Cash Management Procedure in Bangladeshi traditional local banks
Bank is a financial intermediary through which surplus units and deficit units integrate.That means
, surplus unit of the economic environment put their extra money in the banks and deficit unit withdraw that money to fulfill their requirements. So, the main objective of a bank is to receive customers deposit and allow credit facilities.Cash means ready money; money in the form of coins or notes that are easily transferable in exchange of value. Cash is a liquid asset and so banker should manage the cash properly to turn it into an asset. The following are the steps related to cash handling at branch level:
Receiving of cash
Payment of cash
Daily balancing of cash
Scrutiny of cash
Safe keeping of cash
Cash remittance
Receiving and disposal of mutilated notes
Procedure of checking/scrutiny of cash:
Check the sorting of cash
Non-issue
Reissue
Mutilated notes
Forge notes
Note packing slip signature, recounting signature & stamp
Count the loose cash, including coins.
Count the bundles & check them also.
Check Patty Cash, stock of Prize Bond & late paid and received cash.
Safe keeping of cash at Strong Room
We should remember that cash is the liquid asset of the general public and we, the bankers are the custodians of it. While preserving this, we should take careful actions and they are:
Cash should be kept in a fireproof Iron Safe/ Strong Room under three custodians, i.e. Manager, Deputy Manager and Cash In-Charge.
Respective desk officer should maintain cash register(both receive and payment)
Physical cash should be checked every counter individually with the receive and payment register and also should be transferred to the Officer Cash In-Charge after the close of the business hour.
The daily cash book of the branch is prepared by the Cash-In-Charge of every branch and should be signed jointly by the branch In-Charge, Deputy Manager and Cash-In-Charge regularly. All the books relating to cash must be checked and signed jointly by the Manager, Deputy Manager/GB In-Charge and Cash-In-Charge.
Surprise checking must be made by the Manager of the branch by counting entire cash physically at least once in a fortnight and a certificate to that effect should be recorded in the cash balance book.
Branch In-Charge should be alert about the functioning of cash department during working hour. Now a day, it is done by CC camera, which also helps to detect fraud.
Cash insurance policy must be obtained against cash in safe, cash in counter & cash in transit for a particular limit. Now the banks have introduced a new scheme "Reserve for Unforeseen losses".
A vault register is maintained in order to understand the clear position of cash while cash is out or in so that vault limit is not exceeded.
The armed guard should remain alert during the time of remitting cash from and to the feeding branch.
Maintenance of safe keys and Strong Room keys:
First key of both the locks of the safe will remain with the Cash-In-Charge. One key will remain with Deputy Manager/GB In-Charge and the other key will remain with the Manager/Deputy Manager. In case of big branches, Deputy Manager will hold the keys in place of Manager. The same procedure will be followed for vault room and strong room gate.
Keys against each individuals should be recorded in key register against their names and duplicate keys will be deposited in the feeding branch/other bank as safe deposit withdraw able under joint signatures of the key custodians and received of which to be recorded in Safe-In-Safe-Out register. Keys will be withdrawn at the time of changing of key custodians and handing/taking over charge/conducting of the branch.
Cash Balance Book & Cash Position Memo:
A vault register is maintained in order to ascertain the clear position of cash while is out or in.
After receiving cash, the cash official must sort out the notes and make 100 pcs of each denomination in a packet. Such 10 packets will make a bundle, i.e, 1000 pcs will be in a bundle. All the packets must be stitched, signed and sealed by the cash official.
The Cash-In-Charge may prepare the cash position in a separate sheet before preparing the branch's cash position to avoid cutting and over writing. After the day's work, the rough sheet should be destroyed. When the cash is balanced, the Cash Position Memo & Cash Balance Book is prepared and they are counter signed by the joint custodians after physical verification of the entire cash invariably.
Cash Remittance:
In the metropolitan cities, the job of cash feeding branch is done by the main branch. A cash remittance register is being maintained by the feeding branch for recording the fund flow to & from the link branches and this remittance register is being maintained by the link branches also. The link branch should give the information of lifting or sending of surplus cash to the feeding branch one day before the amount is required. The requisition letter along with IBCA should be signed by the two joint custodians (Manager is mandatory) with a request to handover the cash to the authorized representative whose signature is to be attested. The letter should be addressed to the branch in charge & must be sent under sealed cover.
At the time of remitting cash to the link branch, the feeding branch will withdraw money by Cash Debit Voucher' to the debit of Suspense A/c- Cash Remittance' head.
When the link branch wants to remit their surplus cash they will draw the money to the debit of Suspense A/c- Cash Remittance' held by a Cash Debit Voucher'.
For both the cases, the vouchers should be jointly signed by both the Manager and the Deputy Manager.
Accounting procedure during the cash transaction period:
During the time of cash receive the accounting procedure is:
-> Cash account Debit
-> Party/Individual account - Credit
The reverse procedure is done at the time of cash withdrawing, that means
-> Party/Individual account - Debit
-> Cash account Credit
Conclusion:
The above stated description is exercised in the banks of Bagladesgh and the total scenerio should be more technology oriented and fast.
Cash Management Procedure in Bangladeshi traditional local banks
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