Cash Department is one of the most important Departments in any Bank. It serves as a centre-point for all other departments and without it no transaction can be done. Cash Department can be considered as a reflector of Banks competency, credibility and its trustworthiness.
Cash Department, as the name suggests, deals with the cash that is either inward or outward i.e. payment in cash by the customer or payment to customer in cash form, with cheques and with receipts. The cash department, generally, performs the following activities:
¬ It collects the funds of government.
¬ It accepts the deposits of customers.
¬ It collects the utility bills from relevant areas or surroundings.
¬ It pays the checks presented by customer
These cheques can only be paid by transferring money into account of payee, the person to whom payment is to be made. The person who is writing the cheque puts two parallel lines on the face of the cheque. Crossing can be general or specific. In general crossing there is no specific banks name mentioned but in specific crossing the drawer writes the name of specific bank so the cheque is being crossed specifically. iii. Order Cheques:
Order cheques are those cheques which can be presented by an authorized person that is being chosen by the account holder but the person should properly show his identification thus satisfying the bank to pay money to him. After proper assurance the money can be paid on the spot.
However the cheque presented by a customer cannot be honoured if it does not fulfil following conditions:
¬ The cheque should be in proper form. The bank should check that the name or signatures of the customer on cheques matches with those in the bank record. Date and amount in words and figures should be properly and clearly mentioned .If the bank finds any ambiguity, it should be cleared immediately or cheque should be returned,
In-House Cheques: These are the cheques which are presented at one branch of National Bank and drawn on other branch of National Bank. A transferred stamp is being marked on these cheques.
II. Local Cheques: Local cheques are those cheques which are presented at one bank and drawn on other bank but both banks are located in one city.
III. Outstation Cheques: These are the cheques which have to be collected from the banks located outside the city.
Clearing Process can be of two types:
a. Inward Bills for collection: All the cheques which were presented to bank for collections are called inward clearing. The record of all these are kept in inward clearing book. When these cheques are presented, the customer account becomes debit.
b. Outward Bills for collection: All the cheques which were delivered by the bank to other banks come under outward clearing and their record is kept in outward clearing book. When these cheques are presented, customer account becomes credit.