robust reconciliation and settlement processes support control, and how GIFT City is expanding the possibilities for international banking and financial services. The focus is on the real-world considerations behind these changes, rather than technology or regulatory developments in isolation. For banking professionals, corporate finance teams, and decision makers, the discussion offers a clearer understanding of how treasury operations can move beyond routine transaction management to support stronger controls, more efficient capital deployment, and better-informed financial decisions. It also highlights the capabilities institutions need to develop as treasury becomes increasingly connected to risk management, digital infrastructure, and cross-border business strategy.
Q1. Based on what you are seeing across global markets, where are banks finding the most attractive opportunities to deploy excess liquidity today?
Around the world, banks are taking a more cautious approach when deciding how to use their extra cash. Right now, they see the best opportunities in short-term investments that offer both good returns and flexibility. Many banks are favoring high-quality government bonds, repurchase agreements, and short-term corporate debt as their top choices. In financial centers like GIFT City, international banks are also turning to offshore markets. Here, they can access a variety of currencies and benchmark interest rates, which helps treasury teams make the most of their liquidity. The key focus is staying agile—so funds can be moved quickly whenever interest rate expectations change.
Q2. Based on your experience through different interest-rate cycles, how do treasury teams adjust portfolio duration when the rate outlook becomes increasingly uncertain?
Treasury teams have always kept an eye on duration risk, but the current uncertainty around interest rate cycles makes this job even more important. When it's hard to predict where rates are headed, teams usually keep their portfolios shorter in duration. This allows them to stay flexible, so if interest …
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