INTERBANK CASH POOLING 2017-11-12T23:17:02+00:00

Among corporate clients Cash Pooling solution is becoming more and more popular in the market. Its purpose boils down to the following: a holding or a group of legal entities organizes a so-called cash pool and determines the primary company, which will be responsible for the holding of Master Account, where the entire group’s liquidity is accumulated and where the companies participating in the pool allocate funds. Normally, all fund sweeps within the pool are automated, with algorithm being set by the client.

As of today, many banks are ready to offer their clients such a service with various extra options. However, despite the extensive functionality of Cash Pooling in a given bank, all these solutions have one big downside – the pool doesn’t work beyond the bank environment.

In other words, the entire holding or group of companies that desires to benefit from Cash Pooling is forced to open accounts and move the primary funds to a specific bank. But that’s not how it works in practice, since companies normally have loan obligations to other banks, meaning maintenance of a determined turnover or account balance. To top it off, it is undesirable to keep the entire liquidity in a single bank.

That is why B-SwiftFin implemented a special functionality that allows you to set up an interbank Cash Pooling. All you need to do is sign agreements with the pool participants, settlement banks and a B-SwiftFin provider. All pool settlements will be processed by B-SwiftFin . Once it analyzed online the client’s account balances information received from banks, B-SwiftFin will forward corresponding instructions to those banks. Having received such instructions and acting by virtue of the signed agreements, banks can make wire transfers on behalf of a given company. The good thing about that solution is that information regarding transfers among the banks can also go through B-SwiftFin, which dramatically increases timeframe for making transactions.

That said, B-SwiftFin processing will replace a core banking system within one bank and act as a settlement center for Cash Pooling, which expands opportunities for corporate clients in organizing automated interbank transfers within a holding or a corporate group.

Banks that currently have no Cash Pooling, or those willing to expand functionality without a lot of modifying, will be able to use B-SwiftFin for setting up Cash Pooling for their clients within their banks.

Study-case of cash pooling based on B-SwiftFin is illustrated below.