OFF ICE INSTRUCTIONS CIRCULAR NO : FIN/NOV/2017/001

SUBJECT: CASH ADVANCES, REIMBURSEMENTS OF OUT OF POCKET EXPENSES AND

MAINTENANCE OF PETTY CASH FLOATS

This office instruction circular shall be applicable for Cash Advances, Re-imbursement of out of pocket
expenses and Maintenance of Petty Cash Floats with effect from 01st January 2018 and shall supersede
all previous instructions on above subject.

(1) Cash Advances

Cash Advances could be obtained for official purposes where official pay orders/direct account credits
are not possible with the approval of delegated authority levels specified under 1 (e) below. The
following procedures shall apply for issuing and settlement of Cash Advances;

a) The Standard Cash Advance Claim/Settlement Form available in bank intranet under Forms and
Applications- Finance Department should be used for the purpose of requesting Cash Advances.

b) All Requests for Cash Advances should be completed in duplicate, clearly indicating the
purposes for which such advances is requested, and the date the expense is to be incurred. The
original copy will be retained by the Finance Department and the duplicate will be issued to the
person who claiming the advance for the purpose of settling the same in future.

c) A Cash Advance should not be used for any other purpose other than the purpose mentioned in
the cash advance form. Further the amounts requested by the way of Cash Advance should
approximate the actual expense to be incurred.

d) A Cash Advance should be requested not earlier than three working days prior to the date of the
event. However, Finance Department may release cash advances even prior to three working
days of the event with the approval of the respective Corporate Management team member in
extreme circumstances;

e) All requests for Cash Advances should carry the recommendation of the Manager in Charge of
the Branch/Head of Department and the approval of the respective Area Manager/Corporate
Management Team member as specified below;

Branch/Area Office Requests

Amount Approved by

Up to Rs. 25,000 /- Area Manager

Rs. 25,001- 50,000/- AGM - Leasing and Retail Assets/AGM- Branch Network as
Applicable
Rs. 50,001 to Rs. 75,000/- DGM - Retail /DGM- Business Development and Personal
Banking as applicable
Rs. 75,000/- 500,000/- Chief Financial Officer (CFO) or AGM - Operations and Credit
Administration
Any Amount Chief Executive Officer (CEO)
 Department Requests

Amount Approved by

Up to Rs. 50,000/- Respective Corporate Management member in charge

Rs. 50,001- Rs. 500,000/- Chief Financial Officer (CFO)
Any Amount Chief Executive Officer (CEO)

f) All Cash advances should be settled within Seven (07) working days from the date of the
event/purpose for which it was obtained. The respective Manager/Head in Charge of the
Branch/Department must ensure that all cash advances are settled within the due period.

g) All Cash Advance settlements must be supported by proper bills/invoices/receipts issued by

identifiable party and must contain the approval of recommending party if the actual costs do not
exceed the amount of cash advance. Excess amounts shall be deposited to Finance Collection
Account – LK9551830014 and cash deposit slip must be handed over to Finance Department for
settlement of Cash Advance.

h) If the actual costs exceeds the amount of cash advance, then it must be approved by the same
delegated authority level that approved the cash advance (However, if the actual costs exceed the
delegated authority limit of the party who approved the original advance, then it must be referred
to the next upper level).

(2) Re-imbursements of Out of Pocket Expenses

The Bank always encourages staff to make all third party payments by the way of pay orders or account
credits. However, in certain instances staff may incur certain official expenses out of pocket then get such
reimbursed from Finance Department thereafter. The following instructions shall apply for all such re-
imbursements;

a) The Standard Expense Reimbursement Form available in intranet under Forms and Applications
- Finance Department should be used for the reimbursements of out of pocket expenses. All re-
imbursement claims must be supported by original bills/invoices/receipts issued by an
identifiable party.

b) Original Claim Forms should reach Finance Department in order to get the re-imbursement of
out of pocket expenses. No re-imbursements shall be made for photocopies/scan copies under
any circumstance.

c) The staff claiming and approving reimbursement of out of pocket expenses must ensure that the
expenses are incurred only for official purpose and such expenses are reasonable, necessary in
the circumstances .

d) All re-imbursements of Branch Managers should be approved by the relevant Area Manager. All
re-imbursements of branch staff must be approved by the Branch Manager.

e) Re-imbursement of all client relation expenses of Branch Managers (Subject to a maximum of

Rs. 5,000/- per month) should be recommended by the respective Area Manager and approved by
DGM – Business Development and Personal Banking since such expenditure falls within
Business development budget of the bank. All other client relation expenses at Area/Head Office
level must be recommended by the respective Corporate Management member and approved by
DGM - Business Development and Personal Banking since such expenditure falls within
Business development budget of the bank.

f) No Capital Expenditure should be claimed by the way of re-imbursement.

 g) All travelling re-imbursement claims must be made in accordance with the circular No.
SCL/14/00 dated 11th July 2014 on Revision of Travelling Allowance and Claiming Procedures.

(3) Maintenance of Petty Cash Floats

The purpose of the Petty Cash Float System is to enable branches/departments to incur their day to day
expenses of recurrent and insignificant nature. Though the Bank always encourage staff to seek for the
assistance of Central Payment Function based at Finance Department for the purpose of all third party
expenditure payments, the branches/departments are permitted to use their petty cash float for their day to
day spending which could not be made by pay orders or account credits.

a) Initial Approval - Petty Cash Float

All Petty Cash Floats must be recommended by the respective Corporate Management Member in
Charge of the Branch/Department and approved by the Chief Financial Officer. For branches respective
Corporate Management member shall be AGM-Operations and Credit Administration.

Finance Department shall open petty cash accounts at the request of the respective branch/ department
with the approval of Chief Executive Officer. The following entry must be passed in order to create a
new petty cash float.

Branch Petty Cash A/C Dr

Branch Main Cash Float Cr

Responsibility and Management of the Petty Cash Float – Branch Manager/ Head of the Department
must assign a staff member from the permanent cadre to handle Petty Cash Float under his/her
supervision. Handling of petty cash must not be undertaken by staff in Junior Executive Trainee grade/
contract staff/interns under any circumstance.

The staff responsible must maintain a separate petty cash book clearly identifying the expenses incurred
and replenishments made by Finance Department. The petty cash vouchers need to be obtained from
Administration Department through monthly stationery requests. A petty cash voucher consist of with
two copies, the first copy needs to be sent to Finance Department along with the petty cash
reimbursement schedule and the second copy must be maintained at the branch/department for record
purpose.

b) Branch/Department Responsibility

The staff responsible for handling petty cash at the branch/department should submit an expenditure
schedule with relevant Expenses category (Please refer Annexure- I) along with the original voucher and
bills to get petty cash balance replenished. This reimbursement schedule should be forwarded to Finance
Department with the approval of the respective Branch Manager/Head of Department.

c) Head Office Responsibility

The staff in charge of Petty Cash Re-imbursements at Finance Department shall peruse all expenditure
schedules and bills attached to the petty cash voucher and then accounting entries must be posted for
petty cash transactions;

Respective Expenses A/C Dr

Petty Cash A/C Cr
d) Replenishment of Float

The staff in Charge of Petty Cash Re-imbursements at Finance Department should notify the respective
Branch Manager/Head of Department the amount to be replenished through an e-mail and float should be
replenished simultaneously.

Respective Petty Cash A/C Dr

Main Cash Float Cr

Specific facts to remember:

1. The owners of petty cash floats should always ensure that petty cash floats are replenished
always beforehand. Spending above the Petty Cash Float is not permitted under any
circumstance.

2. There should not be delays in terms of replenishment and accounting for the same.

3. The respective Branch Manager/Head of Department must ensure that expense claims made
under petty cash are reasonable, necessary in the circumstances and incurred only for official
purpose.

4. The re-imbursement of following expenses should only be made through Human Resources
Department and petty cash float must not be used to pay for following expenses under any
circumstance;

a) Lodging Expenses
b) Subscription & Membership Fees
c) Any other benefit covered under employment contract

5. All branches and departments are encouraged to make third party payments for purchase of
goods and supply of services (Stationary, Maintenance, Promotional Expenses, IT expenses
etc.) through the respective head office department. However, in case of an
emergency/exceptional circumstance branches/departments are permitted to purchase such
goods/obtain services directly from the market subject to a maximum of Rs. 50,000/- per
event, with the prior approval from the Head of the Department in charge for procurement of
such goods or services as specified below;

Type of Expense Approval Required From

All Promotional Expenses DGM – Business Development and Personal
Banking
Premises Maintenance Manager – Premises
IT Maintenance Head of Information Technology
Stationery/general maintenance services Senior Manager - Administration
Legal Matters AGM-Legal
All Staff Events including Get AGM – Human Resources and & CFO/CEO
Together/Outings

6. Petty Cash Float must not be used for following types of expenses;
a) Utility Bills - Electricity/Water Bills etc.
b) Rent for premises

7. All petty cash claims should be supported by valid bills/invoices/receipts and should carry the
signatures of Branch Manager/ Head of Department as necessary.

Signed Signed
CHIEF FINANCIAL OFFICER CHIEF EXECUTIVE OFFICER