What are concentration accounts?

What are concentration accounts?

• A. External accounts used for a single large customer transaction.
• B. Internal accounts established to facilitate processing and settlement of multiple or individual customer transactions within the bank, usually on the same day.
• C. Offshore accounts used for tax planning.
• D. Customer deposit accounts used for retail clients.

Answer: (B)

Concentration accounts are internal bank accounts used to consolidate funds from many customer transactions and settle them within the bank. They streamline processing and settlement, often enabling same-day completion by pooling multiple items into a central account before final credit or debit to customer accounts. This setup is about liquidity management and operational efficiency inside the institution, not about external customer deposits or offshore tax planning. Because funds move through these internal accounts, they’re a point of focus in AML monitoring to spot unusual or rapid fund movements.

Concentration accounts are internal bank accounts used to consolidate funds from many customer transactions and settle them within the bank. They streamline processing and settlement, often enabling same-day completion by pooling multiple items into a central account before final credit or debit to customer accounts. This setup is about liquidity management and operational efficiency inside the institution, not about external customer deposits or offshore tax planning. Because funds move through these internal accounts, they’re a point of focus in AML monitoring to spot unusual or rapid fund movements.