Zero Balancing

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Zero Balancing is a tool for large corporate groups which have many accounts, a centralised finance function and their own intra-group bank. Zero Balancing enables the group to reduce its interest expenses and obtain higher credit interest rates through better utilisation of their total capital.

Benefits:

Higher interest income
Lower interest expenses
More effective management of currency exposure
Better monitoring and control of the subsidiaries' liquidity

Suitable for large groups with:

An effective electronic accounting system/intra-group bank function
Many accounts and a need to have liquid funds in one account
A centralised finance function

What is Zero Balancing?

A Zero Balancing system consists of operating accounts for the individual subsidiaries and a master account belonging to the parent company.

All accounts can have their own credit limits.

Legal issues:

The establishment of a group account system requires that the company is an independent legal entity or a corporate group as defined in the Norwegian Companies Act.

Any participants from outside Norway must meet the legal requirements that apply in their respective countries.

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