A PROJECT REPORT

ON
ON
(Study of Cash management at Standard Chartered Bank)
SUBMITTED IN THE PARTIAL FULFILLMENT OF
DEGREE OF BACHELOR IN BUSINESS ADMINISTRATION2006-09
2006-09
Guided By:
Submitted by:
Mrs. Jyoti Goel
Mr. Avnish Mehra
(Project Guide)
1371591706

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RUKMINI DEVI INSTITUTE OF ADVANCED STUDIES
(Aff. to Guru Gobind Singh Indraprastha
University)
CERTIFICATE
This is to certify that the summer training project (MS/BBA-CODE) entitled
Study of cash management at Standard Chartered Bank done by Mr.

Avnish Mehra, Roll No. 1371591706 is an authentic work carried out by her at Rukmini Devi

Institute of Advance Studies under my guidance. The matter embodied in this project work has

not been submitted earlier for the award of any degree or diploma to the best of my knowledge

and belief.

ACKNOWLEDGEMENT
I sincerely record my appreciation to all, who have contributed in preparing this report with
suggestions and critical evaluation.

I am extremely thankful to Mr. AMIT AGGARWALA (Associate Director, standard chartered) who

zestfully monitored the growth of this project. He from time to time guided 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 my request for
expert guidance.

(
)
AVNISH MEHRA
1371591706

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. Cash movement in a business is two-

way traffic. It keeps on moving in and out of business. The inflow and outflow of cash never
coincides. Important aspect which is unique to cash 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 than the inflow at a particular point of time.

This needs regulation. Left to itself cash flow is apt to follow monsoonic pattern, and showers of

cash may be heavy, scanty or just normal. Hence there is a dire need to control its movement

through skillful cash management. The primary aim of cash management is to ensure that there

should be enough cash availability when the needs arises, not too much, but never too little.

TABLE OF CONTENTS
Sr. No.
Topics
Page No.
1.
Introduction

✔ Definition

✔ Facets of CMS

✔ Purpose of CMS

✔ CMS at Standard Chartered Bank

1 - 14
2.
Objectives
15
3.
Research Methodology
16 - 17
4.
Literature Review
18 – 36
5.
Industry Profile
37 – 43
6.
Company Profile

✔ History of Standard Chartered Bank

✔ About Standard Chartered Bank

✔ Products offered by SCB

✔ Cash Management at length

44 - 87
7.
Result and Analysis
88 – 96
8.
Case Study
✔ Case Study
✔ Analysis of the Case Study

9.
Limitations of the report
105
10.
Conclusions and Recommendations
✔ Conclusions
✔ Recommendations
106 - 109
11.
References
110
12.
Appendixes
✔ Questionnaire
111 – 113

INTRODUCTION
Cash management is a marketing term for certain services offered primarily to larger

business customers. It may be used to describe all bank accounts (such as checking accounts)

provided to businesses of a certain size, but it is more often used to describe specific services

such as cash concentration, zero balance accounting, and automated clearing house facilities. Sometimes,

private bank customers are given cash management services.

Cash Management Services Generally offered
The following is a list of services generally offered by banks and utilised by larger businesses
and corporations:
•

Account Reconcilement Services: Balancing a checkbook can be a difficult process for

a very large business, since it issues so many checks it can take a lot of human monitoring to

understand which checks have not cleared and therefore what the company's true balance is. To

address this, banks have developed a system which allows companies to upload a list of all the

checks that they issue on a daily basis, so that at the end of the month the bank statement will
show not only which checks have cleared, but also which have not. More recently, banks have

used this system to prevent checks from being fraudulently cashed if they are not on the list, a

process known as positive pay.

•

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

advanced than the one available to consumers. This enables managers to create and authorize

special internal logon credentials, allowing employees to send wires and access other cash

management features normally not found on the consumer web site.

•

Armored Car Services: Large retailers who collect a great deal of cash may have the
bank pick this cash up via an armored car company, instead of asking its employees to
deposit the cash.
•

Automated Clearing House: services are usually offered by the cash management

division of a bank. The Automated Clearing House is an electronic system 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 criticized by some consumer advocacy

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 and transaction information at

their lead bank. These sophisticated compilations of banking activity may include balances in

foreign currencies, as well as those at other banks. They include information on cash positions

as well as 'float' (e.g., checks in the process of collection). Finally, they offer transaction-specific

details on all forms of payment activity, including deposits, checks, wire transfers in and out, ACH

(automated clearinghouse debits and credits), investments, etc.

•

Cash Concentration Services: Large or national chain retailers often are 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 these accounts from being idle and not earning

sufficient interest, many of these companies have an agreement set with their primary bank,

whereby their primary bank uses the Automated Clearing House to electronically "pull" the

money from these banks into a single interest-bearing bank account.

•

Lockbox services: Often companies (such as utilities) which receive a large number of
payments via checks in the mail have the bank set up a post office box for them, open
their mail, and deposit any checks found. This is referred to as a "lockbox" service.
•

Positive Pay: Positive pay is a service whereby the company electronically shares its

check register of all written checks with the bank. The bank therefore will only pay checks listed

in that register, with exactly the same specifications as listed in the register (amount, payee,

serial number, etc.). This system dramatically reduces check fraud.

•

Sweep Accounts: are typically offered by the cash management division of a bank.

Under this system, excess funds from a company's bank accounts are automatically moved into

a money market mutual fund overnight, and then moved back the next morning. This allows them

to earn interest overnight. This is the primary use of money market mutual funds.
•

Zero Balance Accounting: can be thought of as somewhat of ahack. Companies with

large numbers of stores or locations can very often be confused if all those stores are depositing

into a single bank account. Traditionally, it would be impossible to know which deposits were

from which stores without seeking to view images of those deposits. To help correct this problem,

banks developed a system where each store is given their own bank account, but all the money

deposited into the individual store accounts are automatically moved or swept into the company's

main bank account. This allows the

company to look at individual statements for each store. U.S. banks are almost all converting

their systems so that companiescan tell which store made a particular deposit, even if these

deposits are all deposited into a single account. Therefore, zero balance accounting is being

used less frequently.

•
Wire Transfer: A wire transfer is an electronic transfer of funds. Wire transfers can be

done by a simple bank account transfer, or by a transfer of cash at a cash office. Bank wire

transfers are often the most expedient method for transferring funds between bank accounts. A

bank wire transfer is a message to the receiving bank requesting them to effect payment in

accordance with the instructions given. The message also includes settlement instructions. The

actual wire transfer itself is virtually instantaneous, requiring no longer for transmission than a

telephone call.
•

Controlled Disbursement: This is another product offered by banks under Cash

Management Services. The bank provides a daily report, typically early in the day, that provides

the amount of disbursements that will be charged to the customer's account. This early

knowledge of daily funds requirement allows the customer to invest any surplus in intraday

investment opportunities, typically money market investments. This is different from delayed

disbursements, where payments are issued through a remote branch of a bank and customer is

able to delay the payment due to increased float time.

In the past, other services have been offered the usefulness of which has diminished with the

rise of the Internet. For example, companies could have daily faxes of their most recent

transactions or be sentCD-ROMs of images of their cashed checks.

Cash management aims at evolving strategies for dealing with various facets of cash
management. These facets includes the following:
•
Optimum Utilisation of Operating Cash
•
Economical Borrowings

Another product of non-synchronisation of cash inflows and cash outflows is emergence

of deficits at various points of time. A business has to raise funds to the extent and for the period

of deficits. Raising of funds at minimum cost is one of the important facets of cash management.
Purpose of Cash Management
Cash management is the stewardship or proper use of an entity’s cash resources. It serves as

the means to keep an organization functioning by making the best use of cash or liquid resources

of the organization.
The function of cash management at the U.S. Treasury is threefold:

1. To eliminate idle cash balances. Every dollar 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.

2. To deposit collections timely. 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.

3. To properly time 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 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.
 CASH
MANAGEMENT
AT
STANDARD
CHAR TERED
BANK
Cash Management As part of Standard Chartered's global transaction solutions to Corporates
and Institutions, we provide Cash Management, Securities Services and Trade Services through
our strong market networks in Asia, Africa, the Middle East and Latin America. We also provide

a bridge to these markets for clients from the U.S and Europe. We are committed to providing

you with

Integrated, superior cross-border and local services

Efficient transaction processing

Reliable financial information

Innovative products
World-class clearing services Thus ensuring a full suite of transactional products for your
needs.
For Corporates

Standard Chartered is highly recognized as a leading cash management supplier across the

emerging markets. Our 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,

you'll always know your exact financial position. You have the flexibility to manage your

company's complete financial position directly from your computer workstation. You will also be

able to take advantage of our outstanding range of Payments, Collections, Liquidity and

Investment Services and receive comprehensive reports detailing your transactions. With

Standard Chartered, you have everything it takes to manage your cash flow more accurately.
 Payments Services

Collection Services

Liquidity Management
For Financial Institutions

Standard Chartered is highly recognized as a leading cash management supplier across the

emerging markets. Our Cash Management Services cover local and cross border Payments,

Collections, Information Management, Account Services and Liquidity Management for both

corporate and institutional customers. If you are looking for a correspondent banking partner you

can trust, Standard Chartered can help you. We have more than 500 offices located in 50

countries throughout the world and, with 150 years of on-the-ground experience, we can help our

bank clients with all their cash management needs.

Clearing Services
Asian Gateway

Payment ServicesGlobal payments solution for efficient transaction processing Looking to

outsource your payments to enable:

Efficient processing of all your payables in the most cost effective way

Straight through processing both at your end as well as your bank's back-end

Efficient payables reconciliation with minimal effort and delay

Quick approval of payments from any location

Minimum hindrance to automation due to local language difficulties

Centralized management of payables across departments, subsidiaries and countries Our
Solution Standard Chartered's Straight Through Services (STS) Payments Solution can be

tailored to the different payment needs of companies, whatever industry, size or country you may

be in. With a comprehensive End-to-end Payment Processing Cycle, STS allows companies to

process a variety of payment types, whether they be domestic or international, local or central in

different countries, all in a single system file. To realise the benefits of STS, please contact your

local Relationship Manager or Cash Management representative. Our Coverage We are the foreign
bank having the largest geographical representation in the country. We are present in 31

locations which enables you to print Payable At Par at 31 locations with the highest number 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. We are the only bank which

provides draft status to you on the website.

Collection 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 optimise utilisation 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 maximise
returns.
Cost Management - reducing interest costs through optimal utilisation of funds. Our
Solution The Standard Chartered Collections Solution leverages the Bank's extensive regional

knowledge and widespread branch network across our key markets to specially tailor solutions

for your regional and local collection needs. In India we have around 270 local locations and we

are the only foreign bank which is present in 31 locations. We have the widest network among

foreign banks in the country. This Collections Solution, delivered through a standardised

international platform, has the flexibility to cater to your local needs, thus enabling you to meet

your objectives of reducing costs and increasing efficiency and profitability through better

receivables and risk management. The key components of our solution include the following:

Extensive Clearing Network

Guaranteed Credit

Comprehensive MIS

System Integration
 Outsourcing of Collection
Liquidity Management

Solutions for efficient management of your funds A corporate treasurer's main challenge often

revolves around ensuring that the company's cash resources are utilised to their maximum

advantage. You need a partner bank that can help you:

Maximise interest income on surplus balances; minimise interest expense on deficit

balances for domestic, regional and global accounts

Minimise FX conversion for cross-currency cash concentration

Customise liquidity management solutions for different entities in different countries

Centralise information management of consolidated account balances Our Solution With our

global experience and on-the-ground market knowledge, Standard Chartered will help you define

an overall cash management strategy which incorporates a liquidity management solution that

best meets your needs. Click here for an 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

OBJECTIVES

Objectives of a project tell us why project has been taken under study. It helps us to know more

about the topic that is being undertaken and helps us to explore future prospects of that

organisation. Basically it tells what all have been studied while making the project.

➢ To learn about various aspects of standard charered cash management.

➢ To analyze the history of Standard chartered bank.

➢ To gain insights about functioning of standard chartered cash management.

➢ To explore the future prospects of standard chartered cash management.

Research Methodology
 Research is a process through which we attempt to achieve systematically and with the support

of data the answer to a question, the resolution of a problem, or a greater understanding of a

phenomenon. This process, which is frequently called research methodology, has eight distinct

characteristics:

1. Research originates with a question or problem.

2. Research requires a clear articulation of a goal.

3. Research follows a specific plan of procedure.

4. Research usually divides the principal problem into more manageable subproblems.

5. Research is guided by the specific research problem, question, or hypothesis.

6. Research accepts certain critical assumptions.

7. Research requires the collection and interpretation of data in attempting to resolve the
problem that initiated the research.
8. Research is, by its nature, cyclical; or more exactly, helical.

Descriptive research is used in this project report in order to know about cash management

services to clients and determining their level of satisfaction. This is the most popular type of

research technique, generally used in survey research design and most useful in describing the

characteristics of consumer behavior. The method used were following:


Questionnaire method


Direct Interaction with the clients.
MODE OF DATA COLLECTION
 Primary Data: - The sources of Primary data were questionnaires and personal
interviews.
 Secondary data: - the sources of secondary data were internet, books and newspaper
articles.
Sample size: 8

LITERATURE REVIEW
Web-based Cash Management
Finacle web-based cash management solution enables banks to offer comprehensive cash
management services to businesses, ranging from small enterprises to large corporate houses.
Built on new-generation industry standard technologies J2EE and .NET, the modular solution

provides corporate customers anytime, anywhere access to real-time consolidated information. It

manages cash positions and electronically sends and receives funds in a secure
manner, within and across borders.

The solution is multi-currency enabled and offers multilingual support. It is also designed to

support multiple channels including the Internet and mobile, and can be interfaced with disparate

host systems and third-party applications.

Key Offerings
•

Balances and Transaction Information

•

Electronic Invoice Presentment and Payment

•

Payables Management
•

Receivables Management
•

Liquidity Management and Reconciliation Reporting

•

Trade Finance
Additional Features
•

Alerts
•

Infrastructure
•

Security
Corporate Cash Management to benefit from Electronic Payments

The new electronic payment products and services offer the corporate clients an improved

bottom line by helping manage cash requirements. It helps corporate to make the best use of

their funds and provides an effective means of managing their financial requirements.

Several of the trends in cash flow forecasting favor the use of electronic payment products like

RTGS, Electronic Funds Transfer (EFT) and card payments. Improved technology and systems

integration makes it more attractive to use electronic payment products because these methods

of payment can be incorporated into firm-wide computing systems.

The new forecasting techniques also suggest use of electronic payments, because they offer
disaggregated revenue and spending data that can easily be categorized and studied.

Electronic payments and cards provide control over incoming funds, and allow companies to limit

access to these funds to authorized parties. In addition, limiting corporate purchases to electronic
payments makes it easier for firms to monitor cash outflows and prevent unauthorized

expenditures, because these payments are easier to document and provide an audit trail.

From the perspective of a Corporate, the electronic payment systems ensure speed and security

of the transaction processing chain, from verification and authorisation to clearing and

settlement. Also it gives a great deal of freedom from more costly labor, materials, and

accounting services that are required in paper-based processing, better management of cash

flow, inventory, and financial planning due to swift bank payments.

Thin-client architecture over the Internet reduces the cost of maintenance associated with

frequent upgrades and support. The deployment of Finacle enables a cost-effective channel

through which to serve customers. As the number of transactions completed on-line increases,

the number of more expensive branch transactions decreases. This is especially true of small

business customers who tend to use the branch as their primary channel. Greater automation

and productivity, as well as reduced human error, further lead to increased cost savings.
Increased Customer Satisfaction

The self-service capabilities empower corporate customers to manage the solution in terms of

defining user-permissions, based on hierarchy and roles. This leads to greater convenience and

offer better monitoring of banking transactions in real time. A more empowering corporate client

would be a more satisfied and profitable customer.

Cash Management Basics
Cash is your business's lifeblood. Managed well, your company remains healthy and strong.
Managed poorly, your company goes into cardiac arrest.

If you haven't considered cash management an important issue, then you're probably

undermining your business's short-term stability and its long-term survival. But how can you

manage business cash better?

Start with understanding how good cash-management practices can influence your company's

growth and survival by reading "The Art of Cash Management," Inc Finance Editor Jill Andresky

Fraser's classic article on the topic. Then dive into forecasting your business-cash

needs and learning how to handle a cash crisis. Assembled here are practical pieces of advice,
tips and tricks from CEOs, and tools that you can use to get a handle on business cash.
Handling and Avoiding Crises
How Do You Define Cash Flow?
If your definition of cash flow is flawed, and you're not tracking the right numbers, you
may grow your company right into a cash crisis.
The 10 Absolutely Must Follow Cash Flow Rules
Everyone wants cash on hand at all times. Here are 10 rules to help you get there.
The Magic Number
Every business has a magic number. By employing his, our columnist didn't overstaff this
year.
Riding the Economic Roller Coaster
Tighten your seatbelt. Surviving the ups and downs of the world economy means keeping
an eye on business finances.
When a Cash Crisis Strikes

Credibility with vendors, bankers, and other creditors is built slowly, but can be destroyed quickly

if your company falls behind on payments. Know how to break the bad news to preserve your

business's relationships.
Hot Tip: Prepare for a Cash Crisis

How do you prep for a cash crisis? Wayne Karpoff, president of Myrias Software Corp., knew

cash would be a problem late last year. His 15-employee, $1.5-million company dropped selling

its products and became a full-time service business. So he built a contingency fund into his

annual budget -- an amount equal to three months' worth of payroll. He got the idea when his

bank suggested he set up a contingency fund to safeguard his mortgage payments in the event

he found himself out of work. He dipped into the fund three times last year to float the company

during project and payment delays.

Source: Ilan Mochari,Inc magazine, March 2000
Forecasting, Projections and Budgets
The Secrets to Formatting Cash Flow Projections
Here are the keys to creating a powerful tool to take control of your cash flow.
Cash Flow Projections Made Easy
Here is a 4-step process you can use to create cash flow projections you can trust.
Breaking Free from Budgets
Exasperated by budgets that hamstring creativity, a growing number of companies are
tossing off financial constraints--and still holding the line on spending.
Budgeting for Blunders
Lisa Hickey created a fund to support creative risks her Boston-based ad agency, Velocity
Inc., takes when trying innovative ideas that might not pan out.
A Passion for Forecasting

Don't put together an annual sales forecast using only gut instinct and wishful thinking! Here are

some rules you can follow to create a forecast that you and your employees can count on.
Action Plan: Forecasting and Cash-Flow Budgeting

Developing a budget is simple, and when created with solid sales and expense forecasts in mind,

you can ensure that your budget will stand up to the daily demands of your business. Here are

some steps you can take to create a cash flow budget you can rely on.

Services should be reviewed once implemented to ensure that the high-level goals and

objectives are obtained. There should also be an ongoing emphasis on improvement, and a

culture for empowering staff to recommend and look for ways and means to improve cash

management services and processes. This needs to be encouraged, especially with the new

developments in technology afforded by the Internet. Management and users must commit to the

discipline of cash management.

Protecting Yourself from Fraud

Safeguarding your personal and financial information has become increasingly challenging, as

the threat of fraud has never been greater. Personal computers, the Internet and e-mail can

become dangerous weapons in the hands of someone looking to deceive you.

You can help prevent many types of fraud if you know what to look for. Below are some of the
most common online threats.
What types of scams should I be aware of?
Among ways that scam artists obtain access to personal and/or financial information are:
Phishing: These authentic-looking e-mail messages instruct the recipient to provide

sensitive personal, financial or password information. The e-mail appears to have been sent by a

reputable company from a legitimate e-mail address and includes logos and links to reputable

businesses and government agencies.

Social engineering (a term used in the information security industry):Cri minals

pretend to be, for example, from the security and fraud department of a major credit card

company. They ask questions to verify personal information such as your home address, as well

as the numbers on the back of your credit card, to verify you have the card.
Bank scams: Perpetrators attempt to get you to log on to a fake Web site to capture your

personal financial information. They send an e-mail to bank customers asking them to click on a

fake bank Web site and supply their account name and password. These e-mails may contain

logos and graphics that appear to be legitimate, but they often contain typos, e-mail addresses or

URLs that have nothing to do with the company. An example of this is the 419, or advance-fee

scam, run by Nigerian gangs who set up fake bank Web sites .
How can I protect myself from these scams?

Use extreme caution in providing personal information on Web sites or on unsolicited phone

calls. Be cautious of unexpected e-mails linking to online forms that ask you to submit sensitive

personal information. Legitimate Web sites hardly ever ask for this kind of information to confirm

account renewal or other information. Scam artists take many precautions to make consumers

believe their site is secure and legitimate.

If you receive an e-mail that warns you, with little or no notice, that an account of yours will be

shut down unless you confirm your billing information, do not reply or click on the link in the e-

mail. Instead, contact the company cited in the e-mail by a telephone number or Web site

address you know to be genuine. (Note: Merrill Lynch will not ask a client to send sensitive

personal information via non-secure e-mail.)

If someone calls about a potential attempt at credit card theft, hang up and call back, using the

phone number on the back of your credit card. Do not share any personal information over the

phone with an unsolicited caller.

Why Invest Your Working Capital?
Keeping your operating funds working for your company is crucial to maintaining healthy cash

flow and maximizing your financial return. Investing idle funds wisely may help you to generate

income from your working capital, increasing your yields while maintaining liquidity.

There are a wide variety of investment instruments available to companies seeking a return on

excess cash. How do you know which investments to choose? Many businesses emphasize only

convenience and accept whatever return is offered. However, there are ways you may be able to

improve yields on your idle working capital.

Concentrate on maximizing after-tax returns

If your company is in a lower tax bracket, focus on higher yields rather than tax advantages;

however, if your federal tax bracket is high, you may be able to obtain a better after-tax return by

investing in federally tax-exempt securities. It's important to compare the yields on tax-free

obligations to their fully taxed equivalents to find those that provide a higher after-tax return. The

tax benefits of some investments may depend on your business structure. 1

highest investment rating) of equal maturity. You should, however, be comfortable with the
incremental risk associated with lesser quality credits.
Choose investments based on the amount of cash available to you

Many working capital investment vehicles must be purchased in minimum amounts and in

multiples of the same or smaller amounts. Treasury bills, for example, can be bought in multiples

of $1,000, with a minimum investment of $10,000.

As a business grows and builds a stronger cash flow, the variety of investment opportunities

increases. If you have a large amount of investable assets (perhaps $100,000 or more), this

gives you an advantage in finding higher rates. Many institutional investment vehicles require

high minimum investments but, in return, offer higher yields

Four Steps to a Healthy Cash Flow

Healthy cash flow is essential to the success of a small business. You may have the best service

or product around, your employees and customers may love you, your office may be well
organized, but if you don’t have the money to buy inventory or pay bills, you can’t keep your

business running. Many business owners make the mistake of believing cash flow is largely out

of their control. On the contrary, the following steps can really help.
1. Analyze your financial condition

Financial analysts, credit providers and knowledgeable investors rely heavily on financial ratios to

judge the health of a company. You should use these tools as well. Commonly used ratios can

help you analyze your pricing strategy, level of overhead, liquidity, the health of your cash flow,

your average collection period, the appropriateness of your collection terms and your inventory

turnover rate.
2. Improve your cash management

When it comes to the cash flowing through your financial accounts, your goals should be to

ensure that incoming funds spend as much time as possible earning interest or dividends for

your benefit and that outgoing funds are available when needed. With a traditional business

checking account, meeting these seemingly simple goals can be a complex task. You will have to

move funds manually into a separate money market account in order to earn interest or dividend

income and back into your checking account to cover disbursements when due.

An alternative is a central asset account, which combines traditional checking features,

investment and borrowing into a single account. A central asset account saves you time and

effort by automatically putting your cash where it needs to be, when it needs to be there. And by

keeping your cash in interest-bearing accounts right up until the moment disbursements clear

your account, a central asset account can also help increase your return and your bottom line. 1
3. Even out temporary fluctuations

No matter how efficiently you manage your cash flow, there may be times when your business

needs more money than it has on hand. This is why adequate credit resources are essential. A

business line of credit is useful and convenient because it can be used as needed, paid down
and reused without reapplying. When a line of credit is integrated with a central asset account,

credit is automatically accessed when needed. And incoming funds automatically go to pay down

your loan balance, reducing borrowing time and interest expense.

4. Invest surplus cash

Although part of your business capital needs to be liquid, most businesses have some capital

that can be invested in short- and intermediate-term securities for potentially higher yields. A

broad array of investments can be purchased within a central asset account. And you can sell

securities in your account at any time, or, if appropriate, borrow against their value 2, to meet

working capital needs. Be sure to discuss the risks of borrowing against your securities with your

Business Financial Advisor.

Today’s business environment changes rapidly, and as a business owner, you need to regularly

review your cash flow and cash management policies to ensure that they are helping to keep

your business competitive.

highest investment rating) of equal maturity. You should, however, be comfortable with the
incremental risk associated with lesser quality credits.
Choose investments based on the amount of cash available to you

Many working capital investment vehicles must be purchased in minimum amounts and in

multiples of the same or smaller amounts. Treasury bills, for example, can be bought in multiples

of $1,000, with a minimum investment of $10,000.

As a business grows and builds a stronger cash flow, the variety of investment opportunities

increases. If you have a large amount of investable assets (perhaps $100,000 or more), this

gives you an advantage in finding higher rates. Many institutional investment vehicles require

high minimum investments but, in return, offer higher yields

Four Steps to a Healthy Cash Flow

Healthy cash flow is essential to the success of a small business. You may have the best service

or product around, your employees and customers may love you, your office may be well

organized, but if you don’t have the money to buy inventory or pay bills, you can’t keep your
business running. Many business owners make the mistake of believing cash flow is largely out

of their control. On the contrary, the following steps can really help.
1. Analyze your financial condition

Financial analysts, credit providers and knowledgeable investors rely heavily on financial ratios to

judge the health of a company. You should use these tools as well. Commonly used ratios can

help you analyze your pricing strategy, level of overhead, liquidity, the health of your cash flow,

your average collection period, the appropriateness of your collection terms and your inventory

turnover rate.
2. Improve your cash management

When it comes to the cash flowing through your financial accounts, your goals should be to

ensure that incoming funds spend as much time as possible earning interest or dividends for

your benefit and that outgoing funds are available when needed. With a traditional business

checking account, meeting these seemingly simple goals can be a complex task. You will have to

move funds manually into a separate money market account in order to earn interest or dividend

income and back into your checking account to cover disbursements when due.

An alternative is a central asset account, which combines traditional checking features,

investment and borrowing into a single account. A central asset account saves you time and

effort by automatically putting your cash where it needs to be, when it needs to be there. And by

keeping your cash in interest-bearing accounts right up until the moment disbursements clear

your account, a central asset account can also help increase your return and your bottom line. 1
3. Even out temporary fluctuations

No matter how efficiently you manage your cash flow, there may be times when your business

needs more money than it has on hand. This is why adequate credit resources are essential. A

business line of credit is useful and convenient because it can be used as needed, paid down

and reused without reapplying. When a line of credit is integrated with a central asset account,
credit is automatically accessed when needed. And incoming funds automatically go to pay down

your loan balance, reducing borrowing time and interest expense.

4. Invest surplus cash

Although part of your business capital needs to be liquid, most businesses have some capital

that can be invested in short- and intermediate-term securities for potentially higher yields. A

broad array of investments can be purchased within a central asset account. And you can sell

securities in your account at any time, or, if appropriate, borrow against their value 2, to meet

working capital needs. Be sure to discuss the risks of borrowing against your securities with your

Business Financial Advisor.

Today’s business environment changes rapidly, and as a business owner, you need to regularly

review your cash flow and cash management policies to ensure that they are helping to keep

your business competitive.

PROFILE
AN INTRODUCTION TO THE BANKING SECTOR IN INDIA
Banks are the most significant players in the Indian financial market. They are the biggest

purveyors of credit, and they also attract most of the savings from the population. Dominated by

public sector, the banking industry has so far acted as an efficient partner in the growth and the

development of the country. Driven by the socialist ideologies and the welfare state concept,

public sector banks have long been the supporters of agriculture and other priority sectors. They

act as crucial channels of the government in its efforts to ensure equitable economic

development.

The Indian banking can be broadly categorized into nationalized (government owned),

private banks and specialized banking institutions. The Reserve Bank of India acts a centralized

body monitoring any discrepancies and shortcoming in the system. Since the nationalization of

banks in 1969, the public sector banks or the nationalized banks have acquired a place of

prominence and has since then seen tremendous progress. The need to become highly

customer focused has forced the slow-moving public sector banks to adopt a fast track approach.

The
unleashing of products and services through the net has galvanized players at all levels of the

banking and financial institutions market grid to look anew at their existing portfolio offering.

Conservative banking practices allowed Indian banks to be insulated partially from the Asian

currency crisis. Indian banks are now quoting al higher valuation when compared to banks in

other Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems

linked to huge Non Performing Assets (NPAs) and payment defaults. Co-operative banks are

nimble footed in approach and armed with efficient branch networks focus primarily on the ‘high

revenue’ niche retail segments.

The Indian banking has finally worked up to the competitive dynamics of the ‘new’ Indian

market and is addressing the relevant issues to take on the multifarious challenges of

globalization. Banks that employ IT solutions are perceived to be ‘futuristic’ and proactive players

capable of meeting the multifarious requirements of the large customer’s base. Private Banks

have been fast on the uptake and are reorienting their strategies using the internet as a medium

The Internet has emerged as the new and challenging frontier of marketing with the conventional

physical world tenets being just as applicable like in any other marketing medium.

The Indian banking has come from a long way from being a sleepy business institution to

a highly proactive and dynamic entity. This transformation has been largely brought about by the

large dose of liberalization and economic reforms that allowed banks to explore new business

opportunities rather than generating revenues from conventional streams (i.e. borrowing and

lending). The banking in Indiais highly fragmented with 30 banking units contributing to almost

50% of deposits and 60% of advances. Indian nationalized banks (banks owned by the

government) continue to be the major lenders in the economy due to their sheer size and

penetrative networks which assures them high deposit mobilization. The Indian banking can be

broadly categorized into nationalized, private banks and specialized banking institutions.

The Reserve Bank of Indiaacts as a centralized body monitoring any discrepancies and

shortcoming in the system. It is the foremost monitoring body in the Indian financial sector. The

nationalized banks (i.e. government-owned banks) continue to dominate the Indian banking

arena. Industry estimates indicate that out of 274 commercial banks operating in

India, 223 banks are in the public sector and 51 are in the private sector. The private sector
bank grid also includes 24 foreign banks that have started their operations here.
The liberalize policy of Government of India permitted entry to private sector in the banking, the
industry has witnessed the entry of nine new generation private banks.The major
differentiating parameter that distinguishes these banks from all
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RUKMINI DEVI INSTITUTE OF ADVANCED STUDIES
(Aff. to Guru Gobind Singh Indraprastha
University)
CERTIFICATE
This is to certify that the summer training project (MS/BBA-CODE) entitled
Study of cash management at Standard Chartered Bank done by Mr.

Avnish Mehra, Roll No. 1371591706 is an authentic work carried out by her at Rukmini Devi

Institute of Advance Studies under my guidance. The matter embodied in this project work has

not been submitted earlier for the award of any degree or diploma to the best of my knowledge

and belief.