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Concentration Account

   Also found in: Wikipedia 0.01 sec.
Concentration account
A single centralized account into which funds collected at regional locations (lockboxes) are transferred.
Concentration Account
A large account kept by a bank or other financial institution for its own internal purposes. Financial institutions use the funds in their concentration accounts to settle numerous transactions that occur on a particular day. For example, if a customer closes his/her bank account, the money given to him/her likely comes from the concentration account. Often, the money in a concentration account comes from regional branches of a bank, which transfer funds to a central location. This is the origin of the name.

It was formerly relatively common for customers to transfer their own money through the concentration account of their banks, for both legitimate and illegitimate purposes. However, the USA PATRIOT Act forbade this practice.
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The account structure features hundreds of zero-balance sub-accounts that roll up to one master concentration account, dramatically simplifying reconciliation and improving visibility and control.
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The strain on the city's concentration account was acute, and could only be relieved by pulling resources out of investments to meet the cash demand.
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Concentration accounts permit funds from various individuals to be commingled without divulging their origins.
Problems with Current U.S. Policy by Ehlers, Scott / Foreign Policy in Focus
 
 
 
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