A systems study on the cash handling system of the Bangko Sentral ng Pilipinas

• Main Authors: Cruz, Erwin Rommel R., Visperas, Moises G., Pacaon, Ana Fresyl C.
• Format: text
• Language: English
• Published: Animo Repository 1997
• Subjects: Systems engineering; Central Bank of the Philippines; Cash management; Banks and banking; Engineering
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/9191
• Institution: De La Salle University

The oldest central bank is Riksbank of Sweden (1656). The bank of England (1694), however, is considered teh first central bank because it developed fundamentals of central banking. Other countries followed, such as France (1800), Netherlands (1814), and Norway (1816), Russia (1860), Japan (1882). In Southeast Asia, The Bank of Thailand was established in 1942, Bank of Indonesia in 1953, Central Bank of Malaysia in 1958, and the Philippines in 1949. The first governor of the Central Bank of the Philippines is Miguel Cuaderno. The Cash Department is headed by a Director and consists of 3 functional groups namely Group 1 (Accounting and Cashiering Group), Group 11 (Currency Operations Group), and Group 111 (Currency Administration Group). The area of concern of the proponents of the study is the Cash Handling System of the Bangko Sentral ng Pilipinas (BSP). There are different types of banks. These types are commercial banks, thrift banks, and rural banks. At present, there are 52 major players in the banking industry competing against each other. There are 4 sections in the Cash Department. These sections are the receiving, verification, withdrawal, and retirement sections. There are two kinds of machines in the verification section --- Glory machines and CVCS machines. The retirement section, on the other hand, has the CVCS machine and the Disintegrator. The only section incurring costs is the verification section. Unless the currency notes received are verified, it will incur an interest of 4% p.a. The BSP has multi-function machines (CVCS) which can be used both for the verification and retirement sections. Presently, the BSP has backlog of notes unverified and stacked in vaults. The BSP currently pays an average of P 931,861,600/year due to interests earned by backlog. The causes of the backlog problem are the frequent absenteeism of money counters and the low capacity of machines. Absenteeism is caused by the dust pollution in the work area. The solutions proposed to solve the problems are the installation of a billboard, safety devices, procurement of 11 Glory Machines and overtime. These alternatives were evaluated using 3 criteria, implementability, availability of resources, and efficiency. A simulation was used to evaluate how many machines and how much overtime are needed. The total cost of the proposed solution is P 933,470,423.40 while the benefit is P 1,582,801.053.70. The net present value at the end of ten years is P 5,262,672,643.71. The implementation of the proposed solution will take 13 weeks. The proponents of the study recommends the BSP to study further on their policies regarding the verification of fit and unfit notes. Withdrawing banks can verify it instead of the BSP doing the verification. Another recommendation is that another study should be made on the retirement section since it also incurs backlog.