home Banking Books Money and credit - Ivanov V.М.

Money and credit - Ivanov V.М.

25.3. Organization of interbank settlements

Interbank settlements are a component of the payment mechanism of the state. Cashless payments between business entities, as a rule, can not be completed within a single bank. In the chain of payments of entities whose accounts are open in different banks, interbank settlements inevitably arise. They are a system for the implementation and regulation of payments on monetary claims and liabilities arising between banking institutions.

In Ukraine, the general principles of organizing interbank settlements that are based on the following models are being implemented:

• on inter-branch turnover accounts;

• by establishing correspondent relations between commercial banks;

• through correspondent accounts with NBU institutions;

• through clearing institutions.

The modern model of interbank settlements provides for the transition of Ukrainian banks to an electronic payment system that operates in real time and allows completion of settlements between banks during the operational day.

The organizational-technical model includes a number of new elements. As part of the NBU, a new subdivision was created - the clearing house, which is responsible for the technical conduct of interbank settlements using electronic technologies. The clearing house is built on a two-level principle:

• the central clearing house, which reports directly to the NBU;

• Regional clearing houses, which are structural subdivisions of the NBU territorial offices.

To conduct settlements, commercial banks, along with accounts opened in regional cash centers (RCCs), open technical accounts and sub-accounts in the regional clearing house. The RCC is also a participant in the regional clearing house. The technical accounts reflect all payments made by the bank on behalf of customers, as well as the amounts received from other banks in favor of its customers. At the end of the day, the turnover on the technical correspondent account is reflected in the correspondent account of a commercial bank opened in the RCC. Regional clearing houses are responsible for timely and high-quality operations on orders of commercial banks.

Transactions on the transfer of payments to the benefit of customers of other banks are conducted if there is a sufficient balance on the correspondent or sub-correspondent account of a commercial bank, i.e. within the credit balance. If the amount of payments in favor of other banks exceeds the counter receipts, a debit balance arises on the correspondent account with a small input balance of funds. In essence, the correspondent account overdraft reflects the amount of unauthorized credit issue carried out by a commercial bank.

In order to prevent such NBU issue, a strict mode of functioning of the correspondent account is established in the presence of a debit balance. The remainder of the debit balance accrues interest at the level of the NBU's refinancing rate and a penalty is charged in the amount of twice the refinancing rate for each day. Interest and penalty are charged at the expense of daily receipts to the correspondent account. Operations on the correspondent account are suspended until the debit balance is fully paid off. In the case of a debit balance of a correspondent account three or more times during a month or permanently within 10 working days, the regional administration applies to the NBU for applying sanctions to the commercial bank provided for by banking legislation.

In the central clearing house, the technical accounts of the regional clearing houses are opened, according to which the operations performed for the day are recorded. Account management allows you to monitor the correctness of transactions on technical correspondent accounts by the regional clearing houses. In addition, the generalization of the information reflected on these accounts allows you to obtain a picture of the overall state of payment turnover between the regions of Ukraine.