SBIA : Nostro Pickup and automatically updating branch code

Annexure to Nostro Recon

03 Mar 2014 Credence Analytics Prasad K Nayak

Nostro Pickup

SBI-A

Table of Contents
1. 2. Requirement ......................................................................................................................................... 3 Solution ................................................................................................................................................. 3 2.1. Updating Branch Code automatically ........................................................................................... 3

Branch Code update Logic .................................................................................................................... 3 MT 103 Message Structure ................................................................................................................... 4 {1: Basic Header Block} ......................................................................................................................... 4 {2: Application Header Block} ............................................................................................................... 5 {3: User Header Block} .......................................................................................................................... 6 {4: Text Block or body} .......................................................................................................................... 6 {5: Trailer Block} .................................................................................................................................... 8 MT 202 Message structure ................................................................................................................... 8 2.2. Nostro Pickup Facility .................................................................................................................... 8

MT 103 Message view......................................................................................................................... 10 View Message Logic ............................................................................................................................ 11 Validation ............................................................................................................................................ 11 3. Document Versions ............................................................................................................................. 11

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1. REQUIREMENT

Facility to upload MT103/202 should be provided. Nostro entries should be automatically assigned to the branches based on MT messages i.e. MT 103 or MT 202. Facility to view MT 103/202 messages of Nostro transactions. Facility for branches to pickup credits pertaining to that branch i.e. Straight through processing of Inward Remittances. Facility should be provided to use part funds on statement credit date and part funds on a later date. Facility should be provided to apply rate for part funds using fine rate/forward/bill and part funds to FCNR/EEFC/PCFC account. Bulk processing for applying card rates as well as posting it to CBS. Breakup facility for purchase/collection cheque's. o Scenario : Associate Banks prepare a cash letter for all the purchase/collection cheques and send it to the Nostro(e.g. SBI London). SBI London gives consolidated credit for the total amount(Assuming no cheques are returned). SBI London also sends the details of individual transactions which are realised in the cash letter. Facility to break the consolidated amount into individual transaction and assigning it to the branches is required.

2. SOLUTION 2.1. UPDATING BRANCH CODE AUTOMATICALLY In upload view , user will upload all the MT 103/202 messages in the application. In the same view, a button "update branch code" will be provided in the application. On update action, application will update the branch code in Nostro entries.

BRANCH CODE UPDATE LOGIC On update action application will match the related reference number i.e. field 20 of MT 103 with service instituition reference in case of nostro credit entries and account owners reference number in case of Nostro debit entries of MT 940/950 message. If the reference number matches then it will take the customer account number i.e. field 59 of MT 103 and fetch the branch code from core banking application via mercury(already available in Mercury). Nostro Recon Page 3 of 11

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Once branch code is updated then MT 103 and Nostro entry will be flagged as 'Tagged' . In scenarios where reference number is not available in MT 103/202 or 'NONREF' is populated in reference number tag then branch code has to be manually updated. In case of future credits in MT 103 , application will scan all the MT 103 messages where reference number is available and it is not 'Tagged'. On update action application will scan all the backdated MT 103 messages as per above logic and if any reference number matches then it will update the branch code accordingly. For MT 202 messages application will update "treasury branch code" by default by matching related reference number with service institution account number for credit transactions/account owners reference number for debit transactions. A parameter to define default branch code for MT 202 messages will be provided. Branch code defined in this parameter will be updated in the MT 940/950 message.

MT 103 MESSAGE STRUCTURE Swift MT 103 has the following Message Structure {1: Basic Header Block} {2: Application Header Block} {3: User Header Block} {4: Text Block or body} {5: Trailer Block} These five SWIFT message blocks include header information, the body of the message, and a trailer. All blocks have the same basic format:
{n:...}

The curly braces ({}) indicate the beginning and end of a block. n is the block identifier, in this case a single integer between 1 and 5. Each block identifier is associated with a particular part of the message. Blocks 3, 4, and 5 may contain sub-blocks or fields delimited by field tags. Block 3 is optional. {1: BASIC HEADER BLOCK} The basic header block is fixed-length and continuous with no field delimiters. It has the following format:
{1: (a) F (b) 21 (c) SBTRINBB (d) 0137 (e) 019663} (f)

Field a) Credence Analytics

Position 1 Nostro Recon

Size 2

Description 1: = Block ID (always 1:). Page 4 of 11

Nostro Pickup b) 3 1

SBI-A Application ID as follows: F= FIN(Financial application) Service ID as follows: 01 = FIN/GPA 21 = ACK/NAK SBTRINBB = Logical terminal (LT) address. It is fixed at 12 characters; it will not have X in position 9. 0137 = Session Number. It is generated by the sender user's application and is right padded with zeros 019663 = Sequence number that is generated by the sender user's application. It is right padded with zeros

c)

d)

12

e)

18

f)

22

{2: APPLICATION HEAD ER BLOCK}

{2: (a) O (b) 103 (c) 1502 (d) 131213SCBLGB2LAXXX4618296045 (e) 131213 (f) 2032 (g) N} (h)

Field a) b) c) d) e)

Position 1 3 4 7 11

Size 2 1 3 4 28

f) g)

39 45

6 4

Description 2: = Block ID (always 2) O = Output 103 = Message type 1502 = Input time with respect to the sender 131213SCBLGB2LAXXX4618296045 = The Message Input Reference (MIR), including input date, with Sender's address 131213 = Output date with respect to Receiver 2032 = Output time with respect to Receiver Page 5 of 11

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Nostro Pickup h) 49 1 N = Message priority(Normal)

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{3: USER HEADER BLOCK}

This is an optional block and has the following structure:

{3: {108:FTC6504053 01}} (a) ( b)

Field a) b)

Position 1 3

Size 2 No fixed length

Description 3: = Block ID (always 3) 108:FTC6504053 01= This is the Message User Reference (MUR) used by applications for reconciliation with ACK.

{4: TEXT BLOCK OR BODY}

Sr.No

Field

Field Name

Mandatory(M)/optional(O) and conditional M

:20

Transaction Reference Number Time indication Bank operation code Instruction code Transaction Type Code Value Date/ Currency /Interbank Settled Currency/ Original Ordered amount

2 3 4 5 6

:13C :23B :23E :26T :32A

O O O/C O M

:33B

O/C

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Nostro Pickup 8 9 10 11 :36 :50A, F or K :51A :52A or D Exchange Rate Ordering Customer(Payer) Sending Institution Ordering Institution(Payer's Bank) Sender's Correspondent(Bank) Receiver's Correspondent(Bank) Third Reimbursement institution Intermediary(Bank) Account with institution(Beneficiary Bank) Beneficiary Remittance Information Details Of Charges Sender's Charges Receiver's Charges Sender to receiver information Regulatory Reporting O/C M O O

SBI-A

12

:53A, B or D

13

:54A, B or D

14

:55A, B or D

15 16

:56A, C or D :57A, B, C or D

O O/C

17 18 19 20 21 22

:59 or 59A :70 :71A :71F :71G :72

M O M O O O

23

:77B

The format of block 4 field tags is:

:nna:

where nn = Numbers, a = Optional letter, which may be present on selected tags

For example:

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:20:

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= Transaction reference number = Beneficiary bank

:58A:

{5: TRAILER BLOCK} A message always ends in a trailer with the following format:
{5: {MAC:12345678}{CHK:123456789ABC}

MAC
Message Authentication Code calculated based on the entire contents of the message using a key that has been exchanged with the destination and an algorithm.

CHK
Checksum calculated for all message types.

MT 202 MESSAGE STRUCTURE MT 202 message structure is the same as MT 103 except o Message Header block will contain 202 instead of 103 o Tags 23,26,33,50,55,59,70,71 and 77 will not be available in 202.

2.2. NOSTRO PICKUP FACILITY Branches will be provided a view where branches can view tagged as well as untagged messages. For e.g. there are 10 Nostro entries uploaded out of which 2 are tagged to Branch A and 3 are tagged to branch B and 5 are untagged. Then Branch A will be able to view 2 transactions tagged to it and 5 transactions which are untagged. Similarly Branch B will be able to view 3 transactions which are tagged to it and 5 untagged transactions. This view will be "from date" and "to date" view. It will only be populated with Credit transactions. Apart from all other details of Nostro, this view will consist of following columns

Column description.xlsx

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Branch will be tagged based on o MT messages. For MT message tagging please click here o Manual tagging by the treasury. For Manual tagging by the treasury refer Manual Nostro Entries o Branch request. Facility to pickup untagged entries and an action to 'Submit' the same to treasury will be provided. For untagged transactions branch can pick the entry and submit the same to treasury for processing the transaction i.e. applying funds. Once the transaction is picked it will not be available for view to other branches. Based on the documents or any other proof submitted by the branch, treasury will authorise the submitted transaction. An "authorise" action will be provided to authorise such type of transactions. Once it is authorised branch will be able to process the transactions. If the transaction doesn't pertain to that branch then treasury will reject the transaction. An "Reject" action will be provided to reject such type of transaction. After the transaction is rejected, it will be again available for all the branches. Only processing branch(TFCPC/Cat B) will be able to pick up the transaction. Home branches will be able to view the transactions but they won't be able to pickup. Processing branch user will be able to select multiple credits or single credits. Pick up of multiple credits will only be available for card rate transaction. User will not be allowed to apply any other rates i.e. utilise/dealer rate. User will then apply rates for all the selected transaction and post it to CBS. Accounting entries will be generated and sent to CBS using Straight Through Processing method. CBS will immediately respond whether accounting is successful or failure Part utilisation of Nostro pickup will be available. In case of single credits i.e. where fine rate is required(dealer rate, forward rate), Processing branch will be able to use part amount or the whole amount. User will have to select a transaction and click on add transaction. On this action the Mercury FX Add Screen will be opened with prefilled details from pickup. Fields which will be auto populated from the entries are o Currency o amount o value date o maturity date o Nostro date o customer account number o correspondent Nostro Recon Page 9 of 11

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o correspondent account number o Nostro ref number: This will be a new field in the ADD transaction screen. There will be no limit on the break up of single transaction into multiple parts. For e.g. a credit received for 100000 can be divided into 30000 dealer rate, 30000 utilisation of forward contract, 30000 to EEFC account and 10000 to FCNR account. Facility to use part amount today and part amount on subsequent days will be provided. A button "Switch" to transfer utilisation of credit to home branch will be provided. On Switch action processing branch will be updated with home branch and it will not allow the "original processing" branch to process the transaction. Home branch will be allowed to use this transaction after " authorisation". "Authorisation" and "Rejection" button access rights will be given to original processing branch users. If the transaction is wrongly assigned to home branch, then checker user of original processing branch will have to select the transaction and click on reject action to revert the transaction to its original state. Once the transaction is authorised it cannot be reverted again.

CHEQUE REALISATION In case of cheque realisation a consolidated credit is received in the Nostro. As per the advise sent by the correspondent , facility will be provided to branches to enter their respective cheque amounts and submit it to treasury for approval. A "Cheque amount" column will be available in the view to enter individual cheque amount and submit it to treasury. After submitting the transaction, it will not be available for viewing purpose to other branches till treasury authorises. After authorisation a separate transaction will be generated for the cheque amount and the "utilised amount" column will be added by that amount. Remaining amount column will be the difference between Original amount and Utilised amount. Once the transaction is authorised and if there is any amount pending then it will again be available in the Nostro pickup view of the branches. If remaining amount is Zero then it will not be available in the Nostro Pick up view.

MT 103 MESSAGE VIEW An Action "view message" will be provided in the view. User will have to select a particular transaction and click on view message. For NONREF and messages for which no reference number is available, a facility to manually link the MT 103/202 to a particular Nostro entry will be provided. Nostro Recon Page 10 of 11

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Nostro Pickup A button "link Messages" will be provided in the upload view. User will select a particular Nostro entry and click on Link message. On this action a form will open with all the untagged MT 103 messages. User to select the appropriate MT 103 and click on 'Ok' to link the message.

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VIEW MESSAGE LOGIC Based on the reference number of the selected transaction, application will populate MT 103 message.

VALIDATION Utilisation of more than original amount will not be allowed. Application will prompt " Utilised amount cannot be greater than original amount." On Entering amount in " Cheque amount" column, application will prompt " Please ensure this transaction pertains to cheque credits." If MT 103 is not available i.e. for manual tagged entries then application will prompt " MT 103/202 message not uploaded for the particular transaction". On linking messages manually application will prompt " Message linked successfully".

3. DOCUMENT VERSIONS

Date 03-Mar-2014

Author Prasad K Nayak

Version Number Revision reasons 1.0

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