29 January, 2011

Functions of Bank's Cash Department of a Branch

Functions of cash are one of the most important functions of the Bank. It is of extreme necessity that the cashiers and officers as well as other staffs of the bank should understand this very well. Our main discussion of Cash Department will be on Branch Cash balance, Safe custody of cash, Custody of keys/Duplicate keys, Maintenance of Vault book, Sorting of Notes and Coins, Security measures, Irregularities in the functions of the Cash Department and its' remedial.

Receipt & Payment of Cash:
Cash will be received by the Receiving Cashier/Teller from the customers on bank's printed form called pay-in-slip. The concerned Receiving Cashier/Teller will ensure that the name of the account holder, account number, name of the branch, date, denominations of the notes and coins are legibly written on the pay-in-slips. He/She must also ensure that the pay-in-slips are signed by the person depositing the cash. After counting the cash carefully, the Receiving Cashier/Teller put the 'Cash Received' stamp with date and enters the amount in the Teller's Cash Proof Sheet under a Serial Number which will also be put in the both part of the pay-in-slip with joint signature of the concerned Teller and the Head Teller. In some cases, cash is received on bank's vouchers for various transactions (PO, TT, MT, Commission, VAT etc.).

Payment Cashier/Teller will receive cash from the Head Teller at the out set of the transaction hour. He/She will pay cash against the valid Cheques/Instruments presented by the customers after observing the required formalities of passing the same. He/She must write the denominations of Notes/Coins on the reverse of the Cheque/Instrument as well as obtain signature of the payee before payment. After payment of the cash, he/she will put 'Cash Paid' stamp with date and enter the amount in the Teller's Cash Proof Sheet under a Serial Number which will also be put on the Cheque/Instrument paid. Cash is also paid against Cash Debit Voucher which must be signed by the authorized officer & Manager/Deputy Manager.

Branch Cash Balance Register:
The Tellers make entry in their respective Cash Proof Sheet against receipt and payment of cash which then jotted down to the Reserve Cash Proof Sheet Teller wise. The closing cash balance of the day is calculated by adding the opening cash balance with total amount of cash received minus total amount of cash paid.
The particular of bank's cash balance at the close of business of the day is entered in to the Cash Balance Register. This Register is signed by the Head Teller/Cash In-Charge, Joint Custodian and Manager/Deputy Manager jointly. The physical cash will be checked by the joint custodians/Manager before signing of the Register. The closing cash balance must agree with the Clean Cash Report and Statement of Affairs of the day.


Maintenance of Vault Book:
A Vault Book is maintained in the branch which must always remain in the Strong Room. All notes and coins are entered in the vault book immediately after proper sorting. Ever deposit and withdrawal of cash from the vault/Iron safe should be entered in to the vault book denomination wise. The vault book is to be initialed by all the custodians of cash jointly against each entry. Deposit and withdrawal of cash from the vault/Iron safe is to be regulated as per the insurance limit of the cash (Cash in safe, Cash on counter, Cash in transit).

Safe custody of cash:
After completion of the above mentioned functions, if cash is found physically in order at close of business of the day, the entire cash is kept in the bank's safe vault (Iron safe). The Iron safe is double locked by all the custodians including Head Teller/Cash-In-Charge and Manager/Deputy Manager. When the vault is opened, all the custodians must be present. The Cash Balance Register, Vault Book should be kept in the safe vault. Other important documents/sheets should be kept in the strong room.

Preparation of Cash Position Memo:
The daily Cash Position Memo is prepared by the Head Teller/Cash-In-Charge. The total cash receipt and payment of the day is written in the memo including opening cash balance of the branch. This cash position memo contains the entire cash balance of the branch excluding late receipt and payment if any. The IT Department of the branch will make posting on the basis of this memo to the respective GL head of account before starting day end process in the computer server.


Custody of Keys and Duplicate Keys:
A Key Register is maintained in the branch. All the particulars of the original and duplicate keys of the safe vault, grilled gate, and strong room door are entered in the Key Register. The Register is signed by the concerned custodian of cash and countersigned by the Manager. The custody of the keys must not be handed over without the permission of the Manager.
The duplicate keys of the branch must be deposited to the Main Branch or to the branch authorized by the Head Office. In the absence of the branch of Shahjalal Islami Bank, the duplicate keys may be deposited to the nearest branch of Sonali Bank or Bangladesh Bank as per advice of the Head Office. Before surrendering the keys, all the keys should be greased, labeled and placed to a plastic/wooden box which should be wrapped by a piece of cloth and properly stitched. The box should be signed by the Cash-In-Charge and the Manager jointly and gala sealed accordingly. The duplicate keys may be withdrawn under joint signature of the Cash-In-Charge and the Manager.


Sorting of Notes and Coins:
Notes will be sorted out on the basis of good, torn, mutilated, soiled etc. Torn/mutilated notes should be pasted with thin and light papers as per directives of Bangladesh Bank. Utmost care should be taken for not to receive any fake/forged notes. The holder of the fake/forged notes should be handed over to the police under intimation to the nearest office of Bangladesh Bank. Notes of different denomination must be bundled and stitched/stapled by 100 pieces attaching therewith the bank slip. The attached slip will be signed by the cash officer/money tester counting the pieces and countersigned by the Head Teller/Cash-In-Charge. Soiled notes should be counted separately and kept apart from the good notes which will be used again. Bags of different denominations of coins must be stacked separately from each other.

Security Measures:
Bank has to take extreme security measures to ensure the safety of the cash and other valuables. Some of the measures are as follows:
a) Double lock system: The cash balance is kept in the safe vault inside the Strong room under double lock with joint custody of more than one official.
b) Restricted entry: Entry to the vault and inside the cash counter should be restricted only to the authorized personnel only.
c) Alarm bell: An alarm bell must be set up outside the bank premises with multiple switches for turning it on by different officials. Periodical checks should be done whether the Alarm system is in order or not.
d) Close Circuit Television: CCTV is to be set up covering the cash counter and the Strong room gate. The CCTV must be turned on at the beginning of the transaction hour each day and time to time check should be made whether the same is functioning properly.
e) Insurance of branch cash limits: Insurance of the Cash in safe, Cash on counter and Cash in transit (for the Cash feeding branches) up to a certain limit is arranged by Head Office. Care should be taken not to exceed the limits. Excess cash must be remitted to the Main branch invariably on the same day. Cash on Cd•unter limit must be maintained while taking out cash from the vault and after receipt of the cash from the customers.
e) Proper watch and ward duty of the guard: The guards will perform their duties for the safeguard of the inside cash as well as bank premises. The guards will have 24 hours watch and ward duty by rotation. The Manager will arrange surprise inspection at irregular intervals on the holidays and at the night on the week days.

Surprise checking of cash:
The Manager should check some items at random of Cash balance on hand at the close of each day. At least once in a week, the entire cash should be checked physically by the Manager Which he must note in Cash Balance Register under his full signature.

Procedures of maintaining Cash receipt and payment in the evening banking:
Banks may receive money from their customers and pay cash after normal transaction hour' Which is called Evening banking. Separate evening banking license is to be obtained from Bangladesh Bank. In the evening banking hours the Teller will receive the cash in the pay-in-slip stamped with 'Evening Banking' seal. The 'Cash Received' stamp will be dated for the date of the following working day. The amount is to be entered in Tellers Cash Proof sheet on the date of the following working day. The Cash payment of the Cheque in the evening banking will be made to the Account holder only with his/her signature on the reverse side of the Cheque after observing the required formalities except posting it to the computer. Before payment, late payment permission from the Manager is to be obtained who will put his initial under the permission. The amount of cash payment should be entered in the Teller's Cash Proof Sheet and the Cheque to be stamped with the 'Cash Paid' seal on the date of the following working day. The amount paid must be blocked in the respective account in the computer.
Separate Cash Balance Register may be maintained for evening banking transaction. The amount of cash received and payment must be entered in to the Vault Book on the same date. The notes of late receipt along with the coins if any must be, kept in the safe vault separately.

Irregularities found in the functions of cash and its remedial:
There are many irregularities that occur in the functions of cash department. Some of the common irregularities are as follows:

a) Payment of post dated/out of date cheques: Some times post dated or out of date cheques are paid by the teller. As soon as the matter comes to the knowledge it should be corrected by obtaining signature of the drawer of the Cheque. b) Non -writing of denominations of notes received or paid: Tellers while receiving/paying cash do not write the denominations of notes in some cases. Branch Managcr/Deputy Manager should strictly impose upon the tellers to write denominations on pay-in-slips/vouchers and on the reverse of the Cheque/Cash Debit Voucher.
c) Keeping excess cash in the vault beyond limit: Some times closing cash balance exceeds the limit of cash in safe. Care should be taken for not exceeding the limit. Excess cash shall invariably be remitted to the Main branch on the following day.
d) Keeping unsorted cash in the vault: Notes are kept in the vault without sorting, some times without proper stitching/stapling. It is the responsibility of the Head Teller/Cash-In-Charge to have the notes sorted out and properly stitched. Branch Manager/Deputy Manager should impose upon him/her for strict compliance.
e) Shortfall of cash/Excess cash received: Some times shortfall of cash may occur in the hand cash balance of the Teller. In this case the shortfall amount shall directly be recovered from the concerned Teller before the close of business of the day. If not possible on that day, the cash may be adjusted by debit to 'Protested Bill Account' under telegraphic/Fax advice of the Head Office.

Where any excess cash is received, the amount should be credited to the Sundry Deposit Account. If any genuine claim is found later on, the amount may be refunded subject to obtaining permission from Head Office.

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