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## 3.1 Benefits of Notional Pooling

This topic describes the information about the benefits of Notional Pooling.

The benefits of Notional Pooling are as follows:

- Minimizes interest expense and improves balance sheet for corporate by off-setting debit and credit positions.
- Single liquidity position without commingling of funds.
- Allows each subsidiary company to take advantage of a single, centralized liquidity position, while still retaining daily cash management privileges.
- Preserves autonomy, control and record-keeping.
- Benefit from off-setting without movement of funds and saving on administrative costs by avoiding foreign exchange costs.
- Avoids inter-company loans by avoiding the use of cash transfers to a central pooling account.
- Automation of interest reallocation.
- Reduction in operating expenses by reducing short term borrowings.
- Concentration of balances.
- Largely eliminates the need to arrange overdraft lines with local banks.

Parent topic: Notional Pooling