Cash Management Services

Traditionally banks in India had a paper based clearing system involving high processing cost and security risk. Objective of a cash management service is to improve revenue, maximize profits, minimize costs and establish efficient management systems. In India, cash management business primarily involves collections and payments services. The requirement of an efficient cash management solution in India is to execute payments, collect receivables and managing liquidity.

Products offered by banks under collections (paper and electronic):

Local cheque collections. High value (0 Day clearing). Magnetic ink character recognition (MICR) (three day clearing of cheques). Outstation cheque collections. Cheques drawn on branch locations. Cheques drawn on correspondent bank locations. Cheques drawn on coordinator locations. House cheque collections. Outside network cheque collections. Cash collections. ECS-Debit. Post dated cheque collections. Invoice collections. Capital market collections.

Products offered by banks under payments (paper and electronic):

Demand drafts/bankers cheques. Customer cheques. Locally payable. Payable at par. RTGS/NEFT/ECS. Cash disbursement. Payments within bank. Capital market payments.

Cash Management Solutions offered in India

Account reconciliation service
Balancing a cheque book for a very large business is a difficult process. Banks allow companies to upload a list of all the cheques whereby at the end of the month, the bank statement will show not only the cleared cheques but also uncleared ones.

Positive Pay
An effective anti-fraud measure for cheque disbursements. Using the cheque issuance data, updated regularly with cheque issuance and payment, the bank balances all cheques offered for payment. In the case of any discrepancies, the cheque is reported as an exception and is returned.

Cash Management Solutions offered in India (cont.)

Balance reporting service
Balance reporting provides help in procuring a company's current banking information from its accounts. With this service the banks can offer almost all types of transaction-specific details on activities related to payment like deposits, cheques, wire transfers etc. It also helps in an effective and efficient management of regular cash flow.

Lockbox
Facilitates the cash improvement where, instead of being delivered to business address, customer payments are delivered to a special post office (PO) box. The company's own bank collects the amount and delivers them to the banks of the customers. The bank of the customers opens and processes the payments for direct deposit to the bank account.