Hi - I have a couple of queries on SWIFT..
1.What is mean by SWIFT payment by SERIAL method and Cover method and what is the difference?
2. Am confused re the difference between correspondent bank in a MT 103 payment (Sender Correspondent (Tag 53a) and Receiver Correspondent (Tag 54a)) and Intermediary bank (Tag 56a). What is the difference between a payment via correspondent and a payment via an intermediary?

Thank you,
Anjali

In a SERIAL third party transfer, a 103 travels from the originating bank to the intermediary bank to the beneficiary bank.

Using a COVER payment; a 103 is sent by the originating bank to the beneficiary bank, and a 202COV is sent to the intermediary bank. The classical reason for using a cover payment is to insure that the funds will be immediately available to cover, or pay the 103.

The roles that sender or receiver's correspondent play in the wire transfer are somewhat different from the role played by the intermediary.

The intermediary bank is, first of all, a bank that has RMA permissions to communicate with both the originating bank and the bene bank. Second of all, it is, or can be the bank that maintains correspondent accounts either with both the originating and bene banks, or with their correspondents. So, an intermediary is in a position to pass along the payment message, and to move funds for it.

The use of correspondents and/or intermediaries is dictated by the relationships maintained by the originating bank. If they do not have a direct relationship with the bene bank, they muse rely on an intermediary who does, or, a 'friend of a friend' a correspondent who also maintains a correspondent relationship with the bene, or with the bene's correspondent.

Does that clarify the concept at all?

Wow, Hrothgrar, thanks!
I am totally clear on the serial and cover concepts. While I understand the difference between an intermediary and correspondent, what kind of a scenario would involve the use of both? Best wishes, Anjali

To paraphrase Dr. Freud; sometimes a correspondent account is just a checking account.

The use of a correspondent account can simply be a way of funding the transaction.

If you will indulge me, here's an example. You, amulatti, wish to send $2,718.28 to a Mr. Lebowski. Your account is at Bob's Bank, and Mr. Lebowski's is at Brunswick Mutual. For whatever reason, Bob's Bank decides to fund the transfer, not out of its own account on itself, but to use Bob's Bank's account at Sobchak National Bank. On the wire transfer:
tag 50:Amulatti
tag 52:Bob's Bank
tag 53:Sobchak National (the Sender's Correspondent)

It's just a way of saying, take the money out of *this* account instead of *that* account.