What does IBPC mean in BANKING

An Inter Bank Participation Certificate (IBPC) is a financial instrument issued by banks to non-banking entities. It acts as an important tool for the capitalmarket and is used primarily to transfer funds between banks.

The IBPC can be issued in two forms, namely non-negotiable and negotiable.

By being issued by one bank and bought by another, the IBPCs act as provisional settlements of payments between them, allowing funds to be transferred without having to wait for checks or other paperwork to clear.

Since much of the transaction with these certificates happens over the phone, there's always a risk that one party may not live up to its end of the bargain or provide false information about their identity. There's also a chance that one party might not honour its obligations under the agreement.

In a typical transaction, there will be an issuer bank, investor bank, purchaser bank and two intermediaries (i.e., brokers). These parties are typically responsible for ensuring that all regulations governing ISBC transactions are followed.