In-House Banking
In-house banking is an internal treasury function, typically used by large multi-national corporations, where the treasury department provides foreign exchange services, intra-group lending and cash flow management services for the group. An in-house bank processes and settles inter-company transactions on an in-house account and provides the subsidiaries and operating units with statements on the balances and payments on their accounts as would a commercial bank.
In-house banks deliver considerable savings by cutting the cost of intra-group payments, minimizing external borrowing and investment, reducing the number and cost of bank relationships, minimizing FX costs, and improving cash control and liquidity management.
The role of the in-house bank has expanded considerably over the last few years and now often includes not only facilitating foreign exchange services, intra-group lending and cash flow management services for the group's companies and subsidiaries, but also many other services offered by commercial banks, such as multi-lateral netting services and commodity trading on behalf of the group.