Settlement Finality Principle
The governing principle within a Real Time Gross Settlement (RTGS) System that once a payment has been submitted to and processed by the RTGS the payment/settlement is final and irrevocable.
The finality principle comes from the juridical domain where has the meaning that certain disputes must achieve a resolution from which no further appeal may be taken, and from which no collateral proceedings may be permitted to disturb that resolution.
Finality is considered to be important because otherwise, there would be no certainty as to the meaning of the law, or the outcome of any legal process.
The same with RTGS settlements because RTGS sits at the top of the settlement piramid in a country it has to be governed by the finality principle to ensure financial stability.
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.