Proof of Funds (POF) Procedure – Banking Acquisition POF Page

This procedure outlines the mandatory requirements for submitting Proof of Funds (POF) when engaging in a potential acquisition or significant transaction with our institution. Strict adherence to these requirements is non-negotiable.

1. Purpose of Proof of Funds (POF)

Proof of Funds (POF) is a mandatory document that demonstrates the full financial capacity of the potential Buyer (individual or entity) to cover the agreed-upon purchase costs for the transaction (e.g., banking license acquisition, equity purchase).

2. Mandatory Source and Format Requirements

All submitted Proof of Funds documentation must strictly adhere to the following:

• Source of Funds: The POF must unequivocally demonstrate that the funds are held directly by the future Ultimate Beneficial Owner (UBO) of the acquiring entity. Funds originating from third parties, regardless of the relationship, will be rejected.

• Liquidity Requirement: The assets presented as POF must be fully liquid and immediately available for use in the transaction.

  • Accepted Liquid Assets:

    • Official Bank Statement (Checking, Savings, or Deposit Account Balance).

    • Copy of a Money Market Account Balance.

    • Bank-Certified Financial Statement.

  • Unacceptable Non-Liquid Assets (Will Be Rejected):

    • Mutual Funds, Shares, Bonds, or other Securities.

    • Life Insurance Policies.

    • Non-liquid assets or proof of other possessions (e.g., real estate, jewelry, art).

    • Funds held in another person’s bank account.

    • Commitment letters from lenders or financing institutions.

• Required Documentation:

  • Official bank statement, security, or custody statement issued by a regulated financial institution that holds the funds.

  • The document must be recent, typically issued within the last 7-14 business days.

3. Essential Content for the POF Document

To be considered valid, the POF document must clearly and legibly include the following details:

• The Official Name and Physical Address of the Issuing Bank or Financial Institution.

• The Account Holder’s Name (must match the future UBO).

• The Account Number or Reference.

• The Current Liquid Balance of Funds clearly displayed.

• The Official Signature of an Authorized Bank Employee or Officer.

• The Official Bank Stamp or Seal.

• A Copy of an online banking statement is only acceptable if confirmed by an accompanying official bank letter/stamp/signature.

4. Verification and Authentication Policy

Supporting Letters from Lawyers, Accountants, or Lenders/Financing Institutions will NOT be accepted as valid Proof of Funds. The only acceptable POF is a direct statement from the bank or financial institution holding the liquid funds.

Our institution reserves the absolute right to verify the authenticity, validity, and liquidity of the POF directly with the issuing Bank or Financial Institution. Submission of the POF grants implicit consent for our legal and compliance teams to contact the issuing institution for confirmation. Any refusal by the issuing institution to cooperate with the verification process will result in the immediate rejection of the POF and cessation of negotiations.

5. Confidentiality

All POF documentation is considered strictly confidential information and will be handled by our compliance and legal departments in accordance with applicable data protection and confidentiality laws.