API Console

Swagger | Microservice

Executive Summary

Notional pooling allows corporate customer with multiple active accounts to pool credit and debit balances to provide a single centralized liquidity position and to minimize interest expense, simplify cash management and retain a degree of local autonomy to the accounts

Examples of Use

A (corporate) customer with multiple subsidiaries has establishes notional pooling to simplify cash management and minimize its interest expense by fully off-setting credit and debit positions across the company. This enables the subsidiaries to manage their cash position while the company can avoid transferring funds and the tax implications of arranging intercompany loans.Notional pooling allows a corporate with many accounts, often held by subsidiaries, to pool the balances to obtain a single centralized liquidity position.

Role Definition

Notional pooling is a mechanism for calculating interest on the combined credit and debit balances of accounts that a corporate customer chooses to cluster together, without actually transferring any funds between the accounts. It allows obtaining a single centralized liquidity position. This enables the subsidiaries to manage their cash position while the company can avoid transferring funds and the tax implications of arranging intercompany loans. Interest income and charges are calculated and distributed periodically in proportion to the local account balances. More advanced pooling arrangements may support multiple currencies

Related Business Scenarios

Core Business Object

Key Features

• Establish the structure and control mechanisms for the notional account pool
• Consolidate account information to maintain the central liquidity position
• Periodically calculate and allocation interest income and charges across the pool