A PROJECT REPORTON ON (Study of Cash management at Standard Chartered Bank) SUBMITTED IN THE PARTIAL FULFILLMENT OF DEGREE OF BACHELOR IN BUSINESS

ADMINISTRATION 2006-09 Guided By:

Submitted

RUKMINI DEVI INSTITUTE OF ADVANCED STUDIES (A f f . t o G ur u G o bi nd Si ng h I ndr a pr a s t ha University)

CERTIFICATE

T h i s is t o c e r t i fy t ha t t he s u m me r t ra i n i n g p r o j e c t ( M S / B B A C O D E)entitled St ud y of c a s h ma na g e me nt a t St a nd a r d C ha r te r e dBank done by Mr. Avnish Mehra, Roll No. 1371591706 is an authenticwork carried out by her at Rukmini Devi Institute of Advance Studiesunder my guidance. The matter embodied in this project work has notbeen submitted earlier for the award of any degree or diploma to thebest of my knowledge and belief. Date: Mrs. Jyoti Goel (Project Guide) RDIASRukmini Devi of Institute Of Advanced Studies 2 ACKNOWLEDGEMENT I sincerely record my appreciation to all, who have contributed in preparing this reportwith suggestions and critical evaluation. I am extremely thankful to Mr. AMIT AGGARWALA (Associate Director, standardchartered) who zestfully monitored the growth of this project. He from time to timeguided me in the right direction and took care that I had enough time to complete my project. As an amateur in this field I am indebted to those who have readily responded to myrequest for expert guidance. Rukmini Devi of Institute Of Advanced Studies 3 (na )

ABSTRACT In a business anything done financially affects cash eventually. Cash is to a business is what blood is to a living body. A business cannot operate without its life- blood cash, and without cash management, there may remain no cash to operate. Cashmovement in a business is two-way traffic. It keeps on moving in and out of business.The inflow and outflow of cash never coincides. Important aspect which is unique tocash management is time dimension associated with the movement of cash. Due to nonsynchronicity of cash inflow and outflow, the inflow may be more than the outflow or t he o u t fl o w ma y b e mo re t h a n t h e i n fl o w a t a p a r t ic u l a r p o i n t o f t i me . T h i s ne e d s regulation. Left to itself cash flow is apt to follow monsoonic pattern, and showers of c a s h ma y b e he a v y , s c a n t y o r j u s t n o r ma l . He nc e t he re is a d i re ne e d t o c o n t ro l i t s movement through skillful cash management. The primary aim of cash management isRukmini Devi of Institute Of Advanced Studies to ensure that there should be enough cash availability when the needs arises, not toomuch, but never too little 4

TABLE OF CONTENTSS Sr.No. Topics 1. Introduction Definition Facets of CMS Purpose of CMS CMS at Standard Chartered Bank 2. 3. 4. 5. 6. Objectives Reaserch Methodology Literature review Industry Profile Company profile 15 16-17 18-19 37-43 44-47

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History of Standard Chartered Bank About Standard Chartered Bank Products offered by SCB Cash Management at length

Rukmini Devi of Institute Of Advanced Studies5 7. 8. Analysis of the Case Study Case Study Case Study Analysis of the Case Study 9. 10. Limitation of the report Conclusion and recommendation  Conclusions  Recommendations References 110 88-86

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Appendixes  Questionnaire

106 - 109

INTRODUCTION

Cash managementis a marketing term for certain services offered primarily tol a r ge r b u s i n e s s c us t o me rs . It ma y b e us e d t o d e s c r i b e a l l b a n k a c c o u n t s (s uc h a s checking accounts) provided to businesses of a certain size, but it is more often used todescribe specific services such as cash concentration,zero balance accounting a n d automated clearing house facilities. Sometimes, private bank customers are given cashmanagement services.

Cash Management Services Generally offered The following is a list of services generally offered by banks and utilised by larger businesses and corporations: Rukmini Devi of Institute Of Advanced Studies Account Reconcilement Service: Ba la n c i n g a c h e c k b o o k c a n b e a d i ff i c u l t process for a very large business, since it issues so many checks it can take a lotof human monitoring to understand which checks have not cleared and thereforewhat the company's true balance is. To address this, banks have developed asystem which allows companies to upload a list of all the checks that they issueon a daily basis, so that at the end of the month the bank statement will show notonly which checks have cleared, but also which have not. More recently, bankshave used this system to prevent checks from being fraudulently cashed if theyare not on the list, a process known as positive pay . Advanced Web Services: Most banks have an Internet-based system which ismore advanced than the one available to consumers. This enables managers tocreate and authorize special internal logon credentials, allowing employees tosend wires and access other cash management features normally not found onthe consumer web site.

Armored Car Services: Large retailers who collect a great deal of cash mayhave the bank pick this cash up via an armored car company, instead of askingits employees to deposit the cash.

Automated Clearing House: s e r v i c e s a r e u s u a l l y o f f e r e d b y t h e c a s h management division of a bank. The Automated Clearing House is an electronicsystem used to transfer funds between banks. Companies use this to pay others,especially employees (this is how direct deposit works). Certain companies also use it to collect funds from customers (this is generally how automatic payment p l a ns w o r k ). T h i s s ys t e m i s c r it i c i z e d b y s o me c o n s u me r a d vo c a c y g r o up s , because under this system banks assume that the company initiating the debit is correct until proven otherwise. Balance Reporting Services: Corporate clients who actively manage their cash balances usually subscribe to secure web-based reporting of their account andtransaction information at their lead bank. These sophisticated compilations of banking activity may include balances in foreign currencies, as well as those atother banks. They include information on cash positionsas wellas 'float'(e.g.,c he c k s i n t h e p ro c e s s o f c o l l e c t i o n ). Fi n a l l y , t h e y o ffe r t ra ns a c t i o ns p e c i fi c d e t a i l s o n a l l fo r ms o f p a y me n t a c t i v i t y , i nc l u d i n g d e p o s i t s , c he c k s , w i re t r a n s f e r s i n a n d o u t , A C H ( a u t o m a t e d c l e a r i n g h o u s e d e b i t s a n d c r e d i t s ) , invest ments, etc. Cash Concentration Services: La r g e o r n a t i o n a l c ha i n re t a i l e rs o ft e n a re i n areas where their primary bank does not have branches. Therefore, they open b a n k a c c o u n t s a t va r i o us l o c a l b a nk s i n t he a re a . T o p re v e n t fu n d s i n t h e s e a c c o u n t s fr o m b e i n g i d l e a n d n o t e a r n i n g s u f fi c i e n t i n t e re s t , ma n y o ft h e s e c o m p a n i e s ha ve a n a g re e me n t s e t w i t h t he i r p r i ma r y b a n k , w he re b y t h e ir primary bank uses theAutomated Clearing House to electronically "pull" themoney from these banks into a single interest-bearing bank account. Rukmini Devi of Institute Of Advanced Studies8

s Manager or Cash Management representative.

Our Coverage We are the foreign bank having the largest geographical representation in the country. We are present in 31locations which enables you to print Payable At Par at 31 locations with the highestnumber of print sites. i.e. we can print cheque, drafts for you at 31 locations and thus bring down your cost. We can also provide 700+ locations online for draft required. Weare the only bank which provides draft status to you on the website. Collection Services Comprehensive receivables management solution. Standard Chartered understands thato p e ra t i n g a n d s us t a i n i n g a p r o fi t a b le b us i n e s s t h e s e d a ys is e x t re me l y t o u g h . I n a nenvironment of constant changes and uncertainties, most businesses face challenges of costs and efficiency. Key concerns include:Receivables Management - ensuring receivables are collected in an efficient and timely manner to optimise utilisation of funds.Risk Management - ensuring effective management of debtors to eliminate risk of returns and losses caused by defaulters and delayed paymentsInventory Management - ensuring efficient and quick turnaround of inventory to maximise returns.Cost Management - reducing interest costs through optimal utilisation of funds. Our Solution T he St a nd a r d C ha rt e re d C o l l e c t io n s So l u t i o n l e ve ra g e s t h e Ba n k 's extensive regional knowledge and widespread branch network across our key marketsRukmini Devi of Institute Of Advanced Studies18

to specially tailor solutions for your regional and local collection needs. In India wehave around 270 local locations and we are the only foreign bank which is present in 31l o c a t i o n s . W e ha v e t he w id e s t n e t w o r k a mo n g fo re i g n b a n k s i n t h e c o u n t r y. T h i s Collections Solution, delivered through a standardised international platform, has theflexibility to cater to your local needs, thus enabling you to meet your objectives of reducing costs and increasing efficiency and profitability through

better receivables andrisk management. The key components of our solution include the following:Extensive Clearing Network Guaranteed Credit Comprehensive MIS System Integration Outsourcing of Collection

Liquidity Management So l u t i o n s fo r e f fi c i e n t ma n a ge me n t o f y o u r fu n d s A c o rp o ra t e t re a s u r e r 's ma i n challenge often revolves around ensuring that the company's cash resources are utilisedto their maximum advantage. You need a partner bank that can help you:Rukmini Devi of Institute Of Advanced Studies19

Maximise interest income on surplus balances; minimise interest expense on deficit balances for domestic, regional and global accountsMinimise FX conversion for cross-currency cash concentration C us t o mi s e l i q u i d i t y ma na g e me n t s o l u t i o ns fo r d i f fe r e nt e n t i t i e s i n d i ffe re n t countriesC e n t ra l i s e i n fo r ma t i o n ma n a ge me n t o f c o ns o li d a t e d a c c o u n t b a l a nc e s OurSolution With our global experience and on-the-ground market knowledge, StandardChartered will help you define an overall cash management strategy which incorporatesa l i q u i d i t y m a n a g e m e n t s o l u t i o n t h a t b e s t m e e t s y o u r n e e d s . C l i c k h e r e f o r a n illustration of our propositions. Key Features

Based on your needs and the regulatory environment that you are in,you can choose any of the following features:Physical Sweeping Notional Pooling OBJECTIVES