How important is it to monitor the credits and debits in the overdraft account of a corporate customer ? And what exactly should be the checks involved ? (assuming there exists only a single lender).

Amount of flow and direction of flows need to be seen. Normally, a waterfall arrangement is prescribed where all inflows are required to flow through this account only and once the flow comes in it is distributed as per the pre agreed pattern only. Only the residual left is available to company for its free use

The Account Balance Monitoring System (ABMS) is the Federal Reserve computer system that allows Reserve Banks and institutions to obtain account balance information throughout the day. It also allows Reserve Bank staff to monitor an account on a real-time basis and establish certain controls over Fedwire activity. Institutions that are Fedline or computer interface customers may use ABMS to manage intraday and end-of-day account balances. ABMS is operational for institution inquiries from 12:30 a.m. to 9:00 p.m. eastern time.

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