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Cash Management

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  1. Cash Management

  2. Financing of PO-Principles • Cash should be available to meet demand • Not to be held in excess of demand • Easy Mode of • Clearance of cash • Getting of cash • Security arrangement • In collecting office minimum kept

  3. Financing of PO-Principles… • In other offices normally minimum plus liability to be kept • Liabilities exceed maximum balance, cash equal to actual liability to be kept • Liabilities includes MIS interest, matured NSC/KVP can also be foreseen

  4. Fixing of authorized balances • On the basis of cash handled by an office • Cash receipts • Cash payments • This can be arrived at by collecting four quarterly months statistics as discussed in next slides

  5. Collection of statistics • Suppose you are taking up a proposal for revision of authorised balance in the month of March 2011, then the statistics for the following months are to be collected and sent. • May 2010 • August 2010 • November 2010 • February 2011

  6. Collection of statistics (Receipt side) • Total of all columns in SO account except the following • Opening Balance column • Cash received from cash office • Book adjustment items • Cheque transaction

  7. Collection of statistics (Payment side) • Total of all columns in SO account except the following • Cash remitted to cash office • Book adjustment items • Payment by cheques • Closing balance column

  8. Fixing of authorized balances…General rule • Three type of offices will be there • Collecting office • Paying office • Office where receipt & payment equal • Minimum normally average requirement + 25% • Maximum normally 1.5 times of minimum

  9. Fixing of authorized balances…Other points to be seen • Time required to replenish or clear cash • Safety arrangements for cash • Line limits for remittance • Whether the office is • Collecting office • Paying office • Both equal

  10. Fixing of authorized balances…(collecting office) • Minimum cash • 50% of daily average payment (Bank transaction) • Daily average payment + 25% • Maximum • Min + (difference betn receipts & payments) x No.of days required for remittance to remove surplus cash

  11. Exercise- 7 (SO – B)

  12. Fixing of authorized balances…(Paying office) • Minimum • Daily average payment x No.of days for rem + 25% • Maximum • Min + (Daily payment-Daily receipts) x No. of days for remittance

  13. Exercise- 7 (SO – A,BO – D,BO - E)

  14. Fixing of authorized balances…(Receipts & Payments are equal) • Minimum • Daily average pmt + (difference betn receipts & pmts) x No.of days for remittance • Maximum • Min + (difference betn receipts & pmts) x No.of days for remittance

  15. Exercise- 7 (SO – C)

  16. Fixing of authorized Stamp balances • SO/BO • Daily average sale of PS x 15 • Head Office • Daily average sale x (30 + transit from CSD to HO) • (HO Sale + Supply to SOs +Supply to BOs)

  17. Exercise- 7 (Postage stamps)

  18. Line limits

  19. Line limits

  20. Suggestion to reduce cash handling • Deposits by cheque or DD • Payment by cheque • Automatic transfer to POSB account • Reinvestments • Payments credited to POSB account • TRC by cheque

  21. Security vigilance on cash by Postmaster • MAB -Memo of Authorized Balance • CMAB -Consolidated Memo of Authorized Balances • MR -Monthly Report

  22. Security vigilance on cash by Postmaster… • ECB Memo -Excess Cash Balance Memo • BO Abstract and MO payment

  23. Thank you