SWIFT is an international secure financial message system used by banks and financial institutions throughout the world, and stands for “Society for Worldwide Interbank Financial Telecommunications”. The SWIFT system ensures that all financial messages between banks are authenticated, and provides validation and verification checks on all inter-bank communications.
Each message employed by the system has a specific designation, and all messages are preceded by MT, (Message Type), and three numbers. To take an example, a SWIFT message with the prefix MT101 and MT 102, are used for making cash transfers. To pre advise a Bank Guarantee from one bank to another, a free flow message designated MT 799 is utilised. The MT 799 is also used to pre advise Standby Letters of Credit and Documentary Letters of Credit.
A dedicated message type, MT 760, is utilised to send Bank Guarantees from one bank to another. This message type is also employed for sending Standby Letters of Credit and Documentary Letters of Credit.