About Rejects & Returns
Rejects occur prior to inter-bank settlement (e.g. the Creditor & Debtor Banks). Such payments are diverted and not executed.
When could this occur?
- For technical reasons identified by the Creditor, Debtor or CSM with regards to invalid file formats, bank info (BIC/IBAN, etc)
- Debtor Bank is unable to execute the collection due to regulation (reasons set out in Article 78 of Payment Services Directive)
- Debtor Bank is unable to execute the collection due to non-compliance (reasons in section 4.2 of the SDD Core Rulebook (e.g. similar to Bacs Direct Directs in the UK – in that the bank account could be closed or the account does not accept direct debits).
- Debtor has made a Refusal Request directly to their Debtor Bank. The bank in turn generate a ‘Rejection’ of the collection being refused
The latest date for a settlement of a Return is five Inter-Bank Business Days* after the settlement Date of the collection.
*Interbank Bank Business Days (IBBD)
IBBD can differ to Business Banking Days. With IBBD being when the banks are typically open for bank to bank business. To do this effectively across the European Union requires the use of TARGET2. TARGET2 is an interbank payment system for the real-time processing of cross-border transfers throughout the European Union. Its owned by the Eurosystem and runs to its own calendar, that has been caclculated long into the future in an effort to avoid operational disruption.