Key Fields and Structure of the MT740 Message

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Introduction

The SWIFT MT740 – Authorization to Reimburse is one of the most critical message types used in documentary credit settlements. Its accuracy and clarity determine how efficiently funds are transferred between the issuing bank, reimbursing bank, and claiming bank.

Understanding the key fields and structure of MT740 is essential to ensure compliance with SWIFT standards, avoid message rejections, and guarantee smooth interbank reimbursement operations under Letters of Credit (LCs).

Keywords: SWIFT MT740 fields, transaction reference number (20), amount (32B), reimbursement details, sender and receiver information
Related terms: LC reimbursement message, SWIFT field tags, UCP 600, interbank settlement, payment authorization

I. Overview of MT740 Structure

The MT740 message is part of the SWIFT Category 7 series (Documentary Credits and Guarantees). It provides a standardized format for banks to communicate reimbursement authorizations securely and unambiguously.

Each MT740 is composed of a sequence of structured fields (or “tags”) that carry essential transactional information — including the reference number, authorized amount, beneficiary details, and instructions to the reimbursing bank.

The message follows SWIFT’s mandatory and optional field hierarchy, ensuring uniformity across the global financial network.

II. Mandatory Fields and Their Purpose

Below is a breakdown of the key mandatory fields used in the MT740 message, with their corresponding function and example data.

Field Tag Field Name Purpose / Description Example Value
20 Sender’s Reference Number Unique transaction reference generated by the issuing bank. Enables traceability and reconciliation. 2025NNRV12345
25 Account Identification Identifies the account held by the issuing bank with the reimbursing bank. 456789/NNRVTRADE
32B Currency / Amount Specifies the currency and total amount authorized for reimbursement. USD123,500.00
40F Applicable Rules Indicates the international trade rules governing the LC (e.g., UCP600). UCP LATEST
52A Issuing Bank Identifies the issuing bank that opened the LC and is instructing reimbursement. NNRVTRPCAXXX
53A Reimbursing Bank Specifies the bank authorized to make the payment to the claiming bank. CITIGB2LXXX
57A Account With Bank Identifies the bank with which the account to be credited is maintained. DEUTDEFFXXX
72 Sender to Receiver Information Provides free-format instructions or special notes related to reimbursement. « Reimbursement under LC No. 2025NNRV12345 »

These fields collectively form the core of the MT740 message, providing all the data necessary to execute and audit the reimbursement authorization.

III. Optional Fields and Supplementary Data

In addition to the mandatory fields, certain optional fields may be included to clarify transaction details or comply with bilateral agreements between banks:

Field Tag Field Name Usage Example
21 Documentary Credit Number Links the reimbursement authorization to a specific LC reference.
50 Applicant Information Specifies the buyer/importer initiating the LC.
59 Beneficiary Information Identifies the final recipient of the payment.
77A Narrative Allows for explanatory remarks, regulatory notes, or compliance details.

These supplementary elements enhance transparency, particularly in multi-bank transactions or complex LC structures.

IV. Logical Sequence of the MT740 Message

A well-structured MT740 follows a precise logical flow that mirrors the reimbursement process.

Typical Sequence:

  1. Identification: Fields 20, 21, 25

  2. Authorization Details: Fields 32B, 40F, 52A, 53A

  3. Account Information: Field 57A

  4. Instructions and Notes: Field 72 and optional 77A

This sequential flow enables all parties — issuing, reimbursing, and claiming banks — to interpret and process the message without ambiguity or delay.

V. Importance of Field Accuracy

Each field in the MT740 must be precisely formatted and cross-referenced with the Letter of Credit (MT700) to ensure payment consistency.
Even minor discrepancies can lead to message rejections or delayed reimbursement.

Common Errors to Avoid:

  • Misstated transaction reference number (Field 20)

  • Inconsistent amount or currency (Field 32B)

  • Incorrect SWIFT BICs for the reimbursing or beneficiary bank

  • Missing or ambiguous Field 72 instructions

Banks typically employ SWIFT validation systems and automated compliance tools to prevent such errors and ensure message integrity.

VI. Integration with Related SWIFT Messages

The MT740 does not function in isolation — it is part of a broader LC settlement ecosystem.

Linked Message Types:

Message Type Purpose
MT700 LC Issuance – Establishes credit terms and conditions.
MT742 Claim for Reimbursement – Used by the claiming bank to request payment.
MT747 Amendment to a Reimbursement Authorization – Used to modify an existing MT740.
MT900 / MT910 Debit / Credit Confirmation – Confirms settlement between banks.

Understanding this interrelationship helps trade professionals map out the entire documentary credit flow with precision.

VII. Compliance and Audit Requirements

All MT740 messages must conform to:

  • SWIFT FIN standards and formatting rules

  • ICC UCP 600 or equivalent governing rules

  • AML / KYC regulations

  • Local central bank reporting requirements

Additionally, financial institutions maintain audit trails of all MT740 transmissions for regulatory and internal control purposes.

VIII. Example of a Standard MT740 Message

 
{1:F01NNRVTRPCAXXX0000000000}{2:I740CITIGB2LXXXXN}{4: :20:2025NNRV12345 :25:456789/NNRVTRADE :32B:USD123500,00 :40F:UCP LATEST :52A:NNRVTRPCAXXX :53A:CITIGB2LXXX :57A:DEUTDEFFXXX :72:/ACC/REIMBURSEMENT UNDER LC NO. 2025NNRV12345 -}

This example demonstrates a complete, compliant MT740 message ready for SWIFT transmission between banks.

IX. Strategic Importance of Structured Messaging

A correctly formatted MT740 ensures:

  • Seamless payment execution

  • Reduced operational risk

  • Improved interbank transparency

  • Compliance with international standards

For financial institutions, the reliability of MT740 communication directly influences client confidence, liquidity management, and reputation in trade finance.

Conclusion

The MT740 message structure serves as the foundation of secure LC reimbursement operations.
By maintaining precision in field entry, adherence to SWIFT rules, and alignment with governing frameworks like UCP 600, banks can ensure efficient, compliant, and error-free trade settlements.

The meticulous design of MT740 enables global trade flows to operate smoothly, reinforcing trust and stability across the international banking system.

FAQ — Key Fields and Structure of MT740

Q1 — What is the purpose of Field 20 in MT740?
It identifies the transaction through a unique sender’s reference number, ensuring traceability.

Q2 — Which field specifies the authorized reimbursement amount?
Field 32B, which states the currency and total value authorized for payment.

Q3 — What information does Field 52A contain?
The issuing bank’s SWIFT BIC, confirming the source of the reimbursement authorization.

Q4 — What happens if a field is incorrectly formatted?
SWIFT may reject or delay the message, leading to settlement inefficiencies or disputes.

Q5 — Is Field 72 mandatory?
While technically optional, it is highly recommended to provide specific reimbursement instructions for clarity.

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