In-house Bank

Solusius can assist treasury departments on the legal structure and documentation of an In-house Bank and Payment Factory. This documentation may include settlement of intercompany deliveries, cash sweeping, direct debiting, payments made on behalf of other entities and overdraft facilities. Settlement of payments made om behalf could be rather complex if various companies within the group execute payments requests on behalf of group companies. Solusius has experience in setting up In-house Bank and Payment Factory agreements that enable a flexible means of enacting companywide or country specific amendments. Solusius Treasury Lawyers drafted in-house bank documentation which meets legal, fiscal and accounting requirements. This model has been checked and approved by the relevant departments of various multinationals in many counties in Europe, the Americas, Asia and the Middle East. For a description of the model documentation see In-house bank documentation.

An In-house bank is a great way to improve cash management, to mitigate transfer risks and to reduce costs. There are many Treasury Management Systems  that offer the possibility to set up an In-house bank that offers multiple services to group companies. When an In-house bank is implemented, the primary focus is usually on the technical solution to operate the In-house bank. Generally tax advisors are involved to advise on applicable interest rates. However, legal advisors are often involved at a late stage or are not involved at all. This can be tricky approach because not having proper In-house bank agreements in place can violate compliance obligations, may lead to personal liability of directors and can turn out to be a costly affair. The article below elaborates on these risks in detail.