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A PROJECT REPORTON

ON

(Study of Cash management at Standard Chartered Bank)

SUBMITTED IN THE PARTIAL FULFILLMENT OF

DEGREE OF BACHELOR IN BUSINESS ADMINISTRATION

2006-09

Guided

By: Submitted



RUKMINI DEVI INSTITUTE OF ADVANCED

STUDIES

(Aff. to Guru Gobind Singh IndraprasthaUniversity)

CERTIFICATE

This i s to cer t i fy tha t the summer t ra in ing pro jec t (MS/BBA-

CODE)entitled

Study of cash manag ement a t Sta ndard C hartere dBank

done by Mr. Avnish Mehra, Roll No. 1371591706 is an authenticwork carried out

by her at Rukmini Devi Institute of Advance Studiesunder my guidance. Thematter embodied in this project work has notbeen submitted earlier for the award

of any degree or diploma to thebest of my knowledge and belief.

Date:

Mrs. Jyoti Goel

(Project Guide)

RDIASRukmini Devi of Institute Of Advanced Studies

2

ACKNOWLEDGEMENT

I sincerely record my appreciation to all, who have contributed in preparing this

reportwith suggestions and critical evaluation.

I am extremely thankful to Mr. AMIT AGGARWALA (Associate

Director, standardchartered) who zestfully monitored the growth of this

project. He from time to timeguided me in the right direction and took care that I had enough time to complete my project.

As an amateur in this field I am indebted to those who have readily

responded to myrequest for expert guidance.

Rukmini Devi of Institute Of Advanced Studies 3 (na )



ABSTRACT

In a business anything done financially affects cash eventually. Cash is

to a business is what blood is to a living body. A business cannot operate

without its life- blood cash, and without cash management, there may

remain no cash to operate. Cashmovement in a business is two-way

traffic. It keeps on moving in and out of business.The inflow and outflow

of cash never co incides. Important aspect which is unique tocash

management is time dimension associated with the movement of cash. Due to non-

synchronicity of cash inflow and outflow, the inflow may be more than the outflow

or the outflow may be more t han the in flow at a pa rt icula r point

of ti me. Th is nee ds regulation. Left to itself cash flow is apt to follow

monsoonic pattern, and showers of ca sh may be hea vy, sc an ty or ju st

nor mal . Henc e t her e is a di re nee d to c on tr ol its movement through

skillful cash management. The primary aim of cash management isRukmini Deviof Institute Of Advanced Studies to ensure that there should be enough cash

availability when the needs arises, not toomuch, but never too little

4

TABLE OF CONTENTSS

Sr.No. Topics

1. Introduction Page No

1-14

Definition

Facets of CMS

Purpose of CMS

CMS at Standard Chartered Bank

2. Objectives 15

3. Reaserch Methodology 16-17

4. Literature review 18-19

5. Industry Profile 37-43

6. Company profile 44-47



History of Standard Chartered Bank

About Standard Chartered Bank

Products offered by SCB

Cash Management at length

Rukmini Devi of Institute Of Advanced Studies5

7. Analysis of the Case Study 88-86

8. Case Study

Case Study

Analysis of the Case Study

9. Limitation of the report

10. Conclusion and recommendation

Conclusions

Recommendations

11. References 110

12. Appendixes 106 - 109

Questionnaire



INTRODUCTIO N

Cash managementis a marketing term for certain services offered

primarily tolarger business customers. It may be used to describe

a l l bank acc ounts (suc h aschecking accounts) provided to businesses of a

certain size, but it is more often used todescribe specific services such as

cash concentration, zero balance accounting a n d automated clearing house

facilities. Sometimes, private bank customers are given cashmanagement services.

Cash Management Services Generally offered

The following is a list of services generally offered by banks and utilised

by larger businesses and corporations:

Rukmini Devi of Institute Of Advanced Studies

�Account Reconcilement Service: Balancing a checkbook can be a

difficult process for a very large business, since it issues so many checks it can

take a lotof human monitoring to understand which checks have not cleared and

thereforewhat the company's true balance is. To address this, banks have

developed asystem which allows companies to upload a list of all the checks that

they issueon a daily basis, so that at the end of the month the bank statement will

show notonly which checks have cleared, but also which have not. More

recently, bankshave used this system to prevent checks from being

fraudulently cashed if theyare not on the list, a process known as

positive pay

.

�Advanced Web Services: Most banks have an Internet-based system which

ismore advanced than the one available to consumers. This enables

managers tocreate and authorize special internal logon credentials,

allowing employees tosend wires and access other cash management

features normally not found onthe consumer web site.

�Armored Car Services: Large retailers who collect a great deal of cash

mayhave the bank pick this cash up via an armored car company, instead

of askingits employees to deposit the cash.



�Automated Clearing House : s e r v i c e s a r e u s u a l l y o f f e r e d b y

t h e c a s h management division of a bank. The Automated Clearing House is an

electronicsystem used to transfer funds between banks. Companies use this to pay

others,especially employees (this is how direct deposit works). Certain companies

also use it to collect funds from customers (this is generally how automatic payment plans work). This system is cri t icized by some consumer

advocac y groups , because under this system banks assume that the company

initiating the debit is correct until proven otherwise.

�Balance Reporting Services: Corporate clients who actively manage their

cash balances usually subscribe to secure web-based reporting of their

account andtransaction information at their lead bank. These

sophist icated compilations of banking activity may include balances in foreign

currencies, as well as those atother banks. They include information oncash positionsas wellas 'float'(e.g.,chec ks in the pr oc es s of co lle ct ion

) . Fina l ly , they offer t ransac t ionspeci f icde ta i l s on a l l fo rms of pa

yment ac t iv i ty, i nc lud ing depos i ts , checks , w i re t ra ns fe rs i n an d

o u t , A C H ( a u t o m a t e d c l e a r i n g h o u s e d e b i t s a n d c r e d i t s ) , invest

ments, etc.

�Cash Concentration Services: Large or na t ional cha in re ta i le rs of ten

ar e in areas where their primary bank does not have branches. Therefore,

they open bank accounts at various local banks in the area. To

prevent funds in theseaccounts from being idle and not earning

suff ic ien t in teres t ,manyofthesecompanies have an a greement se t w

ith thei r pri mary ban k, wher eby the ir primary bank uses

theAutomated Clearing House to electronically "pull" themoney from these

banks into a single interest-bearing bank account.

Rukmini Devi of Institute Of Advanced Studies8

s

Manager or Cash Management representative.



Our Coverage

We are the foreign bank having the largest geographical representation in

the country. We are present in 31locations which enables you to print

Payable At Par at 31 locations with the highestnumber of print sites. i.e.

we can print cheque, drafts for you at 31 locations and thus bring down

your cost. We can also provide 700+ locations online for draft required. Weare the

only bank which provides draft status to you on the website.

Collection Services

Comprehensive receivables management solution. Standard Chartered

understands thatop era ti ng an d s ust ai ni ng a p ro fit ab le bus ine ss th es e

da ys is e xt re me ly to ug h. In anenvironment 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 optimise utilisation of funds.Risk Management - ensuring

effective management of debtors to eliminate risk of

returns and losses caused by defaulters and delayed paymentsInventory

Management - ensuring efficient and quick turnaround of inventory to

maximise returns.Cost Management - reducing interest costs through

optimal utilisation of funds.

Our Solution

The Standard Char tered Col lec t ions Solu t ion leverages the Bank ' s

extensive regional knowledge and widespread branch network across

our key marketsRukmini Devi of Institute Of Advanced Studies18

to specially tailor solutions for your regional and local collection needs.

In India wehave around 270 local locations and we are the only foreign bank which is present in 31loc at io ns . We ha ve the wid es t

network among foreign banks in the countr y. This Collections

Solution, delivered through a standardised international platform, has

theflexibility to cater to your local needs, thus enabling you to meet your

object ives of reducing costs and increasing efficiency and profitability through



better receivables andrisk management. The key components of our solution

include the following:Extensive Clearing Network

Guaranteed Credit

Comprehensive MIS

System Integration

Outsourcing of Collection

Liquidity Management

Solu t ions for e f f ic ien t management of your funds A corpora tetreasurer 's ma inchallenge often revolves around ensuring that the company's

cash resources are utilisedto their maximum advantage. You need a partner bank

that can help you:Rukmini Devi of Institute Of Advanced Studies19

Maximise interest income on surplus balances; minimise interest expense on

deficit

balances for domestic, regional and global accountsMinimise FX conversion for

cross-currency cash concentration

Customise l iqu id i ty management so lu t ions for d i f fe ren t en t i t i es in

d i f feren t

countriesCentralise information management of consolidated accou

nt ba lances

OurSolutionWith our global experience and on-the-ground market knowledge,

StandardChartered will help you define an overall cash management strategy

which

incorpora t e sa l i qu id i ty managemen t so lu t ion tha t bes t mee t s yo

u r n e e d s . C l i c k h e r e f o r a n illustration of our propositions.

Key Features



Based on your needs and the regulatory environment that you are in,you

can choose any of the following features:Physical Sweeping

Notional Pooling

O B J E C T I V E S

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