Netting

Corporate Treasury: Approaches to In-House Banking

Report date: 
21 Apr 2026

Commentary

Cash pooling and sweeping is one of the most basic and widespread tools in modern cash management. To the extent allowed under exchange controls and regulations, it is important to bring all the liquidity into a central entity, and avoid having cash balances earning little to no interest, while some entities are borrowing and paying spreads. 

By definition, this central entity performs the functions of a bank: it is taking deposits and making loans - for tax reasons, it needs to pay and charge interest on the balances. This also means it faces a lot of the challenges banks have: it needs good systems to track the loan balances and calculate and post the interest, and it also needs to ensure any FX exposures are properly identified and managed. Of course, it also needs to have access to sufficient group funding to meet the group’s net cash needs.

Unsurprisingly, once they have set up the relevant structures, many treasurers find they can be used to provide additional functions: POBO (Payment On Behalf Of) is quite common; ROBO (Receive On Behalf Of) exists but is less frequent. Some, but not all, have used their in-house banks to eliminate intercompany netting: any transaction between group companies gives rise to a debit or a credit to their accounts with the IHB, which will be cash settled or not in accordance with regulations and cash management policies. The central entity can also be used for FX management, executing trades with the market and doing back-to-back intercompany hedges. 

In this call, peers went through the systems they use, and gave a frank assessment of the benefits and drawbacks of IHBs – it is not all plain sailing. 

 

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Topics covered in this report: 
in-house bank, Netting, Cash Pooling - cross border, POBO/ROBO, Funding, Hedging FX, Virtual accounts
Service providers discussed in this report: 
Chatham Financial, Citi, FIS, Wall Street Systems, Kyriba, SAP, TIS, SWIFT

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Usages of AI in Corporate Treasury

Report date: 
1 Apr 2026

AI is everywhere. It dominates many business discussions – and, of course, is having a profound impact on the equity and funding markets. 

In treasury, the main focus so far has been on cash forecasting. This is a promising area: it is a real problem for treasurers, and some are reporting improvements. But it is complex, and the quality of historical data in many companies’ systems is an issue.

For this report, treasurers shared with us the increasing number of uses they are finding for AI. These usually improve productivity, and include various automation efforts, such as using the tools to generate and verify bank and capital markets agreements, as well as monitoring internal systems accesses. Increasingly, AI is being used to write internal software and bots to help with these tasks.

In turn, this is having an impact on the skills in treasury: increasingly, staff members and interns who can use AI tools are making a significant contribution. At the same time, IT policies, which were initially very concerned about potential data leaks, are becoming more open – and yes, most companies have one.

We are in the early stages of a journey which will change the way we all work. Find out more in the report.

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Topics covered in this report: 
AI, Technology, Netting, Bank Accounts, Intercompany loans, Capital Markets, policies

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Corporate Treasury: Approaches & Experiences with Multilateral Netting

Report date: 
23 Jun 2025

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Topics covered in this report: 
Bank Relationships, Netting, intercompany netting, Intercompany loans, In house bank, POBO/ROBO, Hedging FX
Service providers discussed in this report: 
CoProcess, GTreasury, Kyriba, it2, Finastra, Integrity

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Corporate Treasury & FX in South Africa

Report date: 
18 Feb 2025

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Topics covered in this report: 
FX, Hedging FX, Bank Relationships, Cash Pooling - domestic, Netting, Cash Repatriation, Trapped cash, Intercompany loans, Collections - domestic
Service providers discussed in this report: 
Standard Chartered, HSBC, Citi, Standard Bank, First National Bank (S Africa), JP Morgan

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FX & Treasury in South Korea

Report date: 
25 Nov 2022

Commentary

South Korea is a market which it is notoriously difficult for foreigners to penetrate: this applies as much to banks as it does to industrial companies. The culture is fiercely patriotic, and the vitality of South Korean industry means that most products are available from local companies, who are often world leaders.

The result is a situation where, despite the size of the economy – in 2021, it had the world’s 10th largest GDP, ahead of Brazil and Russia – it tends not to be a major market for most non South Korean MNCs. This was reflected in the call, where the country is complicated, and not a major focus for most participants. The situation is further complicated by language – English language skills can be rare amongst local staff and banks – and by a significant reluctance on the part of staff and customers to work with foreign banks. When you add in a series of specific, and very strong, local customs and processes, such as customers who often insist on making payments in person, you have a challenging situation.

Despite all of this, our participants manage to work successfully. Cross border cash pooling is possible, using the Consolidated Management of Funds (CMF) structure, which has to be approved by the Bank of Korea. The approval process is burdensome and requires a lot of work – and it all has to be done in Korean. But it works. 

Equally, dividends can be paid – but again, there is bureaucracy. Currency trades must be settled onshore, so many people find it easier to use the offshore NDF market, which is fairly liquid. Intercompany netting has to be gross in gross out – and the won can be remitted offshore. Cross border intercompany loans

 

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Topics covered in this report: 
Cash Pooling - cross border, Hedging FX, Bank Relationships, Collections - domestic, CMF, Netting, Dividends, Virtual accounts
Service providers discussed in this report: 
HSBC, JP Morgan, Standard Chartered, Bank of America, Citi

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Treasury & FX in China

Report date: 
25 Sep 2019

In this report: Netting, pooling, supply chain finance, customs guarantees, cash repatriation, Hedging, Local v International banks and T&E

Topics covered in this report: 
Netting, Cash Pooling - cross border, Cash Pooling - domestic, Customs, Cash Repatriation, Dividends, Hedging FX, Funding, T&E Management, Supply Chain Finance, Bank Relationships, KYC
Service providers discussed in this report: 
Alipay, WeChat Pay, ICBC, Bank of China, China Merchant Bank, Standard Chartered, Union Pay, HSBC, Citi, JP Morgan

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Treasury & Banking in India

Report date: 
25 Apr 2022

Commentary

This call took place against the background of the war in Ukraine – but it was a useful chance to catch up on the ever improving situation in India.

India has always been complex, with many regulations and poor clarity. This is clear from the comments below, where participants often have different experiences on the same topic. But, overall, the economy is working well, people are making profits (this was not always the case), and regulations are becoming more user friendly, even if they remain challenging.

Business structure: most participants have one legal entity which faces customers, and a different one which acts as an international shared service centre, invoicing other companies in the group on a cost plus basis. This can lead to inefficiencies in cash management: everyone struggles with domestic cash pooling and intercompany loans, while the shared service centre has guaranteed profits and cash generation. One participant has all activities in the same legal entity, which makes life easier.

Intercompany loans within India create transfer pricing and tax challenges: there is a required or recommended interest rate of 8%, compared to deposit rates of 4% to 4.5%.

Cross border cash pooling and intercompany loans are generally very difficult: many approvals are required. Dividends are subjected to withholding tax of 15%, which is sufficient to deter some, but not all, participants from paying dividends. However, this is an improvement on the previous 22% dividend tax, which was often not creditable against tax in the receiving country.

Netting of intercompany invoices is not allowed. However, one participant is using an Indian entity to centralise all invoices within the country using a POBO/ROBO process, and limiting the transactions to a single, large, gross in/gross out settlement. They are also looking at a non resident INR account.

Participants mostly use deposits for investing their excess cash. One is using the TIDE deposit: the bank automatically sweeps fixed amounts of cash above a defined threshold into deposits. These receive a higher rate if they remain for more than two weeks, but can be released if needed, with a lower interest rate being paid.

Most participants use international banks, mainly Citi and BNPP. Most complained that Citi are reluctant to...please sign in to continue reading

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Topics covered in this report: 
Bank Accounts, Tide deposits, POBO/ROBO, Cash Repatriation, FX, Cash Pooling - domestic, Intercompany loans, Cash Pooling - cross border, Dividends, Netting, Tax
Service providers discussed in this report: 
JP Morgan, HSBC, BNP Paribas, Citi, ICICI, FXall, 360T, CoProcess

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