Settlement at the Central Bank is a process (operation) through which actual funds transfer is executed between the settlement accounts of the sending and receiving institution held with the Central Bank in the RTGS (Real Time Gross Settlement) system.
Settlement is the mechanism by which obligations in respect of funds transfer or in respect of payments in securities transactions between two or more parties are finally discharged.
This means the updating of the definitive settlement accounts of the Participants involved in the transfer.
After the actual transfer of funds or payment element of a securities transaction has been recorded and successfully processed in the RTGS system of the Central Bank, the settlement is considered complete and is called final.
Final settlement is irrevocable and unconditional.
This is a series of posts with definitions for the jargon used in #banking, #fintech and #payments.
Too many people use some terms without understanding them beyond the definition.
Too many “experts” use the terms but they never had experience with the actual implementation of anything in #banking, #fintech and #payments.