Cash Handling Procedures

Cash Systems and Procedures – A Handout (Module - 1) Chapter or Module Chapter or Screen title Voice-over Text

Cash Systems and Procedures

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Welcome Welcome to the course on Cash Systems and Procedures. This e - Learning course is intended to familiarize the audience with the importance of various systems and procedures followed by the Cash Department at SBI.

Welcome to the Course on Cash Systems and Procedures

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Objectives By the end of this course, you should be able to: Define In Branch Cash Handling process, Describe the security and escort arrangement related to cash remittance, Identify the functions and responsibilities of Cash Officer during emergency, Summarize the receipt and remittance procedures of Treasury and Recall the rate of penal interests for delayed or wrong currency chest transaction.

By the end of this course, you should be able to: • • • • •

Define In Branch Cash Handling process Describe the security and escort arrangement related to cash remittance Identify the functions and responsibilities of Cash Officer during emergency Summarize the receipt and remittance procedures of Treasury Recall the rate of penal interests for delayed or wrong currency chest transaction



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Introduction Guidance on Cash Handling Procedures is important in order to meet internal and external auditing requirements, and to assist both Financial Services and user departments for in-branch cash handling, distribution, exchange, and delivery of cash and currency notes.

Guidance on Cash Handling Procedures is important to: • • • • •

Meet internal and external audit requirements Assist Financial Services and user department In-cash handling Distribution of cash Exchange and delivery of cash and currency notes



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Standards of Cash Handling and Distribution All cash transactions and delivery are subjected to applicable policies and procedures stated under SBI to handle cash transactions appropriately. Let’s look at the various standard and regulations followed by SBI to handle and distribution of cash.

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All cash transactions and delivery are subjected to applicable policies and procedures stated under SBI to handle cash transactions appropriately.

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The course intends to benefit cashiers, custodians of currency chest, Managers (Branch Operations), and all officers working in the Accounts department with essential information on various systems and procedures followed by Cash department.



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Need for Cash Regulations Procedures Cash departments of bank and their branches follow the regulation to manage: In Branch Cash Handling Process, Cash Remittances – Transportation, Preparation or Handling of Note Packets, Receipt and Remittance of Treasure, Facilities for Exchange of Notes or Coins and Levy of Penal interest.

Cash departments of bank and their branches follow the regulation to manage: • • • • • •

In Branch Cash Handling Process Cash Remittances - Transportation Preparation or Handling of Note Packets Receipt and Remittance of Treasure Facilities for Exchange of Notes or Coins Levy of Penal Interest



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Module Objectives OK! Let’s begin with the first module of the course on In-Branch Cash Handling. By the end of this module, you should be able to: Recall the preconditions and steps to In-Branch Cash Handling process, Define the cash distribution process of Cash at the beginning of the day and Returning of Cash at the end of the day and Define the cash verification process to In-Branch Cash Handling.

By the end of this module, you should be able to: • Recall the preconditions and steps to In-Branch Cash Handling process • Define the cash distribution process of Cash at the beginning of the day and Returning of Cash at the end of the day • Define the cash verification process to In-Branch Cash Handling

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In-Branch Cash Handling Process/Revised In-Branch Cash Handling Process With the time, however, there are few revisions adopted by the Cash Department, related to distribution of cash during day and evening time. The revised process introduced to core banking units prompts: The balance cash on hand, up to the overnight cash retention limit, fixed. The balance cash on hand instead of handling to SWO or Cash Assistant is kept in the cash box. The SWO or Cash Assistant who handles the cash during the daytime should be responsible for the custody, safety, and correctness of cash and valuables during the day’s closure. The Special Assistant-in-Charge for Cash should deposit the cash and valuables in the vault during the day’s closure and ensure that they are not tampered. The Cash-incharge or the Assistant should verify the contents of the cash boxes. The CO or CIC should also verify the cash and valuables on every Friday of the week. If Friday is scheduled as a holiday, the verification should be carried on the previous working day.

The revised processes in brief is as under: • At the close of business each day, the SWO/Assistant (Cash) is require to handover. • The balance cash on hand instead of handling to SWO or Cash Assistant is kept in the cash box. • The SWO or Cash Assistant who handles the cash during the day time should be responsible for the custody, safety, and correctness of cash and valuables during the day’s closure. • The Special Assistant-in-Charge for Cash should deposit the cash and valuables in the vault during the day’s closure and ensure that they are not tampered. • The Cash-in-charge or the Assistant should verify the contents of the cash boxes. The CO or CIC should also verify the cash and valuables on every Friday of the week. • If Friday is scheduled as a holiday, the verification should be carried on the previous working day.



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In-Branch Cash Handling Process/Benefits of In-Branch Cash Handling Process Introduction of the revised process benefited with no delay in starting customer transactions at the beginning of the day and reduces the time spent by the Cash Officer or Cashier-in-charge or SWO or Assistant (Cash) in handing or receiving cash at the beginning or closing of day.

The following benefits will accrue with the introduction of the revised process: • •

There will be no delay in starting customer transactions at the beginning of the day The process will reduce the time spent by the Cash Officer or Cashier-in-charge or SWO or Assistant (Cash) in handing over and receiving cash at the beginning or close of day



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In-Branch Cash Handling Process/Preconditions and Steps to Extant Instructions Let’s look at the preconditions for handling cash under extant instructions. Under the revised procedure, the revision is levied to few balance branches and currency chests of SBI. According to revision procedure, the overnight cash is restricted to Rupees One Lac and stored in 14 inch by 11 inch by 4 inch aluminium cash boxes with lock and key.

Preconditions for extant instructions established under revised process shall: •

Introduced at Hand Balance branches only and Currency Chest branches

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Shall allot overnight cash retention limit to the SWO or Assistant (Cash) up to a limit of Rs. 1 lac in the system, before the revised process is introduced

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Introduce the revised process, individual branches must be identified by controllers and a communication sent to BOG at CDC Belapur for setting BPR Cash parameters for that Branch

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Each SWO/Assistant (Cash) will be Provided with aluminium cash box measuring 14 inch x 11 inch x 4 inch, as per approved design and specifications (which shall be advised separately at the time of introduction of the revised' process) along with both the keys of the lock of the cash box. They shall be appropriately marked for identifications purpose.



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In-Branch Cash Handling Process/Cash Handling Guidelines Overall distribution process involves with the cash handling at workplace during: Beginning of the Day, End of the Day, Delivery of Cash Boxes, Custody of Cash and Retention of Keys.

Overall process involved with the cash handling at workplace during: • • • • •

Beginning of the Day End of the Day Delivery of Cash Boxes Custody of Cash Retention of Keys

Beginning of Day • Cash Officer or CIC shall arrange to take out the Cash Boxes and hand over to the SWO or cashier and the respective boxes allotted to them. •

All entry shall be made in the Cash Box Receipt or Delivery Register to record handing over of Cash Boxes to SWO or Assistant(Cash).

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Entries in the register shall be signed by SWO or Assistant (Cash).

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The SWO or Assistant (Cash) shall acknowledge receipt in the system and begin the day’s activities the after.

End of the Day • The SWO or Assistant (Cash) shall count or sort the notes and prepare packets as per extant instructions. The SWO or Assistant (Cash) shall not keep any soiled or mutilated notes in the cash box overnight. Each SWO or Assistant (Cash) shall tally his physical cash on hand^ denomination-wise, with the system, if the cash held exceeds the day-end retention limit fixed for him, the SWO or Assistant (Cash) shall not close his cash drawer in the system He shall hand over surplus cash to CO or CIC or to another SWO or Assistant (Cash), as directed by the CO or CIC. All transfer of physical cash shall, be simultaneously inputted in his Cash Drawer in the system. •

The CO or CIC or the other SWO or Assistant (Cash) shall verify the cash received for correctness and acknowledge receipt of the same in The system. The SWO or Assistant (Cash) shall retain the remaining cash balance in his Cash Box.

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In case any of the SWO or Assistant (Cash) is holding insufficient cash (i.e. cash below his overnight retention limit), the CO or CIC may deliver additional cash to the (SWO or Assistant (Cash), as is felt necessary Jo begin the next day's work, before he closes his cash drawer. However, it must be ensured that the cash held overnight, by the SWO or Assistant (Cash), should not exceed the overnight retention limit.

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CO or CIC shall reconcile his Cash Drawer and the physical cash and after passing necessary entries, transfer cash balance of his Cash Drawer to the Vault Teller (Accountant or Service Manager). Joint custodian (Accountant or Service Manager) snail verify physical cash handed over to him by CO or ClC and ensure that the details tally with the details of the cash transferred to him by CO or C1C through the system (Vault Teller).

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Accountant/Joint Custodian Service Manager shall accept the cash in the system. Details of packets to be turned in the cash safe are entered in the Vault Register and duly authenticated by CO or CIC and Joint Custodian. • If SWO or Assistant (Cash) proceeds on any type of leave with prior approval, he shall transfer the entire cash to the CO or C1C. It shall be the responsibility of the SWO or Assistant (Cash) to transfer the cash to CO or CIC. CO or CIC shall take over the cash and acknowledge the same in the system for having received the cash and deal with it in the manner stated above. Delivery of Cash Boxes • At the close of business each day, the SWO or Assistant (Cash) shall retain the cash with him (subject to the overnight cash retention limit fixed for this purpose). •

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The SWO or Assistant (Cash) shall keep the cash in the Cash Box provided to him, which shall be duly locked by him. Each SWO or Assistant(Cash) shall be responsible for contents of their respective Cash Box and the contents should tally with the details appearing against his or her name in the system. “

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The locked Cash Boxes shall be deposited with the CO or CIC for safe keeping in the strong room or vault under joint custody. CO or ClC shall verify the Cash Box to ensure that it is properly locked and not tampered with Necessary entry shall be made in the Cash Box Receipt and Delivery Register to record deposit of Cash Box by SWO or Assistant(Cash). Entry in the register shall be signed by both the CO or CIC and the Accountant or Service Manager.

Cash Boxes shall be deposited in the Strong Room or Safe in the presence of the Joint Custodian. The Joint Custodians shall ensure that the cash boxes relating to all cash drawers showing closing cash balances are received by them and actually lodged in the strong room or safe after proper entry in the Cash Box. Register. The cash held by each SWO or cashier shall form part of branch cash balance. Custody of Cash • It should be noted that although the Cash Box shall remain overnight in the joint custody of CO or CIC and Accountant or Service Manager, the cash in the drawer shall continue to remain in the single custody of SW& or Assistant (Cash) as the key of Cash Box shall remain with the SWO or Assistant (Cash). Retention of Keys The original keys of the Cash Box must always be in the possession of the SWO or Assistant (Cash). The duplicates of the keys of the cash box or drawer shall be lodged, in a packet duly sealed by the Assistant (Cash), in the joint custody of the two officials in joint charge of cash, valuables, etc. at the Branch along with the keys of the other Assistants‘ (Cash). •

A separate section in the key register shall be opened for the purpose and the details of the keys shall be entered on the fines as is in vogue for the joint ^custodians' keys. The circumstances for using duplicate keys for opening the Cash Box shall be as under: If SWO or Assistant(Cash) remains on leave, without prior approval If SWO or Assistant(Cash) proceeds on" sick leave, without handing over the Cash and his absence is indeterminate • Any other unforeseen and emergent circumstances. The procedure to be followed for using duplicate keys for opening the Cash Box under the circumstances mentioned in para (iii) above shall be as under: • •

Duplicate key of the Cash Box to be, opened shall be withdrawn as per the or .extant instructions. The Cash Box shall be opened with the duplicate key, recording the circumstances under which the duplicate key was used.

CO or CIC shall invoke the 'Open' option in the system and note the system cash position of the Cash Box. The Cash Box shall be opened and physical cash shall be counted by CO or CIC in the presence of Joint Custodian and one SWC Assistant (Cash), who shall act as a witness. The physical cash shall be tallied with the system cash, both for amount and denominations. In case of any difference (short or excess) in physical cash and system cash the same shall be adjusted or recovered as per existing instructions. After verification of the Cash Box, CO or CIC shall transfer the system balance of Cash Box to his Cash balance. The* physical cash shall also be transferred to CO or CIC's cash balance.


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In-Branch Cash Handling Process/Cash Verification Process Cash verification process differs by their guidelines for different types of branches are shown on the screen. The regular branches need to conduct: Surprise verification of cash balances held by SWO or Cash Assistant The system generates a random list of cash boxes required to be verified daily either at the beginning or end of day Unless the cash box is verified in the system by the cash officer, the concern SWO/Asst (Cash) should not be able to commence transactions in the morning In case of any difference in physical cash and system cash the same shall be adjusted/recorded from the SWO/Asst. (Cash) concerned. Cash verification is conducted by CO/CIC every Friday. SWO or Cash Assistant is authorized to undertake transfer of cash in case of excess of shortage. Cash boxes is marked for verification if SWO or Cash Assistant is not present on the day of verification and shall continue to be marked for verification on subsequent days till the time it is verified and marked in the system as verified. The 7-Day Working branches follows usual procedure of: Generating random list of tellers followed by the CO or CIC verification. In case, the teller whose cash is to be checked is absent, he is to be marked as absent in the cash Verification Menu and the boxes are marked as “for verification” .

Regular Branches The regular branches need to conduct: • Surprise verification of cash balances held by SWO or Cash Assistant • The system generates a random list of cash boxes required to be verified daily either at the beginning or end of day • Unless the cash box is verified in the system by the cash officer, the concern SWO/Asst (Cash) should not be able to commence transactions in the morning • In case of any difference in physical cash and system cash the same shall be adjusted/recorded from the SWO/Asst. (Cash) concerned. • Cash verification is conducted by CO/CIC every Friday • SWO or Cash Assistant is authorized to undertake transfer of cash in case of excess of shortage • Cash boxes is marked for verification if SWO or Cash Assistant is not present on the day of verification and shall continue to be marked for verification on subsequent days till the time it is verified and marked in the system as verified.

7-Day Working Branches The 7-Day Working branches follows usual procedure of: • •

Generating random list of tellers followed by the CO or CIC verification In case, the teller whose cash is to be checked is absent, he is to be marked as absent in the cash Verification Menu and the boxes are marked as “for verification”

Sunday Working Branches If the branch is open on Sunday and observes holiday on some day of the week, usual procedure of generating random number of tellers for cash verification shall be followed on Sunday. 8 A.M. to 8 P.M. Working Branches Usual procedure of generating tellers is followed by the CO or CIC. Cash verification shall be: • •

Applicable only for normal (day) shift For morning or evening shifts, as the cash is handed over to the Official -in -Charge, separate verification through random list is not required



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Cash Handling Procedures

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