Cash Management System

Gauravjwal Kundu () Nanaiyah Naman () Nilesh Kirdat (034) Nitil Nair (038) Omkar Sohoni (040)

Current Cash Management System at Public Transport Mumbai

The Brihan-mumbai Electricity Supply and Transport (BEST) Undertaking is a public transport service and electricity provider based in Mumbai. The BEST runs a total of 4,680 buses, ferrying 4.8 million passengers over 365 routes, and has a workforce strength of 38,000, which includes 22,000 bus drivers and conductors Daily earnings from its transport system is Rs. 20 million. It collects Rs. 7 million worth of five rupee coins daily, Rs. 4.8 million worth of ten and twenty rupee notes, and Rs. 6 million worth of fifty rupee notes, through its fare collection system.

Daily Collection : Rs. 2 crore

Cash credit delay wrt collection: 10 days

Regional dependence of cash collection

High value transaction management system inefficient and non competitive

New Cash management system

Proposed Bank accounts
Collection account Withdrawal account Current account Regional Cash credit account

Cash collection cycle completes in 2 days

Opportunity cost analysis

Average Per day Collection (in billions) Amount locked on each day (As per 8 days improvement) 1) Interest lost/day @ 3 pcpa 2) Interest lost in money market instruments (Min 12%) 3) Interest incurred on loan ( Min rate of lending at 8%) 20,000,000

160,000,000
13,150 52,603 35,068

Cash collection Account Hierarchy

Master Pooling

RCN pooling

LA pooling

Collection and withdrawal pooling

Zone 1

Zone 2

Zone 3

Zone 4

Collection pooling

Withdrawal pooling

Collection pooling

Withdrawal pooling

Collection pooling

Withdrawal pooling

Collection pooling

Withdrawal pooling

ERP integration of cash management system

ERP Package offers integration for following facets of cash management Receivables Payment Collection Liquidity Management Forecasting
Cash Payment Cash receipt

Advantages of better cash management system

Cash Inventory
Increased Investment opportunities Lesser risk of liquidation

Accounts receivables
Better transaction transparency Customer payment lead time is reduced Forecasting error minimization

Accounts payable
Traceability in spending Forecasting errors minimization

Risk mitigation
Timely Identification of potential risk factors Development of risk mitigation strategies.

Thank You