RTGS(Real Time Gross Settlement)

What is RTGS?
• Real time gross settlement is the payment scheme for urgent and irreversible payments.
• By real time gross settlement it reduces the counterparty credit risk.
• Mostly operated and managed by central bank of countries.

ESMIG: Authentication & Authorization.

A2A communication: Relies on XML messages, using ISO 20022 standard.

U2A Communication: Dedicated GUI.

RTGS– Party

Operator – Responsible for initial setup and day to day operation RTGS , usually its central bank of country..

CBs – Core Banks are responsible for setting RTGS actors belonging to their own community, CBs mostly work as RTGS Account
holders as well, responsible for RTGS DCA and sub account set-up.

Payment Bank – Own RTGS DCA and RTGS sub accounts, maintain & monitor their own liquidity and send credit/debit
instructions.

Ancillary systems - Authorized to send debit & credit instruction to RTGS DCA or RTGS Sub-account.
RTGS– Components & Type of Accounts
CLM – Central Liquidity Management, Holds main cash account.

DCA – Dedicated Cash Account, Settlement of real-time interbank &customer payments. Every RTGS account holder must have on
DCA, it can be many as well.

MCA – Main Cash Account, a central source of liquidity. MCA can be used to increase the liquidity of DCA.

ESMIG – Provide Authentication & Authorization services.

CRDM – Interface for setup, maintain & query all type of reference data from RTGS system.

DWH - Data storage for historical, statically & regulatory reporting.

T2S - Target 2 Securities, Settlement services , making cross-border settlement identical to domestic settlement.

TIPS - Target Instant Payment Settlement, enables PSP to make payment real time.

Liquidity Transfer Group – Group of DCAs, formed by CB,s for intra liquidity transfer, a DCA can be part of multiple
liquidity transfer group.
Floor – Defined minimum amount in DCA to be available for settlement.

Celling – Defined Maximum amount to be available in DCA for settlement.

BIC - A RTGS account holder can have multiple DCA account , this all DCA account get identified by single unique BIC.
RTGS– Components & Type of Accounts

RTGS dedicated transit account – Account used for inter-service liquidity transfer.

RTGS CB account – Cash account owned by Core Bank, allowed with negative balance

RTGS SUB ACCOUNT – Sub account of DCA or CB account, holds dedicated liquidity and used for settlement of ancillary system.
RTGS– Access type

Direct Participants –
• Have direct access of RTGS,
• Can provide indirect access to other credit institution.
• Responsible to setup their reference data and CRDM.
• Maintain their own liquidity.
• Responsible for all cash transfer on their cash account by any entity registered through them.

Indirect Participants –
• Send and receive cash transfer through RTGS direct participants.
• Directly attached with RTGS DCA account.
• Settlement occur through RTGS DCA account of direct participants.
• Each indirect participant have BIC.

Multi-addressee access
• RTGS account holder authorize their branches and channel to direct interact with RTGS.
• All cash transaction occurred through linked RTGS DCA account.
RTGS: Connectivity
RTGS: Credit Transfer

Pacs.008: If the debtor or the creditor or both are non-financial institutions ( ISO 2022 standard XML) to RTGS.
pacs.009: If the debtor and creditor both are financial institutions ( ISO 2022 standard XML) to RTGS.
Pacs.002: PaymentStatusReport /notification ( ISO 2022 standard XML), to sender of payment instruction for confirmation.
Pacs.009/.008: Again sent by RTGS to Acc. holder B for settlement notification
DCA: Dedicated Cash Account(Every RTGS actor must have one)
RTGS: pacs.008
CustomerCreditTransfer message used to transfer money from sending bank to receiving bank account if sender and receiver both
or any one of them are non financial institute.

Information:

• Payment identification;
• Payment type;
• Interbank settlement amount;
• Interbank settlement date;
• Settlement priority;
• Settlement time indication and request;
• Instructed amount;
• Exchange rate, charges and charge bearer information;
• Instructing and instructed agents;
• Intermediary agents and their accounts;
• Ultimate debtor;
• Initiating party;
• Debtor, debtor agent, creditor agent and credit parties, and their accounts;
• Ultimate creditor;
• Instruction for creditor agent;
• Purpose;
•
•
Regulatory reporting;
Related remittance information;
pacs.008.001.09.xsd
• Remittance information.

Business Application Header : Every message XML prepended by BAH, this section contains the unique message id and creation date
RTGS: pacs.009

FinancialInstutionCreditTransfer message used to interbank transfer.

• Payment identification;
• Intermediary agent 3
• Payment local instrument code
• Intermediary agent 3 account
• Payment category purpose code
• Debtor
• Interbank settlement amount;
• Debtor account
• Interbank settlement date;
• Debtor agent
• Settlement time indication
• Debtor agent account
• Settlement time request - till
• Creditor agent
• Settlement time request - from
• Creditor agent account
• Settlement time request - reject
• Creditor
• Previous instructing agent 1
• Creditor account
• Previous instructing agent 1 account
• Remittance information
• Previous instructing agent 2
• Previous instructing agent 2 account
• Previous instructing agent 3
• Previous instructing agent 3 account
• Instructing agent
• Instructed agent
•
•
Intermediary agent 1
Intermediary agent 1 account pacs.009.001.09.xsd
• Intermediary agent 2

Business Application Header : Every message XML prepended by BAH, this section contains the unique message id and creation date
RTGS: pacs.002

PaymentStatusReport message sent by RTGS to RTGS account holder, it is mandatory in case of rejection and subscription based in case of
successful transaction.

• Identification of the original payment order instruction;

• Original UETR – Unique id to provide the original end-to-end reference of a payment transaction
• Original Transaction Identification
• Transaction Status ---RJCT/ACPT
• Proprietary ----------Status reason
• Additional Information---------Detail of error

pacs.002.001.11.xsd
RTGS: Debit Transfer

Pacs.010: FinancialInstitutionDirectDebit , used to send debit instruction to RTGS

Pacs.002: PaymentStatusReport /notification ( ISO 2022 standard XML), RTGS system confirm the acceptance of transaction.
Pacs.010: Again sent by RTGS to Acc. Holder B for transaction settlement notification.
DCA: Dedicated Cash Account(Every RTGS actor must have one)
RTGS: pacs.010 (FinancialInstitutionDirectDebit )

FinancialInstitutionDirectDebit sent by RTGS Acc. holder to RTGS , used to transfer amount from one RTGS account holder DCA to another RTGS Account
holder

Uses:

• Financial institution direct debit order;

• financial institution direct debit order settlement notification.
Field Name Description

Instructing Agent BIC of the instructing agent

Instructed Agent BIC of the instructed agent
Creditor Financial institution servicing an account for the creditor.
Instruction Identification ID set by the instructing agent
End To End Identification ID set by the instructing agent.
UETR Universally unique identifier to provide an end-to-end reference of a payment transaction.
Interbank Settlement Amount Amount of money moved between the instructing agent and the instructed agent

Interbank Settlement Date Date on which the amount becomes available for the

Settlement Priority Urgent(URGT), High(HIGH) ,Normal(NORM)

Debtor Financial institution that owes an amount of money to the (ultimate) financial institutional creditor.
RTGS: Payment Instruction from multi addressee

Multi – Addressee: A entity which is authorized to submit settlement/payment instruction to RTGS account holder DCA.
RTGS: Mandate Payment MANP

Mandate Payment: A mandatory payment is credit transfer order , instructed by Central Bank on behalf of his RTGS account holder in
contingency situation. Direct Debit & RTGS return can not occur under mandate payment.
RTGS: camt.054(BankToCustomerDebitCreditNotification )

BanktoCutsomerDebitCreditNotification:: Message sent by RTGS to RTGS actor to confirm the credit/debit of certain amount from RTGS DCA.

Field Name Description

Identification RTGS DCA ID

Currency Currency of the RTGS DCA

Creditor Financial institution servicing an account for the creditor.

AnyBIC BIC of the Party owning the RTGS DCA

Amount Transaction amount

CreditDebitIndicator CRDT/DBIT

value date Date of transcation

status Transcation Status

Settlementdate settlement date

RTGS: camt.054(BankToCustomerDebitCreditNotification )

BanktoCutsomerDebitCreditNotification:: Message sent by RTGS to RTGS actor to confirm the credit/debit of certain amount from RTGS DCA.

Field Name Description

Identification RTGS DCA ID

Currency Currency of the RTGS DCA

Creditor Financial institution servicing an account for the creditor.

AnyBIC BIC of the Party owning the RTGS DCA

Amount Transaction amount

CreditDebitIndicator CRDT/DBIT

value date Date of transcation

status Transcation Status

Settlementdate settlement date

RTGS: Liquidity Management

Liquidity Transfer : Process of debiting RTGS DCA account by RTGS Account. It occurs in 2 steps
1) Debiting RTGS DCA and crediting it to transit account of recipient RTGS actor may be DCA Account/ CB Account, TIPS /T2S account.
2) Debiting transit account and crediting to recipient RTGS Account.

Why Liquidity Transfer:

• RTGS Account holder has to maintain the floor & celling defined in CRDM.
• Settlement of money b/w to RTGS actors , if debit/credit transaction occurred b/w them.
• Settlement b/w RTGS DCA and RTGS Sub account.
• Run time money flow from MCA to DCA , to fulfill the large transaction in que.

• Inter Transfer

• Liquidity transfer b/w 2 DCA intra Liquidity Transfer Group.

• Transfer between RTGS DCA and RTGS CB account –Intra.
• Transfer between RTGS DCA and linked sub account. Intra e.g. multiple sub addressee.

• Intra Transfer

• RTGS DCA and MCA

• RTGS DCA & CLM CB account.
• RTGS CB account CLM CB account
• RTGS DCA and another services e.g. TIPS /T2S
PS:
• Every RTGS user must have at least DCA account & all DCA linked with single MCA, a DCA can also have sub accounts linked.
• Every CB possess CLM account
Liquidity Management : Immediate Liquidity transfer b/w 2 DCA

• Account Holder 1 sent LiquidityCreditTransfer to RTGS.

• RTGS to the schema as well as business rule validation.
• RTGS send confirmation receipt to account holder 1
• RTGS prepare BankToCustomerCreditDebitNotification to RTGS account 2.
Liquidity Management : camt.050(LiquidityCreditTransfer)

LiquidityCreditTransfer :Sent by RTGS account holder to RTGS , can also be sent by RTGS to Centralized Liquidity Management on behalf of
RTGS account holder to manage floor and celling .

For fund transfer request it can be sent :

• Between 2 RTGS DCA belongs to different liquidity group.

• Between 2 RTGS DCA belongs to same liquidity group.
• From RTGS to CLM on behalf of RTGS account holder.

camt.050 contains following fields

• Liquidity transfer identification;

• Creditor party and account;
• Amount;
• Debtor party and account;
• Settlement date.

Reference: http://www.swift.com/mystandards/RTGS/camt.050.001.05_RTGS
Liquidity Management : camt.025(LiquidityCreditTransferRecipt)

LiquidityCreditTransfer :Sent by RTGS to RTGS account holder, it is reply of camt.050 LiquidityCreditTransfer.

camt.025 contains following fields

• status code: RJCT, ACPT
• Description: Reason of RJCT

Reference: http://www.swift.com/mystandards/RTGS/camt.025.001.05_RTGS
Liquidity Management : Immediate Liquidity transfer b/w DCA using CB
Liquidity Management : Immediate Liquidity transfer b/w DCA & MCA

1. Liquidity Transfer from DCA to Transit account CLM of RTGS account holder 1
2. Liquidity transfer from transit account of CLM and Transit account of RTGS of RTGS Account holder 1
3. Credit to MCA account from RTGS transit account of Transit RTGS account holder 1.
Liquidity Management : Immediate Liquidity transfer b/w DCA & MCA

1. Liquidity Transfer from DCA to Transit account CLM of RTGS account holder 1
2. Liquidity transfer from transit account of CLM and Transit account of RTGS of RTGS Account holder 1
3. Transfer of liquidity from Transit RTGS account to Transit account of third party account of RTGS account holder 1.
4. Transfer of liquidity from Transit account of third party to CLM Transit account of RTGS account holder 1.
5. Transfer of Transit CLM account to third party DCA account of RTGS account holder1.
Liquidity Management : Auto liquidity transfer BY CLM

1. Initiated by CLM in case of large payment in que and CRDM has instruction from RTGS Acc holder.
2. Liquidity transfer from transit account of CLM MCA account and Transit account of RTGS of RTGS Account holder 1
3. Transfer of liquidity from Transit RTGS account to Transit CLM account of RTGS account holder 1.
4. Transfer of liquidity from Transit account CLM to DCA of RTGS account holder 1.
RTGS: Transaction Priority Matrix

Transfer Type Default Allowed

Priority
Credit transfer order for a customer payment Normal High, Normal
Credit transfer order for a payment return Normal Normal

Credit transfer order for an interbank payment Normal Urgent, High, Normal

Direct debit order for an interbank payment Normal Urgent, High, Normal

Liquidity transfer order Urgent N/A

AS transfer order Urgent N/A