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VOL. 6, ISSUE 1 (2024)
Implementation of zero base budgeting system to commercial banks in India: Need of the hour
Authors
Dharmendra Kumar
Abstract
Zero Based Budgeting (ZBB) is an operating, planning and budgeting process which requires each manager to justify his entire budget request in detail from scratch and shifts the burden of proof to each manager to justify the proposed spending. ZBB is not based on last year's budget but rather on ground zero. ZBB is a powerful managerial tool that will help the bank management in judicious allocation of resources, minimization of cost of operation and in deriving the optimum benefits out of the current deployment funds. By permitting constant review and appraisal of on- going programmes, it enables the management to spotlight redundant and relatively less deserving schemes and staves-off their perpetuation and thereby safeguards the organisation from suffering on account of them. Since ZBB requires justification of each budget request, it permits trade-offs within and across departments and relates costs and benefits of programmes and managers will be very careful in selection of projects in the very beginning. They will always be cost conscious and objective during the operation of the projects. Thus, the ZBB will foster a culture of efficiency and cost consciousness among the bank executives which is very much in demand in the present Indian banking scenario.
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Pages:19-22
How to cite this article:
Dharmendra Kumar "Implementation of zero base budgeting system to commercial banks in India: Need of the hour". International Journal of Finance and Commerce, Vol 6, Issue 1, 2024, Pages 19-22
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