Background of Enterprise A group finance co. ltd is a non-bank financial institution that was established under the approval of People's Bank of China with level-1 legal person qualification, registered capitals of RMB 300 million Yuan and annual profits of about RMB 20 million Yuan. The credit grade of the company was determined as A+ in the primary assessment in 2006. The company mainly offers services for its 8 member units (among them, 6 are distributed in other provinces and cities, another 2 in the place in where the group company was registered). The business scope of the company that has been checked and ratified by the banking regulatory bureau in accordance with the latest "Finance Company Management Method" basically includes the business scope provided in the "Method" with various business qualifications. The company is a B-class member of the national inter bank borrowing market and a member of the inter-bank loan market, entitled to carry out business with bank and other financial institutions such as bond transaction, repurchase and borrowing. Meanwhile the company has a relatively wide business cooperation relationship with commercial banks, such as credit-awarding, credit asset transfer, borrowing, inter bank note discount and commission letter of guarantee. The company is leading the way in the industry in quality of assets, profitability, capital adequacy ratio and some other indicators and enjoying the sound reputation in the industry. As the settlement center and the financing center of the group company, the group finance co. ltd is mainly devoted to the settlement and financing business for the member units of the group company.
The Group Finance Company has following cash management demands: ● According to the requirement of the National Assets Committee, the group company plans to carry high centralized fund management in the group, so it requires all (or the most) of the fund settlements of the member units to be conducted through the finance company and requires the bank to assist the member units to centralize all funds of the member units in the finance company. ● After all funds of the member units were centralized in the finance company, the existing bank accounts are still retained so that the balances and the records of the accounts will not be impacted by the fund collection. ● The finance company needs to connect its self-owned fund management system with the bank system so as to realize the electronic operation of it financial system and the synchronized handling of the accounts of the client in bank and the enterprise as well as clearly know the fund flow and the balance conditions of the member units. ● The finance company shall fulfill the function of the settlement and conduct centralized payment for the large-scale projects of the member units in accordance with the requirements of the group company, and the finance company will be commissioned to check and centralize the payments and then deliver the payment order to the bank. ● The finance company hopes its current funds obtain bigger earnings. ● Due to the relatively small fund scale, the finance company hopes the bank offer financing supports with multiple forms.
Analysis on Demands of Cash Management
Financial system needs to direct link with bank system, Realize synchronized handling of accounts of bank and enterprise
Hope flow fund obtain high earning
Income and expense management
Funds of member units need to be collected, Finance company direct handles expense of large-scale project
Require financing support when fund is short
Cash Management Solution 1. Bank-enterprise interlink solution Based on the demand of the synchronized handling of the accounts of the client in bank and the enterprise, the cash management service plan first is considered to establish a service framework of the bank-enterprise interlink between the finance company and the bank so as to establish a one-to-one corresponding relationship between the account of the finance company and the bank and realize the synchronization of the completion of the account handling of the finance company and the handling of the bank business.
2. Fund Collection Solution ICBC establishes a secondary group account structure for the general account of the finance company and the accounts of the member enterprises so that the funds of the secondary accounts of the member units can be collected in the general account of the finance company in real time and the balance of the funds and detailed records of the accounts of the member units will not be impacted by the collection.
3. Centralized Payment Solution After the establishments of the bank-enterprise interlink system and the secondary group account structure, the finance company can handle the centralized external payment of the member units, and the finance company sums up all payment orders and submits the orders to the bank through the bank-enterprise interlink system.
4. Current Fund Increment Management Solution The finance company can reasonably configure the wealth management products offered by ICBC in accordance with the practical demand, replace the single inter-bank deposit with these products so as to enhance the profitability of the current funds and realize flexible various current fund managements.
5. Financing Solution With diversified financing channels and products, ICBC can offer different financing choices for the finance company and offer timely financing support when the deficiency of the funds of the finance company.