中国现金池介绍 china cash pooling (中英对照).pdfVIP

CashManagement Cash pooling in China Cash pooling is a popular cash management technique, used to optimise interest and improve liquidity management. In China, the traditional cash pooling model has been adapted in response to local regulations. In this article, we provide an overview of traditional cash pooling techniques, consider how these have been adapted for the China market, and look at the recent regulatory changes. What is cash pooling? In a cash pooling arrangement, balances from a number of different bank accounts belonging to one or more entities of the same company are either physically concentrated onto a single bank account or notionally netted against each other. This is done for three reasons: . Optimising interest. In a cash pooling arrangement, positive and negative balances on different accounts can effectively cancel each other out, at least in part. This may improve the interest paid on positive balances, or reduce the interest that the company must pay on negative balances. 2. Improving liquidity management. Excess cash is consolidated and may therefore be invested more efficiently. . Improved visibility and control of cash. There are two different ways in which funds can be concentrated – physical sweeping and notional pooling. . Physical sweeping Physical sweeping is also often referred to as cash concentration. Funds are physically transferred from participant accounts to the master or header account at the end of each day,