SWIFT MT101 Usage to pay from a subsidiary account

The MT101 is a payment initiation message that can be used for many purposes and in various ways. An overview of how corporations use it was provided in the introductory article of this series. We saw in the previous article the meaning of using the field 50a in the MT101 sequence B. In the following, we will see how parent companies use the MT101 SWIFT Message to pay from their subsidiaries accounts. This is a feature that is very useful for multi-subsidiary corporations.

The example we consider here is illustrated with the following picture.

MT101 SWIFT Message Usage to pay from subsidiary account
MT101 SWIFT Message Usage to pay from subsidiary account

The parent company is Compagnie de Saint Gobain located in France. Saint Gobain France received an invoice for goods or services provided by a company located in Australia that we call Beneficiary Company. Saint Gobain France wants to pay the invoice from the account of its subsidairy, Saint-Gobain Abrasives, which operates in Australia. There can be many reasons for that. The parent company may not have a bank account in Australia or simply it may decide to use the subsidiary account to optimize liquidity usage.

The table below contains the fields that are transported in the MT101 SWIFT Message. As usual, we have added a column (comments) to provide further explanation and ease the understanding for you.

WP Data Tables

Read this page on the SWIFT formatting rules and Character sets of MT Messages to get additional information and understand what 16x, 5n, 34x and the format of the field options mean.

Narratives and notes on this MT101 SWIFT Message

As usual, there is more in this message than meets the eye. The following narrative and notes allow to get a deeper understanding of the message content.

Narrative and note 1 (Main purpose of this MT101 SWIFT Message)

The Sender (SGOBFRPP), Saint Gobain wants to pay an invoice to a company in Australia from its subsidiary’s account in that country. SGOBFRPP instructs the Receiver (BNPAFRPP), to forward the payment to the Bank that will execute the instruction. This is generally done with a SWIFT MT101 containing multiple sequence B transactions details. We consider a MT101 with one sequence B occurrence to make things simple.

Narrative and note 2 (BNPAFRPP, forwarding bank in this MT101 SWIFT Message)

The Receiver (BNPAFRPP) of this message does not hold the account to be debited for the payment. Therefore it plays the role of a forwarding bank. It forwards the MT101 SWIFT Message to National Australia Bank, the debtor bank that holds the ordering customer account and can execute the instruction.

The debtor bank executes the payment and sends a SWIFT MT103 or a local clearing system message to the beneficiary bank.

Narrative and note 3 (Field 50L in this MT101 SWIFT Message)

The field 50L is crucial in this message. It is the field where the instructing party information is provided. The instructing party, SGOBFRPP, can do this only if it has an authorization from its subsidiary to make payments from its account. That means the debtor bank knows the parent company and has a formal approval from its customer, the subsidiary.

In some countries, the parent company must own at least 50% of the subsidiary company. Otherwise it is not considered as a subsidiary and therefore cannot pay from the subsidiary’s account. In other countries, paying from a subsidiary’s account is not allowed even if the parent company owns more than 50% of the subsidiary.

Narrative and note 4 (BSB codes in this MT101 SWIFT Message)

The field 52A specifies the national clearing code (called Bank State Branch code in Australia) and the BIC of the bank holding the Ordering Customer account. The BSB code unambiguously identifies the branch which is supposed to receive the instruction. However, note that the forwarding bank uses to BIC code to route the MT101 to National Australia Bank, the debtor bank, over the SWIFT network.

Certain Australian Banks request senders to provide the BSB codes in the format AU123456, so preceded by the country code.

The BSB code is also indicated in the field 57A.

Narrative and note 5 (Field 57A in this MT101 SWIFT Message)

The field 57A specifies the Bank that the beneficiary has an account with. If the beneficiary account was held by National Australia Bank, the field 57A would not be needed. Since it is different, it must be provided.

Narrative and note 6 (Remittance Information in this MT101 SWIFT Message)

Saint Gobain, the parent company, is the one who received the invoice. So the receiver may not know the subsidiary at all. And note also that the subsidiary may have a name that is completely different from the one of the parent company. For these reasons, the name of the parent company must appear in the remittance information (Field 70). The beneficiary can then easily make the link between the payment and its customer, the parent company.

This ends our analysis of this MT101 SWIFT Message. It is always fascinating how many things we can say about one message. But the SWIFT MT101 has not revealed all its secrets yet. In the next article, we will see how a parent company can use the MT101 to pay from own account on behalf of its subsidiaries.


  1. zHello Jean,
    Could you please tell why Saint Gobain doesnt sent MT101 directly to National Bank since it has subsi account with National australian bank, Why should it route via BNP Paribas when it has direct relationship


    • Hi Srini,

      Saint Gobain can prepare and send one single MT101 to BNP and BNP will take care of forwarding the MT101 to all the other banks.
      It makes things easy for Saint Gobain. Otherwise, it must prepare N MT101 files and send to each party.
      The SWIFT Standards allow to do that and large corporates do appreciate the service.
      I hope it clarifies.

      BR, Jean Paul

  2. Thanks Jean, it helps.
    So Saint Gobain prefer to use BNP for all its MT101 communications (Though its not mandatory to do so ), Also I guess there will be some small charges from BNP to forward the MT101?


  3. For Electronic Payments for both domestic and foreign vendors, is it possible to support country specific characters as of part of an MT 101 (say for example, Japanese characters or Thai characters)

  4. Dear Jean,

    How about subsidiary using parents BIC and sends MT101 to the debtor bank to use own account to further make the payment ?

    Is this case 50L or 50H is referring to subsidiary or only 50H is viable since ordering and instructing both is pertaining to subsidiary in this case however the sender is parent BIC.

    Please enlighten on this piece.

    • Hi,

      In this case, an authorization is required for the subsidiary to make payments from the parent account. The Instructing Party (50L) is the subsidiary and the ordering customer is the parent company (50H).
      The subsidiary sends the MT101 to his own bank which forwards it to the bank of the Parent company. The field 50H identifies the account owner whose account is to be debited. The subsidiary does not own the account. It is using the parent account to pay.

      Best regards,


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