The sole purpose of this Blog is to keep our understanding of concepts learned from the Internet and Work experience in one place.
References
Get link
Facebook
X
Pinterest
Email
Other Apps
-
General Disclosure:
As I Gather most of my information on this Blog from various other sites online, As an honorary mention I would like to try and attempt to list them in the comments section.
SWIFT MT – Serial and Cover Method This is one of the most important articles from SWIFT payments’ perspective and it is critical that you fully understand the concepts laid out here. Payments are cleared and settled via 2 primary methods: Through a payment market infrastructure (PMI) Through correspondent banking Through payment market infrastructure: This is the case where bank A and bank B are direct participants of this PMI aka CSM. IN General usage the concept of serial and cover does not apply here but if you put a gun to my head, I would say is very close to the serial method. Through correspondent banking: This is the case where banks open accounts with each other (Nostro/Vostro) and settle funds directly. The prerequisite here is that banks need to open accounts with each other or in other words they need to have an accounting relationship with the other bank. Now, let us try to understand the connection between sending/receiving SWIFT messages and the moveme...
SWIFT MTs – Blocks 1 Through 5 We have discussed in our previous article that there are 5 blocks in a SWIFT MT message. Now we will dive deep into each of these blocks and try to understand them in detail. Please save this page for your future reference (At least till 2025) There are some common details and we will try to understand what they are All the blocks start with “{” The Block number or block identifier will be displayed at the very beginning followed by a “:” (Separator) This will be followed by the contents of the block The block will end with a “}” Basic Header Block (Block 1 ) This block is the only mandatory block and contains general information identifying a message. Let us now dissect the block {1:F01CITIFRPPAXXX0070970817} This can be split into different components ( Split using spaces) { 1 : F 01 CITIFRPPAXXX 0070 970817} F – This is application Identifier or AppID . F Indicated that it is a FIN message 01 ...
SEPA Clearing and Settlement Mechanism: CSMs are very important for the transfer of funds from one bank account to another if both the accounts are not with the same bank. PSPs who are part of the SEPA payment scheme have to choose a CSM in order to comply with the reachability requirements of the scheme in which they are participating. PSPs can have a choice of different participation in CSM. There are two types of CSM participants Direct participants Indirect participants Direct Participants: They are the PSPs that connect directly with the CSM and they settle funds with the CSM at the central bank level. When direct participants send and receive funds via their CSM their account with the CSM will be debited or credited (Ultimately). S0501 Indirect Participants: These are PSPs that connect to the CSM through direct participants. These PSPs will have an accounting relationship with a direct participant which in turn has a direct link to the CSM. The CSM will just have the detail...
Comments