Swift

Agenda

What

is Swift What is BKE / RMA Swift Messages / Categories of messages Structured and Free format messages

SWIFT stand for

S W I F
Society for Worldwide Inter Bank Financial

Telecommunication

Swift History

Increase in International trade and commerce after World War-II

Efficient Banking System for payment mechanism with Security, Reliability and Confidentiality was needed. Computer and Telecommunication technology came to rescue.

Co-operative organization SWIFT was born

Swift History

SWIFT is the industry-owned co-operative

Established in 1973
Head quarters at Brussels, Belgium Common language for international financial transactions Secure, Standardised messaging services Provides interface software
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Swift usages :-

Payments Securities Treasury

Trade

SWIFT in figures

208+
Countries Connected

12,946,626 Avg Daily Messages 8147+ Live Users

WHY SWIFT
Advantages

of SWIFT

It is Highly Secured and Reliable It is very cost effective It is Standardized - accepted globally It offers standardized web based trust service and e-payments to corporate customers.
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WHY SWIFT
Disadvantages

of TELEX

Insecure and Slow Transaction Slower transmission Susceptible to transmission errors

Expensive
Most transacting Bank is a SWIFT user and not having test key arrangement for TELEX
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SECURITY

SWIFT Security objectives 1. CONFIDENTIALITY Information is disclosed to authorized persons at authorized location only 2. INTEGRITY Information can be RELIED upon ABSOLUTE, ACCURATE and VALID. 3. AVAILABILITY Information and the associated services is accessible and usable when needed 4. ACCOUNTABILITY Every individual authorized to use the system is 10 accountable

Swift BIC

BIC stands for Bank Identifier Codes It is the unique identification code of a particular Bank / Branch SWIFT handles the registration of these codes The code is 8 or 11 characters 4 characters - bank code

2 characters - country code

2 characters - location code

3 characters - branch code, optional ( 'XXX' for primary office) Where an 8-digit code is given, you may assume that it refers to the primary office. BIC is often called SWIFT addresses or codes
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Examples of BIC

BIC ICICINBB is for ICICI Bank, Mumbai ICIC identifies ICICI Bank IN identifies country code for India BB identifies Code for Mumbai

BIC ICICINBB011 is for ICICI Bank, Andheri 011 identifies Code for Andheri Branch

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RMA Relationship Management Application

RMA is an essential part of the security of the S.W.I.F.T. network.

Previously known as BKE-Bilateral key exchange

Exchanges secret bilateral authentication keys Automatically generates code while sending

It also decodes and confirm while receiving

Once RMA relation established within 2 banks they can send and receive authenticated messages between them.

If No RMA is present then only MT 999 can be exchanged (MT 999 Free format Unauthenticated Message)
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RMA PROCESS
Yes I give you Permission to send me traffic Iam looking for a correspondent in Bangladesh, Are you interested.?
RMA authorization

RMA answer

RMA query

Bangladesh Krishi Bank

Bank of India

Benefits of RMA

Automatically verifies the authenticity of message Smooth process without human intervention Cost saved for processing Processing time reduced Unilateral traffic. Dates / Time can be defined.

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Swift Messages

It is a written communication in a structured format

It is not a file
No Attachments can be sent Message types (MT)

SWIFT message as identified by 3 digit number

Each MT have different Structures / Usages

Message categories

series of MTs relating to a particular class of transaction, as indicated by the first digit of the MT number.

Message Blocks Header, Text , Trailer.

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Categories of Messages
Category
1 2 3

Details
Customer Payments and Cheques Financial Institution Transfers Treasury Markets Fx, Money Market and Derivatives

4 5 6

Collection & Cash Letters Securities Markets Treasury Markets - Precious Metals / Syndications

7 8 9

Documentary Credits & Guarantees Travelers Cheques Cash Management & Customer Status
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Message Blocks

Header: Contains control information Addressee, processing, priority and security. Text Contains the substance of the message. format and structure varies according to the MT

Trailer For control purposes, CHK Trailer, PDE Trailer

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Structured / Free Format Message

X99 in each category are free format message (Example : 799 is Free format message for LC/BG) All other are structured MTs Structured as per Type and use of Message Except 999 all other free format MTs are authenticated

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THANK YOU