In the new situation of economic development, it is becoming a trend for group corporations to strengthen their cash regulatory efforts towards centralized management and effective allocation of their resources. Making full use of its technological advantages, the China Merchants Bank introduced a set of tailor-made, all-around, comprehensive and customized service products for group corporations. They constitute a complete solution for electronic financial management in group corporations.

Solutions for Fund Real Time Monitoring

• Instant inquiry of account information on local and remote subsidiaries
• Examine and approve case-by-case the payments of subsidiaries in different localities
• Head office examines and approves business operations exceeding the competence of the subsidiaries
• Monitoring over cash movement anytime, anywhere

Solutions for Plenary-Power Remote Management Account

• Case-by-case examination and approval of external payment by subsidiaries in different localities
• Plenary-Power Remote Management Accounts substitute financial staff designated to other cities

Solutions for Separate Management on Revenue And Expenditure

• Separate accounts for collection of payment and cost/expenditure in subsidiaries and representative offices to achieve faster fund centralization
• Helps corporate clients establish their own management systems on cost, profit, and cost

Solutions for Zero-Balance Cash Management

• Cash supplies are centralized on accounts of group corporations to realize universal cash management
• Having no right for external payment, accounts of subsidiaries are well under the control of their parent companies
• External interactions are all in the name of subsidiaries, which ensure the integrity and independence of their business operation and accounting affairs to evade taxation and legal risks
• Operation illustrated as follows:

Note: Dotted lines stand for automatic process within the bank

Solutions for Group Corporation Fund Settlement Agent

• Group corporations share the cash supply of their respective subsidiaries, which facilitate universal management and maneuvering of fund
• Group corporations and their respective subsidiaries are independent in their external interactions. The subsidiaries have the autonomy to decide external payments within their respective cash supply quota, but are still subjected to the account balance at the settlement centers of the group corporations
• Operation illustrated as follows:

Note: The account of the settlement center of the group corporation serves as the cash supply account for the subsidiaries; at a certain time point, the group corporation’s actual disposable balance of cash supply is:

1. 16+0.85+0.08+0.41=2.50 million yuan

In case collections and payments occur to the account of settlement center of the group corporation and the accounts the subsidiaries:

• Group corporation pays out 1.6 million yuan
• Subsidiary A pays out 0.78 million yuan
• Subsidiary B collects 0.12 million yuan
• Subsidiary C collects/pays out 0 million yuan

Note: Changes in fund status at subsidiaries are reflected on the account of the settlement center of the group corporation, and the changes in funds status at the group corporate are directly reflected on the account of the settlement center. At this moment, the group corporation’s actual disposable balance of cash supply is: -0.44+0.07+0.20+0.41=0.24 million yuan. In case any of the subsidiaries need to pay out, their total payment should not exceed their respective account balance, namely, 70,000 yuan for Subsidiary A, 200,000 yuan for Subsidiary A, and 240,000 yuan for Subsidiary C.

Solutions for Automatic Centralization Of Cash Supply

• Funds at subsidiaries are transferred to the group corporation instantly on a case-by-case basis
• Retained cash supplies at subsidiaries are transferred to the group corporation regularly
• Operation illustrated as follows:

Solutions for Subsidiary Sporadic Payment Under Centralized Cash Supply

• At the end of the day, cash supply that exceeds a certain quota on the accounts of the subsidiaries is automatically transferred to the group corporations
• The subsidiaries keep a certain quota of cash supply for possible small-amount payments
• Operation illustrated as follows: (100,000 yuan cash supply quota set for a subsidiary for its small-amount payments)

Scenarios	Computer Automatic Process
1. 2.50 million yuan on the subsidiary’s account	At the end of the day, 2.4 million yuan is transferred to group corporation, while the rest 100,000 yuan is left
2. 100,000 yuan on the subsidiary’s account	No process needed; 100,000 yuan on the subsidiary’s account
3. 60,000 yuan on the subsidiary’s account	At 9:00 on the next morning, an extra of 40,000 yuan is transferred from the group corporation to the subsidiary; 100,000 yuan on the subsidiary’s account