Real Time Gross Settlement System (KASSIP)
Kuwait's Automated Settlement System for Inter-participant Payments (KASSIP) is Real-time gross settlement system that is designed to process large-value payments. Also, KASSIP processes large number of low-value or retail-value payments. It went live on August 5th, 2004 with 11 participation. In addition to that, CBK used KASSIP for sending and receiving its own payments and those for its customers, such as government ministries, overseas banks, international institutions and investment companies.
KASSIP regulation was prepared according the core principles for systemically important payment systems that established by committee on payment and settlement system (CPSS) (PDF file).
KASSIP provides extensive functionality and services comprising:
- Message Handling through SWIFT and independent CBK-Net carriers
- Payment Processing
- Liquidity Management
- Monitoring and Reporting
In addition to processing of inter-participant payments, the system provides support for many other banking transactions including:
- Ministries and Government payments to and from Participants.
- Inter-bank cheques clearing settlement.
- Monetary policy transactions.
- Sale, switch and redemption of Treasury Bills and Treasury Bonds.
- Cash transactions
- Other CBK transactions affecting Participant accounts
Secure electronic networks are used for the transmission of payments, between participants and KASSIP. Two networks available: SWIFT and a private wide area network (CBK-net). The following message types are supported: MT102, MT103, MT202, MT203 and MT205.
Payments are settled gross and in real time. When KASSIP receives a payment transaction from a sending participant, settlement takes place as soon as there is a covering balance in the participant's account. Only then does KASSIP generate and send an electronic message (payment advice) to the receiving participant.
KASSIP provides settlement mechanism in which both processing and final settlement of inter-participant payment transactions take place continuously. The settlement of payment transactions takes place on a transaction-by-transaction basis. The transactions are tested for availability of funds, and settled individually, in real time on accounts of participants (in CBK General Ledger).
Settlement takes place provided that sending participant has sufficient covering balance or credit (settlement limit). Settlement is final: payment transactions are irrevocable. Intraday liquidity facility is ranted up to daily operation cut-off time.