The Society for Worldwide Interbank Financial Telecommunication (SWIFT) provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment.
SWIFT is a single, secure communications channel used by more than 10,000 banking organizations, corporations, and others to exchange millions of standardized financial messages.
A list of additional potential benefits include:
- Increased geographic reach for your financial operations
- Increasing visibility of idle cash throughout your bank network
- Improved audit compliance
- Highly secure communication infrastructure
- SWIFT has been accorded ISO 9000 certification due to assured standard and universal acceptance
In the year 1973 about 239 banks from Europe, North America, and Asia came together and decided to form this non-profit co-operative society. The main objective of Swift is to standardize the fund’s transfer, delivery of payment instructions, enhance the security level of such transactions, and cut down the cost of the message. Over the year, the SWIFT has grown well and almost all the countries, banks and financial institutions became its members.
In India, the SWIFT was inaugurated on 2nd Dec 1991 as a result of persistent efforts put in by IBA.
To ensure uniformity, SWIFT devised ten categories of messages from 0 to 9.
|1||Customer Payments and Cheques|
|2||Financial Institution Transfers|
|4||Collection and Cash Letters|
|6||Treasury Markets – Metals and Syndications|
|7||Documentary Credits and Guarantees|
|9||Cash Management and Customer Status|
A three digit number identifies the messages. The First digit of each message type represents the category it belongs to. The commonly used message types are:
MT 100 – Customer Transfer
MT 111 – Request for Stop Payment of a cheque
MT 202: General Financial Institution Transfer
MT 203: Multiple General Financial Institution Transfer
MT 400: Advice of Payment
MT 410: Acknowledgment
MT 412: Advice of Acceptance
MT 416: Advice of Non-Payment / Non-Acceptance
MT 420: Tracer
MT 422: Advice of Fate & Request for Instructions
MT 430: Amendment of instructions
MT 456: Advice of Dishonor
MT 700 & MT 701: Issue of Documentary Credit
MT 705: Pre-Advice of a Documentary Credit
MT 707: Amendment to a Documentary Credit
MT 730: Acknowledgment
MT 734: Advice of Refusal
MT 740: Authorization of Reimbursement
MT 742: Reimbursement claim
MT 756: Advice of Reimbursement
MT 760: Guarantee
MT 986: Status Report