1: Introduction

Recent years have seen considerable growth in cross-border and overseas banking activities. On the one hand, banks are increasingly seeking to ascertain subsidiaries, or atleast offices, in countries apart from their own. On the opposite hand, the commercial activities of banks, specifically funds transfers, have expanded tremendously. This growth has occurred in terms of both the quantity of individual payments and also the total amounts "moved" from one entity to a different entity. The United Nations Commission on International Trade Law (UNICITRAL) was formed in 1966 by the United Nation's General Assembly.However, the Model law on International Credit Transfer was adopted by the United Nations Commission on International Trade Law (UNICITRAL) in 1992. The Model law was made as a response to a major change in the means by which funds were being transferred internationally. The change mainly involved two elements, that is, the switch from paper based payment orders (through the collection of cheques and other similar instruments) to more use of payment orders sent through electronic means and the switch from generalized use of debit transfers to generalized use of credit transfers.The Model law is the most useful document of modern times as it offers opportunity to unify the law of credit transfers by adopting a text that is drafted in order to meet the needs of modern funds transfer techniques. The 1992 document principally revolves around the rules governing the credit transfer done internationally and all the payment undertakings by the banks and insurance companies to back up the obligations of their customers arising under cross-border transactions. The underlying purpose of these instruments is solely to improve payment systems and thereby facilitate trade between two or more states.{1}

2:What do you mean by credit transfer?

A credit transfer is a payment transaction by which a payment services provider transfers funds to a payee's account against a payer's order, and the payer and the payee can be the same person.A standing order is a payment service by which a payment service provider, on the basis of a contract on the standing order with its payment services user, periodically on a certain or determinable day transfers a certain or determinable amount from the payment account of its payment services user to credit the payment account of the payee (e.g. payment of the annuity or instalment of a loan, etc.). The contract on the standing order can be separately entered into or as a provision of another contract.{2}

3: What is the difference between a credit transfer and debit transfer ?

The biggest difference between a direct credit transfer and a direct debit transfer is that the former is initiated by the account holder and the latter is initiated by the recipient. Additionally, a direct credit transfer involves a predetermined amount of money being transferred and cannot be changed by the recipient, for example, while a direct debit transfer involves the recipient being authorised to withdraw a predetermined amount of money from the account of the person who initiated the transfer.Both methods of electronic funds transfer have their own benefits and drawbacks, and it is important to understand the differences between them in order to choose the method of direct electronic transfer that is best for your needs.

Importance of Direct Credit Transfers

The importance of direct credit transfers in business payments is monumental, and they have become an essential part of the modern financial system.

Direct credit transfers offer convenience and speed.
With direct credit transfers, payments can be made instantly, and they can be made 24/7, which is particularly useful for urgent payments or payments outside of business hours.

They are secure and reliable.
Direct credit transfers are processed electronically, which means that there is less risk of fruad or error than with traditional payment methods. The electronic nature of the direct credits transfer also means that the payment cannot be lost in transit or stolen.

Greater transparency and visibility.
With traditional payment methods such as cheques, it can be difficult to track payments and keep track of payment histories. Direct credit transfers, on the other hand, are fully traceable and can be easily tracked using online banking or payment tracking tools. This makes it easy to keep track of payments and reconcile accounts, making the payment process more transparent and streamlined.

Reduced costs.
Traditional payment methods can be expensive, particularly for businesses that need to make a large number of payments. Direct credit transfers are often cheaper than other payment methods, and there are often no transaction fees for sending or receiving direct credit payments. This can help to reduce costs for businesses and make payments more affordable for consumers.{3}

4: What is the credit transfer law ,1992?

The Model law is the most useful document of modern times as it offers opportunity to unify the law of credit transfers by adopting a text that is drafted in order to meet the needs of modern funds transfer techniques. The 1992 document principally revolves around the rules governing the credit transfer done internationally and all the payment undertakings by the banks and insurance companies to back up the obligations of their customers arising under cross-border transactions. The underlying purpose of these instruments is solely to improve payment systems and thereby facilitate trade between two or more states.

Prior To The 1992 Documents:

Until the mid-1970s, a person who wished to transfer funds internationally to waive off his/her obligation or to provide funds to someone in the foreign country had limited options. Most of these ways involved paper based transactions like cheques, bills of exchange and other similar instruments. Furthermore, collection of international bank draft was also one of the most used ways to transfer funds overseas. However, it was soon realized that such transmission was time consuming, expensive and slow. Therefore, need for introduction of other methods of payment was felt internationally and as a result appropriate steps were taken.In mid 1970s, introduction of telex transfers and computer-to-computer interbank telecommunication came into picture and it proved to be cost efficient, speedy and more accurate. It overcame all the shortcomings of the earlier used methods. Both of these methods were also preferred because in these methods it is the originator of the fund transfer who initiates the banking procedures by issuing a payment order to its own bank to debit its account and then to credit the account of the beneficiary. Hence, the use of other methods of funds transfer decreased drastically.However, the situation began to change when in 1975 the first international inter-bank computer-to-computer message system came into service. Simultaneously, electronic funds transfer system for businesses and for consumer use started to appear in a number of different countries.Since, the rules to be applied on electronic funds transfer were not uniform everywhere, UNICITRAL started doing efforts in the direction of unification of laws in order to make uniform rules for all the countries to follow since there were a lot of differences in the legal rules governing such international transactions. Hence, it is often said that Model law arose out of the development of electronic credit transfer systems. The Model law is wider is not limited to banks only and hence, is wider n scope. This is so because in many countries non-banks operate a credit transfer services which are directly competitive with the services offered by the banks.{4}

5: Conclusion

International credit transfer programs, also known as credit transfer or credit mobility programs, allow students to transfer academic credits earned at one institution to another institution in a different country. This is often used by students who wish to study abroad for a semester or year, while also maintaining progress towards their degree program at their home institution.In these programs, the courses taken abroad are typically pre-approved by the student's home institution to ensure that they will count towards the student's degree requirements. Upon completion of the courses, the grades and credits earned abroad are then transferred back to the home institution, where they are recorded on the student's transcript.International credit transfer programs can be arranged through various organizations and institutions, including universities, study abroad programs, and government agencies. They provide opportunities for students to gain international experience and broaden their academic and cultural perspectives, while still making progress towards their degree program.