KARACHI: The State Bank of Pakistan has decided that banks can now use the MT 102 message in Pakistan Real-time Interbank Settlement Mechanism (PRISM) system free of charge and with no limit on minimum amount.
The Payment System Department (PSD) has said that the move should help in facilitating stakeholders by reducing Turnaround Time (TAT), and to ensure the secured settlement of remote area clearing obligations between banks.
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Previously, the SBP had allowed banks to settle their clearing obligations through their respective head offices using MT 202 in PRISM, but only in cities where clearing house services are not available.
The MT 102 message was first allowed by the SBP to be used under the PRISM system back in 2015.
The decision was taken in order to ensure timely interbank domestic transfer of home payments and transactions under the arrangement of Pakistan Remittances Initiative (PRI)
Banks availing this facility shall ensure that for transactions received in Pakistan on a working day from 9 am till 3 pm, the payment is transferred to the beneficiary bank via PRISM within two hours of the receipt of advice from abroad.
For transactions received in Pakistan after 3 pm till 9 am next working day, the payment shall be transferred to the beneficiary bank by 11 am via PRISM. In case of holiday, the same shall be credited on the next working day before 11am.
According to the new SBP circular, while preparing the MT 102 message for clearing obligations, banks are advised to use a special transaction type code (039) in relevant field of MT 102 message in order to differentiate transactions relating to clearing obligations of remote areas from the other transactions. This transaction code has been assigned in PRISM only for remote areas transactions.
Additionally, the beneficiary’s IBAN / Account Number, along with instrument number shall be used in Field 70 of each payment instruction, and MT 199 will be used in case a returned instrument is not received by the collecting or presenting bank.
The SBP also said that presenting, collecting, paying or drawee bank will ensure to specify beneficiary’s IBAN / Account Number in the field ‘59’ of the message.
“All banks are required to devise a mechanism and establish internal procedures to be followed by their branches and treasury for smooth and timely settlement of above referred settlement obligations”, the SBP added.
According to the State Bank, the PRISM system was started in 2008 as a response to the growing awareness of the need for sound risk management in settlement of large-value funds transfers in Pakistan.
