Niraj Sharma(Cash Operation

7/24/2019 Niraj Sharma(Cash Operation

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Cash Operation

Niraj SharmaNCC Bank


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What is cash?Cash means currency notes whichare in vogue (type) in different

denominations issued & guaranteedby Central Bank of the country as

means of settlement of public debt.

Cash are the most liuid assets of

any possessor.


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What is Cash !uivalent then?Cash euivalents are those assets

other than currency notes which

can be easily or within very uickand"or specified time period

converted into cash i.e. currencynotes.


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#ow cash is generated in the

bank?Cash is generated by deposit

transactions of the bank. $t may be

%ccount eposit and or other forms

of deposits as reuired and allowed

by banks. Withdrawal by a normal'C cheue may reduce the deposit

of physical cash.


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Who manages such cash? %nd how?

$n every bank there is Cash epartment managing

and handling cash items. $t ensures the collectionof physical cash and arranges it properly. hen

based on the capacity of the vault (Where

physically Currency notes are reserved with proper

insurance coverage) the e*cess and over cash aresent to concerned institutions responsible for such

transactions. +or us ,epal -astra Bank (,-B) is

that $nstitution where e*cess and over cash (i.e. not

unutilied cash) are dumped into our account with,-B. 'ut of this dumped cash certain

percentages are statutory reuirements as a

cushion to depositors.


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What is C-- (Cash -eserve

-atio)?% prescribed percentage of physicalcash reuired to be maintained at

,epal -astra Bank (,-B) at ouraccount. his is a Cushion to eposits

of the Bank. C-- is /./0 of total

eposits. hat means if total deposit is-s.122 as a C-- -s. /./2 should be

held as Cash -eserve at ,-B.


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What types of balances are considered for

C-- calculation?'nly cash balance maintained with ,epal -astra

Bank (,-B). +or calculation following accounts are

considered3Current %ccount eposits

3,ormal 4aving %ccount eposits

3+i*ed eposit eposits

%part from these 'ther eposits such as +C5eposits 6argin %ccounts etc are not included in

the calculation.


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What is eposit?$t is liability of a bank received from

Customers of the Bank in agreement to

give or may not give return to thedepositors in specified intervals. 4uch

liabilities are in the form of emand

erm or 7uasi term eposits and orothers as may be agreed upon.


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#ow the deposit liabilities are

created?eposit liabilities are created once the

account of a customer is opened and moneyis deposited into the account by way of

a) %ccount ransfer ( Balance ransfer)

b) 8hysical Cash eposit.


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THE BASIC FUNCTION OF CASH

Department

The basic function of Cash Department

is receipt an pa!ment of cash an

cash items che"ues#$


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The summarized functions of the CashSection are as follows:

eposit of cash over the counter.

8ayment of cash" cheue over the counter

eposit of cash items (cheues) over the

counter.

8urchase and 4ale of foreign currency Cash"C

Cash give and take among ellers"#ead eller

Cash transfer 3$nter Branch and ,-B Cash vault operation.

Cash position management and

$nsurance


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Deposit of cash into customer%s

account&

1. 9et cash from the customer along with eposit:oucher" 4lip filled in two copies; original andcounterfoil.


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=. 6ake sure both copies of the deposit slips contain thesame information.

>. While counting the notes ensure that none of thepiece is mutilated fake or unacceptable in any way tothe Bank.

/. 8ass the entry in the computer system

. !nsure that the name of the depositor mentioned in

the deposit slip tallies with the name appearing in thesystems while posting.

@. 6ark both copies of the deposit slip with ACash'ecei(e stamp and initial deposited amount thereonalong with your signature.

. #and over the


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)roceures for Che"ue Encashment &

1. 9et the Bank cheue from the customer with thecheue presenterEs endorsement.


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/. :erify the signature and account operation instruction.

. ,ote down the denomination of cash and its summationon the back of the cheue.

@. 6ark A8ay cash or ACash 8aid stamp and sign on it.. 9et the signature of the cheue presenter once again

on the back of the cheue to ensure the right payee andacknowledgement of receipt of cash and pay the cash.

D. %ll the cheues are valid up to months unless

mentioned on it.12. he common reasons for getting the transaction into

stack are as follows a. Out of debit amount limit

b. Insufficient available balance. c. Account frozen

d. Incorrect check number.

e. Dormant account

f. Stop payment held etc.


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Date of The Che"uei.e. banker should check whether thecheue drawn is 4tale Cheue ( i.e. a predated cheue not

presented for payment within a reasonable period after the dateof issue)

'r 8ost ated Cheue ( i.e. Cheue having date subseuent to

the date on which it is drawn)

Stale Cheque; % cheue dated 1st Baisakh presented tothe bank on Chaitra i.e. after si* months of issue.

Post Dated Cheque; % cheue dated


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Forei*n currenc! Cash+TC purchase+

Deposit & +C5 Cash"C can be purchased from ,epalese as

well as foreigners.

9et +C5 Cash"C and passport from the seller along

with the +C5 encashment application form.

!nsure the +C5 Cash"C is acceptable as per ,-B

regulation.

9ets a photocopy of passport evidencing foreign trip

and detail address of seller.

+or +C5 Cash pass entry by debiting +C5 teller and

crediting ,-4 teller. %pply cash buying rate.


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Deposit cont,$ +or +C5 C debit C purchase a"c and credit ,8-

teller a"c. %pply other instrument buying rate.

$ssue +oreign Currency !ncashment -eceipt.

+C5 cash up to F4


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Deposit cont,$ $n case of cash deposit into +C5 account take 10

commission.

$n case of C purchase" deposit take 2./0

commission.

$n case of $,- /22 and 1222 denomination notes are

not allowed to purchase as per ,-B regulation.


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Cash *i(e an take amon* Te--ers+Hea Te--er &

he #ead eller distributes the reuired amount of cash to

the ellers. he ellers are given certain cash holdinglimits during the transaction hour. $f any eller is

short"e*cess of cash he"she can get"give the cash from"to

the #ead eller. he #ead eller monitors and helps for

maintaining optimum level of cash with the ellers. %ny

such cash transaction between the #ead eller and theellers is called ECash 9ive and akeE transaction.

4ometimes two tellers may also 9ive and ake with the

permission of the #ead eller. he ECash 9ive and akeEtransaction is recorded in the computer system through

the G9ive and akeH module.

$f cash is not balanced the difference amount should be

booked in cash GshortH or GoverH with the approval of

higher authority.


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Other operations 'e-ate to Cash Department

.$ Cash Transfer bet/een the Branches

0$ Cash Transfer to + from N'B

1$ Cash 2au-t Operations Cash (au-t

2au-t ke! arran*ement

2au-t ke! re*ister

2au-t 3o* Book

2au-t Ba-ance 'e*ister+2au-t Cash Book


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Other Operations 'e-ate to Cash Department

.$ Cash Transfer bet/een the Branches

0$ Cash Transfer to + from N'B

1$ Cash 2au-t Operations Cash (au-t

2au-t ke! arran*ement

2au-t ke! re*ister

2au-t 3o* Book

2au-t Ba-ance 'e*ister+2au-t Cash Book


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Cash )osition

Cash position at an! point of time is the sum of

three states of cash 4Cash in (au-t5 Cash inTe--er an Cash in transit#$ The ba-ance sho/n

b! the Computer S!stem at an! point of time

shou- ta--! /ith the ph!sica- ba-ance of each

state of the cash position as mentione abo(epro(ie a-- the transaction are poste an

appro(e in the s!stem$ The cash position at

an! point of time shou- be /ithin the

insurance -imit$


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Cash )osition Insurance

For securit! purpose5 the cash position shou-

ha(e ae"uate insurance co(era*e$ The amountof insurance ma! iffer from branch to branch$

The branches nee to kno/ their respecti(e

insurance -imits an maintain the cash

accorin*-!$ In case5 the branch has some

e6cess cash position than the insurance

co(era*e -imit5 aitiona- temporar! co(era*e

shou- be obtaine b! fa6in* the re"uest of that

to the nominate insurance compan! /ith cop!

to the 7enera- Aministration Department5Corporate Office$

Insurance&8

Cash at 2au-t5 Te--er Cash5 Cash in Transit


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C-earin*

Durin* the course of a business a! a number

of instruments 4che"ue5 raft etc# are eposite/ith a bank for co--ection b! its customers$

These instruments ma! be ra/n on ifferent

branches of (arious banks an a co--ectin*

bank has to ph!sica--! present the instruments

for co--ection to each ra/ee bank+branch$ Thec-earin* s!stem pro(ies a con(enient an /e--

estab-ishe institutiona- mechanism to take

care of the prob-em of ph!sica- e-i(er! of

instruments as /e-- as funs transfer bet/eenifferent banks$


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C-earin*

Durin* the course of a business a! a number

of instruments 4che"ue5 raft etc# are eposite/ith a bank for co--ection b! its customers$

These instruments ma! be ra/n on ifferent

branches of (arious banks an a co--ectin*

bank has to ph!sica--! present the instruments

for co--ection to each ra/ee bank+branch$ Thec-earin* s!stem pro(ies a con(enient an /e--

estab-ishe institutiona- mechanism to take

care of the prob-em of ph!sica- e-i(er! of

instruments as /e-- as funs transfer bet/eenifferent banks$


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T!pes of C-earin*

3oca- Currenc! C-earin*

Forei*n Currenc! C-earin*

Out/ar C-earin*

Out/ar C-earin* is the c-earin* of instruments

eposite b! our customers$ These instruments are

ra/n on other banks+financia- institutes in thesame -oca-it! or outstation$


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Out/ar C-earin*

he clearing process begins with the acceptance ofclearing instruments by the front desk.

he person receiving the instruments for collection should

ensure that the deposit slip is filled up properly

incorporating all details of instruments to be sent forcollection.

he receiving person in the front desk then puts the

Banks received stamp and initial on the deposit slip (on

both the Bank and Customer Copy) and the customer

copy is handed back to the customer. he received dateshould be correctly ensured and affi*ed clearly on both the

copies of the deposit slip.


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Out/ar C-earin* cont,

he details of instruments should be recorded in theCheue -eceived -egister by the receiving person

and forwarded to the Clearing Fnit" epartment for

further processing.

On basis of the authori9e eposit s-ip5 theinstruments are checke an punche into the

s!stem for (a-ue ate creit to ini(iua-

accounts$

Crossing stamps and endorsements should beaffi*ed on all instruments and cross checked before

they are dispatched for clearing"collection.


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Out/ar C-earin* cont,

he instrument and deposit slip is segregated at thisstage.

he clearing summary sheet for collection to respective

banks with the number of instruments and the amount

to be claimed is generated from the system. $ndividualsheets of instruments to be drawn on respective

branches of other banks are generated as well. he

clearing summary sheet and individual sheets are to be

checked again and authoried by the esk 'fficer

before being finally dispatched.

he verification check list of all clearing items for credit

to respective accounts is generated and audited on

basis of the deposit slips.


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In/ar C-earin*

$nward Clearing is the clearing of $nstruments presentedby other banks through the clearing house for the debit of

our customers account.

Steps + )roceures&

otal number of instruments received and the total claimfrom other banks and financial institutions should match

the total inward claim for the day. he separate claim

from banks and financial institutions should also be

ensured correct. Clearing epartment should ensure that the instruments

received for payment are in order and correct in all

aspect. Crossing and endorsements should be checked

as well.


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In/ar C-earin* cont$$

he instruments to be honored are passed for paymentas per authority delegated in the system.

he unpaid instruments are reIected to the Clearing

#ouse by


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:oa-ities of the C-earin* House

he clearing summary sheet of the total presentation ispresented to the Clearing #ouse before 12;22 %6 every

business day and presenting and accepting of

instruments with other relative members takes place.

he Clearing #ouse will then prepare 1st

settlement ofclearing transaction of that day and will provide a copy

of that settlement to each member bank showing the

total volume of total acceptance and total presentation

from"to each member banks (in amounts).

$f any mistakes or corrections are found in the 1st

4ettlement an adIustment summary is presented to the

Clearing #ouse within


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:oa-ities of the C-earin* House cont$$

he instruments that are not honoured are fa*ed to theClearing #ouse within


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Nettin* of C-earin* Transactions&

% net settlement is arrived at the clearing house and thedebit or credit position of the bank is determined. hese

are booked in their current accounts maintained by the

settling bank. his represents the inter3 bank settlement.

he payment process is completed only when the funds

are debited from the drawerEs account and credited to

he payeeEs account. his occurs after the completion of

the return clearing.


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Nettin* of C-earin* Transactions&

otal out!ard clearin" cheques presented # $$$$$ %ess& return out!ard clearin" cheques # $$$$$

Net receivable = xxxxx

otal in!ard clearin" cheques received # $$$$$

%ess& return in!ard clearin" cheques # $$$$$

Net payable = xxxxx

Netting of Clearing Transaction # '() Payable * '+) ,eceivable


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'e*u-arisation of C-earin* )rocees&

he outward clearing is regularied at the end of dayin the system and the proceeds of collection realied

to individual accounts after adIusting the returned

cheues. he cheue receivable and cheue sent for

collection accounts should be ero at the end of the

day. he corresponding entry to ,-B account should

match the advice received from the Clearing #ouse.

%ny difference should be immediately informed to the

Clearing $n3charge "Branch 6anager.


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'e*u-arisation of C-earin* )rocees&

he outward clearing is regularied at the end of dayin the system and the proceeds of collection realied

to individual accounts after adIusting the returned

cheues. he cheue receivable and cheue sent for

collection accounts should be ero at the end of the

day. he corresponding entry to ,-B account should

match the advice received from the Clearing #ouse.

%ny difference should be immediately informed to the

Clearing $n3charge "Branch 6anager.


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Niraj Sharma(Cash Operation

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