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December 23, 2013updated 04 Apr 2017 4:09pm

Five global banks to join CHAPS payments system

CHAPS Clearing Company, a UK-based payments system, has received letters of intent from five major global banks to become direct participants.

By Verdict Staff

CHAPS Clearing Company, a UK-based payments system, has received letters of intent from five major global banks to become direct participants.

The five international lenders, who have agreed to become settlement banks, include BNY Mellon, ING Bank N.V, Northern Trust, BNP Paribas and Société Générale. These banks are currently working as indirect participants in CHAPS.

The move will enable the lenders to send and receive binding, guaranteed sterling payments with same day settlement finality.

CHAPS, which processes and settles both systemically important and time-dependent payments, said that these banks will be join the scheme within an agreed time frame.

By the end of 2015, a total of 25 banks will be CHAPS Direct Participants, an increase of 11 since the onset of financial crisis in 2007-2008.

In order to encourage more and more banks to join as direct participants, CHAPS has incorporated a number of changes to decrease systemic risk within its system.

Last month, Sweden-based bank, Handelsbanken joined CHAPS as a full direct participant, free from of the Bank of England’s deterring initiative.

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