Comparative Overview of CHIPS and CHAPS Payment Systems

Foreign Exchange

IntroductionCHIPS (Clearing House Interbank Payments System) and CHAPS (Clearing House Automated Payment System) are prominent high-value payment systems operating in different jurisdictions. While both facilitate large-value transactions, they differ in terms of currency, geographical scope, settlement mechanism, and typical usage. 1. CHIPS – Clearing House Interbank Payments SystemCHIPS is a U.S.-based electronic payment system primarily…

Understanding Nostro, Vostro, and Loro Accounts in International Banking

Foreign Exchange

IntroductionIn the realm of international banking, the terms Nostro, Vostro, and Loro accounts refer to how banks manage and record cross-border transactions and foreign currency holdings. These accounts are essential for facilitating international trade, currency exchange, and interbank settlements, particularly when banks do not have a physical presence in foreign jurisdictions. The terminology originates from…

Correspondent Banking in India: Accounts and Financial Services

Foreign Exchange

IntroductionCorrespondent banking in India refers to formal arrangements between domestic and international banks to provide a range of financial services, particularly in the context of cross-border transactions. These partnerships enable Indian banks to offer services such as international payments, trade finance, and clearing, even in jurisdictions where they do not have a physical presence. Such…

Correspondent Banking Overview

Foreign Exchange

Correspondent Banking OverviewCorrespondent banking is a financial arrangement wherein one bank, referred to as the correspondent bank, provides banking services on behalf of another bank, known as the respondent bank, typically across international borders. This framework facilitates access to global financial systems, enabling banks to serve customers in jurisdictions where they lack a direct presence.…

SWIFT Financial messages: authentic and universal

Foreign Exchange, Information Technology2 Comments

The SWIFT financial messages are trusted as the most authentic and universal financial messages worldwide. SWIFT financial message is also the most convenient and fastest medium through which banks can meet customer’s requirements to send and receive messages to and from any country. Reasons for trusting SWIFT messages by banks and financial institutions: SWIFT stands…

What are RTGS & NEFT transactions

Information Technology

Latest update: RBI on thursday (06.06.2019) informed banks that it has decided to waive charges levied on NEFT & RTGS transactions and accordingly instructed the bank to pass on the benefit to their customers. Instruction on this regard will be issued within a week. Process of RTGS and NEFT RTGS& NEFT transactions are the fastest…

What is ECS (Electronic Clearing system)?

Information Technology

Electronic Clearing Service (ECS) in bank transaction is a simple, faster and cost effective solution for repetitive bulk transactions. The system was first introduced by Reserve Bank of India in April 1995 to facilitate speedier bulk inter-bank transactions. It is most useful to facilitate repetitive payment transaction such as salary, pension, interest, commission, dividend etc. ECS…

Reporting Requirements under the Liberalised Remittance Scheme (LRS)

Foreign Exchange

Under the Liberalised Remittance Scheme (LRS), resident individuals are permitted to remit up to USD 250,000 per financial year for a wide range of permissible current and capital account transactions. In order to ensure transparency and regulatory compliance, the scheme imposes specific reporting and documentation obligations on both remitters and Authorised Dealer (AD) banks. 1.…

Look up facility for RTGS and NEFT services from April 2025

Reserve Bank Functions and news

The Reserve Bank of India (RBI) has mandated the implementation of a beneficiary account name verification system for fund transfers via Real-Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) services by April 2025. Currently, payment systems such as the Unified Payments Interface (UPI) and Immediate Payment Service (IMPS) allow remitters to verify the…