Electronic Fund Transfer System-Electronic Securities Transfer System

Electronic Fund Transfer System-Electronic Securities Transfer System

Electronic Fund Transfer (EFT) System provides real time transfer and real time gross settlement of Turkish Lira interbank payments. First generation of the EFT System started to operate in April 1992 and was followed by reconstructed second generation of the EFT System, which started to operate in 2000.  The third generation of the EFT System, which was developed by the CBRT, started to operate in 2013.

There was no upper or lower limit defined for the amounts of payment messages in the EFT System and the high volume share of low-value payments was creating huge risk in the settlement of high-value and urgent payments. In order to eliminate this risk, a functional separation was performed on 7 December 2012 to differentiate banking payments and consumer payments. Consumer payments are settled in Turkish Lira Payments System of Consumer Payments whereas; interbank payments and banks’ payments related to international correspondent transactions are settled in Turkish Lira Payments System of Interbank Payments. Both systems operate by using in-house software.

Electronic Securities Transfer and Settlement (ESTS) System  was first launched in 2000, providing transfer and gross settlement of banks’ securities operations. Second generation of the ESTS System started to operate on 12 July 2013 under reconstruction program of Turkish payment systems.

Transactions of securities like treasury bills and liquidity bills are executed through the ESTS System.  Delivery versus Payment (DvP) principle is used for the ESTS transactions. According to this principle, the integrated structure of EFT and ESTS systems performs security and fund transfers’ settlement simultaneously. Only the participant of the EFT System participants and Central Registry Agency of Turkey (MKK) can be participants of the ESTS System.

Owing to their integration and common interface, EFT and ESTS are usually regarded as a single system, which is referred to as "EFT-ESTS System". The CBRT is both the owner and the operator of EFT-ESTS System. According the Turkish Banking Law (Law No. 5411), banks which have activity in Turkey can participate in the  EFT-ESTS System participant with the acceptance of the CBRT.  The rules and procedures of the system are determined in the “CBRT Payment Systems Rule Book” which was prepared based on the CBRT Law.

EFT-ESTS System has very critical roles in the CBRT’s monetary policy implementation since interbank operations (e.g. money market and securities settlement transactions) are executed through it.

EFT-ESTS System settles commercial payments and financial market transactions as well. Final settlements of cheque payments, credit card operations, transactions related to government and corporate securities traded on the Borsa Istanbul cleared through Takasbank, are carried out in EFT-ESTS System.

Disaster recovery management guides of the EFT-ESTS System are up-to-date and shared with the participants. The technical and operational divisions perform regular tests within the context of the scenarios about disruption of the functioning of the systems contained in these documents.

The CBRT charges participants for the payment messages they send to cover investment and operating expenses related to hardware and software of the EFT-ESTS System. Charging details are given in the CBRT’s Tariffs Regulation and its annex, the Tariff Schedule.

Additionally, the self-assessment report of the EFT-ESTS System for the observance of the Principles for Financial Market Infrastructures (PFMI), which have been defined by the Committee on Payments and Market Infrastructures of  the Bank for International Settlements (BIS) and the International Organization of Securities Commission (IOSCO) for all financial market infrastructure institutions including payment systems, central counterparties, securities settlement systems, central securities depositories and trade repositories, can be accessed here.

 


CENTRAL BANK OF THE REPUBLIC OF TURKEY Head Office Anafartalar Mah. İstiklal Cad. No:10 06050 Ulus Altındağ Ankara Phone : (+90 312) 507 50 00 | Fax : (+90 312) 507 56 40