Page 132 - DMGT303_BANKING_AND_INSURANCE

Unit 6: New Age Clearing and New Age Payment

MT 707 - Amendment to a Documentary Credit Notes
MT-730 - Acknowledgement
MT -734 - Advice of Refusal
MT- 740 - Authorization to reimburse

MT-742 - Reimbursement Claim
MT-756 - Advice of Reimbursement
MT-760 - Guarantee

Category 9

Common Group Message
n92 - Request for cancellation

n95 - Queries
n96 - Answers
n99 - Free format message
Where 'n' can be any number in any of the said categories.

Message Format/Authentication

Each message text is divided into different parts called 'fields' for easy identification and also to
indicate the specific action associated with that part. Some of these fields are mandatory while
others are optimal. In the PC connected application each field is identified by a code work
mandatory field/optional field (MF/OF) indicating the mandatory optional usage of the
concerned field. Each message comprises of (a) Header, (b) Message Text, (c) Authenticator, and
(d) Trails.
For every message conveyed to the computer, a numerical figure called 'Checksum" is calculated
automatically by the computer, based on certain set mathematical formulae (algorithm) fed
along with the software. The computers automatically add this 'checksum' as a part of the trailer
of every message and on receipt at the destination, the receiving computer again checks it
automatically to ensure that message text has remained unchanged during transmission.

6.6 Bank Identification Code (BIC)

All member banks and those of their branches which are connected to SWIFT are automatically
assigned specific Bank identification code (BIC) for easy identification both for sender and
receiver. This BIC is drawn in accordance with norms/instructions of international organization
for standardization (ISO) and International Chamber of Commerce.

Message Flow in SWIFT System

All those branches of a member bank in one country, which are connected to Swift, are
linked to one nominated focal office of that bank which is called CBT. Each branch prepares
and sends the messages to CBT for that bank. The computer based system at each Swift
branch as also communication between the CBT of the bank and its various branches is
decided at the discretion of each individual member bank.

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