CLEARING OF INTERNATIONAL

PAYMENTS

Belgrade, March 2007

Clearing of international payments

Clearing of international payments is performed for banks headquartered in the

Republic of Serbia and for banks headquartered in the territory of the country with whose
central bank the National Bank of Serbia has entered into agreement on net settlement of
international payments.
Clearing of international payments is performed as multilateral net settlement for the
account of natural persons and legal entities that are clients of banks whose central banks
are signatories to the agreement on clearing of international payments.

Participants in the clearing of international payments are:

- central banks signatories to agreement, and
- banks that have signed an agreement on participating in the settlement of international
payments with their central bank, signatory to the agreement.

Participants in clearing are responsible for authenticity, encoding and content of

messages, for timely sending of messages in the clearing system, and for safety and
protection of communication with the clearing system.

Reasons

Reduced costs
Foreign exchange payments in the country performed in
the same way (on condition they are in compliance with
regulations)
Efficiency
Costs are paid in the country
Preparation for European integrations (SEPA)
Support to free trade (CEFTA)
Possibility to cooperate with other countries of the region

Criteria for access to the clearing system

In order to participate in the clearing system, banks need to submit an
application for participation, certified and signed by authorized representatives
of the bank, and to:

register their bank identification code BIC code;

meet technical preconditions to access;
register persons authorized for contact;
enter into agreement on participation in the clearing system with their central
bank.

Communication: private network, file adapter

Alternative: SWIFT FileAct

Settlement accounts, limit and net position

Clearing of international payments is performed as net settlement through the

settlement account of a bank opened and maintained with the central bank.
Net position of a bank at a given time means the difference between account
credits and debits of such bank from the start of the clearing cycle through to that
particular time.
Clearing operator is in charge of clearing of international payments.
The central bank notifies the clearing operator of net debit limits for its banks,
for whose performance it stands guarantor in accordance with the agreement.
Net debit position of a bank can at no time exceed the approved limit.
A participant may request from its central bank to raise or lower the limit,
which will be approved if conditions for such move have been met.

Receipt of orders and clearing system

procedures

Communication in the system is done by means of MT103 or MT102 messages

(SWIFT standard).
If, after processing, a message is found to meet the requirements for participation
in clearing, such message will be recorded in the banks settlement account only
insofar as it conforms to the limit.
If the net debit position exceeds the approved limit, the sent message will be
delegated to the queue (priority from 11 to 50).
Incorrect messages shall be rejected.
At the end of the cycle, multilateral net positions will be calculated and central
banks notified of their aggregate net balances and net balances of their banks.
Payments among central banks settlement will be effected through an account
with a prime international bank.
Central banks debit and credit banks accounts for the amount of their clearing net
positions.
Each bank will get a statement from its settlement account, after which
settlement will be deemed final.

SWIFT standard messages used in the clearing

system
Basic SWIFT standard messages used in the clearing system are:

MT103 single customer credit transfer

MT102 multiple customer credit transfer
MT202 general financial institution transfer
MT900 confirmation of debit
MT910 confirmation of credit
MT920 request message
MT941 balance report
MT942 interim transaction report
MT950 statement message
MT940 customer statement message (with details)
MT196 answers to MT103 and MT102 queries
MT195 status query message
MT192 cancellation request

Message MT103 - example

:20:VBUBCS22XX230
:23B:CRED
:23E:SDVA
:26T:REF
:32A:070116EUR1400,00
:50K:/RS35908000000003550178
Vojvodjanska banka
:53A:/D/RS35908000000003550178
VBUBRS22XXX
:57A:/C/BA390000000001340153
IKBZBA2XXXX
:59:/BA390000000001340153
Investiciono-komercijalna banka dd
Zenica
:70:SIF-212
PBZPBO:71A:SHA
:72:/BNF/Trade in services of public enter
//prises

TRN of SWIFT
Always CRED
Always SDVA
Currency date, currency code (EUR) and amount, date
K /IBAN of the ordering party, its name and address
IBAN and BIC of the paying bank in the following
format /D/IBAN of the bank or /IBAN of the bank BIC
IBAN and BIC of the bank whose account is credited
IBAN is mandatory, slash is a part of syntax for account
designation
Payment code, debit reference number and credit reference
number are transferred.
Always SHA
Payment purpose

Message MT102 example

:20:5161031630131682
:23:CREDIT
:26T:REF
:71A:SHA
In the repetitive sequence B, for each
individual payment
:21:5162031630131265
:32B:EUR8274,00
:50K:/RS35305001000000211460
STR SRECCKO TOMICC MAJA
:59:/BA390000000001340153
Investiciono-komercijalna banka dd
Zenica
:70:SIF-221
PBZPBO- 9683
:77B:TRADE IN GOODS AND SERVICES
Sequence C
:32A:030612EUR8274,00
:53A:/D/RS35908000000003050143
PBPASR22
:54A:/BA390000000001340153
IKBZBA2XXXX

TRN of the SWIFT

Always CREDIT
Always REF
Always SHA
Transaction reference
Currency code (EUR) and amount
IBAN of the ordering party, name and address of the
ordering party
/IBAN of the beneficiary, name and address of the
beneficiary
Payment code, debit reference number and credit reference
number are transferred.
Payment purpose, 35+35+35
Currency date, currency code (EUR) and amount (sum of all
transactions)

/D/IBAN of the paying bank or /IBAN

IBAN and BIC of the bank whose settlement account is
credited.

Daily operating schedule of the clearing

system
Start of day
Receipt of limits (and exchange of
payment messages)
Exchange of payment messages
Pre-clearing
Clearing
Settlement of net positions of CB
Cancellation of unprocessed payment messages
Issuance of account statements
Storing
End of day

9:00
9:05 9:30
9:30 11:30
11:30 12:00
12:00 12:30
12:30 15:55
15:55 16:00
16:00 16:15
16:15 17:00
17:00

Start of day and receipt of limits

9:05 9:30
clearing operator
BANK

BANK
AIKBRS22

BANK
KOBBRSBG

National Bank of
Serbia

Central Bank of
BiH

RZBABA2S

BANK
VBSABA22

Based on central banks notifications, the clearing operator will set net debit
limits for each bank.

Exchange of payment messages

9:05 11:30
BANK
AIKBRS22

196,MT900,MT910
103, 102

BANK
KOBBRSBG

103, 102

103, 102

196,MT900,MT910

clearing operator

BANK
RZBABA2S

196,MT900,MT910
103, 102

196,MT900,MT910

BANK
VBSABA22

Communication between participants and the clearing system is effected via

messages to be submitted either individually (MT103) or for multiple
payments (MT102).
A message that cannot be processed for any reason shall be rejected, with an
adequate message returned to the sender MT196.
If a sent message is found to meet the requirements for participating in the
clearing system, such message will be recorded on the banks settlement
account only if the net debit position at that time does not exceed the net debit
limit.

Pre-clearing
11:30 12:00
clearing operator

National Bank of
Serbia

Central Bank
of BiH

After the time for receipt of messages, as set out in the daily operating
schedule, the clearing operator will notify central banks of aggregate net
balances in respect of clearing and of net balances of their banks.
Central banks will then agree on their net positions.

Settlement of net positions of CB

12:00 15:55
MT202

Deutsche bank
MT900, MT910

MT202

MT900, MT910

clearing operator
National Bank
of Serbia

Central Bank
of BiH

Settlement of aggregate net positions between central banks is done

through an account with a prime international bank in conformity with
contractual provisions (Deutsche Bank).
Central banks, in accordance with contractual provisions, notify the clearing
system of their approval to settle net positions.

Crediting and debiting of bank accounts

In line with their authorizations, central banks credit and debit the
accounts of banks for the amount of their clearing positions.

National Bank of Serbia

Debit

Credit

Bank A
Bank B
Bank C

Bank D
Bank E
Bank F

Cancellation of unprocessed payment messages

15:55-16:00

The system automatically sends MT196 for messages that

were not accepted for clearing (returns unprocessed
messages)

Issuance of account statements

16:00 16:15

clearing operator

MT940

MT940

BANK

BANK

AIKBCS22

RZBABA2S
MT940
MT950

BANK

NBS

MT950

MT940

CB of
BiH

KOBBCSBG

BANK
VBSABA22

After settlement, the clearing system will send to each of the banks a
statement from its settlement account for clearing, after which settlement will
be deemed final.
Message 950 is statement message and 940 is customer
statement message (with details).

MT940 customer statement message

20

Reference

Yes

TRN

25

Account number

Yes

Number of the account to which the message refers (IBAN)

28C

Statement number/Message
sequence

Yes

Statement number is the ordinal number of the account statement since the
beginning of the year. If the statement is sent in more than one message,
these messages will be marked in a sequence from 1 onwards.

60F

Initial balance in the form (D/C),

date, currency code, amount

Yes

Example
C070222EUR100995,01

61

Statement line

86

Information for account holder, for

103
50K, 59 (IBAN only) and 4 lines for
70,
for 202 only 53A and 58A (IBAN
only)

Up to 6*35 characters

62F

End balance in the form (D/C),

date, currency code, amount

Yes

Example
C070222EUR200996,

The field 61 repeats for each change in the statement.

The format of the field 61 is as follows:
currency date (YYMMDD),
date of entry (MMDD),
credit/debit (C,D,EC,ED,RC or RD, E expected, R reversed),
final letter of the currency code,
amount (up to 12 integer places, up to 2 decimal places)
code for identification of transaction type, 3 characters,
reference for account holder, up to 16 characters
//,
reference of the institution servicing the account, up to 16 characters,
further details, up to 34 characters

Legal regulations (Serbia)

Article 32, paragraph 4 of the Law on Foreign Exchange Operations (RS Official
Gazette, No. 62/2006);
Decision on Clearing of International Payments;
Decision on the Conditions and Manner of Performing International Payment
Transactions (supplement);
Guidelines for Implementation of the Decision on the Conditions and Manner of
Performing International Payment Transactions (supplement);
Operating Rules for Clearing of International Payments (special Rules for clearing
of international payments for our banks);
Agreement on Participation in the Clearing of International Payments;
Account debit order;
Authorization for the person in charge of security and protection of communication
with the system of clearing of international payments protection administrator;
Registration of persons authorized for contact with the National Bank of Serbia with
regard to settlement transactions in the clearing of international payments;

National Bank of Serbia

Payment System Department