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What is CERTIS?

May 17, 2024June 23rd, 2024No Comments

CERTIS (Czech Express Real Time Interbank Gross Settlement system) is the cornerstone of interbank payment systems in the Czech Republic, exclusively dedicated to transactions conducted in Czech koruna (CZK). Established in 1992, CERTIS plays a critical role in expediting the real-time settlement of interbank payments through accounts maintained at the Czech National Bank (CNB). Each participating bank in CERTIS is assigned a unique bank identifier code, ensuring precise and efficient processing of transactions.

Key Features and Principles of CERTIS

Real-Time Gross Settlement (RTGS)

One of the defining characteristics of CERTIS is its utilisation of the Real Time Gross Settlement (RTGS) system. In RTGS, transactions are settled individually and immediately, provided that the sending bank holds sufficient funds. This real-time processing ensures that payments are executed instantly, enhancing liquidity and financial stability within the banking system.

Transaction Irrevocability

Once a transaction is accepted by CERTIS, it is irrevocable. This principle guarantees the finality of payments, which is crucial for maintaining trust and reliability in the financial system. Businesses and individuals can be confident that once a payment is processed through CERTIS, it cannot be undone or altered, thus ensuring the security of transactions.

Handling of Transactions Regardless of Value

CERTIS is designed to handle transactions irrespective of their value. This inclusivity means that both high-value and low-value transactions are processed with equal efficiency, making the system versatile and accessible for a wide range of financial activities.

Participation in CERTIS

Eligibility and Participants

Participation in CERTIS is restricted to banks licensed to operate within the Czech Republic, including branches of foreign banks. In addition to these banks, certain non-bank financial institutions can also participate under specific agreements. This controlled participation ensures that only regulated and authorised entities have access to the system, thereby maintaining its integrity and security.

Unique Bank Identifier Codes

Each participating bank is assigned a unique bank identifier code, which is used to facilitate accurate transaction processing. This identifier is crucial for distinguishing between different banks and ensuring that funds are transferred to the correct recipient.

Operational Mechanics of CERTIS

Queuing System

In scenarios where the sending bank does not have sufficient funds to complete a transaction, CERTIS employs a queuing system. The transaction is placed in a queue and is processed as soon as the necessary funds become available. This mechanism prevents the system from rejecting transactions outright due to temporary fund shortages, thus providing a flexible and reliable payment environment.

Role in the Czech Financial Market

Enhancing Financial Stability

CERTIS is pivotal in enhancing the stability and efficiency of the Czech financial market. By providing a reliable platform for interbank payments, it fosters economic confidence and supports the smooth functioning of the financial system.

Supporting Economic Activities

The ability to process transactions in real-time ensures that businesses and individuals can manage their finances more effectively. This is particularly important for companies that require timely payments to maintain cash flow and operational efficiency.

CERTIS and International Payments

Converting GBP to CZK

For businesses and individuals involved in converting GBP to CZK and making international payments to the Czech Republic, the primary payment route typically involves the SWIFT network. SWIFT facilitates cross-border payments by ensuring that funds are transferred securely between banks in different countries.

Utilising Local Routes

In cases where the recipient’s bank does not support SWIFT payments, local routes such as CERTIS may be utilised. Although CERTIS is primarily used for domestic transactions in CZK, it can serve as an alternative avenue for seamless and reliable transactions, especially when dealing with local banks and financial institutions.

Benefits for Businesses and Individuals

Speed and Efficiency

The real-time processing capabilities of CERTIS provide significant advantages in terms of speed and efficiency. Businesses can ensure that payments are made promptly, avoiding delays that could impact operations.

Security and Reliability

The principles of transaction irrevocability and RTGS employed by CERTIS guarantee that payments are secure and reliable. This reliability is crucial for maintaining trust in financial transactions, particularly for high-value payments.

Cost-Effectiveness

Using CERTIS for domestic transactions can be more cost-effective compared to international payment systems. This cost efficiency benefits both businesses and individuals by reducing transaction fees and other associated costs.

Conclusion

CERTIS stands as a robust and reliable interbank payment system in the Czech Republic, facilitating real-time, secure, and efficient transactions in Czech koruna. Its integration with the broader financial system, adherence to strict regulatory standards, and ability to handle transactions of any value make it a cornerstone of the Czech financial market. For businesses and individuals making payments to the Czech Republic, understanding and utilising CERTIS can provide significant benefits in terms of speed, security, and cost-effectiveness.

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