Introduction to Outward Remittances and Conversions

The Outward Remittances and Conversions feature caters to HKMB specific guidelines on the remittances (Ex. Chinese characters conversion for swift messages, handling limits on CNY or RMB currency), matching the beneficiary name, cross border remittance guidelines.

Outward Remittance

The Outward Remittance transaction is guided by the local and international regulations as mandated by SWIFT. The remittance processing in Hong Kong allows capturing Chinese commercial codes as part of the SWIFT tags and when the messages are transmitted between banks, then, these commercial codes can be converted to local languages like Chinese.

CNY remittance is one of the most common ways of remittance processing wherein the funds are transmitted through SWIFT and RTGS modes. These remittances are mandated by the local regulation in Hong Kong, which requires input of additional details during the transaction processing, which is used for regulatory reporting.

Some of the details included are as follows:

• Remittance purpose code: Denotes the specific purpose of the payment like individual payment, trade settlement, etc.
• Remittance code word: These are the common code words to be captured as part of the message, which indicates specific code words indicating that the payment is cross border goods trade, cross border service trade, charity donation, etc.
• Remittance sub-type: These are sub codes in relation to the code words mentioned above and includes code words indicating individual remittance, corporate remittance, etc.

CNY Remittances

This functionality covers the regulatory requirements in Hong Kong, while processing the CNY remittances.

CNY Remittance processing has specific set of regulations in Hong Kong.

The regulatory requirements covers the following:

• Validation of transactions processing within the permissible limits.
• Validation for name checks for transaction processing.
• Validation of underlying customers for resident status during transaction processing.
• Validations for senior citizen customers during transaction processing.

Introduction to CNH to CNY Conversion

Customers holding CNH denominated accounts could request for outward remittances through SWIFT for settlement in CNY, in which case the transaction initiation and settlement must be possible without involving any exchange rate conversions between the two forms of Chinese currency.

Similarly, any inward remittances initiated in CNY currency could also be towards an account which is denominated in CNH. Hence, the incoming CNY payment will be required to be settled into CNH accounts without involving any exchange rate conversions.

Introduction to Inward Remittance

Banks in Greater China region remit funds in RMB and these banks face challenges in recognizing the values identified in certain fields like beneficiary name and address of the SWIFT messages, as these field values can be in Chinese characters. Hence, further processing of such payments are difficult, as the SWIFT does not support input of Chinese characters.

In order to overcome this issue, the banks in the region started adopting usage of Chinese Commercial Code (CCC) which is a sequence of 4 digits numbers representing a specific Chinese character. The bank initiating a payment will transmit the data in the form of CCC and the beneficiary institution wil convert the CCC from the incoming message to the equivalent Chinese character.

The specific SWIFT message types for which the conversion will be applicable are MT103/202/202cov. All the inward messages will be received with the Chinese commercial codes in specific tags and when these messages are processed in Temenos Transact, these codes are required to be converted into traditional Chinese characters.

In order to enable the usage of Chinese characters in Temenos Transact, suitable modifications need to be done for the ASCII.VALUES and ASCII.VAL.TABLE and LANGUAGE applications. Also, the mapping of Chinese commercial codes with the traditional Chinese character is achieved by having a local table and the incoming SWIFT message will refer this local table to populate the Chinese characters in the FT application.