SWIFT message types relevant for CDCS Exam

In this post, we’ll discuss about various SWIFT message types relevant for CDCS Exam. Proper understanding of the various message types used in the letter of credit mechanism will help you to understand the letter of credit mechanism in a better way.

Table of Contents

What is SWIFT?

SWIFT is a messaging platform using which banks exchange information among one another.

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication and it is headquartered in Belgium.

Every bank participating in the SWIFT platform has a SWIFT code.

There are various categories of SWIFT messages. For example, 1 series, 2 series etc.

Each message type is denoted in the format “MTxxx”, where MT stands for Message Type and it is followed by a 3 digit number.

e.g. MT103 stands for the “1 series” message type which is used for “Customer to customer wire transfer”.

SWIFT message types relevant for CDCS exam

For the CDCS exam, you only need to know about the 7 series message types. These are discussed in details in this section.

MT700 Issuance of a Documentary Credit

This message is sent by the issuing bank to the advising bank.

This message indicates the terms and conditions of the documentary credit.

MT707 Amendment of a Documentary Credit

This message is sent by the issuing bank to the advising bank.

It may also be sent by an advising bank to a second advising bank or by a transferring bank to an advising bank.

The purpose of this message is to communicate any changes in the terms and conditions of the documentary credit to its receiver.

MT740 Authorization to Reimburse

This message is sent by the issuing bank to the reimbursing bank.

An MT740 authorizes the reimbursing bank to debit the account of the issuing bank to honour claims for reimbursement of payment from a claiming bank.

MT747 Amendment to an Authorization to Reimburse

This message is sent by the issuing bank to the reimbursing bank.

It is used to inform the reimbursing bank about amendments to the terms and conditions of the documentary credit which has an impact on the authorization to reimburse.

MT742 Reimbursement Claim

This message is sent by the paying/negotiating bank to the reimbursing bank.

It is used to claim reimbursement of payment/negotiation done under a documentary credit.

MT734 Advice of refusal

This message is sent by the issuing bank to the bank from which it has received documents under a documentary credit.

It may also be sent by a nominated bank to the bank from which it has received documents.

This message type –

conveys that the bank concerned is refusing to honour or negotiate the documents
states each discrepancies due to which the bank is refusing to honour or negotiate, and
provides the receiver with details regarding the disposal of the documents.

MT799 Free format message

This message type can be used by any bank to communicate to each other. This message type is used to send or receive information for which a standard message type is not available.

MT760 Issue of a Standby Letter of Credit

MT767 Amendment to a Standby Letter of Credit

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