Page 135 - DMGT303_BANKING_AND_INSURANCE

Banking and Insurance

Notes Fedwire

This is another US payment system operated by Federal Reserve Bank, operated all over the US
states, since 1918, and handles majority of domestic payments. It is an automated computer
based messaging and payment system, working on gross settlement basis. All US banks maintain
accounts with Federal Reserve Bank, and are allotted an "ABA numbers" to identify the senders
and receivers of payments.
As compared to CHIPS, this is a large system, with over 9,500 participants, and handles a large
number of payments across the US, covering interbank transfers out of New York, local
borrowings and lending, commercial payments, as also some securities transaction related
payments for domestic banks.

Chaps

Clearing House Automated Payments System (CHAPS), is a British equivalent to CHIPS, handling
receipts and payments in London. This system works on the same principles as CHIPS, working
on the net payment settlement system. CHAPS is used by a large number of banks in UK, with
about 20 member banks and over 400 indirect members, using the system through some large
bank.

Did you know: At present all the major banks are connected through SWIFT as it is impossible
for them to answer the current demands of retail as well as corporate customers who need
services at speed of thought.

Target

Trans-European Automated Real-Time Gross Settlement Express Transfer system is an EURO
payment system comprising 15 national RTGS systems working in Europe. These are
interconnected by common procedures and uniform platform for processing high value payments
by over 30,000 participating institutions across Europe. This facilitates receipts and payments of
funds across the Euro zone (all member countries).

RTGS-plus and EBA

These are other Euro clearing systems, with RTGS plus, being a German hybrid clearing system
and operating as an European oriented real time gross settlement and payment system. RTGS
plus, has over 60 participants.
The EBA-EURO 1, with a membership of over 70 banks, in all EU member countries, works as a
netting system with focus on cross border Euro payments. For retail payments, EBA has another
system, called STEP 1, with over 200 members across EU zone.
STEP 2 is also in use in EU zone, which facilitates straight through processing (STP) to member
banks, using industry standards.

Notes The more frequently affirm must refinance debt, the greater is the risk of its not
being able to obtain the necessary financing.

Task analyze the EFT & NEFT transactions of a particular bank.

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