Public Joint-Stock Company “Moscow Joint-Stock bank “Tempbank” effects payments in foreign currency on the date of application entry if it is applied during the trading day (till 15:00), if it is applied after the trading day (after 15:00) – payments are effected on the next working day.
We provide express-remittance of foreign currency service for payments acceleration – client’s currency remittance application is processed within 2 hours since the time of entry (if it is applied till 15:00).
Remittance (in foreign currency) to the accounts, opened in departments of PJSC MJSB “Tempbank”, is processed in real-time and is free.
Clients’ accounts cash funds enter is free and is effected on the day of inpayment to the Bank correspondent account.
Covered transfers in foreign currency as a way to minimize a risk of refund
In international banking practice there are two methods to effect payments.
1. The first one – more simple and used more often –consecutive funds transfer “in chain order”
Under this method a client provides a bank with a payment order containing beneficiary’s name and address, beneficiary’s account number in his servicing bank, the name of this bank (the beneficiary’s bank) and quite often the name of intermediary bank where the beneficiary’s bank holds an account in the payment currency.
To effect a payment the ordering institution sends via SWIFT/TELEX system a payment order (electronic authenticated* SWIFT MT103 message) to its correspondent bank where it holds an account in the payment currency presenting the above payment data.
Under the instructions of the ordering institution the correspondent bank debits its account with them for the payment amount and then effects further transfer of funds through its own correspondent bank, specifying the same payment instructions as stated in the original payment order.
And so, in chain order, banks transfer each other payment instructions and funds up to the funds are credited to the beneficiary’s account with the beneficiary’s bank. As we see under this method the funds and instructions are being transferred from bank to bank in close conjunction thus all the banks being involved in the transactions are aware of beneficiary’s name and the name of beneficiary’s bank.
If some of them have any problems through financial monitoring (being in the list of problem countries, under USA sanctions and/or EU etc.) then ANY bank - party of the chain may refuse to effect payment of such client/bank and withhold/refund payment to the payment originator.
2. In case of using the second method, called “covered transfer”, funds and payment instructions are being transferred to the final destination independently of each other. The payment originator bank sends via SWIFT/TELEX system two payment orders (electronic authenticated MT103 and MT202 formats messages). MT103 is being forwarded directly to the beneficiary’s bank and MT202 – to the correspondent bank where the ordering institution holds an account in the payment currency.
Content of the first, so-called, direct payment order (direct payment МТ103) is almost the same as while using the first method, except indicating intermediary banks, but with the necessary use of reference ie outgoing payment coverage reference number (other message - MT202).
Thus this is crucial that BEFORE effecting “covered payment” the ordering institution and the beneficiary’s bank should have exchanged TELEX/SWIFT keys. And here our ordering customers can significantly assist their bank.
For this purpose they should contact their counterparties-beneficiaries so that the latter should apply to their serving bank with the request to exchange keys with PJSC MJSB “Tempbank” as in the near future they are expecting international transfer from this particular bank. In case the beneficiary confirms to its bank the necessity of making a transaction with a remitter’s particular bank the keys exchange is usually carried out within a short time.
The second payment order (format MT202 message) called “cover payment”. In this message the ordering institution indicates to its correspondent bank the beneficiary’s bank as the recipient of funds where the first MT103 message has been sent. And consecutive chain of further payment effecting the correspondent bank builds itself. Thus the message MT202 contains neither ordering customer details nor payment details, which significantly reduces the risk non-payment on the part of any of the transaction participants.
* Electronic key in the interbank telecommunication messages system which is similar to banking signature and seal in hard copy payment document.
Covered transfers in foreign currency .doc 83Кб