The Low Value Payments Clearing and Settlement System (LVPCSS) – is a clearing system created to maintain small size, reiterating and non-instant payments, where payments are made on a netto basis, resulting from a multilateral clearing process. Payments are handled on a FIFO basis. Pending payment instructions may be recalled by participants and priorities may be changed. In the event of lack of funds pending documents are automatically annulled over a day and participants are informed accordingly. Over a day participants are informed on transactions conducted in their correspondent accounts, pending documents and balances on the basis of their inquiries. Participants may send payment instructions to the system 10 days in advance with the future value date.

Settlements in the LVPCSS are maintained in the national currency (the Azerbaijani manat – AZN) on the basis of payment instructions and direct debits. Participants conduct settlements in the AZIPS within the funds in correspondent accounts on the basis of pre-set liquidity limits. The limit per payment transaction is set AZN 40 thousand. The system receives participants’ payment documents from 9:25 to 16:00. Payment batches received from participants are processed in a three-session format – results of the clearing sessions are sent to participants at 12:00-12:35 on Session 1, 14:30-15:05 Session 2 and 16:00-16:40 Session 3. The operation day is closed from 16:45 to 17:05 and participants receive excerpts on transactions in their sub-correspondent accounts. However, the transaction may be prolonged on the basis of the procedures provided for in the system procedures at the appeal of one or several participants.

Exchange of information in the LVPCSS is maintained over the local Closed Telecommunication Network. Electronic certificates of the CBA’s Bank Certification Services Center are used to secure the exchange of information.

The CBA owned AZIPS and LVPCSS are operated by the Payments Systems and Settlements Department. The systems are managed on the basis of a comprehensive normative legal base that include the Law of the Republic of Azerbaijan on the Central Bank of the Republic of Azerbaijan, the Law of the Republic of Azerbaijan on Banks, the ‘Regulations on organization of settlements in centralized interbank payment systems in the Republic of Azerbaijan’, the ‘Guidelines on cashless settlements and money remittances in the Republic of Azerbaijan’ and other internal regulations.