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Cross-border Cash Pool

I. Physical Pool

1. Unified global/regional treasury management. Physical pool is mainly used in multinational corporations, where the cash reserves of the company's overseas subsidiaries are gathered to specific country/region to build a global cash pool or regional cash pool.

2. Flexible cash allocation. The multilevel framework of physical pool allows customers to automatically sweep the accounts globally or regionally for cross-border treasury activities and interest tax planning. Physical pool supports companies to initiate sweeping, allocation or single cash allocation and enables multinational corporations to allocate liquidity across regions. Moreover, physical pool allows payment made between accounts of higher/lower level as one option for companies to process external payment flexibly.

3. Global account support. In a corporate group, domestic ICBC accounts, overseas ICBC accounts or accounts of partner banks can all be included in a physical pool.

4. Complete information. To customers, physical pool provides a list of internal incoming and outgoing account transactions, a list of successful and unsuccessful pooling/allocation to group headquarters and member companies. The lists are for customers to check the cash pooling or allocation.

II. Notional Pool

Notional pool is designed as required by a corporate group, without the need to transfer in actual cash between different corporate settlement accounts. ICBC calculates the deposit interest and loan interest by combining the net amount after offsetting the balance and overdraft in each settlement account.

1. Combined interest calculation, improving interest income and expense. Under combined interest calculation, interest is calculated on the net position after netting the positive, negative balance of member accounts in the pool in order to narrow the deposit-loan interest spread, reduce interest expense;

2. Internal pricing, strengthening internal management. Group internal management is clearer by estimating the cost for each member account against headquarters according to the account balance size;

3. Liquidity sharing, reducing external debt. Notional pool under liquidity sharing mode enables sharing of amount in all the internal accounts of the Group to raise fund internally instead from outside;

4. Day overdraft, reducing cost of fund transfer. Liquidity cost is reduced since each member account can use the shared liquidity of other accounts without actually transferring any fund.

III. Notes
Cross-border cash pool (including physical pool and notional pool) is a service depending on the regulatory policy and requirement of the domicile country.

Note: Information herein is for reference only. Refer to the announcements and regulations of local outlets for further details. ICBC reserves the final right of interpretation.

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