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Financing of PO-Principles Cash should be available to meet demand Not to be held in excess of demand Easy Mode of –Clearance of cash –Getting of cash Security arrangement In collecting office minimum kept 2

Financing of PO-Principles… In other offices normally minimum plus liability to be kept Liabilities exceed maximum balance, cash equal to actual liability to be kept Liabilities includes MIS interest, matured NSC/KVP can also be foreseen 3

Fixing of authorized balances On the basis of cash handled by an office –Cash receipts –Cash payments This can be arrived at by collecting four quarterly months statistics as discussed in next slides 4

Collection of statistics Suppose you are taking up a proposal for revision of authorised balance in the month of March 2011, then the statistics for the following months are to be collected and sent. –May2010 –August2010 –November2010 –February2011 5

Collection of statistics (Receipt side) Total of all columns in SO account except the following –Opening Balance column –Cash received from cash office –Book adjustment items –Cheque transaction 6

Collection of statistics (Payment side) Total of all columns in SO account except the following –Cash remitted to cash office –Book adjustment items –Payment by cheques – Closing balance column 7

Fixing of authorized balances… General rule Three type of offices will be there –Collecting office –Paying office –Office where receipt & payment equal Minimum normally average requirement + 25% Maximum normally 1.5 times of minimum 8

Fixing of authorized balances… Other points to be seen Time required to replenish or clear cash Safety arrangements for cash Line limits for remittance Whether the office is –Collecting office –Paying office –Both equal 9

Fixing of authorized balances…(collecting office) Minimum cash –50% of daily average payment (Bank transaction) –Daily average payment + 25% Maximum –Min + (difference betn receipts & payments) x No.of days required for remittance to remove surplus cash 10

Exercise- 7 (SO – B) 11

Fixing of authorized balances…(Paying office) Minimum –Daily average payment x No.of days for rem + 25% Maximum –Min + (Daily payment-Daily receipts) x No. of days for remittance 12

Exercise- 7 (SO – A,BO – D,BO - E) 13

Fixing of authorized balances…(Receipts & Payments are equal) Minimum –Daily average pmt + (difference betn receipts & pmts) x No.of days for remittance Maximum –Min + (difference betn receipts & pmts) x No.of days for remittance 14

Exercise- 7 (SO – C) 15

Fixing of authorized Stamp balances SO/BO –Daily average sale of PS x 15 Head Office –Daily average sale x (30 + transit from CSD to HO) –(HO Sale + Supply to SOs +Supply to BOs) 16

Exercise- 7 (Postage stamps) 17

Line limits CategoryFoot/CycleOther vehicles In closed bagRs.15,000Rs.20,000 Postman without escort Rs.20,000 Head postman/ Overseer without escort Rs.30,000 18

Line limits CategoryFoot/cycleOther vehicles PRI(P)/PARs.20,000Rs.25,000 PA with escortRs.25,000Rs.50,000 Postman/HPM/ Overseer with escort Rs.30,000Rs.50,000 IPRs.30,000Rs.40,000 19

Suggestion to reduce cash handling Deposits by cheque or DD Payment by cheque Automatic transfer to POSB account Reinvestments Payments credited to POSB account TRC by cheque 20

Security vigilance on cash by Postmaster MAB -Memo of Authorized Balance CMAB -Consolidated Memo of Authorized Balances MR -Monthly Report 21

Security vigilance on cash by Postmaster… ECB Memo -Excess Cash Balance Memo BO Abstract and MO payment 22

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