Role Of Management Accountant in Banking Industry.

A management Accountant is vital individual for any organisation in that he is person who focusses attention on Value generation be it Cost or exchange.
Unlike a general financial accountant who has focus of recording transactions and presenting statements of finance a Management Accountant involves himself in Processes that drives value .So a management accountant though retains necessarily Accountant brand as he possesses the skills of a general financial accountant additionally delivers that extra bit needed by the management to take decisions on vital internal and external parameters that drives value.He thus speaks what an accountant or the barren documents do not do ,he also speaks what a floor team(technical) does and what it ought to ,to earn the Optimum value.
In this back drop letus see what a management accountant has in store for Banking Industry.
A Banking Industry is basically the financial Backbone of the economy and its prime structure Begins with Central Bank,The lead Banks,Commerical Banks,Private Banks,Focussed financial institutions,Capital markets,Non-Banking financial intermediaries,and others.
The definition of a bank is Accepting for the purpose of lending and investment.Be it treasury operations,Forex,project financing,Social banking,the bank is expected to abide by that conventional definition.
A bank always is in hunt for money and this it gets through various routes Deposits,Call money,Recoveries out of credit,International funding channels etc.
A bank is also in the hunt for borrowers of its idle funds.
In essence banks operate on differential revenues(Lending rate- Deposit rates).
Both these involve risks and matching risk to return is the bottom line strength of a Management Accountant.
The dynamics in Banking Industry needs constant monitoring and advise of the Portfolio risks.
Funds can be directly linked to projects but sometimes not.
Unsecured credits have been heavy risk area and usually high return zone.
Though Banking industry is heavily controlled in favour of depositors often the inbuilt cost of services or never revealed and probably not studied in a structure manner that sometimes banks are caught napping and at other times the depositors bear the burden.
Financial Accounting miserably fails in such type of analysis and hence the stakeholders are put to loss often.
Effective Cost management system will protect the interest of all concerned.
Banks now have come up with various products and services which needs costing and constant review.
NPA of the banks are better controlled with good cost-management system in place.
Depositors are often cheated in portfolio mismatch and they have to bear the loss of cross subsidisation.
Fixation of interest rate shall also take into consideration the cost data of each particualr banks once the cost management system is strengthened.