In the previous article, we saw how corporations use the SWIFT MT101 message to transfer funds either domestically or internationally. Now we want to go deeper and look at the content of SWIFT MT101 messages. The SWIFT MT101 message specifications is of great help to understand the messages content. Take few minutes to read it if you have not done it yet.
In this article, we will study a basic SWIFT MT101 message which contains 2 transactions: one transaction where the beneficiary account is held by the debtor bank and one transaction where the beneficiary account is held by another bank in the same country. In our example, the MT101 is sent by Saint Gobain Corporation, a french multinational company that has an account in GBP with Royal Bank of Scotland (RBS).
The table below contains the fields that are transported in the MT101 Request for Transfer. An additional column (comments) provides further explanation, so that it is easy to understand each field and what it is used for.
Read this page on the SWIFT formatting rules and Character sets of MT Messages to get additional information and understand what 16x, 5n, 34x and the format of the field options mean.
Narratives and notes on this SWIFT MT101 message
As usual, there is more in this message than meets the eye. The following narrative and notes allow to get a deeper understanding of the message content.
Narrative and note 1 (Main purpose of this SWIFT MT101 message)
The Sender (SGOBFRPP), Saint Gobain is instructing the Receiver (RBOSGB2L), its bank, to debit its account and credit the account of two beneficiaries (since the order contains two transactions). The execution of this order may result either in one single debit with the total amount of all transactions (GBP 60000,) or in two debits for each transaction on the account provided in the field 50H of the sequence A.
Narrative and note 2 (Field 50a is not present this SWIFT MT101 message)
There is no field 50a (Instructing Party) in the message neither in the sequence A nor in the sequence B. The sender of the message owns the account to be debited.
Narrative and note 3 (Field 57A is present only in the second transaction of the SWIFT MT101)
In the first transaction, the field 57A is not provided. The sender did that because the beneficiary account is held by Royal Bank of Scotland (RBS), the debtor Bank. As a consequence, this transaction results in a book transfer for RBS.
The sender has indicated the field 57A in the second transaction because the beneficiary account is not with the Debtor Bank, but with another Bank, Barclays, which is the account with institution. RBS must therefore send a MT103 transaction to barclays either through SWIFT or through a local clearing system. A MT103 must be used because sender and receiver are financial institutions and the transaction involves end customers that are not financial institutions.
Narrative and note 4 (Details of charges in the SWIFT MT101 message)
Details of charges (71A) is OUR in the first transaction and SHA in the second transaction.
OUR means the transaction charges are to be borne by the ordering customer. The ordering customer pays charges to ordering bank, intermediary bank(s) and receiving bank.
SHA means the charges are shared between Ordering and beneficiary customer. Ordering customer pays charges to ordering bank. Beneficiary pays to receiving and other intermediary banks.
This ends our analysis of this SWIFT MT101 message. In the next article, we will analyze a SWIFT MT101 Message where ordering customer account appears in the Sequence B Transaction Details.