Our customer had agreed to sell on an open account basis, and was sending the shipping documents directly to the buyer to enable them to take possession of the goods prior to receiving payment. This meant that once the shipment had been made there was no control over when payment would be received.
Despite the buyer's agreement to pay at the end of the month following the invoice date, our customer found that payment was actually received 30 to 60 days later. In addition the time spent chasing the payment was creating additional costs as well as increasing the time spent on the account by the credit control function.
NOOR BANK advised the company to consider using a Documentary Collection to obtain payment, or a commitment to pay from the buyer. This meant our client would send their shipping documents to the buyer through NOOR BANK , accompanied by a Bill of Exchange drawn on the buyer with a payment date at the end of the month following the date of shipment.
Collections – Alternate Channels
A major low-cost carrier needed a banking partner to accept payments on its behalf for all its services offered to its customers. Given its line of business, the carrier required additional channels and partners to reach the intended customer base in addition to the online acquiring model. This carrier was seeking alternate easy-to-access payment channels to reach its customers.
Noor Islamic Bank provided its online payment gateway with direct connectivity to the airline's booking system and facilitated collections through multiple channels to accept payments on behalf of the carrier that include branches, electronic cash deposit machines, and online banking platform. Upon providing a reference number, a passenger gets a real time update on flight itinerary in addition to the payment amount. Post payment, the customer receives an email confirmation.
By customizing our payment gateway and direct connectivity, NOOR BANK was able to offer bespoke alternate channels to the low-cost carrier to collect payments and enhance the carrier's end to end value proposition.
Case study - Confirmed Letter of Credit (LC)
One of our large corporate customers had a contract with a new buyer in Pakistan. The buyer convinced our customer to sell to them on open account terms. The buyer obtained 60 days credit, which was to be calculated from the date of the invoice. The value of the order was USD 500,000.00
As this was the first contract that our customer had with this buyer, we advised our customer that he should request the buyer to open a letter of credit in their favour, requesting for the LC to be confirmed by NOOR BANK .
By adding our confirmation to the LC, NOOR BANK undertook to effect payment to the customer at maturity in the event of non-payment from buyer's bank provided documents presented under the LC were compliant. Also, as this was a Usance LC, our customer had the opportunity of receiving payment prior to maturity date as NOOR BANK was able to extend financing post acceptance of subject bill, with underlying Shari'a compliant structure being a 'commodity murabaha'.
Customized Solutions – Outsourced Counter Services
One of the government entities within UAE preferred its staff to focus on its core business to retain and grow its business instead of handling cash / cheques received from all its customers.
Noor Islamic Bank was able to provide onsite counter services during the entity's working hours to receive cash and cheques from its clients. NOOR BANK also provided complete collection MIS and reconciliation for funds collected for the entity. Furthermore, the corporate no longer needs to warehouse and track its post-dated cheques (PDCs), as the NOOR BANK package also included a complete end-to-end PDC warehousing and presentment solution.
By outsourcing existing counter services to NOOR BANK , the corporate was able to minimize cost and increase operational efficiency, while ensuring timely execution of transactions for its clients. The entity was also able to redeploy resources so that staff could focus more on exception management and enhanced customer service levels.
Payments – ERP Integration
A government entity makes majority of its payments to suppliers, vendors and staff through cheques. Their challenge was to manage the cumbersome process of cheque inventory, timely signature from authorizers, supplier disbursements and reconciliation by multiple units. This took a lot of effort internally and engaged multiple staff in managing the whole payment cycle.
NOOR BANK provided a complete payment outsourcing solution that entails the customer generating a payment file through their ERP platform and providing the same to NOOR BANK through a secure connection. Upon payment file receipt and content verification, the cheques are printed by Noor Bank and disbursed to beneficiaries and all electronic payments processed seamlessly through SWIFT. A daily response file is sent to the customer with the instrument numbers to complete system reconciliation instantly. Customized reports are also provided through NOOR BANK online banking channel (Noor Connect) which are used by the customer to fully reconcile individual payments.
NOOR BANK improved the payment cycle of the customer which allowed their staff to focus on core activities, and also increase efficiencies in the procurement, reimbursement and reconciliation processes.
Corporate Online Banking -Case Study A
A European based investment company expanded its operations in MENA region by establishing a regional office in Dubai. The regional office was required to accurately manage investment portfolio for each country and segregate incoming and outgoing funds.
Corporate Online Banking portal provided a single sign-on access on all accounts to selected staff which allowed the user(s) to transact on all company accounts real-time. The flexibility of the platform enabled the authorizer in Europe to request a Manager's Cheque which could be collected by the local staff in the same working day or request a telegraphic transfer to be executed on a future value date. This allowed the payment to be approved on a working day in Europe (Friday) but processed on Saturday (clearing day in UAE).
The company was able to streamline their processes and conduct business on a 6-day working week.
Corporate Online Banking -Case Study A
A UAE group of companies with nine separate legal entities was faced with the challenge of timely processing their payroll with authorizers on the move in either Australia or USA. Corporate Online Banking platform greatly facilitated the payroll disbursement. Through the file upload feature, the 'Wages Protection System' payroll file processed in UAE was uploaded on the system and made easily accessible to the approvers overseas in another time-zone for electronic sign-off. This allowed the company to process the salaries for all their employees on time while meeting the strict salary disbursement guidelines of UAE Ministry of Labour and Central Bank. Also, by managing the payroll of multiple companies within the group from a single corporate account accessible online, operational efficiencies were realized in the existing payroll process.