GLOBAL PAYMENTS KNOWLEDGEISO 20022 / SWIFT / SEPA / MT / MX
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Japan Zengin System

A domestic yen credit transfer from one customer to another, netted by the Zengin Center and settled net across the banks' accounts at the Bank of Japan.

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Contributor Shubham Mathure

STEP 1 / 6MESSAGE

Riya instructs the transfer

Riya (payer) → Bank Alfa (sending bank)

Riya asks Bank Alfa to pay Arjun by a domestic credit transfer. The instruction is a request to move money; on its own it carries no funds.

Step 1 of 6: Riya instructs the transfer

  1. 01Message
    Riya instructs the transferRiya (payer) → Bank Alfa (sending bank)
  2. 02Posting
    Bank Alfa debits Riya's accountBank Alfa (sending bank)
  3. 03Message
    Bank Alfa sends the transfer through the Zengin SystemBank Alfa (sending bank) → Zengin System (Zengin-Net)
  4. 04Posting
    Nordbank makes the funds available to ArjunNordbank (receiving bank)
  5. 05Clearing obligation
    The Zengin Center calculates each bank's net positionZengin System (Zengin-Net)
  6. 06Settlement
    Net positions settle across accounts at the Bank of JapanBank Alfa (sending bank) → Nordbank (receiving bank)
MESSAGECLEARING OBLIGATIONSETTLEMENTPOSTING
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  1. 01Message
    Riya instructs the transferRiya (payer) → Bank Alfa (sending bank)

    Riya asks Bank Alfa to pay Arjun by a domestic credit transfer. The instruction is a request to move money; on its own it carries no funds.

  2. 02Posting
    Bank Alfa debits Riya's accountBank Alfa (sending bank)

    Once Bank Alfa accepts the instruction it books the debit. Riya's money has left her account, but no money has yet moved between the banks.

    • DR Riya's current account at Bank Alfa — JPY 50,000
  3. 03Message
    Bank Alfa sends the transfer through the Zengin SystemBank Alfa (sending bank) → Zengin System (Zengin-Net)

    Bank Alfa submits the transfer to the Zengin System, the interbank clearing network run by Zengin-Net, which routes the details on to the receiving bank.

  4. 04Posting
    Nordbank makes the funds available to ArjunNordbank (receiving bank)

    Having received the routed transfer, Nordbank credits Arjun so he can use the money, trusting that the interbank leg will settle later that day.

    • CR Arjun's current account at Nordbank — JPY 50,000
  5. 05Clearing obligation
    The Zengin Center calculates each bank's net positionZengin System (Zengin-Net)

    The Zengin Center adds up all the day's transfers and works out one net amount each participant owes or is owed — these are obligations, not yet money.

    Netting produces who-owes-whom. The banks do not have their money yet — that only happens at settlement across their Bank of Japan accounts.

  6. 06Settlement
    Net positions settle across accounts at the Bank of JapanBank Alfa (sending bank) → Nordbank (receiving bank)

    The net positions settle across the banks' current accounts at the Bank of Japan, which finalizes settlement. Only now has money moved between Bank Alfa and Nordbank.

    This retail transfer is well under JPY 100 million, so it settles on a deferred net basis. A transfer of JPY 100 million or more would instead settle one-by-one in real time (RTGS) in BOJ-NET.

    • DR Bank Alfa current account at the Bank of Japan — JPY 50,000
    • CR Nordbank current account at the Bank of Japan — JPY 50,000

What this simplifies: One Zengin clearing cycle and a single net settlement at the Bank of Japan; real processing nets many payments across the day and diverts payments of JPY 100 million or more to real-time settlement in BOJ-NET.

LEARN THE CONCEPTS BEHIND THIS FLOW

Sources for this flow2
  1. Official requirement

    Zengin System ↗ — Japanese Banks Payment Clearing Network (Zengin-Net)

    Describes the Zengin System, Japans interbank clearing system for domestic retail credit transfers (launched 1973), operated by the Japanese Banks Payment Clearing Network (Zengin-Net): payments below JPY 100 million settle on a deferred net settlement basis across accounts at the Bank of Japan, while payments of JPY 100 million or more settle RTGS in BOJ-NET (since the Next-Generation RTGS project of November 2011). · Checked 2026-07-14

    Zengin clears retail credit transfers and nets positions settled at the Bank of Japan; large-value items are diverted to RTGS in BOJ-NET.

  2. Simplified educational illustration

    Payments Signal editorial teaching models — Payments Signal

    This site's own simplified teaching models. · Checked 2026-07-12

    What this simplifies: One clearing cycle and a single net settlement; multiple daily cycles, batching, and indirect participation are omitted.

    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.