Since 2006 UniCredit Bank has been offering fully automated Domestic Physical Cash Pooling solution – an advanced tool used to consolidate Group cash flows on one Master Account for better management possibilities, and to automatically provide funding from that account to Participant accounts in order to finance external payments.
UniCredit Bank is also offering an innovative International Pooling solution – Cash Pooling between residents and non-residents, a truly unique product on the Russian market.
Liquidity Management
UniCredit Bank is one of the market leader in Liquidity Management products. We are proud to propose a wide range of tailor-made liquidity management solutions aimed at improving the efficiency of how the Companies are using their internal cash flows.
UniCredit Bank offers modern solutions for corporate liquidity management. Physical pooling is one of such solutions, that allows to consolidate all funds and accounts of a company in one master account and connect new accounts thereto.
How does it work?
You have a master account that is owned e.g. by the company’s head office. Other accounts, owned, for example by regional branches of the company, are consolidated with that account (pooled together). During a banking day excess balances are automatically transferred at regular intervals from the pool participants accounts to the master account. You may individually agree upon with the Bank the frequency of such transfers. Thus, the funds are consolidated, and account management is optimized.
UniCredit Bank has developed three options of accounts management for the pool participants:
- Standard: during the day a pool participant uses its funds in a standard mode, no transfers are made from the master account;
- Funding from the master account: if funds on the pool participant’s account are insufficient to make a payment, the required funds are transferred from the master account;
- Full utilization of funds from the master account: a pool participant makes payments with the funds of the master account only.
UniCredit Bank offers both Zero Balancing (when all the funds are swept from the participants’ accounts to the master account) and Target Balancing (when a certain amount is left on the participants’ accounts) Cash Pooling solutions.
What are the advantages of physical pooling?
- Funds are consolidated on a single master account and cash flow management is more efficient;
- Control over the working capital is improved;
- Financial potential of the whole group is utilized, and the group financial expenses are reduced;
- Unified cash flow coordination makes planning and control over the group financial operations easier;
- All payments are executed automatically by the Bank on behalf of the company under the contract; there is no need to submit original payment documents;
- Overdraft limit may be set for the master account and the pool participants accounts, in such case funds may be transferred from one account to another account from the overdraft limit as well;
- Resident and non-resident accounts may be consolidated to make resident to resident, resident to non-resident and non-resident to non-resident transfers;
How to start using this service?
Please contact your bank branch to enter into a physical pooling service addendum for your accounts. If the account that you wish to include in a single pool are owned by different legal entities, you will also need a corporate loan agreement or any other non-gratuitous contract entered into between those legal entities.
UniCredit Bank can offer you customized solutions at any time. We take into account the specifics of the company’s business and offer physical pooling that meets your requirements in full.
International Cash Pooling or Pooling between residents and non-residents is an unprecedented and unique product for the Russian market.
All transactions between residents and non-residents are subject to the Russian Currency Control regulations set by the Central Bank of Russia. One of the major benefits of UniCredit Bank’s Resident/Non-Resident Cash Pooling is that all the required currency transaction certificates are prepared by the Bank, on behalf of the Clients (for both debit and credit operations under Cash Pooling), therefore fully automating daily Currency Control routine for the Companies.
The Non-Resident Company needs to open an account with UniCredit Russia, which can be incorporated into the Pool. There are no limitations for the Non-Resident Company to operate these accounts since they are not subject to the Russian Currency Control legislation. The Non-Resident Company can make FX with UniCredit Russia to buy Foreign Currency. Transfers to other accounts abroad both in RUB and Foreign Currencies from these accounts can be easily done by the Non-Resident Company via e-channel. The funds received under Resident/Non-Resident Cash Pooling are no longer subject to Currency Control, since all the necessary documentation for Currency Control under Cash Pooling had already been prepared beforehand.
There are no specific legal restrictions and laws on cash pooling in Russia. Nevertheless, our CP product is fully compliant with the current Russian legislation. We have a Legal Opinion prepared by an independent consulting company Baker & McKenzie that further confirms this.
To save Company’s time and reduce manual inputs, UniCredit Bank offers its Client standing orders, which allow for automatic payments with given details. Such orders allow to transfer fixed amount of funds to other accounts (including with other banks), transfer amounts exceeding certain threshold or to make transfers in such amount to make sure that the balance on Beneficiary’s account will be equal to a certain threshold.