Thursday, 11 May 2017

Financial Management for RBI Grade-B and Bank of India (BOI)

Dear Readers,


As per Notification of Officer (Credit) JMGS- I and Manager MMGS- II released by Bank of India (BOI) and Reserve Bank of India Grade- B. There will be three subjects and one of the subjects is Financial Management. Financial Management is not one of the easier subjects so it requires your great effort. So, friends do not worry about that, Bankersadda is always with you for your best preparation for competitive examinations. Here are some topics/content of Financial Management. It is also helpful for Assistant Manager (Financial Analyst) in Oriental Bank of Commerce (OBC) Specialist Officers (SO) and RBI's Grade-B.

Finance Manager
Finance manager is one of the important role players in the field of the finance function. He must have entire knowledge in the area of accounting, finance, economics and management. His position is highly critical and analytical to solve various problems related to finance. A person who deals finance related activities may be called finance manager.

Finance manager performs the following major functions:

1. Forecasting Financial Requirements: It is the primary function of the Finance Manager. He is responsible to estimate the financial requirement of the business concern. He should estimate, how much finances required to acquire fixed assets and forecast the amount needed to meet the working capital requirements in future.

2. Acquiring Necessary Capital: After deciding the financial requirement, the finance manager should concentrate how the finance is mobilized and where it will be available. It is also highly critical in nature.

3. Investment Decision: The finance manager must carefully select best investment alternatives and consider the reasonable and stable return from the investment. He must be well versed in the field of capital budgeting techniques to determine the effective utilization of investment. The finance manager must concentrate on principles of safety, liquidity, and profitability while investing capital.

4. Cash Management: Present day’s cash management plays a major role in the area of finance because proper cash management is not only essential for effective utilization of cash but it also helps to meet the short-term liquidity position of the concern.

5. Interrelation with Other Departments: Finance manager deals with various functional departments such as marketing, production, personnel, system, research, development, etc. Finance manager should have sound knowledge not only in finance related area but also well versed in other areas. He must maintain a good relationship with all the functional departments of the business organization.

Important of Financial Management
Finance is the lifeblood of the business organization. It needs to meet the requirement of the business concern. Each and every business concern must maintain the adequate amount of finance for their smooth running of the business concern and also maintain the business carefully to achieve the goal of the business concern. The business goal can be achieved only with the help of effective management of finance. We can’t neglect the importance of finance at any time at and at any situation. Some of the importance of the financial management is as follows:

1. Financial Planning: Financial management helps to determine the financial requirement of the business concern and leads to take financial planning of the concern. Financial planning is an important part of the business concern, which helps to the promotion of an enterprise.

2. Acquisition of Funds: Financial management involves the acquisition of required finance to the business concern. Acquiring needed funds play a major part of the financial management, which involves the possible source of finance at minimum cost.

3. Proper Use of Funds: Proper use and allocation of funds lead to improve the operational efficiency of the business concern. When the finance manager uses the funds properly, they can reduce the cost of capital and increase the value of the firm.

4. Financial Decision: Financial management helps to take the sound financial decision in the business concern. The financial decision will affect the entire business operation of the concern. Because there is a direct relationship with various department functions such as marketing, production personnel, etc.

5. Improve Profitability: Profitability of the concern purely depends on the effectiveness and proper utilization of funds by the business concern. Financial management helps to improve the profitability position of the concern with the help of strong financial control devices such as budgetary control, ratio analysis, and cost volume profit analysis.

6. Increase the Value of the Firm: Financial management is very important in the field of increasing the wealth of the investors and the business concern. The ultimate aim of any business concern will achieve the maximum profit and higher profitability leads to maximize the wealth of the investors as well as the nation.

7. Promoting Savings: Savings are possible only when the business concern earns higher profitability and maximizing wealth. Effective financial management helps to promote and mobilizing individual and corporate savings.

Nowadays financial management is also popularly known as business finance or corporate finances. The business concern or corporate sectors cannot function without the importance of the financial management.

All the best for Exams!!!!



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