Cash management practice in commercial bank of

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Chapter 14 / Exercise 10
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cash management practice in commercial bank of Ethiopia at Harar branch . 1.2 Background of the Organization The State Bank of Ethiopia was established in 1942 with on objectives the duties of both commercial and central bank is 1963 established as Share Company to take over the commercial banking activities of the state bank of Ethiopia. In the 1974 revolution, commercial Bank of Ethiopia got its strength by emerging with privately own Addis
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Chapter 14 / Exercise 10
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Ababa Bank. The Commercial Bank of Ethiopia which is striving to embark in to world class commercial bank hindering the state of the art and reliable service to its millions of customers both locally and abroad. The business strategy of the bank focuses in the stake holders its services. On April 30, year 2011 the number of branches reached 364 stretches across the length breadth of the country. CBE combines a wide capital base with more than 9700 talented and committed employees. In 2011 whom it regard as its key asset for employees. In 2011 whom it regard as its key asses for banking development. The state owned commercial bank of Ethiopia still dominates the market in terms of asset capital and customer base and Branch Network. This makes it one of the most reliable and strong commercial Bank in the country and the region. Its strong capital base above 67 years of rich experience in the market and large branch network through the country enable the bank to accommodate large demand for banking service, Bank from private and public companies and to increase its overall revenue on sustainable base the fundamental component of our mission statement includes customers. These are the most important asset we continuously revise our attitude towards the customers with the view to securing. 1.3 Statement of the Problem 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 deficit amount 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. (Planket 1986). Cash is sensitive assets that require proper control and attention because these assets are easily spendable and highly subject to theft. The management of cash generally center on forecasting and internal controls. The responsibility of management with respect to cash is to assure that there is sufficient cash to carry on the operations, to invest idle cash and to prevent loss of cash due to theft or misappropriation, John (1999). Proper cash control mechanisms are necessary to assure that cash is used for proper business purpose and not wasted, misused or stolen. Management is responsible for controlling and processing issues such as vault cash, and idle cashes of the company in this regard.

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