Learn #banking, #fintech and #payments jargon: Settlement Account

By | June 25, 2021

Settlement Account

Definition:

An account with the Central Bank, which is maintained in the RTGS (Real Time Gross Settlement) system by a Participant institution subject to the rules and procedures of the RTGS system.

An account with a Central Bank, a settlement agent, or a counter-party, used to hold funds and securities and to settle transactions between Participants in a system.

Details:

Note that the first type of settlement account that is maintained directly in RTGS is available only to certified direct participants of an RTGS system. In most of the countries this participants are banks or financial institutions accredited by the Central Bank to have a settlement account.

There are also indirect institutions that can have a settlement account with a settlement agent and in that case the settlement account can be seen as a sub account of the settlement agent’s RTGS settlement account.

Note:

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.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.