Interbank System of Money Transfer (ISMT) is a system of gross settlements in real-time mode of the country (hereinafter – RTGS), in which each document is processed individually and money transfer is carried out based on each payment document. 

Money transfer in the system is carried out within the limits of the participant’s amount of money transferred by correspondent account opened in the National Bank to the specially determined system’s account in the National Bank, as well as amount of money received from other participants of ISMT. The system’s account in the National Bank serves for registration of participants’ money during period of fulfilling money transfers in the system.

The purpose of ISMT consists in processing the largest and the most priority-oriented payments in the country. Both credit and debit transfers can be made through the system. The system provides finality of handling accounts in national currency (KZT) during transaction day. At that payments in ISMT are performed only be electronic method.   

ISMT management is carried out by the National Bank, and the system’s operator providing its functioning is Kazakhstan Interbank Settlement Center (KISC).

ISMT is based on the solid legal base provided by the Law “On the National Bank of the Republic of Kazakhstan”, the Law “On banks and banking in the Republic of Kazakhstan” and the Law “On payments and remittances”. As well the Rules of money transfers in ISMT, the Rules of using payment documents and making non-cash payments and money transfers are developed and in effect on the territory of the Republic of Kazakhstan, as well as other rules and standards where procedures of system functioning are revealed in detail.    

In ISMT procedures of providing information security approved by KISC are observed which are aimed at verification of evidence of electronic messages transfer and error detection during their transfer. KISC and users provide registration and carry out control of electronic being sent and received messages. All electronic messages processed in ISMT leave an audit trail.

Figure 1. Exchange of electronic messages between the ISMT users.

At the beginning of the system’s operational day (from 8 a.m. till 9 a.m.) the National Bank of the Republic of Kazakhstan transfers a certain part of ISMT participants’ funds from their correspondent accounts in the National Bank of the Republic of Kazakhstan to the specially determined account of NBRK – account of ISMT in NBRK. Operational day of ISMT begins at 9:00 a.m. Money transfers in ISMT are carried out during operational day within the limits of the participant’s amount of money transferred by him to the account of ISMT in the National Bank, as well as amount of money received from other participants of ISMT. In the event of money insufficiency for making payment, the payment document stands in a queue.

Payment documents being in the queue are processed in accordance with priority codes. Within the limits of priority codes execution of payment documents is carried out in the order of their queue entry, according to FIFO principle (first-in – first-out). The system’s participants have a right to establish and change order of priorities of execution of payment documents.   Moreover, participants can withdraw the payment document  being in the queue. During transaction day participants upon their requests are provided with information about performed payments, about payment documents registered in the queue and the participant’s balance of money in the system.   

Closing of operational day is conducted at 20:00. However, on request of the system’s participant the National Bank can prolong the transaction day. Upon completion of the transaction day ISMT forms for each participant the documents finishing the transaction day.  At that electronic sheet with the participants’ amount balance positions is sent to the National Bank. The National Bank conducts inspection of this sheet and informs KISC of inspection results, then the National Bank carries out money transfer in the amount of the participants’ balance positions from the account of ISMT in the National Bank to the correspondent accounts of these participants opened in the National Bank. 

More detailed information about the system functioning and operational day of ISMT is provided on the site of KISC: www.kisc.kz