PRESENTATION

ON

SUMMER TRAINING PROJECT REPORT

TOPIC: WORKING OF CASH MANAGEMENT SYSTEM

COMPANY: BHUSHAN STEEL LIMITED, SAHIBABAD(U.P.)

GIVEN BY:
SHALABH GOYAL
MBA-3rd Sem.
SESSION: 2007-2009

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 NEERAJ SINGAL
Managing Director

Vision:

To provide the best service,

technology, quality to customers and
value of money to stakeholders.

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 Company Profile:
BSL was incorporated in 1983.

It is an ISO 9002,QS 9000 Certified

company.

The company establish it’s plant in 1987 at

Sahibabad.

The Khopoli plant, commissioned in 2004

has been playing a remarkable role in the
growth of exports & in the production of a
much wider variety of value added steel .

 The milestone came in BSL by establishing

new plant at Dhenkanal in Orissa.

It currently exporting to Europe, USA,

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 POLICIES OF BHUSHAN STEEL LTD.

1. Integrated Quality.
2. Environment protection policy.
3. Occupational Health & Safety
Management System Policy.

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 PLANTS
Presently BSL has 3 plants set up as-

1. Sahibabad plant
2. khopoli plant
3. Dhenkanal plant

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 PROBLEM FACED

• Span of time as the company provided

three days training only within a week.

• Hectic schedule of finance department.

• The availability of the data as I get data

which belongs to only few banks provided
by the company.

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 OBJECTIVE OF THE PROJECT

To gather information about the

collection charges charged by different
banks at different locations for the
given period and find out which Bank
provides better services at minimum
cost.

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 RESEARCH METHODOLOGY

FOR the research work, the data used for the

project was both primary as well as
secondary in nature.
For collecting the primary data, the source was the information
collected by different banks about their cash collections charges.

I gathered the Secondary Data matter from Company:

Statement of Accounts.
Company’s Balance Sheet.
Statement of opening charges.

The analysis is done on the basis of the various Statements

of the Cash Management Services provided by the bank to
Bhushan Steel Limited. The total collection from various
locations is calculated for the respective banks..

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 LIMITATION OF THE PROJECT
Although every sort of precautions has taken while preparing the summer
training project yet following are the limitations associated with the project:

1. Span of time
2. Bank rate changes with respect to time
frequently.
3. Capacity of negotiation in cash collection
charges refers to the turn over of the
company accordingly.
4. Different type of industries may have
different scenario

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Cash management system
• Bhushan steel ltd follows a unique system of cash management
to establish synchronization between fund inflow and outflow. BSL
keeps a keen watch on each and every aspect of cash. Finance
department of Bhushan Steel maintains a separate team of people
who are responsible for the smooth functioning of the cash
management system.

• Earlier BSL also used to bear the cost related to collection period of
2-3 days, but now bank account of BSL gets credited either on the
same day or on the next day, thus saving time cost of money.

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 WORKING WITH CASH MANAGEMENT
SYSTEM

• The banks collect payments from customers on behalf of Bhushan

Steel, in return of which bank charges a nominal amount from
Bhushan steel Ltd. These collection charges vary from bank to
bank and location to location as per the agreement with Bhushan
Steel Ltd. Due to CMS being implemented in BSL, the problem of
blockage of money has been cured.

• Earlier BSL also used to bear the cost related to collection period of
2-3 days, but now bank account of BSL gets credited either on the
same day or on the next day, thus saving time cost of money.
When the cheque paid by the party to Bhushan Steel is being
dishonored, the bank credits the BSL a/c on the very same day but
then debits it on the next day when the notification of the dishonor
of the cheque is being received.

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• After this area wise collection charges is
being calculated as per the bank located
in different areas. Area wise detail of the
collection charges for the month of April
and May for ICICI bank has been stated
below:

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Collection Charges of ICICI
bank Location Days Rate
Ahmadabad 1 0.3
Amritsar 2 0.2
Aurangabad 2 0.2
Bangalore 1 0.15
Baroda 2 0.3
Calcutta 1 0.15
Chandigarh 1 0.15
Chennai 1 0.15
Dindigul 2 0.3
Hubli 2 0.3
Hyderabad 1 0.15
Jaipur 1 0.15
Jallandhar 2 0.3
Kanpur 1 .05
Ludhiana 2 0.2
Mumbai 1 0.15

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 ICICI-CMS BANK SERVICE CHARGES FOR THE M/O MARCH 08

LOCATION COLLECTION RATE TOTAL  

AHMEDABAD 2537181.00 0.0004 1014.87  

NAGPUR 5453139.86 0.0003 1635.94  

MUMBAI 9552339.93 0.0004 3900.00  

JALLANDHAR 3056092.00 0.0003 916.00  

LUDHIANA 1395840.00 0.0002 279.00  

TOTAL 21994592.79 7745.81  

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CONCLUSION
• CASH Management Services has saved huge amount of cost which BSL had to
pay to procure funds from its customers. The savings have been nearly to the
tune of Rs 4800000. CMS has not only saved cost but have also ensured fast
realization of cash. Earlier it used to take BSL at least 4-5 days to realize the
payments made by its customers whereas now it takes 24-48 hrs.
• On the basis of information of collection charges charged by the different
banks I conclude that HDFC and UTI are best suited for BSL. The conclusion has
not been made only on the grounds of financial charges, while finalizing the
banks the interest rate, MIS report by banks have also been taken into
consideration.
• BSL adopted CMS in 1999, at cheapest rate of that time but now these are very
high and there is the need of negotiation.
• HDFC bank does not charge the collection charges of cheques by courier.

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RECOMMENDATION
• I would like to recommend BSL to negotiate with
HDFC for different locations so if negotiation at
lower rates, then the saving would increase at
higher rates.
• As regard business with Corporation Bank,
Corporation Bank is having very high rate as
compared to HDFC.
• ICICI Bank is another option but it charges high in
case of delayed payment.
• In case of delay in credit by banks BSL should
charge the interest as equivalent as bank rate.

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