Vault Cash Management

Presentation
on
Vault Management
Md. Anis Ur Rahman

SVP & OM
Banani Branch
1
Cash & Vault Custodian
 Cash may be defined as the sum of all coins,
currency and other unrestricted liquid funds
that have been placed on deposit with a
financial institution. Cash in bank is
considered a highly liquid form of current
asset, and when reported on a business'
balance sheet, it is combined with cash in hand
for accounting purposes.
 Cash department of the branch deals all kinds
of cash transactions (Payment and Receive).
2
 A bank vault (or strong room) is a secure
space where money, valuables, records, and
documents can be stored. It is intended to
protect their contents from theft, unauthorized
use, fire, natural disasters, and other threats,
much like a safe.
3
 Unlike safes, vaults are an integral part of the
building within which they are built, using
armored walls and a tightly fashioned door
closed with a complex lock.
4
 A custodian is a person, who is responsible for
safeguarding of the cash/vault of the bank. The
safekeeping of cash (local & foreign) is the basic
responsibility of a custodian.
 The custodians will be closed daily cash. Cash
Balance Book, Cash position memo and vault
register will also be signed by the custodians.
5
 At close of business of the day the physical cash
is kept in the vault /iron safe. The cash Balance
book and vault register should be kept in the
vault. The vault /iron safe in double locked by all
the custodians. When the vault is opened all the
custodians must be present.
6
 Who would be the custodian?
 Cash and vault maintained by joint custodian
with Manager /Operation Manager and Cash in-
Charge.
 As per the circular of our bank cash/vault
custodian will be the Branch In-charge/Head of
Branches jointly with cash in-charge except
Principal Branch, Dhaka, Khatungonj & Agrabad
Branch, Chittagong and Sylhet Branch, Sylhet.
7
 That means the HOB(S) of all Branches are to
hold the vault keys. However, in case of
Branches where the HOB is VP and above and
the Operation Manager is in the rank of FAVP,
HOB(S) of those branches may be relieved from
holding of vault keys.
8
Vault Limit
 The vault limit means the limit upto which the
respective branch can hold the cash (both BDT
and foreign currency). Each branch should
maintain the limit of the vault.
 Basically, the vault limit is fixed/approved by the
concern department (BCCD) of Head Office.
Considering the transaction volume, location of
branch, the vault limit is determined.
9
Vault Limit
 In case of requirement of excess limit for an
interim period, the branch should obtain
approval from Head office and insurance to be
obtained for the enhanced amount.
10
Cash/Vault Insurance
 Insurance is a contract, represented by a policy,
in which an individual or entity receives financial
protection or reimbursement against losses
from an insurance company. The company pools
clients' risks to make payments more affordable
for the insured.
11
 Cash/vault insurance means to keep the
cash/vault secured in every aspects. Insurance
Coverage is required for every position of Cash
for safety and security purpose.
12
 Bank maintains four kinds of insurance for cash
purpose.
a. Cash in vault
b. Cash in counter
c. Cash in transit
d. Cash in ATM
13
 Cash department deals will all kind of cash
transactions. This department starts the day
with cash in vault. When cash are put down in a
vault to preserve with security is called cash in
vault.
 When cash are brought from vault to counter
for payment purpose before starting of
transaction hour in called cash in counter.
14
 When cash in vault or closing balance is over
the insurance limit or lower than the minimum
cash requirement for smooth cash operation
for the next working day, the branch have to
contact with feeding Branch for lifting or
arranging cash. This situation is known as cash in
transit.
15
 When the branch feeds the cash into the ATM’s
for 24 hours cash withdrawal facility of our
clients is called cash in ATM.
 Insurance coverage is required for every

position of cash as above for safety and security
purpose.
16
 Present insurance policy of the bank:
Bankers Blanket Bond including Electronic
Computer Crime Insurance.
To indemnify the reinsured for losses arising from
Bankers Blanket Bond including Computer Crime
whether by Infidelity of Employees, on Premises of
the Insured or In Transit or by Forgery or
Alteration, Securities, Counterfeit Currency, Office
and Contents during the period of insurance.
17
Cash Remittance with feeding
Branch
 Feeding means to supply with something
essential for growth, maintenance or operation.
In banking point of view, feeding means to
supply/receive required cash to the nearby
branches and the branch who performs this
act is called feeding branch.
18
Branch
 If the cash in hand exceeds the limit as authorized
by the Head Office, the feeding branch is
informed to collect the excess cash. With due
consent of HOB/OM, Cash in-charge inform the
feeding branch for lifting of additional cash on
receipt of information the feeding branch deputed
a cash officer along with a letter of authority to
collect the cash with adequate security
arrangement.
19
Branch
 To complete the process, the feeding branch has
to follow some steps like-
a) Armed guards to be accompanied with the
cash officer along with the letter of authority
to receive the cash from the branch.
b) The transit register to be recorded and
signed by the authorized officer (with
adequate insurance).
c) Required transaction to be made in the
FCBUS by the cash in charge from the Vault
ID.
20
Deposit of cash to chest Branch
 To facilitate the distribution of banknotes and
coins, the Central Bank has authorized
scheduled banks (Sonali Bank Ltd.) to establish
Currency Chests. These are actually
storehouses where banknotes and coins are
stocked on behalf of the Central Bank. The
chest branches are expected to distribute
banknotes and coins to other bank branches in
their area of operation.
21
 The chest branch concept is applicable for the
areas where the branches of central bank are
not located.
22
 Operations of Chest Branch:
If cash in hand exceeds limit authorized by the
Head Office, the excess amount is deposited with
the chest branch (Sonali Bank) where account is
maintained. On the other hand, if the branches
faces shortfall of cash, the respective branches
may collect the cash from the chest branch.
The account which is maintain with the chest
branch is like a corporate account maintained
with a bank.
23
Basically the account is operated by the Joint
signatory. It may be mentioned here that early
notification is required for the deposit and
withdrawal to the chest branch for a certain
amount (may be differ considering the location).
For deposit or withdrawal of cash some required
accounting entries to be passed.
24
Cash arrangement with
Bangladesh Bank
Cash arrangement with Bangladesh Bank is
normally maintain by the feeding branch. If cash in
hand exceeds the limit authorized by the Head
Office the excess amount is deposited with
Bangladesh Bank. On the other hand, cash is
withdrawn from the Bangladesh Bank, when cash
is required for day to day operations.
25
Cash arrangement with Bangladesh
Bank
 Cash to be carried (both deposit & withdrawal)
strictly according to the limit.
 At the time of deposit of cash to Bangladesh
Bank, the following entries to be passed:
Dr: Banker’s A/C Bangladesh Bank
 The following entries are passed to deposit the
cash in the branch:
Cr: Banker’s A/C Bangladesh Bank
26
Exchange of soiled and Mutilated
notes
Mutilated Notes: Notes which are in pieces
and/or of which the essential portions are missing
can also be exchanged. Essential portions in a
currency note are name of issuing authority,
guarantee, promise clause, signature, water mark.
Refund value of these notes is, however, paid as
per Central Bank(Note Refund) Rules. These can
also be exchanged at the counters of any
schedule bank’s branch.
27
notes
 "Mutilated note“ means a note of which a
portion is missing or a note which is
composed of pieces, provided that the
note presented is clearly more than half a
note in area and that if the note is
composed of pieces of a note joined
together, each piece is, in the opinion of
Prescribed Officer, identifiable as the part
of the same note.
28
notes
 If the Prescribed Officer is satisfied that a
mutilated note presented before him is one
which appears to have been cancelled at any
office of Bangladesh Bank or the claim is one
which appears to have already been paid under
these regulations, he shall ,after making
enquiries reject the claim on such note.
29
notes
 Disposal of mutilated note(s):
No Claim in respect of a mutilated note shall be
entertained unless the single largest piece of the
note presented is more than 50%. Where the
single largest piece is more than 50% the payment
shall be made in the following manner, namely:
 Full value shall be payable if the area of the
note presented is more than 90% of the
respective denomination.
30
notes
 Proportionate value shall be payable if the
area of the note presented is more than 50%
and less than or equal to 90% of the
respective denomination as under:
Sl. Area of the note of Payable value of the note
respective of respective
denomination Denomination
1. 51% - 75% 50%
2. 76% - 90% 75%
31
notes
 Soiled notes are those which have
become dirty and slightly cut. Notes
which have numbers on two ends are
treated as soiled note. The cut in such
notes, should, however, not have passed
through the number panels. All these
notes can be exchanged at the counters
of any schedule bank’s branch in
Bangladesh.
32
notes
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33
Management of Keys
 Cash safe or vault keys will be held by Manager

/OM jointly with cash in-charge.
 Keys of strong room gate and grill gate will be
held by the OM/GB in-charge of the branch
jointly with any other officer.
 Duplicate key to be kept in the locker of
nearest Branch of the Bank with due record
34
Management of Keys
 Keys of the vault which is included keys of the

door and the grill door are received by the
branch all the keys shall be recorded in the key
register. Name of the officers to whom the keys
are allocated shall be recorded in the key
register with date and time of allocation. Input
the name and signed when the keys are handed
over to another officials.
35
Thank You
36

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Presentation

Md. Anis Ur Rahman

 Insurance coverage is required for every

 Cash safe or vault keys will be held by Manager

 Keys of the vault which is included keys of the

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