An Introduction to Low Value Credit Transfers Cleared on an Immediate Basis (TCIB) for prospective new participants
SADC Payment Project
- Project driven under the SADC Finance and Investment Protocol
- Governed at the Committee of Central Bank Governors
- SADC Banking Association mandated to develop the various payment schemes and interface with the central bank settlement systems
- In order to increase financial inclusion in the region and the fact that regulators permit non-banks to transact cross-border all market players are eligible for participation in the TSIB scheme
The Operating Model
- Includes all eligible participants i.e. both banks and non-banks
- Uses existing intra-country settlement mechanisms
- Reuses existing infrastructure where possible
- Takes into consideration regulatory requirements
- The model is based on a central clearing and settlement operator switch
- Banks and non-banks can clear credit transfers to each other
- Non-banks need a partner settlement bank for their settlement of daily clearing obligations
SADC TCIB Regulatory Eco System
Participants to adere to the AML, KYC, BoP reporting requirements etc. of own regulator.
These have been harmonised as far as possible
SADC Low Value Credit Transfer Cleared on an immediate basis via RCSO operating model
Bank can have various roles;
- Send own payments,
- Manage Trust Account,
- Settlement Bank Nostro
- Settlement Bank for non-SADC-RGTS currencies,
- FX provider
– net paying settlement bank settle via correspondent banking
The TCIB Participants
Payment Scheme Entities & Roles
Aligned Payment Scheme Entities & Roles
How It Works
- The next images show the high level flows
- The flows cover all SADC currencies as well as the USD
- They allow both banks and non-banks to transact with each other
- They comply with Central Bank settlement where available
High Level Flows
Today Bank High Value Transfers are made via the SADC-RTGS
Sending of payments and clearing
Message data set complies with FATF requirements
The tranfer is made between the 2 participants and are
cleared and settled immediately by the RTGS
TCIB Clearing of Tranfers - Bank Transfers
Sending of payments and clearing
Message data set complies with FATF requirements
The tranfer is made between the 2 participants and are cleared and settled immediately by the RTGS
Clearing of Tranfers - Non-Bank Tranfers
Sending of payments and clearing
Message data set complies with FATF requirements
The tranfer is made between the 2 participants and are cleared immediately by the RCSO. Either non-bank to bank or bank to non-bank as well as bank to bank.
Pre-Settlement of Daily Clearing Obligations
Step 2
Daily the RCSO will notify the two participants and their settlement banks of the net obligations to be settled.
Settlement via Central Bank RTGS
Step 3
The central bank will debit the net paying bank and credit the receiving bank in order to ensure timely settlement.
Settlement via Correspondent Banking
Step 3
Transfer in Non-SADC-RTGS Currencies
Aligned Payment Scheme Entities & Roles
All participants must be able to send or receive tranfers using the ISO 20022 standard to ensure compliance with FATF and other regulatory needs
Message usage guides are housed on SWIFT.com/Mystandards
Connectivity
All participants must decide on method of connectivity and direct and hubs must formalise network protocol standard with RCSO
One connection to RCSO can provide link to all participants that a participants wishes to do business with.
SADC Payment Scheme Documents
- Beige Book-operating models, rule books, other information and background
- Linked associated documents covering specific agreements, procedures etc
- Message schemes and rules as well as message examples
- Operator documents and agreements covering its services
What to do next?
- Advise your regulator of your intent to join the scheme
- Complete the TCIB scheme application form and send it to the Bankserv Africa (RTSO)
- Documentation on how to on-board will be forwarded to your institution
For more information on how to become a participant,
please contact Ms Litha Ngwane at LithaN@Bankservafrica.com
https://www.bankservafrica.com/website/services/transactions-cleared-on-an-immediate-basis
https://www.sadcbankers.org/subcommittees/PaySystem/projects/Pages/default.aspx
