Cash and Balance with the Reserve Bank of India
(I). Cash in Hand (Including Foreign Currency Notes);
(II). Balance with the RBI :
(a). in current account;
(b). in other accounts
Cash in hand includes Foreign currency Notes and also foreign branches in the case of bank having such branches
Balances with Other Banks and Money at Call and Short Notice
(I). In India
(i). Balance with banks:
(a). In Current Accounts;
(b). In other deposit accounts : Includes all balances with banks in India
(Including Co-operative Banks). Balances in current accounts and deposit accounts should be shown separately).
(ii). Money at call and Short Notice :
(a). With Banks;
(b). With other Institutions : This item mainly represents the loan given by one bank to another for a short period. Call loans are repayable at any time the banker recalls them while short notice advances are repayable within a short notice of (say) 24 hours.
(II). Outside India
(I). Current Accounts and
(II). Deposits Accounts: Includes balances held by foreign branches and balances held by Indian branches of the banks outside India. Balances held with the foreign branches by other branches of the bank should not be shown under this head but should be included in inter – branch accounts. The amount held in ‘Current Accounts’ and the ‘Deposit Accounts’ should be shown separately.
(III). Money at call and Short Notice : Includes deposits usually classified in foreign countries as money at call and short notice.
# Operating Instructions on Cash #
In the front office of a bank, the nature of banking activities makes it imperative to handle large number of transactions involving cash and clearing. The front office staff should be aware of the operating instructions regarding these activities. The instructions are not common across all banks and may vary from bank to bank.
Cash and It’s Custody :
I General:
a. The cash and small coin balances must be kept in the strong room in the joint custody of the Head Cashier/Cashier and all the authorized supervising official, who will be the Manager to perform their duty.
b. Managers should see that no member of staff other than the Cashier / Teller receives money over the counter from depositors. Notice to that effect should be prominently displayed in English and also in regional in two places. One near the cash department and the other at near entrance.
2. Strong Room/Safe :
The strong room or safe must be under double lock of the Cashier and the supervising official in charge of cash. Both officials must be present when the strong room/safe is opened and as far as possible, all respectable in the strong room which are used for storing cash and the small coin balances must also be under the double lock of the cashier and the supervising official, with the exception of the receptacle used for the cashier’s hand balance which should be under his single lock.
3. Cash Balance of the Bank :
I. The bulk of the Cash Balance should always be in the strong Room /Safe under joint custody, while the remainder (Cashier’s Hand Balance) which will be kept as low as conveniently possible, will be left with the Head Cashier/Cashier during the day for the day’s transactions. Only the cash sufficient for the day’s requirement will be withdrawn in the morning from joint custody.
II. The amounts of all notes and coins withdrawn from or deposited in the joint custody portion of the bank’s Cash Balance (i.e. excluding the Head Cashier/Cashier’s hand balance) will be entered immediately in the reserve cash register under the initials of the joint custodians. The reserve cash register must always remain in strong room. The amount will be recorded in the cash book, which will be checked and signed by the Head Cashier/Cashier and the supervising official after the latter has compared all the items of cash balance taking into account the cashier’s hand balance, reserve cash and coins. The manager will also sign the cash balance book after agreeing the combined total of the ‘Joint Custody’ balance and the Head Cashier’s/Cashier’s hand balance with closing balance of his scroll.
Checking of Cash Balance: a. Before taking notes and coins into ‘joint custody’ balance, the supervising official will check their correctness in the following manner:
i. She /he will personally count all notes of denomination above Rs.10 and will verify a portion of all other notes on the ‘clip system’. Under this system a few notes in each book of notes are clipped together at the top. The remainder is counted by an employee other than the one responsible for it’s correctness in the presence of supervising official who verifies the total by counting the clipped notes. Notes of the same denomination are banded together into books of one hundred pieces each, every ten such books being tied up into a bundle of one thousand pieces. As counting machines are supplied to branches, the supervising staffwill check all note bundles using the note counting machines personally.
ii. The supervising official will have all bags of coins weighed in his presence and a few number of bags emptied to verify that the contents are genuine coins.
iii. He will take and count a few pieces and leave the remainder to be counted in his presence same as in the case of ‘Clip System’ for notes. He will also verify the relative denomination slip in the bags at the same time.
iv. Occassionally this will also be done in the case of small and non current coins.
v. The supervising official will verify at the close of the working day that the ‘joint custody’ balance corresponds exactly with the entries in the Cash Balance Book.
vi. He will also invariably chek the entire Head Cashier’s/Cashier’s hand balance of loose notes and also check the loose packets in Hand Balance and initial against the items checked in the Cash Balance Book.
vii. Fter the closing cash is checked by the supervising official. He must also ensure that the notes and coins held in the Head Cashier’s/Cashier’s Hand Balances are kept in the Cash Box and locked in his presence.
viii. He should also accompany the Cashier to the safe room when the cash box is kept under joint custody.
ix. Before the safe is closed, the supervising official, head cashier and the cashier should check the bundles kept in the vaultand verify the same with reserve cash register.
x. At least once a week on different days, the official, head cashier and the cashier should check the whole of the bank cash balance by test check.
Shortage or Excess in Cash:
Accounting for shortage or excess in cash has to be carried out as follows:
I. Any shortage in the cash balance should be recovered the same day from Head Cashier/Cashier. Who will in turn recover from the employee concerned of the cash department.
II. Failing recovery on the same day, the amount of shortage should be debited to the suspense Account taking the signatures of the members responsible for the shortage on the reverse of vouchers under report to the Head Office and adjusted on recovery from the concerned members.
III. Head Cashier/Cashier is responsible for any shortage either in hand or vault balance. In case of any shortage in any books of notes, the cashiers who have signed the denomination slips will be responsible for shortage.
IV. Any excess in the cash balance must be credited to sundry creditors account on the same day it self.
Remittance of Cash:
When remittance of currency notes are sent from one office to another, the following instructions must be strictly complied with :
a. Physical cash remittance to branches outside the town should be undertaken only if transfer cannot be effected through the SBI or any Nationalized or other bank with which he bank has an account.
b. Under no circumstances should cash be allowed to be carried without the armed guard.
c. Cash remittance should always be entrusted to an authorized employee who should be accompanied by a reliable and experienced member of the subordinate staff and the armed guard.
d. Night Journey and unusual halts at the junctions should be avoided.
e. The remittance box should always be conveyed in the van provided by the bank.
f. A register should be maintained to record all cash remittances to and from local branches and other branches.
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