My secretary brought me a file I urgently needed, as its contents were always on my desk before my arrival early in the morning. But today I arrived at the bank, as usual, early in the morning and did not find that file on my desk. When I asked why it was not there, the answer was that there was a breakdown in the computer server that resulted in not printing it and placing it on my desk as soon as the previous day's work was done. The contents were daily reports on all of the bank's operations within a program called MIS. Since I took up my post as General Manager, and after using the computer in all of the bank's operations and linking all the bank branches with each other, on the one hand, and with the bank regional headquarters on the other, I issued the necessary instructions that daily reports should be prepared and be on my desk. Each report states the bank position from several aspects according to the result of the previous day's work, so that I am aware of all that is going on in the bank, on the one hand, and, on the other, to be assured of the bank's financial position and that it is fully consistent with the legal ratios according to the Central Bank requirements. The first of these reports is the liquidity report. It reflects the bank commitment in retaining a ratio of liquid assets, semi- liquid or easy to be turned into liquid, from its resources, that is enough to cover any expected or unexpected needs or withdrawals. That ratio is determined by the Central Bank and is known as legal liquidity ratio. The failure of maintaining such liquidity would make the bank subject to penalties by the Central Bank. Technically, it would also be subject to the probability of not fulfilling its immediate liabilities if faced with unexpected withdrawal. This would result in the so-called liquidity risk. Among these reports is also the banknote or cash in hand report. It reveals all cash balances retained in the safes of the bank and all its branches, in all currencies (local and foreign). And it includes the extent of commitment of each branch not to retain an amount of cash exceeding the amount covered by the insurance policy on cash money. This report is also useful for managing the cash in hand in terms of transfers among the branches, according to their needs. Another report is a past due debts report. It declares the payments owed by the clients and have not been paid in each branch. This report is transferred immediately to the Unpaid Dues Department in order to take, along with the branches, the appropriate action immediately, know the reasons for that and submit a report on the following day with the relevant conclusions. Another report is about the amounts the bank has to pay within a month divided on daily basis. Those amounts, which represent the payments owed by the clients for suppliers abroad and guaranteed by the bank, are in all cases, whether the client has paid them or not, due on the bank who has to pay them to the banks abroad at the maturity date, regardless of the client's fulfillment of his liabilities. This is to enhance the bank's credibility in fulfilling its liabilities towards the banks abroad. It shows the readiness of the bank to pay the due amounts, in terms of the availability of the liquidity necessary for that purpose, on due dates. There is another report that is no less important than the aforementioned reports. It is the report of the balances that show irregularities. For example, a debit balance appears in a client's current account while it is supposed to show credit balance. This report presents cases in which the client's balance for credit facilities turns to be a creditor. This states that the client has already paid his liabilities and kept a credit in his account. Similar cases are the creditor expenses accounts or the debtor's revenues accounts. Soon after checking such accounts, I ask for an immediate clarification for each item from the concerned branch, provided that such accounts will be settled promptly. There is also a report on irregular entries, such as debtor entry on the revenues account or creditor entry on the expenses account. This needs an immediate explanation along with prompt settlement for such entries, indicating who is responsible for that. There are many other reports, such as the report of the bank balances in correspondent banks abroad; a report on the transactions on the accounts of the bank's top twenty clients; a report on the bank's profitability, day by day, along with a comparison with the profits of the previous day and the profits of the day before that compared with the same day in the previous month and the previous year… etc. Bank management does not only lie in personnel, but it is also in all that is taking place and what is likely to take place! [email protected]. Mahdi is a veteran Egyptian banking expert.
