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Emerging trends in cash management

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documents in English
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indian project
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35 pages
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  1. Introduction
  2. Background study of cash management
  3. Two basic models that help in determining levels of cash
    1. The Baumol model
    2. The Miller Orr model
  4. What is cash management
  5. The four P's of marketing cash management
  6. Environmental analysis
  7. Generic strategies
  8. Organizational goals
  9. Product portfolio of cash management
  10. Case studies
  11. Comparative analysis
  12. Conclusion

Whenever any long-term investment is considered the future cash flows from the project, the uncertainty of those cash flows, and the opportunity cost of the funds invested in the project are evaluated. Investments in current assets are also evaluated by all organizations in the same manner but over a short-term period. The time value of money plays an important role in the valuation of long term investments as these investments produce expected cash flows into the future. In the case of current assets (cash, marketable securities, accounts receivables, inventory) provide expected cash flows only in the short term, therefore the time value of money is of lesser importance while evaluating current assets. Whenever decisions are made for new product development and marketing there is capital investment. Investments made in current assets support the day to day operations of the firm. Therefore investment in long term projects there has to be investment in current assets in order to support the day to day operations that will be required by the project. Current assets are the ?Working Capital? put together to work in order to generate benefits monetary or other wise from the investment made.The type of business, whether extractive, retail, manufacturing or service, affects the way an organization invests. In some industries, large investments in machinery and equipment are necessary. In other industries, such as retail firms, less is invested in plant and equipment and other long-term assets and more is invested in current assets such as inventory and receivables.

[...] Bank - Fast Collection Service SBI - Cash Management Product HSBC - Chequemate DEUTSCHE - H/V MICR LOCKBOX Local clearing of cheques through non-branch locations across India Integrated MIS with customization for select relationships Concentration of funds in a central account Cheque pick-ups at the center with return cheque deliveries also the same center Flexibility to define credit arrangements for each customers QUICKENCASH Utilities and arrangements with correspondent banks to enable faster clearing of cheques Allows the customer to receive credit on a fixed day, say, day 0 for discounted cheques and day 8 for regular collections Interest charged on return cheques for period for which the bank is out of funds Consolidated MIS provided Courier pickup provided for select relationships QUICKCOLLECT Collection of upcountry cheques drawn on any location in the country In the case of instant credit [...]


[...] They maintain a lot of surplus cash in their main operating account, as they do not know when the cheques that they have issued will hit the counter. This is in the case when they issue dividend warrants. They would like to get interest on the surplus funds lying in the account. They use ECS to make payments. HDFC currently has 41 branches and they have access to another 60 locations via Vijaya Bank. Salary payments are done via HSBC. [...]


[...] ORGANISATIONAL GOALS A bank which believes in partnership, listens to customer needs and offers end-to-end solutions Understanding customer needs Internal accounting ease Reconciliation related benefits Information availability Integration of information Single window capability Competitive pricing Contingency THE VALUE CHAIN COMPETITIVE LANDSCAPE: The Indian market for cash management is a very competitive one with both global and local banks offering a wide array of products. Citibank, Deutsche Bank, ANZ Grindlays (which has recently merged with Standard Chartered) HSBC being some of the strong global contenders with HDFC, ICICI, State Bank of India emerging as the strong local banks. [...]

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