1. The Essence of a KTT Message
A KTT is a secured telex/message instruction that tells the beneficiary bank: “Please debit this account at the correspondent bank and credit the recipient.” The message itself carries no funds—the actual transfer occurs through correspondent/nostro-vostro accounts, RTGS, or other clearing systems.
2. Common Fields in a KTT Message
While each bank may have its own format, these fields are frequently seen and must be carefully verified by intermediaries:
Below are the example of KTT message (for educational purposes, not a real banking format).
3. How the Key Test Works
The Key Test is KTT’s signature security feature. Common approaches include:
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Pre-shared Key (most common):
Banks agree on a fixed phrase or code in advance. The sending bank includes this key in the message; the receiving bank verifies it before proceeding. -
Challenge–Response:
The beneficiary bank sends a random challenge. The sender computes a response (e.g., hashing with a pre-shared key) and returns it. This ensures a higher security verification.
Important: Key Test confirms message authenticity but does not replace KYC checks or confirm fund availability.
4. Standard Verification Sequence After Receiving a KTT
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Record the message reference and archive the telex.
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Validate the Key Test to verify sender identity.
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Check message content for completeness (amount, accounts, charges).
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Verify attached compliance documents (CIS, passport, company registration, black screen, invoices).
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Confirm sufficient balance in the sender’s or correspondent accounts.
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Initiate actual settlement via correspondent banking, RTGS, or internal transfer—funds move to the beneficiary bank’s nostro, then credited to the recipient.
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Send Advice of Credit or confirmation to the sender/customer.
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Perform accounting, reconciliation, and audit logging.
5. Where the Funds Actually Are
Funds move along a path like this:
Customer Account → Issuing Bank / Nostro Account → Correspondent / RTGS Clearing → Beneficiary Bank Nostro → Recipient Account.
The key point: money only truly “moves” when entries are booked in the correspondent or clearing systems, not in the telex itself.
6. Red Flags and Suspicious Signs
Stop and verify immediately if any of the following appear:
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Key Test missing or inconsistent with historical agreements.
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Client cannot provide compliance documents (CIS, black screen, registration, authorization).
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Sender or bank contact cannot be verified, or uses personal email/phone.
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Request to “confirm via telex but without proof of funds” or for intermediaries to advance large sums.
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Unreasonable clauses like “release funds to intermediary before beneficiary.”
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Multiple changes to beneficiary account or requests to use unknown company names.
KTT transfers are sophisticated, requiring precise coordination between banks and strict verification at each step. Understanding the mechanics—from key tests to fund movement—helps intermediaries and clients navigate them safely.
