Cash Mgmt in Bank of India

A PROJECT REPORT ON “CASH MANAGEMENT” IN BANK OF INDIA

SUBMITTED BY

Miss. DIPTI.V.DALVI M.M.S (SEMESTER II)

Yerala Medical Trust & Research Center’s Y.M.T COLLEGE OF MANAGEMENT P.G. INSTITUTE INSTITUTIONAL AREA SECTOR - 4 KHARGHAR, NAVI MUMBAI - 410210

ACADEMIC YEAR 2007-2008

UNIVERSITY OF MUMBAI

Acknowledgement

It is my proud privilege to show my gratitude to my project guide who is also the Chief Manager of Bank of India (SME Department) Mr.S.Venkatsubramaniyan for all his valuable guidance and encouragement that helped me to complete this project successfully and in time. I sincerely thank from the bottom of my heart Mr. B.B Senapati Assistant General Manager of SME Department who has given me an opportunity to study Cash Management in his department. I cannot ignore the help, which I got from Mr.M.V.Gokhale, Relationship Manager, C&IC Dept Head Office of BOI. Also I thank the entire SME Department Head Office and other staff members of The Bank of India Head Office, Mumbai for giving me a bagful of information pertaining to the topic. In addition to the co-operation extended by Mr. S.Ravindranath DGM, BPR Department. All of them guided and explained me the concepts of Cash Management in spite of their busy schedule they were always broad-minded in helping me with valuable tips pertaining to the subject.

The support from the college and department is always crucial in completing the project. As well as the unparallel support rendered by our beloved faculties.

Ultimately I would thank my friends who supported me and co-operated with me. I have received a valuable support from them and for that I thank them again.


DECLARATION

I, Miss. DIPTI VIJAY DALVI , MMS (Semester-II), hereby declare that I have completed the project report on “CASH MANAGEMENT IN BANK OF INDIA ” in the academic year 2007-2008. The information submitted is true and original to the best of my knowledge.

Ms. DIPTI V DALVI


CERTIFICATE This is to certify that

Miss. DIPTI VIJAY DALVI

student of

M.M.S (Semester-II) has completed the project report on “CASH MANAGEMENT BY BANK OF INDIA” in the academic year 2007-2008. This information submitted is the true and original.

Project Guide

Mr.Venkatsubramaniyan Mr.Venkatsubramaniyan

Mr. B.B.Senapati

Chief Manager

AGM

SME Department

SME Department Head

Head Office (BKC)

Head Office (BKC)

SR NO

TOPIC

PAGE NO

1

Bank Profile

1-7

2

Introduction of cash management

8-10

3

Cash Management Services-Indian Scenario

4

Framework of CMS

13

5

Cash Management Process

14

6

Product and services offered by various banks

15-40

7

Benefits and features of CMS

41-46

8

Conclusions

47-51

9

Bibliography

52

11-12

100 YEARS OF FULFILLING DREAMS

Relationships beyond banking

Bank Of India STAR HOUSE (BKC)

Bank Profile History of Bank Of India Bank of India was founded on 7th September 1906 by a group of eminent businessmen from Mumbai. The Bank was under private ownership and control till July 1969 when it was nationalized along with 13 other banks. Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50 employees, the Bank has made a rapid growth over the years and blossomed into a mighty institution with a strong national presence and sizable international operations. In business volume, the Bank occupies a premier position among the nationalized banks. The Bank has 2644 branches in India spread over all states/ union territories including 93 specialized branches. These branches are controlled through 48 Zonal Offices . There are 24 branches/ offices (including three representative offices) abroad. The Bank came out with its maiden public issue in 1997. Total number of shareholders as on 30/09/2006 is 2,25,704. While firmly adhering to a policy of prudence and caution, the Bank has been in the forefront of introducing various innovative services and systems. Business has been conducted with the

1

successful blend of traditional values and ethics and the most modern infrastructure. The Bank has been the first among the nationalized banks to establish a fully computerized branch and ATM facility at the Mahalaxmi Branch at Mumbai way back in 1989. The Bank is also a Founder Member of SWIFT in India. It pioneered the introduction of the Health Code System in 1982, for evaluating/ rating its credit portfolio. The Bank's association with the capital market goes back to 1921 when it entered into an agreement with the Bombay Stock Exchange (BSE) to manage the BSE Clearing House. It is an association that

has blossomed into a joint venture with BSE, called the BOI Shareholding

Ltd. to extend depository services to the stock broking community. Bank of India was the first Indian Bank to open a branch outside the country, at London, in 1946, and also the first to open a branch in Europe, Paris in 1974.The Bank has sizable presence abroad, with a network of 23 branches (including three representative office)at key banking and financial centers viz. London, Newyork,Paris,Tokyo,Hong-Kong,and Singapore. The international business accounts for around 20.10% of Bank's total business.

The Bank has a strong position in financing foreign trade. Over 270 branches provide export credit. The expertise in this area has enabled the Bank to achieve a leading position in providing export credit in certain areas like diamond export. The Bank has identified specialized target groups to develop core advantage for future growth. The Bank, has specialized branches comprising of Corporate Banking Branches to undertake very large credit business, Overseas Branches specializing in Foreign Exchange Business, NRI Branches which specially cater to the requirements of Non-Resident Indians, Capital Market Branches which undertake all activities relating to capital market such as collection of applications, processing of refund orders, Merchant Banking etc. Commercial & Personal Banking Branches cater to the requirements of high net worth customers. Apart from this, the Bank also has specialized Branches for Asset Recovery, Small Scale Industries, Hi-tech Agriculture Finance, Lease Finance and Treasury. To effectively meet the ever-growing challenges and competition, the Bank has made a good headway in bringing about technological up gradation. MIS and critical functions of controlling offices have been computerized. At present, the operations at about 2618 branches are totally computerized. 26 branches operate in partially computerized mode besides these 1019 branches and 31 extension counters are migrated to Core Banking Solution. New

facilities such as, Telebanking, ATM & Signature Retrieval Systems have been introduced in a progressing manner to add value to services. Telebanking facilities with Fax on Demand

2

facility, Remote Access Terminals for Corporate Customers are now available at many branches. The Bank has installed ATMs in Mumbai and other centres in the country. The Bank is a member of the RBI's VSAT Network and has installed 39 VSATs linking strategic branches/offices. The Bank is making a paradigm shift from branch automation to bank automation and is in the process of implementing a Multi-Branch Banking Project, that facilitates City-wise Connectivity of Computerized Branches. The Bank is in the process of installing BOINET, a Wide Area Network for providing a inter- and intra-city connectivity, as a part of enhancing its decision support system. The Bank's corporate personality and philosophy are fully reflected in the emblem, which is a five-pronged Star -- a harmonious blend of traditional and the functional. The elongated prong pointing upwards, conveys the Bank's drive to achieve ascending goals. The Star is a beacon and guide to those in need of direction

MISSION & VISION Our Mission

"To provide superior, proactive banking services to niche markets globally, while providing cost-effective, responsive services to others in our role as a development bank, and in so doing, meet the requirements of our stakeholders". Our Vision

"To become the bank of choice for corporate, medium businesses and upmarket retail customers and to provide cost effective developmental banking for small business,mass market and rural markets"

3

HIGHLIGHTS FOR QUARTER ENDED MARCH 2007

(RS. CR.) 447

Net Profit increased Profit increased to Rs.447 crores from Rs.254 crores for Quarter March 2006, 254

growth of 76%. Q R . M A R .0 6

Q R . M A R .0 7

( R S . C R .) 364

215

Q R . M A R .0 6

Q R . M A R .0 7

Domestic Net

Profit improved Profit improved

to

Rs.364 crores from Rs.215 crores for Quarter March 2006, growth of 70%.

(RS. CR.) 895

Operating Profit increased by 42% to Rs.895 crores from Rs.630 crores for Quarter

630

March 2006, Q R . M A R .0 6

Q R . M A R .0 7

BANK’S NEW INITIATIVES

ACQUISITION  The Bank has finalised acquiring 76% stake in P T Bank Swadesi Tbk, a listed Bank in

Indonesia and the formalities to take over the management of the said Bank is in final stages.

4

JOINT VENTURE  Bank entered into an arrangement with Dai-Ichi Mutual Life Insurance Company, second

largest Japanese company in the field of Life Insurance (sixth largest in the world) and Union Bank of India for setting up a Joint Venture Life Insurance Company with capital stake of 51%, 26%, and 23% respectively. Formalities for incorporation of JV Company are in advanced stage. BRANCH EXPANSION  Bank opened 63 new branches and converted 41 Extension counters to full-fledged

branches. Total number of domestic outlets is 2845. INTERNATIONAL OPERATIONS  With the opening of a branch at Antwerp (Belgium), number of overseas offices stand at

25 spread in 13 countries. Shenzen Representative Office in China was upgraded as a Branch in March 2007. A new Representative Office was opened in Beijing Beijing (China).  Bank has taken over management of Almana Exchange House in Doha Qatar.  Arrangements with Bank Azizi, Kabul in Afghanistan made for money remittance to

India.  Bank is holding approval of Reserve Bank of India for setting up •

Subsidiaries in Tanzania and Canada,

•

Branches in DIFC (Dubai) and Dhaka (Bangladesh), and

•

Representative Offices in Dubai, Johannesburg (South Africa) and Doha (Qatar).

 Bank’s International Operations contribute 20% of Bank’s total Business.

CORPORATE SOCIAL RESPONSIBILITY  Bank as part of its centenary celebrations promoted a Trust, ‘ABHAY’, to offer credit

counseling services, free of cost, with the following objectives:  Advising on gaining access to structured financial system including banking  Counseling people who are struggling to meet the repayment obligations and helping debt

resolution  Helping in rehabilitation of borrowers in distress  Bank has pioneered a Mega Project for Integrated Development of 129 villages in 78

Districts and 17 States covering 60,000 households, identified for holistic development and showcased as Model Villages. Villages. The Bank has so far far extended financial financial assistance over over Rs. 150 crores to the rural rural households in the identified villages. An evaluation study conducted conducted

5

in select villages has revealed that there is 20-25% improvement in the household income after the implementation of the scheme.

BACK OFFICE SERVICES OF BANK  Delegation of powers

Bank will ensure that authorities at various levels will be empowered with adequate powers to take prompt decisions with regard to sanctioning of loans and advances, issuance of guarantees, settlement of claims of deceased depositors, issuance of duplicate demand drafts, deposit receipts, other claims and administrative matters concerning customer service.

 Reorganisation

In order to facilitate quick decision-making and to suit the changing requirements, the organisational structure has been revamped. More specialised branches like Personal Banking Branches, Corporate Branches, Small Scale Industries Branches, Hitech Agricultural Finance Branches, Housing Finance Branches, Capital Market Branches, Overseas and NRI Branches have been opened at important centers.

 Transparency and secrecy

Bank will ensure that there would be transparency in all business operations at all stages. Customers will be educated about the various products and facilities available. A uniform strategy will always be adopted to eliminate any possibility of discrimination on caste, creed and religion or economic status of the clients. Secrecy norms will be simultaneously observed observed to protect the interests of our customers.

 Surveys by outside agencies

All steps will be taken by bank to improve Customer Service and enhance customer satisfaction. Towards this end, bank services will be got evaluated through outside reputed marketing agencies with a view to assessing the quality of services extended at the branches and to ensure that bank customer service match the expectations of bank’s various clientele.

6

7

Cash Management

8

Introduction of Cash Management

Manage your cash flow and liquidity-Effectively and Efficiently

For any organization, cash is the lifeblood that keeps the business going. That is why, increasingly, Cash Management has been gaining importance with organizations that view the services as a crucial part of their corporate strategies.

Cash Management is Efficient Management of cash (Outflows/Inflows) to improve liquidity and returns while implementing adequate control and managing risks. Cash Management can generally be defined as the efficient utilization of cash through coordinated management of payments, collections and cash balances. The objectives are to reduce costs, enhance control and optimize returns as well as reduce the inventory holdings. Traditionally, cash management involved personalized services offered by the bank's staff to the company's treasurer via mails, telephone, calls, faxes etc or visits to the bank initiated transactions. But with the advent of computer technology, cash management services have been automated to a large extent. Many banks now allow their corporate customers to perform online inquiries and transaction services (payment, collection and liquidity management) through PC or Internet via a web interface. With such a system in place, a company can perform most of the cash management functions themselves without relying on a bank staff to act as the executor of their requests.

9

Cash Management helps the organization in: Properly timing the disbursements.

Some payments must be made on a specified or legal date, such as Social Security payments. For such payments, there is no cash management decision. For other payments, such as vendor payments, discretion in timing is possible. Government vendors face the same cash management management needs as the Government. They want to accelerate collections. One way vendors can do this is to offer discount terms for timely payment for goods sold. Eliminating idle cash balances.

Every Rupee held as cash rather than used to augment revenues or decrease expenditures represents a lost opportunity. Funds that are not needed to cover expected transactions can be used to buy back outstanding debt (and cease a flow of funds out of the Treasury for interest payments) or can be invested to generate a flow of funds into the Treasury’s account. Minimizing idle cash balances requires accurate information about expected receipts and likely disbursements. disbursements. Ensuring timely deposit of collections.

Having funds in-hand is better than having accounts receivable. The cash is easier to convert immediately into value or goods. A receivable, an item to be converted in the future, often is subject to a transaction delay or a depreciation of value. Once funds are due to the Government, they should be converted to cash-in-hand immediately and deposited in the Treasury's account as soon as possible. Monitoring exposure and reducing risks

The Banks have the responsibility to use timely, reliable, and comprehensive financial information and systems. To that end, banks encourage to improve their cash management practices by using electronic funds transfer (EFT) whenever cost effective, practicable, and consistent with statutory authority. So there is a need to monitor the exposure and reduce the risk.

10

Cash Management Services - Indian Scenario

The need for cash management aroused two decades ago in the mid eighties when the Indian corporates were facing various problems like the uncertainty as to when funds would be made available to them, the problem of long transit period between banking cheques and receiving funds, long period of administrative administrative work in banking cheques and tracking tracking progress and reconciliation problems regarding uncertainty of inflows and lack of d etails on each credit to the account. It is important to review the Indian scenario in this regard. As we are all aware, that the banks’ desire for funds has lost because of the slowdown. Despite the offer of very soft terms corporates are refusing to borrow, while bank deposits have been ballooning. Compelled to service the burgeoning liabilities, but unable to lend hastily and allow their non-performing assets (NPAs) to grow, bankers are forced to compete for the handful of safe bets among their borrowers. Banks chose to use the opportunity to refocus their activities, seeking clearly defined identities in terms of services and customer segments. Most of them concentrated on cleaning up their books by peeling down their NPAs. All of them are attempting for freezing of costs, improving improving operational operational efficiencies, and boosting productivity. The strategy of the banks, which are performing well, is to use fee-based services to maintain their earnings growth. With interest rates falling, non-interest income is, unsurprisingly, the fastest-growing component of the banks’ total income. Fee-based activities will complement though not substitute the core business of lending. With rising interest rates too, Corporate and others are not willing to borrow, fee-based services play again an active role in boosting a Bank’s total income. It is gratifying to note that a number of banks in India are offering wide-ranging cash management services to their corporate clients. All the three categories of banks viz., nationalized banks, private banks, and foreign banks operating in India are active in the cash management segment. SBI, PNB, Corporation, ICICI Bank, HDFC Bank, Centurion Bank of Punjab and ING Vysya Bank, are some of the active Indian banks in this segment. Citi Bank, Standard Chartered Bank, ABN Amro Bank, BNP Paribus, and HSBC are the foreign banks operating in India, which are prominent among the cash management services providers. Indian banks are offering services like electronic funds transfer services, provision of cash related MIS reports, cash pooling services, collection services, debit transfer services, guaranteed credit arrangements, sweep products, tax payment services, receivables and payables management. Foreign banks operating in India are offering regional and global treasury management services, liquidity management services, card services, electronic banking services, ecommerce solutions, account management services, collection management services, cash delivery

11

management services and investment solutions. Banks realized that if they do not offer the services required by corporate customers it would result in a net loss of clientele, returns and goodwill. Banks in India need to continuously monitor international trends in innovations taking place in providing cash management services and swiftly offer similar services to their corporate clients. The Reserve Bank of India is taking a number of initiatives, which has facilitated facilitated the active involvement of commercial banks in the sophisticated cash management segment. One of the prerequisites is to ensure faster and reliable mobility of funds in a country and to have an efficient payment system. Considering the importance of a robust payment system to the economy, the RBI has been taking numerous measures since mid Eighties to strengthen the payments mechanism in the country. Introduction of computerized settlement of clearing transactions, use of Magnetic Ink Character Recognition technology, provision of inter-city inter-city clearing facilities and high value clearing facilities, Electronic Electronic Clearing Service Scheme , Electronic Electronic Funds Transfer scheme, Delivery vs. Payment for Government securities transactions, setting setting up of Indian Financial Network are some of the significant initiatives which highlight the seriousness with which the Reserve Bank has taken up the reforms in Payment systems. Introduction of a Centralized Funds Management System , Securities Services System , Real Time Time Gross Settlement System System and Structured Financial Messaging System are on the top priority items of the agenda to transform the existing existing systems into a state-of-the-art state-of-the-art payment infrastructure in India by the Reserve Bank. The current vision envisaged for the payment systems reforms is one, which contemplates linking up of at least all important bank branches with the domestic payment systems network thereby facilitating cross border connectivity. With the help of the systems already put in place in India and which are coming into being, both banks and corporates can exercise effective control over the cash management.

12

Framework for effective Cash Management Services

Companies seek to achieve synergies by implementing a simplified account structure and through rationalizing the number of banks used. In advising companies on the optimal account structure, it is important to bear in mind the nature of company’s funds flows. The aim is to maximize control, efficiency and returns. Banks need to work with its clients to ensure that arrangements are in place to assist them in maximizing returns from an otherwise idle fund. Experience of local banking regulations and market practices can ensure client’s preferred structure. Greater challenges lie in tying together multiple accounts into a cohesive structure to manage liquidity efficiently, often across numerous time zones and currencies. To meet the needs of international corporate and institutional clients, banks should have a wide range of customized products and services. Often companies should maintain multiple banking relationships for their cash management. Movement of funds between accounts across banks is generally inefficient, costly and time-consuming. Cash status is not readily available, often causing unnecessary usage of overdrafts or return of issued checks. Untimely payments can also result in penalty and other charges. With multiple accounts, account reconciliation is usually difficult to be kept current, making control virtually impossible. So for effective cash management there is a need for multiple banking relationships which is often due to the lack of comprehensive service offered by a bank, the difficulty in accessing particular services of a bank, or the varying degree of efficiency across services of a bank. Many companies, including medium-sized enterprises, are now implementing Enterprise Resource Planning (ERP) systems to help manage the accounting process and gain better control of their cash management. However, what several have found is that while internal processes are more automated, the number of staff required to support their cash management operations has not reduced. Without a comprehensive cash management solution from a bank, business finds it difficult to reach the optimal operational and working capital efficiency level. Corporate treasurers cannot afford to spend time worrying about routine payments and collections. So banks have to help clients to successfully handle the large volumes of corporate client payments. So in today's competitive market place, effectively managing cash flow can make the difference between success and failure. And so the Banks offer a full range of receivables and payment services to meet the complex cash management needs. Payments received from their buyers and made to their suppliers are efficiently processed to optimize their cash flow position and to ensure the effective management of their business' operating funds. The flow of receivables and payables can also be seen through the web solution.

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CASH MANAGEMENT PROCESS

COLLECTIONS

PAYMENTS

Collection of Cheques

Customer payment Instruction

Clearing and Settlement

Debit Customer Concentration A/C

Funds Transfer to Concentration A/C

Internal/External Funds Transfer

Investment Management

Delivery/Clearing of instrument

Reconciliation Reporting

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and

Cash Management Services

The menu of cash management management services offered by banks is indeed diverse and tempting. The services broadly fall under collection services, disbursement disbursement services, information and control services, services related to electronic data interchange commercial web banking services, sweep services, fraud detection solutions, global trade solutions and investment solutions. Collection Services accelerate receipt of payments from sales and quickly turn them into usable cash in accounts. Disbursement Services make efficient payments by reducing or eliminating idle balances in company’s accounts. Information and Control Services receive the data and provide the management capability needed to monitor company cash picture, control costs, reconcile and audit bank accounts, and reduce exposure to fraud. Financial Electronic Data Interchange is a computerized exchange of payments between a company’s business and its customers and vendors. Commercial Web Banking Services give a wide range of services from any Internet connection, which can help streamline banking process quickly and efficiently. Sweep Services maintain liquidity and increase earnings without having to actively monitor accounts and move money in and out of them. Information reporting solutions assist companies, which need to receive account data that is timely, precise, and easy to access and interested in initiating online transactions. Investment solutions help to minimize excess balances and maximize return on available funds.

Product and services offered by Banks

Nationalized Banks

Private Banks

Foreign Banks

Bank of India

ICICI Bank

Citi Bank

Corporation Bank

HDFC Bank

HSBC Bank

Canara Bank

UTI Bank

Standard Chartered

15

Product and services of Nationalized Banks

BANK OF INDIA Collection of cheques •

Local Cheques & Upcountry cheques at places where Bank’s branches exist.

•

Upcountry cheques at places where Bank’s branches do not exist.

•

Instant credit as per arrangement on any day before realization.

•

Customized MIS,including outstanding entries at any time.

•

Pooling is possible ,including multiple pooling.

•

Single point reference for any d etail/data.

•

Courier Pick-Up from Customer’s Collections. Post Dated Cheques Collection:

•

Post –dated cheques (PDC’s) vaulted, dispatched to drawee center three days in advance collected on due dates and credited to account on due date or next day.

•

Tracking of customer’s invoices with PDC’s possible.

•

Auto Reconciliation.

•

Unpaid/Returned PDC’s also properly tracked and accounted.

•

All other advantages of collections. Payments

•

Centralized or Remote printing of payments (Cheques/Pay Orders/DDs/IWs/DWs/Ros-with facsimile signatures)

•

Printing of Cheques on continuous stationery.

•

Interface with RTGS/NEFT/ECS.(Linkage to e-modes)

Correspondent Banking •

Issue of DDs by branches*of Correspondent Correspondent Bank.

•

Funding before issue/upon payment.

•

Auto Reconciliation.

(* On places where Bank’s CBS branches situate or even places where Bank’s branches not suitable-thro similar correspondent /courier arrangement)

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General: •

Customized MIS of data in whichever way desired.

•

Interface between Finacle and CMS Software.

Corporation Bank

Banks has been always aiming to create values for its customers. Looking beyond traditional banking, the Bank introduced an array of other products and services to different customer segments. Cash Management Services is one such solution offered by the Bank to the Corporate customers. Every organization has receivables to collect from its dealers/ depots/ customers. Every revenue collected by the organization gets paid in one form or the other. Collection And Payment Services (CAPS) provides customized solutions to corporates' needs in liquidity management. Fast Collection Service

Fast Collection Service (FCS) is the premier product of the Bank under CAPS range of products. FCS envisages elimination of one leg of movement of cheques from drawer to beneficiary’s place and travel back to speed up the process. The corporates can access the collections effected at 301 LOCATIONS (OPERATING CENTRES) across the country covered under the arrangement within 24 to 48 hours at a location of corporate’s choice. Corp Clear Services [ CCS ]

CCS ensures quick collection of outstation cheques. The product enables assured credit on predetermined day of corporate’s choice, in respect of upcountry cheques deposited with specialized CAPS branches irrespective of the day of realization. The need-based product range under this segment includes Corp Clear Services

- 8 th* Day

Corp Express Services

- 4 * Day

Corp Instant Services

- Next Day

th

(* for cheques drawn on locations where CorpBank has branches)

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Corp Collect Service [ CCT]

Corporates apprehensive of cheque realisations may use their Corp Collect Service that operates on “Realise and Pay” basis. The Service is extended for both within and outside network locations. All the benefits of other corp. clear services do come along with Corp Collect Service. Corp Comfort Services

Waiting unduly and without certainty as to realization of outstation cheques would hamper the business cycles. With an assured credit on 8th day in respect of outstation cheques falling outside network, CorpComfort Service proves an effective blend of CorpClear Service and CorpInstant Service. Corp Remit Services

CorpRemit Service meets the corporates’ wholesale payment requirements such as statutory payments, payments to vendors/suppliers, banking requirements, inter branch transfers etc., Corporates need just to hand over the payout instructions file along with funding cheque to CAPS branch. Further Servicing will be taken over by the CAPS outfit. One of the salient features of CorpRemit is that corporates get confirmation on payout effected. Remittances can also be sent through RTGS to over 25000 bank branches across the country. Corp Pay Services

Corp Pay Service facilitates corporates’ to make retail payments very effectively. Some of the payouts that can be very effectively and conveniently handled includes disbursal of incentives, equity and debt servicing to the satisfaction of investors, salary and wages payouts etc. All that corporates need to do is to furnish the payout details in magnetic media/mail and the funding therefor. Rest is only client satisfaction. Value added service such as dispatch of payout instrument to beneficiary is also made available. All these are available at a very competitive price exclusively for corporates. Payment Processing Centre

Continuing the initiatives in re-engineering the Cash Management Process, Payment Processing Centre was set up to replicate the success achieved in collections in payments too. At PPC, capabilities are built to print exceptionally large number of Demand Drafts with advise. Value added service such as dispatch of payout instruments to beneficiaries is being undertaken. PDC Hub

Considering the huge market available and market demand for collection of PDC cheques, PDC Hub was setup exclusively for handling bulk PDC cheques received from Finance Companies, Banks etc towards repayments loans extended by them.

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CorpNet - an Internet banking facility

Symbolizing the commitment to deliver value added services to clients using CAPS with continuous improvements year after year, the Bank has made the use of the state of the art technology.

CorpNet an internet banking facility is now available to all corporates using CAPS for their cash management needs. CorpNet optimizes the efficiency of co rporates cash management.

CorpNet provides for a host of advantages to corporates using CAPS. Convenience, information on line, data modulation, cash inflow forecast, outstanding position of instruments sent for collection are some of these distinct advantages coming without any extra cost. A very high level of security features are incorporated to afford greater degree of client comfort using this technology driven value addition. Correspondent Banking Arrangement

Corporation Bank has developed structured products exclusively to the agency services requirements of clients of correspondent banks under the umbrella of Correspondent Banking Arrangements. The product can be used by top rated corporate houses within the country for effecting cash disbursal across country. Speed Remittance :

Under this arrangement, the NRIs can send remittances through exchange houses across globe. The exchange houses send the details to our Nodal branch (PPC Branch) at Bangalore who in turn credit the same to the beneficiaries accounts maintained in any of our branches. In case the beneficiary account is not held in our Bank, a pay order can be issued at the destination, which can be collected by the beneficiary. Payment Gateway :

The Division, with futuristic view in mind where web trade is taking shape gradually in India especially amongst urban population, has decided to offer payment gateway solutions to corporate having its own trading sites on Internet. The product envisages providing buyers having account with our Bank an opportunity to pay for the purchases made on the net. Through this product our corporate customer will get wider base for selling their products ECS payments / Collections:

The product envisages large volume, low value bulk collections and payments from various accounts at select ECS locations. The same can be handled through select specialized CAPS branches.

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CANARA BANK

CORPORATE CASH MANAGEMENT SERVICES (CCMS)

The speedier Corporates are, its easier for them to address the challenges of globalization. Corporate Cash Management Services (CCMS), an innovative service offered by Canara Bank for speedy collection of cheques and other instruments, places Corporates on a fastertrack. In more ways than one-such as definite funds flow, better cash management and deployment of funds, better monitoring of funds flow, optimum allocation of funds and effective planning of investment functions. WHAT IS CCMS: •

An

innovative

service

specifically

tailored

to

meet

the

requirements

of

Corporates/Business Corporates/Business houses/Partnership firms. •

Speedy collection of outstation cheques and other instruments.

•

Pooling of funds at designated centers.

•

More importantly, providing funds to the Corporates as per their need.

•

Customized MIS reports.

WHAT CANARA OFFER:

Under CCMS they offer the state of the art technology products. •

SUPERFAST SERVICE

- Local cheque collection services

•

FASTRACK SERVICE

- Upcountry cheque collection services

•

BULK COLLECTION SERVICE

- Bulk cheques collection services

Under 'SUPERFAST SERVICE', agents or offices of Corporates can deposit the cheques to be cleared in the local clearing and funds will be pooled at any pooling branch designated by the Corporates. Under 'FASTRACK SERVICE', agents or offices of Corporate can deposit the cheques drawn on outstation centers and proceeds will be pooled at any pooling branch designated by Corporate.

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Under 'BULK COLLECTION SERVICE', agents or offices of Corporate can deposit their bulk (large number) instruments of small value to be cleared in the local clearing and funds will be pooled at any pooling branch designated by the Corporate.

PRIVATE BANKS

ICICI BANK Collection Products Local Cheque Collections •

One of the largest network spanning ov er 488 locations.

•

Courier pick-up can be provided.

•

Process flow can be structured to suit the company’s requirements.

Upcountry Cheque Collections •

Coverage of over 3919 locations with tie-ups with correspondent banks

•

Capability to process cheques drawn on any location in India.

•

Assured credit given with funds pooled at any ICICI Bank location. Instrument level tracking of instruments to ensure faster realization.

Cash Collections •

Cash Collection from dealers and business associates on behalf of companies.

•

Cash pick-up facility in 28 locations.

•

Customized MIS for cash collection.

Payment Products

Anywhere Banking •

Cheques issued payable at par at various ICICI Bank locations .

•

Single account to be operated at any ICICI Bank branch for this facility.

•

Ideal for small value, large volume payments.

Fund Transfers •

Online transfer of funds between accounts maintained with any branch of ICICI Bank.

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Issue of Bulk Demand Drafts/ Pay orders •

Capability to issue Bulk Demand Drafts/Pay Orders on various ICICI Bank and correspondent bank locations

•

Capability to accept online requests from the customers

•

Capability to print beneficiary advice and despatch

•

Remote printing facility

•

Simple process with a low turnaround time and delivery .

Cheque Writing •

Cheques can be issued on behalf of companies

•

Capability of processing large volumes of cheques in a short turnaround time

•

Capability of printing facsimile signatures

•

Capability to print beneficiary advice and despatch

•

Ideal for bulk payments such as pension payments, gratuity payments.

At Par Payments •

Services can be availed for the ‘at par’ payment of dividend warrants /interest warrants/ refund order/redemption payments/brokerage payments

•

Simplified and streamlined procedures ensuring smooth process flow Online validation of instruments before payment ? Regular reconciliation statements provided by the bank

•

Covering over 100 major locations through own network (90%of the payments) Arrangement with correspondent banks thereby covering over 200 locations through instruments based payments

•

ECS credit facility at all available locations

UTI BANK Power Pay

The Power Pay products are designed to take maximum benefit of the Anywhere Banking through their large network of branches with centralized database . UTI Bank not only provides a clearing platform to process your payments but also have taken a step ahead by enabling you to outsource your cheque writing and other time-consuming and routine manual payment processes. The Centralized Payment system, connecting our entire branch network, is capable

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to process any type of payment - physical instrument (with or without facsimile signature) as well as electronic payment, bulk DD payment to vendors, salary payment or dividend/ interest payments of large corporate houses. .At Par Payment They issue At Par payable cheque book to their Current Account customers. Par facility enables the customer to maintain only one Account and issue cheques that would be payable at any UTI Bank location as a local cheque. Further Further each cheque, if needed, can be validated against an issue file before clearing the instrument to avoid fraudulent payment. Dividend/Interest Payment

They also undertake Bulk dividend and interest payment of corporate houses through an At Par facility. A central account,is maintained by the customers. The Bank, needs to be funded and they would ensure that the dividend/interest warrant presented at any UTI Bank location is cleared under respective local clearing. A validation process ensure that each warrant matches with the issue file before it is cleared and thereby avoids fraudulent payment. Power Remote-Remote DD Printing

To cater to the Corporate need for issuing bulk demand draft (DD) at various locations, they also offer our remote printing services where in the corporate fund a central account and the bank would print the DD at different UTI Bank locations and arrange for the dispatch of the same. Validation against the issue file keeps a check on fraudulent payment. Power Cheque-Customer Cheque Printing

Payment by Cheque still remains a popular payment method but involves time-consuming and laborious manual processes. Payments outsourcing to UTI’s Bank would enable the customer (corporate) to get the cheqeus and the cover note printed as per the payment file with the facsimile signatures of the authorized signatories of their company. The cheques can be printed centrally various remote locations as per your requirement. Electronic Clearing Service (ECS Credit)

ECS Credit is an electronic clearing system that facilitates paperless transaction through an offline system. UTI Bank facilitates facilitates ECS Credit at 46 locations. They accept the electronic file and then then arrange it to be uploaded at the RBI site for clearing. The funds gets debited from a centralized account and a detailed MIS about the transactions is provided to the c ustomer. Electronic Fund Transfer

EFT is an expeditious system of funds transfer across around 13000 branches of designated EFT bank at various locations. The bank offers this facility at all designated EFT Centres that are activated by

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the clearinghouses. Further, the bank has recently launched the EFT under Internet Banking known as "Power Transfer" which facilitates execution of fund transfer from anywhere through Internet.

NEFT

To establish an Electronic Funds Transfer System to facilitate an efficient, secure, economical, reliable and expeditious system of funds transfer and clearing in the banking sector throughout India. The customer willing to avail the NEFT facility offered by the bank shall submit an "NEFT Application Form" authorizing the sending bank to debit the sender's account and transfer funds to the beneficiary specified in the NEFT Application Form. The Beneficiary's account will be credited on the same day by crediting the specified account of the beneficiary or otherwise placing funds at the disposal of the beneficiary.

Collection Solutions : Power Collect

UTI’S Power Collect products are designed and developed to meet all of customers Collection needs Cheques, Cash and Electronic Transfer. Whether the corporate customer do business locally or throughout India, the bank can provide them with innovative, integrated cash management solutions solutions customized to their specific needs. UTI Bank's Cash Management Services is based on an extremely robust technology capable to cater to collection or payment requirements of: •

Large Corporate

•

Small and Medium Segment

•

Banks

•

NBFCs

•

Mutual Funds

•

Financial Intermediaries.

Power Speed-Local Cheque Collection UTI Bank Locations:

With their their large network network of branches, they are able to collect Customers locally payable cheques across the country. Their branches are e quipped to handle large volume of instruments and ensure that the funds are pooled as per the agreed timelines even before the same are realized.

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Non UTI’s Bank Locations

Currently they have Correspondent Banking arrangement with with multiple Banks to use their branch network. They

have also appointed their Co-coordinators Co-coordinators at various locations to facilitate the

Customers cheque pick-ups and ensure that they are immediately processed in the local clearing through a Correspondent Bank. Power Reach-Upcountry Cheque Collection : UTI Bank Locations

Their wide network of Branches ensures that most of Customers outstation Cheques would be covered within UTI Bank network. This would result in faster realization of funds. Further, funds can be pooled into the customers account even before the instruments are realized as per the arrangement. Non UTI Bank Location

To further further extend their

offering to process customers Outstation Cheques at Non UTI Bank

locations, they have also tied up with other banks to act as their Correspondent Bank and ensure that all of the customers Outstation Cheques are collected and immediately presented for clearing. clearing. Remote Locations

There could be a possibility wherein the location where the outstation cheque is drawn on is not covered under UTI’s extended network with correspondent banks. We still can offer you to collect the same and send it directly to the Drawee location for realization. Post Dated Cheque Collection

The Bank handles complete life cycle of the Post Dated Cheques till they are realized. All the activities like maintaining PDC inventories, retrieval and depositing the cheque for payment, re presentation of a bounced cheque and exception handling (stop payment etc.) are conducted by the Bank on behalf of its customers. Bulk Collections - Utility Bills or PDC’s Management

UTI Bank, offer solutions to meet Bulk Collection Requirements Requirements i.e., Post Dated Cheques (PDC’s), Bulk Collections through Cheque clearing or ECS debit services, etc. The Bank processes collections in a convenient and efficient way to avoid any reconciliation issues. They have required infrastructure, technology and capability to manage and handle PDC’s through our dedicated team that manages inventory of Cheques and timely presentation of the same, well supported with MIS ensuring maximum benefits to your organization.

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Utility Bill Collection :

UTI bank offers ease & convenience to its customers and utility subscribers in their bill payment by facilitating bill payments via online & offline modes for various utility service providers. The various popular channels offered by Bank for bill payment are: Online Mode:

Electronic Clearing Services (ECS) Collection through Internet and ATM for common customers Collection through Bill payment Kiosks Offline Mode:

Drop boxes at branches of UTI Bank/ Departmental Stores/Mobile Galleries, Onsite and Offsite ATM’s.Pick-up from customer service centers and other a uthorized outlets. Presently the bank has tied up with utility service providers like MTNL, BPL Mobile, AIRTEL, Reliance Energy, Mahanagar Gas, and others in the pipeline. The UTI bank's extensive network & prominently placed ATMs provide reach and access for customers to pay their bills. Bill payment service from UTI bank has a robust and proven technology to ensure reliability, security and performance and is aptly supported by a dedicated desk for efficient functioning and customer service. IPO Collections/Rights issue

Our wide network of Branches facilitates IPO collection across the country. Thus all the activities like Collecting the Application Forms and the Instrument, Processing the Instruments, Pooling the funds to the designated Account and Consolidated Report/MIS generation form part of our end to end solution for IPO Collection. ECS Debit

ECS Debit is an electronic clearing system that facilitates paperless debit transaction. UTI Bank facilitates ECS Debit on all the locations that are activated by the respective local clearing houses. They also accept the electronic file centrally for all the locations and arrange to upload it at the RBI site. The realized funds gets pooled to a centralized account.

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HDFC BANK Payment Services

HDFC Bank can structure a number of Payment products to suit the corporates needs. Payable at par chequebook

This product enable the corporate to issue local cheques at all HDFC Bank branch locations through one chequebook thereby eliminating the hassles of obtaining demand drafts or opening current account at each location.

At par facility for statutory payments

HDFC Bank branch locations - cover over 80% of shareholders / beneficiaries for most of their clients. Hence reconciliation, query resolution and pricing are superior. In order to provide adequate coverage, HDFC Bank also provides 100 locations of their correspondent bank. However, there is sustained reduction in dependence on correspondent bank due to continuously increasing branch network. The maximum limit on warrant can be mutually agreed upon - substantially reducing draft costs and efforts. It also has Ability to meet the customer’s requirement of large number of drafts in a short time at very competitive rates. An At Par chequebook is provided on branch locations, after revalidation thereby eliminating the need for Demand Drafts on branch locations. Pay Quick •

This product caters to the customers requirement of large volume volume of Demand Drafts/Pay orders at over 1617 HDFC Bank and correspondent bank locations.

•

It provides the Option to forward data in soft copy form (floppy) in a secure environment.

•

It gives Easy data transferability from the Corporate office to HDFC Bank.

•

Multiple payment instructions through one file.

•

Upload option for bulk issuance resulting in quick and error free delivery.

•

Payment instrument to include payment details.

•

Facility to mail to beneficiary directly. Also the committed courier turn around time enables you to make payments as close as possible to the payment date - resulting in additional cost savings.

•

Various value added MIS

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•

One Stop dedicated Service Desk at our Centralized Cash Management Operations Unit for prompt attention to your queries

•

Extensive coverage - over 500 locations.

•

Status of DD - paid / unpaid - can be provided on HDFC Bank location on a case-to-case basis.

Collection services

HDFC Bank’s Collection services are aimed at ensuring quick realization of local and outstation cheques and providing the funds in a central collection account. This enables the corporate to manage their funds flow position most effectively from a central location. This service can be availed with/without a current account with HDFC Bank. Local cheque collection

This product provides quick realization of local cheques deposited at the same location. This product is available at all locations of HDFC Bank ("SPEED") and over 292 locations of their correspondent Bank ("RAPID"). Outstation Cheque Collections

This product enables the customer to deposit outstation cheques drawn on any HDFC Bank location at any HDFC Bank location ("SPRINT"). Similarly, cheques drawn on over 928 locations of their correspondent bank ("EXPRESS") can be deposited at any HDFC Bank locations. Transfer Cheque Collection

This product provides quick realization of local/outstation cheques drawn on any branch of HDFC Bank Ltd. This product is available at all locations of HDFC Bank ("HDFCTRF") locations. Clean Collections •

Cheques drawn on any locations, which are not covered, by HDFC Bank or their correspondent bank are also collected at any of their locations and proceeds credited to Customers account as soon as credit is received by HDFC Bank.

HDFC Bank's comprehensive MIS includes:

•

Daily report of deposits made at various locations.

•

Location wise report

•

Credit Forecast report

•

Monthly cumulative report - date wise / location wise.

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•

Monthly charging statement.

•

Monthly cheques return statement.

•

Customized reports as per mutual agreement.

Foreign Banks

Standard Chartered

Standard Chartered is highly recognized as a leading cash management supplier across the emerging markets. Their Cash Management Services cover local and cross border Payments, Collections, Information Management, Account Services and Liquidity Management for both corporate and institutional customers. With Standard Chartered's Cash Management services, the corporate will always know their exact financial position. The corporates have the flexibility to manage their company's complete financial position directly from the computer workstation. The corporates will also be able to take advantage of the banks outstanding range of Payments, Collections, Liquidity and Investment Services and receive comprehensive reports detailing their transactions. With Standard Chartered, the corporates have everything it takes to manage their cash flow more accurately. •

Payments Services

•

Collections Services

•

Liquidity Management

Comprehensive Payments Solution

Standard Chartered’s Payment Solutions can help to reduce the companies overall processing costs – for domestic and global payments – saving the time and money while providing a value-added service to their suppliers. The Banks comprehensive payment services will be tailored to enhance the Customers Customers accounts payable process. process. This will eliminate many many manual tasks involved in making payments, allowing the corporate and their staff to spend more time focusing on their core business needs. The Bank understand that most of the corporates effort in the payment cycle is directed towards initiation; difficulties in the subsequent reconciliation process can jeopardize the whole process. With Straight2Bank Channels the customer can now track the exact status of

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each payment through timely reports that can be uploaded seamlessly into their company’s system. The Bank offers a full range of payment capabilities including: Cross Border payments •

Telegraphic Transfers

•

International Bank Cheques/ Drafts

Domestic payments •

Local Bank Cheques/ Drafts/ Cashiers Order

•

Corporate Cheque

•

Direct Credits - ACH/GIRO/Credit vouchers

•

Local Bank Transfers (RTGS)

•

Book Transfers (Account transfer between Standard Chartered branches)

•

Payroll

Payments System Integration

Straight2Bank channels cater to different levels of customer payment sophistication, including simple online transaction via Internet, bulk file payment via Internet or lease line, and the ability to send industry standard messages messages directly to the bank. Their in-country specialists are available to help customize a solution that would enable the corporate to manage their working capital in a more efficient manner.

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Collections Services Comprehensive receivables management solution

Standard Chartered understands that operating and sustaining a profitable business these days is extremely tough. In an environment of constant changes and uncertainties, most businesses face challenges of costs and efficiency. Key concerns include: •

Receivables Management - ensuring receivables are collected in an efficient and timely

manner to optimize utilization of funds. •

Risk Management - ensuring effective management of debtors to eliminate risk of

returns and losses caused by defaulters and delayed payments. •

Inventory Management - ensuring efficient and quick turnaround of inventory to

maximize returns. •

Cost Management - reducing interest costs through optimal utilization of funds.

Solution:

The Standard Chartered Collections Solution leverages the Bank's extensive regional knowledge and widespread branch network across their key markets to specially tailor solutions for the customers regional and local collection needs. This Collections Solution, delivered through a standardized international platform, has the flexibility to cater to the customers local needs, thus enabling them to meet their objectives of reducing costs and increasing efficiency and profitability through better receivables and risk management. management. The key components of the banks solution include the following: •

Extensive Clearing Network

•

Guaranteed Credit

•

Comprehensive MIS

•

System Integration

•

Outsourcing of Collection

Extensive Clearing Network

The Banks extensive branch network, complemented by their correspondent banks' network, provides the customers with a wide coverage of clearing locations to ensure they get the benefit of early availability of funds. This is further enhanced by the customer’s cheque purchase and guaranteed credit services.

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Guaranteed Credit

To help the corporate manage their cash inflow from their accounts receivable more efficiently, Standard Chartered can arrange for guaranteed (subject to prior agreement) credit to their account for cheque collections. The customers local and foreign currency cheques will be credited to their account on a fixed date even if the Bank is not in receipt of the funds from the clearing house or correspondent bank.

Comprehensive MIS

The Bank understand the importance of timely and accurate information regarding accounts receivable to help the corporate effectively manage their receivables and debtors, and minimize losses caused by delayed receipts and defaults. The Corporate can also better manage their buyers' requirements and improve their inventory management. Based on the customers choice of Straight2Bank channels, multiple, detailed reports are delivered to them via email, fax, Straight2Bannk Access (Host-To-Host channel) or Straight2Bank Web(Internet Banking Channel). These reports are tailored to the customers needs and provide details such as invoice number, drawer name, customer reference number, debtor code, special narration, remarks and any other information the customer have requested for. Here are some of the comprehensive reports the Standard Chartered solution provides the customer with: •

Activity Reports e.g. information on collections activity for the period

•

Deposit Réconciliation Reports e.g. deposit confirmation

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Return and Reversals Report e.g. information on cheques returned

•

Drawer Summary Report e.g. information on drawers

The Standard Chartered collection platform can be integrated with the corporates accounts receivable system to enable auto reconciliation for their accounts receivable. They also get fully reconciled receivables files with invoice details and amounts matched against receipts. In addition, Straight2Bank Web (Internet Banking Channel) can also be used as an electronic channel to transmit collection information such as DDI (direct debit initiation) files or invoice number (Account Receivable) details to the Bank. We also provide the option of transmission of files and MIS through Straight2Bannk Access (Host-To-Host channel).

Outsourcing of Collections

Standard Chartered supports the corporates complete collection cycle. These services cover:

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•

Courier pick-up service, which is available for cheques from the Corporates office, dealers' and distributors' offices, from PO Boxes etc.

•

Clearing of instruments whether local or foreign currency through the clearing houses, directly by Standard Chartered or through their correspondent bank network.

•

Electronic collection services through the ACH.

•

Data capture of information.

•

Reconciliation activities.

Types of Collections

The Bank provide collection services for: •

Local currency cheques

•

Foreign currency cheques

•

Lock box services – Retail and Wholesale

•

Direct Debits

•

Credit Card Collections

•

Inward Telegraphic Transfers

HSBC BANK

Transactional Banking HSBC has a range of transaction banking solutions for the corporates domestic or international business. HSBC’s products and services will help corporate with their everyday banking needs as they understand the importance of sound financial management. Integrated Receivables Solutions

The Bank understands the importance of converting receivables into cash. HSBC delivers sophisticated solutions that leverage their investment in technology, regional presence and local knowledge. Direct Debit

This service is ideal for businesses who want to receive on time payments from regular debtors. By lodging a direct debit file with HSBC, their Corporate accounts are debited and the customer account bulk credited. This way the corporate receive the money on time and their customers enjoy an easier way of making payments.

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What does it offer? •

On time payment from debtors (subject to availability of funds)

•

Supply of date when funds are available. Debits can be for variable amounts or frequency to align with billing requirements

•

Reduced paperwork and preparation time

Wholesale Lockbox

This service, through HSBC net , allows the corporate to outsource the processing of cheque receipts. It's ideal for businesses with a large volume of cheques collected through the mail. These cheques go to a designated post office locked bag and delivered to the bank for processing. What does it offer? •

Cheques are processed processed by the lockbox centre centre and deposited into into the customers customers account on the same day.

•

Ability to view colour images of processed cheques and invoice items

•

Ability to search for specific items or customers and generate reports via HSBC net

•

Reconciliation of Corporates Wholesale Lockbox transactions against their outstanding

invoices. Receivables Management System

This service, through HSBC net , is an automated reconciliation and information management module, which fully integrates the collections and processing services. What does it offer? •

Consolidation of receivables information across electronic and paper collections

•

Automation of accounts receivable receivable reconciliation using corporates corporates pre-defined matching matching parameters

•

Delivery of consolidated and summary reporting (online and data file) structured to meet their specific needs

•

Online transaction enquiry capabilities

•

Can integrate with the corporates enterprise resource planning (ERP), accounting or treasury systems.

Integrated Payment Solutions

As HSBC, understand that effective control of the corporate accounts payable process is important to optimize their working capital management. Explore the full suite of accounts payable services that meet the corporate domestic and international payment needs.

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Direct Credit Payments

HSBC provides them with a great solution for regular purchases or payments such as accounts payable and payroll and dividends. What does it offer? •

Delivery of multiple payments in a single instruction

•

Integration of corporates office system with electronic banking platform to reduce errors and simplify reconciliation

•

HSBC’s Payments Advising service through HSBC net , notifies beneficiaries when they have processed the corporates payment instructions

Priority Payments

HSBC offers this service for high value same day payments. Priority payments can be: •

International (Telegraphic Transfers)

•

Domestic (Real Time Gross Settlement RTGS)


Use of our payment instruction templates to save time and reduce errors

•

Delivery of payment instructions in a variety of currencies using HSBC in most offshore markets.

Payment Advising


Customised, information-rich advices.

•

Multiple invoice advising to deliver payment consolidation.

•

Real-time advice issuance to multiple parties.

•

Data delivered to your beneficiaries for easy receivables reconciliation

•

Advice can delivered via email, fax or mail.

Account Management Solutions

They have a range of account and transaction services that will create practical and costeffective solutions for the corporates and their business. Manage the cash flow, eliminate idle balances and enhance operational efficiency with the services below.

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International Cash Management Account

This competitive interest account is ideal for international transactions, particularly for large surplus local and foreign currency deposits. What does it offer? •

High return for balances exceeding $AUD250,000 $AUD 250,000

•

The ability to conduct international transactions in foreign currency

•

Regular statements for transaction reconciliation

•

Funds available at call

•

International electronic access through HSBCnet

Term Deposits

A Term Deposit account is perfect for when a company wants to maximise it's return of surplus funds. With a Term Deposit account the money is locked in for a fixed term 1 and therefore, the corporate should only invest money that will not be required for that period of time. Please note that there is an AUD5,000 minimum to invest. What does it offer? •

A choice of terms and attractive interest rates

•

Availability in major foreign currencies

•

Guaranteed income stream

Business Cheque Account

This attractive interest-bearing account can meet all the customers daily banking needs, while providing them with the flexibility of easy access and control. What does it offer? •

Attractive interest rates

•

Convenient cheque book access, customisable cheques and deposit books

•

Competitive transaction and account keeping fees

•

Easy to read transaction statements

•

HSBCnet for easy access and control.

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CITI BANK

If the Corporates are looking to streamline their business processes to realize greater operational efficiencies and to manage their company's working capital more effectively, Citigroup has the solutions. The banks Cash Management products include: •

Web-enabled payment and receivables solutions

•

Vendor financing

•

Commercial Commercial card solutions

Payables

Citi bank ACH Citigroup has been providing high-quality Automated Clearing House (ACH) Payment and Receivables Solutions to their clients for over two decades. They offer a full range of solutions that include the collection of consumer payments via the telephone, Internet or check-to-ACH conversion, as well as payments to employees and vendors. ACH can streamline the customer’s payments and receivables processes for: •

Consumer-initiated Consumer-initiated bill payments and pre-authorized debits

•

Direct deposit of payroll, pension payments and T&E reimbursements

•

Vendor payments

•

Mortgage and tax payments

•

Dividend payments

•

And a growing number of other ACH-facilitated applications

The use of ACH to make payments to employees and vendors, will benefit the company from: •

Cost savings

•

Improved account reconciliation

•

Resource re-deployment

By using ACH to receive payments from customers, the company will benefit from: •

Timely collection and cash flow

•

Reduced processing costs

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•

Improved customer satisfaction ®

Citibank Funds Transfer

Citibank ® Funds Transfers is the ideal tool to remit payments that need same-day execution and settlement, such as investments, treasury payments, foreign exchange settlements and third-party settlements. The company gain same-day movement of funds and immediate availability, with payments processed by our Funds Transfer Network, then executed via CHIPS, FedWire or Book-to-Book transfer. ®

Citibank Integrated Payments Service

The corporate can operate all over the world, making payments of all types—which can be complex and time-consuming. time-consuming. The bank provide greater efficiency and control control with a single solution that meets the customers global and local l ocal payment needs. Citibank® Integrated Payments Service offers information management and consistency across all the customers locations and processes—from pricing and transacting through reporting, customer service and billing. It is basically designed for organizations looking to improve efficiency through standardization, automation and centralization of their payment operations, Citibank Integrated Payments Service provides: •

Cost savings. Minimize the costs by streamlining payment processes, outsourcing non-

core payment activities, and standardizing reporting. •

Convenience. Meet regional and country-specific payment requirements with a single

solution. •

Efficiency. Standardize transaction initiation and reporting options for consistency across

all the corporate locations with Citigroup's advanced technology and local and global network. •

Flexibility. Choose from a range of payment options, including funds transfers and cross

border checks. The corporate can also indicate specific payment needs for particular regions and countries. •

Versatility. The bank also facilitate electronic and paper transactions in more than 100

currencies with a comprehensive package of payment products and services that are tailored to the way the corporate do business.

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®

World Link Payment Services

For over 20 years, the WorldLink solution has been successfully enabling their clients to issue payments in more than 135 currencies, right from their offices via a single window— without having to maintain local currency accounts. WorldLink Payment Services is a complete global transaction solution that makes cross-border payments simple and secure.

Receivables

Citibank ® Customer Initiated Payments enables the company to offer their customers Web and telephone payment capabilities, integrated with optional online bill presentment. Citi Banks integrated solution enables the company to offer their customers: •

An Internet payment application, hosted on the Citibank Customer Initiated Payments system and branded to appear consistent with the companies own Web site, that provides one-time or automated recurring payment initiation

•

A touch-tone telephone (IVR) payment application for one-time payment initiation

•

A customer service console to enable payment initiation by an operator

The system can provide the customers summary invoice information such as the amount due, due date or other pertinent information based on data that the company provide. Alternatively, the bank can present the companies invoice electronically on the Citibank Customer Initiated Payments Web site, with integrated payment capabilities. The system’s flexibility gives the choice to include bill presentment and payment, or payment only. Payments can be made using ACH debits, credit cards, or debit cards. The company can choose which access channels (Web, IVR, or voice telephone) methods and payment methods they wish to offer. Full remittance detail is provided to company daily and can be combined with remittance data from other Citigroup receivables streams, including our Lockbox or Electronic Receivables Services. ®

Citibank Electronic Check Deposit (ECD)

The U.S. Check Clearing for the 21st Century Act ("Check 21") gives the reprint of a scanned check legal equivalence to the original paper check. That opens up opportunities for the Corporates to enjoy more efficient, more cost-effective check deposits. Electronic Check Deposit (ECD) service is the most effective way for the corporate to take full advantage of Check 21. With ECD, the corporate can scan checks in their own office, and

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then electronically transmit the images to Citigroup—eliminating the hassle of overnight paper checks to the U.S. or physically preparing them and delivering them to the bank.

Liquidity and investments

To help the corporate optimize optimize return on excess operating operating balances and minimize minimize time spent on execution, Citigroup offers an array of integrated investment options through multiple channels. Investment transactions may be completely automated or actively initiated through our desks and online investment investment options. The investment options the corporate select will depend upon their organization’s operating footprint and currencies—as well as on the company’s investment strategy and objectives in terms of risk, return, convenience and timing. A key offering within Citigroup’s Global Liquidity and Investments product suite, Notional Pooling is ideal for corporations with decentralized operational structures that want to preserve the autonomy of their subsidiaries and accounts. Pool participant accounts in a single currency are aggregated for interest compensation purposes. Funds are not physically moved, but are instead notionally combined. There is no commingling of funds, and the integrity of the individual account position is maintained. Net excess pool positions both in the U.S. and offshore may be fully invested using one of their Automated Investments solutions. Direct Debit

Citigroup offers two services that can enable the corporate to offer automated direct debits to their customers as a convenient payment method. An automated direct debit program can reduce their transaction costs, improve accounting efficiency, and accelerate their receivables cash flows. Citibank Direct Citibank Direct Debit Services

Citibank® Direct Debit Services meets the needs of clients who manage their direct debit program in house. They can collect authorizations and bank account information from their customers, and subsequently send instructions to Citigroup to debit their customers' accounts via ACH, in order to settle their outstanding obligations.

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Benefits & Features of cash management services

Cash Management services are availed benefits to all from the manufacturer, retailer, logistics to the supplier as well as global customer. The following are the benefits provided by various banks.

Nationalized Banks

Corporation Bank has been always aiming to create values for its customers. Looking beyond traditional banking, the Bank introduced an array of other products and services to different customer segments. Cash Management Services is one such solution offered by the Bank to the Corporate customers. Every organization has receivables to collect from its dealers/ depots/ customers. Every revenue collected by the organization gets paid in one form or the other. Collection And Payment Services (CAPS) provides customized solutions to corporates' needs in liquidity management. The PRODUCT RANGE under the umbrella of CAPS, provide one point solution to corporates cash management requirements in the area of receivables and payables management of the corporates. The essence of CAPS is Speed, Acc uracy, and Efficiency. Features of CAPS, - evolved in response to corporates' needs - aim at providing significant TANGIBLE BENEFITS to corporates. Collection And Payment Services are offered and managed by specialized exclusive Special Business Units in the form of CAPS BRANCHES, Payment Processing Centre and FCS HUB using the state of the art technology.

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CAPS - Benefits to Corporates

CAPS ensures not just unlocking of funds in transit, it enhances liquidity in the Corporate’s system and enables effective funds management. All these at a very attractive cost structure reducing the burden on the corporate. Detailed MIS along with payouts and customized MIS of corporate needs in soft form either through Mail, floppy, CD ROM and through Internet eliminates all the hassles of reconciliation and enables onward integration into corporate system. Value addition such as courier pick up from clients’ desks enables operational convenience Collection of service charges at monthly rests as opposed to check to check charges deduction provides the operational comfort and reconciliation ease.

Unique payment products under CAPS makes payable processing very simple with tremendous comforts in the areas of dispatch of payout instruments, tracking, paid/unpaid status, confirmation on payouts etc.

Benefits and features of cash management services in private banks

ICICI Bank is a leading player in the field of Cash Management Services (CMS) market. Their Cash Management Service is technology driven with a versatile software, hardware and network support. Customized daily transaction reports and web-enabled reports are offered regularly to their clients. CMS solutions are designed to be company-specific allowing a corporate to efficiently manage its treasury. Cash management products covers both. Collections and payments.

ICICI Bank's Cash Management Services also helps the customer to make optimum use of their working capital, leveraging the float between faster collections and just-in-time payments. Their vast network across the length and breadth of the country uses superior technology based solutions to deliver speedy& efficient payments. Their solution is to customize to customer needs. So the customer can leave the burden of bulk demand drafts and pay orders, dividend and interest warrants, fund transfers, cheque writing and more to ICICI Bank. They will also get customized daily transaction reports and online reports for complete MIS.

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At Par Payments – IsafePay In this the customers can Make payments through dividend warrants, interest warrants, refund orders, redemption warrants, etc. These warrants are payable at par at the centres/locations selected by them. The customer can avail of this service through over 300 ICICI Bank locations and 200 correspondent bank locations. They also get monthly reconciliation statement showing the account status and unpaid list of warrants on a monthly basis.ISafePay offers them a complete solution solution for executing their their payments. Through different modes including Warrants, Demand Drafts / PO, ECS, Direct Credit, Swift Remittances and Foreign DD.

UTI BANK •

Extensive Network

UTI Bank has its own branches in various locations. Above this their arrangement with reputed correspondent banks covering more than 900 locations ensures that most of the customers cheques are covered under their network and the realization status can be known at the earliest. •

Lower Interest Costs & Improved Liquidity

A dedicated HUB ensures that the customers receive funds in their designated account within transit time thereby reducing interest costs and improving their liquidity position. •

Centralized Service Desk

A dedicated service desk has been started at their Centralized Collection and Payment HUB to ensure that the customers queries are resolved quickly and efficiently. The Customers can contact CCPH regarding any query about the MIS or the process flow. •

Web CMS

Web CMS provides the customers with all the information at a click. Detailed MIS like location wise collection and return, product-wise pooling, pooling in pipeline (due credit report) etc. can be viewed and downloaded from web interface through Internet.

•

Comprehensive MIS

The bank provides comprehensive MIS reports like daily report, transaction report future credits reports and cheque returned unpaid report. On the payments side they provide daily paid - unpaid status for the demand drafts, drafts, cheques or warrants issued by the Organisation.

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•

Payment Solutions

UTI Bank brings to the customer Payment Solutions. Save on effort, time and worry. Plus, their Electronic Clearing Services help serve customer even better. •

Collection Solutions

With the UTI Bank's collection service, the firms can collect regular and recurring payments from their customers more efficiently. The centralized CMS solution allows in getting quicker access to the company funds with matching MIS/reports through emails/web solution. These deposits are directly credited to a designated account, regardless of where they are made.

HDFC BANK Benefits to Corporates

If the organisation is multi-locational, managing outstation funds collections and payments can often be time consuming and expensive. Delays of days or even weeks in realizing outstation cheques, constant tracking and follow-up to transfer funds from outstation collection accounts, uncertainty and delays regarding information on the fate of cheques etc., are common. At HDFC Bank they offer a comprehensive range of Collections and Payments solutions under their Cash Management Services (CMS) umbrella to meet Corporate needs and put them in control of their cash position. HDFC Bank's Cash Management Services will enable the customer: •

Lower Interest Costs

Their collection services enable the customer to receive funds in their main (concentration) account with the bank with a minimum transit time thereby reducing interest costs. •

Improve Liquidity

Saving on transit time enables the customer to realize cheques and use funds earlier and therefore gives them enhanced liquidity. •

Better Accounting and Reconciliation’s

Detailed information on cheques deposited are made available on a daily / weekly basis/periodically thus simplifying accounting, reconciliation and query resolution. HDFC Bank also provide customized MIS as per the customers requirements

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•

Achieve Overall Operational Convenience

HDFC Bank's Collection Services enable the customers to derive convenience in banking operations thereby facilitating management of cash positions through a central treasury. A lso, the same may be used for improved control over different business segments. The advantages of their Collection products can also be availed without opening a Current Account with HDFC Bank. •

Interconnectivity:

Experience real-time online banking on E-Net with your CMS account. E Net is an Internet based software, which allows you to view current a/c balances, download statements, view CMS collections, effect payments / receive payments online, plus a host of other activities •

Centralized Service Desk:

HDFC Bank provides a dedicated service desk to ensure that the queries are resolved quickly and efficiently.

Foreign banks

STANDARD CHARTERED BANK Based on the corporates needs and the regulatory environment that they are in, they can choose any of the following features: •

•

Physical Sweeping Notional Pooling

•

Interest Reallocation

•

Investment

Physical Sweeping

Subject to regulatory considerations, Standard Chartered offers both domestic and cross border physical sweeps. To maximize yield on corporate daily cash, these solutions help them concentrate all surplus balances and deficit balances at a pre-defined period into one concentration account. Under a physical sweep structure, balances in multiple accounts are physically transferred from participating accounts to a designated concentration account. Main Features: •

Multiple-layer sweep;

•

Standing instruction;

•

1-way Sweep; 2-Way Sweep;

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•

Zero-balancing Sweep; Target Balancing Sweep;

•

Debit Sweep; Credit Sweep;

•

Sweep with Back Value transactions;

•

Comprehensive Comprehensive MIS reporting.

Notional Pooling

If regulatory considerations permit, the corporate can utilize Standard Chartered's Notional Pooling to help maximize yield on their daily cash by offsetting accounts with deficit balances against accounts with surplus balances in different entities. They also enjoy all the benefits and features of Physical Sweep, except that under Notional Pooling, there is no daily physical movement of balances from the participating entities to the designated cash concentration account.

Interest Reallocation

Standard Chartered provides corporates with a flexible Interest Reallocation Programme whereby the interest component can be reallocated back to the participating entities from the designated cash concentration account based on their instruction. They also get a detailed report, tracking the daily cash balance from each entity and the interest computation based on the interest reallocation formula that they have defined.

Investment

To help corporate maximize their surplus balances, they make use of Standard Chartered's overnight investment instruments. With this, they can instruct excess balances to be invested to yield a return that is based on the overnight market driven rate. Alternatively, for longerterm core balances, they have a choice of investing in short term 'AAA'credit rated Money Market funds.

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Conclusions regarding cash management services In today’s competitive world the key differentiator between a successful bank and other bank is the stress each lays on technology.

Infrastructure

PSU

Private

MNC

Network

High

High

High

Technology

High

High

High

Corporate Relationshi s

High

High

High

Scalability

Low

High

High

Marketing

Low

High

High

?

High

High

Service

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The above chart gives a clear explanation regarding the Cash Management infrastructure provided by all the three sectors. The network, technology and the corporate relationship services provided by all the three sectors are highly sophisticated and good but the scalability, marketing provided by the Public sector is low in terms of the Private and MNC sector. As well as the services provided by the public sector is not fairly good and up to the standard.

As Cash management is constantly changing to meet the needs of the corporate treasurer. The challenge for both corporation and provider is to keep up with developments, technology, changing regulations and fitting these in with normal business. A changing regulatory environment, new technology and mergers that expand the scope of traditional banking are redefining the traditional treasury management paradigm for both banks and corporations. Electronic commerce is evolving far beyond simply ordering goods online or buyer-tosupplier commerce. commerce. In a vast country like India Providing Cash Management Services do posses a challenge to the Cash Manager as well as the banks. Considering the present Indian scenario, where Cheques are the basic form of payment and cheque clearing takes a long time, cash management services need to devise innovative methods and means to expedite the clearing to benefit the corporate customer. As the Indian economy becoming an open market economy, residents may maintain accounts in other countries and non-residents may hold accounts in India. As a result, Indian treasurers may often find themselves managing cash across geographies and time zones. In India the transaction types run from the classic paper cheque to the latest Internet initiated electronic payment. Corporations initiate and receive paper-based transactions, as well as high value and low value electronic transactions on a daily basis. Expectations from new services may not eliminate or fully replace the older traditional services. Change will be gradual but, probably, it will be firm. Fee structures for cash management services in India vary from bank to bank and also from customer to customer. Many banks price the services based upon the overall relationship, especially for multiple product solutions. As Indian banks become more consultative and total solutionoriented rather than product-driven, pricing will become even more customized. Corporate treasurers will consider the amount they can save on banking fees and the level of efficiency in their departments as a sequel to the new cash management services. After they have negotiated the best possible price, treasurers then focus on the return on excess balances. They are no longer content to leave large balances in return for no fees charged. Treasurers will look for true partnership with banks to build systems that will take them into future. 48

SWOT Analysis of Competition in the CMS Market

Product

PSU

Private

MNC

Local collections

Available

Available

Available

Upcountry Collections

Available

Available

Available

Cash

Not Available

Available

Available

Electronic Payments

Available

Available

Available

Available

Available

Available

Available

Available

Dividend

Payment outsourcing

Not Available

The above Chart gives the explanation of the SWOT analysis and the competition in the cash management services in the market. It tells about the products offered and the services it provides.

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Importance of Cash Management for a Corporate Entity

There is a need to put in place a specialized cash management system by Corporates. Good Cash Management is a conscious process of knowing when, where, and how a company’s cash needs will occur; knowing what the best sources for meeting additional cash needs; and being prepared to meet these needs when they occur by keeping good relationships with bankers and other creditors. Cash management results in significant savings in time decrease in interest costs, less paper work and greater accounting accuracy. Proper cash management creates more control over time and funds; provides timely access to information; enables easy employee related payments; supports electronic payments; produces faster electronic reconciliation; allows for detection of bookkeeping errors; reduces the number of cheques issued and earns interest income or reduces interest expense. Corporations with subsidiaries worldwide can pool everything internationally so that the company can offset the debts with the surplus monies from various subsidiaries. The end result will transform treasury function as a profit-centre by optimizing cash and put it to good use. Creative and pro-active cash management solutions can contribute dramatically to a company’s profitability and to its competitive edge. The ultimate purpose of proper management of liquidity, needless to emphasize, is to improve the overall productivity of funds.

How Corporate Select a Bank for Sourcing Cash Management Services?

Probably, it is important to consider what the companies expect from their bankers in this regard. It is normally the client-bank relationship, which is a main consideration in choosing a bank for cash management. Pricing, obviously, is a very dominant factor. Making a choice between the local banks and the more highly priced foreign banks usually depends on how cost savings are presented by the banks. Multinational corporate with complex treasury operations admire their respective banks’ expertise and ability to offer creative solutions. There are some common requirements related to basic cash management systems. Flexibility, reliability, security and stability have been cited as vital parameters for any electronic banking system. The systems should be tailored to provide pertinent reports and the ability to upgrade easily in future. The technology should allow real-time real-time cash cash management management with strategic banking partners. It should integrate easily with legal framework in place. It should lower operating costs and resolve disputes quickly by providing secure and legally enforceable audit trails. It should be capable of reducing risk of fraud in electronic funds transfers and other treasury activities. It should also be able to use a low-cost public network infrastructure like Internet, which eliminates the need for dedicated leased lines. 50

For instance, availability of requisite bandwidth for Internet connection is still a problem faced by various financial institutions. With a highly technology savvy there are several exciting new opportunities for both user and provider in the cash management arena. Cash management worldwide is constantly evolving to meet the needs of the corporate treasurer, take advantage of new technology and support customers as they move into new markets. The challenge for both company and service provider is to keep up with developments in technology and changing regulations and espouse them to their normal business. The key to success will be active partnerships between corporations and their providers as no one will be able to keep up with all developments on their own. Because of the mounting importance of fee-based financial services, all banks need to finetune their strategies, if they want to harness the potential in this area. They need to appreciate the dynamics of the new fee-based market, which is driven by the growth of the Internet and inter-connect applications. But it won’t be easy for all banks to capture their share and profit of the swiftly expanding fee-based market. Taking advantage of the opportunities and avoiding the threats of unprofitable products, insufficient customer service, and diverse IT applications entails an understanding of the market place, the needs and expectations of the customer and of course the competition. It is an important point to note that offering fee-based services is no longer a choice today to the beleaguered banker. It is a desirable compulsion to thrive. Managing cash in the emerging milieu will require a new mind-set of banker and his client. With a comprehensive cash management solution, companies are able to compete with low operating and administrative costs, with more focus on better control of their cash flow and efficient use of working capital .The right solution can even enhance the relationships with customers and suppliers by helping them to be more efficient and reducing non-productive activities .It is therefore important to select a cash management bank that offers a complete and proven solution to deliver the results the customers expect to achieve.

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Bibliography  Bank of India Cash Management Training Programme Notes

Websites

 www.Bankofindia.com

 www.google.com

 www.yahoo.com

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Cash Mgmt in Bank of India

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