What are Corporate Credit Cards? – Different Types of Cards
February 12, 2025
It may seem like the banking business is about money. However, the banking business is really all about information. Until banks have the required information about a prospective borrower, they cannot ascertain the risk and make the loan. This is where credit rating comes to the rescue. It this article, we will have a closer […]
Commercial or corporate banking has undergone a sea of change in the recent past. All these changes have not been related to technology. Some of the changes have also been related to ideology. The rise of the concept of sustainable corporate banking signifies an ideological shift in the commercial banking industry. Earlier, corporate banking was […]
While the system of debit and credit is the foundation for maintaining balance and accuracy, it can often feel overwhelming for beginners and even for clerical staff who handle day-to-day bookkeeping. The Golden Rules of Accounting are designed to simplify these concepts into actionable principles that anyone can use. These rules break down the most […]
The usage of remote deposit capture has been increasing rapidly in the recent past. This is because the technology is convenient and also because check processing became very difficult during the lockdowns which were induced by the coronavirus pandemic. As a result, corporations were forced to deploy remote deposit capture machines in order to continue […]
Equity valuation is usually conducted for an entire enterprise. For instance, if we are trying to come up with a valuation for Apple Inc, we will usually consider Apple Inc as being one single indivisible unit. This is because the cash flows that will accrue to Apple Inc are intertwined and all of the cash […]
The liquidity management paradigm in the commercial banking industry has undergone a drastic change. At one time, liquidity management was driven by constraints such as cut-off times and end-of-day processing. However, with the passage of time, the industry has witnessed continuous technological advancement. The industry now has the infrastructure as well as the regulatory mechanism in place to enable the real-time processing of transactions. As a result, the past few years have witnessed the migration towards the concept of real-time liquidity.
Real-time liquidity is very important for clients and provides several benefits. However, there are many challenges that commercial banks and companies have to face while implementing this real-time liquidity. In this article, we will have a closer look at the concept of real-time liquidity as well as how it is implemented.
Traditionally, there has always been a time lag between when payments were made and when they were actually realized by the beneficiary. This is because the sending and the receiving bank needed time to settle their books and then transfer the funds to the beneficiary. The clearing and settlement were manual processes till the late 1990s and early 2000s. However, the past couple of decades has witnessed advancement in information technology. As a result, most of the transactions can now be automatically cleared and settled with a high degree of accuracy.
The end result is that commercial banks all across the world are now able to enable their clients to make instant payments. The money gets instantly transferred to the beneficiary in case of domestic payments. However, in the case of international payments, there is still a small-time lag. This too is being eliminated with the implementation of the SWIFT global payments initiative.
Corporations across the world expect their banks to provide them with real-time liquidity. This is because of the fact that real-time liquidity provides several advantages to corporations. Some of the important benefits which accrue to corporations have been mentioned below:
Even though real-time liquidity theoretically seems like a good idea, there are many challenges that need to be overcome in order to make it a success. Some of the most prominent challenges have been mentioned below:
The bottom line is that real-time liquidity has become a very important aspect of commercial banking. It is quite important for corporate clients. However, the idea is still in its nascent stage and is likely to face many challenges in the future.
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