Netting Payment Schemes

Glossary

Banking

Netting Payment Schemes

Banks using netting schemes exchange payments throughout the schemes working day. Settlement for these payments is made on a netted basis - payments received are tallied against payments made. The bank settles only the net amount. The final netted payment is usually made at close of scheme day, but to avoid end of day settlement risk where one party may fail during the course of the scheme day one or more designated settlement times during the day may be agreed.

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