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Basic Remittance Transaction

Basic Remittance Transaction. 1. Type of Remittance. 2. Telegraphic Transfer Flow Chart. (1)In case payment bank is depository correspondent bank (2)In case payment bank is non-depository correspondent bank (3)In case remittance amount is unpaid. 3. Demand Draft Flow Chart. 4. SWIFT.

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Basic Remittance Transaction

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  1. Basic Remittance Transaction 1. Type of Remittance 2. Telegraphic Transfer Flow Chart (1)In case payment bank is depository correspondent bank (2)In case payment bank is non-depository correspondent bank (3)In case remittance amount is unpaid 3. Demand Draft Flow Chart 4. SWIFT (1)Definition (2)Message Type (3)Specialized Category (4)Character & Sign in Use (4)SWIFT BIC (Bank Identifier Code) 5. IBAN (International Bank Account No.) 6. National Clearing Code 7. New Quick Remittance Service (1) New Quick Remittance Service (For Outward Remittance – Overseas Branch)

  2. Basic Remittance Transaction • Type of Remittance Type of Remittance It is the transaction receiving remittance amount and fee from client and put on hold in foreign transaction bank account or bills sold a/c, it is classified into T/T, M/T and D/D based on remittance method • Telegraphic Transfer • Remittance notification by SWIFT, Telex, Fax and RTGS • Most fast and safe method among remittance • SWIFT is widely used as of now • RTGS Message of local settlement system is used in some countries and it is obligated in some countries 1) T/T What is RTGS? ※What is RTGS? :It is the abbreviation for Real-Time Gross Settlement that is local fund transfer system. As representative RTGS, there are Fedwire of US, MEPS of Singapore, DeskBank of Australia, PlayLing for the Netherlands, CAPS of Great Britain, SIT of France, DTA/ELS of Germany, etc. • Mail Transfer • Transaction to send M/T to paying bank via mail by generating it with receipt of remittance amount • Other transaction processes is same as T/T except the sending method 2) M/T • Demand Draft • Issuance of D/D to client after generating it with receipt of remittance amount • Remittance method for acceptor to withdraw remittance amount by presenting the D/D to paying bank prescribed on the after client sends it to acceptor • Although bank fee is inexpensive, there is risk for loss. • Used in small amount remittance 3) D/D D/D Form used in KEB D/D • Demand Draft • Paying bank is not printed on check and paying bank is assigned at the point of check issuance. • Korea Exchange Bank Remittance Service • Check with printing of Paying Bank as BONY N.Y. and MICR printing of Check No. and Settlement Bank Code • Used only when issuing currency is USD • It may be used in remittance to country other than USA when there is no depository correspondent bank of our bank KRS

  3. 2. Telegraphic Transfer Flow Chart (1)In case paying bank is depository correspondent bank Send payment order directly to the paying bank without commission to the third bank Paying authorizes the OUR A/C or Their A/C and pays the remittance amount to beneficiary ② Send Payment Order (Payment Order, MT100,MT103,RTGS) Remitting Bank Paying Bank (Account with bank) ① Request for Remittance ③ Payment of Remittance Amount Remitter Beneficiary Means the bank that can settle the remittance fund, etc since current account in name of Korea Exchange Bank is opened in foreign banks or current account in name of foreign banks is opened in Korea Exchange Bank Depository Correspondent Bank (2)In case paying bank is non-depository correspondent bank Necessity for bank to perform fund settlement on remittance amount. Bank with deposit correspondent contract with our bank Sole use of MT100,MT103 All transactions are process with solely using SWIFT MT100 or MT103 Reimbursement Bank ② Payment Order ③ Payment Order (Payment Order, MT100,MT103) (Payment Order, MT100,MT103,RTGS) Remitting Bank Paying Bank (Account with bank) ④ Payment of Remittance Amount ① Request for Remittance Remitter Beneficiary

  4. Use of MT103 or MT 100 with MT202 at the same time In case client shall receive fund quickly regarding the elongation in fund settlement period for currency other than USD, etc Reimbursement Bank ②Order for Debit Authorization ② Credit Advice ④ (Credit Advice MT910) (Debit Authorization MT202) Remitting Bank Paying Bank (Account with bank) ② Payment Order (Payment Order, MT100,MT103,RTGS) ① Request for Remittance ③ Payment of Remittance Amount Remitter Beneficiary Cost Analysis for Remittance No method is concluded to be advantageous in aspect of cost Remittance Fee Use of MT100,MT103 Cable Fee … Fee of Settlement Bank Through Bank Through Bank Through Bank Remittance Fee Combination use of either MT100 or MT103 with MT202 Cable Fee

  5. (3) In case remittance amount is unpaid For error in minor information, Amend Processing to Remitting Bank Return processing in case paying bank unpaid the remittance amount due to beneficiary unknown, cancellation in remittance, etc. ② Send Payment Order (Payment Order, MT100,MT103,RTGS) Remitting Bank Paying Bank (Account with bank) ④Return ⑤ Refund for Returned Amount ③ Payment of Remittance Amount ① Request for Remittance Remitter Beneficiary Refund for Returned Amount: Refund remittance amount received of return notification Return :Return with no processing of remittance amount in Paying Bank (Account with bank) 3. Demand Draft Flow Chart ③ Send D/D Issuance Notification(MT110) Remitting Bank Paying Bank (Account with bank) ⑤ Debit Advice ① Request for Remittance ⑤ Payment of Remittance Amount ② Issue D/D ④Present D/D (Request in Remittance Amount ③ Send D/D Remitter Beneficiary

  6. 4. SWIFT (1) Definition • Abbreviation for The Society for Worldwide Interbank Financial Telecommunication • It was established in May. 1973 by banks of 15 countries including USA, Europe, etc to construct worldwide data telecommunication network to send message of foreign exchange transaction such as remittance, collection, commercial L/C and capital transaction between foreign countries. • Korea registered as member on Mar. 1992 as 76th country. • SWIFT is the international organization for data telecommunication without fund settlement capability (2) Message Type Standardization in message type for the quick and precise message sending It is composed of 3 digit number and each number has certain meaning Message Type MT n n n ① ② ③ ④ ① : Abbreviation for Message Type ② : Message Category : Indication for Category of Relevant Transaction ③ : Message Group : Indication for Certain Function within Transaction Category ④ : Message Type : Indication on Details of Certain Function

  7. (3) Special Category (4) Character & Sign in Use Only use character & sign allowed in SWIFT for message sending 1) Character & Sign in Use • English Alphabet • Arabic Number • Sign ※Caution: No use of Colon (:) in first line

  8. 2) Example of sign in no use (5) SWIFT BIC Abbreviation for SWIFT Bank Identifier Codes Unique code granted to each financial institution for the identification of financial institution in automatic processing of telecommunication message sent and received between financial institutions Composer of either 8 digits or 11 digits 2 digit character or number 4 digit character 2 digit character 3 digit character and number + + + BANK CODE COUNTRY CODE LOCATION CODE BRANCH CODE Ex. KOEX: Abbreviation for Korea Exchange Bank Headquarter - KOEX KR SE (8 digits) of our bank KR : Korea - Country Code SE : Seoul - Location Code Prevent generation of Repair Charge by putting bank code for each country of BIC or IBAN before drawing up the remittance request

  9. ○ Method to confirm BIC of the opposite bank with statement received in SWIFT MIR : 071008CHASUS33DXXX1821434143 MIR-TIME : 0314-----① MOR : 071009KOEXKRSEAXXX9868449829 MOR-TIME : 1714-----② MUR : FM : JPMORGAN CHASE BANK N.A..,NEW YORK TO : KOREA EXCHANGE BANK, SEOUL DATE:070309 ① Message Input Reference MIR : 071008 CHASUS33DXXX 1821434143 MIR-TIME : 0314 • MIR : MESSAGE INPUT REFERENCE • 071008 : Local date for message sent by sending bank (Oct. 8th, 2008) • CHASUS33DXXX : -SWIFT BIC of sending bank Means JPMORGAN CHASE BANK - CHAS : BANK CODE - US : COUNTRY CODE (means USA) - 33 : CITY CODE (means NEW YORK) - A : LOGICAL TERMINAL - XXX : Place for BRANCH CODE-XXX’ means no relevant data • 1821 : Sequence No. with which sending bank accessed to SWIFT System with SESSION NUMBER • 434143 : Sequence No. granted when sending bank sends the message to SWIFT system with Input Sequence No. • MIR-TIME : 0314 is message sending time, local time sending bank sent message to SWIFT system ※ Method to input BIC of receiving bank in drawing the receiving statement • In case BRANCH CODE is XXX : Input only 8 digits from the front • Ex : CHASUS33 • In case BRANCH CODE is not XXX : Disregard number or character in 9th digit and input 11 digits • Ex :CHASUS33DCLS →CHASUS33CLS ② Message Output Reference MOR : 071009KOEXKRSEAXXX9868449829 MOR-TIME : 1714 • MOR : MESSAGE OUTPUT REFERENCE • 071009 : Date Woori Bank received the message (Oct. 9th, 2007) • KOEXKRSE : SWIFT BIC of Woori Bank • 9868 : Sequence No. with which Woori Bank accessed to SWIFT system with SESSION NUMBER • MOR-TIME : 1714 is message receiving time, local time receiving bank received message from • SWIFT system

  10. ○ BIC CODE for Banks in Korea ** Hong Kong: //HK + 3 digits ** Ireland: //IE + 6 digits ** Switzerland: //SW + 6 digits ** Russia : //RU + 9 digits

  11. 5. IBAN (International Bank Account No.) Abbreviation for International Bank Account No. International standardization of beneficiary account no. by EU membership countries for the purpose of straight through processing in remittance, etc between foreign countries. 1) Composition ①COUNTRY CODE ②CHECK DIGIT ③ National Clearing Code ④ Beneficiary Account No. + + + ① 2 digit country code (Ex: Germany-DE, Italy-IT, France-FR) ② 2 digit Check Digit ③ Bank Code = National Clearing Code ④ Beneficiary Account No. (Germany – 10 digits) ⑤ No. of digits differ for national clearing code and beneficiary account no. 2) Ex DE 19 52410400 3011009010 DE : Country Code of Germany, 19 : CHECK DIGIT 52410400 : Korea Exchange Bank AG National Clearing code//BL52410400 3011009010 : Beneficiary Account No. 6. National Clearing Code, Nat’l Routing Code National Clearing Code, National Routing Code In foreign countries, national clearing code (//FW, //CC, etc) is indicated in beneficiary account no. instead of branch name of beneficiary transaction bank thus you must input it for quick and precise remittance

  12. 7. New Quick Remittance Service Outline of Service • Quick remittance service where notification to beneficiary within 30 minutes of remittance from foreign countries, payment of remittance amount or deposit of remittance amount to account and notification on result of remittance process to remitter via e-mail are processed through cooperation with overseas branch. Service Target • Foreigner staying in Korea who needs emergency fund • Client including company demanding quick remittance, etc requesting for urgent remittance Contents of Service A. Service Country & City (8 countries 11 branches): Japan (Tokyo, Osaka), Hong Kong, Philippines (Manila), Singapore, Australia (Sidney), China (Peking, Tianjin, Dalian), Vietnam (Hanoi), Indonesia (Jakarta) B. Remittance Currency : USD & Local Currency C. Remittance Amount :Amount equivalent to USD 10,000 or less D. VALUE DATE : Same date as date of remittance (straight through processing) E. Remittance Hour : 30 minutes before closing hour of domestic branch Remittance Hour of Overseas Branch * Closed on Saturdays, Sundays and Local Holidays * Local time for remittance is calculated in accordance with business hour of Korea (30 minutes for closing hour considering the processing time after reception of New Quick Remittance) within business hour of local branch F. Fee for New Quick Remittance - Amount : USD 10 for each remittance (Separate from remittance fee) - Possession of Profit : Overseas branch performing remittance - Account Settlement : Miscellaneous profit from foreign exchange fee (straight through processing) - No exemption with discretion of chief of branch G. Refund of Fee - Refund Target : In case appeal has been instituted due to failure of operation support center (foreign exchange team) of headquarter in notification to beneficiary within 30 minutes after the remittance to overseas branch or failure in payment of remittance amount -Account Settlement : Debit from miscellaneous profit from foreign exchange fee account * Instruct window to recommend overseas remitter to make phone call to domestic beneficiary regarding the remittance and domestic beneficiary to directly visit domestic branch for withdrawal.

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