2. Funds Transfer - An Overview

2.1 Introduction

As the trend towards automated processing increases, and as the demands of the financial business become more complex, Oracle FLEXCUBE, a sophisticated package, breaks down these complexities by its quick, easy-to-use features, which are essential to successful financial management.

The Funds Transfer (FT) Module that constitutes a part of Oracle FLEXCUBE is a front office system that handles the processing of the transfer of funds (local and foreign) between Financial Institutions. Financial institutions or banks can initiate these transfers for themselves, or on behalf of their customers.

The FT Module is a comprehensive transaction handling and management system, which integrates with the overall system for settlement of payments, charges, commissions and MIS. The system handles all the necessary activities during the life of a contract, once it is booked. All the relevant account balances will be updated when Transfers are processed.

Exchange rate conversions are automatically effected in cases of Cross-currency Transfers based on the rate and method of conversion that you define. The essence of a funds transfer (i.e., transfer of money and the generation of messages) is handled comprehensively by this module.

With regard to funds transfers, you will encounter some basic terms frequently, which are listed below:

Field/ Term



SWIFT Equivalent

Ordering Cus­tomer

The initiator of the transfer instruction also referred to as the Remitter. The remitter is the source of funds in a pay­ment order

Only in the case of cus­tomer transfers (refer section ‘Classifying Funds Trans­fers’, below)

Field 50

Ultimate Ben­eficiary

The Ultimate recipient of funds as a result of the funds transfer (also called benefi­ciary customer).

Only in the case of cus­tomer transfers

Field 59

Ordering Insti­tution

The financial institution that originates a bank transfer / customer transfer


Field 52

Account with Institution

A financial Institution that ser­vices the account for the ben­eficiary customer beneficiary institution

Customer and Bank Transfers

Field 57

Credit Advice

An advice given by the Account With Institution indi­cating credit to the account of the beneficiary

Any transfer

MT 910

Cover Pay­ment

The reimbursement of an intermediary through one’s correspondent

Customer and Bank Transfers

MT202 Cover Message


Sender of a Payment Mes­sage (Not necessarily the Ordering Institution)

Any transfer



Receiver of a Payment Mes­sage (Not necessarily the Beneficiary Institution)

Any transfer


2.2 Funds Transfer - An Introduction

A Funds Transfer is a sequence of events that results in the movement of funds from the remitter to the beneficiary. It is also defined as the remittance of funds from one party to itself or to another party through the banking system. It is an essential support function for other financial products such as loan repayment, settlement of trade bills etc., apart from being an important stand-alone function in a typical bank.

Classifying Funds Transfers

Funds Transfers can be classified as Incoming, Outgoing or Internal depending on the direction of flow of funds in the transfer. Incoming or Outgoing transfers are indicative of whether funds are coming in or going out of the bank. Internal transfers indicate funds being transferred within the bank itself (between two accounts within the Bank). No other financial institution is involved in such transfers. Based on the parties involved in the transfer, Funds Transfers can also be classified as customer transfer, bank transfer and bank transfer for own account.

Customer Transfer: A customer transfer is a transfer in which either the ordering customer or the beneficiary customer, or both, are non-financial institutions, i.e. at least one party in the chain is not a financial institution.

Bank Transfer: A bank transfer refers to the transfer of funds between the ordering institution and beneficiary institution. Here the originator and beneficiary and all intermediary parties are financial institutions.

Bank Transfer for Own Account: A transfer initiated by a bank to transfer funds from one of its accounts (held in one Bank) to another account (held in another Bank).

2.2.1 Media Supported

Messaging which constitutes an important ingredient of a Funds Transfer is supported. In Oracle FLEXCUBE, FTs can be executed using any of the following media types:

The following SWIFT messages are supported for FTs:

Type of transfer

Message type

Customer Transfer

MT 103 and 103+

Customer Transfer with Cover

MT103 and 103+ and MT202

Bank Transfer

MT202 and MT205

Bank Transfer with cover

MT 202 and MT205

Bank Transfer for Own Account

MT200 and MT210

Notice to Receive

MT 210

Incoming Bank Transfer with Notice to Receive

MT 202 and MT 210

Confirmation of Debit

MT 900

Confirmation of Credit

MT 910

Multiple Customer Credit Transfers

MT102 and 102+

Request for Transfer


Multiple Bank Transfers


Multiple Bank Transfers for Own Account