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## 2.1 Zero Balance

This topic provides the information about the Zero Balance method.

In this method, all balances from the sub-account\child account are automatically transferred to the master account at the EOD or on an intra-day basis with the original value dates. Therefore, the top account holds the total net cash position of the company or group of companies. The top account is usually held by the parent company or group treasury.

1 Way Scenario

The system tries to zero balance the child account. The child account balances are swept to leave a zero balance in the child account. If the child account balance is zero or negative, the system does not execute any sweep instructions.

2 Way Scenario

The system tries to bring the child account to zero balance if it has a negative balance. If the balance in the parent account is not sufficient to cover the overdraft in the child account, either sweep is not executed or sweep is executed up to the balance available in the parent account.

If more than one child account is in negative balance, the transfer from the parent account is based on the priority set at the child account (Least numeric is given top priority) and the available balance on the major account.

When sweeping from major account to minor account, the major account balance cannot go below Zero if the unlimited OD is not selected at the account level. If it is checked, the sweeps can be executed without any limit to cover the child overdrafts till all the minor account balances are set to zero.

Parent topic: Cash Concentration Methods