swift
swift

خانه swift

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swift

swift

The Swift is an international interbank financial association derived from the initials “The Society For Worldwide Interbank Financial Telecommunication” and is headquartered in Belgium and operates as an institution and cooperative after the end of the war. World War II, especially in the late 1950s, global trade began to grow and flourish rapidly, and at the same time the volume of international interbank operations expanded, but non-compliance with international standards in interbank transactions caused confusion in international payments and increased bank costs. So in the early 1950s and 1960s, major European and American banks began to think about how to design and standardize interbank messaging to automate the international banking system. Any currency message is used between the currency units of domestic and foreign banks.Currently, all domestic banks in Iran are connected to a center called SAP in the central bank via leased lines or satellite and through Satellite systems send messages to the target banks. This system has been considered to speed up foreign exchange transactions and customer satisfaction, as well as the coordination of all foreign exchange operations worldwide using a standard software.

Swift is headquartered in Belgium and operates under its laws, with the United States, the Netherlands, the United Kingdom and Hong Kong serving as member support centers. Swift In each country you have an SAP, the access point to Swift, which is controlled by the Swift Institute. (In Iran, SAP is located in the Central Bank.)

 

In foreign purchases, and during the exchange period, it is necessary for the buyer to have the seller’s bank information. The most important of these information is usually the bank account number (IBAN Account Number), bank name and Swift code. Of course, sometimes other information such as bank address is also required. The word Swift (s.w.i.f.t) is derived from the words “Society for World Wide interbank Financial Telecommunication”. This code contains English letters and numbers. Messages are exchanged securely between banks and other financial institutions. SWIFT is also a place for trading software and various services to financial institutions. Most interbank messages are transmitted worldwide using the SWIFT network. Since April 2006, Swift has been associated with more than 8,000 financial institutions in 205 countries. SWIFT itself does not have money transfer facilities and financial institutions need to contact the bank to send remittances.

In money transfer to the seller, if one of these Swift letters is mistyped (for example, sometimes it is mistaken between the number zero and the letter O), the remittance will be returned and will not reach the seller. If the Swift code is illegible or you have doubts about some of its letters, you can enter the Swift code on the SIWFT site. (http://www.swift.com)

This site shows you the bank to which the code belongs. And this way you can find out if the code is correct. You can also do the above steps in reverse. That is, enter the name of the bank to display the dedicated swifts.

After the end of World War II, especially in the late 1950s, world trade began to grow and flourish rapidly, and at the same time the volume of international interbank operations expanded, but non-compliance with international standards in interbank transactions caused confusion in international payments. And increased bank charges. Hence in the early 1960s about 60 major European banks
And Americans wondered how interbank messaging could be designed and standardized to automate the international banking system. In December 1967, seven top banks from the United States, Austria, the United Kingdom, Denmark, Switzerland, France, and the Netherlands began to study, and in 1971, 73 of these countries paid for the study. This study was conducted by a group of experts for a year and its results were presented in 1972. Finally, in May 1973, Swift was founded with 239 member banks from 15 countries in La Hulpe, near Brussels, Belgium.

It took four years for Swift to be legally established, purchased, and installed, and finally launched on May 9, 1977, with 518 member banks from 23 countries sending 5,000 messages on the first day. At the start of the launch, it was expected that up to 300,000 messages a day would be sent through the network (every 325 characters make up one Swift message), but today, decades later, the number of messages is growing rapidly.

Swift Benefits

Swift’s significant growth is due to the many benefits this system has for users in international settlement, the most important of which are the following:

1_ Standard

The system is designed in such a way that by sending a message through the Swift network, it is possible to communicate between computers.

Two banks and performing all accounting steps such as credit operations and debiting of related accounts, preparation of invoices and discrepancies are possible without the intervention of manpower, and on the next business day, all open foreign currency accounts will be opened and discrepancies will be resolved quickly. Performing such operations is extracted (traditionally manually) with a delay of several months. On the other hand, in Swift, banking messages are standard and a message is specified for each type of banking business, and all Swift member banks are required to use a special format to transmit the message. Also, all currencies in the Swift system are standard and international. So we can say that the advantages of being standard are:

A. Preventing the tastes of individuals in compiling the texts of bank messages.

B. Quick identification of messages.

C- Avoid wasting time in composing the text of bank messages.

D. Accelerate the setting of the text of bank messages.

In standardizing interbank messages for ease of work and not creating new standards, Swift has accepted the standards developed by international organizations such as ISITC, ISDA, ICC, ISO, and has set new standards for cases where there is no standard.

2_ Reliability

The Swift system is designed in such a way that the error rate is very small, and if the message attribute is not set correctly and in accordance with the standards, the system will refuse to accept it. Swift claims to be about 99.99% reliable. The reason for this claim is that a Swift message has not been missing since its inception. So with

Large volume of messages The system reliability is close to 100%.

3_ Security

The exchanged messages are transmitted automatically, and the text of the messages is scattered and incomprehensible until they reach their destination, and access to the messages is not allowed by unauthorized persons. In terms of security compared to telex, the following advantages can be listed:

A- In Telex encryption system, four or five factors such as recipient bank, message sending date, message row number, amount and type of currency

Used in calculating the password. Hence when the encrypted message is given to the customer, it encrypts the password so that the customer can not discover the password, because if one is somewhat familiar with mathematics, by having several encrypted messages exchanged between
Two banks will be able to discover the password, but in Swift, the Swift password key must first be exchanged between two brokers, and the password must be worked out using a sophisticated mathematical algorithm that calculates all the letters of the message from beginning to end in calculating the password. Are taken, calculated

And adds to the message and checks the password at the destination system and verifies if correct. In other words, the encryption and decryption operation is performed automatically by the system. In addition to the above password, another password is added to the message by Swift, indicating that the delivered message was completely consistent with the received message.

B) Using a device called Encriptor on the Swift site, the source of the message is cluttered and unreadable and placed in the international telecommunication network, and no one, even if they can access the Swift message, can read or change the There will be no message and only on the Swift site the destination of the message can be read by another device called Decriptor on a regular basis.

It can be read by the terminal, if it is not in the telex and if a source accesses the telecommunication lines, the message can be read and changed. The system can only be used by authorized people within the specified authority. In other words, logging in and dividing the users ‘duties by the two bank officials who have been provided with the main key by Swift, are allowed to log in and determine one of the two parts of the users’ password key. Users receive a unique password by receiving both parts
One of these officials and putting it together will be allowed to enter the Swift network and work with it within the specified authority. The user’s password is the same as his signature. In order to prevent possible misuse if the wrong password is entered, the system for

That user is locked, and users are forced to change their password at least once every three months.

4_ Speed

The message transfer speed in the Swift system is very high. Sending a message does not take more than a few seconds, and as soon as it is sent through the Swift network by the last authorized signature, the message is immediately delivered to Swift, but in telex this is not easily possible and in case the line is busy, it may take hours. Upon receiving the message, Swift is responsible for immediate delivery of the message to the recipient, and if during the working hours of the recipient of the message, due to reasons beyond Swift control, it is not possible to deliver the message with eleven visits to the recipient within 1.5 hours Returns the message to the sender. Swift rules state that every member of the Swift network must be ready to receive messages for at least eight working days, and if they deviate from the rules, they must be accountable to Swift.

5 _ The cost of transmitting the message

The cost of sending a message through the Swift system is lower than other systems and is calculated in characters. The more messages users send, the cheaper each message becomes. In addition, the fee received by brokers for executing Swift and telex messages is different, and almost the fee for executing a Swift message, considering that it does not require manpower and is read and executed by a computer, is between one-half to one-third of the fee for executing a telex message. Manpower must implement it.

6 _ Accessibility

The Swift system provides services 24 hours a day, 7 days a week. This means that it is possible for the broker to set and send the message at any time. So in general, Swift is available on all 365 days of the year and 24 hours a day, and messaging is possible.

Swift Organization

Swift is a cooperative or in other words a non-profit organization that belongs to member banks and is controlled by members and designed to meet their common goals, of course, is financed by members by paying a membership fee and the number of messages sent And it is also managed by the members. Pursuant to Article 14 of the Swift Articles of Association, the 25 members of the Swift Board of Directors are elected by the member banks, and any bank holding more than 1.5% of Swift’s shares can nominate one member of the Board of Directors. (The amount of dedicated shares of each member is determined once every three years according to the amount of messages sent by the member through the network). If a member owns more than 6% of Swift, it can have a maximum of two board members

And countries with less than 1.5% stake can nominate a board member jointly if their stake exceeds 1.5%. The operating profit of this cooperative naturally belongs to the members and should be divided among the members, but Swift does not do this and uses the profit to reinvest and reduce the cost of the Swift message next year.

 

Swift users

1- Members: The central offices of banks are known as members who are Swift shareholders. Like the central office of Bank Saderat or Bank Melli in Tehran, which are a member and shareholder.

2. Subsidiaries: Overseas branches Members or subsidiaries in which more than 90% of the shares belong to the member are accepted as subsidiaries. For example, foreign branches of Iranian banks, whose membership was accepted as a subsidiary after Iranian banks were accepted as members.

3_ Participants: Non-bank members who are active in one of the fields of banking operations, such as stockbrokers who are active in various fields such as buying and selling currency, stocks and the like. Members and affiliates can benefit from all Swift services. However, participants can only send and receive a specific type of message depending on their specialty. In other words, members and affiliates can benefit from all Swift facilities, but participants have limited facilities depending on their field of specialization.

They can use.

Conditions for admission to a Swift country

Before the admission of a country to Swift can be considered by the Board of Directors, the following three conditions must be announced to Swift by the applicant country:

1- Establishment of Swift site (S.A.P): Swift should be leased to the local applicant in case of need to set up the site

To set up a Swift site there at his own expense.

2- Tax exemption: In presenting a certificate of tax exemption, because the tax rate is different in different countries, if it is observed, all members will be treated the same.

3_ Data transmission line: An international data transmission line for transmitting messages from Swift site abroad for at least five leases.

Swift must be provided at Swift’s expense.

Swift Network

If the number of messages sent by a country is large enough to require the launch of a Swift site in the applicant’s country, Swift will establish a site in that country. Otherwise, it will redirect the applicant country’s messages to the neighboring country’s Swift site. Each Swift site is under the umbrella of one of Swift’s two operational centers based in the Netherlands and the United States. Depending on their geographical location, the countries are under the umbrella of one of the two sites, the United States or the Netherlands. The Netherlands and the United States are also supporting me. In other words, if one of them goes out of circuit due to a technical defect, the other is immediately replaced. Swift users are responsible for delivering and delivering their messages to the Swift site. From then on, to the Swift site of the destination country of the message, Swift is responsible for delivering the message. Transfer of messages from Swift site in the country of origin is possible through data transmission lines or ordinary telephone lines by installing a modem, and members are required to introduce a support line to Swift, which in case of emergency when the main line is out of circuit, Swift Be able to deliver messages.

Types of Swift messages

In order to facilitate communication and receiving messages between Swift and members with each other, Swift has tried to classify different messages into ten groups from 0 to 9 as follows: group zero is system messages between members and Swift and group one to nine are financial messages between Members are:

Zero Group Messages: Between members and Swift.

Group I messages: transfer of funds between customers’ accounts, check notices, non-payment orders and. . .

Group 2 messages: Transfer of funds between banks and between different accounts of a bank.

Group Three messages: confirmation of foreign exchange transactions.

Group Four Messages: Receipts.

Group Five Messages: Stocks and Bonds.

Group Six Messages: Precious Metals, Syndicated Loans.

Group 7 messages: documentary credit, guarantee.

Group E Messages: Traveler Check.

Group nine messages: invoice, debtor and creditor declaration.

Membership of Iranian banks in Swift

1985: Central Bank experts conducted preliminary surveys for the membership of Iranian banks in Swift. The favorable assessment and membership offer of Iranian banks were given, but it was postponed due to the outbreak of the imposed war and more fundamental priorities.

1990: The Central Bank commissioned a delegation to coordinate with commercial banks to join Swift.

1991: After the necessary coordination with commercial banks, the application for membership of the Iranian banking system by the Central Bank to Swift

presented.

1992: After presenting three preconditions for SWIFT membership, the Central Bank along with five commercial banks Saderat, Melli, Tejarat,

Mellat and Sepah were accepted in December.

1993: After launching the site, purchasing software and hardware equipment and installing them on the 14th of December to Swift network

We joined.

1988: Accepting the membership and accession of the Export Development Bank.

1998: Accepting the membership of the Bank of Industry and Mines and applying for the membership of the Workers’ Welfare Bank.

1999: The accession of the Bank of Industry and Mines and the welfare of workers.

Conclusion

At present, unfortunately, the country’s banking system, despite the growth in the use of Swift messaging system in recent years, does not make optimal use of Swift and the number of messages sent by Iran through this network and the benefit of its side benefits is not optimal. Of course, Iran can make the most of Swift and send more shares through Swift, while the risk, the cost of sending the message and the commission of the brokers when using Swift are much lower than Telex, and one of the ways to use it. The best way for SWIFT is to connect the foreign exchange branches of banks in Tehran and other cities to SWIFT as soon as possible and to plan towards the automation of the banks’ international operating network using SWIFT.

Author: persian / Date: 2017-10-26
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