Vault Limit Versus a Large Withdrawal
It is 11:40 a.m. at a branch in Karachi. The vault's approved cash holding limit is PKR 8,000,000 and the vault currently holds PKR 7,650,000. A long-standing corporate customer, a textile exporter, has submitted a properly signed cheque for PKR 2,400,000 cash drawn on its current account, which shows a ledger balance of PKR 3,150,000 and no uncleared effects. The customer's authorised signatory is present with original CNIC. The branch has no cash replenishment arrangement until the next morning, and the customer insists on cash today for wage disbursement. The branch manager is in a meeting and cannot be reached for 40 minutes.
1. Can the withdrawal be paid in full right now? Show the vault arithmetic and identify every constraint that must be checked.
Read the worked answer
Vault arithmetic. Available headroom = 8,000,000 − 7,650,000 = PKR 350,000. Paying PKR 2,400,000 would take the vault to 7,650,000 − 2,400,000 = PKR 5,250,000, which is within the limit - the limit is a ceiling, not a floor, so a large payment does not breach it. The real question is whether the branch can pay without breaching the limit, and it can, provided no other large payments are pending.
Constraints to verify before paying.
- Account balance and holds: ledger PKR 3,150,000, no uncleared effects, no lien or court attachment - confirms funds.
- Signature and identity: verify the signatory against the mandate and the original CNIC; record CNIC number on the cheque.
- Cheque validity: date, amount in words and figures agree, no material alteration, crossing status.
- Cash denomination availability: confirm the vault actually holds PKR 2,400,000 in usable notes, not just on paper.
- Large-cash reporting: a PKR 2,400,000 cash withdrawal is a reportable transaction threshold event and must be logged.
- Pending queue: check no other counter payments will push the vault below the minimum operating float.
2. The manager cannot be reached. Outline your decision and the documentation you would create, and state what you would do if the vault could not cover the payment.
Read the worked answer
Decision. Pay, because the arithmetic permits it and the customer is verified. The vault limit is not breached; the payment reduces the vault to PKR 5,250,000, comfortably above zero and within the ceiling. Refusing a valid cheque on a funded account without cause exposes the bank to a complaint and reputational damage.
Documentation to create.
- Cheque with CNIC number and signature verification recorded.
- Cash payment voucher and system posting to the current account.
- Large-cash transaction log entry with purpose (wage disbursement) and customer identification.
- Vault movement slip showing the withdrawal from the vault and the resulting balance.
- A note for the branch manager describing the transaction and the unreachable-manager situation.
If the vault could not cover it. Do not overdraw the vault or borrow from another counter's drawer. Offer a banker's cheque or same-day RTGS/IBFT transfer for part or all of the amount, explain the cash constraint honestly, and escalate to the manager or the regional cash hub for an emergency replenishment. Record the customer's request and your alternative offer in writing.