Held in the queue: a CHAPS payment waiting for liquidity
Trigger: Bank Alfa's Bank of England settlement account lacks the liquidity to cover a high-value CHAPS payment when it is checked.
What operations sees first: A submitted CHAPS payment does not settle at once; it sits in the RTGS central queue until the account can cover it.
WHERE IS THE MONEY?
No money moved while queued — Bank Alfa's settlement account was untouched until cover arrived.
DID SETTLEMENT HAPPEN?
Settlement was deferred until liquidity was available, then completed gross and final.
WHO ACTS NEXT?
Bank Alfa (sending bank) Bank Alfa manages intraday liquidity, drawing on the Bank of England's intraday facility so high-value payments do not sit queued late in the day.
PLAY THE EXCEPTION
Trigger: Bank Alfa's RTGS settlement account does not hold GBP 850,000.00 of available liquidity at the moment the payment is checked.
Bank Alfa submits the CHAPS payment
Bank Alfa (sending bank) → CHAPS · pacs.008
Bank Alfa must pay a high-value sterling obligation — the completion monies on a property purchase — to Nordbank, so it sends an interbank payment (a pacs.008) into CHAPS. Since the ISO 20022 migration on 19 June 2023 the message carries richer structured data, including the Purpose Code and Legal Entity Identifier (LEI). Nothing has moved yet — it is an instruction.
Step 1 of 5: Bank Alfa submits the CHAPS payment
- 02ProcessingCHAPS checks Bank Alfa's available liquidityCHAPS → Bank of England (RTGS)
- 04 · EXCEPTION PATHProcessingBank Alfa brings in intraday liquidityBank Alfa (sending bank) → Bank of England (RTGS)
- 05 · EXCEPTION PATHSettlementThe queued payment settlesBank Alfa (sending bank) → Nordbank (receiving bank)
- OUTCOME
- Funds
- No money has moved while the payment sits in the queue — Bank Alfa's account is untouched until cover arrives.
- Settlement
- Settlement is deferred until liquidity is available; the payment settles, with finality, only once the settlement account can cover it.
- Who acts next
- Bank Alfa (sending bank) — Bank Alfa manages its intraday liquidity, drawing on the Bank of England's intraday facility so high-value payments do not sit queued late in the day.
Full step-by-step text (works without JavaScript)
- 02ProcessingCHAPS checks Bank Alfa's available liquidityCHAPS → Bank of England (RTGS)
Before it settles anything, CHAPS checks whether Bank Alfa's settlement account in the Bank of England's RTGS infrastructure holds enough available liquidity to cover the full GBP 850,000.00 amount.
- 04 · EXCEPTION PATHProcessingBank Alfa brings in intraday liquidityBank Alfa (sending bank) → Bank of England (RTGS)
Incoming CHAPS payments arrive, or Bank Alfa draws on the Bank of England's intraday liquidity facility against eligible collateral, so its settlement account can cover the queued payment. This is the day-to-day work of intraday liquidity management.
- 05 · EXCEPTION PATHSettlementThe queued payment settlesBank Alfa (sending bank) → Nordbank (receiving bank)
As soon as liquidity is available, the Bank of England releases the queued payment and settles it across the two settlement accounts in central-bank money, individually and with immediate finality.
- DR Bank Alfa's settlement account at the Bank of England — GBP 850,000.00
- CR Nordbank's settlement account at the Bank of England — GBP 850,000.00
- OUTCOME
- Funds
- No money has moved while the payment sits in the queue — Bank Alfa's account is untouched until cover arrives.
- Settlement
- Settlement is deferred until liquidity is available; the payment settles, with finality, only once the settlement account can cover it.
- Who acts next
- Bank Alfa (sending bank) — Bank Alfa manages its intraday liquidity, drawing on the Bank of England's intraday facility so high-value payments do not sit queued late in the day.
THE TIMELINE
- 01Bank Alfa (sending bank)Submits a GBP 850,000.00 CHAPS payment carrying its Purpose Code and LEI.pacs.008
- 02CHAPS / Bank of England RTGSChecks Bank Alfa's settlement-account liquidity, finds it insufficient, and queues the payment rather than rejecting it.
An RTGS system will not settle money that is not there, but it holds the instruction instead of failing it.
- 03Bank AlfaDraws on the Bank of England's intraday liquidity facility against eligible collateral, or waits for incoming CHAPS receipts.
- 04Bank of England (RTGS)Releases the queued payment and settles it gross in central bank money, with immediate finality.
Resolution: The payment is deferred, not lost. Once the settlement account can cover it, CHAPS settles it with finality. Queuing is intraday liquidity management, not an error.
Sources for this scenario2
- Official requirement
CHAPS ↗ — Bank of England · RTGS queue / intraday liquidity
The Bank of England has operated CHAPS directly since November 2017; participant-facing reference documents are published separately.
- Simplified educational illustration
Payments Signal editorial teaching models — Payments Signal
What this simplifies: Single-cycle teaching model; participant-specific handling and exact cut-offs vary.
Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.