CHAPTER NO 6
THE DEPARTMENT OF CASH
INTRODUCTION
Cash department is mainly responsible for inflow, outflow and safe custody of bank’s cash i.e. accepting cash deposits, enchasing cheques, drafts, ,making other cash payments, safe keeping and maintenance of the daily cash payments, safe keeping and maintenance of the daily cash balance.
6.1 CASH MANAGEMENT
The head cashiers at the entire branch is responsible for the proper supervision of the work of the entire cash department and for seeing that the procedure laid down is being scrupulously followed. A cashier is jointly responsible with the branch manager for the safe keeping of all cash and safe custody articles and other key of the safe containing the cash and valuable, the other key to be kept by the manager and in case of triple operation by accountant. 1
6.2 CASH RECEIPT
All cash receipt vouchers pertaining to TDR, SND, DD, TT, Cash Order etc. and pay-in-slip (current/saving) are required to be got scrolled first for allotment of serial no from the token assistant and then these are presented the receiving cashier only along with the cash deposit.
6.2.1 Scrutiny Of Deposit Slip
The cashier observes the following points:
· The deposit slip/voucher is of the same branch.
· It is correctly dated and bears scroll number.
· Pay-in slip bears signatures of the depositor.
· Title of account no. is given and there is no overwriting, cutting etc.
· Amount in words and figures mentioned in the voucher or in the counterfoil and the pay-in-slip (main foil) is the same.
6.2.2 Careful Counting And Examination Of The Note Tendered
After scrutiny of the deposit slip/voucher the cashier separate the cash from the slip/voucher and will minutely check and count the cash tendered to him, while counting the examination for counterfeited, domination or defaced notes. He also note down domination-wise detail of the cash being counted by him on the reversed of the voucher or the pay-in-slip to be retained by the branch as voucher.
6.2.3 Handling And Recording Of The Cash
when tended notes comes for depositing cash and cashier found it excess than the deposit slip/voucher, he refunds the excess amount to the tendered by taking his signature on the back of the slip/voucher clearly indicating the amount being refunded, he also informs to account holder if he him self has not come for deposit. And if the cash is short than deposit slip/voucher has asked than the deposit slip/voucher has asked to tender to make good shortage at the spot.
After satisfying that the cash tendered by the deposit is in order, the cashier write in red ink the amount as received by him in words and figure on the both the portions of the pay-in-slip or the voucher under his full signature, and there after an entry of cash receipt is made on the receipt side giving account no. title and head of account in the cashier’s receipt and payment long book.
6.2.4 Cash Received Stamp
The officer in charge deposit or accountant checks the entries made by the cashier in the long book and initials each respective entry. After affixing cash received stamp held him and signature the vouchers, the officer also obtain the signatures of the other officer or manager as required in terms of schedule of signing power in force.
The cash receive stamp remain in the custody of the officer during the working hours who affixes it personally on the pay-in-slips and other receipt vouchers after authentication of the entries. At the close of the business, cash receipt stamp saved in along with the cash.
6.2.5 Handing Over The Receipt To Customer
When all formalities are completed, the portion of pay-in-slip is meant for branch’s voucher is detached by the officer and the rest i.e. the counter-foil is handed over the client, while the cash tendered through voucher in respect of TGR ,SNDR DD, TT, MT, CASH ORDER , IBC etc is sent to the cashier for entering further receipts. Under no circumstances the counterfoil is issued under the single signature, either by the officer of the cashier.
6.3 CASH PAYMENTS
All cheques, TDR, SNDR, DD, TT, MT, CASH ORDER and vouchers Cancelled or passed for cash payment is forwarded by the respective department to the paying cashier for payments. On receipt of a passed cheque or instrument or voucher, the cashier scrutinizes it on the following points before making payment:
· The cheque or instrument or voucher is apparently required to be in order in all respect and has to be passed and signed by the authorized officers according to the signing power vested in them as par branch officer order and by schedule of signing powers.
· The cheque or instrument bears “pay cash” stamp under the signature of passing officers.
· The cheque or instrument or voucher has been signed by the payee or presenter.
· The token issue stamp has been affixed and token no. stated therein.
In case the cheque bears thumb impression i.e. the account holder is an illiterate person, the cashier see that cheque has been passed by the manager and the accountant irrespective of the amount of cheque. He obtains another thumb impression of the account holder, compare and see that it is similar to the already affixed on the cheque to prove his identity.
When cheque or voucher is found in order an all respect, the cashier will call the token holder to surrender the token. He obtains second signature of the identity of the claimant where the amount is larger or he suspects or wishes to confirm the identity of the claimant where the amount is larger or he suspect or wishes to confirm the identity of the claimant or recipient of cash.
On being satisfied that the cheque or instrument or voucher is in order identity of the claimant has also been established , the cashier will enter the brief particular of the cheque or of the voucher in his long book.
And when entry has been made, he will take out the exact quantity of the notes for the amount as mention in the cheque from cash held by him. After noting down the denomination of the notes on the back of the cheque or voucher, he hand over cash to claimant from whom he received the token, specially telling him to counter as bank shall not responsible thereafter. At the same time the cashier note down the time of the payment under his initial at the space provided for token issue stamp.
He also note down the amount paid by him on the face of the cheque in red ink both in words and figures under his full signature and the cash “paid” stamp.
6.3.1 Authentication Of Long Book
After having made the payment, the long book along with the entered paid cheque or voucher is sent to the in-charge deposit or accountant for his authentication. On authenticating the long book, the in-charge deposit or accountant return it along with the cheque or voucher which kept by the cashier in his drawer till along with the cheque which kept by the cahiers in his drawer till the close of the day, all the paid cheque and payment voucher handed over by the cashier (paying cashier) to the in-charge receipt and payment book against his signature in the cashier long book.
6.3.2 Balancing Of Cash
At the close of the business the cashier in-charge strikes pout the balance on hand for the day by summing up the receipt side, adding in it the last day’s closing balance and summing up the payment side total and working out the balance. The total of the receipt side and the total of the payment side arrived at after working the balance must agree with each other. He also physically checks his cash in hand; prepare the rough denomination wise detail with the balance of the cash work out in the long book. On conformation that cash in hand tailed with along the long book as well as with the receipt and payment book written by token assistant, who writes down the closing cash balance in words in his long book under his full signature and inform the manager to check and close it.
6.3.3 Singing Of Long Book
The manager and accountant, after satisfying that each and every entry has been authenticated and the balance on hand has been correctly worked out which tvastmedia with balance shown in the receipt and payment books, signs it.
6.3.4 Daily Memo Book
After the cash in hand has been physically checked and balanced, the denomination-wise detail of the cash balance and prize bound (held at the close of business each day) will be recorded in the cashier daily memo book. Summarized detail of previous day’s cash balance, day’s receipt balance on hand will also be written on it and in a separate slip, which shall be signature by him and passed on the cash-cum-general ledger writer. Separate cashier’s daily memo books are maintained for the foreign currency held by the branches designed for handling of foreign currency accounts.
The memo book is checked and sign by the cashier in charge or chief in-charge after it is checked with the actual cash in hand. The manager also check and total of receiving and paying cashier long book with the cash book and cashier daily memo book and signature at the time of closing cash. The book is placed other than the cash safe. No member of cash department is allowed to leave the office without the manager’s permission until the cash balance has been so checked, found correct and locked.
6.4 STRONG ROOM
Strong room is under the dual control of manager and accountant where there are only two attorney holders. In other branches having more than two attorney dual control may be exercised by the accountant (preferably the manager) and the attorney.
6.5 CASH SAFE
The manger and the accountant and the cashier operate cash safe under triple control. In number of keys of the cash safe is passed on the custody of any other official. In big branches, special permission is obtained from the circular executive concerned for exemption the manager from the holding custody of the cash keys. The covers of the locks of the cash safe is invariably sealed after all the keys have been operate for closing the cash with the personal brass engraved seal of the manager over the wax. Before opening the safe in the next morning it is seen that the seal affixed on the cover on the closed of the pervious working day is un-tampered and in tact.
6.6 CUSTODY OF KEYS
A key register for all the important keys including those of strong room, cash safe and chests is required to be maintained at a branch. One page is reserved for each key. The particulars of all the existing original and duplicate keys along with the name of the custodians, time of key received by them are entered in it. The entries for the custody of keys are invariably made in the key register at the change of a holder or on his proceeding on leave under his full signature with dates, which is authenticated by the manager or accountant.
The main keys of the branch are not be out of possession of the official to whose charge they have been entrusted, expect in cases of incapacitation for duty, when they are taken over by another responsible bank official or some one officiating for the manager in an emergency. The grave consequences that are liable to result due to his non-observation of his instruction cannot be strongly impressed on the officials responsible for safe custody of cash and securities.
At no time more then one key of cash safe or two different keys are held by the same person. For example, if the accountant’s key is held by an attorney on account of the accountant having gone on leave, the said attorney never hold his own keys as well as of the accountant at the same time. In such a case the keys of the attorney are to be kept by next senior attorney. Similarly when an accountant officiates in the manager absence, he ceases top held his own keys in addition to those of those of manager, accountant’s in such cases are held by the next senior attorney and so on.
When the key of the strong room and other keys are kept in the personal safe in which they are lodged not leave his custody. Subordinate staff or unauthorized personal are not allowed to handle the keys f the strong room and safes for any purpose what ever.
The above instruction will equal force to the chief cashier or chief in-charge or cashier in-charge, who is personally responsible for the custody keys and for the arrangements made (subject to the manager approval) in the event of his absence from office.
Great care is taken of all the locks and keys. When ever any important key shows sign of serious wear or any lock is proving defective the matter is immediately brought to the notice of regional office for necessary action.
6.7 SALE
Sign board regarding sale or encashment of prize bounds and acceptance of prize bound money claims is displayed prominently at the counter of the branch. Publicity posters of prize bound are also displayed conspicuously in the branch.
At the time of encashment of prize bounds, the cashier manifest the same caution and vigilance as is displayed by him while counting currency notes. During the course of counting he observed for fake, counterfeited, altered, tampered or defective prize bounds as well as the prize bounds withdrawn from circulation.
6.7.1 Holding Of The Stock Of Prize Bounds
Branches keep adequate stock of prize bounds in hand for sale to public during the sale period of such denomination of the bounds, sale of which is in progress. Every effort is made to dispose of the stock by the shut period. Unsold stock is surrendered to SBP immediately on the commencement of the “shut period.”
6.7.2 Sale
All sales are debited to national prize bound account code no 0210 maintained in the cash-cum-general ledger and all encashment are credited to the above account and entry of sale and encashment are recorded in the subsidiary ledger or register.
6.7.3 Keeping Of List Of Prize Bounds
The cash department keeps for reference, list of those prize bounds, which have withdrawn from circulation, so that encashment of such bounds is avoided.
6.7.4 Voucher
For each purchase or encashment separate cash payment voucher is prepared, signature by the office in-charge or accountant and the manger, on the basis of which payment id made to the tendered of the bounds after obtaining his signature on the back of the voucher. On the payment the vouched is entered by him (paying cashier) in his long book and handle like other payment vouchers.
6.8 REMITTANCE OF SURPLUS FUNDS
At the close of the business, branches keep their cash balances at the barest minimum, which including soiled and mutilated notes. The holding of cash beyond normal requirement of the branches is fraught with the risk and above all such idle holding is un-remunerative and loses interest on it. This loss of interest when assessed in an overall scenario of the bank culminates into colossal amount.
6.8.1 Remittance Of Surplus Funds
In order to minimize the risk of the holding the large idle balance and to earn maximum interest on Pak account, branches maintaining account with SBP can remit funds to central office, Karachi by purchasing. TT from SBP, free of any charge almost daily by paying cost of telegram only, similarly branches maintaining account with SBP can avail of this facility twice a week by paying telegram charges only. Further more, the branches can utilize their TT discounting limits already arrange with these banks for replenishment of their cash in case of urgent requirements., in view of availability of the above facilities it is incumbent up to the branches having surplus funds of the above facilities it is incumbent up to the branches having surplus funds to remit immediate to central office, Karachi through SBP or NBP or MCB.
6.8.2 Telegraphic Intimation And Confirmation Of Remittance
According intimation is sent to remittance department, finance division central office and Karachi
· Day and date of remittance.
· TT serial no as provided by the remitting banks
· Name of the drawee and paying bank branch
· Transaction of TT in words and figures.
· Name, telegraphic address and code no of the branch.
6.8.3 Entry In Remittance In Transit Register
When ever surplus funds are remitted those are debited to remittance in transit account (code no 0106) maintained in cash-cum-general ledger and their particulars are entered in the register remittance in transit register. All entries in the register are checked and initialed by the manger or accountant at the time of passing the relative voucher.
6.8.4 Reimbursement By Central Office
Reimbursement of remittance from the branches is made by the remittance department, finance division within 3 days after the date of remittance through Pak account credit advices. On receipt of such advices branches is credit is credit their remittance in transit accounts previously debited by them to them to adjust the outstanding.
Where such advice are not receive within 3 days from the date of remittance, matter is taken up on top priority basis with the remittance department by repeating the message telegraphically enabling the remittance department to obtain reimbursement for clearing of the entries promptly.
6.9 DISCOUNTING FACILITY OF TT
As per arrangement made by central office, Karachi
6.9.1 Telegraphic Intimation Of TT Discounted
Accordingly telegraphic intimation is sent to remittance department, finance division central office, Karachi
· Test no of the telegram
· Day and date of remittance
· Discounting of the bank name
· Amount in words
· Transaction code
· Name, telegraphic address and code no of the branches.
6.9.2 Checking Of Entries
All eateries in the above register is checked and initialed by the manager or accountant at the time of passing the relative vouchers.
6.9.3 TT Discounting Entry
Remittance department claims reimbursement of the TT discounted by the branches within 3 days by debit advice drawn on Pak account, which is immediately responded to the outstanding. If any such advice is not received within 3 days it is incumbent upon the manager to follow it up personally with remittance department for immediate clearance of the entry, which is no allowed to outstand for beyond the immediate clearance of the entry, this is no allowed to outstand for beyond the aforementioned period.
6.9.4 Monthly Statement Of Remittance
A statement of outstanding in remittance-in-transit and TT discounted is forwarded to remittance department on the last working day of the month, so that claim outstanding, if any, in respect of remittance by branches me be lodged immediately.
6.9.5 Remittance Department Correspondence
The manager them selves promptly attend the remittance department queries or clarification, whether in respect of remittance and TT discounted and replay forwarded to the department on the same day when theses are received.
6.10 MAINTENANCE OF BANK’S ACCOUNT WITH SBP OR NBP
Whenever branches are authorized to maintain their accounts with SBP or NBP, these are operating jointly by the manger and accountant or by the authorized officers. The cheque books issued to them by the concerned banks are kept by the managers under their custody and locked in the cash safe in the strong room over night.
6.10.1 Issuance Of Cheques
The manger authorized all withdrawals in respect of cash and payment to other banks (in case of need). The accountant or authorized officers before signing cheque are that the issuances of cheque are against valid authority and duly signed vouchers.
6.10.2 Entries In Banker’s Ledgers
A subsidiary ledger known as “banker’s Ledger” is maintained in order to keep entry wise detailed record of the “banker’s account” for the facilitating periodical reconciliation. All entries is checked and initialed by the manager or accountant. Leger balance is proved daily with the balance of the cash-cum-general ledger.
6.10.3 Preparation Of Reconciliation
At the end of the month, statement of account received from the concerned bank is checked with the ledger (enter wise) and reconciled. A monthly reconciliation statement is kept in recorded for future reference. Any difference is taken up with the respective bank and got cleared immediately.
6.10.4 Maintaining Of The Balance
Branches have instruction not to maintained balance with the other banks. Beyond the limit fixed for them. Any balance maintained in excess of their ceiling must be intimated to finance division on the very day with reasons of keeping such an un-usual balance.
Summary
Cash department is mainly responsible for inflow, outflow and safe custody of bank’s cash i.e. accepting cash deposits, enchasing cheques, drafts, making other cash payments, safe keeping and maintenance of the daily cash payments, safe keeping and maintenance of the daily cash balance. In the next chapter we discussed the financial analysis of VM.
Reference:
· Operational Manual of VM 2005
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