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Demystifying Electronic Funds Transfer(Wire Transfers)

18 Apr

mobile banking and money transfer

Sending money across borders has never been easy than it is now, What are the requirements?  what information do you need to provide to the sender or in case you’re the sender what details do you need from the recipient.

The wire transfers are not only used for international payments, Local Payment through RTGS has also been well received by a section of Kenyans.  In Kenya you cant pay more than or equal to One Million using a cheque you have to use RTGS- Real Time Gross Settlement.

1.  Sending or Receiving Funds Locally Through RTGS

RTGS-Real time gross settlement-  Is (kepss) Kenya Electronic Payment and Settlement System in which both processing and final
settlement of fund transfer transactions take place on an item by item (gross) basis continuously throughout a business day. It is an on-line system that facilitates the transfer of high value and/or time critical payments between participants in real time. It aims at
enhancing efficiency by reducing inherent risks in the existing payment System. Unlike cheques that take 4 working days to mature and can easily be forged, sending money through RTGS should take a maximum of 2 hours and the recipient can access his funds the security is enhanced through SWIFT messages.

when sending money through RTGS you need to provide:

  1. Both your account name and number you wish the funds to be debited from
  2. Both account name, account number, bank and branch  details of the recipient
  3. The purpose of payment for example upkeep, school fees, payment for supplies(provide invoices where necessary)
  4. clearly indicate the amount in words and figures and the currency, you can send KES, USD or EUR through RTGS
  5. The form should be signed in accordance with the mandate held for that account and your account should have sufficient funds to cover the payment and charges .

RTGS charges are kes 500 per transaction

As a prove for payment you can leave an email address with your bank to send you a swift message copy(commonly called the TT COPY that can be presented as a prove of payment)

what to check on the MT 103 TT Copy to ascertain the payment went through

  • check the message status whether message was acknowledged or aborted
  • check the value date (date when the settlement will be due)
  • the time the message was sent (RTGS cut off time is 3.30pm) and be keen on the beneficiary details and amount sent.
  • check whether it has, kps, on the header

Currently CBK, bank of Uganda and bank of Tanzania  are testing on possibilities of having a payment system for the whole of east Africa. you will be able to send KES to Uganda and Tanzania and UGX to TZ or UG once the EAPS (East Africa payment system( is effected.

2. Sending or Receiving funds from abroad.

Most Kenyans receive funds from abroad either as proceeds from our exports (mostly agricultural) or through direct remittances by relatives abroad. what do you need to provide the sender with for the money to reach you efficiently and timely.

  1. Your Bank’s Name and Swift Code/BIC (bank identify code)
  2. Your Account Number and Name
  3. Ask your bank for their USD, EUR or GBP correspondent abroad to enhance effective settlement

A swift code is what identifies banks for example equity bank is EQBLKENA, fina bank FBAKKENA, bbk BARCKENX and so on this is information your bank will provide to you on request.

Sending funds a broad …….

while sending USD to USA get the routing code/fedwire for the recipient’s bank, banks swift code and beneficiary’s account name and number.

while sending USD to any other country other than USA you’ll need the beneficiary bank’s correspondent bank in USA

while sending Indian rupees to India you need beneficiary bank’s IFSC code (the clearing code) and must include the purpose of payment.

when sending EUR to a country in Euro zone you’ll need an IBAN (international bank account number) while for GBP to Britain you will need either an IBAN or simply a sort code and beneficiary account number and name.

To avoid losses due to conversion from foreign currencies to KES  you can open an account in the currency your frequently receive funds in mostly open a USD account with your bank

SWIFT CHARGES IN KENYA

For Local Transfers (RTGS) The sender is charged KES 500 While the Recipient is not supposed to be charged anything. International transfers are charged an equivalent of KES 1500 depending on Currency being sent and Exchange Rate.

While receiving funds from abroad different banks charge differently, Most banks charge USD 15 for US  Dollars, EUR 13  for Euro and GBP 8.5 for pounds.

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8 Comments

Posted by on April 18, 2011 in Banking, Financial

 

Tags: , , , ,

8 responses to “Demystifying Electronic Funds Transfer(Wire Transfers)

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  4. Margret

    April 18, 2011 at 11:50 am

    what is the minimum amount of kes can one send thr RTGS

     
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      November 23, 2011 at 12:14 pm

      RTGS any amount no minimum and maximum set. it is only for the cheques and EFT s that the cbk set a ceiling of kes 1,000,000.00

       
  5. bonnte

    April 18, 2011 at 9:31 am

    Good information, Kenyans certainly need to keep a breast with the current developments in the financial sector. This information is not easy to come by and therefore it is great to have someone willing to offer the same absolutely free.

     
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      April 19, 2011 at 4:57 am

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