Proof of Funds Services

SWIFT(“Society for Worldwide Inter-bank Financial Telecommunication”) provide secure mechanisms for electronic interbank messaging and funds transfer. SWIFT messages are used to conduct business between transactional partners. Not all SWIFT members are financial institutions. An ordinary corporate can join SWIFT and send messages including MT101. An MT101 would be a very secure and normally high value version of a payment request. Just like a private citizen might use their internet banking to request the bank pay their land lord. If, however you are an airline and you need to pay your fuel bill in an unstable part of the world you would use an MT101. It is said that SWIFT has never had its security compromised. If this is true it is very impressive. The SWIFT system was established in the early 1970’s by a group of European banks who until that time had been conducting business together via telex and courier. Each type of SWIFT message is pre-defined and follows a “format specification”. All SWIFT messages must adhere to these established forms or they will be rejected by (a) the central SWIFT system or (b) the receiving bank. There are nine (9) SWIFT message categories with multiple message types in each category.

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SWIFT MT760 Capability – is primarily used as a either a bank guarantee or a standby letter of credit.

  • This message requires RMA between sender and receiver.
  • This message is sent between banks involved in the issuance of a guarantee.
  • It is used to issue a guarantee or to request the Receiver to issue a guarantee.
  • This message may also be used for Standby Letters of Credit.

While there is no SWIFT imposed minimum size, the practicalities and costs impose a commercial reality and additional costs apply. Often an MT760 proves to be more than what is required.

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SWIFT MT710 Capability – is an advice of a Third Bank’s documentary credit.

  • This message requires RMA between sender and receiver.
  • This message is sent by an advising bank, which has received a documentary credit from the issuing bank or the non-bank issuer, to the bank advising the beneficiary or another advising bank.
  • It is used to advise the Receiver about the terms and conditions of a documentary credit.

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SWIFT MT999 Capability – allows bank-to-bank SWIFT electronic verification for Proof of Funds in compliance with the SWIFT Category 7 message types.

  • This message does NOT require RMA between sender and receiver. This allows for very quick communication between banks, within the secure environment of SWIFT but without full interbank introductions.
  • This message is a free format message and can be used for miscellaneous communication, for which other message types are not suitable. This message may be used to confirm/ verify / authenticate messages sent via other means (fax, bank comfort letters etc).

Often there is a misconception that a particular circumstance requires a SWIFT MT760 message, when in fact, the SWIFT MT999 format provides the required bank confirmation for the application. While there is no SWIFT imposed minimum size the practicalities and costs impose a commercial reality and additional costs apply.

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