These steps assume you have already set up the following:
Common Data:
Accounting:
Please follow the above links to complete any setup steps that you may have missed before continuing.
Purpose
In-House Banking (IHB) is a treasury management structure in which a central entity within a corporate group acts as an internal bank for its subsidiaries and affiliates. An IHB isn’t a licensed bank; it’s a governance, process, and technology framework used to manage cash, liquidity, funding, and intercompany positions centrally.
An IHB records all activity, both cash and non-cash movements, between a company's subsidiaries or business units and maintains the outstanding balances in a virtual account.
Key characteristics of an IHB include:
Interest Charges: Interest is applied to IHB balances so that the cost of internal funding is properly accounted for.
GL Entries: General ledger entries are generated for both the parent company and the relevant subsidiary, keeping the books of each entity accurate and up to date.
For example, a parent company may fund its subsidiary's operations by transferring money from its own bank account. When this occurs, the IHB must automatically:
Track the cash movement
Calculate the associated interest cost
Generate the corresponding GL journal entries
This ensures full visibility and accurate accounting of intercompany funding activity across the group.
The core principle is centralization: bringing financial control and visibility together in one place rather than leaving it fragmented across individual subsidiaries. This allows the corporate group to operate more efficiently, with greater oversight and coordination of its financial activities.
Plan for Configuration
Ask yourself the following questions to plan for and map out each currency pool independently, and to understand how central treasury governs the full multi-pool structure.
Currency Scope and Pool Structure
Which currencies do you transact in across its subsidiaries?
Which currencies are significant enough to call for their own IHB pool?
Is there a threshold, such as transaction volume or value, that determines whether a currency gets its own IHB?
How many IHB pools are needed in total?
Are any currencies expected to be added or retired soon?
Subsidiary Participation
Which legal entities will participate in each currency pool?
Does each subsidiary transact in a single currency or in multiple currencies?
If a subsidiary operates in multiple currencies, which pools will it participate in?
Are there subsidiaries that should be excluded from a currency pool despite transacting in that currency?
Intercompany Account Structure
Will each subsidiary hold a single intercompany account per currency pool, or multiple accounts?
How should intercompany balances be tracked: at subsidiary level, entity level, or both?
What naming or coding conventions are needed to identify accounts within each currency pool?
Should accounts be in debit, credit, or both positions, and are there limits on either?
Cash Movements within Each Pool
How will subsidiaries fund or draw from their currency pool: manual instruction or automated sweep?
What triggers a cash movement: end of day, a threshold, or on demand?
Are there minimum or maximum balance requirements per subsidiary within a pool?
How should excess liquidity within a pool be invested or deployed?
Intercompany Balance and Interest
How are intercompany balances tracked within each currency pool?
How frequently are intercompany positions calculated and confirmed: daily or monthly?
How is interest calculated on intercompany balances within a pool?
Are interest rates fixed, or benchmarked to a reference rate such as SOFR for USD, SONIA for GBP, or EURIBOR for EUR?
How frequently is interest accrued and settled?
GL and Accounting per Pool
Does each currency pool have its own set of GL accounts, or are they shared across pools?
How should intercompany reporting be managed at consolidation for each pool?
Are there specific accounting treatment requirements per currency, such as IFRS versus local GAAP?
How are accrued interest and intercompany balances reported at period end for each pool?
Central Treasury Oversight
How does central treasury currently monitor positions across all currency pools?
What consolidated reporting is needed across all IHB pools, such as a group liquidity dashboard?
How should central treasury be alerted to imbalances or liquidity shortfalls within a specific pool?
Does central treasury need to move liquidity between currency pools, and if so, how is the resulting FX exposure managed?
FX Boundary Management
How are cross-currency transactions managed when a subsidiary needs to transact in a currency outside its primary pool?
Where does FX conversion happen: at subsidiary level before entering the pool, or centrally by treasury?
Who is responsible for managing residual FX exposures that arise at central treasury level?
Technology and System Fit
Does the current TMS or ERP support multiple independent IHB pools by currency?
How are intercompany positions currently recorded: in the TMS, in the ERP, or manually?
What level of automation is expected for balance updates, interest calculations, and GL postings per pool?
How will each pool's data feed into group-wide treasury reporting?
Regulatory and Tax per Currency Pool
Are there withholding tax implications on intercompany interest within specific currency pools?
Are there local regulations restricting participation in a particular currency pool?
Are transfer pricing policies documented per currency pool and per intercompany relationship?
Configure In-House Banking
The most important part of a successful IHB implementation is to have a good understanding of your requirements, including the uses for IHB before setting up the required information.
Step | Required For |
|---|---|
| All IHBs |
| Bank statement imported for parent only Payment on behalf of (POBO) Receipt on behalf of (ROBO) |
| All IHBs |
| All IHBs |
| All IHBs |
| All IHBs |
| All IHBs |
Run IHB Processes
After you configure IHB, schedule the daily processes and manually run the month-end processes to manage your in-house banking.
Copyright 2026 Ripple Labs Inc.
These steps assume you have already set up the following:
Common Data:
Accounting:
Please follow the above links to complete any setup steps that you may have missed before continuing.
Purpose
In-House Banking (IHB) is a treasury management structure in which a central entity within a corporate group acts as an internal bank for its subsidiaries and affiliates. An IHB isn’t a licensed bank; it’s a governance, process, and technology framework used to manage cash, liquidity, funding, and intercompany positions centrally.
An IHB records all activity, both cash and non-cash movements, between a company's subsidiaries or business units and maintains the outstanding balances in a virtual account.
Key characteristics of an IHB include:
Interest Charges: Interest is applied to IHB balances so that the cost of internal funding is properly accounted for.
GL Entries: General ledger entries are generated for both the parent company and the relevant subsidiary, keeping the books of each entity accurate and up to date.
For example, a parent company may fund its subsidiary's operations by transferring money from its own bank account. When this occurs, the IHB must automatically:
Track the cash movement
Calculate the associated interest cost
Generate the corresponding GL journal entries
This ensures full visibility and accurate accounting of intercompany funding activity across the group.
The core principle is centralization: bringing financial control and visibility together in one place rather than leaving it fragmented across individual subsidiaries. This allows the corporate group to operate more efficiently, with greater oversight and coordination of its financial activities.
Plan for Configuration
Ask yourself the following questions to plan for and map out each currency pool independently, and to understand how central treasury governs the full multi-pool structure.
Currency Scope and Pool Structure
Which currencies do you transact in across its subsidiaries?
Which currencies are significant enough to call for their own IHB pool?
Is there a threshold, such as transaction volume or value, that determines whether a currency gets its own IHB?
How many IHB pools are needed in total?
Are any currencies expected to be added or retired soon?
Subsidiary Participation
Which legal entities will participate in each currency pool?
Does each subsidiary transact in a single currency or in multiple currencies?
If a subsidiary operates in multiple currencies, which pools will it participate in?
Are there subsidiaries that should be excluded from a currency pool despite transacting in that currency?
Intercompany Account Structure
Will each subsidiary hold a single intercompany account per currency pool, or multiple accounts?
How should intercompany balances be tracked: at subsidiary level, entity level, or both?
What naming or coding conventions are needed to identify accounts within each currency pool?
Should accounts be in debit, credit, or both positions, and are there limits on either?
Cash Movements within Each Pool
How will subsidiaries fund or draw from their currency pool: manual instruction or automated sweep?
What triggers a cash movement: end of day, a threshold, or on demand?
Are there minimum or maximum balance requirements per subsidiary within a pool?
How should excess liquidity within a pool be invested or deployed?
Intercompany Balance and Interest
How are intercompany balances tracked within each currency pool?
How frequently are intercompany positions calculated and confirmed: daily or monthly?
How is interest calculated on intercompany balances within a pool?
Are interest rates fixed, or benchmarked to a reference rate such as SOFR for USD, SONIA for GBP, or EURIBOR for EUR?
How frequently is interest accrued and settled?
GL and Accounting per Pool
Does each currency pool have its own set of GL accounts, or are they shared across pools?
How should intercompany reporting be managed at consolidation for each pool?
Are there specific accounting treatment requirements per currency, such as IFRS versus local GAAP?
How are accrued interest and intercompany balances reported at period end for each pool?
Central Treasury Oversight
How does central treasury currently monitor positions across all currency pools?
What consolidated reporting is needed across all IHB pools, such as a group liquidity dashboard?
How should central treasury be alerted to imbalances or liquidity shortfalls within a specific pool?
Does central treasury need to move liquidity between currency pools, and if so, how is the resulting FX exposure managed?
FX Boundary Management
How are cross-currency transactions managed when a subsidiary needs to transact in a currency outside its primary pool?
Where does FX conversion happen: at subsidiary level before entering the pool, or centrally by treasury?
Who is responsible for managing residual FX exposures that arise at central treasury level?
Technology and System Fit
Does the current TMS or ERP support multiple independent IHB pools by currency?
How are intercompany positions currently recorded: in the TMS, in the ERP, or manually?
What level of automation is expected for balance updates, interest calculations, and GL postings per pool?
How will each pool's data feed into group-wide treasury reporting?
Regulatory and Tax per Currency Pool
Are there withholding tax implications on intercompany interest within specific currency pools?
Are there local regulations restricting participation in a particular currency pool?
Are transfer pricing policies documented per currency pool and per intercompany relationship?
Configure In-House Banking
The most important part of a successful IHB implementation is to have a good understanding of your requirements, including the uses for IHB before setting up the required information.
Step | Required For |
|---|---|
| All IHBs |
Bank statement imported for parent only Payment on behalf of (POBO) Receipt on behalf of (ROBO) | |
All IHBs | |
All IHBs | |
| All IHBs |
| All IHBs |
| All IHBs |
Run IHB Processes
After you configure IHB, schedule the daily processes and manually run the month-end processes to manage your in-house banking.
Copyright 2026 Ripple Labs Inc.