Explanation:
The bank does not actively measure and track the flow of outgoing payment transactions relative to total payments or time markers to determine the best means of acquiring intraday liquidity. Intraday liquidity refers to funds that can be accessed during the course of a business day, usually to meet time-specific obligations. While the bank does monitor its payment transactions, this activity is not directly linked to the acquisition of intraday liquidity. The bank may use other methods, such as short-term borrowing or the sale of assets, to acquire intraday liquidity. Therefore, the assertion that the bank tracks its payment transactions to know the best means of acquiring intraday liquidity is incorrect.
Choice A is incorrect. Tracking volume patterns is a crucial part of ensuring that all payments are processed on time. By monitoring these patterns, the bank can anticipate high-volume periods and allocate resources accordingly to prevent any delays or issues in processing.
Choice B is incorrect. Meeting FMU requirements for submitting a target percentage of payments by a deadline is another valid reason for monitoring outgoing payment transactions. The FMU sets these targets to ensure smooth operation of the financial system, and banks must comply with them.
Choice C is incorrect. Identifying and tracking peak periods over time allows the bank to understand its intraday liquidity needs better and manage its intraday credit usage more effectively. This understanding helps in maintaining sufficient liquidity on hand during peak periods, thus preventing potential liquidity crises.
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Q.3918 ABC Bank has been a participant of FMU for a significant period. The bank has been actively measuring and tracking the flow of outgoing payment transactions relative to total payments or time markers. Which one of the following is not a reason for the bank to perform that?
A
To track its volume patterns to aid in ensuring that all the day’s payments are processed on a timely basis.
B
To meet FMU requirements for submitting a target percentage of payments by a deadline.
C
To identify and track its peak periods over time and the correlation of this activity with its intraday liquidity on hand and intraday credit usage.
D
To be able to know which means are best for acquiring intraday liquidity.