A Research Proposal of CASH MANAGMENT PRACTICE IN Bunna International Bank S.C (A Case Study On Arat Kilo Branch) of

A research proposal of CASH MANAGMENT PRACTICE IN
BUNNA INTERNATIONAL BANK S.C

(A CASE STUDY ON ARAT KILO BRANCH)
Of
SUBMITTED BY: SELAMAWIT TEFERA

ADVISOR: TAKELE TESHOME
DEPARTMENT OF ACCOUNTING
COLLEGE OF CONTINUING AND DISRANCE EDUCATION
HAREMAYA UNIVERSITY
May 2014
ADDIS ABEBA ETHIOPIA
1
ABSTRACT
This research paper will seeks to address the cash management practice
of Bunna International bank Arat kilo branch. It will address five basic
research questions designed to asses cash management performance of
the bank. For the purpose of the study both primary and secondary data
will use, but much focus on primary data in which more information will
obtain by interview and questionnaires.
After the data gather, it will be analys and present. The data analysis will
be carrie out bases on tabulation and percentage method. Care full
interpretation of analyze information will be carrie out to arrive at
reasonable generalization.
Ultimately the research will be expecting to provide rescannable results

that can help the management to take reseanable decision for their
future activity.
Bunna Interntinal bank wes officialy is regulated on Octber 10/2009 ,currently

the bank has 60 branches,that are found both in Addis Abeba and turn of Eth
CHAPTER ONE
1. Introduction
1.1. Background of the Study
Cash is a medium of exchange that the bank will accept for deposit and
immediate credit to depositor account that include currency and coins,
personal checks, bank drafts, money order credit cards, select drafts and
so on (Planket, 1986).
Cash management is one part of the financial management system. It is

a proper use of an entities cash resource, Since the bank play a major
role in facilitating the way of financial sector operates with banks utilize.
Cash is important for understanding not only banking behaviour but
also for the role that the bank play in the transmission mechanism by
effective cash management banks can reduce cash balance at the
minimum level and at the same time customers requirement can be
insured banks are business established that safeguard can be insured
banks are business established that safeguard peoples money and use it
to loan and investment, cash management services as the mean to keep
the bank functioning by making the best use of cash or liquid resources
of the bank. There fore banks are very much interested in establishing
procedure for increasing the efficiency of their management. Among the
procedure carefully prepared cash forces (short-term and long term) and
investment of idle cash is the major ones. (WWW. Docstoc. Com 2:00
PM).
Bunna International bank gives various type of service to their customers
for example the mobilization of financial resources and lending the
resources to the business community mobilization of
financial resource arise from the fact that the amount of productive
investment is very low. In order to receive financial constraints on
investment financial intermediaries are expected to play a deceive role is
brining about efficient way of rising the required level of funds through
application of proper financial management system. There for
financial managers how cash the bank should carry, the specific types of
securities to issue and how mach of the firms earning to Retain versus to
pay dividends, (www.com bank eth.com)
1.2 Background of the Organization
The bank was officialy inaugurated on oct 10 2009;the bank has 60

branches that are found both in addis ababa and other touns of
Ethiopia.Uniqe established as a larugest number of share holdr banks in
the country .It has more than 11000 share holdersthat put the bank on
strong base.It just the bank of People. . In the 2009 , Bunna
International Bank got its strength by emerging with privately own Addis
Ababa Bank. Since then if has been playing significant role in the
development end over the countryuntrry .
The Bunna Internatinal Bank provide full fledge fast and efficient
banking service provide by INFOSYS FINACLE,SWIFT.WESTERN
UNION,MONY GIRAM,XPRESS MONY,DAHABSHILL,FLOW CASH,JUBA
EXPRESS AND TRANSFAST.
Maximum customers satisfaction in order to optimally meet the need of
our customers and effiently manage our business we are committed to
enhancing long term share holder have, the other is to get quality
customers employees are very important Quality customers service is
possibility only through motivated and skilled employees to this end the
bank is highly concerned for the well being of its employees. It tries to
develope a work force that enjoy working for and prides itself is
associated with bank and we believe that our success always emantes
from the effort we continuously expert on securing reliability and public
confidence from the community a large.
1.3 Statement of the Problem
Management is responsible for controlling and protecting of the business

like inventory, receivables, plant assets and cash. Cash management is
one part of financial management system that focus on internal control
and forecasting the future cash requirement. (www. Investopedie –
com.6:00 pm).
Cash is the most important element of banks day today activity. By

effective cash management banks can reduce the excess cash at
optimum level and ensure customers requirements. Cash management
involves neither excess not deficient amounts of cash on hand at right
time proper cash management requires that the bank know how much
cash is need as well as how much it has and where that cash is at all
time. Cash management also require knowing the amounts of fund
available for investment and the length of time that can be must.
(Planket, 1986).
Banks are increasing becoming innovative and anticipating the needs of
corporate to wards standardization, enterprise resources planning
integration, reconciliation, real time reporting, providing an end view as
cash management value chain besides offering the ability to reach and
bereached their own customers the mounting pressure from competition
forces the banks to look an information technology vendor who offer
better solution and services in cash management (www. Hcltech. Com.
9:50 am at local).
Eventhough, cash management receive a priority for financial institution

especialy Bunna International Banks little is know on how effectively
monitor its cash flow, how to accelerate collection receipt and optimize
timing of disbursement, maximizing interest lelate collection receipt and
optimize timing of disbursement, maximizing interest earning and
properly secured investment.
There for this study will tray to investigate a solution for the following
basic research questions.
 What are the source of short term financing used by BIB.

 How the bank control cash receipt and disbursement.
 Does the bank have Idle cash.
 Does the bank has cash budget.
 Does the bank posses cash shortage.
1.4 Objective of Study
1.4.1 General Objectives
The general objective of the study focus on the cash management practices of
BIB in Adiss Ababa.
1.4.2 Specific Objectives
In addition the above mentioned general objective the study will have the
following specific objectives.
 To identify the source of short term finance in the bank.

 To asses the internal control of cash receipts and disbursement.
 To asses the bank’s its cash budget.
 To identify and asses idle cash its investment area.
 To compare theoretical aspect of cash management practice with in
actual practice of BIB.
1.5 Significance of the Study
This study will benefit BIB of Addis Ababa Branch by identifying factors
that affect the internal control over cash and suggesting possible
recommendation. It also reflects the researcher cash management
practice of Addis Ababa Branch with its limitation and weakness and
give possible commentive idea or solution as to how the financial
manager of the banks of Arat Kilo Branch control its cash under the
proper management of cash.
1.6 Scope of the Study
Here the researcher will knows that the study includes the whole banks
cash management practice but time and financial constraints the
researcher forceing to focus on the assessment of cash management
practices of BIB Arat Kilo branch. After this study the community will
expecte to compare the cash management practice of BIB with theoretical
aspect of cash management and it there is cash management problem
give possible solution (Advices).
1.7 Limitation of the Study
During the collection of data for this study purpose the researcher will
face different limitation, like voluntariness of the concerning people to
give the information and there will also a time constraint to do this
study.

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What is the purpose of the study?

What is the purpose of the study?

What are the specific objectives of the study?

What are the specific objectives of the study?

A research proposal of CASH MANAGMENT PRACTICE IN

BUNNA INTERNATIONAL BANK S.C

SUBMITTED BY: SELAMAWIT TEFERA

ADDIS ABEBA ETHIOPIA

Ultimately the research will be expecting to provide rescannable results

Bunna Interntinal bank wes officialy is regulated on Octber 10/2009 ,currently

Cash management is one part of the financial management system. It is

1.2 Background of the Organization

The bank was officialy inaugurated on oct 10 2009;the bank has 60

1.3 Statement of the Problem

Management is responsible for controlling and protecting of the business

Cash is the most important element of banks day today activity. By

Eventhough, cash management receive a priority for financial institution

 What are the source of short term financing used by BIB.

1.4 Objective of Study

1.4.1 General Objectives

 To identify the source of short term finance in the bank.

1.5 Significance of the Study

1.6 Scope of the Study

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