Collecting money at stations to prove there is no sweat

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The South Central Railway (SCR) decided to outsource the work of collecting money at 364 of its stations in four states and depositing it in banks.

It is a five-year contract and represents a big deal for the bank that signs the contract and the agencies that accompany it.

For the CRA, that would mean moving to a professionally run service, for which the RBI has prescribed standards, and comes with insurance coverage, at a cost. Currently, either the supervisor concerned deposits the cash at the nearest bank branch, or a withdrawal device is provided by the latter from the station.

And then there are several stations that generate meager sums from the sale of passenger tickets to which cash boxes are sent by train at specific intervals to collect the money.

“It will be a big deal for the agencies,” said J. Swaminathan, chief managing director of Hyderabad Circle at the State Bank of India. So what for the banks in the call for tenders that the SCR launched last month since they themselves have entrusted a service of collection and deposit of cash at home?

“We won’t make any money except for the cash handling fee. It’s negotiable. Sometimes we can give it up or reduce it, ”he says.

Cash deposit

SCR sources indicate that the tender for the contract, which is being processed, would be awarded to a bank. Other rail areas are also considering outsourcing the work, as the move would put an end to the day-to-day hassles associated with depositing the money. Once deposited in the bank by the agency, the same could be confirmed by verifying the account online.

Typically, fundraising agreements are for three years, while SCR offers the same for a longer period. These arrangements operate on a cost recovery basis. “The agency fees will be the responsibility of the customer. We provide home banking services at a cost specified by the agency. It’s a matter of convenience for both, ”says Swaminathan.

bank guarantee

The rail contract would be decided on the basis of the lowest estimate. Some public sector entities also require a bank guarantee in addition to insurance that covers cash during transit. In the case of most private companies that contact banks to hire agencies for the collection and deposit of cash, the contract is awarded on the basis of negotiations.

Jewelry showrooms, gas tanks, liquor stores, and those in businesses where a large amount of money is generated daily prefer to use these outsourced services.


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