The document discusses cash management services (CMS) and related topics. It defines CMS and outlines its benefits for customers, including assured credit, pooling of funds, and control benefits. It describes the CMS structure and process, including client acquisition, collection and disbursement products, branch responsibilities, and operational constraints. Host to host connectivity, correspondent banking services, and related advantages and disadvantages are also summarized.

1. Presented By
Adnan Abdul Kader
Piyush Das
Zeeshan Mohammad

2.  What is CMS  Branch Responsibility
 Need for CMS  Operational Constraint
 Customer Benefits  Disbursement
 CMS Structure  Host to Host Connectivity
 Client Acquisition Process  Correspondent Bank
 CMS Procedure Services
 CMS Collection Products
 Express Local Collection
 Swift Workflow
 Max Reach Workflow

3.  CMS is the process of optimizing receivable and payables ensuring predictability
in the cash flows of CMS clients.
 In a geographically large country like India having a complex financial clearing
system, corporate find it increasingly challenging to process collections &
payments across dispersed business locations.
 Cash Management thus means getting funds in time, quick transfers, quick
realization of local and outstation instruments, easy disbursements, accounts
reconciliation, controlled processes and customized MIS.

4.  Geographical spread of the country
 Complex clearing system
 Delays in cash realizations
 Uncertainty in cash flows
 Increased borrowing and associated costs
 Difficulty in collecting data / MIS on the funds
collected

5.  Assured Credit
• Availability of cleared funds variable
• Depends on type of cheque viz. Local/Outstation(Branch/Non branch)
• Customer gets credit after fixed number of days once instruments are picked up,
even if bank is not yet in funds
 Pooling of funds
• Funds collected & deposited in Central Account
• Instruments picked up at various locations, sent to appropriate clearing houses,
funds collected & credited to customer’s Pooling Account
 Control Benefits
• Corporate to maintain better control over its various Banking and Treasury
related activities
• Improve speed and ease of reconciliation and reduces the risk of fraud

6. CMS Sales
• Client identification
• Understand requirements
• Pricing Approval & Offer
•Documentation
Delivery Channels
CMS Operations
IT Platform Branches
CPU
6

7. Customer Call Get the required line limit
approval from Head – CMS (in
Understand case of Auto Lines- NLL) /
requirements Credit approval process (in case
of credit line limit - LL)
Collect the
information
Send the completed document
required for pricing
set to CMS CPU
Obtain the pricing
approval from Inform the client once the
Head - CMS setup is confirmed by
Operations and ensure send
startup instructions to the
Send the Offer customer
Letter to the client
Make some post delivery calls
Collect to ensure that all pickups/MIS
Documentation etc is happening in a timely
from the Client manner. 7

8. Cash Management Service
Collection or Payment or
Receivables Management Payables Management
Collection Disbursement
Products Products
8

9.  A Chq is a Local Chq when the Chq Payable SWIFT Outstation cheques drawn On IDBI
Location & Deposit Location is the same. locations
 A Chq is Outstation when the Chq Payable &
MAX Outstation cheques drawn On Non
Deposit Location are different.
REACH IDBI / Corr Bank locations i.e.
where partner bank tie up is in
place
EXPHV Local High Value Cheques at IDBI Bank
Locations REMOTE Outstation Collections in locations
beyond IDBI and Partner Bank
EXPRES Local Collections on IDBI Bank Centrs
S Locations
RAPID Local Collections on Non IDBI Bank /
REACH Partner Bank Locations
CCASH Cash Deposited at IDBI locations
(IRR) by CMS Clients
IDBITRF Cheques drawn on IDBI Bank across all NCASH Cash Deposited at Non IDBI
Branches Bank but partner bank locations
*SPEED Outstation cheques drawn on CBS
Networked Bank Branches
participating in RBI’s Speed Clearing. 9

10. Customers deposit local
cheques at IDBI branches Cheques are
or the cheques are picked sent into
up by the courier clearing
Local IDBI
Bank Branch
Local Clearing
Pick Up House
Location
Funds are credited
Pool into a pool account
Account as per arrangement.
10

11. CMS Pool A/C
Operations
Pick up location
SWIFT Chqs from Non
IDBI locs sent to CPC
Mumbai
IDBI Bank Branches
Couriers SWIFT Cheques
To IDBI Bank at Drawee Locations IDBI Bank at
Drawee
Locations 11

12. CMS
CPC Mumbai Client Credited as per
Arrangement.
Courier pick-up
From Clients Office at
Non IDBI Centers Chqs from Non IDBI
locs sent to CPC
Mumbai
Max Reach chqs
processed by CPC
IDBI Bank Branches Mumbai and
Couriers IMR Cheques dispatched accordingly
to CPC Mumbai. to the Corr Bank CPC
or Corr Bank Br.
12

13.  Accepting & Acknowledging receipt of cash/cheques
 Sorting of cheques
 Crossing of Cheques
 Data entry
 Return cheque processing
 Voucher checking report

14.  High dependency on vendors/service providers
 Delay in realisation of outstation (remote cheques) due to various
reasons
 Drawee bank not complying with RBI guidelines(14 days norm-
payment of interest for delayed credit),non co-operation
 Cash retention limits of branches, high rejection rates, absence of
adequate number of currency chests etc
 Decentralization of processing at few centres

15.  PROMPT PAY : Bulk Demand Draft issuance on IDBI Network. Instruments are
handed over to the customer/beneficiary.
 PROMPT PAY PLUS : Bulk Demand Drafts on Correspondent Bank Network.
DDs are printed centrally, on the Correspondent bank stationary.
 QUICK CHEQUE: Cheque Writing/Payable at Par on own bank Network with
Facsimile signatures of the client.
 EXPRO PAY: Bulk Instrument issuance on IDBI Network in the customized
format. . The data is uploaded in the Finacle system and instruments are printed
centrally and handed over to the customer.

16.  Last mile connectivity between Banks and Corporate which
facilitate high velocity business transaction
 Features of Host to Host Connectivity:
 Facilitates exchange of data
 Reduces Infrastructure complexities
 Less point of failure
 Improved Security
 Better transperancy

17.  To increase the penetration of banking services in the internal
part of the country, bank takes services from other institutions
 Institute Which provides correspondent services are:-
 Other Banks
 SHG
 MFI
 CSO

18.  Advantage to Bank:
 Increase penetration
 Cost Efficient
 Access to a new profitable segment in BOP market
 Advantage to Correspondent and public:
 Source of Revenue Generation
 Foster the habit of Savings
 Access to banking services like Micro Finance, etc

19.  Disadvantage of CBS:
 The reputation of Bank is at some others hand
 Issue relating what these institution can or cannot do (KYC,
etc)
 In competencies in handling many services
 Redressal of Grievance:
 The name and contact number of grievance redressal should
be known to public
 There should be a prompt reply to the grievance, if not address
in 60 days, complainant has an option to approach Office of
Banking Ombudsman

20.  Correspondent can also be done internationally with foreign
banks which doesn’t have a branch in India and the local bank
doesn’t have a branch in the foreign bank’s home country
 RBI permission is not required to set up correspondent service
(According to the letter issued by Mr P. Vijay Bhaskar-(Chief
General Manager of RBI) to all scheduled commercial bank as
on 25th January 2006)