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Cash Management

Cash Management. 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. Financing of PO-Principles….

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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

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