Letters of Credit User Manual

Letters of Credit User Manual
Letters of Credit
Oracle FLEXCUBE Universal Banking
Release 11.5.0.0.0
[July] [2014]
Letters of Credit
Table of Contents
1.
ABOUT THIS MANUAL................................................................................................................................ 1-1
1.1
1.2
1.3
1.4
1.5
1.6
2.
INTRODUCTION ........................................................................................................................................... 1-1
AUDIENCE .................................................................................................................................................. 1-1
ORGANIZATION .......................................................................................................................................... 1-1
CONVENTIONS USED IN THIS MANUAL ....................................................................................................... 1-2
GLOSSARY OF ICONS .................................................................................................................................. 1-2
RELATED DOCUMENTS ............................................................................................................................... 1-3
LETTERS OF CREDIT - AN OVERVIEW ................................................................................................. 2-1
2.1
INTRODUCTION ........................................................................................................................................... 2-1
2.2
FEATURES................................................................................................................................................... 2-1
2.3
OPERATIONS SUPPORTED ON LC ................................................................................................................ 2-2
2.4
PROCESSING COMMISSIONS AND CHARGES ................................................................................................ 2-3
2.5
VARIATIONS SUPPORTED FOR AN LC.......................................................................................................... 2-3
2.5.1
Red Clause Letter of Credit ............................................................................................................... 2-4
2.5.2
Transferable and Non-transferable LCs ............................................................................................ 2-4
2.5.3
Revolving and Non revolving LCs ..................................................................................................... 2-4
2.5.4
Sight and Usance LC ......................................................................................................................... 2-4
2.5.5
Cash Collateral against an LC .......................................................................................................... 2-4
2.5.6
Availment against an LC.................................................................................................................... 2-4
2.5.7
Reports ............................................................................................................................................... 2-5
3.
MAINTENANCE............................................................................................................................................. 3-1
3.1
INTRODUCTION ........................................................................................................................................... 3-1
3.2
MAINTAINING DOCUMENT DETAILS ........................................................................................................... 3-1
3.2.1
Specifying UDF Values ...................................................................................................................... 3-3
3.2.2
Operations on Document Maintenance Record ................................................................................. 3-4
3.3
MAINTAINING CLAUSE DETAILS ................................................................................................................ 3-4
3.3.1
Specifying UDF Values ...................................................................................................................... 3-6
3.3.2
Operations on a Clause Maintenance Record ................................................................................... 3-6
3.4
MAINTAINING GOODS DETAILS .................................................................................................................. 3-7
3.4.1
Specifying UDF Values ...................................................................................................................... 3-8
3.4.2
Operations on Goods Maintenance Record ....................................................................................... 3-9
3.5
MAINTAINING FREE FORMAT TEXT CODES .............................................................................................. 3-10
3.5.1
Specifying UDF Values .................................................................................................................... 3-11
3.5.2
Operations on FFT Maintenance Record ........................................................................................ 3-11
3.6
MAINTAINING CUSTOMER/ADVICE FREE FORMAT TEXT.......................................................................... 3-12
3.7
MAINTAINING INSURANCE COMPANY DETAILS ........................................................................................ 3-13
3.7.1
Specifying UDF Values .................................................................................................................... 3-14
3.7.2
Operations on Company Maintenance Record ................................................................................ 3-15
3.8
MAINTAINING IMPORT LICENSE EXPIRY DATE ......................................................................................... 3-16
3.8.1
Specifying UDF Values .................................................................................................................... 3-16
3.8.2
Operations on Licence Expiry Date Record .................................................................................... 3-17
3.9
MAINTAINING EXCHANGE RATES FOR BILLS ........................................................................................... 3-18
3.9.1
Specifying UDF Values .................................................................................................................... 3-20
3.9.2
Operations on Exchange Rate Type Maintenance Record ............................................................... 3-21
3.10 MAINTAINING INCO TERMS .................................................................................................................... 3-21
3.10.1
Operations on INCO Term Maintenance Record ............................................................................ 3-23
3.11 MAINTAINING OPEN INSURANCE POLICY DETAILS................................................................................... 3-23
3.11.1
Operations on an Open Policy Record ............................................................................................ 3-27
3.12
3.13
4.
BLACKLISTING LCS .................................................................................................................................. 3-28
MAINTAINING BRANCH PARAMETERS FOR LETTER OF CREDIT ................................................................ 3-29
DEFINING PRODUCT ATTRIBUTES ........................................................................................................ 4-1
4.1
INTRODUCTION ........................................................................................................................................... 4-1
4.2
CREATING LC PRODUCT............................................................................................................................. 4-1
4.2.1
Specifying Preferences for a Product ................................................................................................ 4-4
4.2.2
Specifying Accounting Roles ............................................................................................................ 4-18
4.2.3
Specifying Events ............................................................................................................................. 4-18
4.2.4
Specifying Branch and Currency ..................................................................................................... 4-20
4.2.5
Specifying Customer Details ............................................................................................................ 4-21
4.2.6
Specifying Commission Details........................................................................................................ 4-22
4.2.7
Specifying Commission Schedule Details ........................................................................................ 4-23
4.2.8
Specifying Free Format Text ........................................................................................................... 4-24
4.2.9
Specifying Tracer Details ................................................................................................................ 4-25
4.2.10
Specifying Charge Details ............................................................................................................... 4-25
4.2.11
Specifying Tax Details ..................................................................................................................... 4-26
4.2.12
Specifying MIS Details..................................................................................................................... 4-26
4.2.13
Specifying UDF Details ................................................................................................................... 4-27
5.
PROCESSING LC CONTRACT ................................................................................................................... 5-1
5.1
INTRODUCTION ........................................................................................................................................... 5-1
5.2
CAPTURING LC CONTRACT DETAILS.......................................................................................................... 5-2
5.2.1
Creating Contract .............................................................................................................................. 5-5
5.2.2
Uploading LCs ................................................................................................................................... 5-6
5.3
SPECIFYING CONTRACT DETAILS ............................................................................................................... 5-6
5.3.1
Main Tab............................................................................................................................................ 5-8
5.3.2
Parties Tab....................................................................................................................................... 5-22
5.3.3
Advices Tab ...................................................................................................................................... 5-27
5.3.4
Viewing Different Versions of a Contract ........................................................................................ 5-30
5.4
AUTHORIZING AN LC CONTRACT ............................................................................................................. 5-30
5.5
CANCELING AN LC ................................................................................................................................... 5-32
5.5.1
Procedure for Canceling an LC ....................................................................................................... 5-32
5.6
CLOSING AN LC........................................................................................................................................ 5-33
5.6.1
Procedure for Closing an LC ........................................................................................................... 5-33
5.7
REOPENING AN LC ................................................................................................................................... 5-34
5.7.1
Procedure for Reopening an LC ...................................................................................................... 5-34
5.8
VIEWING LETTERS OF CREDIT CONTRACT SUMMARY DETAILS ............................................................... 5-34
5.8.1
Letter of Credit Contract Information Report .................................................................................. 5-36
5.8.2
Documents Tab ............................................................................................................................... 5-37
5.8.3
Shipment Tab ................................................................................................................................... 5-39
5.8.4
Documents Tab ................................................................................................................................ 5-43
5.8.5
Tracers Tab ...................................................................................................................................... 5-45
5.8.6
Preferences Tab ............................................................................................................................... 5-47
5.8.7
Viewing Different Versions of Contract ........................................................................................... 5-54
5.9
CANCELING LC ........................................................................................................................................ 5-55
5.9.1
Procedure for Canceling LC ............................................................................................................ 5-55
5.10 CLOSING LC ............................................................................................................................................. 5-55
5.10.1
Procedure for Closing LC ................................................................................................................ 5-55
5.11 REOPENING LC ......................................................................................................................................... 5-56
5.11.1
Procedure for Reopening LC ........................................................................................................... 5-56
6.
CAPTURING ADDITIONAL DETAILS ...................................................................................................... 6-1
6.1
6.2
6.3
INTRODUCTION ........................................................................................................................................... 6-1
CAPTURING DRAFT DETAILS ...................................................................................................................... 6-3
SPECIFYING SETTLEMENT INSTRUCTIONS ................................................................................................... 6-5
6.4
VIEWING EVENT DETAILS .......................................................................................................................... 6-6
6.4.1
Viewing the Accounting Entries Passed for the LC ........................................................................... 6-7
6.4.2
Viewing Advices Applicable to Contract ........................................................................................... 6-8
6.5
CAPTURING MIS DETAILS .......................................................................................................................... 6-9
6.6
DEFINING COMMISSION DETAILS ............................................................................................................... 6-9
6.6.1
Specifying Details for Commission Schedules ................................................................................. 6-11
6.7
DEFINING CHARGE DETAILS..................................................................................................................... 6-12
6.8
SPECIFYING TAX DETAILS ........................................................................................................................ 6-13
6.9
MAINTAINING COLLATERAL DETAILS ...................................................................................................... 6-13
6.10 LINKING CONTRACTS TO DEPOSITS AND ACCOUNTS ................................................................................ 6-15
6.11 VIEWING AMENDED DETAILS OF CONTRACT ........................................................................................... 6-17
6.12 SPECIFYING TRANSFER DETAILS .............................................................................................................. 6-18
6.13 CAPTURING UDF VALUES ........................................................................................................................ 6-19
6.14 LINKING CONTRACT TO FX TRANSACTIONS ............................................................................................. 6-19
6.15 SPECIFYING LICENSE DETAILS .................................................................................................................. 6-22
7.
MAKING AVAILMENT ................................................................................................................................ 7-1
7.1
INTRODUCTION ........................................................................................................................................... 7-1
7.2
CAPTURING AVAILMENT DETAILS.............................................................................................................. 7-1
7.2.2
Specifying Collateral Details ............................................................................................................. 7-6
7.2.3
Maintaining Settlement Instructions .................................................................................................. 7-8
7.2.4
Viewing Advice Details .................................................................................................................... 7-22
7.2.5
Specifying Charge Details ............................................................................................................... 7-23
7.2.6
Specifying Commission Details........................................................................................................ 7-23
7.2.7
Specifying Tax Details ..................................................................................................................... 7-24
7.2.8
Viewing Event Details ...................................................................................................................... 7-24
7.3
VIEWING LC AVAILMENT SUMMARY DETAILS ........................................................................................ 7-26
8.
AMENDING DETAILS OF LC ..................................................................................................................... 8-1
8.1
INTRODUCTION ........................................................................................................................................... 8-1
8.2
PROCEDURE FOR AMENDING LC ................................................................................................................ 8-1
8.2.1
Indicating Change of Value for a Field ............................................................................................. 8-2
8.2.2
Commission and Charges for Amendment ......................................................................................... 8-2
8.2.3
Amendment of an Unauthorised LC ................................................................................................... 8-3
8.3
CONFIRMING LC AMENDMENT................................................................................................................... 8-3
8.3.1
Details Tab......................................................................................................................................... 8-4
8.3.2
Parties Tab......................................................................................................................................... 8-6
8.3.3
FFT Tab ............................................................................................................................................. 8-7
8.3.4
Advices Tab ........................................................................................................................................ 8-8
8.3.5
Authorizing Amendment Details ...................................................................................................... 8-11
8.3.6
Confirming Amended Details ........................................................................................................... 8-11
8.3.7
Amending details using the Contract screen .................................................................................... 8-12
8.3.8
Rejecting Amended Details .............................................................................................................. 8-14
8.4
OPERATIONS ON CONFIRMATION RECORD ............................................................................................... 8-15
8.5
RE-CALCULATING COMMISSION DURING AMENDMENT ............................................................................ 8-16
8.6
UPLOADING LC AMENDMENT .................................................................................................................. 8-16
8.7
VIEWING LC AMENDMENT CONFIRMATION SUMMARY DETAILS ............................................................. 8-17
9.
TRANSFERRING LC ..................................................................................................................................... 9-1
9.1
SPECIFYING LC TRANSFER DETAILS .......................................................................................................... 9-1
9.1.1
Parties Tab......................................................................................................................................... 9-3
9.1.2
Documents Tab .................................................................................................................................. 9-4
9.1.3
Note on Transfers made from Import and Export LCs ...................................................................... 9-6
9.1.4
Viewing Details of Transfers made to the LC .................................................................................... 9-6
10.
LIQUIDATION OF RECEIVABLE COMPONENTS OF LC ............................................................. 10-1
10.1 INTRODUCTION ......................................................................................................................................... 10-1
10.1.1
Invoking Receivable Liquidation Screen.......................................................................................... 10-1
10.1.2
Liquidating Receivable Components of LC ..................................................................................... 10-2
10.1.3
Specifying Details of Advices for Liquidation.................................................................................. 10-2
10.1.4
Reversing Liquidation Entries ......................................................................................................... 10-4
10.1.5
End of Day Processing for Receivable Components........................................................................ 10-4
10.1.6
LQ EOTI Function ........................................................................................................................... 10-4
10.1.7
LQ EOD Function............................................................................................................................ 10-5
10.1.8
Report on Outstanding Items ........................................................................................................... 10-5
10.1.9
Invoking this Report ......................................................................................................................... 10-5
10.1.10
Contents of Report ....................................................................................................................... 10-5
11.
CREDIT LIMIT TRACKING FOR LC .................................................................................................. 11-1
11.1 INTRODUCTION ......................................................................................................................................... 11-1
11.1.1
Specifying Whether Limit Tracking is Required .............................................................................. 11-1
12.
AUTOMATIC PROCESSES .................................................................................................................... 12-1
12.1 INTRODUCTION ......................................................................................................................................... 12-1
12.2 MAINTAINING BRANCH PARAMETERS ...................................................................................................... 12-1
12.2.1
Invoking LC Batch Process.............................................................................................................. 12-4
12.2.2
Automatic Events Executed During Beginning of Day (BOD) ........................................................ 12-6
12.2.3
Automatic Liquidation of Periodic Commission .............................................................................. 12-6
12.2.4
Automatic Reinstatement of LC ....................................................................................................... 12-7
12.2.5
Processes Run during End of Day (EOD) ....................................................................................... 12-8
12.2.6
Automatic Closure of LC ................................................................................................................. 12-8
12.2.7
Automatic Accrual of Commission ................................................................................................... 12-8
12.2.8
Memo Accrual of Commission ......................................................................................................... 12-9
12.2.9
Accrual Control Report ................................................................................................................... 12-9
12.2.10
Selection Options ......................................................................................................................... 12-9
12.2.11
Contents of Report ....................................................................................................................... 12-9
12.2.12
Generating Tracers .................................................................................................................... 12-10
12.2.13
Executing Tracer Generation Function ..................................................................................... 12-10
12.2.14
Straight Through Processing of SWIFT Messages .................................................................... 12-10
12.2.15
STP of MT710 - Advise of Third Bank’s Documentary Credit................................................... 12-11
12.2.16
STP of MT707 – Amendment to Documentary Credit................................................................ 12-15
12.2.17
STP of MT730 – Acknowledgement ........................................................................................... 12-17
12.2.18
STP of MT740 - Authorization to Reimburse ............................................................................. 12-19
12.2.19
STP of MT747 – Amendment to an Authorization to Reimburse ............................................... 12-22
12.2.20
STP of MT768 - Acknowledgement of a Guarantee Message .................................................... 12-24
13.
REPORTS .................................................................................................................................................. 13-1
13.1 INTRODUCTION ......................................................................................................................................... 13-1
13.2 EXPIRED LCS WITH OUTSTANDING ITEMS REPORT .................................................................................. 13-1
13.2.1
Selection Options ............................................................................................................................. 13-2
13.2.2
Contents of Report ........................................................................................................................... 13-2
13.3 CLOSED LCS WITH OUTSTANDING ITEMS REPORT ................................................................................... 13-3
13.3.1
Contents of Report ........................................................................................................................... 13-4
13.4 LCS DUE TO EXPIRE REPORT ................................................................................................................... 13-5
13.4.1
Selection Options ............................................................................................................................. 13-6
13.4.2
Contents of Report ........................................................................................................................... 13-6
13.5 LCS DUE TO BE CLOSED REPORT ............................................................................................................. 13-7
13.5.1
Selection Options ............................................................................................................................. 13-8
13.5.2
Contents of the Report ..................................................................................................................... 13-8
13.6 COMMISSION DUE REPORT ....................................................................................................................... 13-9
13.6.1
Selection Options ............................................................................................................................. 13-9
13.6.2
Contents of Report ......................................................................................................................... 13-10
13.7 PERIODIC COMMISSION ACTIVITY REPORT............................................................................................. 13-10
13.7.1
Selection Options ........................................................................................................................... 13-11
13.7.2
Contents of Report ......................................................................................................................... 13-11
13.8 REPORT ON OPEN ENDED LCS ................................................................................................................ 13-12
13.8.1
Contents of the Report ................................................................................................................... 13-13
13.9 UNREPLIED TRACERS REPORT ................................................................................................................ 13-14
13.9.1
Contents of Report ......................................................................................................................... 13-15
13.10
CONFIRMED LC REPORT..................................................................................................................... 13-16
13.10.1
Selection Options ....................................................................................................................... 13-16
13.10.2
Contents of Report ..................................................................................................................... 13-16
13.11
OVERRIDES REPORT ........................................................................................................................... 13-17
13.11.1
Selection Options ....................................................................................................................... 13-18
13.11.2
Contents of Report ..................................................................................................................... 13-18
13.12
OUTSTANDING LC CUSTOMERWISE REPORT ...................................................................................... 13-19
13.13
LC DAILY ACTIVITY JOURNAL REPORT ............................................................................................. 13-20
13.13.1
Selection Options ....................................................................................................................... 13-21
13.13.2
Contents of the Report ............................................................................................................... 13-21
13.14
ACCRUALS CONTROL REPORT ............................................................................................................ 13-22
13.14.1
Selection Options ....................................................................................................................... 13-22
13.14.2
Contents of Report ..................................................................................................................... 13-23
13.15
COMMISSION ACTIVITY 3 REPORT...................................................................................................... 13-23
13.15.1
Selection Options ....................................................................................................................... 13-24
13.15.2
Contents of Report ..................................................................................................................... 13-24
13.16
PERIODIC COMMISSION ACTIVITY REPORT......................................................................................... 13-25
13.16.1
Contents of Report ..................................................................................................................... 13-25
13.17
PROCESS EXCEPTION REPORT ............................................................................................................ 13-26
13.17.1
Contents of Report ..................................................................................................................... 13-26
13.18
LIQUIDATION DAILY ACTIVITY REPORT ............................................................................................. 13-27
13.18.1
Report Options ........................................................................................................................... 13-28
13.18.2
Contents of Report ..................................................................................................................... 13-28
13.19
OUTSTANDING ITEMS REPORT ............................................................................................................ 13-29
13.19.1
Report Options ........................................................................................................................... 13-30
13.19.2
Contents of Report ..................................................................................................................... 13-30
14.
ANNEXURE A - ACCOUNTING ENTRIES FOR LCS ....................................................................... 14-1
14.1 ACCOUNTING ENTRIES FOR LCS............................................................................................................... 14-1
14.1.1
LC Events ......................................................................................................................................... 14-1
14.1.2
Amount Tags .................................................................................................................................... 14-2
14.1.3
Accounting Roles ............................................................................................................................. 14-4
14.2 EVENT-ACCOUNTING ENTRIES ................................................................................................................. 14-5
14.2.1
BISS: Booking of an import LC ....................................................................................................... 14-5
14.2.2
AVAL: Availment Under LC ............................................................................................................ 14-7
14.2.3
AVAM: Availment through Amendment of a Bill ............................................................................. 14-8
14.2.4
CLOS: Closure of an LC / Guarantee .............................................................................................. 14-9
14.2.5
REIN: Reinstatement of an LC / Guarantee..................................................................................... 14-9
14.2.6
BADV: Advising an LC .................................................................................................................. 14-10
14.2.7
BCFM: Confirming an LC ............................................................................................................. 14-10
14.2.8
BPRE: Pre-advising an LC ............................................................................................................ 14-11
14.2.9
BANC: Advising and Confirming An LC ....................................................................................... 14-11
14.2.10
AMND: Amendment ................................................................................................................... 14-11
14.2.11
AOCF: Amendment from Open to Open and Confirm ............................................................... 14-12
14.2.12
APAD: Amendment from Pre-advice to Advice ......................................................................... 14-12
14.2.13
APAC: Amendment from Pre-advice to Advice and Confirm .................................................... 14-12
14.2.14
REVR: Reversal ......................................................................................................................... 14-12
14.2.15
ACCR: Accrual of Commission ................................................................................................. 14-12
14.2.16
CALC: Periodic Commission Calculation Date ........................................................................ 14-12
14.2.17
14.2.18
14.2.19
14.2.20
14.2.21
14.2.22
14.2.23
14.2.24
15.
CLIQ: Liquidation of Commission ............................................................................................. 14-12
ROPN: Reopening of an LC ....................................................................................................... 14-12
CANC: Cancellation of an LC ................................................................................................... 14-13
TRGN: Generation of Tracers ................................................................................................... 14-14
AATC: Amendment from Advice to Confirm .............................................................................. 14-14
RASN: Reassign an LC .............................................................................................................. 14-14
RAVL: Reversal of Availment .................................................................................................... 14-15
MAMD: Margin Amendment ..................................................................................................... 14-15
ANNEXURE B - EVENTS AND ADVICES FOR LC ........................................................................... 15-1
15.1 EVENT - ADVICES FOR LCS ...................................................................................................................... 15-1
15.1.1
LC Events ......................................................................................................................................... 15-1
15.1.2
LC Messages .................................................................................................................................... 15-2
15.1.3
Generating Multiple Copies of LC Instrument ................................................................................ 15-4
15.1.4
Generating Fax 700/707 LC Confirmation Mail Message Copy to Counterparty........................... 15-4
15.1.5
LC event - Messages ........................................................................................................................ 15-6
15.1.6
BISS: Booking of an Import LC ....................................................................................................... 15-6
15.1.7
AVAL: Availment under LC ............................................................................................................. 15-6
15.1.8
CLOS: Closure of an LC / Guarantee .............................................................................................. 15-6
15.1.9
REIN: Reinstatement of an LC / Guarantee ..................................................................................... 15-6
15.1.10
BADV: Advising an LC ................................................................................................................ 15-7
15.1.11
BCFM: Confirming an LC ........................................................................................................... 15-7
15.1.12
BPRE: Pre-advising an LC .......................................................................................................... 15-7
15.1.13
BANC: Advising and Confirming an LC ...................................................................................... 15-7
15.1.14
REIS: Reissue of Guarantee......................................................................................................... 15-8
15.1.15
AMND: LC Amendments.............................................................................................................. 15-8
15.1.16
REVR: Reversal ........................................................................................................................... 15-9
15.1.17
ACCR: Accrual of Commission ................................................................................................... 15-9
15.1.18
CALC: Periodic Commission Calculation Date .......................................................................... 15-9
15.1.19
CLIQ: Liquidation of Commission ............................................................................................... 15-9
15.1.20
ROPN: Reopening of an LC ......................................................................................................... 15-9
15.1.21
TRGN: End of Day Check for Tracers ....................................................................................... 15-10
15.1.22
CANC: Cancellation of an LC ................................................................................................... 15-10
15.1.23
APAC: Amendment from Pre-advice to Advice and Confirm .................................................... 15-10
15.1.24
APAD: Amendment from Pre-advice to Advice ......................................................................... 15-10
15.1.25
RASN: Reassign an LC .............................................................................................................. 15-11
15.1.26
RAVL: Reversal of availment ..................................................................................................... 15-11
15.1.27
CALC: Periodic commission calculation ................................................................................... 15-11
15.1.28
Advice Generated for the Insurance Company .......................................................................... 15-11
15.1.29
Advice Generated for Counterparty ........................................................................................... 15-13
16.
16.1
17.
ANNEXURE C - SWIFT CATEGORY 7 MESSAGES ......................................................................... 16-1
LIST OF SWIFT MESSAGES ...................................................................................................................... 16-1
ANNEXURE D – SFMS MESSAGES...................................................................................................... 17-1
17.1 INTRODUCTION ......................................................................................................................................... 17-1
17.2 OUTGOING SFMS MESSAGES ................................................................................................................... 17-1
17.2.1
IFN 700/701 ..................................................................................................................................... 17-2
17.2.2
IFN 710/711 ..................................................................................................................................... 17-6
17.2.3
IFN 707 .......................................................................................................................................... 17-11
17.2.4
IFN 720/721 ................................................................................................................................... 17-13
17.2.5
IFN 730 .......................................................................................................................................... 17-18
17.2.6
IFN 740 .......................................................................................................................................... 17-19
17.2.7
IFN 747 .......................................................................................................................................... 17-20
17.2.8 IFN 760 .......................................................................................................................................... 17-22
17.2.9
IFN 767 .......................................................................................................................................... 17-23
17.2.10
IFN 768 ...................................................................................................................................... 17-24
17.2.11
IFN 799 ...................................................................................................................................... 17-25
17.3 INCOMING SFMS MESSAGES.................................................................................................................. 17-26
17.3.1
Maintenances Required ................................................................................................................. 17-27
17.3.2
STP Field Specifications for Incoming Messages .......................................................................... 17-27
17.3.3
SFMS Header Block Details .......................................................................................................... 17-43
17.
17.1
ANNEXURE D - LETTERS OF CREDIT GLOSSARY ....................................................................... 17-1
LIST OF IMPORTANT TERMS...................................................................................................................... 17-1
1.1
1.
Introduction
About this Manual
This manual is intended as a guide to the Letters of Credit (LC) module, of Oracle FLEXCUBE. It
is designed to help you maintain and process all types of documentary and clean LCs. It also
assists you in handling the necessary activities in the life cycle of an LC once it is booked. This
includes the generation of messages and advices, the updation of account balances and the
collection of various commissions and charges.
1.2
Audience
This manual is intended for the Customer Service Representatives (CSRs) and the staff
responsible for the setting up of new products at your bank.
1.3
Organization
This manual is organized as follows:
Chapter 1
About this Manual gives information on the intended audience. It also lists the
various chapters covered in this User Manual
Chapter 2
Letters of Credit - An Overview gives you an overview of the LC module and
helps familiarize you with its features.
Chapter 3
Maintenance details the basic information to be maintained, before the LC
module becomes fully operational.
Chapter 4
Defining Product Attributes describes the procedure to define LC products for
specific services that you offer your customers.
Chapter 5
Processing an LC Contract described in this chapter is the procedure to process
all types of LCs (import, export, invoice, clean, guarantees, shipping
guarantees).
Chapter 6
Capturing Additional Details explains how you can capture additional information
for an LC contract.
Chapter 7
Making an Availment explains how, upon receipt of bills or on notification from
the negotiating bank, an availment is recorded under an LC.
Chapter 8
Amending Details of an LC discusses the circumstances under which the details
of an LC contract would need to be amended. It also details the procedure for
amending the LC.
Chapter 9
Transferring an LC explains how you can transfer an LC.
Chapter 10
Liquidation of Receivable Components of an LC deals with the liquidation of the
receivable components of an LC.
Chapter 11
Credit Limit Tracking for an LC is the procedure to track the exposure against
the applicant or against the issuing bank. It depends on whether you are issuing
1-1
an import LC/advice or confirming an export LC.
1.4
Chapter 12
Automatic Processes explains the processes that will be carried out
automatically, in the life cycle of an LC.
Chapter 13
Reports gives a list of all reports that can be generated for the LC module.
Chapter 14
Annexure A - Accounting Entries for LCs contains a list of suggested accounting
entries, event-wise.
Chapter 15
Annexure B - Events and Advices for LC gives an exhaustive list of events that
can take place and the messages that can be generated, during the life cycle of
an LC.
Chapter 16
Annexure C - SWIFT Category 7 Messages gives a list of SWIFT messages
supported in the LC module.
Chapter 17
Annexure D – SFMS Messages contains details and formats of incoming and
outgoing messages supported for SFMS and the related straight-through
processing.
Chapter 18
Annexure E - Letters of Credit Glossary lists out important terms used in the LC
User Manual.
Conventions Used in this Manual
Important information is preceded with the
1.5
symbol.
Glossary of Icons
This User Manual may refer to all or some of the following icons:
Icons
Function
New
Copy
Save
Delete
Unlock
Print
Close
Re-open
1-2
Icons
Function
Reverse
Template
Roll-over
Hold
Authorize
Liquidate
Exit
Sign-off
Help
Add
Delete
Refer the Procedures User Manual for further details about the icons.
1.6
Related Documents

Procedures
1-3
2.1
Introduction
2.
Letters of Credit - An Overview
A Letter of Credit is an undertaking by the bank issuing it to pay the beneficiary of the credit
provided stipulated documents are presented and other terms and conditions of the LC are
complied with. It is the preferred mode of settlement between a buyer and a seller under the
following circumstances:

They are not well-known to each other.

They are located in different countries and the seller is not sure of the credit worthiness of
the buyer.
In such cases, the seller would like a bank to provide assurance of payment. As an instrument of
international trade, It is one of the most secure methods for a seller to be paid. Besides credit risk
considerations, LCs is the customary business practice for long distance trade and a particularly
important commission earning service for any bank.
The Letters of Credit (LC) module constitutes a part Oracle FLEXCUBE’s comprehensive trade
financing system. Together with the Bills and Collections module, it automates the entire gamut of
trade financing. While the LC module handles the opening, advising and amending of all types of
LCs, the BC module handles collection of bills which may or may not be presented under LC. The
documents required under an LC are maintained in the BC module. Once an LC is opened, the
documents presented by the beneficiary and LC negotiation are also processed in the BC
module.
The LC module primarily supports the processing of all types of documentary and clean LCs. It
can handle all activities during the lifecycle of an LC. This includes the generation of messages
and advices for all the applicable events, and the update of account balances. The system also
handles the collection of various commissions and charges defined for an LC.
2.2
Features
In an effort to sharpen the competitiveness of your trade-financing department and to empower
your bank to handle a high volume of credit transactions Oracle FLEXCUBE is designed with the
following features:

The Letters of Credit module supports the processing of all types of clean and
documentary LCs. These include:

Import LCs

Export LCs

Guarantees

Shipping Guarantees

Clean LCs

Standby Guarantees
2-1
2.3

The LC module is designed to handle all the events in the life cycle of an LC. The
booking, subsequent amendments and an availment can be processed automatically.
The messages and advices applicable for each event are also automatically generated.
The messages are communicated done through SWIFT, TELEX, mail, or any other
compatible medium.

The product definition function enables you to create products for specific services you
offer. This offers your customer flexibility as well as quick and efficient processing of
contracts.

The product definition covers all the key features of a LC. For example, details of
documents that should accompany it, the free format messages that form part of the
correspondence, the advices to be generated for various events, the accounting entries
to be passed for an event, the commission and tax handling specifications.

The details of documents, free format messages, and commodities are defined only once
and can be retrieved whenever needed. This reduces the effort involved in the capture of
LC details, thus rendering it faster and error free. The flexibility built into the system
ensures that you can modify these details to suit the requirement of each LC.

Oracle FLEXCUBE supports the concept of “specialized services branch” concept. If you
have trade financing expertise at only one branch, say the Head Office (HO) and LCs for
customers of any branch is processed only through the HO, Oracle FLEXCUBE offers
absolute ease of operations. The LC can be processed for a customer of any branch, in
the same way as you would, for a customer of your own branch.

The template and copy features further simplify, the input processing, for contracts.

The Central Liability sub-system automatically controls the booking of an LC against the
credit lines assigned to the customer before the bookings are made.

The module supports automated follow-up for commission and charge payments,
confirmation and acknowledgements.

Graphic User Interface (GUI) facilitates ease of input. Pick-lists have been provided
wherever possible. This makes the module both efficient and easy to use.

The media supported include Mail, Telex and SWIFT.

The National Language Support (NLS) features are available.

LCs is governed by the Uniform Customs and Practice (UCP) which is published by the
International Chambers of Commerce (ICC) Paris, France. You can indicate that the LCs
issued at your bank fall in line with the UCP, which is regarded as a rule book by virtually
all banks in the world.
Operations Supported on LC
The following are the operations supported on an LC:

Open an import LC or guarantee

Open and confirm an import LC

Pre-advice an export LC

Advice an export LC
2-2

Advice and confirm an export LC

Confirm an export LC

Advice a guarantee
Thus, your bank can perform one of the following roles:

The issuing (opening) bank for an import LC or guarantee

The advising bank or for an export LC

The confirming bank for an export LC
In addition to amendment of the terms of an LC such as the expiry date, the amount, the latest
shipment date, etc., you can amend the operation on an LC as follows:

Open to open and confirm of an import LC

Pre-advice to advice of an export LC

Pre-advice to advice and confirm an export LC

Advice to advice and confirm an export LC
Appropriate messages, advices, and covering letters are generated for these operations. These
are listed in an annexure in this manual. The SWIFT messages generated for the different types
of LC are listed in this chapter.
2.4
Processing Commissions and Charges
In the LC module, the method of collecting commissions and levying charges is flexible.
Commissions can be collected for the initiation and amendment events of an LC. The definition of
commission rules facilitate the uniform and efficient application of commission across all LCs
processed under a product.
Commissions can be collected in advance or in arrears, periodically or non-periodically. You can
choose to accrue commissions at a regular frequency (daily, monthly, quarterly, half-yearly or
annually). Similarly, the frequency of liquidation of periodic commission can be varied. In Oracle
FLEXCUBE various charges such as handling charges, SWIFT charges, etc. can be processed.
The commissions and charges can be collected from any party, and if necessary, debited from a
receivable account and liquidated subsequently.
2.5
Variations Supported for an LC
An LC being a very flexible payment mechanism can be made available to the customers of your
bank in a number of popular variations.
2-3
2.5.1 Red Clause Letter of Credit
You can process a Red Clause LC wherein you can provide for anticipatory drawings. In such a
case, the confirming bank or any other bank is authorised to make advance payments to the
beneficiary, before the presentation of the documents.
2.5.2 Transferable and Non-transferable LCs
While capturing the details of an LC, you can indicate whether it is transferable. This information
is part of the instrument generated for an LC.
2.5.3 Revolving and Non revolving LCs
You can open an LC and choose to make it available again in its original amount after the goods
have been shipped, documents presented and credit is settled. Such an LC is a revolving LC.
Under a revolving LC the amount is reinstated or renewed without any specific amendments to
the LC. A revolving LC may be revocable or non-revocable, and can revolve in relation to the
following:

Value

Time
This facility can be utilized when a supplier wishes to make repetitive shipments over a period
such as a year. The LC can have an automatic reinstatement clause, which provides for
continuing the renewal of availability. You also have the option to manually reinstate an LC. The
credit may require approval of the opening party before it becomes available again.
2.5.4 Sight and Usance LC
Oracle FLEXCUBE allows the processing of a sight or usance payment against an LC.

In case of a sight LC, the negotiating bank pays the seller immediately and is later
reimbursed by the issuing bank.

In the case of a usance LC, the drawee bank accepts the obligation to pay the seller at
maturity. An LC with a time draft drawn on the opening party, calling for payment at a
future date is called a time or Usance LC.
2.5.5 Cash Collateral against an LC
An LC can be processed against cash collateral. Oracle FLEXCUBE provides you with the facility
to calculate the cash collateral either as a percentage of the LC amount or as a fixed amount.
Cash collateral advice will be generated for its collection. When the LC amount is amended, you
also have the option of adjusting the collateral amount accordingly.
2.5.6 Availment against an LC
You can process the availments against an LC either through the LC module or through the bills
module of Oracle FLEXCUBE. Availment charges can be levied and cash collateral adjusted,
during an availment.
2-4
2.5.7 Reports
Information on the LCs processed and the static maintenance done for the module is available in
the form of reports. These reports can be printed, spooled on to a disk file or displayed on the
screen. The following are some of the reports available:

Accrual control report

Closed out LCs report

Commission activity report

Commission due report

Confirmed LCs report

Daily activity report

Expired LCs report

LCs due to be closed report

LCs due to expire report

Open ended LCs

Un-replied tracers report

Process exception report

Overrides
Refer the chapter titled ‘Reports’ in this User Manual for details about reports.
2-5
3. Maintenance
3.1
Introduction
The LC module requires the setting up of certain basic information before it becomes fully
operational. The information that needs to be maintained includes:

Document details

Clause details

Goods details

Free Format Text details

Insurance Company details

Import License Expiry Date for a customer

Exchange Rate Type maintenance for different transaction amount slabs

INCO Terms

Open Insurance Policy details

Blacklist criteria
The procedure for maintaining these details is discussed in the subsequent sections.
3.2
Maintaining Document Details
There are certain standard documents that are required under a documentary LC. As these
documents are standard and common in most countries, their details need not be specified every
time you need to use it for an LC. Instead, you can maintain its details in the Document
Maintenance screen and attach it to the LC you process.
The advantage of maintaining document details is that at the time of creating a product or at the
time of entering the details of an LC, you only need to specify the code assigned to the document.
All the details maintained for the document will be automatically picked up. This helps reduce
repetitive work, as you do not need to enter the contents of the document each time you use it.
To invoke the ‘Bills and Collections Document Codes Maintenance’ screen, type ‘BCDDOCCD’ in
the field at the top right corner of the Application tool bar and click the adjoining arrow button. If
you are maintaining details of a new document choose New from the Actions Menu or click new
icon from the tool bar. The ‘Bills and Collection Document Code Maintenance’ screen is displayed
without any details.
3-1
Here you can specify the following details.
Document Code
In Oracle FLEXCUBE, each document maintained is identified by a twelve-character code, called
a Document Code. You can follow your own convention for devising this code. However, one of
the characters of the code should necessarily be a letter of the English alphabet.
The code assigned to should be unique as it is used to identify the document. While creating a
product or at the time of entering the details of an LC, you only need to specify the code assigned
to the document. The document details will be automatically picked up and defaulted.
Language Code
The language used in the document which you bank receives from the customer.
Document Type
Select the type of document you bank received from the customer.
Document Short Description
The documents for an LC are at times large and hence difficult to identify. Therefore, you can
specify a short description or a title that will enable you to identify the document quickly.
The short description that you specify is for information purposes only and will not be printed on
any customer correspondence.
3-2
Document Long Description
After you specify a code to identify the document, you can proceed to maintain the content of the
document. The content that you enter is printed on the applicable advices generated for an LC. A
document can contain a maximum of two thousand characters.
Once the document code is stored, the description of a document can be edited only through the
‘Document Codes Maintenance’ screen (the screen we are discussing). However, you can also
view the contents of a document code when you are linking it to a product or LC.
Validate Shipping Guarantee
Check this option to indicate that a shipping guarantee should be validated.
Clause Details
Specify the following details.
Clause Code
Specify the clause code that should be linked to the document.
Description
A brief description of the chosen clause code is displayed here.
3.2.1 Specifying UDF Values
You can specify values for all the User Defined fields (UDFs) created and attached to the ‘Bills &
Collections Document Codes Maintenance’ screen. You can view the list of UDFs associated to
this screen by clicking ‘Fields’ button.
3-3
You can enter the value for the UDFs listed here in the ‘Value’ column.
For more details on how to create user Defined fields, refer chapter ‘Creating custom fields in
Oracle FLEXCUBE’ in the User Defined Fields User Manual under Modularity.
3.2.2 Operations on Document Maintenance Record
On an existing Document Maintenance record, you can perform the following operations (if any
function under the Actions Menu is disabled, it means that the function is not allowed for the
record):

Amend the details of a document

Authorize a document

Copy the details of a document on to a new one

Close the document

Reopen the document

Print the details of a document

Delete the details of a document
Please refer to the manual on Common Procedures for details of these operations.
3.3
Maintaining Clause Details
A clause is a statement that accompanies a document required under an LC. Instead of
specifying the details of a clause every time, you can maintain a list of the standard clauses,
which can accompany the documents, required for an LC, in the Clause Maintenance screen.
The advantage of maintaining clause details is that at the time of creating a product or at the time
of entering an LC, you only need to specify the code assigned to the clause. All the details
maintained for the clause will be automatically picked up.
You can invoke the ‘Letters of Credit Clause Code Maintenance’ screen by typing ‘LCDCLAMA’ in
the field at the top right corner of the Application tool bar and clicking on the adjoining arrow
button. If you are maintaining a new clause, click on ‘New’ from the Actions Menu or click new
icon from the tool bar. The ‘Letters of Credit Clause Code Maintenance’ screen is displayed
without any details.
3-4
Specify the following details.
Clause Code
Each clause that you maintain is identified by a twelve-character code called a Clause code. You
can follow your own convention for devising the code. However, at least one of the characters of
the clause code should be a letter of the English alphabet.
This code should be unique as it is used to identify the clause. While creating a product or at the
time of entering the details of an LC where you need to specify the clauses that should
accompany a document, you only need to specify the code assigned to the clause. The clause
details will be automatically picked up and defaulted.
Language Code
The language used in the document which you bank receives from the customer.
Clause Type
A clause that you maintain will accompany a document that is sent for an LC. Therefore, the type
of clauses that you can maintain is determined by the type of document that it accompanies. The
nature of the clauses that you define can fall within the following categories:

Transport

Insurance

Invoice

Others
Clause Description
After you have specified a code for the clause, you can proceed to maintain a detailed description
of the clause.
3-5
The description carries the contents of the clause, which will be printed on the customer
correspondence that accompany an LC. The clause description can contain a maximum of two
thousand characters.
After you have made the mandatory entries, you should save the record.
3.3.1 Specifying UDF Values
You can specify values for all the User Defined fields (UDFs) created and attached to the ‘Letters
of Credit Clause Code Maintenance’ screen. You can view the list of UDFs associated to this
screen by clicking ‘Fields’ button.
You can enter the value for the UDFs listed here in the ‘Value’ column.
For more details on how to create user Defined fields, refer chapter ‘Creating custom fields in
Oracle FLEXCUBE’ in the User Defined Fields User Manual under Modularity.
3.3.2 Operations on a Clause Maintenance Record
On an existing Clause Maintenance record, you can perform the following operations (if any
function under the Actions Menu is disabled, it means that the function is not allowed for the
record):

Amend the details of the record

Authorize the record

Copy the details of a Clause, on to a new record

Close the record
3-6

Reopen the closed record

Print the details of a record

Delete the record
Please refer to the manual on Common Procedures for details of these operations.
3.4
Maintaining Goods Details
An LC is an instrument used for trade payments, it therefore involves merchandise. There are
certain standard goods or commodities, the trading of which is done, with LC cover. Instead of
specifying the details of merchandise each time they are traded under an LC, you can maintain
the details of the standard goods in the ‘Bills and Collections Commodity Code Maintenance’
screen.
The advantage of maintaining goods details is that at the time of entering the details of an LC,
you only need to specify the code assigned to the goods. The description maintained for the
goods code will be automatically picked up. Typically, the statutory body controlling international
and domestic trade in a country assigns these codes.
To maintain details of the standard goods transacted under LCs, you need to invoke the ‘Bills and
Collections Commodity Code Maintenance’ screen. You can invoke this screen by typing
‘BCDCOMCD’ in the field at the top right corner of the Application tool bar and clicking on the
adjoining arrow button. If you are maintaining details for the goods or commodity for the first time,
choose ‘New’ from the Actions Menu or click new icon from the tool bar. The ‘Bills and Collections
Commodity Code Maintenance’ screen is displayed without any details.
Specify the following details.
3-7
Goods Code
In Oracle FLEXCUBE goods are identified by a twelve-character code called the goods code. You
can follow your own convention for devising the code. However, at least one of the characters of
the goods code should be a letter of the English alphabet.
The code that you assign to a commodity should be unique as it is used identify the goods. While
processing an LC where you need to specify the goods transacted, you need to only specify the
code assigned to the goods. The goods description will automatically be picked up and defaulted.
Language Code
The language used in the document which you bank receives from the customer.
Banned Commodity
As part of maintaining the details of the goods that can be traded under an LC, you can also
specify whether the commodity being defined is banned from import/export.
If you are maintaining the details of a banned commodity, you can indicate the same by selecting
the ‘Banned commodity’ option in the screen.
At the time of selecting the goods being traded under an LC, the system will display the
commodities in the option-list. In addition, the list will also display whether a particular commodity
is banned or not by indicating ‘YES’ (for a banned product) and ‘NO’ (for a product that is allowed
for trade) against the product.
Goods Description
After assigning a code to the goods, you can proceed to maintain a detailed description of the
goods. The goods description can contain a maximum of six thousand five hundred characters.
While specifying the details of the goods transacted under an LC, you can edit the description
that is defaulted, to suit the requirements of the LC you are processing. Specifications such as
the quality and quantity of the merchandise can also be entered.
Under License
Check this box to indicate if the goods transacted under a bill are to be under license. If you leave
the box unchecked it indicates that the goods are freely importable. This detail defaults from the
LC contract to the BC product for a bill under an LC. If the box defaults unchecked it means that
the goods are freely importable. You can choose to keep the goods as freely importable by
leaving the box unchecked or you can specify that any goods under a bill under an LC are to be
maintained under license by checking the box.
3.4.1 Specifying UDF Values
You can specify values for all the User Defined fields (UDFs) created and attached to the ‘Bills
and Collections Commodity Code Maintenance’ screen. You can view the list of UDFs associated
to this screen by clicking ‘Fields’ button.
3-8
You can enter the value for the UDFs listed here in the ‘Value’ column.
For more details on how to create user Defined fields, refer chapter ‘Creating custom fields in
Oracle FLEXCUBE’ in the User Defined Fields User Manual under Modularity.
3.4.2 Operations on Goods Maintenance Record
On an existing Goods Maintenance record, you can perform of the following operations (if any
function under the Actions Menu is disabled, it means that the function is not allowed for the
record):

Amend the details of a record

Authorize a record

Copy the details of a commodity, on to a new record

Close a record

Reopen a closed record

Print the details of a record

Delete a record
3-9
Please refer to the manual on Common Procedures for details of these operations.
3.5
Maintaining Free Format Text Codes
Free Format Text (FFT) may be a set of instructions or statements that are applicable to the LCs
that you process. There are certain standard statements that should appear in the
correspondence and messages, sent to the parties involved in an LC. Instead of specifying the
details of an FFT each time you need to use it, you can maintain them in the ‘Bills and Collections
Free Format Code Maintenance’ screen. The advantage of maintaining FFT details is that at the
time of creating a product or while entering the details of an LC, you only need to specify the code
assigned to the FFT. All the details maintained for the FFT code will be automatically picked up.
This reduces your effort, as you do not need to enter the description of an FFT each time you use
it. You can invoke this screen by typing ‘BCDFFTCD’ in the field at the top right corner of the
Application tool bar and clicking on the adjoining arrow button. If you are maintaining the details
for the FFT for the first time, choose ‘New’ from the Actions Menu or click new icon in the tool bar.
Specify the following details.
Text Code
In Oracle FLEXCUBE, each FFT that you maintain is identified by a twelve character code called
an FFT Code. You can follow your own conventions for devising the code. However, at least one
of the characters of the goods code should be a letter of the English alphabet.
The code that you specify should be unique since it identifies the FFT. While creating a product,
or at the time of entering the details of an LC you only need to specify the code assigned to the
FFT. The FFT details will be automatically picked up and defaulted.
Language Code
The language used in the document which you bank receives from the customer.
Free Format Text
After assigning a code to identify an FFT, you can proceed to maintain the description of the FFT.
The description that you specify can contain text up to two thousand characters.
3-10
3.5.1 Specifying UDF Values
You can specify values for all the User Defined fields (UDFs) created and attached to the ‘Bills
and Collections Free Format Code Maintenance’ screen. You can view the list of UDFs
associated to this screen by clicking ‘Fields’ button.
You can enter the value for the UDFs listed here in the ‘Value’ column.
For more details on how to create user Defined fields, refer chapter ‘Creating custom fields in
Oracle FLEXCUBE’ in the User Defined Fields User Manual under Modularity.
3.5.2 Operations on FFT Maintenance Record
On an existing FFT Maintenance record, you can perform the following operations (if any function
under the Actions Menu is disabled, it means that the function is not allowed for the record):

Amend the details of the record

Authorize the record

Copy the details of an FFT on to a new record

Close the record

Reopen the closed record

Print the details of a record

Delete the record
3-11
Refer to the manual on Common Procedures for details of these operations.
3.6
Maintaining Customer/Advice Free Format Text
Free Format Text (FFT) may be a set of instructions or statements that are applicable to the LCs
that you process. There are certain standard statements that should appear in the advice
generated for a walk-in customer.
You can maintain the details of an advice for customer in a free text format through the
‘Customer/Advice Free Format Text Maintenance’ screen. You can invoke this screen by typing
‘LCDCUFFT’ in the field at the top right corner of the Application tool bar and clicking on the
adjoining arrow button. You can open new, save, close, reopen or authorize the FFTs here.
In this screen, you can maintain the following details for the advice:
Customer ID
Specify the customer Id for whom the advice is being generated.
Module
Specify the module to which these details are being linked.
Message Type
Specify the type of message being generated.
Free Format Text
Assign a code to identify an FFT.
3-12
Free Format Text Description
After assigning a code to identify an FFT, you can proceed to maintain the description of the FFT.
The description that you specify can contain text up to two thousand characters. You need to
maintain the FFT which is specific to the customer and advice in this screen. The FFT defaults at
the contract advice screen along with the FFT maintained at product level.
Single
Check this option to indicate that the FFT is a single message.
3.7
Maintaining Insurance Company Details
An LC, as an instrument of international trade involves the shipment of large merchandise over
long distances. To cover the loss or damage of the goods during transition, most merchandise
traded under an LC is covered with an insurance policy. You can maintain the details of different
Insurance Companies in Oracle FLEXCUBE.
At the time of capturing the details of an LC contract in the system, you can associate the
appropriate Insurance Company Code with the contract. Upon selection of the code, all the
details maintained for the selected code will be automatically picked up by the system.
Subsequently, on receipt of the insurance policy from the company, the insurance policy number
can also be captured in the relevant contract.
You can maintain the details of an insurance company through the ‘Bills and Collections
Insurance Company Maintenance’ screen. You can invoke this screen by typing ‘BCDINSCO’ in
the field at the top right corner of the Application tool bar and clicking on the adjoining arrow
button.
In this screen, you can maintain the following details of Insurance Companies:
3-13
Insurance Company Code
Specify a unique code for each insurance company being defined in the system. The insurance
company will be identified by this code throughout the system. This is mandatory information and
if not provided, you will not be allowed to save the details of the company.
You can use a maximum of 9 alphanumeric characters to create the company code.
Insurance Company Name
After specifying a unique code for the company, you can also specify the full name of the
insurance company.
Address 1 to 4
Specify the mailing address of the insurance company being defined. You can maintain a
maximum of four lines of address. Each line of address can accommodate a maximum of 105
alphanumeric characters.
Telephone Number
Capture the telephone number of the insurance company.
Fax Number
Capture the fax number of the insurance company.
The insurance company will be available for association with LC contracts only after you
authorize the company details.
3.7.1 Specifying UDF Values
You can specify values for all the User Defined fields (UDFs) created and attached to the ‘Bills
and Collections Insurance Company Maintenance’ screen. You can view the list of UDFs
associated to this screen by clicking ‘Fields’ button.
3-14
You can enter the value for the UDFs listed here in the ‘Value’ column.
For more details on how to create user Defined fields, refer chapter ‘Creating custom fields in
Oracle FLEXCUBE’ in the User Defined Fields User Manual under Modularity.
3.7.2 Operations on Company Maintenance Record
On an existing Company Maintenance record, you can perform the following operations (if any
function under the Actions Menu is disabled, it means that the function is not allowed for the
record):

Amend the details of the record

Authorize the record

Copy the details of a record on to a new record

Close the record

Reopen the closed record

Print the details of a record

Delete the record
Refer to the manual on Common Procedures for details of these operations.
3-15
3.8
Maintaining Import License Expiry Date
Oracle FLEXCUBE allows you to maintain the Import License Expiry Date of all the customers of
your bank. You can maintain only one License Expiry Date for a customer. On selection of the
CIF ID of the customer at the time of processing an LC contract, the Import License Expiry Date
maintained for the selected CIF ID is also displayed in the LC Contract screen. The system will
not do any validations based on the expiry date. It is used only for information purpose.
You can capture import license expiry date through the ‘Letters of Credit License Expiry Date
Maintenance’ screen. You can invoke this screen by typing ‘LCDEXPDT’ in the field at the top
right corner of the Application tool bar and clicking on the adjoining arrow button.
Specify the following details.
Customer No
Every customer of your bank is identified by a unique CIF ID. All authorized and active CIF IDs
will be displayed in the option-list. You can select the appropriate CIF ID from the list.
License Expiry Date
After you select the CIF ID, you can specify the Import License Expiry Date for the customer. The
expiry date maintained here will be associated with all LC contracts processed for the customer.
3.8.1 Specifying UDF Values
You can specify values for all the User Defined fields (UDFs) created and attached to the ‘Letters
of Credit License Expiry Date Maintenance’ screen. You can view the list of UDFs associated to
this screen by clicking ‘Fields’ button.
3-16
You can enter the value for the UDFs listed here in the ‘Value’ column.
For more details on how to create user Defined fields, refer chapter ‘Creating custom fields in
Oracle FLEXCUBE’ in the User Defined Fields User Manual under Modularity.
3.8.2 Operations on Licence Expiry Date Record
On an existing Licence Expiry Date Maintenance record, you can perform the following
operations (if any function under the Actions Menu is disabled, it means that the function is not
allowed for the record):

Amend the details of the record

Authorize the record

Copy the details of a record on to a new record

Close the record

Reopen the closed record

Print the details of a record

Delete the record
Refer to the manual on Common Procedures for details of these operations.
3-17
3.9
Maintaining Exchange Rates for Bills
Oracle FLEXCUBE allows you to apply different exchange rates based on the amount involved in
the transaction. The cut-off amount slabs are maintained in the local currency of your bank. If the
transaction currency is not the local currency, the system will first convert the transaction amount
into the local currency equivalent using the Standard Mid Rate. This is necessary as the cut-off
amount slabs are maintained in the local currency. The system will then validate the converted
amount against the different amount slabs to determine the appropriate rate type. This is the rate
type that will be used for the actual conversion of the transaction currency into the local currency
equivalent.
You can capture the exchange rate types for different amount slabs through the ‘Bills and
Collections Exchange Rate Type Maintenance’ screen. You can invoke this screen by typing
‘BCDAMTEX’ in the field at the top right corner of the Application tool bar and clicking on the
adjoining arrow button.
In this screen, you can specify the amount slabs for a branch, module and product combination.
Branch Code
Each branch of your bank is identified by a unique code. All authorized and active branch codes
are available in the option-list. You can select the appropriate branch code from the list.
Module Code
Like wise, all the modules (like Loans & Deposits, Letters of Credit, Bills & Collections, Funds
Transfer etc) available in your bank are also displayed in an option-list. All active and authorized
records are available for selection. You can select the appropriate module code from the list.
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Product Code
The various products/services offered by your bank are also available in an option-list. Select the
product code from the list. Alternatively, you can also maintain the cut-off amounts that will be
applicable for all the branches, modules, and products of your bank. You can make the following
selections to do this:

Branch Code – ALL (all branches)

Module Code – AL (all modules)

Product Code – ZALL (all products)
Amount Tag
Amount tags identify the various components (eg Bill Amount, Loan Principal, LC Amount etc.)
involved in a contract. You can maintain the cut-off amount slabs for:

All: The maintenance will be applicable to all the amount tags available in the system (Module
tags and Non-module tags).

Module: The amount tags that are specific to a particular module are known as Module Tags.
For eg the amount tag PRINCIPAL is specific to the Loans module, BILL_AMOUNT is
defined for the Bills module and so on.

Non-Module: The amount tags that are internally created by the system are referred to as
Non-Module tags. The system will automatically create the amount tags for the Interest, Tax,
Charge, and Commission components that you define for a product.
Basis Amount
Specify the floor basis amount. The upper limit of the previous amount slab gets defaulted as the
Floor Basis Amount.
Amount To
Specify the ceiling limit of the slab.
Click add icon to capture each subsequent amount slab.
Currency Rate Type
You can associate a different exchange rate type with each cut-off amount slab that you have
maintained. All authorized and active rate types defined in your system are available in the
option-list. Select the appropriate rate type for each amount slab.
Example
You have maintained the following cut-off amount slabs, and the corresponding exchange rate types &
exchange rates to be applied on LC contracts processed at your bank:
Cut-Off Amount Slabs
(in Local Ccy - USD)
Exchange Rate Type
Exchange Rate
(for GBP to USD conversion)
0-25,000
STANDARD
1.684
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Cut-Off Amount Slabs
(in Local Ccy - USD)
Exchange Rate Type
Exchange Rate
(for GBP to USD conversion)
>25,000
COUNTER
1.897
Let us assume that you are processing an LC contract for GBP 20,000. The local currency of your bank is
USD. In such a case, the system will first convert GBP 20,000 into the local currency equivalent using the
Standard mid rate. Assuming that the mid rate is 1.5, the converted amount works out to USD 30,000. The
system will then validate the converted amount against the cut-off amount slabs maintained. USD 30,000
(converted amount) falls in the second slab (>25,000). The exchange rate type maintained for this slab is
‘COUNTER’ and the corresponding exchange rate is 1.897. The actual conversion of the transaction amount
takes place using the COUNTER rate of 1.897. Therefore, the USD equivalent of 20,000 GBP works out to
37,940.
3.9.1 Specifying UDF Values
You can specify values for all the User Defined fields (UDFs) created and attached to the ‘Bills
and Collections Exchange Rate Type Maintenance’ screen. You can view the list of UDFs
associated to this screen by clicking ‘Fields’ button.
You can enter the value for the UDFs listed here in the ‘Value’ column.
For more details on how to create user Defined fields, refer chapter ‘Creating custom fields in
Oracle FLEXCUBE’ in the User Defined Fields User Manual under Modularity.
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3.9.2 Operations on Exchange Rate Type Maintenance Record
On an existing Exchange Rate Type Maintenance record, you can perform the following
operations (if any function under the Actions Menu is disabled, it means that the function is not
allowed for the record):

Amend the details of the record

Authorize the record

Copy the details of a record on to a new record

Close the record

Reopen the closed record

Print the details of a record

Delete the record
Refer to the manual on Common Procedures for details of these operations.
3.10 Maintaining INCO Terms
INCOTERMS or international commercial terms indicate who will bear the freight, insurance and
ancillary charges i.e. charges relating to an import or export consignment other than the cost of
the goods/service. Additionally, they also determine which party will make arrangements to clear
the goods from a port or airport. There are 13 INCO terms given by the ICC (full form required).
Each INCO term is a three-letter code stating the responsibility of the seller i.e. the beneficiary in
an LC. For instance ‘EXW’ states that the responsibility of the seller is limited to keeping the
goods at his factory ready for export and it is the buyer’s responsibility to pick it up and arrange
for onward freight and insurance. Under ‘FOB’ the seller is responsible for securing export
clearance and placing the goods on board a ship in his country. From that point on i.e. the cost
relating to the freight, transit insurance and clearing the goods for import are the buyer’s
responsibility. ‘CIF’ states that the seller is responsible for the freight/transport charges and
insurance upto the point of destination. ‘DDP’ indicates that the seller has to take complete
responsibility to arrange and pay for transport, insurance and export/import clearances. An INCO
term is also specific to the mode of transport used. The terms ‘FAS’, ‘FOB’, ‘CFR’ and ‘CIF’
should only be used when the shipment mode is sea.
You can associate documents and clauses to INCO terms as part of a one-time maintenance for
your bank. You can do this through the ‘INCO Term Document Maintenance’ screen. You can
invoke this screen by typing ‘BCDINCOD’ in the field at the top right corner of the Application tool
bar and clicking on the adjoining arrow button.
3-21
Here, you need to specify the following:
INCO Term
The following are the INCO terms for which you can maintain documents and clauses:

EXW - EX Works

FCA - Free Carrier

FAS - Free Alongside Ship

FOB - Free On-Board

CFR - Cost and Freight

CIF - Cost Insurance Freight

CPT - Carriage Paid to

CIP - Cost Insurance Paid

DAF - Delivered at Frontier

DES - Deliver Ex Ship

DEQ - Delivered Ex Quay

DDU - Delivered Duty Unpaid

DDP - Delivered Duty Paid
3-22
Document Code
You need to associate a valid document to an INCO term. All valid document codes maintained
(through the ‘Bills and Collections Document Master Maintenance’ screen) in your current branch
are made available here for selection. You can associate any number of valid documents to an
INCO term.
Description
A brief description of the chosen document is displayed here.
Clause Code
To each document associated with an ‘INCO Term’, you need to associate a clause. The
adjoining option list displays all clause codes maintained in through the ‘Clause Maintenance’
screen. You can choose the appropriate one.
To each document associated with an ‘INCO Term’, you can associate any number of clauses.
Description
A brief description of the chosen clause is displayed here.
3.10.1 Operations on INCO Term Maintenance Record
On an existing INCO term maintenance record, you can perform any one of the following
operations (if any function under the Actions Menu is disabled, it means that the function is not
allowed for the record):

Create a record

Unlock and amend the details of the record

Delete the record
During the ‘amend’ operation, you can amend the clause code only.
Refer to the chapter on common procedures for details on each of these operations.
3.11 Maintaining Open Insurance Policy Details
A trader can enter into an open insurance policy with an insurance company to insure all goods in
transit falling within that agreement for an indefinite period, until the agreement is cancelled by
either party. You can capture details of such insurance policies using the ‘Open Policy
Maintenance’ screen. You can invoke this screen by typing ‘LCDOPNPL’ in the field at the top
right corner of the Application tool bar and clicking on the adjoining arrow button.
3-23
Here you can capture the following details:
Open Policy Code
Specify a unique alphanumeric code to identify the policy. You can specify a maximum of 105
characters.
Insurer
Specify the insurer who has issued the policy. The adjoining option list displays all insurance
companies maintained using the ‘Bills & Collections Insurance Company Maintenance’ screen.
You can select the appropriate one.
Customer CIF
Specify the customer identification number (CIF) for whom the policy is issued. The adjoining
option list displays all CIF maintained using the ‘Customer Information Maintenance’ screen. You
can select the appropriate one.
Goods
Specify the goods to be linked to the open policy.
Currency
Specify the currency in which the total sum assured and the amount per conveyance should be
maintained. The adjoining option lists displays all currency codes maintained in the system. You
can select the appropriate one.
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Sum Assured Amount
Specify the total amount assured for the policy.
Per Conveyance Amount
Specify the limit to be set for every transaction under the policy.
INCO Term
Specify the INCO term that should be linked to the policy. The adjoining option list displays the
following values:

EXW - EX Works

FCA - Free Carrier

FAS - Free Alongside Ship

FOB - Free On-Board

CFR - Cost and Freight

CIF - Cost Insurance Freight

CPT - Carriage Paid to

CIP - Cost Insurance Paid

DAF - Delivered at Frontier

DES - Deliver Ex Ship

DEQ - Delivered Ex Quay

DDU - Delivered Duty Unpaid

DDP - Delivered Duty Paid
You can choose the appropriate one.
Telex Address
Specify the telex number of the customer.
Warehouse Address
Specify the warehouse address of the customer.
Issue Date
The system displays the application date here. However you can change it.
Effective Date
Specify the date on which the policy becomes effective.
3-25
Expiry Date
Specify the date on which the policy expires. Note that this date has to be greater than the
effective date.
Cover Date
Specify the cover date for the policy. This date should not exceed the expiry date.
Voyage
Specify details of the shipment that can be undertaken under this policy.
Location
Specify details of the location to which goods can be shipped under this policy.
Risk Covered
Specify details of the risk coverage for goods under this policy.
Utilized Amount
If you have checked the option ‘Update utilization Automatically’ the system will display the
amount that has been utilized out of the total insured sum. If an LC contract is linked, the
utilization amount will show the LC contract amount. In case of a BC contract being linked
subsequently, the amount will be re-instated accordingly. If that option is not checked, then you
need to enter the utilized amount.
If the linked LC contract is reversed or deleted, the utilization will be reduced to the extent of LC
amount.
Update Utilization Automatically
Check this option to indicate that the system should automatically update utilization amount
based on the transactions undertaken under the policy.
Available Amount
The system displays the amount available for further utilization. This amount is arrived at by
subtracting the utilized amount from the total sum assured.
Key Clauses
Specify the clauses that you wish to link to the policy.
Remarks
Specify remarks pertaining to the policy.
3-26
Contract Linkage
While querying on records, you can view the following details:
Contract Reference Number
The reference number of the linked LC contract is displayed here.
Currency
The currency of the linked LC contract is displayed here.
Amount
The contract amount of the linked LC contract is displayed here.
While creating a new policy or amending an existing one, you cannot modify the fields under the
‘Contract Linkage’ section. You can modify the following fields while amending a record:

Expiry Date

Voyage

Location

Risk Covered

Per Conveyance Amount

Key Clauses

Remarks

Cover Date

Utilization Amount (If the option ‘Update utilization Automatically’ is not checked)

Update utilization automatically

Telex Address

Warehouse Address
3.11.1 Operations on an Open Policy Record
You can perform the following operations on this record:

New

Unlock

Close

Copy
3-27
3.12 Blacklisting LCs
You can black list LCs and collection bills based on a set of criteria that you can define. You can
define criteria for black listing LCs and bills in the ‘Black Listed Transaction Input’ screen. You
can invoke this screen by typing ‘TFDBKLST’ in the field at the top right corner of the Application
tool bar and clicking on the adjoining arrow button.
You can set up the following criteria for blacklisting LCs and Bills:

The module to which the contract belongs

The reference number of the party (For LCs, specify the reference of the Issuer. For Bills,
enter the reference of the Remitting bank).

The Currency Code of the contract

The Contract Amount

The Issue Date and

The Expiry Date
3-28
Number of Matches
Now that you have set up the criteria for black listing contracts, you need to indicate the number
of the above criteria that should be used to black list LCs and Bills.
Example
You indicate 2 in the field Number of Matches. All LCs/Bills that match at least two of the blacklisting criteria
that you specified will be displayed for blacklisting.
After you indicate the blacklisting criteria, select ‘Save’ from the Actions menu or click save icon
to save the record. A message with the Reference Number of the LCs/Bills that matches the
blacklisting criteria that you specified is displayed. You can choose to blacklist the contract or
ignore the message.
If you enter a new LC/Bill that matches the blacklisting criteria, you will be prompted for an
override. Similarly, if you attempt to amend the details of a blacklisted LC/Bill, you will be
prompted with an override.
3.13 Maintaining Branch Parameters for Letter of Credit
You can maintain letter of credit details specific to a branch using the ‘Letters of Credit Branch
Parameters’ screen. These parameters can be maintained for each branch of your bank. You can
invoke this screen by typing ‘LCDBRPRM’ in the field at the top right corner of the Application tool
bar and clicking on the adjoining arrow button.
The following details can be captured here:
3-29
Branch Details
Branch Code
Specify the branch code for which you need to maintain specific parameters. Alternatively, you
can select the branch code from the adjoining option list also. All branch codes maintained in the
system will be available in the list of values for selection.
Branch Name
The branch name is defaulted based on the branch code selected.
Batch Processing
Accrual Entries Level
Select the option to indicate the level at which accrual has to be done and entries have to be
passed, from the drop-down list. The options available are:
 Product
 Contract
Process till next working day
Select the day on which automatic events such accrual, liquidation etc. falling due on a holiday,
should be processed, from the drop-down list. The following options are available for selection:

Next Working Day – 1

System Date – If you select this option the processing of events falling due on a holiday will
be done on the System Date.
User Reference Number in Messages
Check this box to include User Reference Number in messages.
Discrepancy Notice Period
Specify a period within which the discrepancy details should be added to the bills processed
under LCs. This period will be calculated from the date of presentation of the bills (which is
typically the booking date of the bill) to the issuing bank/confirming bank.
The system will display an override if the discrepancies are added to the bills (in the Bills Contract
Details screen) after the discrepancy notice period.
3-30
4.
4.1
Defining Product Attributes
Introduction
In this chapter, we shall discuss the manner in which you can define attributes specific to a
Letters of Credit product. You can create a loans product in the Letters of Credit (LC) Product
Definition screen, invoked from the Application Browser.
4.2
Creating LC Product
The basic information about the product such as the Product Code and its description is captured
through the ‘Letters of Credit Product Definition’ screen. Information related to specific attributes
of a product can be defined in subsequent screens that can be invoked from the product definition
screen. You can invoke this screen by typing ‘LCDPRMNT’ in the field at the top right corner of
the Application tool bar and clicking on the adjoining arrow button. The ‘LC Product Definition’
Screen is displayed. From this screen choose ‘New’ from the Actions menu or click new icon on
the toolbar. The ‘Product Definition’ screen will be displayed with no values in the fields. From the
‘Summary’ screen you can open an existing product. The details of the products that you have
created will be displayed in a tabular form.
You can define the attributes specific to a letters of credit product in this screen.
4-1
The buttons on this screen are explained below:
Buttons
Description
Accounting
Roles
Click this button to define the accounting role to accounting head
mapping.
Events
Click this button to select the events for the product and then maintain
event-wise accounting entries and advices.
Branch and
Currency
Click this button to maintain the list of allowed/ disallowed branches and
currencies for the product.
Customer
Click this button to maintain the list of allowed/ disallowed
customers/customer categories.
Preferences
Click this button to define preferences like tenor, Prepayment option etc.
MIS
Click this button to capture MIS related parameters.
Commission
Click this button to define the Commission details.
Charges
Click this button to define charge components, rules, events and other
associated details.
Tax
Click this button to associate tax rules and select tax currencies.
Fields
Click this button to provide values for the UDFs associated with the
screen.
Free Format
Tax
Click this button to attach the Documents and Free format text required
for the Product. If you specify details in this screen for a ‘Reimbursement’
type of product, the system will display an error message while saving the
product.
Tracers
Click this button to enter details of the tracers that should be generated
for all LCs under this product.
For any product you create in Oracle FLEXCUBE, you can define generic attributes, such as
branch, currency, and customer restrictions, interest details, tax details, etc., by clicking on the
appropriate icon in the horizontal array of icons in this screen. For a letters of credit product, in
addition to these generic attributes, you can specifically define other attributes. These attributes
are discussed in detail in this chapter.
Product Code
The code you assign to a product will identify the product throughout the module. The code
should contain four characters. You can follow your own convention for devising the code,
however, at least one of the characters should be a letter of the English alphabet.
Since the code that you define is used to identify the product, it should be unique across the
modules of Oracle FLEXCUBE. For instance, if you have assigned the code ‘LC01’ to a particular
product in this module, you cannot use it as a code in any other module.
4-2
Description
You can enter a brief description of the product, which will be associated with the product for
information retrieval purposes.
Product Type
The product type identifies the basic nature of a product. An LC product that you create in Oracle
FLEXCUBE can be of the following types:

Import LC - This is the basic LC product opened at the request of the importer (applicant) by
the issuing bank in favour of an exporter beneficiary.

Export LC - When an import LC has to be conveyed to the beneficiary through an advising
bank, for the advising bank this is an export LC.

Guarantee – This is an undertaking by the guarantor (bank) to make payment to the
beneficiary of the guarantee in the event of a default by the applicant of the guarantee.
Usually, the only document required for payment is a simple invocation letter. Guarantees are
normally used in performance contracts.

Standby Guarantee -This is used for normal trade works like a guarantee. It is popular in the
USA and is characterized by ease of operations. Unlike import LCs, only a single document is
required for the bank to make payment.

Shipping Guarantee - This again operates on the lines of a guarantee but is used in the
scenario where the shipping company releases the goods to an importer in lieu of a bill of
lading (transport document) subject to a guarantee being issued in its favour.

Clean LC - A LC not backed by documents. Usually the only document in a clean LC would
be the draft or bill of exchange. This type of LC is used where the goods have already been
received and only the payment has to be settled through banking channels.

Advice of Guarantee - When a guarantee has been received by a bank and is to be advised
further to the beneficiary’s bank the product to be created would be an advice of guarantee.

Reimbursement
The entries that are passed, the messages that are generated and the processing of contracts
involving the product, is determined by your input to this field.
Product Group
Each product is classified under a specific group. The different groups are defined in the Product
Group Definition table.
Slogan
You can specify a marketing punch-line to be associated with the product. This slogan will be
printed on all the advices that are sent to the customer, for an LC involving this product.
4-3
Revolving
LC products can be revolving or non-revolving. If you indicate that the product is revolving, you
can associate the product with only revolving LCs. While actually processing revolving you can
indicate whether the LC should revolve in time or in value. Note that if the product type is
‘Reimbursement’, the system will automatically select the option ‘No’. You will not be able to
change it.
Similarly, if you indicate that the product is non-revolving, you can associate the product to only
non-revolving LCs.
All LCs will be of irrevocable nature.
Start/End Date
A product can be set up for use over a specific period, by defining a start and an end date. The
Issue Date of an LC involving a product should be:

The same as or later than the Start Date.

The same as or earlier than the End Date.
The start and end dates of a product come in handy when you are defining a product for a
scheme, which is open for a specific period.
Remarks
You can enter information about the product, intended for the internal reference of your bank. The
remarks are displayed when the details of the LC are displayed or printed. However, this
information will not be printed on any correspondence with the customer.
To maintain the allowed and disallowed customer and customer categories, you have to click the
button and invoke the ‘Customer and Customer Restrictions’ screen.
4.2.1 Specifying Preferences for a Product
Preferences are the options available for defining the attributes of a product. The options you
make here will ultimately shape the product. Click ‘Preferences’ button to invoke the ‘Letters of
Credit Product Preferences’ screen. Through this screen you can define preferences for the
product you are creating.
4-4
The Preferences that you define for a product will be applied to all the LC contracts involving the
product.
Product Code and Product Description
The Product Code and the description get defaulted from the main product screen.
Note that if the product you are creating is of the type ‘Reimbursement’, you will be able to specify
only the following details:

Limit Tenor Calculation Type

Rekey Requirements

Tolerance

Exchange Rate
Specifying Limits Tracking
You need to specify whether the limits tracking option is to be turned on for the product.
4-5
Limit Track
Check this box to enable limit tracking option for an LC product type. This value is defaulted at
the contract level. However, at the contract level you are allowed to modify it
4.2.1.1 Specifying Tenor Related Details
You can set the Standard, Minimum and the Maximum limits for tenor based LCs. The tenor
details that you specify for an LC product is always expressed in days.
Standard
The standard tenor is the tenor that is normally associated with an LC involving a product. The
standard tenor of an LC is expressed in days and will apply to all LCs involving the product. If you
do not specify any specific tenor while processing an LC, the standard tenor will by default apply
to it.
4-6
The default standard tenor applied on an LC can be changed during LC processing. An expiry
date will be calculated based on the tenor, as follows:
Expiry Date = Effective Date + Tenor
Maximum
You can fix the maximum tenor of a product. The tenor of the LCs that involves the product
should be less than or equal to the Maximum tenor specified. If not, an override will be required
before the LC is stored.
Minimum
The minimum tenor of a product can be fixed. The tenor of the LCs that involves the product
should be greater than or equal to the minimum tenor that you specify. If not, an override will be
required before the LC is stored.
Example
You have defined an LC product, to cater to tenor based import LCs. The minimum tenor specified for this
product is 100 days and the maximum tenor is 1000 days. You have also specified a standard tenor of 500
days.
Under this product, you can process LCs with a tenor between 100 and 1000 days. As you have specified
the standard tenor as 500 days, by default, an LC involving this product will have a 500 day tenor. At the
time of processing the LC you can however, change this tenor to anything between the Minimum and
Maximum tenor limits. This is done by changing the Expiry Date of the LC. If the new tenor falls outside the
range defined as the maximum and minimum tenors, an appropriate override will be sought.
Cash Collateral Percentage
For a product, you can fix the percentage of the LC amount that should be taken as cash
collateral. This percentage will be applied by default and can be changed when the LC is
processed. In addition, the currency in which the collateral is to be collected can be specified in
the LC Contract Collateral screen, while processing an LC.
Example
For a guarantee product, you have specified that customers should offer cash collateral to the tune of 50%
of the LC amount. If you enter a guarantee, using this product, valued at USD $100,000, a sum of USD
$50,000 which is 50% of the guarantee amount will be collected as cash collateral when the guarantee is
issued.
If you enter a guarantee using this product, valued at GBP 500,000, then a sum of GBP 250,000 which is
50% of the guarantee amount will be collected as cash collateral when the guarantee is issued. You can
collect the cash collateral in a currency different from the guarantee currency.
4.2.1.2 Specifying LC Authorization Re-key Fields
All operations on an LC (input, modification, reversal, etc.) have to be authorized by a user other
than the one who carried out the operation. Authorization is a method of cross checking the
inputs made by a user. All operations on an LC, except placing it on hold, should be authorized
before beginning the End of Day operations.
4-7
You have the option to specify whether certain important details of an LC need to be reeked, at
the time of authorization. If you indicate positively, you should also specify the fields that will have
to be re-keyed at the time of contract authorization. You can specify any or all of the following as
re-key fields:

Amount

Currency

Customer

Maturity date

Value date
When you invoke an LC for authorization  as a cross-checking mechanism to ensure that you
are calling the right LC  you can specify that the values of certain fields should be entered before
the other details are displayed. The complete details of the LC will be displayed only after the
values to these fields are entered. This is called the‘re-key’ option. The fields for which the values
have to be given are called the‘re-key’ fields.
If no re-key fields have been defined, the details of the LC will be displayed immediately once the
authorizer calls the LC for authorization. The re-key option also serves as a means of ensuring
the accuracy of inputs.
INCO Term
Specify the INCO term that should be linked to all contracts under this product. The adjoining
option list displays all INCO terms available in the system. You can select the appropriate one.
4.2.1.3 Commission Related Preferences
You can specify the following details.
Collection
Indicate when the commission components of an LC should be collected. Commission on an LC
can be collected in the following ways:

Advance - Select ‘Advance’ to indicate that the commission components of the LC should be
collected at the time the LC is initiated.

Arrears - Select ‘Arrears’ to indicate that the commission components of the LC should be
collected on the maturity date of the LC.
Choose an option to suit the product you are creating.
4-8
Calculation
You can have the commission amount that is due to an LC collected in one of the following ways:

Periodic - Indicate periodic if commission is to be collected in portions over a period in time.
Periodic commission is calculated on the basis of a set of parameters that you define. The
values of these parameters as of the beginning of the period are used as they may change
when a periodic amount is calculated. For instance, the current outstanding LC amount may
be lower at the time of commission collection than at the beginning of the period, because an
availment had been processed. When commission is collected on a periodic basis, it will be
collected automatically, based on the rate period that you specify. Periodic commission can
be collected either in advance or in arrears, depending on your specification. This
specification is made in the Product Preferences screen also. The amount collected will
always be for the current period.

Non-periodic - Indicate non-periodic if the commission amount due to an LC is to be collected
as a single sum. In this case, a single commission amount is calculated at the time you enter
an LC using a set of parameters that you have defined for the LC. For advance collections
the commission is collected at the time you enter the LC. If it is collected in arrears, then the
commission is collected on the expiry date.
Retrospective
Check this option to indicate that commission is collected retrospectively.
Start Date
Specify the start date for commission calculation.
Include To Date
Check this option to indicate that the end date for commission calculation should be included in
the calculation tenure.
Refer the Commissions User Manual under Modularity for further commission related
preferences.
4.2.1.4 Specifying Tolerance
Tolerance denotes the variance that has to be built around the LC amount, to arrive at the
Maximum LC amount.
Positive
A positive tolerance is the percentage that should be added to the LC amount to arrive at the
Maximum LC amount. When an LC is issued or advised, the Maximum LC amount will be the
outstanding LC amount. This will be the maximum amount available for availment.
Negative
The negative tolerance is the percentage that should be subtracted from the LC amount. The
minimum tolerance is captured for information purposes only. The tolerance percentage can be
changed when an LC is processed under a product.
4-9
The positive and negative tolerance amounts will be a part of the LC instrument and the
subsequent amendment instruments. You should use the positive tolerance to indicate the
amount that is uncovered, in the LC amount. Instances could be of the freight or insurance not
being paid.
Closure Days
You can also maintain the number of days after which all LCs processed under the product being
defined, will be closed. The number of days specified here is calculated from the expiry date of
the LC to arrive at the closure date, as follows:
LC Closure Date = LC Expiry Date + Closure Days
By default, the system will display 30 days as the closure days. You are allowed to change this
value. At the time of capturing the details of an LC contract, the system will calculate the closure
date, based on the closure days that you have maintained for the product involved in the contract.
However, you can change the date to any other date after the expiry date.
Example
For the import LC product, LCIR, your bank has specified the closure days as 20 days.
th
Let us assume that the expiry date of the LC Contract involving LCIR is 29 February 2000. The system will
th
calculate the closure date as 20 March 2000. This is arrived at, by adding the number of closure days to
th
th
the expiry date of the LC (i.e. 29 Feb + 20 days = 20 March).
4.2.1.5 Specifying Exchange Rate Related Details
You can specify the exchange rates to be picked up and used, when an LC in a foreign currency,
is processed.
Default Rate Type
Specify the rate type to be used to process an LC.
The exchange rate variance is applicable only if the defaulted rates are changed for an LC, in a
foreign currency. For the rate type applicable, you can specify the variance based on which,
either an override should be sought or the LC should not be saved.
Rate Override Limit
If the variance between the rate defaulted and the rate input is a percentage that lies between the
Rate Override Limit and the Rate Stop Limit, the LC can be saved by giving an override.
Rate Stop Limit
If the variance between the rate defaulted and the rate input is a percentage value greater than or
equal to the Rate Stop Limit, the LC cannot be saved.
4-10
Example
For a product, you have specified the override range as between 7% and 30%. In such a case the entries in
these fields would read as follows:

Rate Override Limit - 7%

Rate Stop Limit - 30%
You enter an LC involving this product. This is a cross currency contract involving the American and the
Australian dollar. Also assume that the standard mid-rate for the currency pair is 1.25. We shall examine the
three possible situations that you can encounter.
Below the override limit - Let us assume that for the LC you have specified the exchange rate to be 1.2. In
this case the exchange rate exceeds the standard rate by 4%. The LC will be processed without any
override.
Within the override limit - If you have specified the exchange rate to be 2.0. In this case you exceeded the
standard rate by 20%. You will be prompted to confirm the override. If you confirm the override the LC will
be processed using these rates.
Above the override limit - Let us visualise a situation in which you have specified the exchange rates to be
2.5. In this case you have exceeded the standard rate by 100%. In such a case an error message will be
displayed and you will not be allowed to continue until the exchange rate you specify is within the
permissible limit of 7-30%.
4.2.1.6 Specifying Period of Presentation
As part of the preferences you define for a product, you can specify the manner in which the
Period of Presentation should be calculated for the documents that accompany LCs processed
under the product. The period of presentation can be arrived at in two ways.
Number of Days
Firstly, you can specify it directly, in terms of days, in the Number of Days field. Typically, this
would be 21 days. (However, you can change this to suit your need.) If you choose this option,
the number of days specified will default to all LCs processed under the product. The value will
default to the ‘Period For Presentation’ field in the LC Contract – Others screen.
Calculated Days
You can opt to calculate the period of presentation as follows:
Expiry Date of the LC – Latest Shipment Date
(You would choose this option if the period of presentation varies for each LC processed under a
product.) To specify this manner of calculating the period of presentation, choose the ‘Calculated
Days’ option.
The system uses the Expiry Date and the Last Shipment Date specified for the LC you are
processing, and arrives at the period of presentation. The period of presentation defined for the
product - or calculated for the LC, as the case may be - will be displayed in the ‘Period For
Presentation’ field in the LC Contract - Others screen. You can change the default to suit the LC
you are processing.
4-11
4.2.1.7 Generating LC Expiry Advices
While creating an LC product, you can indicate whether an expiry advice should be generated for
LCs involving the product.
Required
Check this option to indicate that an expiry advice should be generated for LCs involving the
product.
Expiry Advice
These advices are generated based on the preferences that you specify for them. Select the
appropriate option on the screen to indicate your preference. If you indicated that an expiry
advice should be generated, you need to indicate:

Before – Select this option if the advice is to be generated before expiry.

After Days with New value Date - Select this option if the advice is to be generated after
expiry.
Notice Days
Specify the number of days before/after expiry when the advice should be generated.
4.2.1.8 Generating LC Closure Advices
While creating an LC product, you can indicate whether a closure advice should be generated for
LCs involving the product.
Required
Check this option to indicate that a closure advice should be generated for LCs involving the
product.
Closure Advice
These advices are generated based on the preferences that you specify for them. Select the
appropriate option on the screen to indicate your preference. If you indicated that a closure
advice should be generated, you need to indicate:

Before – Select this option if the advice is to be generated before closure.

After Days with New value Date - Select this option if the advice is to be generated after
closure.
Notice Days
Specify the number of days before/after closure when the advice should be generated.
4-12
Rate Code
When defining the settlement details for a product, you can specify the rate type (under the Rate
Code option) that should be used in case of cross-currency settlements. Your specification for the
product will default to all contracts involving the product. However, you can change the rate type
defined for the product to suit a contract entered under the product. The ‘rate type’ indicates the
type of exchange rate that will be used. It can be:

Mid rate maintained for the currency pair

Buy or Sell rate depending upon the nature of the transaction (debit or credit).
4.2.1.9 Specifying Applicable Rules
You need to indicate the rules applicable for the guarantee.
Applicable Rule
Indicate the rule applicable by selecting the appropriate value from the list of values. The
available values are as follows:

ISPR: The guarantee is subject to International Standby Practices.

URDG: The guarantee is subjected to the ICC Uniform rules of Demand Guarantees.

OTHR: The guarantee is subjected to another set of rules

NONE: The guarantee is not subjected to any rules
Note the following:

The above values are applicable only for Guarantee type of products.

The default value of Applicable Rule is set to NONE. This is applicable only for Guarantee
type of products.
For Import and Export type of products, the following values are applicable:

UCP LATEST VERSION

EUCP LATEST VERSION

UCPURR LATEST VERSION

EUCPURR LATEST VERSION

ISP LATEST VERSION

OTHR: The guarantee is subjected to another set of rules
Note the following:

If the guarantee is subjected to rules other than that provided in the list of values, the
applicable rule must be indicated as ‘OTHR’.
4-13

The default value of Applicable Rule is set to UCP LATEST VERSION. This is applicable only
for Import/Export type of products.

Based on the product type, the list of values will display rules applicable for the product.

‘Applicable Rule’ and ‘Rule Narrative’ will be enabled only for import, export and guarantee
product types.
Rule Narrative
This is enabled only if ‘Applicable Rule’ is set to ‘OTHR’. It is mandatory to specify the rule
narrative if the applicable rule is ‘OTHR’. You need to describe the Applicable rule here. Oracle
FLEXCUBE will validate the rule narrative for slashes.
Note the following:

‘Rule Narrative’ should not start or end with ‘/’ or should not have two consecutive slashes.

The above fields will be enabled only for a guarantee.

The Applicable Rule and Rule Narrative cannot be amended after authorization.
LIFO/FIFO Rule
Specify the order in which the availment under this contract should be processed. You can
choose one of the following options:
If multiple amendments are made to the LC contract amount, then the system applies the
FIFO/LIFO rule when utilization is made against the LC contract.

LIFO – LC amount will be utilized in ‘First In First Out’ order when availment is triggered
against the multiple amended LC contract.

FIFO – LC amount will be utilized in Last In First Out order when availment is triggered
against the multiple amended LC contract.
The system will calculate the commission accordingly.
The system applies FIFO / LIFO rule when it finds that multiple amendment has been made to an
LC contract against which utilization has been completed.
Confirmation Required
Check this option to indicate that confirmation message is required for all LCs under this product.
Allow Prepay
Check this option to indicate that prepayment should be allowed for commissions that are marked
as ‘Arrears’.
4-14
Specifying Auto Closure
You can specify the following auto closure preference here:
Auto Closure
Check this box to indicate that a contract created from the LC product can be closed
automatically. This is defaulted to the contract screen.
4.2.1.10 Specifying Accrual Details
Specify the following accrual details.
Frequency
Specify the frequency of accrual for commission, charge or fees. The frequency can be one of the
following:

Daily

Monthly

Quarterly

Half-yearly

Yearly
In case of monthly, quarterly, half yearly or yearly accruals, you should specify the date on which
the accruals have to be done during the month. For example, if you specify the date as ‘30’,
accruals will be carried out on the 30th of the month, depending on the frequency.
4-15
If you fix the accrual date for the last working day of the month, you should specify the date as
‘31’ and indicate the frequency. If you indicate the frequency as monthly, the accruals will be
done at the end of every month -- that is, on 31st for months with 31 days, on 30th for months
with 30 days and on 28th or 29th, as the case may be, for February.
If you specify the frequency as quarterly and fix the accrual date as the last day of the month,
then the accruals will be done on the last day of the month at the end of every quarter. It works in
a similar fashion for half-yearly accrual frequency.
If you set the accrual frequency as quarterly, half yearly or yearly, you have to specify the month
in which the first accrual has to begin, besides the date.
Month
If you choose one of the following options for accrual frequency, specify the month in which the
first accrual has to begin:

Quarterly

Half-yearly

Yearly
Day
If you choose one of the following options for accrual frequency, specify the date on which the
accruals have to be done during the month:

Monthly

Quarterly

Half-yearly

Yearly
Specifying the Claim Days
You need to specify the period in days within which to claim the LC amount. The expiry date for
the claim is calculated based on the claim days specified.
Claim Days
Specify the span of days within which the LC amount is to be claimed. You can only specify this
for ‘Guarantee’ type of products. On ‘Save’ this information is cleared for any other product type
other than ‘Guarantee’. The claim days values will be calculated in ‘Calendar Days’.
This value is defaulted to the contract level and the claim expiry date is calculated. The expiry
date (claim expiry date) for the claim is calculated based on the claim days specified.
Specifying the Interest Clause
You can indicate if an interest clause needs to be maintained for the LC/guarantee contract.
4-16
Interest Clause
Based on the ‘From date’, ‘To date’ and Rate type (either fixed or floating) the system calculates
the interest amount. Check this box to indicate that the interest clause details related to a
guarantee/LC contract need to be captured.
The interest for an LC is calculated on the usance period.
4.2.1.11
Specifying Guarantee Serial Number
Auto Generation Required
Check this box to generate the guarantee serial number in Guarantee.
You can check this flag only if the product type is Guarantee. If the ‘Auto generation
Required’ Flag is checked then the system generates the Guarantee Serial number on
Authorization of the Guarantee
For more information on Guarantee generation, refer topic ‘Maintaining Central Bank Reference’
under Bills and Collection User Manual.
4.2.1.12
Specifying Margin Details
Margin Required
Check this box to calculate the margin. Accordingly the system passes the accounting entries
while saving the contract. You are allowed to check this box only for import LC products.
Issue of LC %
Specify the percentage of margin to be collected on issue of LC. You can specify this value only if
the ‘Margin Required’ is set to ‘Yes’, else the system will display an error message.
Import Bills %
Specify the percentage of margin to be collected on linking Bills to LC. You can specify this value
only if the ‘Margin Required’ is set to ‘Yes’. You are allowed to specify this value only for Import
LC products.
On saving a Bill linked to LC that has Margin Required set to ‘Yes’, before Bill’s INIT event is
fired, the system performs a validation by checking the customer account balance to pay Marginal
Bill Amount. If the customer account balance is sufficient then it creates an Amount Block on the
Customer Account for the Marginal Bill Amount. If the customer account balance is not sufficient,
then it displays an error message
‘Insufficient Balance in Customer Account for Marginal Bill Amount’
In Bills, if Customer Account Balance is not sufficient to pay Marginal Amount and if you want
to change the Customer Account, then you are allowed to change the Customer Account in LC
Contract Online Screen.
4-17
On Authorizing the Bill linked to LC, the system fires the Availment Event. If the LC Product has
Margin Required set to ‘Yes’, then the Amount Block set on the Customer Account during Bill’s
INIT is released and utilizes the amount for Bill Margin Payment.
4.2.2 Specifying Accounting Roles
Click ‘Accounting Roles’ button to maintain accounting roles for the product.
4.2.3 Specifying Events
Click ‘Events’ button to maintain accounting roles for the product.
4-18
You must associate the event REIS (reissue of guarantee) for an LC product for processing of
reissue of guarantee. The system will display the REIS event during Events definition in the
Product Maintenance.
You must associate the event AVAM event (Availment through amend of a bill) for automatically
availing the LC during amendment of a bill contract under the LC.
For more details on AVAM event and associated accounting entries triggered refer section
‘Amending Bill Amount for Bills under LC’ in the chapter titled ‘Processing Bills’ in Bills and
Collections module.
Refer to Products user manual for detailed explanation of ‘The Product Event Accounting Entries
and Advices Maintenance screen’.
4.2.3.1 Specifying Event for Reissue of Guarantee
You must associate the event REIS for an LC product for processing of reissue of guarantee. The
system will display the REIS event during Events definition in the Product Maintenance.
Refer to Products user manual for detailed explanation of ‘The Product Event Accounting Entries
and Advices Maintenance screen’.
4.2.3.2 Generating advices for the Insurance Company
For generation of advice to insurance company at the time of opening or amending the LC, you
need to associate the message type ‘LC_INSURANCEADV’ for the events BISS and AMND
respectively. During authorization of these two events, the system will process the messages for
all import LCs.
4-19
Refer to Products user manual for the procedure to define advices that are generated for each
event.
All the messages are sent to the insurance company via mail. For this reason, you need to
specify the insurance code (Receiver) and the mailing address of the Insurance Company in the
LC Drafts screen.
Refer to the Annexure chapter to view an advice sample generated for the insurance company.
4.2.3.3 Generating Advices for Faxing LC Confirmation to Counterparty
For generation of advice to the counterparty at the time of confirming an LC, you need to
associate the message type ‘LC_INSTR_COPY’ and ‘LC_AM_INST_COPY’ for the events BISS
and AMND respectively. During authorization of these two events, the system will process the
messages for confirmed LCs.
Refer to the Annexure chapter to view an advice sample generated for faxing the confirmation to
the counterparty.
4.2.3.4 Generating Copy of Advices in Mail Format
A copy of MT700 Swift Message of can be generated in a mail advice format at the time of LC
contract authorization. You need to associate the message type ‘LC_INSTR_COPY’ along with
‘LC_INSTRUMENT’ for all the MT700 events.
On authorization, ‘LC_INSTRUMENT’ message is generated in Swift Message format and
‘LC_INSTR_COPY’ is generated in mail format.
4.2.4 Specifying Branch and Currency
Click ‘Branch & Currency’ button to maintain branch and currency restrictions.
4-20
4.2.5 Specifying Customer Details
Click ‘Customer’ button to maintain customer restrictions.
4-21
4.2.6 Specifying Commission Details
Click ‘Commission’ button to maintain commission details.
Usance Based
Check this box to indicate that the commission component includes usance based commission.
This identifies the commission component as usance type. Usance Based is not allowed for main
components. No accruals are allowed for this commission component.
Re-compute on Liquidation Date
Check this box to indicate that the commission amount needs to be re-calculated on commission
liquidation date, if the rate had changed after LC issuance or after previous liquidation. The rate
specified at the rule level is used to re-compute the commission.
Note the following:

The check box ‘Re-compute on Liquidation Date’ is enabled only for schedule type of
commission components.

‘Accrual Required’ is not applicable for schedule type of commissions.
4-22
4.2.7 Specifying Commission Schedule Details
You can collect commission periodically on installment basis at specified intervals like monthly,
quarterly, half yearly or yearly. A percentage of the commission is collected while issuing the LC
and the remaining is collected in installments. Installment commissions are collected at the rates
prevailing on the due dates of the installments, regardless of the rate prevailing while guarantee
was issued.
Schedule type of commission is applicable only for BISS event. You can specify only one
commission component of ‘schedule’ type. Fixed Rate Commission Rules with Tenor type wither
as ‘Tiered Tenor’ or ‘Tiered Tenor with Cascade Amount flag set to ‘N’’ are used for schedule
type of commissions.
You can specify the details related to the commission schedule in ‘Schedules’ screen. To invoke
this screen click ‘Schedules’ button in ‘Letter of Credit Product Preferences’ screen.
The Product Code and Product Description are defaulted in this screen. You can specify the
following details related to commission schedules:
Frequency
Select the frequency at which the commission has to be collected. The following options are
available in the drop-down list:

Monthly

Quarterly

Half Yearly

Yearly
Unit
Specify the number of schedules for commission collection.
4-23
Upfront (%)
Specify the percentage of commission to be collected upfront. You can specify this value only
while issuing the LC. Commission can be collected upfront in any of the following situations:

Issuing LC

Amendment of LC amount

Amendment of LC tenor

Amendment of LC amount and tenor
Refund (%)
Specify the percentage of commission for the unexpired period, to be refunded to the customer
on cancellation of LC.
‘Schedule’ type of commission calculation and collection is applicable only for Import LC and
Guarantee type of products.
4.2.8 Specifying Free Format Text
Click ‘Free Format Text’ button to maintain free format messages.
4-24
4.2.9 Specifying Tracer Details
Click ‘Tracer’ button to maintain tracer details.
4.2.10 Specifying Charge Details
Click ‘Charge’ button to maintain charge details.
4-25
4.2.11 Specifying Tax Details
Click ‘Tax’ button to maintain tax details.
4.2.12 Specifying MIS Details
Click ‘MIS’ button to maintain MIS details.
4-26
4.2.13 Specifying UDF Details
Click ‘Fields’ button to maintain user defined fields.
For further information on the generic attributes that you can define for a product, please refer the
following Oracle FLEXCUBE User Manuals:

Products

Interest

Charges and Fees

Commissions

Tax

User Defined Fields
4-27

Settlements
4-28
5.
5.1
Processing LC Contract
Introduction
An LC contract is an instruction wherein a customer requests the bank to issue, advise or confirm
a letter of credit, for a trade transaction. An LC substitutes a bank’s name and credit for that of the
parties involved. The bank thus undertakes to pay the seller/beneficiary even if the remitter fails
to pay.
Example
Ms. Keturah Smith (buyer or importer) in India and Mr. Silas Reed (seller or exporter) stationed in Paris
agree to a sales contract. In this contract the buyer Keturah Smith, is required to arrange for her bank, Midas
Bank, India (buyers bank) to open or issue an LC in favour of the seller, Mr. Reed.
Midas Bank sends the LC to Mr. Reed’s bank, Berliner Bank, Paris (advising bank). The advising bank then
sends details of the credit to the seller, who is the beneficiary of the credit. On receiving the credit details Mr.
Reed, ships the merchandise traded under the LC to Ms. Smith. He then presents the draft and documents
to the advising bank. The negotiating bank pays Mr. Reed. On making the payment, Berliner Bank will send
the documents to Midas Bank (issuing bank) and will debit the issuing bank’s account.
The issuing bank examines the document and charges Ms. Smith’s account. It releases the documents to
her allowing her to claim the merchandise.
The sequence of the events involved, in processing the LC can be considered an LC contract.
The specific letters of credit thus processed for the customers of your bank constitutes a contract.
An LC Contract would therefore require information on:

Who is the buyer or importer

Who is the seller or the exporter

The operation that your branch is performing on the LC

The merchandise traded under the LC

Specifications for the transportation of the consignment

The documents that should accompany the LC

The amount for which the LC is drawn

Details of the parties involved in the LC

The type of LC you are processing

The details of the insurance company under which the goods traded are covered
You have defined products to group together or categorize LC which share broad similarities.
Under each Product that you have defined, you can enter specific LCs based on your customers’
needs. Each of these will constitute a contract. While products provide a general framework and
serve to classify or categorise LCs, contracts are customer specific.
By default an LC inherits the attributes of the product to which it is associated. This means that
you will not have to define these general attributes each time you input an LC involving a product.
5-1
5.2
Capturing LC Contract Details
You can invoke the ‘Letters of Credit Contract Input’ screen by typing ‘LCDTRONL’ in the field at
the top right corner of the Application tool bar and clicking the adjoining arrow button. You are
allowed to book other branch transactions from the logged in branch. Also, you can query other
branch transactions from the logged in branch. Click on New from the Actions Menu. The system
will display ‘Transaction Branch’ screen. Here you can select the transaction branch.
The system defaults the logged-in branch by default as the transaction branch.
Transaction Branch
Select the appropriate branch from the list of branches available in the option list.
While clicking ‘Ok’ button, the system validates the access rights of the selected branch and
function for the user. If you don’t have appropriate rights on the selected branch and function, the
system would raise an error message. If you select a valid branch, the system updates the same
as transaction branch and the transaction would be posted for this branch.
The system performs the action level access rights validation only on ‘Save’ operation.
If you are calling a contract that has already been created, click on the contract reference number
in the Summary screen. The details of the contracts that you have entered will be displayed in a
tabular form. From the ‘Summary’ screen, you can open an existing contract by double clicking
the contract.
5-2
The LC Contract Details screen consists of a header and footer that contains fields specific to the
contract being entered. Besides these, you will also notice six tabs and a vertical array of buttons
along the lines of which you can enter details of the contract. Contract details are grouped into
the various screens according to the similarities they share.
The LC Contract Screen contains six tabs along the lines of which you can enter details of the
contract. The six tabs are:
Tabs
Description
Main
Click this tab to enter the essential terms of the LC. This screen along with
its fields has been detailed under the head Entering Main Contract Details.
Parties
In the screen that corresponds to this tab, you can enter the details of all
parties involved in the LC. This screen along with its fields has been
detailed under the head Entering Party Details.
Advices
In the screen corresponding to this tab you can view, suppress and
prioritize the advices that are to be generated for a contract. This screen
along with its fields has been detailed under the head Specifying Advises
for an LC.
Ships/Documents
In the screen that corresponds to this tab you can enter details of the
documents required under an LC and the clauses that should accompany
the documents.
Besides, you can also specify a description of the merchandise traded
under the LC and shipping instructions for the transportation of the
merchandise.
5-3
Tabs
Description
Tracers
Click on this tab to enter details of the tracers that should be generated for
an LC.
Others
In the screen that corresponds to this tab you can enter details that are to
be picked up for the SWIFT messages generated for the LC. This screen
along with its fields have been detailed under the head LC Contract details Others.
On the Contract Detailed screen are also displayed some buttons. They enable you to invoke a
number of functions vital to the processing of an LC contract. These buttons have been briefly
described below.
Buttons
Description
Drafts
Click this button to capture the details of draft drawn for the LC. You can specify
the name of the insurance company that is covering the goods traded under the
LC.
Settlement
Click this button to invoke the Settlement screens. Based on the details that you
enter in the settlement screens the LC will be settled. The details of these
screens have been discussed in the Settlements manual.
Events
Click this button to view the details of the events and accounting entries that a
contract involves.
MIS
Click this button to define MIS details for the LC.
Commission
On invoking this button Commission details of the contract is displayed
Charges
This button invokes the Charges, Commissions and Fees (ICCF) service.
On invoking this function you will be presented with a screen where the ICCF
rate, amount, currency and the waive charge parameter can be specified.
The Processing Charges and Fees manual, details the procedure for
maintaining charge rules. It also deals with the linking of a charge rules to a
product and the application of the rule on an LC.
The Processing Commissions manual, details the procedure for maintaining
commission rules. It also deals with the linking of a commission rule to a
product and the application of the rule on an LC.
Tax
This button invokes the Tax services. The Processing Tax manual details the
procedure for maintaining tax rules and schemes. It also deals with the linking
of a tax scheme to a product and the application of the scheme on an LC.
Collateral
In the screen that corresponds to this button, you can specify details of the cash
that you collect as collateral form a customer for the LC that you process. The
details of this screen are discussed under the head Specifying Collateral details
for an LC.
Linkages
Clicking this button invokes the Contract Linkages screen. In this screen, you
5-4
Buttons
Description
can link an LC to a deposit or account, and indicate the funds that you would
like to block.
Transfer
Details
If the LC is transferred to a new party, you can view the transaction details.
Fields
Click this button to specify values for the user defined fields (UDFs).
FX Linkages
Click this button to link details of an FX forward contract to the LC contract.
License
Click this button to specify the license details of the goods specified.
Refer the chapter titled ‘Capturing Additional Details’ in this User Manual for further details about
these buttons.
Enter valid inputs into all the mandatory fields or you will not be able to save the contract. After
making the mandatory entries for the LC, save the contract by either clicking save icon in the
toolbar or selecting Save from the Actions menu.
A contract that you have entered should be authorized by a user bearing a different Login ID,
before the EOD is run.
You have the option to amend all the unauthorized entries made for an LC. However, after
authorization, certain fields cannot be amended.
Click ‘Exit’ or ‘Cancel’ button to go back to the Application Browser.
5.2.1 Creating Contract
Through the screens that follow in this section, you can process all types of LCs (import, export,
invoice, clean, guarantees, shipping guarantees). You can choose to enter the details of a
contract using the following methods:

Selecting a template that has been created earlier - the details that have been stored in the
template will be displayed. You can change the values required in all fields except the
Product Code and Type.

Copying the details from an existing contract and changing only the details that are different
for the LC you are entering.

Using your keyboard or the option lists that are available at the various fields to enter the
details of the LC afresh.
To facilitate quick input, you only need to input the product code. Based on the product code,
many of the fields will be defaulted. Overwrite on these defaults to suit your requirement. You can
add details that are specific to the LC like the LC amount, details of the buyer and the seller, etc.
5-5
5.2.2 Uploading LCs
Oracle FLEXCUBE allows you to a facility to automatically upload LCs.
The MT 700 and MT 701 messages that you receive can be uploaded into Oracle FLEXCUBE as
LC contracts. Depending on whether confirmation is required, the uploaded LCs will be of type
‘advice’ or ‘advice and confirm’.
5.3
Specifying Contract Details
You can specify the following details:
Product
Select the product from the list of products created in the LC. Details of this product get defaulted
from the Product screen.
Product Description
Product description given for this product gets defaulted from the Product screen.
Contract Reference Number
The Contract Reference Number identifies a contract uniquely. It is automatically generated by
the system for each contract.
The Contract Reference Number is a combination of the branch code, the product code, the date
on which the contract is booked (in Julian format) and a running serial number for the booking
date. The Reference Number consists of a three-digit branch code, a four-character product
code, a five-digit Julian Date and a four-digit serial number.
The Julian Date has the following format:
YYDDD Here, YY stands for the last two digits of the year and DDD for the number of day(s) that
has/have elapsed, in the year.
You can fetch the transactions of all branches and query the other branch transaction and
proceed with authorization of the same. The system displays the branch in the query fields of the
option list.
Type
The type of product gets displayed here from the product screen, specifying if the product is of
type import/export or revolving or non-revolving.
An arrangement, in which the continuing availability of the LC revolves upon shipment and/or
presentation of documents and not upon specific amendment, is known as a Revolving LC.
Following are the product types:
5-6

Import

Export

Guarantee

Standby

Shipping Guarantee
User Reference Number
In addition, a contract is also identified by a unique User Reference Number. By default, the
Contract Reference Number generated by the system will be taken as the User Reference
Number. But you have the option to change the User Ref Number. Oracle FLEXCUBE also
provides you the facility to generate the user reference number in a specific format.
You can specify a format for the generation of the User Reference Number in the ‘Sequence
Generation’ screen available in the Application Browser.
Refer to the Core Services User Manual for details on maintaining a sequence format.
External Reference Number
This is a unique message identification number that will be used to identify an incoming message
coming from an external system. This is defined as the ICN number. On upload of an incoming
message into Oracle FLEXCUBE, this number, given by the external system, will be stored in
Oracle FLEXCUBE and passed on to the contract generated as a result of the incoming
message. If the incoming message results in an outgoing message, the ICN number will be linked
to the outgoing message also.
This number will help you in creating a relationship between the incoming message, the resultant
contract in Oracle FLEXCUBE, and the outgoing message, if any.
For instance, if an incoming MT103 results in an FT transaction, then ICN number of the incoming
MT103 will be linked to the FT contract generated due to the upload of the incoming payment
message.
If an Incoming message results in an outgoing contract (outgoing message), Oracle FLEXCUBE
will store the External reference number (ICN Number) at the following levels.

Incoming Message Level

Contract Level (Resulted due to the Incoming message)

Outgoing message (As a result of the above contract)
Guarantee Serial Number
This field is disabled if you set the ‘Auto Generation Required’ to ‘Yes’ at the product level. The
system generates the ‘Guarantee Serial No’ during authorization of Guarantees. However you are
allowed to enter Guarantee Serial No if ‘Auto Generation Required’ is set to ‘No’ at the product
level.
5-7
The system generates the Guarantee Serial No only for the first operation in LC and not for
subsequent operation change.
The system performs the following validations on save of LC:

It checks if it is entered only for guarantee products.

It checks the Guarantee Serial No. is a unique number. It should not be available for any of
the existing guarantees.
Operation Code
The operations that you can perform on an LC are determined by the type of LC being processed.
The operation that you specify will determine the accounting entries that are passed and the
messages that will be generated. You can select an operation from the option list available. The
type of operation that you can perform on an LC has been diagrammatically represented below:
5.3.1 Main Tab
While defining a product, you defined a broad outline that can be applied on LCs. However, while
processing an LC involving a product, you need to enter information specific to the LC. This
information is captured through the LC Contract Details Main screen.
5-8
The following are the features of the contract details main screen.
LC Details
The terms defined for an LC, form the basis on which the LC will be processed.
Currency
The currency in which it is drawn
Language
The language to be used for the LC instrument
Contract Amount
Specify the amount for which the LC is drawn. If the contract is linked to an open insurance policy
and the amount is greater than the available amount on the linked policy, the system will display
an override/error message.
Similarly, if the amount is greater than the limit specified for every conveyance of the linked
policy, the system will display an override.
Outstanding Amount
The balance amount available after the availment of an LC is displayed here.
5-9
Reference Number
The related LC Reference Number if the LC being processed has to be referred along with
another already opened (for example, an import LC would be a related LC for a shipping
guarantee).
Expiry Place
Specify the city, country, or the bank where the LC expires.
Applicable Rule
System defaults this value from the product level. However, you can modify it. The value
displayed here is not picked up in the field 40F. Message type ‘MT740’ displays ‘URR LATEST
VERSION’ irrespective of any value displayed in the option 'Applicable Rule'.
Issue Date
Enter the date on which the LC is issued.
Effective Date
In the LC Contract Details screen, you can capture the Effective Date of a guarantee. The
effective date that you capture for a guarantee will be printed on the instrument.
By default, the system displays the Issue Date, in the Effective Date field. You can change the
default value (for a guarantee) to a date in the past or future.
As stated earlier, the Effective Date along with the Tenor of the LC will be used to calculate the
Expiry Date of the LC.
Commission for a guarantee, will be calculated according to your specifications for the
product that the guarantee involves. In the LC Product Definition screen, you can indicate if
commission is to be calculated from:

The Issue Date

The Effective Date
Tenor
All LC contracts will be associated with the standard tenor maintained for the product under which
the contract is being processed. The tenor of the LC will be used in combination with the Effective
Date to arrive at the Expiry Date of the LC, as follows:
LC Expiry Date = Effective Date + Tenor
However, for a specific LC contract, you can choose to maintain a different tenor. The tenor of an
LC can be expressed in one of the following units:

Days (D)

Months (M)
5-10

Years (Y)
If you do not specify a unit, the system will automatically append ‘D’ with the numeric value
(tenor) indicating that the tenor is expressed in Days.
Depending on the tenor that you specify, the system will recalculate the Expiry Date.
Consequently, the Closure Date that is dependent on the Expiry Date will also be recalculated by
the system.
Expiry Date
Specify the date on which the LC contract expires.
Closure Date
The date of closure is based on the ‘Closure Days’ maintained for the product involved in the LC.
The number of days specified as the Closure Days is calculated from the expiry date of the LC, to
arrive at the Closure Date.
LC Closure Date = LC Expiry Date + Closure Days
If the ‘Closure Days’ are not maintained at the Product level, then the Closure Date is calculated
as follows:
LC Closure Date = LC Expiry Date + 30
However, you can change the closure date, thus calculated, to any date after the expiry date.
If the closure date falls on a holiday, the system will prompt you with an override message.
Stop Date
This date will be defaulted to LC Expiry date. Stop date cannot be earlier than Issue date and
later than expiry date.
Claim Days
Specify the days for claiming an LC amount for an LC Guarantee type of contract. This is
defaulted from the preferences maintained for an LC Guarantee type product. You can however
change the defaulted value.
Claim Expiry Date
The claim expiry date is derived based on the claim days specified at the product level. On saving
the contract the claim expiry date is calculated as: Expiry date + claim days (calendar days).
The Claim expiry date does not exceed the closure date of the LC contract. On save the system
validates the same.
If claim days are not maintained at the product level then the system defaults the Contract Expiry
date as the claim expiry date.
5-11
Rule Narrative
This is defaulted from the product level. The value displayed here can be amended at the
contract level. However, once the contract is authorized, you cannot make any amendments.
Oracle FLEXCUBE validates the rule narrative for any slashes.
Note the following:

The rule narrative should not start or end with ‘/’

It should not have two consecutive slashes
This is enabled only if the Applicable Rule is ‘OTHR’
This value will be repeated twice in field 79 of an outgoing MT707 message if the free format text
associated with the LC_AMND_INSTR advice exceeds 1750 characters in length.
5.3.1.1 Tolerance
Tolerance denotes the variance that has to be built around the LC amount, to arrive at the actual
availability amount for the LC. The tolerance percentage is used to build the Maximum LC
amount, when some component of the trade transaction like the freight, insurance, etc., is not
covered in the LC amount.
Positive %
The positive tolerance is the percentage that should be added to the LC amount, to arrive at the
Maximum LC Amount. This amount will be considered as the LC outstanding LC amount. . When
you try to change the defaulted value for the positive tolerance an override is displayed when you
try to save the contract.
Negative %
The negative tolerance is the percentage that should be subtracted from the LC amount, to arrive
at the Minimum LC Amount. The negative tolerance is captured for information purposes only. It
will form part of the LC and amendment instruments. When you try to change the defaulted value
for the negative tolerance an override message is displayed when trying to save the contract.
The positive and negative tolerance specified for the product associated with the LC is defaulted.
If you change the defaulted Positive Tolerance, an override message is displayed.
Maximum Amount
The Maximum LC Amount indicates the maximum amount that can be availed under the LC. This
amount is arrived at, by adding the positive tolerance to the LC amount.000
Max. LC Amount = LC Amount + Positive Tolerance
If you have indicated the positive tolerance to be zero then:
Max. LC Amount = LC Amount
5-12
A customer cannot, at any point in time, avail more than the Maximum LC amount.
Tolerance Text
This clause/text further qualifies the LC amount. Select one of the following options from the
adjoining drop-down list:

About

Approximately

Circa

None
Liability Amount
Based on the value you specify in ‘Revolves In’ field, the LC Liability Amount will be computed
and displayed.
Liability %
The liability percentage is used to track the maximum LC amount against a given percentage. A
bank would like to limit its exposure to a new or existing customer as LC is a commitment given
by the bank. Although the bank sanctions an LC limit (maximum LC amount which includes
tolerance) to a customer it may like to specify a percentage over and above this limit .This will
result in the customer being shown to be liable or tracked for a higher amount. Specifying a
liability percentage is from the perspective of risk management and provides cushion to the bank.
The liability amount is arrived at in the following manner:
Liability Amount = Maximum LC Amount + Liability % of the LC amount
If you have indicated the liability percentage to be zero then,
Liability Amount = Maximum LC Amount
This amount is computed by the system using the method indicated above, only if you have
specified a liability tolerance. If a Liability tolerance has not been specified, you can enter a
liability amount of your choice. However, the liability amount that you can enter should be at least
equal to the maximum LC amount.
Example
You have issued an LC for USD $100,000 and the positive tolerance specified for the LC is 10%.
This means that the Maximum LC amount is:
Max. LC Amount = LC Amount + Positive Tolerance
= USD 100,000 + 10% of USD 100,000
Maximum LC amount = USD 110,000
5-13
If you have specified the liability percentage to be 10%, the liability amount will computed by the system in
the following manner:
Liability Amount = Maximum LC Amount + Liability % of the Maximum LC amount
= USD 110,000 + 10% of the Maximum LC amount
Liability Amount = USD 121,000
In this case you cannot effect any change to the liability amount.
If you have not specified liability tolerance
If you have not specified liability tolerance for the LC, the liability amount will be USD 110,000. In this case,
you can specify a Liability amount of your own. However, the amount that you enter cannot be less than the
maximum LC amount of USD 110,000.
Under the following circumstances, system will display an error message:

Latest shipment date of the import LC is greater than the latest shipment date of export LC.

Expiry date of import LC is greater than expiry date of export LC.

Import LC amount is greater than export LC amount.

If you check the option ‘Back to Back LC’ for an export LC.
The system will display an override message if you try to amend, cancel or close an export
LC that is linked to an import LC. The above mentioned validations are also done while uploading
an LC contract.
5.3.1.2 Customer
One of the parties in the LC should be a customer of your bank with a valid CIF ID. The details of
this party are captured in the Contract Main Screen. It is then defaulted to the Parties screen.
Customer Name
If none of the parties in the LC is a customer of the bank, you should enter the CIF ID defined for
the walk-in customer and give the details of one of the parties for it.
The party type of the counterparty of the LC is defaulted based on the type of LC you are
processing. If you process an import LC ‘APP’ (indicating applicant) is defaulted. If you process
an export LC ‘BEN’ (indicating beneficiary) is defaulted. You can change the default.
In order to search the values in the option list, you need to enter the minimum number of
characters required by the system for search. That is, to search with the customer number, you
need to enter at least the first four characters of the customer number that you need to search.
Similarly, while searching with customer short name, you need to enter at least the first three
characters.
If you click ‘Fetch’ button without entering the minimum characters, the system will prompt you to
enter the minimum value for at least one of the indexed field.
5-14
Customer
If the applicant is a customer of your bank, specify the CIF ID assigned to the customer, the
related details of the customer will be automatically picked up.
If you are processing an Export LC, you should typically specify details of the beneficiary.
Party Type
Indicate the party type of the customer who is the counter party of the LC. You can select the
valid party type from the adjoining option list.
The details of the other parties involved in the LC are captured in the Parties screen. The
Customer Details specified in this screen will be defaulted to the Parties screen.
License Expiry Date
After you capture the CIF ID of the customer involved in the contract, the Import License Expiry
Date maintained for the selected customer is defaulted to the screen. The system does not do
any validations based on the Expiry Date. It is used only for information purpose.
Dated
Enter the date of the Their Reference. This would normally be the date on which you have a
correspondence from the party regarding the LC.
Customer Reference
This is the reference of the party whose CIF ID you have input. This will be picked up
appropriately in the correspondence sent for the LC.
For an export LC, a reference for the Issuing Bank is mandatory. It is optional for other parties.
5.3.1.3 Revolving Detail
You can capture the following details.
Revolves In
LCs can revolve in Time or in Value. Select the appropriate option from the adjoining drop-down
list.
Automatic Reinstatement
The mode of reinstatement for a revolving LC can be either automatic or manual. Check against
this field to indicate that the mode of reinstatement is automatic.
This field is applicable only for an LC revolving in time.
5-15
Cumulative
Check this box to indicate that the LC is cumulative. Leave it unchecked to indicate otherwise.
Frequency
For LCs that revolve in value, you can specify the maximum number of times the LC can be
reinstated. Based on the value you specify, the LC Liability Amount will be computed and
displayed.
If the number of reinstatements of the LC exceeds the value you specify, an override message
will be displayed when the LC is saved. This override will have to be ratified at the time of
contract authorization.
Units
For LCs, which revolve in time, the maximum number of reinstatements is calculated based on
the Reinstatement Frequency you specify. In the Units field, you can choose one of the following:

Months

Days
Next REIN Date
The system computes and displays the date of next reinstatement based on the value in ‘Units’
field.
Example 1: Reinstatement Frequency in Days
Let us assume you have set up the following details for an LC:
Issuing date
-
January 01, 2003
Frequency
-
60 Days
Next Reinstatement Date is calculated using the following formula:
Issue Date + Frequency
Using this formula:
= 01 January 2003 + 60 Days
= 02 March 2003
Example 2: Reinstatement Frequency in Months
Let us assume you have set up the following details for an LC:
Issuing date
-
January 01, 2003
Frequency
-
2 Months
Using the formula for Next Reinstatement Date, you get:
5-16
= 01 January 2003 + 2 Months
= 01 March 2003
Interest Clause
You can provide an LC/guarantee contract with interest clause details. Only if you have indicated
at the product level that an interest clause needs to be added with an LC/guarantee contract, the
details for the same are enabled for capture at the contract screen. These are applicable only for
‘Guarantee’ and ‘Import’ LC contracts. The Drafts system is disabled if an amendment is made
from the LC Online screen.
From Date
Specify the start date for the interest component on the contract. If you do not input a value prior
to clicking the ‘Default’ button, the effective date of the contract is defaulted as the ‘From Date’.
The ‘Default’ button is used for calculating interest based on the given parameters.
To Date
Specify the end date for the interest clause on the LC/guarantee contract. If you do not input a
value prior to clicking the ‘Default’ button, the expiry date of the contract is defaulted as the ‘To
Date’.
For import LC Contracts this is calculated as Effective date + max draft tenor (from draft details)
if draft tenor details are provided.
The ‘from’ and ‘to’ dates are validated to confirm that the ‘from date’ is greater than effective date,
and the ‘to date’ is less than the claim expiry date given in the BG contract and less than the Max
draft tenor if draft details are provided for the LC Contract. The ‘from date’ is checked for being
lesser than the expiry date given and the ‘to date’ is checked for being greater than the ‘from’
date.
Rate Type
Select the rate type applicable from the option list. You can choose the rate as either:

Fixed

Floating
Rate Code
Specify the tier rate code. This value is captured only if the rate type is floating.
Spread
Specify the spread for the contract. The spread indicates the interest rate for fixed rate types. For
floating rates the rate type is the interest spread. The spread for floating rates can be either
positive or negative.
5-17
The interest is calculated as Actual / 360 and Actual / 365, taken from currency definition of
contract.
Interest Amount
The interest amount calculated is displayed here.
If the interest clause option is given for any product type other than import LC and Guarantees
and it has not been selected at the product level maintenance the system then throws an error on
click of the ‘Default’ Button or save of the interest clause details. The interest calculated for the
LC amount includes the option of limit tracking.
Accounting entries for the interest clause details
Accounting entries for the events are illustrated below. These include the bill issue, amendment
(AMND), availment (AVAL), Closure/cancellation (CLOS/CANC)
For Bill Issue BISS:

Guarantee Amount – 1000 USD

Tolerance – 10%

Interest calculation period – 1 year

Interest Rate – 5%
Then the basis amount for calculation = 1000 + 1000*10% = 1100 USD and INT_SET_AMT calculated is
1100*5*1/100 = 55 USD. Hence TOT_GUAR_INT_AMT is calculated as 1000 + 100 + 55 = 1155 USD
The accounting entries for this calculation are:
Dr. LC_OCU
LIAB_OS_AMT
1100 USD
Cr. LC_OCU_OFFSET
LIAB_OS_AMT
1100 USD
Dr. GUAR_INT_AMT
INT_SET_AMT
55 USD
Cr. GUAR_INT_AMTOFS
INT_SET_AMT
55 USD
AMND (CASE 1)

Guarantee Amount – 800 USD

Tolerance – 10%

Interest calculation period – 1 year

Interest Rate – 5%
Then the Basis Amount for calculation is = 800 + 800*10% = 880 USD and Interest Amount calculated –
880*5*1/100 = 44 USD. Then the INT_AMND_AMT = 44 – 55 = -11 USD.
Accounting entires for this calculation are:
Dr. LC_OCU
LIAB_AMND_AMT
-220 USD
Cr. LC_OCU_OFFSET
LIAB_AMND_AMT
-220 USD
5-18
Dr. GUAR_INT_AMT
INT_AMND_AMT -11 USD
Cr. GUAR_INT_AMTOFS INT_AMND_AMT -11 USD
Now for CASE 2:

Guarantee Amount – 1200 USD

Tolerance – 10%

Interest calculation period – 1 year

Interest Rate – 5%
Then the Basis Amount for calculation = 1200 + 1200*10% = 1320 USD. Interest Amount calculated –
1320*5*1/100 = 66 USD. Hence TOT_AMND_INT_AMT = 200 + 20 + 11 = 231. Then the INT_AMND_AMT
= 66 – 55 = 11 USD.
Accounting entires for the calculations will be:
Dr. LC_OCU
LIAB_AMND_AMT
320 USD
Cr. LC_OCU_OFFSET
LIAB_AMND_AMT
320 USD
Dr. GUAR_INT_AMT
INT_AMND_AMT
11 USD
Cr. GUAR_INT_AMTOFS
INT_AMND_AMT
11 USD
AVAL (availment event)

Availment amount – 600 USD

Tolerance – 10%

Interest calculation period – 1 year

Interest Rate – 5%
Then the Basis Amount for calculation = 600 USD. The Interest Amount Calculated = 600*5*1/100 = 30
USD. The accounting entires for this processing will be:
Dr. LC_OCU_OFFSET
AVAIL_SET_AMT
600 USD
Cr. LC_OCU_OFF
AVAIL_SET_AMT
600 USD
Dr. GUAR_INT_AMTOFS
INT_AVL_AMT
30 USD
Cr. GUAR_INT_AMT
INT_AVL_AMT
30 USD
Closure or cancellation (CLOS/CANC)
During closure the INT_SET_AMT is calculated as mentioned under CASE 1 under AMND event. Which is =
Interest Amount passed during BISS + Total (Interest Amounts passed during all AMND) – Total (Interest
Amounts passed during all AVAL).
The system passes the residual/delta contingent accounting entries to obtain a zero balance for the
contingent GL, as displayed:
Dr. LC_OCU_OFFSET
AVAIL_SET_AMT
280 USD
5-19
Cr. LC_OCU_OFF
Dr. GUAR_INT_AMTOFS
Cr. GUAR_INT_AMT
AVAIL_SET_AMT
280 USD
INT_SET_AMT
14 USD
INT_SET_AMT
14 USD
Interest Clause
Check this box to indicate that you can specify the interest clause details for the LC contract. The
value of this checkbox gets defaulted from the product level.
If this checkbox is selected at the product level, you can unselect it at the contract level, if
required. If this checkbox is not selected at the product level and if you try to select this at the
contract level, then the system will display an error message.
You can specify interest clause details during amendment also based on the value of this
checkbox.
You cannot modify this checkbox, once the contract details are authorized.
Guarantee
If the LC that you are processing is a guarantee you should specify its type. Click the adjoining
drop-down list and select one of the following values:

Bid

Performance

Retention
Amount (Current Availability)
This field displays the current amount that is available for availment under the LC. This value is
automatically updated when there are availments, amendments or reinstatements so that it
reflects the current amount that is available under the LC.
Liability (Outstanding Liability)
This field displays the current outstanding liability amount under the LC. This value is
automatically updated when there are availments, amendments or reinstatements so that it
reflects the current amount under the LC.
Memo
Enter information about the LC that is intended for the internal reference of your bank. This
information will not be printed on any correspondence regarding the LC. However, the remarks
are displayed when the details of the LC are displayed or printed.
5.3.1.4 Credit
Here you can capture the following details.
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Type
Indicate the type of credit for which the LC is being processed.
Mode
Indicate the mode of payment through which the LC will be settled.
Details
Specify the details of the credit.
Credit Avl With
Specify details of the party with whom the credit will be available.
Guarantee Details
The details of a guarantee under an LC are captured here.
Type of Guarantee
Specify the type of guarantee you are processing. . The predefined sets of values are:

Advance Payment

Bid Bond

Financial

Performance

Solvency Certificate

Capability Certificate

Deferred Payment Guarantee
This field is applicable only for only ‘Guarantee’ type of products. If it is entered for any other
types of products, the system performs validation on save of LC and displays the message below:
‘Type of Guarantee can be entered for only Guarantee Type of Products’
You are allowed to amend the value on Amendment of Guarantee Details.
5.3.1.5 Reinstatement of Available Amount
The reinstatement of the amount available may be effected in one of two ways:

Where reinstatement is dependent upon time - In these circumstances a specific amount is
allowed to be drawn within each specific period as stipulated in the LC during its validity. For
example, the credit may indicate that:
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
US$ 25,000 may be drawn each month during the six-month validity of the LC

The reinstatement of the amount may be either cumulative or non-cumulative.
Cumulative Reinstatement - Where the credit indicates that the reinstatement is on a
cumulative basis, in the above example the sixth installment may be the cumulative
for 6 months, i.e., US$ 150,000
Non-Cumulative Reinstatement - In the above example, if the credit indicates that the
reinstatement is on a non-cumulative basis, it means that if one month’s shipment of
US$25,000 is not made (either completely or partially), it cannot be carried forward to
the succeeding month. If, for example, no shipments have been effected for five
months, the drawing for the sixth month is restricted to US$25,000

Where reinstatement is dependent upon value - Sometimes Revolving Credits may indicate
that the amount is to be reinstated upon utilization within the overall validity of the credit. For
example: ‘This LC shall revolve for US$ 25,000 during its validity up to a maximum overall
drawing value of US$ 25,000’.
Reinstatement can be done as Auto or Manual. If Auto reinstatement and revolves in time options
are selected, then the system calculates maximum liability amount as per the frequency
maintained and pass entries for the same.
If Auto reinstatement, revolves in time and Non cumulative options are selected, then the system
calculates initially the maximum liability amount during booking of contract and reverse the
unutilized value of the particular period at the end of respective period.
System calculates and displays the frequency of reinstatement as per the values maintained in
Revolves and Units options. System calculates and display next reinstatement date as per the
frequency maintained when reinstatement is maintained as auto and frequency as time.
If auto Reinstatement and Frequency options are selected, then the system reinstates during
EOD after every availment is made. If you select manual Reinstatement and Frequency, then the
user can reinstates the value of contract anytime after availment is made.
If reinstatement is dependent on value, then cumulative reinstatement is not supported by the
system.
5.3.2 Parties Tab
The Parties screen can be used to record the details related to all the parties involved in the LC.
The documents, tracers and messages that are generated will be sent to the parties concerned,
based on the details you specify in this screen.
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You can maintain the following details here:
5.3.2.1 Party Details
You should specify the following for each of the parties involved in the LC:
Party Type
Specify the party type (beneficiary, accountee, applicant, advising bank, issuing bank,
reimbursing bank, advice through bank, confirming bank, claiming bank). The adjoining option list
displays all party types available for the LC. You can choose the appropriate one. If the operation
code of the LC is ‘Reimbursement’ the system will default the CIF party type as ‘ISB’ (issuing
bank). The party type ‘CLB’ (claiming bank) will be available only if the LC is linked to a
‘Reimbursement’ type of product.
Description
You can provide the description for the party type here.
Customer
The CIF ID assigned to the party, if the party is defined as a customer in Oracle FLEXCUBE. If
the applicant (APP) or beneficiary (BEN) is not a customer of your bank, you can use a walk-in
customer ID.
Customer Name
Enter the name of the Customer. The party name can be 150 characters in length. However,
please note that in the SWIFT messages that you generate only 35 characters will be included.
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Country
Enter the country of the customer.
Address 1 to 4
Enter the address of the customer who has initiated the transaction.
Address Line 5
Specify the additional address details of the customer initiating the transaction. If the local
currency LCY is not used for the LC contract and an advising bank (ABK) type is not maintained
for the contract then an override is displayed on saving the contract. The address details here are
copied to a new contract during LC contract copy. All mail messages include the 5th line of
address with the other details except for type ‘Applicant’ as an applicant is a customer himself.
If the default media is not mail and the 5th line includes address details then an override is
displayed. For an LC Instrument mail media type only beneficiary address details in the 5th line
are displayed.
Customer Reference
Specify the sender’s reference number. In case of an upload of MT768, the value in field 20 of the
message is displayed here. Input to this field will be mandatory for the party type ‘ISB’.
Dated
Specify the date of transaction initiation.
Language
Specify the language in which advices should be sent to the customer.
Issuer
Check this option to indicate that the issue is a bank.
5.3.2.2 Other Addresses
Following details are displayed here:

The media type through which the advises should be routed and the respective address(es)

The account

The party’s mail addresses
All the messages will be sent to the party on the address mentioned in the party’s mail addresses
field. The advices for a party will be sent to the default media maintained in the Customer
Addresses table. If you want to send the advices through another medium, you should indicate it
in the Parties screen. The address should be also indicated. The advices will be sent through the
new medium, only if you indicate so in the Advices screen of contract processing. If not, the
advice will continue to be sent to the default address defined for the party.
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If the media type is ‘mail’, then Address1, Address 2, Address 3, and Address 4 are used to
capture the alternate addresses of the parties.
If the media type is ‘Swift’ or ‘SFMS’, then Address1 is used to capture the BIC or IFSC code but
no data is allowed for Address2, Address 3, and Address 4.
To generate LC messages in SFMS format, you need to select the media as SFMS.
For more details on the SFMS messages supported in LC, refer the chapter titled ‘Annexure D –
SFMS Messages’ in this user manual.
You can use this feature to send a one-off advice, through a different medium. For example, for a
particular customer, you normally send all advices through mail and hence haven’t defined
SWIFT or TELEX advices. For an LC involving a customer, you want to send the advices through
SWIFT. In such a case, you can specify the medium as SWIFT and specify the address only for
the LC you are processing.
The issuer of LC is a bank or an individual. This is enabled only for the party type ISB (issuing
Bank). The party type is defaulted from CIF maintenance. However, you can amend the value
before authorizing the contract.
If issuer of LC is a bank, tags 52A and 52D will be populated. The message Types supported by
these tags are MT710/MT720.
If issuer of LC is not a bank, 52B tag will be populated.
The parties involved in an LC depend upon the type of LC you are processing. The following table
indicates the minimum number of parties required for the types of LC that you can process.
LC type
Parties applicable
Mandatory
parties
Parties not
allowed
Import LC
Applicant/Accountee
Applicant and
Beneficiary
OR
Accountee and
Beneficiary
Issuing Bank
Beneficiary and
Issuing Bank
Advising Bank
Advising Bank
Beneficiary
Confirming Bank
Reimbursing Bank
Export LC
Applicant/Accountee
Issuing Bank
Advising Bank
Beneficiary
Confirming Bank
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LC type
Parties applicable
Mandatory
parties
Parties not
allowed
Applicant and
Beneficiary
Issuing Bank
Applicant and
Beneficiary
Advising Bank
Reimbursing Bank
Shipping
Guarantee
Applicant/Accountee
Advising Bank
Beneficiary
Confirming Bank
Advice Through Bank
Reimbursing Bank
Guarantee
Applicant and Beneficiary
Advise Through
Bank
Reimbursement
Bank
Issuing Bank
Standby
Applicant/Accountee
Applicant and
Beneficiary
Issuing Bank
Applicant and
Beneficiary
Issuing Bank
Advising bank
Beneficiary
Confirming bank
Reimbursing bank
Clean LC
Applicant/Accountee
Advising bank
OR
Beneficiary
Confirming bank (for confirmed LCs
only; could be more than one bank)
Accountee And
Beneficiary
While processing LCs and guarantees, you can use the walk-in customer ID for the applicant
(APP) and Beneficiary (BEN) party types. However, note that you can use a particular CIF ID only
once in an LC.
5.3.2.3 Credit Line
Here you can capture the following details.
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Limits Tracking Required
Specify whether the credit granted under the LC you are processing should be tracked against
the credit limit assigned to the customer under a Credit Line.
Check this box to indicate that limit tracking is required for the LC. Leave it unchecked to indicate
otherwise. In the subsequent fields of this screen, you can specify details of the line under which
the credit is to be tracked.
Party Type
Specify the type of party involved in the LC you are processing, whose details you would
subsequently enter. The parties involved in the LC can be specified in any sequence. However, a
party code can be used only once in each LC.
Line
Specify the credit line under which you want to track the LC amount.
Customer
The system displays the customer for whom the LC is booked.
Limit Tracking Tenor
Specify the basis on which limits need to be tracked. Choose one of the following options:

Letter Of Credit Tenor

Max Draft Tenor
5.3.3 Advices Tab
An important part of processing an LC is the generation of various advices applicable for a
contract.
The advices that can be generated for the events that occur during the lifecycle of an LC are
defined for the product, to which the LC is linked. For example, you may have specified the
following advices for a product:

Issue of an import LC: pre-advice by SWIFT and LC instrument by mail to the advising bank,
the authorization to reimburse to the reimbursing bank.

Advice of an export LC: the acknowledgement advice to the advising bank.

Issue of a guarantee: the guarantee instrument to the beneficiary.
The details of the advices for an event are displayed in the Advices screen. The party type to
whom a specific advice should be sent is picked up automatically based on the type of LC being
processed and the parties involved.
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From the LC Contract Details screen click ‘Advices’ tab. The advices screen is displayed. The
advices defined for the event you are processing will be displayed. You can choose to suppress
any of them. The address of the party to whom the advice is addressed to will be picked up by
default, based on the media and address maintenance for the party. These can be changed if
required.
The first time you navigate to the advices tab in the LC contract online screen; all override
messages pertaining to contract will be displayed. These overrides are displayed if you are
visiting the ‘Advices’ tab for the first time.
fFor a payment message by SWIFT, you also have the option to change the priority of the
message.
You can capture the following details.
Suppress
By default, all the advices that have been defined for a product will be generated for the LCs
involving it. If any of the advices are not applicable to the LC you are processing, you can
suppress its generation by Checking against the suppress field.
Priority
For a payment message by SWIFT, you also have the option to change the priority of the
message. By default, the priority of all advices is marked as Normal. The priority of a payment
message can be changed to one of the following:

Normal

Medium

High
Medium
The medium by which an advice will be transmitted and the corresponding address will be picked
up based on the media and address maintenance for a customer.
You can, however, change either of these while processing the LC. Typically, if changed, both of
them will be changed.
To generate LC messages in SFMS format, you need to select the media as SFMS.
For more details on the SFMS messages supported in LC, refer the chapter titled ‘Annexure D –
SFMS Messages’ in this user manual.
After selecting the advices to be generated for the LC, click on ‘Ok’ to save it. Click ‘Exit’ or
‘Cancel’ button to reject the inputs you have made. In either case, you will be taken to the
Contract Main screen.
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5.3.3.1 FFT Details
Free Format Text instructions (FFTs) are a set of instructions or statements that are applicable to
the LC that you process. It can be used to enter additional details related to the LC you are
processing. In the LC Contract - Advices screen you can specify the FFTs that should accompany
an advice, generated for an LC. When you select an advice code on this screen, the advice code
together and the party type, to which it is to be sent, is displayed in the FFT section. This
indicates that the FFTs that you specify will appear on the advice, which is displayed and will be
sent to the party type that is displayed.
All the FFTs defined for the advice, at the product level will also be displayed. You have the
option to add to or delete from the list of FFTs defaulted for an advice.
Free Format Text Code
To add an FFT to the list, click add icon. Select an FFT code from the adjoining option list that is
displayed.
Text
After selecting the code that identifies the FFT you wish to attach to the advice, its description is
automatically picked up and displayed. The FFT description can be changed to suit the
requirements of the LC you are processing.
Single
Check this option to indicate that the FFT is a single message.
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Guarantee Reference Number
Choose the guarantee whose details you would like to upload (from the Incoming Message
Browser) in the FFT Description fields.
A FFT Description field can contain 2000 characters. If the details of the guarantee you specify
exceeds 2000 characters, the system will automatically stagger the remaining text into
subsequent FFT Description fields.
To delete an FFT from the list, highlight the code that identifies the FFT and click delete icon. The
free format codes for the following purposes have the fixed codes:
SND2RECINFO
Sender to receiver information (Field 72 of SWIFT).
INSTRUCTION
Instructions to the Paying/Accepting/Negotiating bank (Field 78 of SWIFT).
The FFT maintained for the customer and advice combination is defaulted along with the
FFT maintained at Product level during advice pickup. If FFT maintained at product and
customer/advice level is the same, the customer/advice level FFT and description is
defaulted and the product level FFT gets overriden. You can edit the FFT for a contract at this
level.
5.3.4 Viewing Different Versions of a Contract
When you enter a contract, it is allotted the version number, 1.Every amendment and
reinstatement results in the next version of the contract being created.
While viewing the Detailed View screen for a contract, the latest version will be displayed. To
navigate between the different versions, use the arrow buttons to view the previous and next
version.
The LC contract will become effective in the system only after you ‘Save’ the details and your
supervisor authorizes it.
The system will display an override message if you save the contract with the drawee and
applicant being the same. You may use your discretion to proceed or cancel the contract. You
can also have this override configured as an error message in which case, the system will not
allow you to proceed until you make the necessary changes.
5.4
Authorizing an LC Contract
All operations on a deal (input, modification, reversal, manual liquidation or manual roll-over)
have to be authorized by a user other than the one who performed the operation. This user
should have the requisite access rights. All deals should be authorized before you can begin end
of day operations.
You can invoke the ‘Letters of Credit Authorize Contract’ screen by typing ‘LCDTRAUT’ in the
field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
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The following details will be displayed here:
Contract Reference
The system displays the LC contract reference number. However, you can fetch the transactions
of all branches and query the other branch transaction and proceed with authorization of the
same. The system displays the branch in the query fields of the option list.
Maker
The system displays the name of the maker of the contract.
Event Code
The system displays the code of the event happening on the contract.
Event Date
The system displays the date on which the event happened.
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5.4.1.1 Viewing the Rekey Fields
If the contract involves a product for which some Re-key fields have been defined, the details of
the contract will be displayed only after you input the values in those fields. If no Re-key fields
have been defined, the details of the contract will be displayed in the ‘Authorization’ screen.
If you are authorizing an amendment, the old values of the fields that were modified will be
displayed along with the new values. In the re-key fields, you should enter the values that were
given during the amendment.
Generate Messages
This check box is automatically selected by the system and it instructs the system to generate
messages for the event once it is authorized.
After selecting the contracts, click on ‘Authorize’ button to authorize the contracts
5.4.1.2 Viewing the Contract Override Details
All the overrides that were given during the input or modification will be displayed when the
contract is being authorized. The central liability checks (checks to see whether the credit limit
allotted to the customer have been exceeded due to this contract) will be done now. If there are
any excesses, you will be prompted to give an override. The contract will be authorized only if you
give the overrides. If not, the contract will not be authorized and you will be returned to the
‘Contract Detailed View’ screen.
5.5
Canceling an LC
You may have to cancel an LC that has been opened, before its Expiry Date. An example for a
cancellation is when the trade deal for which the LC is opened falls through. A cancelled LC will
not be available for any availment. However, you can cancel an LC that has been availed
partially.
In Oracle FLEXCUBE, the following are the prerequisites for cancellation:

The LC has not yet reached its expiry date

The cancellation event - CANC, has been defined
The accounting entries for this event are generally the reversal of the accounting entries passed
for liability and collateral, when the LC was opened. In addition, a charge can be levied for
canceling the LC. A cancellation advice informing, the advising bank or beneficiary, about the
cancellation may be generated.
5.5.1 Procedure for Canceling an LC
From the Contract Detailed View:

Select Close from the Actions Menu

Click cancel icon in the Toolbar
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You will be prompted to confirm the cancellation.
5.6
Closing an LC
Normally, an LC that is opened will be negotiated within its expiry date. If the negotiation does not
happen even after the expiry date, you can close the LC.
By closing an LC, you will be reversing the liability entries passed for the LC. This ensures that
the credit limit that was taken by the LC is released and is available for future utilization.
5.6.1 Procedure for Closing an LC
In Oracle FLEXCUBE, you can close an LC under the following circumstances:

The event ‘CLOS’ is defined for the LC

The LC is beyond its Expiry Date
The accounting entries defined for this event is generally the reversal of the outstanding liability.
No availment can be made against an LC that is closed. You should reopen a closed LC if you
have to make an availment against it. This would be required in a situation when the LC comes in
for negotiation after it has been closed. The reopening of the LC will put back the outstanding
liability and availability for the LC.
5.6.1.1 Closing an LC Automatically
In the LC Contract Main screen, you can specify the following dates related to the closure of an
LC:

Whether auto closure is allowed

The date on which the LC should be automatically closed
To recall, the date of automatic closure is based on the ‘Closure Days’ maintained for the product
involved in the LC. However, you can change the closure date, to any date, after the expiry date
of the LC.
An LC that is defined for automatic closure will be closed during the End of Day processes on the
closure date.
5.6.1.2 Closing an LC Manually
An LC that is not defined for automatic closure can be closed any time after its Expiry Date.
Choose ‘Close’ from the Actions Menu, when the details of the LC are displayed in the Detailed
View screen.
Oracle FLEXCUBE displays a message prompting you to confirm the closure. The closure of an
LC should be authorised by a user, bearing a different User ID, before the End of Day operations
begin.
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5.7
Reopening an LC
To avail against a closed LC, you have to reopen it. This occurs when the LC comes in for
negotiation after it has been closed. The reopening of the LC will put back the outstanding liability
and availability for the LC.
To reopen a closed LC, you should have defined the event ‘ROPN’ for the product under which
the LC is processed. For this event, you should have ideally defined the same entries for the LC
outstanding amount and the liability, as you would for the opening (issue or advice) of an LC. You
can levy a charge for reopening an LC.
5.7.1 Procedure for Reopening an LC
Choose ‘Reopen’ from the Actions Menu when the details of the LC are being displayed in the
Detailed View screen.
Oracle FLEXCUBE will prompt you to confirm the reopening of the LC.
5.7.1.1 Unlocking an Amendment
An amended record can be unlocked, without requiring initial authorisation to allow modifications.
If preview of a record which has been amended displays certain errors which require correction,
then you can rectify these details by unlocking the record. This unlocking can be done more than
once; the unlocking of LC contract for correcting the details is not a new amendment event, but is
a single continued event which is not authorised.
5.8
Viewing Letters of Credit Contract Summary Details
You can view the summary details of an LC contract in ‘Letters of Credit Contract Summary’
screen. To invoke this screen, choose Letters of Credit from the Application Browser.
Thereafter, choose View and Contracts under it. You can also invoke this screen by typing
‘LCSTRONL’ in the field at the top right corner of the Application tool bar and clicking the
adjoining arrow button.
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In this screen, you can query based on any combination of the following fields:

Authorized

Contract Status

Contract Reference

Product Code

Customer Identification

Currency

Contract Amount

Branch
After specifying the parameters for the query, click ‘Search’. The system displays all the records
matching the parameters specified.
Here you can query the Guarantee Serial No by using Guarantee Serial No Summary
Search. The LC report generated from summary screen will display Guarantee Serial No.
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You can list the other branch transactions by clicking the ‘Advanced Search’ button for Branch
code. The ‘Advanced Search’ screen is displayed.
Here you have to select the branch in the advanced filter option to list the other branch
transactions. And select the transaction from the summary screen to launch the detail screen.
You can perform the appropriate operations after opening the detail screen from the summary
screen.
5.8.1 Letter of Credit Contract Information Report
Click ‘Reports’ button in the ‘Letters of Credit Contract Summary’ screen to generate the ‘Letter of
Credit Contract Information’ report. This report is based on the customer identification value given
in ‘Letters of Credit Contract Summary’ screen. If no customer identification is given, then the
report is generated for all customers from all branches. This report shows the list of all active LC
contracts for the given customer.
This report contains the following details:
Sl No
Fields
Description
1
Cif Id
This shows the customer identification code
2
Contract Status
This specifies whether contract is active or not
3
Auth Status
This specifies whether contract is authorized or not
4
User Ref No
This shows the user reference number of the contract
5
Contract Ccy
This shows the contract currency code
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Sl No
Fields
Description
6
Contract Amt
This shows the contract amount
7
Max Contract
Amt
This shows the maximum amount of the contract
8
Max Liability
Amt
This shows the maximum Liability amount of the contract
9
Current
Availability
This shows the current availability amount of the contract
10
Os Liability
This shows the current outstanding liability amount of the
contract
11
Issue Date
This shows the issue date of the LC Contract
12
Expiry Date
This shows the expiry date of the LC Contract
13
Closure Date
This shows the closure date of the LC Contract
14
Settlement
Method
This specifies the settlement method
15
Latest Shipment
Date
This shows the Latest Shipment date of the LC Contract
5.8.2 Documents Tab
Click on the tab titled ‘Documents’ to specify details of the documents and clauses that are part of
the LC instrument and the documents that should accompany the goods.
Here you can capture the following details.
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5.8.2.1 Documents
There are some standard documents required under a documentary LC. In this screen you can
specify the documents that are required under the LC being processed. These details will be a
part of the LC instrument sent to the advising bank, the advice through bank or the beneficiary. All
the documents specified for the product to which the LC is linked will be defaulted to this screen.
Code
Enter the document Code
Type
Enter the document type
Description
Enter the document description of the document that is defaulted to suit the LC you are
processing. This field will be enabled only if the LC type is ‘Shipping Guarantee’, but not
mandatory.
During copy operation, the value of this field will not be copied to the new contract.
Document Reference
Enter the document reference number based on which the Shipping Guarantee issued.
Number of Copies
Enter the number of copies of the document.
Type
Specify the type of original documents of the shipment
Number of Originals
Enter the number of Original documents here.
Original Receipt
Enter the receipt details here.
You can add to or delete from the list of documents that are defaulted. To add a document for the
LC, click add icon and then on option list positioned next to the ‘Code’ field. Select the code of the
appropriate document from the list of document codes maintained in the Documents Maintenance
screen. The other details of the document will be defaulted to this screen.
To delete a document that is not required for the LC, highlight the document code and click on the
delete icon.
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Original Required
Check this box to indicate if the original document is required for the shipment.
5.8.2.2 Clauses Details
In addition to the other details, the clauses specified for a document while defining the product,
are also defaulted to this screen.
Code and Description
When you highlight a document code, all the clauses defined for the document are displayed in
the Clauses window. You can add to or delete from, the list of clauses that are defaulted.
To add a clause to a document for the LC, click add icon. Then, click adjoining option list. Select
the code of the applicable clause from the list of clause codes maintained, in the Clause
Maintenance screen. The description of the clause will be defaulted, based on the clause code
that you select.
Description
The description of the clause is defaulted, based on the clause code that you have selected.
To delete a clause that is not required for the LC, highlight the Clause code and click delete icon.
5.8.3 Shipment Tab
An LC instrument, which is an instrument of trade finance, involves details of merchandise.
Hence, you will need to specify the following details for the LC:

Details of the merchandise

Details of the mode of transportation
You can also specify Preferences for the shipment of goods. Note that you will not be able to
save shipment and goods related details for an LC under the operation code ‘Reimbursement’.
Click on the tab titled ‘Shipment’ to specify shipment details of LC.
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5.8.3.1 Shipment Details
There are certain standard clauses and conditions, associated with the shipment of the
merchandise traded under an LC. You can specify the following shipping details for an LC that
you process.
Partial Shipment Allowed
Check this option if partial shipment of the goods is allowed under the LC.
Trans Shipment Allowed
Check this option if Trans-shipment is allowed under the LC.
From
The location from which the goods transacted under the LC should be shipped. In international
trading parlance, this is called the Loading on board/Dispatch/Taking in charge at/from.
To
The destination to which the goods transacted under the LC should be sent. In international
trading parlance, this is called the ‘For transportation’ to.
‘Shipment From’ and ‘Shipment To’ are linked to the tags 44A and 44 B respectively. These tags
are applicable to the following message types:

MT700

MT705

MT707
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
MT710

MT720
Specifying the ‘Shipment From’ and ‘Shipment To’ is optional.
Latest Shipment Date
Specify the date on which the last shipment consignment has been sent. If this date is greater
than the linked policy expiry date, the system will display an override/error message.
Shipment Period
Specify the period within which shipment of the merchandise is done.
Additional Shipment Details
Specify additional shipment details.
Shipment Marks
Specify the shipping marks.
5.8.3.2 Goods
The details of the merchandise that will be traded under the LC should be clearly specified.
Code
You have maintained various codes that have been allotted, for commodities normally traded in
your country. The commodities are available for selection in the form of an option-list. In addition,
the list will also display whether a particular commodity is banned or not by indicating ‘YES’ (for a
banned product) and ‘NO’ (for a product that is allowed for trade) against the product. You can
select the applicable code for the LC you are processing, from the list.
Description
The description of this code (which could be 6500 characters long), can be changed to suit the
LC you are processing. You can also enter specifications such as the quality and quantity of the
merchandise.
Description for Preadvice
If pre-advice is one of the advices for the LC, you should enter the details of the LC briefly, as a
pre-advice description. This will be a part of the pre-advice that is generated.
Typically, a pre-advice is sent by SWIFT or cable and contains brief details of the LC. This is be
followed by the LC instrument, that contains all the details of the LC.
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Under License
This check box is defaulted based on the selection made at Commodities Maintenance level for
goods under a bill for which license selection has been set. It displays the selection made which
cannot be modified or altered.
License details are captured using the License button.
INCO Term
Specify the INCO term related to goods that are a part of the LC instrument. You can select one
of the following values from the adjoining option list:

EXW - EX Works (…named place)

FCA - Free Carrier (…named place)

FAS - Free Alongside Ship (…named port of shipment)

FOB - Free On-Board (…named port of shipment)

CFR - Cost and Freight (…named port of destination)

CIF - Cost Insurance Freight (…named port of destination)

CPT - Carriage Paid to (…named place of destination)

CIP - Cost Insurance Paid (…named place of destination)

DAF - Delivered at Frontier (…named place)

DES - Deliver Ex Ship (…named port of destination)

DEQ - Delivered Ex Quay (…named port of destination)

DDU - Delivered Duty Unpaid (…named place of destination)

DDP - Delivered Duty Paid (…named place)
Once you choose the INCO Term, the documents and clause details will be displayed based on
the maintenance for the chosen INCO term in the ‘INCO Terms Maintenance’ screen. However, if
you change the INCO term, the document and clause details will be not be updated automatically.
You will have to manually change them if required. However, the system will check whether the
document and clauses details are the same as those defined in the ‘INCO Term Maintenance’
screen.
The INCO term is picked up and displayed in field 45A of MT700.
5.8.3.3 Port
Specify the following details.
Port of Loading
You can specify the name of the airport from where the goods transacted under the LC are
loaded for shipping. This is called the Port of Loading.
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Port of Discharge
You can also specify the name of the destination port to which the goods transacted under LC
should be sent. This is called the Port of Discharge.
‘Port of Loading and ‘Port of Discharge’ are linked to the 44E and 44F tags respectively. These
tags are applicable to the following message types:

MT700

MT705

MT707

MT710

MT720
It is not mandatory to specify the Port of Loading or Port of Discharge.
5.8.4 Documents Tab
An LC, which is an instrument of trade finance, involves details of merchandise. Hence, you will
need to specify the documents that should accompany the goods for the LC.
Click on the tab titled ‘Documents’ to specify details of the documents and clauses that are part of
the LC instrument.
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Documents
There are some standard documents required under a documentary LC. In this screen you can
specify the documents that are required under the LC being processed. These details will be a
part of the LC instrument sent to the advising bank, the advice through bank or the beneficiary. All
the documents specified for the product to which the LC is linked will be defaulted to this screen.
Code
Enter the document Code
Type
Enter the document type
Description
Enter the document description of the document that is defaulted to suit the LC you are
processing. This field will be enabled only if the LC type is ‘Shipping Guarantee’, but not
mandatory.
During copy operation, the value of this field will not be copied to the new contract.
Reference
Enter the document reference number based on which the Shipping Guarantee is issued.
Number of Copies
Enter the number of copies of the document.
Type
Specify the type of original documents of the shipment
Number of Originals
Enter the number of Original documents here.
Original Receipt
Enter the receipt details here.
You can add to or delete from the list of documents that are defaulted. To add a document for the
LC, click add icon and then on option list positioned next to the ‘Code’ field. Select the code of the
appropriate document from the list of document codes maintained in the Documents Maintenance
screen. The other details of the document will be defaulted to this screen.
To delete a document that is not required for the LC, highlight the document code and click on the
delete icon.
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Original Required
Check this box to indicate if the original document is required for the shipment.
Clause Details
In addition to the other details, the clauses specified for a document while defining the product,
are also defaulted to this screen.
Code and Description
When you highlight a document code, all the clauses defined for the document are displayed in
the Clauses window. You can add to or delete from, the list of clauses that are defaulted.
To add a clause to a document for the LC, click add icon. Then, click adjoining option list. Select
the code of the applicable clause from the list of clause codes maintained, in the Clause
Maintenance screen. The description of the clause will be defaulted, based on the clause code
that you select.
Description
The description of the clause is defaulted, based on the clause code that you have selected.
To delete a clause that is not required for the LC, highlight the Clause code and click delete icon.
5.8.5 Tracers Tab
Tracers are reminders that can be sent to various parties involved in an LC. The list of tracers
that you can send for an LC is predefined (hard coded in the system) and can be classified into
the following types:

The acknowledgement tracer (sent to the advising bank when an import LC is issued and an
acknowledgement is sought)

The charge-commission tracer (sent to the party who has to bear the commission or charges
for an LC, pending the payment of the charge or commission)

The confirmation tracer (sent to the confirming bank, seeking a letter of confirmation).
You can specify the tracers to be sent for an LC, in the LC Contract Tracers screen. To invoke
this screen, click on the tab titled Tracers in the LC Contract Details screen. The LC Product
Tracers screen is displayed.
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The tracers, specified for the product to which you have linked the LC, will be defaulted to this
screen. The following details will be displayed:

Tracer Code

Description of the tracer

Party ID and type to which the tracer is to be sent

Number of tracers sent thus far, to the party(Number Sent)

Date on which the tracer was last sent to the party(Last Sent On)
For the tracer code that is highlighted, the details are defaulted from the product and can be
changed to suit the LC you are processing.
Required
You can stop the generation of a tracer at any point during the life cycle of an LC contract.
For instance, you had specified that an acknowledgement tracer is to be generated for a contract.
When you receive the acknowledgement from the concerned party, you can disable its
generation. At a later stage when you wish to generate the tracer again, you only need to enable
it for the LC by using this facility.
If this box is checked, it means that the tracer should be applied for all new LCs involving the
product. If not, it means that it should not be applied for new LCs involving the product. Amen
If for some reason you want to stop generating the tracer for a product, uncheck this box through
the product modification operation. The tracer will not be generated for new LCs involving the
product.
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Maximum Tracers
You can specify the maximum number of tracers that should be sent for the LC. The value is
defaulted from the product under which you are processing the LC.
Start Days
The tracers that you specify for an LC can be generated only after it has been authorized. Specify
the default number of days that should elapse after an LC has been authorized, on which the first
tracer should be sent.
By default, the first tracer for an authorized LC contract will be sent, after the number of days
prescribed for the product under which it is processed.
Start Date
Specify the date on which the first tracer should be sent once the LC contract has been
authorized.
Frequency
You can specify the frequency (in days) with which the tracer should be re-sent, for the LC you
are processing.
Medium
If you have specified that tracers should be generated for an LC, you should also specify the
medium through which it is to be generated. A tracer for an LC can be sent through Mail, Telex or
other compatible media.
5.8.6 Preferences Tab
You can maintain the preferences an LC contract by using the ‘Preferences’ tab of the contract
screen . You can also maintain the requirement preferences for SWIFT messages that are
generated to provide information specific to the LC you are processing. To specify SWIFT related
details invoke the ‘Preferences’ screen by clicking on the tab titled ‘Preferences’.
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The details that you specify in the fields of this screen are picked up for SWIFT messages.
The SWIFT message that utilizes the information that you specify in this screen and the
corresponding field of the SWIFT message which carries the input, has been listed below:
Field in Oracle FLEXCUBE
SWIFT
Message
Field of the SWIFT
message
Correspondent Bank Charges
MT700
Field 71B
Additional Amounts Covered
MT 700 & MT
740
Field 39C
Period For Presentation
MT 700
Field 48
Charges From Issuing Bank
MT 730
Field 71B
Account For Issuing Bank
MT 730
Field 57A
Date
MT 730
Field 32D
Issuing Bank Amendment Date
MT707
Field 30
Acknowledgement Received and
Date
MT768
Field 30
Credit Line
Here you can capture the following details pertaining to a credit line attached to the LC.
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Limits Tracking Required
Specify whether the credit granted under the LC you are processing should be tracked against
the credit limit assigned to the customer under a Credit Line.
Check this box to indicate that limit tracking is required for the LC. Leave it unchecked to indicate
otherwise. In the subsequent fields of this screen, you can specify details of the line under which
the credit is to be tracked. This value is defaulted from the product level. However at the contract
level you can change this value. When the Limit Tracking is selected in Product level and at
Contract level and if there is not even a single credit line attached to the LC contract, the System
displays an override.
The limit line will be tracked when you book a bill under an LC. The limit is release for the amount
blocked while booking the bill itself.
While authorizing the bill, the system compares the bill amount against the blocked amount. If the
blocked amount is less than the bill amount, then the system re-computes the blocked amount
based on the current LC outstanding. If the computed blocked amount is more than the original
blocked amount, then the system reduces the limit utilization in LC for the difference amount.
Party Type
Specify the type of party involved in the LC you are processing, whose details you would
subsequently enter. The parties involved in the LC can be specified in any sequence. However, a
party code can be used only once in each LC.
Credit Line
Specify the credit line under which you want to track the LC amount.
The system displays the Credit Lines for the Parties associated in LC Contract. It also
displays the additional details in the option list along with Credit Line, they are:

Available Amount

Limit Amount

Utilization

Credit Line Currency
Customer
The system displays the customer for whom the LC is booked.
Limit Tracking Tenor
Specify the basis on which limits need to be tracked. Choose one of the following options:

Letter Of Credit Tenor

Max Draft Tenor
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5.8.6.1 Other Information
Capture the following details as preferences for SWIFT messages
Reimbursement Type
Specify the type of reimbursement. Choose the appropriate one from the dropdown list.
Correpondent Bank Charges
Specify the charge amount borne by the beneficiary. . This defaulted with a value; ‘all charges
outside India are for the account of the Beneficiary.’ This value can however be modified.
Additional Amounts Covered
Specify the additional amount covered.
Reimbursing Bank Charges
Indicate who bears the charges - claimant or your customer.
The Period for Presentation
The period of presentation defined for the product - or calculated for the LC, as the case may be will be displayed in the ‘Period For Presentation’ field. You can change the default to suit the LC
you are processing.
The system uses the Expiry Date and the Last Shipment Date specified for the LC you are
processing, and arrives at the period of presentation.
If the sum of the latest shipment date and period for presentation is greater that the expiry date of
an import LC, the system will display an override message. This is true only in cases where the
‘Latest Shipment Date’ field is not blank.
For details, refer the heading ‘Specifying the Period of Presentation’ in chapter ‘Creating
Products’, in the LC User Manual.
5.8.6.2 Charges from ISB
Specify the following details.
Currency
Specify the currency of the charge.
Amount
Specify the charge amount.
Charge From Issuing Bank(Description)
Give a brief description of the charge.
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Issuing Bank Acc
Specify the account from which charge should be collected.
Issuing Bank Date
Specify the date of charge collection.
5.8.6.3 Amendments
Specify the following details.
Amendment Number
The system displays the amendment number.
Increment Amendment Number
Check this box to indicate that the amendment number should be incremented with every
amendment.
Issuing Bank Amendment Date
The date of amendment is displayed here.
5.8.6.4 Acknowledgement
Specify the following details.
Acknowledgement Received
Check this box to indicate that acknowledgement has been received.
Acknowledgement Date
Specify the date on which the acknowledgement is received.
5.8.6.5 Other Details
Specify the following pertaining to other details of the LC.
INCO Term
Specify the INCO term related to goods that are a part of the LC instrument. You can select one
of the following values from the adjoining option list:

EXW - EX Works (…named place)

FCA - Free Carrier (…named place)

FAS - Free Alongside Ship (…named port of shipment)
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
FOB - Free On-Board (…named port of shipment)

CFR - Cost and Freight (…named port of destination)

CIF - Cost Insurance Freight (…named port of destination)

CPT - Carriage Paid to (…named place of destination)

CIP - Cost Insurance Paid (…named place of destination)

DAF - Delivered at Frontier (…named place)

DES - Deliver Ex Ship (…named port of destination)

DEQ - Delivered Ex Quay (…named port of destination)

DDU - Delivered Duty Unpaid (…named place of destination)

DDP - Delivered Duty Paid (…named place)
Once you choose the INCO Term, the documents and clause details will be displayed based on
the maintenance for the chosen INCO term in the ‘INCO Terms Maintenance’ screen. However, if
you change the INCO term, the document and clause details will be not be updated automatically.
You will have to manually change them if required. However, the system will check whether the
document and clauses details are the same as those defined in the ‘INCO Term Maintenance’
screen.
The INCO term is picked up and displayed in field 45A of MT700.
INCO Description
The description of the INCO term selected is displayed here.
Back to Back LC
Check this option if you want to link an export LC to an import LC. This field is applicable only for
import LCs.
If you check this option, you will have to specify the export LC which you want to link to the import
LC in the ‘Reference Number’ field. All active and authorized export LCs of the same counterparty
will be available for selection in the option list adjoining ‘Reference Number’. An export LC can be
linked to only one import LC.
Related Reference Number
Specify the related reference number. Choose the appropriate one from the option list.
While issuing a guarantee, the option list displays all valid bill of lading reference numbers and
import LCs. Similarly, while issuing a back to back LC, the option list displays all valid export LCs
maintained in the system. You can choose the appropriate one.
Application Rule
The system defaults the application rule from the product level. However, you can modify this.
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Please refer to the section ‘Specifying the Applicable Rules’ under chapter ‘Defining Product
Attributes’ in this user manual.
Rule Narrative
This is enabled only if ‘Applicable Rule’ is set to ‘OTHR’. The system defaults the rule narrative
from the product level. However, you can modify this.
Please refer to the section ‘Specifying the Applicable Rules’ under chapter ‘Defining Product
Attributes’ in this user manual.
Confirmation Required
LCs, for which confirmation is required, are governed by the Uniform Customs and Practice
(UCP)/ Uniform Rules for Demand Guarantees (URDG) published by International Chamber of
Commerce. The system defaults the value as selected.
You cannot change this value once the contract is authorized.
If this value is selected then any financial amendment of LC and Guarantees should be done
through LC Amendment confirmation screen and non financial amendment should be done
through LC contract online screen. If LCs and Guarantees do not require any confirmation, then
financial and non-financial amendments should be done through LC contract online screen.
Related Reference Number
Specify the reference number in relation to the LC contract for which WIFT details are
maintained.
Preferences
Specify the following details.
5.8.6.6 Preferences
You can set the following preferences:
Allow Prepayment
Check this option to indicate that the customer can make a prepayment on the contract.
Auto Closure
This value is defaulted from the product preferences set for the LC. The LC is closed
automatically on the Closure date of the LC contract; if the ‘Auto Closure’ check box is marked in
the preferences screen. If you change the auto closure from the value defaulted, or if then on
save an override message is displayed.
If there are any pending availments under a LC (e.g.: bill in INITIAL stage), then the LC does not
close automatically. This LC will have to be closed manually after it is availed.
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For pending availments; such as a bill in an INITIAL stage; the LC does not close automatically.
You must close this LC manually after it is availed.
Transferable
Check this option to indicate that the LC is transferable.
May Confirm
Check this option to indicate that the LC can have an associated confirmation message. You can
also specify the type of the confirmation instruction that should be sent to the advising/confirming
bank if you are issuing the LC (whether Field 49 of MT 700 should be ‘Without’, ‘Confirm’, or ‘May
add’).
Reimbursement Account Details
You can specify the settlement branch and account in to which the Reimbursement is claimed in
the ‘Reimbursement Account details’ section. These details are automatically picked as part of
the reimbursement clause printed in the LC instrument. The reimbursement branch and account
are printed in the MAIL messages for LC issuance, LC amendment. The Reimbursing details can
be changed during LC amendment. When the LC is copied the Reimbursing Details will not be
copied with the contract.
Reimbursement account Branch
Select the Reimbursing branch from the option list provided. This branch holds the reimbursing
account.
Reimbursement Account
Specify the reimbursing account; alternatively you can also select the reimbursement account
from the adjoining option list. The list displays all the Nostro accounts for the branch selected.
The reimbursement currency can be different from that of the Bill currency; this is the
currency in which the settlement under a BC is claimed.
5.8.7 Viewing Different Versions of Contract
When you enter a contract, it is allotted the version number, 1.Every amendment and
reinstatement results in the next version of the contract being created.
While viewing the Detailed View screen for a contract, the latest version will be displayed. To
navigate between the different versions, use the arrow buttons to view the previous and next
version.
The LC contract will become effective in the system only after you ‘Save’ the details and your
supervisor authorizes it.
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The system will display an override message if you save the contract with the drawee and
applicant being the same. You may use your discretion to proceed or cancel the contract. You
can also have this override configured as an error message in which case, the system will not
allow you to proceed until you make the necessary changes.
5.9
Canceling LC
You may have to cancel an LC that has been opened, before its Expiry Date. An example for a
cancellation is when the trade deal for which the LC is opened falls through. A cancelled LC will
not be available for any availment. However, you can cancel an LC that has been availed
partially.
In Oracle FLEXCUBE, the following are the prerequisites for cancellation:

The LC has not yet reached its expiry date

The cancellation event - CANC, has been defined
The accounting entries for this event are generally the reversal of the accounting entries passed
for liability and collateral, when the LC was opened. In addition, a charge can be levied for
canceling the LC. A cancellation advice informing, the advising bank or beneficiary, about the
cancellation may be generated.
5.9.1 Procedure for Canceling LC
From the Contract Detailed View:

Select Close from the Actions Menu

Click cancel icon in the Toolbar
You will be prompted to confirm the cancellation.
5.10 Closing LC
Normally, an LC that is opened will be negotiated within its expiry date. If the negotiation does not
happen even after the expiry date, you can close the LC.
By closing an LC, you will be reversing the liability entries passed for the LC. This ensures that
the credit limit that was taken by the LC is released and is available for future utilization.
5.10.1 Procedure for Closing LC
In Oracle FLEXCUBE, you can close an LC under the following circumstances:

The event ‘CLOS’ is defined for the LC

The LC is beyond its Expiry Date
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The accounting entries defined for this event is generally the reversal of the outstanding liability.
No availment can be made against an LC that is closed. You should reopen a closed LC if you
have to make an availment against it. This would be required in a situation when the LC comes in
for negotiation after it has been closed. The reopening of the LC will put back the outstanding
liability and availability for the LC.
5.10.1.1 Closing LC Automatically
In the LC Contract Main screen, you can specify the following dates related to the closure of an
LC:

Whether auto closure is allowed

The date on which the LC should be automatically closed
To recall, the date of automatic closure is based on the ‘Closure Days’ maintained for the product
involved in the LC. However, you can change the closure date, to any date, after the expiry date
of the LC.
An LC that is defined for automatic closure will be closed during the End of Day processes on the
closure date.
5.10.1.2 Closing LC Manually
An LC that is not defined for automatic closure can be closed any time after its Expiry Date.
Choose ‘Close’ from the Actions Menu, when the details of the LC are displayed in the Detailed
View screen.
Oracle FLEXCUBE displays a message prompting you to confirm the closure. The closure of an
LC should be authorised by a user, bearing a different User ID, before the End of Day operations
begin.
5.11 Reopening LC
To avail against a closed LC, you have to reopen it. This occurs when the LC comes in for
negotiation after it has been closed. The reopening of the LC will put back the outstanding liability
and availability for the LC.
To reopen a closed LC, you should have defined the event ‘ROPN’ for the product under which
the LC is processed. For this event, you should have ideally defined the same entries for the LC
outstanding amount and the liability, as you would for the opening (issue or advice) of an LC. You
can levy a charge for reopening an LC.
5.11.1 Procedure for Reopening LC
Choose ‘Reopen’ from the Actions Menu when the details of the LC are being displayed in the
Detailed View screen.
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Oracle FLEXCUBE will prompt you to confirm the reopening of the LC.
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6.
6.1
Capturing Additional Details
Introduction
The buttons on the contract screen enable you to invoke a number of functions vital to the
processing of an LC Contract.
These buttons have been briefly described below.
Buttons
Description
Drafts
Click this button to capture the details of draft drawn for the LC. You can
specify the name of the insurance company that is covering the goods
traded under the LC.
Settlement
Click this button to invoke the Settlement screens. Based on the details
that you enter in the settlement screens the LC will be settled. The details
of these screens have been discussed in the Settlements manual.
Events
Click this button to view the details of the events and accounting entries
that a contract involves.
MIS
Click this button to define MIS details for the LC.
Commission
On invoking this button Commission details of the contract is displayed
Charges
This button invokes the Charges, Commissions and Fees (ICCF) service.
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Buttons
Description
On invoking this function you will be presented with a screen where the
ICCF rate, amount, currency and the waive charge parameter can be
specified.
The Processing Charges and Fees manual, details the procedure for
maintaining charge rules. It also deals with the linking of a charge rules to
a product and the application of the rule on an LC.
The Processing Commissions manual, details the procedure for
maintaining commission rules. It also deals with the linking of a
commission rule to a product and the application of the rule on an LC.
Tax
This button invokes the Tax services. The Processing Tax manual details
the procedure for maintaining tax rules and schemes. It also deals with
the linking of a tax scheme to a product and the application of the scheme
on an LC.
Collateral
In the screen that corresponds to this button, you can specify details of
the cash that you collect as collateral form a customer for the LC that you
process. The details of this screen are discussed under the head
Specifying Collateral details for an LC.
Linkages
Clicking this button invokes the Contract Linkages screen. In this screen,
you can link an LC to a deposit or account, and indicate the funds that you
would like to block.
Change Log
Click this button to view the changes made to a particular version of an LC
contract.
Transfer
Details
If the LC is transferred to a new party, you can view the transaction
details.
Fields
Click this button to specify values for the user defined fields (UDFs).
FX Linkages
Click this button to link details of an FX forward contract to the LC
contract.
License
Click this button to specify the license details of the goods specified.
Enter valid inputs into all the mandatory fields in screens that can be invoked from the buttons or
you will not be able to save the contract. After making the mandatory entries for the LC, save the
contract by either clicking save icon in the toolbar or selecting ‘Save’ from the Actions menu.
A contract that you have entered should be authorized by a user bearing a different Login ID,
before the EOD is run.
You have the option to amend all the unauthorized entries made for an LC. However, after
authorization, certain fields cannot be amended.
Click ‘Exit’ or ‘Cancel’ button to go back to the Application Browser.
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6.2
Capturing Draft Details
You can capture the details of the draft that is drawn for the LC, in the Drafts screen. In addition,
you can also specify the name of the insurance company that is covering the goods traded under
the LC. Click ‘Drafts’ button in the LC Contract to invoke the screen:
You can capture the following details:
Draft Serial Number
Specify the serial number for the draft created.
Draft Tenor
Specify the tenor of the draft.
Amount/Percentage
Indicate whether the draft is a percentage of the LC amount or a Flat amount.
Draft Amount
Specify the Amount for the draft (based on your selection).
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Draft Percentage
Specify the Percentage for the draft (based on your selection).
Credit Days From
The Date from which the tenor of the draft begins.
6.2.1.1 Specifying Drawee Details
Specify the following details.
Drawee
Specify the party on whom the draft is drawn. You can select the drawee’s CIF from the adjoining
list. This will contain a list of all the open and authorized CIF maintained in the Customer
Directory. This information is captured from the BIC directory.
Address 1 to 3
Specify the address of the drawee.
6.2.1.2 Specifying Insurance Company Details
Specify the following details.
Company Name
Specify the Insurance Company to be associated with the LC.
Company Code
You can select the appropriate company code from the option list. The list will display all
authorized and active company codes. If you have specified an open insurance policy in the
‘Insurance Policy Number’ field, the option list will display the company code associated with the
chosen insurance policy number. Upon selection of the company code, the following details will
be automatically displayed by the system:

Company Name

Address of the company

Telephone Number

Fax Number

Policy Utilized Amount

Cover Date

Insurance Amount

Telex Address

Warehouse Address
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Open Policy
Check this option to link an open insurance policy to the LC.
Policy Number
Specify the insurance policy number here. The adjoining option list displays all insurance policy
codes maintained in the system. If you check the option ‘Open Policy’ the option list will display
the open insurance policies maintained in the system. You can select the appropriate one.
If you have checked the ‘Open Policy’ option and the policy number is specified here is invalid
(i.e. not maintained in the ‘Open Policy Maintenance’ screen) or blank, the system will display an
error message.
Expiry Date
Enter the expiry date of the Policy. If the insurance cover date that is defaulted on selecting
company code is greater than this expiry date, then whenever you attempt to save the contract,
an override is displayed.
6.2.1.3 Specifying Breakup Details
The breakup details of the draft will be displayed here as follows:

Amount Name

Amount
The draft amounts for the different components (Insurance, Interest, Invoice, Freight). If the
insurance amount is less than a value x% of the contract amount, an override is shown when you
save the contract. This x is the insurance percentage component which is also shown in the
override.
You can also choose to associate an Insurance Company that is not maintained in the
system. When you are specifying a company code that does not exist, the system will display an
override (based on your requirement, you can configure the override to be a warning or an error
message). On confirmation of the override, the company code will be automatically changed to
‘XXXXXXXXX’. Subsequently, you can specify any company name to be associated with the
contract. The system will not perform any validations. The remaining fields in the screen will be
disabled in this case.
6.3
Specifying Settlement Instructions
Through the settlement screens, you should specify the customer accounts to which entries for
the commissions, charges, taxes and collateral should be posted.
Click ‘Settlement’ button in the Contract Main screen, for a display of the Settlements screen.
6-5
Besides the account details, you can specify:

The currency in which the component is expressed

The payment account and its currency
If you have specified an account that uses an account class that is restricted for the product,
an override is sought.

The branch of your bank to which the account belongs

The exchange rate (in the case of the component currency being different from the
account currency)

The ERI Currency

The ERI Amount
Refer to the chapter titled ‘Making an Availment’ in this user manual for details.
6.4
Viewing Event Details
The event details screen of contract processing will show the details of the accounting entries
generated for an LC. Click ‘Events’ in the LC Contract Detailed View screen to go to the LC
Contract View Events screen.
The details of events that have already taken place on the contract will be displayed, along with
the date on which the event took place.
6-6
Click ‘Accounting Entries’ to view the accounting entries for the event that is highlighted. Click
‘Message’ to view the messages applicable to the event. Click on ‘Exit’ or ‘Cancel’ to go back to
the LC Contract Detailed View screen.
6.4.1 Viewing the Accounting Entries Passed for the LC
From ‘LC Contract - View Events’ screen, click ‘Accounting Entries’ to view the Accounting
Entries for the event. The accounting entries that are passed depend on the type of LC that you
are processing.
6-7
The following information is provided for each event:

Branch

Account

Account /GL Description

Transaction Code

Booking Date

Value Date

Dr/Cr indicator

Currency

CCY (Currency)

Amount in contract CCY

Amount in local currency

All the overrides that were given for an event will also be displayed
Click ‘Exit’ or ‘Cancel’ to go back to the screen from where you invoked the Accounting Entries
screen.
6.4.2 Viewing Advices Applicable to Contract
Click ‘Message’ from the View Events screen to view the list of advices applicable to a particular
event in the lifecycle of the LC.
The following details of a message are displayed:

The message type

The Name and ID of the recipient of the message and

The status of the message
To view the text of a message, highlight the message and click on the ‘Message’ button. Click
‘Exit’ or ‘Cancel’ to exit the screen.
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6.5
Capturing MIS Details
Click ‘MIS’ button to invoke the following screen.
Refer the MIS User Manual for further details on capturing MIS details.
6.6
Defining Commission Details
Besides the LC amount, the other components of an LC include the commissions that you collect
and the charges that you levy on the parties involved in an LC.
6-9
While defining Accounting Roles for a product you must specify the internal accounts that should
be picked up when commissions are collected and when charges are levied.
For an LC having the operation code ‘Reimbursement’, you will not be able to save commission
related details. While saving the contract, the system will display an error message if you enter
details in the ‘ICCF screen’.
For an LC product of type ‘Guarantee’ the commission is calculated till the ‘Claim Expiry Date’
under an LC contract than the actual ‘Expiry Date’ of the contract. For an Import LC contract the
commission is calculated till the expiry date or till the max draft tenor if the draft details are
provided.
While creating or amending an authorized contract, you can modify the percentage of
commission to be charged. Enter the rate and click ‘Re-compute’ button to recalculate the
commission percentage to be charged.
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Calculated Commission Amount
This displays the default commission amount automatically calculated by the system based on
the rate or amount specified at the ICCF screen. The re-computation of the commission amount
is facilitated by changing the rate in the ICCF screen in case of Tenor Basis. However the original
default value of commission amount calculated by the system displayed here does not change.
Usance Based
If a contract is booked for an LC product for which commission component is indicated as usance
based at the product level, then this is displayed here. The system validates if there exists at least
one draft record maintained. This detail cannot be modified for the contract.
Calculation of commission for an LC will be based on the draft tenor if usance based has been
indicated. This tenor will be the maximum draft tenor. The commission will only be recomputed if
the draft tenor is changed. This condition is only applicable for non periodic commissions. If the
maximum draft tenor is zero, the LC tenor is used for commission calculation.
6.6.1 Specifying Details for Commission Schedules
For schedule type of commissions, the Commission Calculation Method and Payment Type are
defaulted from product as ‘Schedule’. You cannot modify the Payment Type, but you can change
Commission Calculation Method to ‘Non-Periodic’ if required.
Re-compute on Liquidation Date
This value gets defaulted from the product. You cannot modify this at the contract level.
If ‘Re-compute on liquidation’ is selected at the contract level:

You can change the commission rate before contract authorization, if required. Once contract
is authorized you cannot change it.

On commission liquidation date, commission will be re-calculated using rate at rule level, if
rate has changed after LC issuance or after previous liquidation. System triggers ‘CALC’
event before ‘CLIQ’.
If ‘Re-compute on liquidation’ is not selected at the contract level:

You can change Commission rate at contract level after authorization also. If commission rate
is changed at contract level, commission schedules should be re-computed based on the
revised rate, using “P” button in commission schedules screen.
You can capture the following details related to schedules.
Frequency
Frequency gets defaulted from the product. But you can modify it, if required, before first
authorization.
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Unit
Unit gets defaulted from the product. But you can modify it before first authorization, if required.
The unit specified should be such that the last schedule date falls on or before expiry date of the
LC.
Upfront Commission
The upfront commission percentage gets defaulted from the product. You can modify it before
first authorization, if required.
Refund
The refund percentage for the commission gets defaulted from the product. You can modify this,
if required, before first authorization.
Contract Reference Number, Commission component, Total commission amount and Total
commission paid are defaulted from the contract and you will not be allowed to change these
values.
Click ‘P’ button to calculate and display schedule details in the table given below.
The details of the commissions that can be collected and the procedure of making them
applicable to the LC you are processing has been detailed in the chapter Processing
Commissions in the Modularity User Manual.
6.7
Defining Charge Details
Click ‘Charges’ button to invoke the following screen.
Refer the Charges and Fees User Manual under Modularity for further details about this screen.
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6.8
Specifying Tax Details
Click ‘Tax’ button to invoke the following screen.
Refer the Tax User Manual under Modularity for further details on tax processing.
6.9
Maintaining Collateral Details
LCs that are issued or confirmed is often processed with cash collateral. In cases like a in a
Guarantee, you may even take a 100% cash collateral. This is when an applicant is not a
customer of your bank and the credit worthiness of the applicant is not known. Details of such
cash collateral can be maintained in the LC Contract - Collateral Details screen. To invoke this
screen, click ‘Collateral’ in the LC Contract Details screen. The LC Collateral Details screen is
displayed.
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The cash collateral percentage is defined for the product under which an LC is processed. This
percentage is picked up by default for the LC being processed.
6.9.1.1 Specifying Value of the Cash Collateral
The value of collateral can be expressed either as an amount or as a percentage of the LC
amount.
Collateral Currency
Specify the currency of the collateral.
Percentage
If you specify the cash that is to be collected as collateral as a percentage of the LC amount, the
equivalent amount is displayed. This amount is taken to be in the currency, defined as the
collateral currency.
Amount
You can specify the cash collateral as an amount. In this case you do not need to specify a
percentage. However if you specified the collateral as a percentage of the LC amount, the actual
amount is computed in the collateral currency by the system.
Exchange Rate
If the collateral currency and the currency in which the LC is issued are different, you should also
specify an exchange rate to be used in the conversion. The value of the collateral is determined
based on this exchange rate.
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Description
Give a brief description of the collateral.
6.9.1.2 Specifying Adjustment Details for a Collateral
At any time during the lifecycle of an LC, you may want to increase or decrease the value of the
cash, accepted as collateral on LC. This is done by way of an amendment to the LC. The cash
collateral can be increased or decreased, without changing the LC amount. On the other hand, a
change in the LC amount may necessitate a change to the collateral amount.
Type
If you wish to increase the collateral amount, indicate ‘Increase’ on this screen.
If you wish to decrease the collateral amount that you have collected while issuing an LC, indicate
‘Decrease’ on this screen.
Amount
Enter the amount by which you want to increase or decrease the cash accepted as collateral. The
collateral deposit account will automatically increase or reduce based on the specifications you
make.
If at the time of availment, you want to pay from the collateral account, you can include it in
the accounting entries for the event, Availment.
6.10 Linking Contracts to Deposits and Accounts
You can link an LC contract to deposits and accounts.
Type of
linkage
Description
Linking a
deposit
The entire LC amount, or a portion of it, can be linked to a
deposit. The outstanding amount in the deposit should always be
greater than or equal to the LC amount.
You can link several LCs to the same deposit, provided sufficient
funds are available in the deposit.
Linking
an
account
You can link the entire contract amount or a portion of it, to a
savings or current account that is maintained with you. The
available balance in the account should always be equal to or
greater than the contract amount that is outstanding. You can
link any number of contracts to an account provided a balance
greater than or equal to the total outstanding contract amount(s)
is available in the account.
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The entire contract amount or a portion of it can be linked to any number of deposits or account
or to both. From the LC Contract Details screen, you can invoke the ‘Contract Linkages’ screen
by clicking ‘Linkages’ button. In this screen, you can specify any account/deposit with you, and
indicate the funds that you would like to block.
Specify the following details.
Type
In the Contract Details screen, you can specify the type of linkage. The LC can be linked to a:

deposit

account
Linked To Reference Number/Account
If the LC is linked to a deposit, you should enter the Reference Number of the deposit. The
deposit should be a valid contract in Oracle FLEXCUBE, with a Value Date that is earlier than or
the same as the Value Date of the LC contract. The Maturity Date should be the same as, or later
than that of the contract.
If the linkage is with an account, enter the account number to which you are linking the LC. The
account you specify has to be a customer account (a Current account or a Savings Bank
account).
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Currency
The currency of the deposit or account to which the LC is linked, is displayed once the linkage
details are specified.
Available Amount
The system displays the amount available against the linked contract or account.
Exchange Rate
If the currency of the LC is different from the currency of the deposit or account to which it is
being linked, the mid-rate for the day will be picked from the Exchange Rate table and displayed
in the screen.
Coverted Linked Amount
The system displays the coverted linked amount.
Linked Amount
Indicate the contract amount that has to be linked to the deposit or account. This amount can be
the entire amount of the LC or a portion of it. The amount available for linkage, in the specified
deposit or account, is arrived at, by taking into account other linkages and the uncollected and
unauthorised balance (in the case of an account).
Once the linked amount is specified, the system displays the following values.
Account/Deposit
The system displays the amount linked to each contract or account.
Uncovered Amount
The system displays the contract amount that has not been linked, in the case of a partial linkage.
6.11 Viewing Amended Details of Contract
You can view the changes made in a specific version of an LC contract. To do this, navigate to
the version of the contract that you would like to view in the Contract Details screen. Click
‘Change Log’ in the vertical array of buttons on the Contract Details screen.
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The fields that were modified in the version will be displayed along with the old (inherited) and the
changed values.
6.12 Specifying Transfer Details
Click ‘Transfer Details’ button to invoke the following screen.
Specify the following details.
To Letter Of Credit reference
Specify the destination to which the goods transacted under the LC should be sent by selecting
the appropriate option from the list of values.
Transfer Amount
Specify the amount that should be transferred from the original LC. You can only transfer an
amount that is less than or equal to the amount available under the original LC.
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Transfer Date
The system date is displayed as the date of the transfer. This cannot be modified.
Expiry Date
The expiry date is the date up to which the transferred LC is valid. The expiry date of the original
LC is displayed here. You can modify this, provided that the expiry date is not earlier than the LC
issue date or the system date.
Shipment Date
This is the latest date by which the shipment of the goods specified for the transferred LC can
take place. The latest shipment date of the original LC is displayed here. You can modify this,
provided that the date you enter is neither earlier than the Issue Date of the LC, nor later than the
expiry date.
6.13 Capturing UDF Values
Click ‘Fields’ button to invoke the following screen.
The User Defined Fields (UDFs) maintained for the linked product or function id are displayed
here. You can specify values for them.
Refer the User Manual titled ‘User Defined Field’ for details about defining UDFs.
6.14 Linking Contract to FX transactions
You can link an FX forward contract to an LC contract. When a bill is drawn on this LC then the
details of the FX forward contract are defaulted for the bill. Linkage of FX transactions permitted
only for import, export LCs. For any other LC types the linkage details are cleared on saving the
contract. An alert displays that FX linkage details are possible only for import or export LC types.
FX transactions can be linked during contract initiation or booking and can be done so also during
amendment if no bill is attached to the LC. FX details can be consequently input and modified
during contract creation and amendment respectively.
To enable the FX linkages screen click the button ‘FX Linkages’ in the LC contract online screen.
6-19
The following details are provided:
From Reference Number
The LC reference number is displayed for which an FX linkage is maintained.
From Mod ID
The module the details are being linked from is displayed here, which in this instance is the LC
module.
Seq Number
Specify the sequence number in which the FX transactions are auto liquidated in case of a partial
discounting or purchase of bill.
To Mod ID
The module to which these details are being linked is displayed here which in this instance is FX.
To Reference Number
Specify the reference number of the FX. This is defaulted during the linkage however you can
change the value.
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Currency
The currency of the FX transaction is defaulted and displayed here.
Outstanding Amount
The outstanding amount is displayed here as the difference derived between the FX transaction
amount and the amount already linked to the LC contract. This is defaulted on linking the FX
transaction.
Linked Amount
Specify the FX linkage amount which is to be linked to the LC contract.
Liquidated Amount
The amount liquidated for the contract linkage is displayed here. It is updated during liquidation of
the FX transaction, linked to the LC.
Rate
The exchange rate defaulted from the FX transaction linked to the LC is displayed here.
Swap Rate
Specify the rate applicable for the early cancellation or liquidation of FX transactions from a bill
contract. This rate is not used fro processing of LC but is copied into the bill contract. The rate
can be either positive or negative including zero, with positive swap rate being credited to the
customer’s account and negative being debited to the customer’s account.
Total FX amount
The total amount of the FX transaction linked to the LC contract is displayed here.
The total linked amount is calculated using the ‘Calculate’ button. The calculation of the total
linked amount is done when more than one FX transaction is linked to an LC contract.
The FX transactions can be linked to the LC under the following conditions:

Active Forward FX transactions are authorized and not marked for auto liquidation.

Counterparty of the FX contract is the CIF ID of the LC contract

LC contract currency is BOT currency of the FX transaction in case of an export LC or the
SOLD currency in case of an Import LC. Other leg of the FX transaction is in local currency

FX transaction must have BOT and sold value dates as the same

LC contract Expiry date is greater than or equal to option date (if null; the contract is available
for selection) of the FX transaction and is less than or equal to the value date (BOT/SOLD).

Outstanding amount of the FX contract (Derived as explained in the Outstanding Amount
field) is greater than Zero
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The linkage operation is confirmed during save by checking if the total linked amount is less than
or equal to the LC contract amount. As this is a soft linkage no processing is based on the FX
transactions linked. FX transactions linked to this LC will be defaulted to the Bill created under
this LC.
6.15 Specifying License details
You can capture the details for goods transacted under a bill under the LC contract. Based on
whether the goods under the LC are freely importable or under license the license amount is
validated as being lesser or greater than the LC amount and the details captured are for an
Import LC. Click on the button ‘License’ to activate the License Details screen.
The following details are displayed:

The reference number of the LC contract

The version number

The module of operation, in this instance LC
License details
You can capture the details specific to goods under license in an LC contract. The license details
are saved only if the goods are marked ‘Under License’ at the commodity code level.
License Number
Specify the number for the goods under license
6-22
License Type
Specify the license type applicable for the goods
Issue Date
Specify the date on which the license is applied to the goods under the LC. The expiry date of the
license should not be earlier than the issue date and must not be before the issue date of the LC.
Amount
Specify the license amount for the goods under LC. The system displays an override when the
License Amount is less than or greater than the LC Contract Amount during save of the details.
License currency
Specify the currency for the license amount. This license currency can be different from the
contract currency.
Expiry Date
Specify the date the license on the goods expires.
Balance
The default current outstanding balance for an LC is displayed. This cannot be modified.
The user is restricted from accessing the license details screen for goods which are maintained
as ‘not under license. The license details facility is only for Import type LC. For all other type of LC
the user cannot access or visit the license details screen whether the ’Under License’ box has
been checked or not; in the commodity maintenances screen.
6-23
7.
7.1
Making Availment
Introduction
On receipt of the bills or on notification from the negotiating bank, you can record an availment
under an LC. The availment on an LC can be made only up to the Maximum LC amount,
specified in the Contract Main screen.
Once an availment is recorded, the current availability under the LC will be reduced and the
outstanding liability updated automatically. It will be reduced by the availment amount. When an
availment is recorded and there is cash collateral outstanding against the LC, invoke the cash
collateral screen and specify the amount of cash collateral to be released.
7.2
Capturing Availment Details
You can invoke the ‘Letters of Credit Availment Input’ screen by typing ‘LCDAVMNT’ in the field
at the top right corner of the Application tool bar and clicking on the adjoining arrow button. Click
new icon in the toolbar of the screen or select ‘New’ from the Actions menu in the Application
toolbar. The system will display ‘Transaction Branch’ screen. Here you can select the transaction
branch.
Here you are allowed to avail the contracts booked in other branches from the logged in branch.
Also, you can query other branch availed transactions from the logged in branch. The system
defaults the logged-in branch by default as the transaction branch.
Transaction Branch
Select the appropriate branch from the list of branches available in the option list.
While clicking ‘Ok’ button, the system validates the access rights of the selected branch and
function for the user. If you don’t have appropriate rights on the selected branch and function, the
system would raise an error message. If you select a valid branch, the system updates the same
as transaction branch and the transaction would be posted for this branch.
The system performs the action level access rights validation only on ‘Save’ operation.
7-1
After selecting the Transaction Branch, you can enter the remaining details in the ‘Letters of
Credit Availment Detail’ screen.
Specify the following details.
Contract Reference
Specify or select the contract reference number from the option list provided. Click ‘P’ button.
The following contract details will be displayed:

Event

Description

Issue Date

Expiry Date

User ref No

Version No

Currency

Counterparty

Related Reference Number
7-2

Amount

Liability

Outstanding Amount
You can fetch the transactions of all branches and query the other branch transaction and
proceed with authorization of the same. The system displays the branch in the query fields of the
option list.
Availment Details
Specify the following details.
Availment Amount
You can specify the amount being availed under the LC, in this screen. The availment amount
that you specify cannot be greater than the Outstanding LC Amount displayed in this screen.
Partial amounts can be availed against an LC. The availment thus need not always be the
amount available under the LC.
After an availment is made on an LC, the LC amount is automatically reduced. The LC amount
after the availment is displayed in the Outstanding LC Amount field of the ‘LC Contract Main’
screen.
If the LC is linked to an open insurance policy for which the option ‘Update utilization
Automatically’ is checked, the system will decrease the utilization on the policy with the LC
availment amount. Similarly, if the availment is reversed or a reversal is deleted, then the
utilization amount will be increased or decreased respectively to the extent of the availment
amount.
Value Date
An availment can be made either as of a date in the past or today. By default, the system displays
the current date. You can change it to a date in the past. LC availment for ‘Guarantee’ type
contracts validates whether the availment date is greater than or equal to the ‘claim expiry date
derived for the contract. This is validated during contract save.
Availment Type
Specify the type of availment to be recorded under the LC. Click the adjoining drop-down list and
select one of the following values:

Payment

Acceptance

Negotiation
If the entry to this field does not adhere to the conditions specified above you will be prompted for
an override.
7-3
Liability Amount
The Liability Amount refers to the customer’s liability to the bank. For an availment you can
specify the amount that should be reduced, from the Outstanding Liability amount.
The Outstanding Liability amount can be reduced by an amount that is greater or less than the
amount currently being availed. By default, the availment amount specified in the Availment
Amount field will be defaulted here.
The liability amount that you specify should not result in the Outstanding Liability Amount
being less than the Outstanding LC Amount. If the values entered as the Availment Amount and
the Liability Amount result in the liability amount being less than the LC amount, an error
message will be flashed. The message will prompt you to re-enter values to the relevant fields.
Internal Remarks
Click the adjoining icon and enter information about the availment in the window that pops up.
This information is intended for the internal reference of your bank. These remarks will be
displayed when the details of the availment are retrieved or printed. However, this information will
not be printed on any correspondence with the customer.
Interest Clause details
The interest to be credited to the beneficiary account is calculated during the LC availament
process based on the interest clause details captured at the product level. The following details
are displayed during the availament process:

From Date

To Date

Rate Type

Rate Code

Spread

Interest Amount

Calculate Button
The ‘from’ date and ‘to’ date are defaulted as the ‘from’ date and ‘availment’ date respectively.
These details cannot be further modified. The rate type, code, and spread values are copied from
the values provided at the contract screen, these values cannot be changed or altered. The dates
are validated as done during contract creation.
These details cannot be amended or modified, and are available for viewing purpose only. The
basis amount for calculating the interest amount is the availment amount. You can click the
‘Calculate’ button to view the details of the interest calculated.
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7.2.1.1 Reversing LC Liability
When an LC is availed using a Bill (or using the Availment function from the Browser), the
Availment Amount and the Liability Percentage specified for the underlying LC contract, will be
used in computing the default Liability Amount. The default value that is displayed can be
changed.
The following example illustrates this.
Example
You have specified the following details for an LC instrument.
LC Amount
1,000,000
Positive Tolerance
10%
Liability Percentage
5%
LC Liability Amount
100,000 + 10% (100,000) + 5% (100,000) = 115,000
When you avail this LC to a tune of 200,000, the Liability Amount will default as follows:
LC Amount
200,000
Liability Amount
200,000 + 5% (200,000) = 210,000
During availment, the Positive Tolerance Percentage specified for the LC is not taken into
account to compute the default value of the Liability Amount.
The LC availment screen displays buttons that invoke the various functions necessary to make an
availment on an LC. The buttons have been briefly described below:
Icons
Description
Advices
Click this button to define the advices that will be generated for the
availment.
Commission
This button invokes the Charges, Commissions, or Fees service. The
chapter titled Processing Charges on LCs details the procedure of
maintaining charge rules. It also deals with the application of the scheme
on an availment.
Tax
This button invokes the availment tax services. The tax details applicable
for the availment will be shown and you can choose to waive it, if
necessary.
The chapter titled Processing Tax for LCs details the procedure of
maintaining tax rules and schemes. It also deals with the linking and
application of the scheme on an availment.
7-5
Icons
Description
Settlement
Click on this button to invoke the Settlement screens. You can specify
settlement details for the availment like:
the accounts to be used for the availment
message details and
party details
Based on the details that you enter in the settlement screens, the
availment will be settled. The details of these screens have been
discussed under the head Maintaining Settlement Instructions in this
chapter.
Collateral
In the screen corresponding to this button, you can specify the adjustments
that you want to make, on the cash collected as collateral.
Event
Click this button to view the details of the events and accounting entries
that an availment entails. This icon also gives the details of other events on
the LC.
Charge
Click this button to capture charge details.
Enter valid inputs into all the mandatory fields before you save the availment. Save the contract
by either clicking save in the toolbar or selecting Save from the Actions menu. On saving the
availment, your User Id will be displayed in the Entry By field at the bottom of the screen. The
date and time at which you saved the record will be displayed in the Date/Time field.
A user bearing a different User ID should authorise an availment that you have entered, before
the EOD is run. The ID of the user who authorised the availment will be displayed in the Auth By
field. The date and time at which the availment has been authorised will be displayed in the
Date/Time field. The current status of the LC contract on which you are processing the availment,
is also displayed in the field Contract Status. The field will display one of the following:

Active

Closed

Reversed

Cancelled

Hold
7.2.2 Specifying Collateral Details
If the LC that you are processing has been backed by cash collateral, you can specify the cash
collateral to be released as a result of the availment.
By default, the collateral amount proportional to the amount availed will be adjusted automatically.
This default amount can be reduced or increased.
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Click ‘Collateral’ button in the LC availment screen.
Specify the following details.
Collateral Currency
The currency of the collateral is displayed here.
Percent
The system displays the percentage of LC amount that should be considered for the collateral
amount.
Exchange Rate
The exchange rate to be used in the conversion is displayed here. The value of the collateral is
determined based on this exchange rate.
Amount
The collateral amount is displayed here.
Description
A brief description of the collateral is displayed here.
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Adjustment
Specify the following details.
Type
You can increase the collateral amount that is calculated by default. Choose ‘Increase’ option and
enter the amount by which the cash collateral should be increased. Choose the ‘Decrease’ option
Amount
Specify the amount by which the cash collateral should be increased or decreased.
If you are adjusting the collateral against an availment, you should have defined the appropriate
accounting entries for the event code AVAL.
Not invoking the ‘Collateral’ screen during the availment session will mean that you do not want to
adjust the collateral. This would be so even if you have defined the accounting entries for
availment reduction. An override to this effect will be displayed when you save the availment.
7.2.3 Maintaining Settlement Instructions
Apart from the details of the accounts involved in the availment, you may have to capture party
details for messaging requirements. The default settlement instructions for the customer will be
shown in the ‘Settlement Details’ screen. You can modify them. The accounts involved could be
the settlement account for the availment amount, charges and tax, if they are applicable.
Click ‘Settlement’ button in the ‘LC Availment’ screen and invoke the ‘Settlement Details’ screen.
Here you can specify the following details.
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7.2.3.1 Account Details Tab
Click ‘Account Details’ tab to specify the details of the accounts involved in the availment. The
accounts and amount involved in the Debit and Credit legs of the accounting entry, for the
availment amount will be displayed in the ‘Account Details’ screen. These details cannot be
changed here. If a change is necessary, the same would have to be specified in the ‘LC
Availment’ screen.
The other details shown in this screen are the:

Component and its currency

Payment account and its currency

Branch of your bank to which the account belongs

Exchange rate (in case the component currency is different from the account currency)

ERI Amount (Euro Related Information)

ERI Currency

Rate code

Spread definition

Customer spread
When settling charges for an LC or a guarantee, you can use a Receivable Account instead
of a Customer Account. In such a case, you can send a charge claim advice to the customer.
ERI Currency and Amount
SWIFT messages (MT 100/MT 202) generated towards settlement, can furnish the value of the
settlement amount in the settlement account currency and in the ERI currency.
If you choose to furnish the ERI value of the amount, you have to enter the following in the
‘Settlement Message Details’ screen:

The ERI currency

The ERI Amount
The system defaults to the ERI currency specified for the customer and currency combination.
The default ERI currency can be changed. The ERI amount will be validated against the
Tolerance Limit, specified for the ERI currency.
On 1 January 1999, eleven countries that are part of the European Union embarked on the
first phase of economic integration, called the ‘Economic and Monetary Union’ (EMU). The EMU
ushered in a new, single European currency: the Euro (EUR). The Euro, in Oracle FLEXCUBE,
can be handled by capturing information such as the ERI details, in this screen.
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Generate Message
Settlement messages, defined for components that fall due, will be generated automatically when
you the Settlement Generation function at the End of Day. To suppress the generation of the
settlement message defined for a component, uncheck the Gen Message field of the ‘Contract
Settlement Message Details’ screen.
Debit/Credit Indicator
The default settlement instructions for the customer will be shown in the Settlement Accounts
screen. The default can be modified.
The direction of settlement indicates whether the account being shown, will be debited or
credited:

P - Indicates Pay, meaning that the account should be credited

R - Indicates Receive, meaning that the account should be debited
Netting
Check this box to indicate that you would like to enable the Netting option for the various
components (Amount Tags) involved in the transaction. These components could be commission,
interest, tax, charges etc.
Component Description
Give a brief description for the chosen component.
7.2.3.2 Verifying Signatures
Click ‘Signature Verification’ button to verify signatures for the transaction.
7.2.3.3 Message Details Tab
A Letter of Credit can be settled either in the form of an instrument or a Message (a SWIFT,
TELEX or Mail message to be sent to the concerned party). The details regarding the instrument
or message have to be specified in the ‘Message Details’ screen. The message details that you
specify in this screen are applicable only for SWIFT. The type of SWIFT message that is
generated depends on the parties involved in the LC.
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Based on the method of settling the LC, you should input either Instrument or Message details.
Instrument Details
Specify the following details.
Instrument Type
If the payment is through an instrument, indicate the type of instrument. It could be Manager’s
Check, Check or a Demand Draft.
Number
Specify the number that will identify the instrument. This number will be printed on the instrument.
If the settlement is through an instrument, the party details cannot be specified for the transfer.
Typically, an LC availment entails the debiting or crediting of the customer account, for the
settlement amount. If the customer is being credited (in the case of your customer being the
beneficiary, of the availment,) you may want to generate an instrument.
Details of Charges
Specify who should bear charges for the message. Choose one of the following options:

Remitter all Charges

Beneficiary all Charges

Remitter our Charges
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Message Details
For a SWIFT message, you have to specify the following.
Cover Required
Check this box to indicate that a Cover has to be sent to the Reimbursement Bank, along with the
payment message to the receiver.
Details of Payment 1 to 4
Specify bank to bank payment details (these can be in the form of instructions or additional
information to any of the parties involved in the transfer).
Sender to Receiver Information 1 to 6
Tag 72 will be used to specify the sender to receiver information. This tag is applicable to MT740
message type.
RTGS Payment
Check this box to indicate the payment mode is RTGS.
RTGS Network
Specify the RTGS Network used for the transaction.
Transfer Type
Specify the type of transfer. It can be any one of the following:

Bank Transfer

Customer Transfer

Bank Transfer for own A/c

Direct Debit Advice

MCK

None
Banking Priority
Indicate the priority for the payment. Choose any one of the following options:

Highly Urgent Payments

Urgent Payment

Normal Payment
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7.2.3.4 Parties Tab-1
To process an availment on an LC, the funds may have to pass through a series of banks, before
it actually reaches the Ultimate Beneficiary. Through the Parties screen you can capture details of
all the parties that are involved in the transfer of funds.
The details you enter in these screens depend on the type of LC being processed.
An Intermediary Reimbursement Institution is the financial institution between the Sender’s
Correspondent and the Receiver’s Correspondence.
Reimburse Institution 1 to 5
Specify the institution through which reimbursement of the funds should take place.
Intermediary 1 to 5
The Intermediary in a LC refers to the financial institution, between the Receiver and the Account
With Institution through which the funds must pass.
The Intermediary may be a branch or affiliate of the Receiver or the account with Institution or an
altogether different financial institution. This field corresponds to field 56a of S.W.I.F.T. Here you
can enter either the:

ISO Bank Identifier Code of the bank

Name and address of the bank
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Receiver’s Correspondent 1 to 5
The Receiver’s Correspondent is the branch of the Receiver or another financial institution, at
which the funds will be made available to the Receiver. This field corresponds to field 54a of
SWIFT. You can enter one of the following:

ISO Bank Identifier Code of the bank

The branch of the Receiver’s Correspondent

Name and address of the Receiver’s Correspondent
Account With Institution 1 to 5
An Account With Institution refers to the financial institution at which the ordering party requests
the Beneficiary to be paid. The ‘Account With Institution’ may be a branch or affiliate of the
Receiver, or of the Intermediary, or of the Beneficiary Institution, or an entirely different financial
institution. This field corresponds to field 57a of SWIFT.
Receiver of Cover
You can enter one of the following:

ISO Bank Identifier Code of the bank

The branch of the Receiver’s Correspondent

Name and address of the Receiver’s Correspondent

Other identification codes (for example, account number)
Receiver
The id of the receiver in the transaction will be displayed. You can change the same.
7.2.3.5 Parties Tab-2
Click ‘Parties’ tab to capture party details.
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You can capture the following details.
Ordering Institution 1 to 5
The Ordering Institution is the financial Institution that is acting on behalf of itself, or a customer,
to initiate the transaction. This field corresponds to 52a of SWIFT.
In this field, you can enter one of the following:

The ISO Bank Identifier Code of the Ordering Institution

The branch or city of the Ordering Institution

The Name and address of the Bank
Ordering Customer 1 to 5
The Ordering Customer refers to the customer ordering the transfer. Here you can enter the
name and address or the account number of the Customer, ordering the transaction. This field
corresponds to field 50 of SWIFT. You will be allowed to enter details in this field only if you have
initiated a customer transfer (MT 100 and MT 102).
Beneficiary Institution 1 to 5
In this field you can enter details of the institution in favour of which the payment is made. It is in
reality the bank that services the account of the Ultimate Beneficiary. This field corresponds to
field 58a of SWIFT.
Entries into this field are permitted only for Bank Transfers (when the remitter and beneficiary of
the transfer are financial institutions - MT 100 or MT 202). Here you can enter either of the
following:

The ISO Bank Identifier Code of the Beneficiary Institution

The Name and Address of the Beneficiary Institution
Ultimate Beneficiary 1 to 5
The Ultimate Beneficiary refers to the Customer to whom the availment amount is to be paid. This
field refers to field 59 of SWIFT. Entries into this field are permitted only for a customer transfer
(MT 100 and MT 202). The number of banks involved in the transfer would therefore depend on
the following:

Relationships and arrangements between the sending and receiving banks

Customer instructions

Location of parties

The banking regulations of a country
7.2.3.6 Cover Parties Tab
Click ‘Cover Parties’ tab to invoke the following screen.
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Specify the following details.
Beneficiary Institution For Cover 1 to 5
Select the institution in favour of which the payment is made, from the option list. If you click on
the adjoining button, a notepad editor emerges. You can specify further details about the
institution here.
7.2.3.7 Other Details Tab
Click ‘Other Details’ tab to invoke the following screen.
Specify the following details.
Counterparty Bank
The clearing bank code here gets populated with the value specified in the contract screen.
However you can change it. Select the relevant clearing bank code from the adjoining option list.
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Description
The description of the selected bank, where the cover party account resides, is displayed here.
Counterparty Account
Specify the counterparty account. All the counterparty accounts pertaining to the selected
Counterparty Bank will appear for selection in the adjoining option list. On selecting the
Counterparty Account, the system will default the Counterparty Name as maintained for that
account.
If at the time of selecting Counterparty Account, Counterparty Bank is Null, then the Counterparty
Bank will also appear by default.
Counterparty Name
Specify the name of the counterparty.
Agreement Identification
For processing direct debits on transactions you will also need to capture the Agreement ID of the
counterparty in order to facilitate a cross-referencing between the contract payment and the direct
debit instruction when a reversal of payment is carried out due to rejection of the outbound DD.
Specify the Agreement ID in this field. Typically, you will need to specify this only for the Receive
leg. This field is disabled for the Pay leg.
Clearing Network
Specify a clearing network during settlement instruction maintenance for the Pay Leg.
Post Accounting
Check this option to indicate that accounting entries maintained for the product should be posted.
7.2.3.8 Clearing Details Tab
Click ‘Clearing Details’ tab to invoke the following screen.
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Specify the following details.
Bank Operation Code
Select the bank operation code that should be inserted in field 23B of an MT103 message, from
the adjoining drop-down list. The list contains the following codes:

SPRI

SSTD

SPAY

CRED
This specification is defaulted from the settlement instructions maintained for the customer,
currency, product, branch and module combination. However, you can change it.
Transaction Code
The transaction code maintained in the settlement instructions is defaulted here. However, you
can change the code.
Regulatory Report 1 to 3
Select the Regulatory Reporting Details from the drop-down list displaying the following values:

/BENEFRES/

/ORDERRES/
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Time Indicator 1 to 3
Time Indication, specifies one or several time indication(s) related to the processing of the
payment instruction. Select the time indication code from the following values available in the
option list:

/CLSTIME/ - Time by which funding payment must be credited, with confirmation, to the
CLS Bank's account at the central bank, expressed in CET.

/RNCTIME/ - Time at which a TARGET payment has been credited at the receiving
central bank, expressed in CET

/SNDTIME/ - Time at which a TARGET payment has been debited at the sending central
bank, expressed in CET
Instruction Code 1 to 5
Select the instruction code that should be inserted in field 23E of an MT103 message involving
the customer of the contract, from the adjoining drop-down list. This list contains the following
codes:

CHQB

TELE

PHON

PHOI

REPA

INTC

TELI

SDVA

PHOB

TELB

HOLD

CORT

BONL
This specification is defaulted from the settlement instructions maintained for the customer,
currency, product, branch and module combination. However, you can change it.
Description
Specify additional information that should be inserted to qualify the Instruction Code in field 23E
of an MT103 message involving the customer of the contract. For instance, if the Instruction Code
is REPA and the description is "Repayment" then the text ‘REPA/Repayment’ will be inserted in
Field 23E. You can give a description for the following instruction codes only:

PHON

PHOB
7-19

PHOI

TELE

TELB

TELI

HOLD

REPA
This specification is defaulted from the settlement instructions maintained for the customer,
currency, product branch and module combination. However, you can change it.
Envelope Contents 1 to 5
Specify details of envelope contents, if required.
7.2.3.9 Local Clearing Tab
Click ‘Local Clearing’ tab to invoke the following screen.
Specify the following details.
Message Details
Specify the following details.
Ultimate Bank Code
Specify the bank code where the ultimate beneficiary account rests.
7-20
Sender Receiver Participant
Specify the sender receiver participant name.
Additional Identifier
Specify the additional identifier.
Sorbnet Specific Details
Specify the following details.
Payment Code
Specify the Sorbnet payment code.
Additional Information
Specify additional information if required.
ZUS Transaction
Specify the following details.
Nip Payer
Specify the Nip payer.
Payer Identifier
Specify the payer identifier.
Declaration
Give a declaration for the payment.
Supplement Identification
Select the supplement identification from the adjoining drop-down list.
Payment Type
Select the payment type from the drop-down list.
Number of Declaration
Specify the number of declaration.
Sender Receiver Information 1 to 6
Include any message that the sender wishes to pass on to the receiver as part of the funds
transfer.
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Free Text 1 to 3
Specify the free text for settlement messages.
Additional Information 1 to 4
Specify additional information for settlement messages.
Receiver Information
Specify the following details.
Receiver Account
Specify the account number of the beneficiary. This field is used to populate field 58a of a MT202
cover message.
Receiver Name
Specify the name of the receiver.
Address 1 to 3
Specify the receiver’s address.
Repair Reason 1 to 4
Specify the repair reason.
7.2.4 Viewing Advice Details
Click ‘Advices’ button and invoke the ‘Contact Advices’ screen.
You can view advices generated for the contract during availment.
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7.2.5 Specifying Charge Details
Click ‘Charges’ button and invoke the ‘Charge Detail’ screen.
Refer the Charges and Fees User Manual under Modularity for further details about charge
maintenance.
7.2.6 Specifying Commission Details
Click ‘Commission’ button and invoke the ‘Commission Details’ screen.
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Refer the Commission User Manual under Modularity for further details about commissions
processing.
7.2.7 Specifying Tax Details
Click ‘Tax’ button and invoke the ‘Tax Details’ screen.
Refer the Tax User Manual under Modularity for further details about tax processing.
7.2.8 Viewing Event Details
Click ‘Events’ button in the ‘LC Availment’ screen, to go to the ‘View Events’ screen. The details
of events that have taken place on the contract including the last availment, that you are have just
entered will be displayed. The date on which the event took place will also be displayed.
Click ‘Exit’ or ‘Cancel’ button to go back to the main screen.
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7.2.8.1 Viewing Accounting Entries
From the ‘View Events’ screen, click ‘Accounting Entries’ button to view the Accounting Entries
for the event. You can view the details of the accounting entries that were passed only for the
event displayed in the availment – ‘View Events’ screen.
The following information is provided for each event:

Branch

Account

Transaction Code

Booking Date

Value Date

Dr/Cr indicator

Currency

CCY (Currency)

Amount in contract CCY

Amount in local currency.
All the overrides that were allowed for an event will also be displayed
Click ‘Exit’ or ‘Cancel’ button to return to the screen from where you invoked the ‘Accounting
Entries’ screen.
7-25
The system will display an override message if the date when the availment is made i.e. the
value date of the availment falls after the expiry date for the LC issued. You may use your
discretion to proceed or cancel the contract. You can also have this override configured as an
error message in which case, the system will not allow you to proceed until you make the
necessary changes.
7.2.8.2 Reversal of Availment
You can reverse the last availment made on an LC. All availments made on the LC will be
displayed. You can select the last availment performed on the LC for reversal.
To reverse the details of an LC, select Reverse from the Actions Menu or click reverse icon in the
toolbar. On reversing an availment on an LC, the system passes reversal entries for the
availment.
An availment can be reversed, only if it was the last event that took place on the LC contract.
Reversal of LC Liability
When an LC is availed using a Bill (or using the Availment function from the browser), the
Availment Amount and the Liability Percentage specified for the underlying LC contract will be
used in computing the default Liability Amount. This default value can be changed.
The following example illustrates this.
Example
You have specified the following details for an LC instrument.
LC Amount
1,000,000
Positive Tolerance
10%
Liability Percentage
5%
LC Liability Amount
100,000 + 10% (100,000) + 5% (100,000) = 115,000
When you avail this LC to a tune of 200,000, the Liability Amount will default as follows:
LC Amount
200,000
Liability Amount
200,000 + 5% (200,000) = 210,000
Note that during availment, the Positive Tolerance Percentage specified for the LC is not
taken into account to compute the default value of the Liability Amount.
7.3
Viewing LC Availment Summary Details
7-26
You can view the summary details of an LC Availment Summary in ‘Letters of Credit Availment
Summary’ screen. You can invoke this screen by typing ‘LCSAVMNT’ in the field at the top right
corner of the Application tool bar and clicking on the adjoining arrow button.
In this screen, you can query based on any combination of the following fields:

Authorized

Contract Status

Contract Reference

Product Code

User Reference Number

Customer Identification

Branch
After specifying the parameters for the query, click ‘Search’. The system displays all the records
matching the parameters specified.
You can list the other branch transactions by clicking the ‘Advanced Search’ button for Branch
code. The ‘Advanced Search’ screen is displayed.
7-27
Here you have to select the branch in the advanced filter option to list the other branch
transactions. And select the transaction from the summary screen to launch the detail screen.
You can perform the appropriate operations after opening the detail screen from the summary
screen.
7-28
8.1
Introduction
8. Amending Details of LC
An amendment to an LC signifies any change made to the terms of an LC after it has been
authorised. An amendment can be made at anytime after an LC has been authorised and before
its expiry date.
The following are some examples when you would amend the details of an LC:
8.2

You as the issuing bank have got an application from your customer to change the terms
of the LC.

You as the advising bank have received instructions from the issuing bank to amend an
LC advised by you.
Procedure for Amending LC
While in the detailed view of the LC, select Unlock from the Actions menu or click unlock icon on
the toolbar. All the details entered for the LC will be displayed. You can amend the details of the
contract depending on whether:

The LC has been authorized

The LC has not been authorised even once after it was input
Depending on the authorisation status of an LC contract, you can amend its details as follows:

When you have captured the details of a contract and it is not yet authorized, its
attributes, financial as well as non-financial, can be changed, even if the details have
been saved. If accounting entries are involved in the change, the old entries are deleted
and new ones passed.

Once a contract has been authorised, additional entries will be passed, depending on the
nature of amendment.
For each amendment, a new version of the LC will be generated. Different versions of the LC will
also be generated by events like reinstatement and reopening. In the ‘Contract Detailed View’
screen, you can view the different versions by clicking the arrow buttons for the previous and the
next versions. LC Contract Online screen also allows you to amend the financial fields.
When a customer requests for changes in the terms of the contract, the details of the LC are
amended accordingly and an amendment instrument is generated. The amendment of the
following details of an LC, result in the generation of an amendment instrument:

An amendment in the LC amount

An amendment in the expiry date

A change in the latest shipment date

Any change to the free format instructions for the LC
8-1
If there are changes in the terms of the LC other than IN the amount, the expiry date or latest
shipment date, indicate the same in the form of a free format instruction, for the amendment
instrument.
In case of amendment, you have the option to reissue the Guarantee. If you choose to do so, the
REIS (Reissue of Guarantee) event will be triggered. The system checks for any previous
amendment. In case no amendment has been performed, the system displays the message:
Do you want to Reissue the Guarantee?
Click on OK to reissue the Guarantee or click on Cancel to process the amendment of
Guarantee.
The system checks if REIS event is maintained for the product. If the event is maintained, the
system does not allow any further change in the LC contract details apart from FFT fields, which
can be modified/added but you cannot delete the existing data.
The system creates a new version for the Reissue event and the event inherits all the contract
information defined for the authorized BISS event. The version also inherits the information from
the subsystem excluding Charges and Commission. No commission is associated with the
Reissue event and charges can be maintained for the REIS event, which is processed along with
the reissue event.
When the Reissue event is authorized, the advices maintained in the REIS event are processed.
The Reissue event will not be affected by the status of the ‘Confirmation Required’ option in
the ‘Letters of Credit Contract Detailed’ screen.
8.2.1 Indicating Change of Value for a Field
When the LC amount is being changed, the new amount of the LC should be indicated after the
amendment.
Example
The original LC amount was USD 100,000 and you want to make it USD 150,000. In the LC amount field,
during amendment, enter the amount as USD 150,000. The system will calculate the increase in amount
and pass the appropriate entries. The LC amendment instrument will have both the old and new values.
The original LC amount was USD 100,000 and you want to change it to USD 75,000. In the LC amount field,
during amendment, enter the amount as USD 75,000. The system will calculate the decrease in amount and
pass the appropriate entries. The LC amendment instrument will have both the old and new values.
When you are changing the expiry date or the latest shipment date, you should enter the new date in their
respective fields.
8.2.2 Commission and Charges for Amendment
While amending the details of an LC, you can specify the commissions and charges that you
want to levy for processing the amendment. These will be effective from the date of amendment.
It will not affect the booking commission in any way.
8-2
Refer to the Commissions User Manual for details on how commission is calculated, for an
amendment.
8.2.3 Amendment of an Unauthorised LC
The amendment of an unauthorised LC is considered as a modification. When an LC that you
have entered is not yet authorized, you can change all its details except the details in the header
(contract reference number, the product and type of operation). To change any detail on an LC
that has been stored and not authorised, delete the LC and input a new one.
After amending the details of the unauthorised LC, save the contract with the new information. On
saving the amendment, all the accounting entries that were passed during the input of the
contract and the earlier accounting entries specified for the LC, will be deleted. A fresh set of
accounting entries will be passed for the amended LC contract.
As the advices to be generated for an LC, are generated only at the time of authorisation, no
action needs to be taken regarding messages.
The system will not allow you to amend the following fields in the ‘LC Contract’ screen:

Their Reference Number for Party Types ABK, BEN, COB and ISB (in the ‘Parties’ tab)

Issue Date (in the ‘Main’ tab)

Expiry Date (in the ‘Main’ tab)

LC Amount (in the ‘Main’ tab)

Positive and Negative Tolerance (in the ‘Main’ tab)

Additional Amount Covered message (in the ‘Others’ tab)

Shipment From (in the ‘Ship/Docs’ tab)

Shipment To (in the ‘Ship/Docs’ tab)

Port of Loading (in the ‘Ship/Docs’ tab)

Port of Discharge (in the ‘Ship/Docs’ tab)

Latest date of shipment (in the ‘Ship/Docs’ tab)

Shipment period (in the ‘Ship/Docs’ tab)

Sender to receiver information (in the ‘Parties’ tab)
However, you can amend the above fields in the ‘Amendment Confirmation’ screen. This screen
is explained in the following section.
8.3
Confirming LC Amendment
The option to amend these fields is also available in the ‘Letters of Credit Amendment
Confirmation Input’ screen. However, the amendments will become effective only upon receiving
the confirmation from the beneficiary.
8-3
You can do the financial amendment of LCs and Guarantees for which confirmation is not
required (i.e. the ‘Confirmation Required’ option is not selected in the ‘Parties’ tab at the contract
level) only through the ‘Letters of Credit Contract Detailed’ screen.
You can invoke this screen by typing ‘LCDAMEND’ in the field at the top right corner of the
Application tool bar and clicking on the adjoining arrow button. Click new icon in the toolbar of the
screen or select ‘New’ from the Actions menu in the Application toolbar. The system will display
‘Transaction Branch’ screen. Here you can select the transaction branch.
Here you are allowed to amend the contracts booked in other branches from the logged in
branch. Also, you can query other branch amended transactions from the logged in branch. The
system defaults the logged-in branch by default as the transaction branch.
Transaction Branch
Select the appropriate branch from the list of branches available in the option list.
While clicking ‘Ok’ button, the system validates the access rights of the selected branch and
function for the user. If you don’t have appropriate rights on the selected branch and function, the
system would raise an error message. If you select a valid branch, the system updates the same
as transaction branch and the transaction would be posted for this branch.
The system performs the action level access rights validation only on ‘Save’ operation.
After selecting the Transaction Branch, you can enter the remaining details in the ‘Letters of
Credit Amendment Confirmation Input’ screen.
8.3.1 Details Tab
Click ‘Details’ in the screen. The following screen is displayed:
8-4
In this screen, you can capture the following information:
Contract Ref No
Select the reference number of the contract to be amended from the option list provided. This
option list will contain the reference numbers of all contracts for which the ‘Confirmation Required’
option has been selected.
You can fetch the transactions of the respective branch and query the other branch
transactions and proceed with authorization of the same. The system displays the branch in the
query fields of the option list.
Upon selection of the contract, the following details will be displayed in editable mode:

Version Number

Contract Amount - The amount that is availed under the LC

Currency – The contract currency

Issue Date - The date on which the LC is issued. You cannot specify a future date here
8-5

Expiry Date - The date on which the LC is scheduled to expire. If the insurance cover
date is greater than this expiry date, then whenever you attempt to save the contract, an
override is displayed.

Closure Date – This the date LC is scheduled to be closed. You can modify this particular
value.

Increase Decrease of LC Amount - A display field which indicates the amount of LC
increased or decreased, as the case may be

Additional Amounts Covered - This indicates the value to be carried in field 39C of the
SWIFT messages MT700 and MT740

Latest Shipment Date - The last date by which the shipment of the goods has to take
place. This date should not be earlier than the Issue Date of the LC or later than the
expiry date

Shipment Period - The extension of the shipping period. You can enter the Shipment
Period only if you have not specified the Latest Shipment Date

Port of Loading – The port from where the goods transacted under the LC will be loaded

Port of Discharge – The destination port to which the goods transacted under LC should
be sent

From Place - The place from where goods are to be dispatched or transported

To Place - The final destination to which goods are to be transported/delivered

Positive Tolerance % - The percentage that is to be added to the LC amount to arrive at
the Maximum LC amount. An override message is displayed when you try to amend the
Positive Tolerance

Negative Tolerance % - The percentage that should be subtracted from the LC amount.
An override message is displayed when you try to amend the Negative Tolerance
8.3.2 Parties Tab
Click ‘Parties’ in the main screen to view the parties’ details for the contract. The following screen
will be displayed.
8-6
In this screen, you can amend the following fields:

‘Their Reference Number’

Language

Issuer

‘Dated’ fields values

Media Type

Account details under Other Addresses
8.3.3 FFT Tab
Click on ‘FFT’ in the main screen to amend the free format text details for the selected contract.
The following screen is displayed:
8-7
In this screen, you can include new codes or remove existing ones. You can also change the
description associated to a code.
8.3.4 Advices Tab
To view the advices that have been linked to the selected contract, click ‘Advices’ in the main
screen. The following screen is displayed.
8-8
.Advices for a party will be sent to the default media specified in the ‘Customer Address
Maintenance’ screen. If you want to send the advices through another medium, you should
mention the media details in Other Address in Parties screen and New Medium in the Advices
screen.
In this screen, you can suppress the generation of an advice by checking the ‘Suppress’ box for
the particular advice.
Make the necessary amendments. Save the changes. To save, click save icon in the toolbar of
the screen or select ‘Save’ from the Actions menu.
The system will update the following details in the audit trail of the screen:

Input By – Your login id

Date Stamp – The date and time at which you saved the contract

Amendment Status – The status will always be ‘Unconfirmed’

Auth Status – The status will always be ‘Unauthorized’
8-9
If the insurance amount that is amended is less than the contract amount by x%, where x is
the insurance percentage, then an override is displayed when you save the amendment. This
value x is also displayed in the contract.
8.3.4.1 Interest Clause Amendment
You can amend the details of the interest clause added to an import contract/guarantee. The
values of the clause captured defaults the following details:

From Date

To Date

Rate Type

Rate Code

Spread

Interest Amount

Calculate Button
The values of the parameters mentioned above are defaulted from the values captured for
interest clause at the contract level. However this being an amendment action these defaulted
values can be changed.
You need to specify the following details as part of the amendment:
From Date
Specify the start date for the interest component on the contract.
To Date
Specify the end date for the interest clause on the contract/guarantee.
The ‘Default’ button is used for calculating interest based on the given parameters. The dates are
validated similar to the validations carried out for dates during contract creation.
Rate Type
Select the rate type applicable from the option list. You can choose the rate as either:

Fixed

Floating
Rate Code
Specify the tier rate code. This value is captured only if the rate type is floating.
8-10
Spread
Specify the spread for the contract. The spread indicates the interest rate for fixed rate types. For
floating rates the rate type is the interest spread. The spread for floating rates can be either
positive or negative.
8.3.5 Authorizing Amendment Details
After you save the amendment details, you have to get it authorized by your supervisor. Follow
the steps given below to authorize:
1. Click authorise icon in the toolbar of the screen or select ‘Authorise’ from the Actions menu.
The following screen will be displayed:
2. Click ‘OK’ button to proceed. The system will seek a confirmation for generating the
messages. Click ‘OK’ to proceed.
3. Click ‘Cancel’ button to return to the ‘Amendment Confirmation’ screen. The system will
display a message to confirm successful authorization of the record. The audit trail of the
screen will now display the following details:

Checker ID – Login id of the authorizer

Checker Dt Stamp - The date and time at which you authorized the contract

Auth Status – The status will updated to ‘Authorized’
8.3.6 Confirming Amended Details
8-11
Once authorized, you will not be allowed to modify these details. The system will provide option
for confirming or rejecting the amendment details.
You can re-compute the schedule commission for financial amendment done through LC
amendment confirmation. After the confirmation of financial amendment, number of units for
commission schedule can be modified in LC Contract Online, which gets launched during
authorization of confirmation. Commission schedules can be recomputed through process “P”
button in Commission Schedule screen or save of contract online screen.
To confirm the details, do the following:
1. Click confirm icon in the toolbar of the screen or select ‘Confirm’ from the Actions menu. The
system will display the following override message to proceed:
Do you want to confirm the record? OK to proceed.
2. Click ‘OK’ in the message window to proceed. The system will display the following message
to confirm the confirmation:
The Record is successfully confirmed.
3. Click ‘OK’ in the message window and this takes you the LC contract online screen. The
charges can be waived using this screen. Note that the ‘Amnd Status’ is updated to
‘Confirmed’ and the ‘Auth Status’ is updated to ‘Unauthorized’ (in the audit trail of the screen).
8.3.7 Amending details using the Contract screen
You can unlock the LC contract screen after clicking ‘OK’ in the message window above. The LC
contract online screen is used for modifying details after confirmation of the amendment action.
The system creates an amendment on the LC once the proposed amendment is confirmed.
When this amendment is created the confirmation and amendment events are both left in an
unauthorized state. This allows unlocking of the LC contract to make the necessary amendments.
You can compute schedule commission for financial amendment done at LC Contract online
screen.
8-12
Upon saving the contract the system will trigger AMND event and MT707 will be generated for
financial amendments. You can preview the Message MT707 using Message Preview Screen.
Once the confirmation is saved on the amendment screen, the LC contract online screen is
launched with the data modified, and this can be unlocked and modified, or closed as chosen by
the user. These changes are directly made by launching the LC contract screen. However the
amendment can only be deleted by using the amendment screen as described above.
The following LC contract screen is launched when the amendment is confirmed in the LC
amendment confirmation input screen.
The amendment cannot be deleted using the LC contract screen, and can only be deleted using
the amendment screen as part of the confirmation. This is done by deleting the confirmation using
the amendment screen.
Hence the process is carried out as follows:
1. The amendment is confirmed using the LC Credit Amendment confirmation screen. It is
completed by clicking ’C’ and saving the confirmation.
2. The LC contract screen is launched once the confirmation is saved. This screen contains the
details of the amendments done in the confirmation input screen.
3. This screen is unlocked and the details are made available for modification. Subsystem
details like charges and commission can be modified or waived as required.
8-13
During an auto authorization of Amendment Confirmation, the amendment created by this
confirmation is also authorized.
Authorizing Confirmation
Your supervisor now needs authorize the confirmation to view the changes made. Financial
amendments of authorized LCs and Guarantees for which confirmation is required (the
‘Confirmation Required’ option has been selected at contract level) can be done through LC
Amendment confirmation screen. Upon saving of LC amendment, system will trigger AMNV
event. Authorization of amendments of LCs and Guarantees that do not require confirmation
should be done only through LC Contract online screen.
The steps to authorize are given below:
1. After logging in, invoke the ‘Amendment Confirmation’ screen and navigate to the record that
needs to be authorized.
2. Click authorise icon in the toolbar of the screen. The system will create a new version of the
contract and display the details of the contract in the ‘LC Contract’ screen, as shown below.
3. After confirming the changes, click save icon in the toolbar of the screen to save the details.
You can delete the amendment if the ‘Amnd Status’ of the contract is ‘Confirmed’ but
unauthorized.
8.3.8 Rejecting Amended Details
To reject the amendment details, do the following:
1. Click the close icon in the toolbar of the screen. The system will display the following
message to confirm the rejection:
2. Are you sure you want to reject the current record?
3. Click ‘OK’ in the message window to return to the ‘Amendment Confirmation’ screen. The
system will display a message to confirm successful rejection of the record.
4. The ‘Amnd Status’ will be updated to ‘Rejected’.
8.3.8.1 Authorizing Rejection
Your supervisor now needs authorize the rejection. The steps to authorize are given below:
1. After logging in, invoke the ‘Amendment Confirmation’ screen and navigate to the record that
needs to be authorized.
2. Click authorize icon in the toolbar of the screen or select ‘Authorise’ from the Actions menu.
The system will display the following screen.
8-14
3. Click ‘OK’ icon to proceed. You will return to the ‘Amendment Confirmation’ screen and the
system will display a message to confirm successful authorization of the record.
4. The ‘Amnd Status’ of the record will be ‘Rejected’ while the ‘Auth Status’ will be updated to
‘Authorized’.
Note the following:

If a contract is amended and confirmed, you can amend it again by creating a new
amendment record in ‘Amendment Confirmation’ screen for already amended LC
contracts.

The system will not allow you to perform any operations on an LC pending confirmation
or rejection.

The amended details will take effect only after confirmation from the beneficiary.

If the amendment is rejected, the system will retain the original or the last amended
confirmed LC.
You can amend the same contract several times in ‘Amendment Confirmation’ screen as long as
the amendment is not authorized.
8.4
Operations on Confirmation Record
In addition to the operations discussed above (Save, Authorize, Confirm), you can perform the
following operations in the ‘Amendment Confirmation’ screen:

New

Delete

Close

Unlock
8-15
8.5
Re-calculating Commission during Amendment
You need to re-calculate the commission during any of the following operations in the life cycle of
the contract:

Amendment of amount

Amendment of tenor

Amendment of contract amount and tenor
During change in Amount and Change in Tenor using LC Contract online, you can input the
number of schedules and click the populate button to re-populate the schedule based on the new
number of units and new commission amount.
For any commission rate change happening at rule level, commission is re-computed on the
commission liquidation date.
For any of these changes, commission that has already been collected for previous schedules
will not be affected.
The commission is re-computed based on rate period and minimum commission period for
schedule type of components. Commission liquidation from the customer account happens only if
there are sufficient funds in the account.
You can amend a contract even after all the schedules all fully paid. However, commission
rate cannot be changed after all schedules are paid.
If you don’t visit the commission screen during amendment then while saving, system will adjust
the computed commission amount in the pending schedules. If there are no pending schedules
then system will create a bullet schedule to collect the same.
8.6
Uploading LC Amendment
While uploading an amendment, the system checks the user reference number in the contract
with the external reference number of the incoming message. If a contract exists with the
reference number and its status is ‘Authorized’ and ‘Active’, then the system will amend it
provided the upload action is ‘AMND’.
If upload action is ‘NEW’ and the external reference number exists, the system will display an
error message. In case of contract amendment through STP of MT707, the following fields are
updated:

Expiry date (31E field)

LC amount (34B field)

Tolerance details(Negative and positive tolerance) (39A field)
8-16

Liability amount (39B field)

Additional amounts covered (39C field)

Shipment from (44A field)

Shipment to (44B field)

Latest date of shipment (44C field)

Shipment period(44D field)

Issuing bank amendment date(30 field)
Once an amendment is uploaded, the event ‘AMND’ will be triggered on the LC contract in the
system.
8.7
Viewing LC Amendment Confirmation Summary Details
You can view the summary details of an LC Amendment Confirmation in ‘Letters of Credit
Amendment Confirmation Summary’ screen. You can invoke this screen by typing ‘LCSAMEND’ in
the field at the top right corner of the Application tool bar and clicking on the adjoining arrow
button.
In this screen, you can query based on any combination of the following fields:
8-17

Authorization Status

Contract Reference Number

Branch Code

Contract Status

Product Code
After specifying the parameters for the query, click ‘Search’. The system displays all the records
matching the parameters specified.
You can list the other branch transactions by clicking the ‘Advanced Search’ button for Branch
code. The ‘Advanced Search’ screen is displayed.
Here you have to select the branch in the advanced filter option to list the other branch
transactions. And select the transaction from the summary screen to launch the detail screen.
You can perform the appropriate operations after opening the detail screen from the summary
screen.
8-18
9.
9.1
Transferring LC
Specifying LC Transfer Details
In Oracle FLEXCUBE, you can make transfers from an LC. A transferable LC is one where at the
request of the beneficiary (‘first beneficiary’) the LC is made available in whole or in part to
another beneficiary (‘second beneficiary’). This is usually done where the first beneficiary is not
the actual manufacturer of the goods and is sourcing it from others.
For an LC to be transferable, the LC must specifically state it to be transferable.
A transferred LC cannot be transferred at the request of a second beneficiary to any subsequent
beneficiary. The first beneficiary is not considered to be a subsequent beneficiary i.e. an
unutilized transferred LC can be transferred back to the first beneficiary only. This is new to UCP
600 and FCC has taken this into consideration.
You can invoke the ‘Letters of Credit Transfer Input’ screen by typing ‘LCDTRANS’ in the field at
the top right corner of the Application tool bar and clicking on the adjoining arrow button.
While transferring funds from an LC, you need to note the following conditions:
9-1

The transferred LC will always be of the same type as the old LC and will be created
under the same product

The charges applicable to the transfer should be associated with the event TRNF defined
for the product

You can only transfer an amount that is less than or equal to the amount available under
the original LC

An Import LC can be transferred only if the Applicant and Beneficiary are customers of
your bank
Specify the following details in the ‘Letters of Credit Transfer Input’ screen.
From Ref No
Indicate the LC from which you want to affect the transfer. Click the adjoining option list and
select a valid LC Reference. The manner in which Oracle FLEXCUBE handles a transfer is
different for import and export LCs.
Refer to the title ‘A note on transfers made from Import and Export LCs’ for more details.
Transfer Amount
The transfer amount is the amount that should be transferred from the original LC. You can only
transfer an amount that is less than or equal to the amount available under the original LC.
Expiry Date
The expiry date is the date up to which the transferred LC is valid. The expiry date of the original
LC is defaulted. You can change the defaulted date. However, the expiry date cannot be earlier
than the LC issue date or today's date.
In the case of an export LC, the expiry date can be earlier than today's date to cater to the
late receipt of the LC. However in this case you will be prompted for an override.
Goods Shipment Date
The shipment date is the latest date by which the shipment of the goods specified for the
transferred LC should take place. The latest shipment date of the original LC is defaulted. You
can change the defaulted date. However, the date you enter should not be earlier than the Issue
Date of the LC and later than the expiry date. If the latest shipping date that you specify for an LC
falls on a holiday in the LC currency, you will be prompted for an override.
It is mandatory for you to enter the Shipment date if you are processing an Import LC.
Period For Presentation
The period of presentation defined for the product - or calculated for the LC, as the case may be will be displayed. You can change the default to suit the LC you are processing.
To Ref No
Specify the reference number to which the LC should be transferred.
9-2
To User Ref No
Specify the user reference number to which the LC should be transferred.
Transfer Date
Specify the date of transfer.
LC Available Amount
The amount available on the chosen LC is displayed here.
9.1.1 Parties Tab
The ‘Parties’ tab can be used to record details related to the parties involved in the transfer. The
documents, tracers and messages that are generated will be sent to all the parties concerned,
based on the details you specify in this screen.
The Party Types that can be involved in the transfer of an LC are the advising Bank and the
Beneficiary. You need to indicate the following details for a party type:

The CIF ID assigned to the party, if the party is defined as a customer in Oracle
FLEXCUBE

The name of the party (It can be 150 characters in length. However, note that only 35
characters will be included in the SWIFT messages that you generate for the transfer)
9-3

The country to which the party belongs

The mailing address of the party
9.1.2 Documents Tab
Click ‘Documents’ tab and specify details of documents and clauses that should accompany the
goods.
There are some standard documents required under a documentary LC. In this screen you can
specify the documents that are required under the LC being processed. These details will be a
part of the LC instrument sent to the advising bank, the advice through bank or the beneficiary.
Documents Details
All the documents specified for the product to which the LC is linked will be defaulted to this
screen. The details specified for these documents such as the document type, description, the
number of copies required, the number of copies issued, the clauses specified for the document
are also defaulted from the product. You can edit the description of the document that is defaulted
to suit the LC you are processing.
You can add to or delete from the list of documents that are defaulted. To add a document for the
LC, click add icon. Type in or select the code of the appropriate document from the list of
document codes maintained in the ‘Documents Maintenance’ screen. The other details of the
document will be defaulted to this screen.
9-4
To delete a document that is not required for the LC, highlight the document code and click on the
delete icon.
Clauses Details
The Clauses associated with the documents that you specified for the transfer are defaulted.
When you highlight a document code, all the clauses defined for the document are displayed in
the Clauses window. You can add to or delete from the list of clauses that are defaulted.
To add a clause to a document for the LC, click add icon. Specify a valid clause code or select
the code of the applicable clause from the list of clause codes maintained, in the Clause
Maintenance screen. The description of the clause will be defaulted, based on the clause code
that you select.
To delete a clause that is not required for the LC, highlight the Clause code and click delete icon.
Specifying Shipping Details for an LC
There are certain standard clauses and conditions, associated with the shipment of the
merchandise traded under an LC.

The location from which the goods transacted under the LC should be shipped. In
international trading parlance, this is called the Loading on board/Dispatch/Taking in
charge at/from

The destination to which the goods transacted under the LC should be sent In
international trading parlance, this is called the For transportation to

The latest date of shipment

Besides these details, you can also specify shipping preferences like:

Should Trans-shipment be allowed under the LC

Should partial shipment of the goods be allowed under the LC

Shipping marks

Additional shipment details
Specifying Goods Details
The details of the merchandise that will be traded under the LC should be clearly specified. You
have maintained various codes that have been allotted, for commodities normally traded in your
country. Pick up the applicable code for the LC you are processing. The description of this code
(which could be 6500 characters long), can be changed to suit the LC you are processing. You
can also enter specifications such as the quality and quantity of the merchandise.
Description for a Pre-advice
If pre-advice is one of the advices for the transfer, you should enter the details of the LC briefly,
as a pre-advice description. This will be a part of the pre-advice that is generated.
Typically, a pre-advice is sent by SWIFT or cable and contains brief details of the LC. This is
followed by the LC instrument will contain all the details of the LC.
9-5
Specifying the Port of Loading and Discharge
You can specify the name of the airport from where the goods transacted under the LC are
loaded for shipping. This is called the Port of Loading.
You can also specify the name of the destination port to which the goods transacted under LC
should be sent. This is called the Port of Discharge.
You can amend the value of ‘Port of Loading’ and ‘Port of Discharge’ after authorization.
9.1.3 Note on Transfers made from Import and Export LCs
How Transfers from Import LCs are Processed
While transferring an import LC, the original LC is modified to include the additional details of the
transferred LC. For instance, the new beneficiary and new advising are added to the existing list
of parties.
In Oracle FLEXCUBE, the transfer made from an LC will be taken as a new event ‘TRNF’.
Availment made by the new beneficiary against the transferred LC will be tracked against the
original LC.
How Transfers from Export LCs are Processed
In the case of an Export LC, a new LC will be opened for each transfer that you make from the
original LC. The transfer amount will be taken as the new LC amount.
On authorizing the transfer,

an availment to the tune of the transferred amount is made against the original LC i.e. the
outstanding amount of the Original LC will be reduced by the transfer amount

a new LC is created based on the transfer details that you specified
The transferred LC will be separated from the original LC. Availment made from the new LC will
not affect the outstanding of the Original LC.
9.1.4 Viewing Details of Transfers made to the LC
Click ‘Transfer Details’ button from the LC Contract screen to view details of the transfers that
were made from the LC.
9-6
The following transfer details are displayed:

The LC from which you are transferring funds

The transfer amount

The transfer date

The expiry date

The shipment date
Click ‘Exit’ button to exit the screen. You will return to the ‘LC Contract’ screen.
Although you can initiate the transfer of an LC to more than one secondary beneficiary on
behalf of the primary/original beneficiary, a secondary beneficiary can only transfer it back to the
original beneficiary. The system will display an error message if a secondary beneficiary initiates
a transfer with ‘Party ID’ different from that of the original beneficiary.
9-7
10. Liquidation of Receivable Components of LC
10.1 Introduction
Whenever you have to collect a component (typically for a commission or charge, or under
certain circumstances the availment amount or the collateral amount), you debit it from the
customer’s account. On some occasions, you may have to debit it from an internal receivable GL,
to be debited from the customer account at a later date.
The debiting of the receivable account happens at the event for which the commission or charge
has to be collected (issue of an LC, amendment of an LC, availment against an LC, etc.). When
the customer account has to be debited at a later date, you have to perform, what is termed as
receivable liquidation. There are two related functions associated with liquidation:

A batch process that reverses the liquidated receivable components, for a contract that is
reversed during the day (the LQ EOTI function)

A batch process that generates the charge and commission claim advice to the party on
behalf of whom a charge or commission was debited, from a receivable account during
the day (the LQ EOD function)
10.1.1 Invoking Receivable Liquidation Screen
From the Application Browser, select ‘Liquidation’ and ‘Detailed’ under it. The ‘Receivable
Liquidation Input’ screen will be displayed. You can also invoke this screen by typing ‘LQDDLIQ’
in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow
button.
Liquidate the components of an LC that have been put in a receivable account Reverse the
liquidation of a receivable component
10-1
10.1.2 Liquidating Receivable Components of LC
Once you enter the reference number of the LC in the Receivable Liquidation screen, the system
automatically assigns a unique liquidation reference number to the component you are
liquidating. Besides this, the following details of the LC are picked up and displayed:

The counterparty (customer) code

The Value Date of the LC

The account to which the liquidated amount should be credited

The currency of the receivable account

The branch to which the account belongs

The total outstanding amount for the component as of the value date (the date on which
the payment is being made)

Details of the tracers that were generated thus far for the outstanding component

The Status of the LC
You can specify the following details for the Liquidation:

The account that should be debited for the liquidation amount

The branch to which the account belongs

The currency of the account

If the component currency and the currency of the account to be debited for the liquidated
amount are different, you can indicate the exchange rate to be used in the conversion. By
default, the exchange rate specified for the product under which the LC is processed, will
be displayed. You can change this and the changed rate should be within the variance
limit specified for the product.
The outstanding components of an LC are displayed for each event. To liquidate an outstanding
component, choose ‘Liquidate’ from the Processing submenu of the Actions menu or click
‘Liquidate’ icon on the toolbar.
After the liquidation of an outstanding component, if there are other outstanding components for
the event, the system will inform you of them and prompt you to liquidate them as well.
10.1.3 Specifying Details of Advices for Liquidation
The advices that can be generated for the events that occur during the life cycle of an LC, are
defined for the product involved in the LC. In this screen you can specify the advices that should
be generated to the parties concerned, indicating that you have liquidated a receivable
component of the LC.
The details of two advices are shown in this screen:

Charge Claim Advice

Debit Advice
10-2
The Charge Claim Advice will, be generated at EOD, on the day the receivable account is
debited. This is the event for which a charge is attached or a commission liquidation event (Event
Code CLIQ). Its details whether it was suppressed during the event, the medium through which it
was transmitted and the date on which it was generated will be displayed. This is for information
purposes only.
The Debit Advice is generated when the receivable components of the LC are liquidated. You can
suppress the generation of the advice or change the media and priority when you are processing
the liquidation.
Suppressing the Generation of an Advice
By default, all the advices defined for the product involved in the LC will be generated. If you do
not want to generate a specific advice, you can suppress its generation by indicating so.
Priority
Priority applies to the advices that need to be sent, through media like S.W.I.F.T. or TELEX. By
default, the priority of all advices is marked as normal. Advices can be prioritized to one of the
following options:

Normal

Medium

High
Indicating the Medium for Generation
It is mandatory to also specify the medium through which an advice is to be transmitted. An
advice can be transmitted through Telex, Mail, S.W.I.F.T or any other media that you have
defined in your branch. You can select the appropriate medium code from the picklist.
In addition, the details for the Charge Commission Tracer are also displayed. This tracer is
generated after the event has taken place till the component is liquidated. These details are for
information only. They are defaulted from the product under which an LC is processed.
10.1.3.1
Accounting Entries passed during Account Receivable Liquidation
Example
Your customer, Mr. Sam Brown has requested you to issue an LC on 01, Jan’98. You have debited a
receivable account since Mr. Brown’s account does not have the necessary balance to pay the commission.
On 30, Jan’98 Mr. Brown pays the commission that was due on 01, Jan’98. When you liquidate the
commission component of the LC you will have to debit Mr. Brown’s account and credit your debited
receivable account.
The accounting entries passed on 01, Jan’98 (the date commission was due)
Dr
Commission Receivable Account
Cr
Income Account
On Liquidation the following entries are passed:
10-3
Dr
Mr. Sam Brown’s account
Cr
Commission Income account
10.1.4 Reversing Liquidation Entries
You can reverse the authorised accounting entries that were passed, when you liquidated a
receivable outstanding component of an LC.
You can reverse the accounting entries, passed for the liquidation of an outstanding component
of an LC, through the Receivable Liquidation screen. Specify the Contract Reference Number of
the LC. All the outstanding components of an LC that were paid from a receivable account will be
displayed. Query the component whose liquidation entries you want to reverse. Choose Reverse
from the Processing sub-menu of the Actions Menu or click ‘Roll-over’ icon on the tool bar.
The system will prompt you to indicate whether you want to reverse the liquidation entries
passed for the outstanding component or make the component outstanding again.
If you indicate that the entries should be reversed, the accounting entries that were passed
earlier will be reversed. However, you will not be able to liquidate the component at a future
date.
If you indicate that the component should be made outstanding, the accounting entries that
were passed earlier will be reversed and the component will become outstanding again. The
component can be liquidated later on.
10.1.5 End of Day Processing for Receivable Components
The following End of Day processing is done for receivable components:

A batch process that reverses, the liquidated receivable components, for a contract that
is reversed during the day (the LQ EOTI function). This function should be defined as a
mandatory program in the pre-EOC stage.

A batch process that generates the charge and commission claim advice to the party on
behalf of whom a charge or commission was debited, from a receivable account during
the day (the LQ EOD function). This function should be defined as a mandatory program
in the EOC stage.
10.1.6 LQ EOTI Function
There are some occasions when you have to reverse a contract on which a receivable
component has been liquidated. The following is an example:
Example
You issue an LC for Gem Granites on 01 January 1998, for which the charges and commission was debited
from a receivable account. On 05 January 1998, you liquidate the commission from the customer’s account.
10-4
Thereafter, say on 07 January 1998, you reverse the LC. All the entries for the LC that were passed when
the LC was stored (including the entries passed into the receivable account) will be reversed. However, the
entries that were passed to liquidate the commission from the customer’s account (which was subsequently
done through the liquidation function) will not be reversed. This entry will be reversed by the LQ EOTI of 07
January 1998.
10.1.7 LQ EOD Function
A charge claim advice informs the concerned party, about a component that is outstanding
against them. This advice will be generated on the day an LC is booked or when any subsequent
amendment for the LC is stored and authorized. The generation of this advice is done by the LQ
EOD function. The advices are put in the Outgoing Messaging Browser by this function. You
should generate them from the browser.
10.1.8 Report on Outstanding Items
This report lists all the outstanding items (including both commissions and charges), which
have been debited to a GL account, which is normally the accounts receivable ledger and are
marked as outstanding.
10.1.9 Invoking this Report
This report is available in the Application Browser under LQ (indicating liquidation).
10.1.10
Contents of Report
The report is sorted on the basis of currency and listed in the serial order of the receivable
account, under the currency.
As the sequence of this report is by the receivable account, an LC may be reported in more
than one place. i.e., different charges and commission items for the same LC were booked to
different general ledgers.
This report highlights the details for the collection or the payment of the outstanding amount,
so that the required action may be taken.
The report contains the following information:
Fields
Description
Party CIF ID
This is the ID assigned to the customer in the Customer Information File
(CIF) of the Core Services module of Oracle FLEXCUBE.
Party Name
The short name of the Customer maintained in LC will be printed.
For all credits which have been opened at your branch, the name of the
applicant is printed here.
For those credits which have been advised or confirmed (i.e., the original
operation was advise, advise and confirm, or confirm) the name of the
beneficiary bank is printed at this field.
10-5
Fields
Description
Party Type
This is the party type assigned to the customer, in the Parties screen.
Ac CCY
This is the currency of the outstanding component.
Module
This is the module to which the outstanding component belongs.
It could be LC for Letters of Credit or BC for Bills and Collections.
Contract Ref
No
This is the reference number of the contract whose outstanding components
are due.
Event Code
This is the event for which the outstanding component should have been
paid.
Booking Date
This is the date on which the event took place, when the component was
booked to a receivable account.
Receivable Ac
Code
This is the receivable GL that has been debited for the component.
Ac Branch
This is the account to which the receivable account belongs.
Amount
This is the amount of the outstanding component that is to be received from
the customer.
Value Date
The Value Date of the transaction that involved the component being put in
the receivable account.
Amount Tag
The Amount Tag of the component that was involved in the transaction.
Description
This is the name given to the component. It could be Issue Commission,
Amendment SWIFT charge, etc.
10-6
11.1 Introduction
11. Credit Limit Tracking for LC
When you issue an import LC or advise and confirm an export LC, you would track your liability
against the party on behalf of whom you are undertaking a liability. For an import LC, you would
track the exposure against the applicant while for an export LC that you confirm, you would do so
for the issuing bank.
In Oracle FLEXCUBE, credit limit tracking is done using credit lines allotted to a customer. The
credit line allotted to the party against whom you want to track your liability, should be indicated
while you capture the details of an LC. In the case of an amendment, from advise of an export LC
to advise and confirm, you can indicate the credit line during the amendment also.
You can specify Central Liability details for an LC, in the ‘LC Contract Party details’ screen. To
invoke this screen, you have to click on the ‘Parties’ tab from the ‘Contract Main’ screen.
The amount that is tracked will be the LC Liability Amount. It is arrived at as follows:
Liability Amount = Maximum LC Amount + Liability % of the LC amount
In the case of an LC revolving in time, the liability amount will be calculated taking into account all
the scheduled reinstatements.
11.1.1 Specifying Whether Limit Tracking is Required
Every credit-seeking customer of your bank is assigned a credit limit under a Credit Line.
Check against the credit limit tracking option, to indicate that the LC liability amount should be
tracked against the credit limit assigned to the customer. Leave it unchecked to indicate you do
not wish to track the LC liability amount against the credit limit assigned to any of the parties
involved in the LC.
Specifying the Party against whom Credit should be Tracked
You would have already captured the details about the different parties involved in the LC. For
each party type (APP, ABK, ISB, etc.), you would have specified the details of the party.
While specifying credit limit tracking details, you have to just indicate the party type against whom
you want to track the credit limit. The party details are picked up by default.
The CIF ID of the Party
When you specify a party type against whose credit limits you wish to track the LC amount the
CIF ID assigned to the party is automatically picked up and displayed.
11-1
11.1.1.1 Specifying Limit Tracking Tenor
While maintaining the preferences for the contract, you can specify whether you want to track the
limits based on LC tenor or the Max Draft tenor (Usance period). For this you need to indicate
your preference by selecting the appropriate checkbox.
The credit lines are displayed depending upon the preferences specified at the time of
creating the line. E.g. Products allowed, branch allowed etc.
For all the contracts, you can change your preference for limits tracking before or after
authorization. However every time you change the tenor type you need to select a credit line
again. Subsequently, tracking will be done for the new tenor and credit line.
11.1.1.2 Indicating Credit Line under which the Liability Amount should be Tracked
You have to specify the credit line of the party against which the LC liability amount has to be
tracked.
If more than one credit line has been defined for the party, only those credit lines whose
restrictions are in line with that of the LC will be displayed. The restrictions could be one of the
following:

Tenor

Product

Branch

Currency
In addition, the expiry date of the line should be before the Issue Date of the LC.
When you enter an LC for a customer, and choose a line, the cash collateral percentage
defined for the customer and line will default. If you have not defined the cash collateral
percentage for a customer and a line, the cash collateral percent defined for the product will
default to the LC Contract. You can change this default value to suit the LC you are processing.
11-2
12.1 Introduction
12. Automatic Processes
The following processes relating to the LC Module can be made automatic:

Automatic closure

Automatic calculation of periodic commission

Automatic liquidation of periodic commission

Automatic reinstatement of the LC amount

Automatic accrual of commissions

Generation of tracers

Closure of open insurance policies
The events that are to take place automatically are triggered off during the Batch Process. The
batch process is an automatic function, run as a mandatory Beginning of Day (BOD) and End of
Day (EOD) process. During EOD, the batch process should be run after End of Transaction Input
(EOTI) has been marked for the day, but before End of Financial Input (EOFI) has been marked
for the day. The tracer generation function should be run after end-of-financial-input (EOFI) has
been marked for the day.
You should maintain the LC EOD function as a mandatory batch process, once as a BOD
and the next as a Pre-EOC program. It is maintained in the EOC mandatory programs table of the
Core Services module. The tracer generation function should also be defined as a mandatory
EOD function.
The contracts that will be processed by the batch processes depend on the definition in the
Branch Parameters screen.
12.2 Maintaining Branch Parameters
A set of rules that govern the LCs processed through the LC module, in a particular branch of
your bank, is defined in the ‘Branch Parameters’ screen.
From the Application Browser, choose ‘Letters Of Credit’ and ‘Branch Parameters’ under it. You
can also invoke this screen by typing ‘LCDBRPRM’ in the field at the top right corner of the
Application tool bar and clicking on the adjoining arrow button. Then, the ‘Letters of Credit Branch Parameters’ screen will be displayed.
12-1
The events, for which you had indicated automatic processing, are triggered off during the Batch
Process. You can specify preferences for the automatic events that fall on a holiday, in the
Branch Parameters screen. In addition, you can also specify the level at which accrual entries
should be passed, for LCs in your branch.
Specifying Preferences for the Automatic Processing of LCs
You have the option to specify, that the batch process should process automatic events falling
due on a holiday should.
The same can be processed on either of the following ways:

Next Working Day - 1

Upto System Date
If you indicate that the processing has to be done upto the Next Working Day - 1, all the
automatic events falling due on the holiday will be processed by the batch process, as part of the
EOD on the last working day, before the holiday.
If you indicate that processing has to be done only upto the System Date, then only the events
scheduled for today (the last working day before the holiday) will be processed. The events falling
due on the holiday are processed by the batch process, as part of the BOD process, the first
working day after the holiday.
Example
The current branch date is 20 March 1998. On 21 March 1998, which is a holiday, the following automatic
events fall due:

The automatic closure of an LC

Automatic reinstatement of the LC amount

Automatic accrual of commission and charges
Next working day - 1
If you specify that the processing should be done on the last working day - 1, the above events will be
processed on March 20, as part of the batch process run at End of Day.
12-2
System date
If you specify that the processing should be done only upto the system date, then the events scheduled for
21 March 1998, will be processed as part of the Batch Process run as part of Beginning of Day on 22 March
1998.
Indicating whether User Reference Number should be Displayed in the Advices Generated
If you wish to display the user reference number in the advices that are generated for a contract,
select the ‘Use user reference no in messages’ option. All the advices generated at your branch
will display the appropriate user reference number.
You can specify a format for the generation of the User Reference Number in the ‘Sequence
Generation’ screen available in the Application Browser. Refer to the Core Services User Manual
for details on maintaining a sequence format.
Specifying the Level at which Accrual Entries should be Passed
At the time of creating a product, you have specified

Whether accrual of Commission is allowed for the product

The frequency with which the accrual entries should be passed

The accounting entries that should be passed for the accrual event
An LC will inherit the accrual frequency defined for the product under which it is processed.
In the Branch Parameters screen, you indicate the level at which the accrual entries have to be
passed. The level can be:

Product

Contract
If you indicate that automatic accrual should be done at the product level, a single entry for all the
LCs, for which commission was accrued automatically, will be passed. This helps reduce the time
taken to pass individual entries. If you indicate that the automatic commission accrual process
should pass accrual entries at the contract level, accrual entries will be passed for each LC for
which commission was accrued automatically.
Example
You have created a product - INL1 to cater to incoming LCs. The product has the following characteristics:

Commission is collected in advance.

Commission has to be accrued every month.
The accounting entries during commission accrual (defined for the event ACCR) are:
Accounting Role
Accounting Head
Amount Item
Dr/Cr
COMMISSION_RIA
COMLI01
Commission
Dr
12-3
Accounting Role
Accounting Head
Amount Item
Dr/Cr
COMMISSION_INC
COMINC01
Commission
Cr
You have entered the following contracts using the product INL1:
Contract
Tenor
Commission
1st accrual amount
Contract 1
3 months
US $300
$100.00
Contract 2
6 months
US $500
$83.33
Contract3
12 months
US $1000
$83.33
The accounts into which the accrual entries should be passed for each of these contracts are the same as
they are linked to the same product.
Accrual entries level - Product
If you indicate that the automatic commission accrual process should pass accrual entries at the product
level, a single accrual entry of US 266.66, for all the LCs will be passed.
Accrual entries level - Contract
If you indicate that the automatic commission accrual process should pass accrual entries at the contract
level, three accounting entries will be passed.
The Accrual Control List will give you the details of the accruals done for every contract, even if the entries
were passed at the product level. Thus, you will have the information about the amount accrued for each
contract.
Specifying the Discrepancy Notice Period
Discrepancies are likely to be found while processing Incoming or Outgoing bills under LCs. You
can specify a period within which the discrepancy details should be added to the bills. This period
will be calculated from the date of presentation of the bills (which is typically the booking date of
the bill) to the issuing bank/confirming bank.
The system will display an override if the discrepancies are added to the bills (in the ‘Bills –
Contract Details’ screen) after the discrepancy notice period.
For details on processing a bills contract, refer the ‘Processing Bills’ chapter of the BC (Bills and
Collections) User Manual.
12.2.1 Invoking LC Batch Process
Batches are run automatically. In the mandatory programs, all batches whichever are required will
be maintained in sequence and that is triggered automatically as based on the maintenance in
the ‘Mandatory Batch Program Maintenance’ screen.
To invoke this screen from the Application Browser, select ‘Batch Operations’, then select
‘Detailed’ option under ‘Mandatory Programs’. You can also invoke this screen by typing
‘EIDMANPR’ in the field at the top right corner of the Application tool bar and clicking on the
adjoining arrow button.
12-4
Module
Choose the module code from the adjoining option list.
Function Identification
Choose the function ID of batch that you wish to run. The adjoining option list displays all batch
processes available for the module.
12-5
Select the appropriate one. You can configure the batch to be run at various stages of day like
EOD, EOTI etc.
For further details about this screen, refer the chapter ‘Setting- up Mandatory Programs for EOD’
in the AEOD User Manual.
12.2.2 Automatic Events Executed During Beginning of Day (BOD)
The Batch program when run as part of BOD processes the following events:

Automatic liquidation of periodic commissions

Automatic Reinstatement of an LC

Calculation of periodic commission
12.2.3 Automatic Liquidation of Periodic Commission
The periodic commission components of an LC will be automatically liquidated, if the commission
components fall due on or before the current system date. As a part of BOD, this function
liquidates the commission components of the LC contracts, whose commission liquidation date is
between the last working date and the current processing date.
The commission components that are liquidated by this function are posted to the accounts
specified, in the settlements screen of the LC. This may be a customer’s account or a receivable
account. On liquidation of the commission components of an LC by the function:

The necessary tax related entries associated with the liquidation will be passed

The necessary debit advices will be generated

The relevant accounting entries will be passed. Typically they would be
If collected in arrears:
Role
Role Description
Amount Tag
Dr/ Cr
COMM_CUST_ACC
Customer account
Commission
Dr
CENC
Commission Earned Not Collected
Commission
Cr
Role
Role Description
Amount Tag
Dr/ Cr
COMM_CUST_ACC
Customer account
Accrual amount
Dr
COMM_RIA
Commission Received in Advance
Accrual amount
Cr
If collected in advance:
As a part of EOD, this function liquidates the commission components of all the LC contracts, for
which commission liquidation date falls between the current processing date and the next working
date.
12-6
If the next working day happens to fall in the next month, this function will pick up only those
contracts whose commission liquidation date, falls within the current processing month.
The following reports will be generated when the commission components of the LC, are
automatically liquidated:

An activity report, which lists the contracts whose commission components were
liquidated

A report on the exceptions that were encountered during the liquidation of the
commission components like account closed, no funds in the account, etc.
12.2.4 Automatic Reinstatement of LC
All LC contracts, for which you had specified automatic reinstatement, will be reinstated when the
batch process for the day, is run as part of BOD.
The revolving details specified for the LC, in the Contract Main screen, are used to reinstate the
contracts. The reinstatement is done subject to the Maximum Liability and the Maximum LC
Amount allowed for the contract. The unutilized credit is removed from the contingent entries for
non-cumulative LCs.
For LCs that revolve in time, the LC Amount and the Maximum Liability Amount is reset based on
the frequency of reinstatement (the value of frequency can be either Days or Months depending
on the ‘Units’ you specify for the contract). In the case of an LC, which revolves in value, the LC
amount is reset when the current availability under the LC is reduced to zero. Thus, the
reinstatement for LCs which revolve in value is done during beginning of day on the next day. It is
done after the availment that makes the current availability to zero is made.
When LCs are automatically reinstated, the necessary accounting entries and advices specified
for the event code REIN (reinstatement), will be passed automatically.
As a part of the BOD process, this function reinstates all the revolving LCs (specified with
automatic reinstatement), which needs to be reinstated. This is determined by two factors:

Whether the LC revolves in time and the next revolving date is less than or equal to the
current date or

The LC revolves in value and the unavailed amount under the LC, is reduced to zero by
the availments that were made.
During EOD, the auto reinstatements scheduled for the next day will be done under the following
conditions:

The next day is a holiday

You have specified in the Branch Parameters table, that events scheduled for a holiday
should be processed, on the working day before the holiday. If the next working day
happens to fall in the next month, this function will pick up only LCs that has their next
revolving date within the same month. The processing for such LCs will be done during
BOD on the next working day.
12-7
All contracts that were automatically reinstated on a day, will appear in the Activity Report for the
day. The exceptions encountered during the reinstatement i.e. the contracts, which should have
got reinstated, but were not, will figure in the Exception Report.
12.2.5 Processes Run during End of Day (EOD)
The Batch program when run as part of EOD processes the following events:

Automatic closure of contracts

Automatic accrual of commissions
12.2.6 Automatic Closure of LC
All LC contracts for which you had specified automatic closure and which are due for closure as
of today, will be automatically closed when the batch processes for the day is run. The accounting
entries specified for the closure will be passed.
If an LC is linked to an open insurance policy for which the option ‘Update utilization
Automatically’ is checked, then on this date, the system will decrease the utilization on the policy
with the LC amount.
12.2.7 Automatic Accrual of Commission
When the batch process is run as part of EOD, the commission components of the active
(authorized and not yet liquidated) LC contracts will be accrued. Accrual is usually performed
from the last liquidation date to the current date. Since commission is calculated for rounded
periods, the final accrual on the expiry date will be for the full rounded period.
When the accrual is done, the relevant accounting entries for the accrued components will be
passed. The internal accounts will be updated with the accrual related details.
Typical accounting entries that are passed include:
If collected in arrears
Role
Role description
Role Type
Amount Tag
Dr/ Cr
CENC
Commission earned not collected.
Asset
Accrual amount
Dr
COMM_INC
Commission earned
P&L
Accrual amount
Cr
If Collected in Advance
Role
Role description
Role Type
Amount Tag
Dr/ Cr
COMM_RIA
Commission received in advance.
Asset
Accrual amount
Dr
COMM_INC
Commission earned
P&L
Accrual amount
Cr
12-8
The level at which accrual entries are passed depends on your definition of branch parameters.
To recall, the accrual entries can be configured to be passed either at the contract level or the
product level.
Either way, the details of accruals for each contract will be available in the Accrual Control List.
The details of this report, the procedure for generation and the contents are discussed in the
chapter on Reports.
12.2.8 Memo Accrual of Commission
The memo accrual function does not generate any accounting entries nor does it mark the
contracts as accrued. It only computes the accrual amount as it would be computed for a regular
accrual and reports the accrued figures, without updating the accrual and P&L accounts. The
commission accrued by the function, is reported in the Memo Accrual Control report. The content
of this report is the same as that of the Accrual Control report.
12.2.9 Accrual Control Report
The accrual control report lists the LCs for which accrual entries were passed as of the current
date.
12.2.10
Selection Options
You can configure this report to be triggered automatically, as part of the batch processes run at
EOD. The report can also be generated at any time in the day from the Reports menu. If the
report is generated as part of EOD, the report will by default list the details of the accruals that
were made, as of the last accrual date.
If you generate the report from the Reports menu, you can indicate the date for which, you want
details of LCs for which commission was accrued. You can also indicate the type of accrual for
which you want details. The options available are:
Actual
The actual accrual report will contain details of the actual accrual entries that were passed as of
the date you have indicated.
Memo
The memo accrual report just gives the details of the accruals due to an LC, as of a particular
date. This will be a projected figure, without the actual accounting entries for accruals being
passed. The memo accrual control report can be generated only after you run the memo accrual
function.
12.2.11
Contents of Report
The report options that you select while generating the report are printed at the beginning of the
report. The contents of the report are discussed under the following heads:
12-9
Header
The Header carries the title of the Report, information on the user who generated the report, the
branch code, the date and time and the page number of the report.
Body of the Report
The report contains the following details:
Fields
Description
Contract Ref No
This is the reference number of the LC to which the accrual details
are related.
Component
This is the commission component that has been accrued.
CCY
This is the currency of the commission component.
Current accrued amount
This is the amount that was accrued for the component, on the last
accrual date.
Amount accrued to date
accrued amount
This is the total amount that has been accrued, for the component,
till date.
12.2.12
Generating Tracers
For an LC, the following types of tracers can be generated:

The acknowledgment tracer (sent to the advising bank when an import LC is issued and
an acknowledgment is sought)

The charge-commission tracer (sent to the party who has to bear the commission or
charges for an LC that has been processed, pending the payment of the charge or
commission)

The confirmation tracer (sent to the confirming bank, seeking a letter of confirmation)
These tracers are generated at a frequency, specified for the LC. On the day they have to be
generated, the EOD processing: Tracer generation function will generate them. This function
should be run after the End of Financial Input (EOFI) has been marked for the day.
12.2.13
Executing Tracer Generation Function
This function should be run after the end-of-financial-input (EOFI) has been marked for the day.
After the successful completion of the function, the tracers will be put in the ungenerated directory
of the Outgoing Message Browser. You should generate them from there.
12.2.14
Straight Through Processing of SWIFT Messages
Oracle FLEXCUBE supports Straight through Processing (STP) of the following messages:

MT710

MT707
12-10
12.2.15

MT730

MT740

MT742

MT768
STP of MT710 - Advise of Third Bank’s Documentary Credit
The MT710 is sent by the ‘Advising Bank’ that has received a documentary credit (MT700) from
the ‘Issuing Bank’. The message is sent to the ‘Advise thru Bank’ (bank advising the beneficiary)
and is used to advise the receiver about the terms and conditions of a documentary credit.
You can upload the incoming MT710 as export LCs in Oracle FLEXCUBE. The following table
lists the mapping that should exist between the SWIFT tags in MT710 and the fields in the LC
Contract screen:
Status
Tag value
Description
Oracle FLEXCUBE
field value
Remarks
M
27
Sequence of
Total
M
40B
Form of
Documentary
Credit
Transferable
M
20
Senders
Reference
Their Reference for
party ‘ABK’
M
21
Documentary
Credit Number
Their Reference for
party ‘ISB’
M
31C
Date of issue
Issue date and
effective date
M
31D
Date and
place of expiry
Expiry date and
Expiry place
M
52A or D
Issuing bank
Party details of ISB
The party details will be
fetched using BIC code if
52A is present else the
party details needs to be
fetched using D to A
converter. In case
counterparty is not found
then ‘Walk-in customer’ will
be used.
O
51A or D
Applicant bank
Party details of APB
The party details will be
fetched using BIC code if
51A is present else the
This field identifies whether
MT711 is sent as part of
MT710.
12-11
The different tag values for
this field and the
corresponding FCC field
value is given in ‘Table A’.
Status
Tag value
Description
Oracle FLEXCUBE
field value
Remarks
party details needs to be
fetched using D to A
converter. In case
counterparty is not found
then ‘Walk-in customer’ will
be used.
M
50
Applicant
Party details of APP
The party details will be
fetched using Name of the
party. In case counterparty
is not found, then ‘Walk-in
customer’ will be used.
M
59
Beneficiary
Party details of
‘BEN’ and customer
details in Main
screen
The party details will to be
fetched using Name of the
party. In case counterparty
is not found then ‘Walk-in
customer’ will be used.
M
32B
Currency code
and amount
LC currency and LC
amount
-
O
39A
Percentage
Credit Amount
Tolerance
About clause,
positive and
negative tolerance
If not present then about
clause should be ‘None’. If
present, the about clause
should be ‘About’ with
positive and negative
tolerance
O
39B
Maximum
Credit Amount
Liability amount
-
O
39C
Additional
Amounts
Covered
Additional amounts
covered in the
‘Others’ tab
-
M
41A or D
Available
with…by…
Credit details of LC
(Type, mode and
available with)
For details, refer ‘Table B’
below.
O
42C
Draft at
Credit details
-
O
42A
Drawee
Credit details
-
O
42M
Mixed
Payment
Details
Credit details
-
O
42P
Deferred
Payment
Details
Credit details
-
12-12
Status
Tag value
Description
Oracle FLEXCUBE
field value
Remarks
O
43P
Partial
Shipments
Partial shipment
allowed
If the tag value is
‘ALLOWED’, Partial
Shipment will be ‘Y’. For
any other value of the tag, it
will be ‘N’.
O
43T
Transshipment
Trans Shipment
allowed
If the tag value is
‘ALLOWED’, FCC value will
be ‘Y’. For any other value
of the tag, it will be ‘N’.
O
44A
Loading on
board/dispatch
Shipment From
-
O
44B
For
Transportation
To
Shipment To
-
O
44C
Latest
Shipment Date
Latest Shipment
Date
-
O
44D
Shipment
Period
Shipment Period
-
O
45A
Description of
Goods and
Services
Goods Description
-
O
46A
Documents
Required
Document Details
-
O
47A
Additional
Conditions
FFT Information
Tag 47A will be uploaded as
FFT with FFT code as
‘UPLD_COND’ and
message type as
‘ADV_THIRD_BANK’.
O
71B
Charges
Charges from
Beneficiary in
‘Others’ tab.
-
O
48
Period of
Presentation
Period for
Presentation in
‘Others’ tab.
-
M
49
Confirmation
instructions
Operation Code and
May Confirm
Refer ‘Table C’ for details.
O
53A or D
Reimbursing
Bank
Party details of
‘REB’
The party details would be
fetched using BIC code if
53A is present else the
party details needs to be
12-13
Status
Tag value
Description
Oracle FLEXCUBE
field value
Remarks
fetched using D to A
converter.
O
78
Instructions to
paying /acc/
neg bank
FFT
Tag 78 would be uploaded
as FFT with FFT code as
‘INSTRUCTION’ and
message type as
‘ADV_THIRD_BANK’.
O
57A or D
Advise thru
bank
Party details of
‘ATB’
The party details will be
fetched using BIC code if
57A is present else the
party details needs to be
fetched using D to A
converter.
O
72
Sender to
receiver info
Internal
remarks/FFT
Tag 72 will be uploaded as
FFT with FFT code as
‘SND2RECINFO’ and
message type as
‘ADV_THIRD_BANK’.
Table A
Tag value
Transferable (Oracle FLEXCUBE value)
IRREVOCABLE
N
REVOCABLE
N
IRREVOCABLE TRANSFERBALE
Y
REVOCABLE TRANSFERABLE
Y
Table B
Tag value
Type (Oracle
FLEXCUBE field
value)
Mode (Oracle
FLEXCUBE field
value)
Payment
Straight
Sight
Acceptance
Straight
Acceptance
Negotiation
Negotiable
Negotiation
Def payment
Straight
Deferred
Mixed pymt
Straight
Mixed
12-14
With (Oracle
FLEXCUBE field
value)
Tag value
Type (Oracle
FLEXCUBE field
value)
Mode (Oracle
FLEXCUBE field
value)
With (Oracle
FLEXCUBE field
value)
st
Option A
1 line
Option D
1 4 lines
st
Table C
Tag value
Type (Oracle FLEXCUBE
field value)
Mode (Oracle FLEXCUBE field
value)
CONFIRM
Advise and confirm
N
MAY ADD
Advise
Y
WITHOUT
Advise
N
During the booking of an export LC, MT711 will be considered for uploading goods description
(field 45B), document details (field 46B) and additional conditions (field 47B). The existence of
MT711 for MT710 will be checked from field 27 of MT710. MT711 SWIFT record will be fetched
from the incoming browser using the reference number from field 20 of MT710.
The system will arrive at the queue through which MT710 should be routed using the STP rule
maintenance. Based on the queue and message type, the system will identify the product for the
LC contract from the product mapping maintenance where a queue is mapped to the product.
The closure date of the LC will be derived from the product (expiry date in field 31D + closure
days maintained in the LC product). The party details of advising bank ‘ABK’ in export LC will be
derived from the sender reference number.
If all MT711 messages are not present in the incoming message browser, then the system will
stop processing the corresponding MT711 and move on to process the next MT710 in the queue.
Field 27 of the message will be used to identify the number of MT711 messages associated with
an MT710.
The STP process will create authorized or unauthorized export LC based on the post upload
status maintained in the ‘Upload Source Preferences’ screen.
12.2.16
STP of MT707 – Amendment to Documentary Credit
Upload of MT707 triggers amendment of an export LC contract. The contract reference number
on which the amendment needs to be triggered is derived primarily based on the value of field 21
in the MT707. The system fetches the contract reference number of the export LC contract using
field 21. If the reference is not found, then it fetches the user reference number using field 21. If
the value in field 21 is ‘NONREF’, the system will check for field 23.
12-15
If field 23 exists, then it will fetch the contract reference number using party as ‘ISB’ and the
issuing bank reference number from field 23. If the contract reference is not found then the
system will reject the record. If field 23 doesn’t exist then the system will fetch the contract
reference number using party as ‘ISB’ and reference number of party ‘ISB’ from field 20. If the
contract reference number is not found for above combination, then it will fetch the contract
reference number using party as ‘ABK’ and reference number of party ‘ABK’ from field 20. If the
contract reference is not found, then the system will reject the record.
The system fetches the amendment amount from field 34B. If the currency in field 34B does not
match the currency of the existing contract, then system will reject the record. The system fetches
the new expiry date of the contract from field 31E. The following table lists the mapping that
should exist between the SWIFT tags in MT707 and the fields in the LC Contract screen:
Status
Tag
value
Description
Oracle FLEXCUBE
field value
Remarks
M
20
Senders
reference
M
21
Receiver
reference
Contract reference
or user reference of
LC contract
O
23
Issuing bank
reference
Their reference of
party ‘ISB’
O
31C
Date of issue
Not needed for
amendment.
O
52A
Issuing bank
Not needed for
amendment.
O
30
Date of
amendment
Issuing bank
amendment date
O
26E
Number of
amendment
amendment
number in others
tab
M
59
Beneficiary
O
31E
New date of
expiry
O
32B
Increase of
amount
O
33B
Decrease of
amount
O
34B
New
documentary
Not needed for
amendment
LC reference in issuing
bank
If this tag is not present
then the system date
should be used for issuing
bank amendment date.
Not needed for
amendment
Expiry date
LC amount during
12-16
Status
Tag
value
Description
Oracle FLEXCUBE
field value
credit amount
after
amendment
amendment
O
39A
Percentage
credit amount
tolerance
About clause,
positive and
negative tolerance
O
39B
Maximum
credit amount
Liability amount
O
39C
Additional
amounts
covered
Additional amounts
in others tab
O
44A
Loading on
board/dispatch
Shipment from
O
44B
For
transportation
to
shipment to
O
44C
Latest
shipment date
Latest shipment
date
O
44D
Shipment
period
Shipment period
O
72
Sender to
receiver info
FFT
Remarks
If not present then about
clause should be ‘None’. If
present then the about
clause should be ‘About’
with positive and negative
tolerance
Tag 72 would be uploaded
as FFT with FFT code as
‘SND2RECINFO’ and
message type as
‘AMD_EXP_CR’’
The system will check for the following while processing a SWIFT upload:

If field 34B is present then the following need to be available:

If field 32B is present, then the difference between the amount in 34B and current LC
amount should be equal to the amount in 32B.

If field 33B is present, then the difference between the current LC amount and
amount in 34B should be equal to the amount in 33B.
If the amount after amendment is less than the availed amount, then system will reject the record.
The system creates a new version of an export LC after amendment upload. The STP process
creates an authorized or unauthorized amendment record based on the post upload status
maintained in the ‘Upload Source Preferences’ screen.
12.2.17
STP of MT730 – Acknowledgement
12-17
MT730 can be generated in response to MT707 and MT710.
12.2.17.1
Acknowledgement of MT707
During LC amendment, MT730 is generated if the media is ‘SWIFT’ and message type is
‘LC_ACK_AMND’. The following table lists the mapping between the SWIFT tags in 730 and the
fields in the LC Contract screen:
Status
Tag value
Description
Oracle FLEXCUBE field value
M
20
Sender’s reference
Contract reference or user
reference
M
21
Receiver reference
Their reference of party ‘ISB’
O
25
Account identification
Account of ISB in others tab
M
30
Date of message being
acknowledged
System date
O
32B
Amount of charges
Charge currency and charge
amount of ISB in others tab
O
71B
Details of charges
Charges from ISB
O
72
Sender to receiver information
FFT code ‘SND2RECINFO’ and
message type as
‘LC_ACK_AMND’
12.2.17.2
Acknowledgement of MT710
MT730 is sent to the issuing bank to acknowledge the receipt of MT700. Oracle FLEXCUBE also
allows you to send an acknowledgment from the advice through bank to the advising bank in
order to acknowledge the receipt of MT710 (Advice of third bank).
The system marks the receiver of the message as ‘ABK’ for message types ‘LC_ACK_ADVICE’
and ‘LC_ACK_AMND’. If ‘ABK’ and ‘ISB’ parties are present for an LC contract, then the receiver
of the message will be ‘ABK’. The receiver of this message will be ‘ISB’ only when ‘ABK’ is not
present in the parties list. This process is applicable for the following events if the message type
is ‘LC_ACK_ADVICE’:

BADV

BCFM
The process is applicable for the following events if the message type is ‘LC_ACK_AMND’:

AMND

AATC

APAC

APAD
12-18
The following table lists the mapping that should exist between the SWIFT tags in MT730 and the
fields in the LC Contract screen:
Status
Tag value
Description
Oracle FLEXCUBE field value
M
20
Sender’s reference
Contract reference/user
reference
M
21
Receiver reference
Their reference of party ‘ABK’
M
30
Date of message being
acknowledged
System date
O
72
Sender to receiver information
FFT code ‘SND2RECINFO’ and
message type as
‘LC_ACK_AMD’ or
‘LC_ACK_ADVICE’
For the automatic generation of MT730 from an export LC, you need to link the message
‘LC_ACK_ADVICE’ to the ‘BADV’ and ‘BANC’ events at the product level. The post-upload status
in the ‘Upload Source Preferences’ screen should be ‘Authorized’. The contract authorization at
the time of contract upload will trigger the MT730 generation process. For manual generation of
MT730 from an export LC, you need to ensure the same advice mapping to the events as
mentioned for automatic generation. However, status in the ‘Upload Source Preferences’ screen
should be ‘Unauthorized’. MT730 will then be generated during manual authorization of the export
LC.
12.2.18
STP of MT740 - Authorization to Reimburse
STP of MT740 triggers creation of an import LC with the operation code ‘Reimbursement’. The
product for this import LC is fetched from the STP product mapping maintenance. The system
check for the following during the STP:

The product type of the LC product is ‘Reimbursement’ or not.

The operation code of the LC contract is ‘Reimbursement’ or not.
The following table lists the mapping that should exist between the SWIFT tags in MT740 and the
fields in the LC Contract screen:
Statu
s
Tag
value
Description
Oracle
FLEXCUBE
field value
M
20
Documentary credit
number
Their reference
of party ‘ISB’
O
25
Account identification
Account of
Issuing bank in
others tab
O
31D
Date and place of
expiry
Expiry date and
place of expiry
12-19
Remarks
Statu
s
Tag
value
Description
Oracle
FLEXCUBE
field value
Remarks
O
58A or D
Negotiating bank
Party details of
‘ABK’
The party details
would be fetched
using BIC code if 58A
is present else the
party details needs to
be fetched using D to
A converter. In case
counterparty is not
found then Walk in
customer would be
used
O
59
Beneficiary
Party details of
‘BEN’
The party details
would be fetched
using name of the
party
M
32B
Credit amount
LC currency
and LC amount
O
39A
Percentage credit
tolerance
About clause,
positive and
negative
tolerance
If not present then
about clause should
be ‘None’. If present
then the about clause
should be ‘About’
with positive and
negative tolerance
.The system should
calculate Max LC
amount = LC
amount+ Tolerance.
O
39B
Maximum credit
amount
Liability amount
Using liability amount
the liability
percentage should be
calculated. Maximum
credit amount = Max
LC amount+Liability
percentage.
O
39C
Additional amounts
covered
Additional
amounts
covered in
others tab
M
41A or D
Available with. by
Credit details of
LC(Type, mode
and available
with)
O
42C
Drafts at
Credit details
12-20
Refer ‘Table D’ for
details.
Statu
s
Tag
value
Description
Oracle
FLEXCUBE
field value
Remarks
O
42A or D
Drawee
Party details of
‘APP’
The party details
would be fetched
using BIC code if 42A
is present else the
party details needs to
be fetched using D to
A converter. In case
counterparty is not
found then Walk in
customer would be
used
O
42M
Mixed payment details
Credit details
O
42P
Deferred payment
details
Credit details
O
71A
Reimbursing bank
charges
Charges from
in others tab
Refer ‘Table E’ for the
tags. If the tag is not
present then charges
from should be ‘OUR’.
O
71B
Other charges
FFT
Tag 71 would be
uploaded as FFT with
FFT code as
‘71BCHARGES’ and
message type as
‘LC_ACK_ADVICE’.
O
72
Sender to receiver
info
FFT
Tag 72 would be
uploaded as FFT with
FFT code as
‘SND2RECINFO’ and
message type as
‘LC_ACK_ADVICE’.
Table D
Tag value
Type (Oracle
FLEXCUBE value)
Mode (Oracle
FLEXCUBE value)
Payment
Straight
Sight
Acceptance
Straight
Acceptance
Negotiation
Negotiable
Negotiation
Def payment
Straight
Deferred
Mixed pymt
Straight
Mixed
12-21
With (Oracle
FLEXCUBE value)
Tag value
Type (Oracle
FLEXCUBE value)
Mode (Oracle
FLEXCUBE value)
With (Oracle
FLEXCUBE value)
Option A
1st line
Option D
1st 4 lines
Table E
Tag value
Charges From
CLM
Claimants
OUR
Ours
The closure date is driven by the closure days maintained in the LC product. The party details of
issuing bank ‘ISB’ in the import LC is derived from the header details using the BIC present in tag
1. This value corresponds to the CIF of the LC contract. The party details of claiming bank ‘CLB’
in the import LC are derived using field 41A or D. These details are updated in the ‘Parties’ tab of
the import LC contract. If value in field 41D is ‘ANY BANK’, then the system will not update the
party type as ‘CLB’.
The STP process creates authorized or unauthorized LC contract based on the post upload
status maintained in the ‘Upload Source Preferences’ screen. The system triggers the event
‘BISS’ after the upload of MT740.
12.2.19
STP of MT747 – Amendment to an Authorization to Reimburse
You can upload MT747 as an LC amendment upload. The system fetches the contract reference
number on which the amendment needs to be triggered based on field 20 of the message. It
fetches the value of ‘Their reference’ field for the party ‘ISB’ using field 20. If the reference is not
found then it will reject the record. The following table lists the mapping that should exist between
the SWIFT tags in MT747 and the fields in the LC Contract screen:
Statu
s
Tag
value
Description
Oracle
FLEXCUB
E field
value
M
20
Documentary credit number
O
21
Reimbursing bank reference
M
30
Date of original authorization to
reimburse
O
31E
New date of expiry
O
32B
Amount Increase
Reference Used
for triggering
amendment on LC
contract
Expiry date
12-22
Remarks
Statu
s
Tag
value
Description
Oracle
FLEXCUB
E field
value
Remarks
O
33B
Amount decreased
O
34B
New amount after amendment
LC amount
during
amend
O
39A
Percentage credit tolerance
About
clause,
positive
and
negative
tolerance
O
39B
Maximum credit amount
LC liability
amount
O
39C
Additional amounts covered
Additional
amounts
covered in
others tab
O
72
Sender to receiver info
FFT
Tag 72 would be
uploaded as FFT
with FFT code as
‘SND2RECINFO’
and message type
as
‘LC_ACK_ADVIC
E’.
O
77A
Narrative
FFT
Tag 72 would be
uploaded as FFT
with FFT code as
‘NARRATIVE’ and
message type as
‘LC_ACK_ADVIC
E’.
If not present then
about clause
should be ‘None’.
If present then the
about clause
should be ‘About’
with positive and
negative tolerance
The STP process creates an authorized or unauthorized amendment record based on the post
upload status maintained in the ‘Upload Source Preferences’ screen. The system creates a new
version of the import LC after amendment upload and triggers the ‘AMND’ event. If field 21 does
not have the LC contract reference, the system will reject the record. If field 34B is present, the
system will check for the following:

If field 32B is present, then the difference between the amount in 34B and the current LC
amount should be equal to the amount in 32B.
12-23
12.2.20

If field 33B is present then the difference between the current LC amount and the amount
in 34B should be equal to the amount in 33B.

The amount after amendment should not be less than availed amount.

The new expiry date should not be before system date.

The new amount after amendment amount should not be less than the outstanding
amount.
STP of MT768 - Acknowledgement of a Guarantee Message
SWIFT MT768 can be uploaded into Oracle FLEXCUBE through STP. The following table lists
the mapping that should exist between the SWIFT tags in MT768 and the fields in the LC
Contract screen:
Status
Tag Value
Description
Oracle FLEXCUBE field value
M
20
Transaction Reference
Number
ABK’s Reference Number
M
21
Related Reference Number
Contract reference or user reference
of LC contract
O
25
Account Identification
Account of ISB in others tab.
M
30
Date of Message being
Acknowledged
ABK’s Acknowledgment Date
O
32a
Amount of Charges
O
57a
Account with Bank
O
71B
Details of Charges
O
72
Sender to Receiver
Information
FFT Information
Values in fields 20 and 30 are updated in the LC contract screen on upload. The system triggers
the event ‘ACKB’ on the uploaded LC Contract.
12-24
13. Reports
13.1 Introduction
Information on the LCs processed and the static maintenance done for the module is available in
the form of reports. These reports can be generated with information on many parameters commissions, closed or expired LCs with outstanding items, LCs with unreplied tracers, etc.
These reports can be printed, spooled on to a disk file or displayed on the screen.
You can generate the following reports for the LC module:

Expired LCs with Outstanding Items Report

Closed LCs with Outstanding Items Report

LCs Due to Expire Report

LCs Due to be Closed Report

Commission Due Report

Periodic Commission Activity Report

Report on Open Ended LCs

Unreplied Tracers Report

Confirmed LC Report

Overrides Report

Outstanding LC Customerwise Report

LC Daily Activity Journal Report

Accruals Control Report

Commission Activity 3 Report

Periodic Commission Activity Report

Process Exception Report

Liquidation Daily Activity Report

Outstanding Items Report
13.2 Expired LCs with Outstanding Items Report
As the name suggests, this report lists all the expired LCs having some outstanding items.
These outstanding items could be the liability amount, cash collateral and outstanding
commission and charges. A commission or charge will be considered outstanding when they
are debited from a receivable GL of the bank and not from a customer account.
This report is generated to check if there are outstanding items against an LC. This is done at
the time of releasing the cash collateral or while inquiring whether an LC is to be extended, etc.
You have an option to close the LCs that has expired. Once an LC is closed, it will not be
reported in this report even if it still has outstanding items. Instead these LCs will be reported in
the Closed LC with Outstanding Items report.
You can invoke the screen by typing the code ‘LCRPEX’ in the field at the top right corner of
the Application tool bar and click on the adjoining arrow button.
13-1
13.2.1 Selection Options
You can specify that the report should contain details of expired LCs associated with all LC
products or a specific product. To generate the report for a specific product, select the
appropriate Product Code from the option list.
13.2.2 Contents of Report
The contents of this report are discussed under the following heads:
Header
The Header carries the title of the report, information on the branch and branch date, user id, the
date and time, the page number and module of the report.
Body of the report
This report contains details of:
Contract
Reference
This is the reference number assigned to the LC by the system.
CIF Id
This is the Customer Identification number or code.
Customer
Name
While you are processing an LC, you would have given the CIF ID
of one party, in the main screen of the LC Contract On-line
function. Typically, it would be the applicant for an import LC while
it would be the beneficiary or the issuing bank for an export LC.
The short name of this customer will be shown here.
Customer
Type
This is the party type of the customer whose short name is
reported.
Country
This is the country code.
13-2
Currency
This is the currency in which the LC was opened.
Expiry Date
This is the date on which the LC expired.
Closure Date
This is the date on which the LC is due for closure.
Max LC
Amount
This is the Maximum LC amount, when the LC was first input and
authorized. This amount does not take into account the
amendments that were made subsequently to the LC.
Original
Liability
This is the liability amount of the LC, when it was first input and
authorized. This amount thus does not take into account the
amendments that were made subsequently to the LC.
Current
Availability
This is the liability amount due to the LC as of the date on which
the report is generated. This amount is the outstanding amount
after all the amendments made to the LC during its lifecycle.
Outstanding
Liability
This is the amount available for availment against the LC, as of the
date on which the report is generated.
This amount is the outstanding amount after all the amendments
made to the LC during its lifecycle.
OS Item
This is the outstanding item. It could be cash collateral,
commission or a charge which has not been liquidated.
Currency
The description of the currency in which the outstanding item is
represented.
Outstanding
Amount
This is the amount for which the item is outstanding.
13.3 Closed LCs with Outstanding Items Report
This report lists all the LCs that was closed but still has certain items outstanding. Such LCs
may require follow-up action. The information given by this report will be as of the day on
which the report is generated.
You can invoke the screen by typing the code ‘LCRPCOLI’ in the field at the top right corner of
the Application tool bar and click on the adjoining arrow button.
13-3
The items of the LC that can be outstanding include the cash collateral, outstanding
commission and outstanding charges. The liability amount outstanding prior to the closing of
the record would have automatically been reversed, when the record was closed.
As long as the LC remains in the system, you can reactivate it using the reopen facility.
13.3.1 Contents of Report
The contents of the report are discussed under the following heads:
Header
The Header carries the title of the report, information on the user who generated the report (User
Id), the branch, branch date, the date and time, the page number and module of the report.
Body of the report
The report contains information on:
Contract
Reference
This is the reference number assigned to the LC by the system.
CIF Id
This is the Customer Identification number or code
Customer
Name
While you are processing an LC, you would have given the CIF ID of one
party in the main screen of the LC Contract On-line function. Typically, it
would be the applicant for an import LC while it would be the beneficiary
or the issuing bank for an export LC.
The short name of this customer will be shown here.
Customer
Type
This is the party type of the customer whose short name is reported.
Country
This is the country code.
13-4
Currency
This the currency in which the LC was opened.
Expiry Date
This is the date on which the LC expired.
Closure Date
This is the Date on which the LC has been closed.
Contract
Amount
This is the Maximum LC amount, when the LC was first input and
authorized. This amount does not take into account the amendments
that were made subsequently to the LC.
Original
Liability
This is the liability amount of the LC, when it was first input and
authorized. This amount thus does not take into account the
amendments that were made subsequently to the LC.
Current
Availability
This is the liability amount due to the LC as of the date on which the
report is generated. This amount is the outstanding amount after all the
amendments made to the LC during its lifecycle.
Outstanding
Liability
This is the amount available against the LC, as of the date on which the
report is generated.
OS Item
This is the outstanding item. It could be cash collateral, commission or a
charge which has not been liquidated.
Currency
The description of the currency in which the outstanding item is
represented.
Outstanding
Amount
This is the amount for which the item is outstanding.
13.4 LCs Due to Expire Report
This report lists the details of the LCs that are due to expire for the period that you specify.
The report provides a kind of warning related to the LCs that is due to expire in the future, so
that you can take the appropriate action extending the expiry date, if it is required.
You can invoke the screen by typing the code ‘LCRPDUE’ in the field at the top right corner of
the Application tool bar and click on the adjoining arrow button.
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13.4.1 Selection Options
You can configure this report to be triggered automatically as part of the batch processes run at
EOD or you can generate the report at any time in the day from the Reports Browser.
If the report is generated as part of EOD, the report will by default list all the LCs that is due to
expire, on the date the report is generated.
If you generate the report outside the EOD, you can specify preferences for the generation of
the report. On selecting this report, indicate the period (from and to dates) during which LCs
that is due to expire. The system will report all LCs due to expire whether they have
outstanding items or not. The details are listed in the order of the expiry date of the LC.
13.4.2 Contents of Report
The report options that you selected while generating the report are printed at the beginning of
the report.
The contents of the report are discussed under the following heads:
Header
The Header carries the title of the report, information on the user who generated the report (User
Id), the branch, branch date, the date and time, the page number and module of the report.
Body of the report
The report contains information on:
Contract
Reference
This is the reference number assigned to the LC that is due to expire.
Customer Id
This is the Customer Identification number or code.
Customer
Name
While you are processing an LC, you would have given the CIF ID of one
party in the main screen of the LC Contract On-line function. Typically, it
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would be the applicant for an import LC while it would be the beneficiary or
the issuing bank for an export LC.
The short name of this customer will be shown here.
Country
This is the country code.
Expiry Date
This is the date on which the LC is due to expire.
Closure Date
This is the date on which the LC is due for closure.
Currency
The description of the currency in which the LC amount is expressed.
Opening
Liability
Amount
This indicates the liability amount at the opening of the account.
Outstanding
Amount
This is the amount of the outstanding item.
OS Item
This is the outstanding item. It could be cash collateral, commission or a
charge which has not been liquidated.
Currency
This is the currency in which the outstanding item is represented.
Amount
This is the amount for which the LC was opened.
Amount Tag
This is amount tag of the outstanding charge.
Currency
This is currency of the amount tag of the outstanding charge.
13.5 LCs Due to be Closed Report
This report lists the details of the LCs that are due for closure, during the period that you
indicate.
You can invoke the screen by typing the code ‘LCRPCOLC’ in the field at the top right corner
of the Application tool bar and click on the adjoining arrow button.
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13.5.1 Selection Options
You can configure this report to be triggered automatically as part of the batch processes run at
EOD. You can also generate the report at any time in the day from the Reports menu.
If the report is generated as part of EOD, the report will by default, list all the LCs that is due to
be closed, on the date the report is generated.
If you generate the report outside the EOD, specify the period for which the report has to be
generated. On selecting this report, you can indicate the period (from and to dates) during
which LCs that are due to be closed should be reported. The system will report all LCs due to
be closed, whether they have outstanding items or not.
13.5.2 Contents of the Report
The report options that you selected while generating the report are printed at the beginning of
the report. The details of the report are listed on the basis of the closure date of the LC. The
contents of the report are discussed under the following heads:
Header
The Header carries the title of the report, information on the user who generated the report (User
Id), the branch, branch date, the date and time, the page number and module of the report.
Body of the report
The report contains information on:
Contract
Reference
This is the reference number assigned to the LC that is due to be closed.
Customer ID
This is the Customer Identification number or code.
Customer
Name
While you are processing an LC, you would have given the CIF ID of one party
in the main screen of the LC Contract On-line function. Typically, it would be the
applicant for an import LC while it would be the beneficiary or the issuing bank
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for an export LC.
The short name of this customer will be shown here.
Country
This is the country code.
Expiry date
This is the date on which the LC expired or is due to expire.
Closure
Date
This is the date on which the LC is due for closure.
OS Item
This is the outstanding item. It could be cash collateral, commission or a charge
which has not been liquidated.
Amount Tag
This is amount tag of the charge applicable for the contract.
Currency
This is currency of the amount tag of the charge.
Amount
This is Amount of the amount tag of the charge.
13.6 Commission Due Report
This report prints the details of the periodic commissions that are due to be collected, for a
specific period in time.
You can invoke the screen by typing the code ‘LCRPCODU’ in the field at the top right corner
of the Application tool bar and click on the adjoining arrow button.
13.6.1 Selection Options
You can specify that this report should contain details of the commission that is due to LCs for
a specific period in the future or for all dates. The selection options that you can indicate for the
generation of the report are:

The product(s) for which you want details. To generate the report for a specific product,
select the appropriate Product Code from the option list.
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
Accrual Type – Select either Actual or Memo options.

Specific End Date - if you indicate a specific end date, the report will contain details of the
commission due from LCs, from the current date (date of generating the report) to the
end date that you indicate.
The sequence in which the details will be reported is next collection date (from earliest to
latest) and then LC reference.
On selecting this report, you can specify the period for which the periodic commissions due to
LCs should be reported. For the purposes of reporting, the system takes the next calculation
date as the date of collection for LCs. This is for the LCs which you specified that commission
should be collected in arrears.
13.6.2 Contents of Report
The report options that you indicate while generating the report are printed at the beginning of the
report.
The contents of the report are discussed under the following heads:
Header
The Header carries the title of the report, information on the user who generated the report (user
Id), the branch, branch date, the date and time, the page number and module of the report.
Body of the report
The details of this report are sorted on the basis of the collection date (earliest to latest). The
report contains information on:
Due Date
This is the due date of the commission.
Contract Reference
This is the reference number of the LC against which commission is
due.
Component
This is the commission component that is due against the LC.
Currency
This is currency in which the commission is applied.
Commission
Amount
This is the commission amount that is to be collected.
Calculation Method
This is the method of the calculation of commission.
13.7 Periodic Commission Activity Report
The Commission Activity report prints details of all the LCs for which commission was
liquidated or calculated, as of the date the report was generated.
You can invoke the screen by typing the code ‘LCRPCAC’ in the field at the top right corner of the
Application tool bar and click on the adjoining arrow button.
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13.7.1 Selection Options
You can configure this report to be triggered automatically as part of the batch processes run at
EOD, or you can generate the report at any time in the day from the Reports menu.
If the report is generated as part of EOD, it will byf default list all the LCs for which commission
was liquidated or calculated as of the current date (the date on which the report was
generated).
If you generate the report outside the EOD, you can indicate the date for which you want the
activity reported. You also have the option to indicate the activity for which you want details.
You can specify the following options:

The product(s) for which you want details. To generate the report for a specific product,
select the appropriate Product Code from the option list.

The activity date for which you want details

The activity for which you want to retrieve information. The options available are:



Liquidation
Calculation
Both
13.7.2 Contents of Report
The report options that you indicate while generating the report are printed at the beginning of the
report.
The contents of the report are discussed under the following heads:
Header
The Header carries the title of the report, information on the user who generated the report (User
Id), the branch, branch date, the date and time and the page number and module of the report.
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Body of the report
The report contains the following details:
Contract
Reference
This is the reference number assigned to the LC by the system.
Component
This is the commission component for which there was an activity.
Event
This is the Code that identifies the event, during which the
commission component is being reported.
Component
CCY
This is the currency of the commission component that had an
activity.
Component
Amount
This is the commission amount that was involved in the activity..
Start Date
This is the start date of the period for which the commission
component is being reported.
End Date
This is the end date of the period for which the commission
component is being reported.
Debit Acc
Branch
This is the branch to which the debit account belongs.
Debit Account
If the activity reported is collection, this is the account number or GL
to which the commission amount is debited.
13.8 Report on Open Ended LCs
This report lists all the open ended LCs that has outstanding items. An open ended LC is one
for which you have not defined an expiry date.
The details in the report are sorted by product. The sequence of the report is based on the LC
issue date and the LC reference number.
You can invoke the screen by typing the code ‘LCRPOPN’ in the field at the top right corner of
the Application tool bar and click on the adjoining arrow button.
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13.8.1 Contents of the Report
The report options that you select while generating the report are printed at the beginning of the
report.
The contents of the report are discussed under the following heads:
Header
The header carries the title of the report, the branch, Branch Date, the User ID, the date and time,
the module and the page number of the report.
Body of the Report
The details of the report include the following:
Product Code
The code of the product that you have associated with the LC.
Issue Date
This is the date on which the LC was processed. It is the issue date for
an import or clean LC and guarantee, and is the date of advise or preadvise (whichever is earlier) for an export LC.
Contract Ref
No
This is the reference number assigned to the LC by the system.
CIF ID
This is the Customer Identification number or code.
Name
While you are processing an LC, you would have given the CIF ID of
one party in the main screen of the LC Contract On-line function.
Typically, it would be the applicant for an import LC while it would be
the beneficiary or the issuing bank for an export LC.
The short name of this customer will be shown here.
Country Code
This is the country code.
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Os Liability
This is the outstanding liability amount as of the date the report was
generated.
Current
Availability
This is the current availability under the LC.
Contract CCY
This is the currency of the LC contract.
Outstanding
Item
This is the description of the type of outstanding item to which, the
currency and amount shown on the same line relate. It could be cash
collateral, commission, or charges, which have not been liquidated.
Currency
This is the description of the currency in which the outstanding item is
expressed.
Amount
This is the amount of the outstanding item.
Amount Tag
This is amount tag of the charge applicable for the contract.
Currency
This is currency of the amount tag of the charge.
Amount
This is Amount of the amount tag of the charge.
13.9 Unreplied Tracers Report
This report provides the details of LCs against which there are some tracers that are yet to be
replied by the concerned party.
Items are listed on this report only after the three statutory tracers have been generated and
there has been no response. It is listed ten days after the last tracer was sent. A tracer is taken
to have been responded, to when you indicate that its generation should be stopped.
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You can invoke the screen by typing the code ‘LCRPUNTR’ in the field at the top right corner
of the Application tool bar and click on the adjoining arrow button.
13.9.1 Contents of Report
The contents of the report are discussed under the following heads:
Header
The Header carries the title of the report, information on the user who generated the report (user
id), the branch, branch date, the date and time, the page number and module of the report.
Body of the report
The report contains information on:
Product Code
This is the code of the product involved.
Last Tracer Date
This is the date on which the last tracer was sent.
Contract Reference
This is the reference number assigned to the LC by the system.
Reason for Follow-up
This is the reason for which the tracer was sent. It can be
acknowledgment, confirmation or outstanding charges.
Max Tracers
This is the maximum number of tracers that can be generated.
Tracer Party
This is the party to whom the tracer is addressed. The first 15
characters of the name of the party to whom the tracer has been
addressed are displayed. This is taken from the LC contract.
Customer Name
This is the name of the customer.
Customer Reference
This is the reference number of the customer.
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13.10 Confirmed LC Report
This report lists all the LC that has been confirmed.
You can invoke the screen by typing the code ‘LCRFNREP’ in the field at the top right corner of
the Application tool bar and click on the adjoining arrow button.
13.10.1
Selection Options
You can select either “All Banks” or “Single Bank”. Specify the bank code from the adjoining
option list.
You can configure this report to be triggered automatically, as part of the batch processes run as
part of EOD or you can generate the report at any time, in the day from the Reports menu.
If the report is generated as part of EOD, the report will by default list details of the LCs that
have the confirming bank, as a party.
If you generate the report outside the EOD process, you can specify preferences for the
generation of the report. On selecting this report, you can indicate whether the report should
contain details of all the banks that are involved as confirming banks or of a selected bank. You
need to select the bank code from the adjoining option list.
13.10.2
Contents of Report
The report options that you select while generating the report are printed at the beginning of the
report.
The contents of the report are discussed under the following heads:
Header
The Header carries the title of the report, information on the user who generated the report (the
User Id), the branch, branch date, the date and time, the page number and module of the report.
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Body of the report
The report contains information on:
CIF Id
This is the Customer Identification number or code.
Name
This is the short name of the CIF.
Currency
This is the currency of the LC.
Product
This is the code of the product involved in the LC.
LC Contract Reference
This is the reference number assigned to the LC by the
system.
Contract Status
This is the current status of the LC.
Contract Amount
This is the amount for which the LC was issued.
Maximum LC Amount
This is the LC amount plus the positive tolerance specified
for the LC.
Current Availability
This is the current outstanding liability amount, as of the
date the report was generated.
Totals
This is the total amount
LCY Equivalent
This is the equivalent amount in local currency
13.11 Overrides Report
A contract can be saved, with certain exception conditions that were encountered, be given an
override. This report lists the overrides that were encountered for contracts, on the date the report
was generated.
You can invoke the screen by typing the code ‘LCRPOVD’ in the field at the top right corner of the
Application tool bar and click on the adjoining arrow button.
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13.11.1
Selection Options
You can generate this report to contain details of all the overrides that occurred to list the
overrides that were encountered, while processing a single LC contract. If you indicate that the
report should contain details of the overrides that were encountered in the processing of a single
LC, you should also indicate the Reference number of the LC. Also, you need to indicate whether
the override report should contain details of all product codes or for a specific product code.
13.11.2
Contents of Report
The report options that you select while generating the report are printed at the beginning of the
report.
The contents of the report are discussed under the following heads:
Header
The Header carries the title of the report, information on the user who generated the report (User
Id), the branch, branch date, the date and time, the page number and module of the report.
Body of the report
The report contains information on:
Product Code
This is the code of the LC product that is involved in the LC.
Product Description
This is a short description of the product.
LC Reference
This is the reference number of the LC during the
processing of which, an override occurred.
Contract Amount
This is the amount for which the LC was opened.
Expiry Date
This is the date on which the LC is due to expire.
Event Code
This is the Code that identifies the event, during which the
override was encountered.
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Event Description
This is the description of the event.
Error Code
This is the error code for which the override was
encountered.
Description
This is the description of the error that was encountered.
13.12 Outstanding LC Customerwise Report
You can generate the Outstanding LC Customerwise Report using the 'Outstanding
Customerwise Report ' screen. You can invoke this screen by typing ‘LCROUSD’ in the field at
the top right corner of the Application tool bar and clicking the adjoining arrow button.
Click ‘Ok’ button to generate the Outstanding LC Customerwise report for the given customer.
This report shows the customer-wise outstanding LC contracts for the given branch and
customer. If no customer is given, then the report will be generated for all customers from all
branches.
This report contains the following details:
Header
The Header carries the title of the Report, information on the branch code, branch date, User Id
and name of the module of the report.
Body of the Report
Sl. No.
Fields
Description
1
Counterparty
This shows the customer identification code of the
contract
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Sl. No.
Fields
Description
2
Customer Name
This shows the customer name of the contract
3
Product
This shows the product code of the contract
4
Cont Ref No
This shows the contract reference number
5
Cont Amount
This shows the contract amount
6
Issue Dt
This shows the LC issue date
7
Expiry Date
This shows the LC expiry date
8
Ccy
This shows the contract currency
9
Liability Outstd
This shows the outstanding liability amount
10
Lcy Bal
This shows the current availability amount
11
Current Availability
This shows the current availability amount
12
Total Cont Amount
This shows the product-wise total contract amount of the
customer
13
Total Liability Outstd
This shows the product-wise total outstanding liability
amount of the customer
14
Total Current Availability
This shows the product-wise total current availability
amount of the customer
15
Grand Total Cont
Amount
This shows the total contract amount of the customer
16
Grand Total Liability
Outstd
This shows the total current availability amount of the
customer
17
Grand Total Current
Availability
This shows the total outstanding liability amount of the
customer
13.13 LC Daily Activity Journal Report
This report gives the details of LCs daily activity journal report. You can initiate the necessary
follow up activities after generating this report.
You can invoke the screen by typing the code ‘LCRLYREP’ in the field at the top right corner of
the Application tool bar and click on the adjoining arrow button.
13-20
13.13.1
Selection Options
Date
You can specify the date for which, you have to generate the report.
On selecting this report, you can indicate whether the report should contain details of all the
events or single event. If you indicate single event, then you need to select the event code from
the option list. Also, you have to select the date on which the report should be generated.
13.13.2
Contents of the Report
The report options that you select while generating the report are printed at the beginning of the
report.
The contents of the report are discussed under the following heads:
Header
The header carries the title of the report, the branch, Branch Date, the User ID, the date and time,
the module and the page number of the report.
Body of the report
The report contains information on:
Event Code
This is the code of the event
Description
This is the description of the event.
Product Code
This is the code of the product involved in the LC.
Description
This is the description of the product code involved
in the LC.
Contract Currency
This is the currency in which the LC amount is
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expressed.
Contract Reference
This is the Contract Reference number of the LC.
CIF Id
This is the Customer Identification number or code.
Customer Name
The short name of the Customer maintained in LC
will be displayed here.
Operation Code
This is the operation code of the LC.
Issue Date
The date on which the LC was issued.
Expiry Date
This is the date on which the LC expired.
LC Amount/ Availment Amount
This is the amount for which the LC was opened.
Total for Currency
This is the sum of all the LC amount and currency
involved in the LC.
13.14 Accruals Control Report
This report lists all the LCs that was accrued. Such LCs may require follow-up action. The
information given by this report will be as of the day on which the report is generated.
You can invoke the screen by typing the code ‘LCRPACCR’ in the field at the top right corner of
the Application tool bar and click on the adjoining arrow button.
13.14.1
Selection Options
You can specify the date of the accrual.
You need to specify the accrual type. You have the following options:

Memo
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
13.14.2
Actual
Contents of Report
The report options that you indicate while generating the report are printed at the beginning of the
report.
The contents of the report are discussed under the following heads:
Header
The Header carries the title of the report, information on the user who generated the report (User
Id), the branch, branch date, the date and time and the page number and module of the report.
Body of the report
The report contains the following details:
Contract Reference
This is the reference number assigned to the LC by
the system.
Component
This is the component for which there was an
accrual.
Event Sequence Number
This is the sequence number of the event.
Currency
This is the currency of the accrued amount.
Current Accrued Amount
This is the current accrued amount, as of the date
the report was generated.
Amount Accrued To Date
This is the accrued amount, as of the date the
report was generated.
Contract Reference
This is the reference number assigned to the LC by
the system.
Component
This is the component for which there was an
accrual.
Currency
This is the currency of the accrued amount.
Current Accrued Amount Total
This is the sum of all the accrued amount, as of the
date the report was generated.
Accrued Amount To Date Total
This is the sum of all the accrued amount, as of the
date the report was generated.
13.15 Commission Activity 3 Report
This report lists all the LCs that was accrued. Such LCs may require follow-up action. The
information given by this report will be as of the day on which the report is generated.
You can invoke the screen by typing the code ‘LCRPACR’ in the field at the top right corner of the
Application tool bar and click on the adjoining arrow button.
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13.15.1
Selection Options
Accrual Date
You can specify the date of the accrual.
13.15.2
Contents of Report
The report options that you indicate while generating the report are printed at the beginning of the
report.
The contents of the report are discussed under the following heads:
Header
The Header carries the title of the report, information on the user who generated the report (User
Id), the branch, branch date, the date and time and the page number and module of the report.
Body of the report
The report contains the following details:
Contract Reference
This is the reference number assigned to the LC by the
system.
Component
This is the component for which there was an accrual.
Event Sequence
Number
This is the sequence number of the event.
Currency
This is the currency of the accrued amount.
Current Accrued
Amount
This is the current accrued amount, as of the date the
report was generated.
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Amount Accrued To
Date
This is the accrued amount, as of the date the report was
generated.
Product Code
This is the code of the product involved.
Component
This is the component for which there was an accrual.
Currency
This is the currency of the accrued amount.
Current Accrued
Amount Total
This is the sum of all the accrued amount, as of the date
the report was generated.
Accrued Amount To
Date Total
This is the sum of all the accrued amount, as of the date
the report was generated.
13.16 Periodic Commission Activity Report
This report prints the details of the periodic commission activity. The information given by this
report will be as of the day on which the report is generated.
You can invoke the screen by typing the code ‘LCRPCACT’ in the field at the top right corner of
the Application tool bar and click on the adjoining arrow button.
13.16.1
Contents of Report
The report options that you indicate while generating the report are printed at the beginning of the
report.
The contents of the report are discussed under the following heads:
Header
The Header carries the title of the report, information on the user who generated the report (User
Id), the branch, branch date, the date and time and the page number and module of the report.
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Body of the report
The report contains the following details:
Contract Reference
This is the reference number assigned to the LC by the
system.
Component
This is the code of the component for which there was an
commission activity.
Event Code
This is the code of the event.
Component Currency
This is the currency of the component.
Component Amount
This is the component amount for which there was an
commission activity.
Start Date
This is the start date of the commission activity.
End Date
This is the end date of the commission activity.
13.17 Process Exception Report
You can generate process exception report by using the ‘Letters of Credit Process Exception
Report’ screen. This report lists the process exceptions that were encountered for contracts, on
the date the report was generated.
You can invoke the screen by typing the code ‘LCRPEXP’ in the field at the top right corner of the
Application tool bar and click on the adjoining arrow button.
13.17.1
Contents of Report
The report options that you select while generating the report are printed at the beginning of the
report.
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The contents of the report are discussed under the following heads:
Header
The Header carries the title of the report, information on the user who generated the report (User
Id), the branch, branch date, the date and time, the page number and module of the report.
Body of the report
The report contains information on:
Event Code
This is the Code that identifies the event, during which the override was
encountered.
Branch Date
This is the branch date.
Contract
Reference
Number
This is the reference number of the LC for which the process exception
report is generated.
Customer
While you are processing an LC, you would have given the CIF ID of one
party in the main screen of the LC Contract On-line function. Typically, it
would be the applicant for an import LC while it would be the beneficiary or
the issuing bank for an export LC.
The short name of this customer will be shown here.
Error Code
This is the error code for which the process exception report is generated.
Error
Description
This is the description of the error that was encountered.
13.18 Liquidation Daily Activity Report
The Liquidation Daily Activity Report provides information on all liquidation events or a particular
event which took place on a specified date. You can set the preferences for generation of the
report via the ‘Liquidation Daily Activity Report’ screen.
To invoke the ‘Liquidation Daily Activity Report’ screen, type ‘LQRPDLY’ in the field at the top
right corner of the Application tool bar and click the adjoining arrow button.
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13.18.1
Report Options
You can set the following preferences for report generation in this screen.
All Events/Single Event
Choose whether you want a daily report on all liquidation events or a single event.
Event Code
Specify the Event Code of the liquidation event which you wish to view as a report.
Value Date
Specify the value dates for which the report must be generated.
Once you have specified the necessary, click OK button. The system displays the print option
screen. Here, you can set your preferences as to printing the report. Click OK button to print the
report.
13.18.2
Contents of Report
The contents of the report have been discussed under the following heads:
Header
The ‘Header’ carries the title of the report, branch code, branch date, user ID, module from which
the report has been generated, date and time at which the report has been generated and the
page number of the report.
Body
You can find the following liquidation event details in the body of the report.
Liq Event
Code
Specifies the Liquidation Event Code
Liq Ccy
Specifies the liquidation currency
Maker Dt
Specifies the date on which the record was made by the Maker
13-28
Liq Event
Code
Specifies the Liquidation Event Code
Stamp
Liq Re No
Specifies the Liquidation Reference Number
Liq Event Seq
No
Specifies the Liquidation event sequence number
Contract Ref
No
Specifies the contract reference number
Latest Event
Seq No
Specifies the sequence number of the latest event
Cf Liq Status
Specifies the Liquidation status
Cf Liq Auth
Status
Specifies the liquidation authorization status
Maker Id
Specifies the ID of the maker of the record
Checker Id
Specifies the ID of the checker of the record
Checker Dt
Stamp
Specifies the date on which the checker had checked the record
Liq Ac Code
Specifies the liquidation account code
Liq Branch
Specifies the Liquidation Branch
Liq Value Date
Specifies the value date of the liquidation
Liq Trn Code
Specifies the liquidation Trn Code
Liq Amt
Specifies the liquidation amount
Cf Amt Total
Specifies the total Cf amount
13.19 Outstanding Items Report
The Outstanding Items report provides information on the open ended letters of credit maintained
in the system. You can set the preferences for generation of the report using the ‘Open Ended
Letters Of Credit’ screen. This report will list all the Outstanding item which has been booked
under receivable and is not specific to open ended letters of credit alone.
To invoke the screen, type ‘LQRPOS’ in the field at the top right corner of the Application tool bar
and click the adjoining arrow button.
13-29
13.19.1
Report Options
You can set your preferences for report generation on this screen.
Activities – All/ Single Module
Specify whether the report should with regard to all activities or activities in a single module.
Branches – All/Current Branch
Specify whether the report should with regard to all branches or in the current branch.
Once you have specified the necessary details, click OK button. The system displays the print
option screen. Here, you can set your preferences as to printing the report. Click OK button to
print the report.
13.19.2
Contents of Report
The contents of the report have been discussed under the following heads:
Header
The ‘Header’ carries the title of the report, branch code, branch date, user ID, module from which
the report has been generated, date and time at which the report has been generated and the
page number of the report.
Body
You can find the following details in the body of the report:
Party Cif ID
The CIF ID of the counter party
Party Name
Name of the counter party
Party Type
The type the counterparty belongs to
AC Ccy
The currency in which the party’s account is maintained
Module
The module for which the record belongs to
13-30
Party Cif ID
The CIF ID of the counter party
Amount Tag
The amount tag
Contact
Reference
Number
Specifies the contract reference number
Description
Gives a brief description of the contract
Event Code
Specifies the event code
Booking Date
Specifies the booking date of the contract
Receivable Ac
Code
Specifies the account number of the receivable account
Ac Branch
Specifies the branch where the account is held
Amount
Specifies the amount in the outstanding item
Value Date
Specifies the value date of the record.
13-31
14. Annexure A - Accounting Entries for LCs
14.1 Accounting Entries for LCs
This Annexure contains details of the suggested accounting entries that can be set up, for the LC
module of Oracle FLEXCUBE. The annexure lists details of the suggested accounting entries,
event-wise.
14.1.1 LC Events
The following is an exhaustive list of events that can take place during the lifecycle of an LC. In
the subsequent paragraphs we shall examine the accounting entries for each of the events listed
below.
Event
Code
Event Description
Remarks
ACCR
Accrual (Of Commission)
All Types
AMND
Amendment
All Types
AOCF
Amendment from open to open and
confirm
Import only
AATC
Amendment from Advice to Confirm
Export Only
APAC
Amend - Pre-advice to Adv & confirm
Export Only
APAD
Amendment from Pre-advice to
advice
Export Only
AVAL
Availment
Only For LC’s
BADV
Booking Of An LC With Operation
Advise
Export LC Only
BANC
Booking Of An LC With Operation
Advise And Confirm
Export LC Only
BCFM
Booking Of An LC With Operation
Confirm
Export LC Only
BISS
Booking Of An LC Or Guarantee
Issue (Open or Open & Confirm)
Only For Import LC, Standby LC, Clean LC,
Shipping Guarantee And Guarantee
BPRE
Booking Of An LC With Operation
Pre-Advise
Export LC Only
CALC
Periodic commission calculation
All types
CANC
Cancellation of an LC
All Types
14-1
Event
Code
Event Description
Remarks
CLIQ
Commission Liquidation
All Types
CLOS
Closure Of An LC Or Guarantee
All Types
RAVL
Reversal of Availment
All types
REIN
Reinstating An LC
Revolving LCs
ROPN
Reopening Of An LC
All Types
REVR
Reversal of contract
All types
ROPN
Reopening of an LC
All types
REIS
Reissue of Guarantee
Guarantee only
AVAM
Availment through amendment of a
bill
Bill Contract booked under an LC
MAMD
Margin Amendment
Liquidation of the Linked Bills Contract
Whenever a conversion of currency is involved, the conversion rate used is as follows:

If the contracts currency is different from the takedown or maturity accounts and neither
of them is in the local currency of your branch, the cross rate entered in the contract
screen is picked up.

If the contract currency is different from the contract account and one of them is in the
local currency of your branch, the exchange rate is picked up from the currency table
maintained in the Core services module of Oracle FLEXCUBE. The FX spread is applied
in a way that is favorable to your bank.
14.1.2 Amount Tags
Amount Tag
Description
AVAIL_SET_AMT
Availment amount paid
AVAIL_SET_AMTEQ
Availment amount received
COLL_AMNDAMT
Collateral amend amount Dr.
COLL_AMNDAMT_EQ
Collateral amend amount Cr.
COLLAMT_OS
Outstanding Collateral amount
COLLAMT_OS_EQ
Outstanding Collateral amount
LC_AMND_AMT
LC Amendment Amount
LC_OS_AMT
Outstanding LC amount
14-2
Amount Tag
Description
LC_REIN_AMT
Outstanding Reinstatement Amount
LIAB_AMND_AMT
Liability Amendment Amount
ADV_LIAB_AMND_AMT
Liability Amendment Amount for advised LCs
CNF_LIAB_AMND_AMT
Liability Amendment Amount for confirmed LCs
LIAB_AMT
Liability Amount
LIAB_AVAIL_AMT
Availment Liability Amount
ADV_LIAB_AVAIL_AMT
Availment Liability Amount for advised LCs
CNF_LIAB_AVAIL_AMT
Availment Liability Amount for confirmed LCs
LIAB_OS_AMT
Outstanding liability amount
ADV_LIAB_OS_AMT
Outstanding liability amount for advised LCs
CNF_LIAB_OS_AMT
Outstanding liability amount for confirmed LCs
LIAB_REIN_AMT
Reinstatement Amount
ADV_LIAB_REIN_AMT
Reinstatement Amount for advised LCs
CNF_LIAB_REIN_AMT
Reinstatement Amount for confirmed LCs
TOT_GUAR_INT_AMT
Total of Contract Guarantee/LC Amount + Positive % tolerance +
Interest Amount.
TOT_AMND_INT_AMT
Total of Contract Guarantee/LC Amended Amount + Positive %
tolerance + Interest Amount(only for positive interest).
INT_SET_AMT
Interest amount calculated during the time of booking the
guarantee/LC.
INT_SET_AMTEQ
Interest amount calculated during the time of booking the
guarantee/LC.
INT_AVL_AMT
The interest amount calculated during the time of availment of the
guarantee/LC
INT_AVL_AMTEQ
The interest amount calculated during the time of availment of the
guarantee/LC
INT_AMND_AMT
The interest amount calculated during the time of amendment of the
guarantee/LC
INT_AMND_AMTEQ
The interest amount calculated during the time of amendment of the
guarantee/LC
14-3
Amount Tag
Description
AVAM_AMT_DECR
Availment amount Decrease
AVAM_AMT_INCR
Availment amount Increase
TOT_AMND_INT_AMT
This is the sum of Contract Guarantee/LC Amended Amount and
Positive tolerance percentage and Interest Amount (Only if the
interest is positive)
MARGIN_AMT_INCR
When the margin amount is of positive value
MARGIN_AMT_DECR
When the margin amount is of negative value
REFUND_COMMISSION
Used for commission refund to the customer in case of LC
cancellation
LC_AMT
Indicates the LC basis amount used for commission computation
14.1.3 Accounting Roles
The following is an exhaustive list that contains details of the Accounting Roles that are
applicable to the LCs you can process at your bank.
Accounting Role
Description
Role Type
LC_OCU
Outstanding Credit Unutilized
Contingent
Liability
LC_OCU_OFFSET
Unutilized Credit Offset
Contingent Asset
LC_CNF
Confirmation of LC
Real GL
LC_CNF_OFF
Confirmation of LC Offset
Real GL
LC_COLL_ACCT
LC Collateral account
Liability
AVL_DEBIT_ACCT
Availment Debit account
Real / Type ‘X’
AVL_CREDIT_ACCT
Availment Credit account
Real / Type ‘X’
CHG_CUST_ACC
Customer Accounts
Real/Type “X”
COMM_CUST_ACC
Customer Accounts
Real/Type “X”
COLL_CUST_ACC
Customer Accounts
Real/Type “X”
TAX_CUST_ACC
Customer Accounts
Real/Type “X”
COMM_INC
Commission Income
Income
COMM_REC
Commission earned not collected
Asset
14-4
Accounting Role
Description
Role Type
COMM_RIA
Commission collected in advance
Liability
CHG_INC
Charge Income
Income
CHG_REC
Charge receivable
Asset
CHG_EXP
Charge expense
Expense
CHG_PAY
Charge payable
Liability
TAX_PAY
Tax payable
Liability
TAX_EXP
Tax expense
Expense
GUAR_INT_AMT
Interest Amount for Guarantees/LCs. Role type C
D (debit)
GUAR_INT_AMTOFS
Interest Amount offset for Guarantees/LCs. Role
type D
C (credit)
14.2 Event-Accounting Entries
In this section we will discuss the suggested accounting entries that should be generated for each
event in the life cycle of an LC.
14.2.1 BISS: Booking of an import LC
Liability
Role
Amount Tag
Debit/Credit
LC_OCU
LIAB_AMT
Dr
LC_OCU_OFFSET
LIAB_AMT
Cr
Collateral (If Any)
Role
Amount Tag
Debit/Credit
COLL_CUST_ACC
COLL_AMT_OS
Dr
LC_COLL_ACC
COLL_AMT_OSEQ
Cr
Charges
Booking (From Customer Account)
Role
Amount Tag
Debit/Credit
CHG_CUST_ACC
CHARGES
Dr
14-5
Role
Amount Tag
Debit/Credit
CHG_INC
CHARGES
Cr
Booking (From Receivable Account)
Role
Amount Tag
Debit/Credit
CHG_REC
CHARGES
Dr
CHG_INC
CHARGES
Cr
On Receipt (For booking Under Receivable Account)
Role
Amount Tag
Debit/Credit
CHG_CUST_ACC
CHARGES
Dr
CHG_REC
CHARGES
Cr
Commission
In Advance (Non - Accrual - On Booking)
Role
Amount Tag
Debit/Credit
COMM_CUST_ACC
COMMSN
Dr
COMM_INC
COMMSN
Cr
In Advance (Accrual - On Booking)
Role
Amount Tag
Debit/Credit
COMM_CUST_ACC
COMMSN
Dr
COMM_RIA
COMMSN
Cr
In Advance (Month-End Accrual)
Role
Amount Tag
Debit/Credit
COMM_RIA
COMMSN
Dr
COMM_INC
COMMSN
Cr
In Arrears (Non - Accrual - On Booking)
No Entries for Booking
In Arrears (Non - Accrual - On Receipt)
14-6
Role
Amount Tag
Debit/Credit
COMM_CUST_ACC
COMMSN
Dr
COMM_INC
COMMSN
Cr
In Arrears (Accrual - On Booking)
No Entries for Booking
In Arrears (Month - End Accrual)
Role
Amount Tag
Debit/Credit
COMM_REC
ACCR_COMMSN
Dr
COMM_INC
ACCR_COMMSN
Cr
In Arrears (On Receipt of Commission)
Role
Amount Tag
Debit/Credit
COMM_CUST_ACC
COMMSN
Dr
COMM_REC
COMMSN
Cr
Margin Amount
On Issue of LC, MARGIN_AMT_INCR = Issue of LC % * LC Amount
Role
Amount Tag
Dr/Cr
COL_CUST_ACC
MARGIN_AMT_INCR
Dr
LCCOLL_INT_ACCT
MARGIN_AMT_INCR
Cr
The Collateral Margin Amount is collected from Customer during issue of LC.
14.2.2 AVAL: Availment Under LC
Liability
Role
Amount Tag
Dr/Cr
LC_OCU
AVAIL_SET_AMT
Cr
LC_OCU_OFFSET
AVAIL_SET_AMTEQ
Dr
LC_OCU
ADV_LIAB_AVAIL_AMT
Cr
14-7
Role
Amount Tag
Dr/Cr
LC_OCU_OFFSET
ADV_LIAB_AVAIL_AMT
Dr
LC_CNF_OFF
CNF_LIAB_AVAIL_AMT
Dr
LC_CNF
CNF_LIAB_AVAIL_AMT
Cr
Collateral (If Any)
Role
Amount Tag
Dr/Cr
COLL_CUST_ACC
COLL_AMNDAMT
Cr
LC_COLL_ACCT
COLL_AMNDAMTEQ
Dr
Margin Amount
On linking Bills to LC, if the total bill amount is lesser than or equal to LC amount, then the
MARGIN_AMT_INCR = Import Bills % * BC Amount.
If the total bill amount is greater than LC amount, then the MARGIN_AMT_INCR = (Import Bills %
* LC linked BC Amount) + ((Issue of LC %+Import Bills %) * Non LC linked BC Amount).
Role
Amount Tag
Dr/Cr
COL_CUST_ACC
MARGIN_AMT_INCR
Dr
LCCOLL_INT_ACCT
MARGIN_AMT_INCR
Cr
The additional margin and collateral margin amount is collected from Customer. This Amount
is calculated using the Import Bill Percentage during Bill and LC Linkage.
14.2.3 AVAM: Availment through Amendment of a Bill
Role
Amount Tag
Dr/Cr
LC_OCU
AVAM_AMT_DECR
Dr
LC_OCU_OFFSET
AVAM_AMT_DECR
Cr
LC_OCU_OFFSET
AVAM_AMT_INCR
Dr
LC_OCU
AVAM_AMT_INCR
Cr
Role
Amount Tag
Dr/Cr
COL_CUST_ACC
MARGIN_AMT_DECR
Cr
Margin Amount
14-8
Role
Amount Tag
Dr/Cr
LCCOLL_INT_ACCT
MARGIN_AMT_DECR
Dr
COL_CUST_ACC
MARGIN_AMT_INCR
Dr
LCCOLL_INT_ACCT
MARGIN_AMT_INCR
Cr
14.2.4 CLOS: Closure of an LC / Guarantee
Liability
Role
Amount Tag
Dr/Cr
LC_OCU
LIAB_OS_AMT
Cr
LC_OCU_OFFSET
LIAB_OS_AMT
Dr
LC_OCU
ADV_LIAB_OS_AMT
Cr
LC_OCU_OFFSET
ADV_LIAB_OS_AMT
Dr
LC_CNF
CNF_LIAB_OS_AMT
Cr
LC_CNF_OFFSET
CNF_LIAB_OS_AMT
Dr
Collateral (If Any)
Role
Amount Tag
Debit/Credit
COLL_CUST_ACC
COLLAMT_OS
Cr
LC_COLL_ACCT
COLLAMT_OSEQ
Dr
Margin Amount
On Closure of LC, only MARGIN_AMT_DECR tag is passed, MARGIN_AMT_DECR = Total
Margin Amount Collected against the LC.
Role
Amount Tag
Dr/Cr
COL_CUST_ACC
MARGIN_AMT_DECR
Cr
LCCOLL_INT_ACCT
MARGIN_AMT_DECR
Dr
On closure of LC, the collateral margin amount collected from customer is debited back to
the customer.
14.2.5 REIN: Reinstatement of an LC / Guarantee
Role
Amount Tag
Debit/Credit
14-9
Role
Amount Tag
Debit/Credit
LC_OCU
LIAB_REIN_AMT
Dr
LC_OCU_OFFSET
LIAB_REIN_AMT
Cr
LC_OCU
ADV_LIAB_REIN_AMT
Dr
LC_OCU_OFFSET
ADV_LIAB_REIN_AMT
Cr
LC_CNF
CNF_ LIAB_REIN_AMT
Dr
LC_CNF_OFF
CNF_ LIAB_REIN_AMT
Cr
Margin Amount
Role
Amount Tag
Debit/Credit
COL_CUST_ACC
MARGIN_AMT_INCR
Dr
LCCOLL_INT_ACCT
MARGIN_AMT_INCR
Cr
14.2.6 BADV: Advising an LC
Booking LC Advice
Role
Amount Tag
Debit/Credit
LC_OCU
ADV_LIAB_OS_AMT
Dr
LC_OCU_OFFSET
ADV_LIAB_OS_AMT
Cr
Charges/ Commission
As given in event BISS
14.2.7 BCFM: Confirming an LC
Liability
Role
Amount Tag
Debit/Credit
LC_OCU
LIAB_AMT
Dr
LC_OCU_OFFSET
LIAB_AMT
Cr
Collateral (If Any)
Role
Amount Tag
Debit/Credit
14-10
Role
Amount Tag
Debit/Credit
COLL_CUST_ACC
COLL_AMT_OS
Cr
LC_COLL_ACCT
COLL_AMT_OSEQ
Dr
Charges/ Commission
As given in event BISS
14.2.8 BPRE: Pre-advising an LC
None
14.2.9 BANC: Advising and Confirming An LC
Role
Amount Tag
Dr/Cr
LC_CNF
CNF_LIAB_OS_AMT
Dr
LC_CNF_OFFSET
CNF_LIAB_OS_AMT
Cr
14.2.10
AMND: Amendment
Liability
Reverse all the previous entries for booking. Re-book entries based on BISS or BADV or BPRE
or BANC.
Role
Amount Tag
Dr/Cr
LC_OCU
ADV_LIAB_OS_AMT
Dr
LC_OCU_OFFSET
ADV_LIAB_OS_AMT
Cr
LC_CNF
CNF_LIAB_OS_AMT
Dr
LC_CNF_OFFSET
CNF_LIAB_OS_AMT
Cr
Margin Amount
On Amending LC Amount, the Margin Amount = (Issue of LC % * New LC Amount) - (Issue of LC
% * Old LC Amount).
Role
Amount Tag
Dr/Cr
COL_CUST_ACC
MARGIN_AMT_INCR
Dr
LCCOLL_INT_ACCT
MARGIN_AMT_INCR
Cr
COL_CUST_ACC
MARGIN_AMT_DECR
Cr
14-11
Role
Amount Tag
Dr/Cr
LCCOLL_INT_ACCT
MARGIN_AMT_DECR
Dr
Note the following:

When the LC Amount is increased then the increased Collateral Margin Amount is
collected from Customer.

When the LC Amount is decreased then the decreased Collateral Margin Amount is given
back to the Customer.
14.2.11
AOCF: Amendment from Open to Open and Confirm
None
14.2.12
APAD: Amendment from Pre-advice to Advice
None
14.2.13
APAC: Amendment from Pre-advice to Advice and Confirm
Same as For BISS
14.2.14
REVR: Reversal
Reverse out all the accounting entries booked for the contract till date.
14.2.15
ACCR: Accrual of Commission
See Commissions under event BISS.
14.2.16
CALC: Periodic Commission Calculation Date
No entries due to commission calculation.
14.2.17
CLIQ: Liquidation of Commission
See Commissions under event BISS.
14.2.18
ROPN: Reopening of an LC
Liability
Role
Amount Tag
Dr/Cr
14-12
Role
Amount Tag
Dr/Cr
LC_OCU
LIAB_OS_AMT
Dr
LC_OCU_OFFSET
LIAB_OS_AMT
Cr
LC_OCU
ADV_LIAB_OS_AMT
Dr
LC_OCU_OFFSET
ADV_LIAB_OS_AMT
Cr
LC_CNF
CNF_LIAB_OS_AMT
Dr
LC_CNF_OFFSET
CNF_LIAB_OS_AMT
Cr
Collateral (If Any)
Role
Amount Tag
Dr/Cr
COLL_CUST_ACC
COLLAMT_OS
Dr
LC_COLL_ACCT
COLLAMT_OS_EQ
Cr
Margin Amount
Role
Amount Tag
Debit/Credit
COL_CUST_ACC
MARGIN_AMT_INCR
Dr
LCCOLL_INT_ACCT
MARGIN_AMT_INCR
Cr
14.2.19
CANC: Cancellation of an LC
Role
Amount Tag
Dr/Cr
LC_OCU
LIAB_OS_AMT
Cr
LC_OCU_OFFSET
LIAB_OS_AMT
Dr
LC_OCU
ADV_LIAB_OS_AMT
Cr
LC_OCU_OFFSET
ADV_LIAB_OS_AMT
Dr
LC_CNF
CNF_LIAB_OS_AMT
Cr
LC_CNF_OFFSET
CNF_LIAB_OS_AMT
Dr
14-13
Margin Amount
On Cancellation of LC, only MARGIN_AMT_DECR tag is passed, MARGIN_AMT_DECR = Total
Margin Amount Collected against the LC.
Role
Amount Tag
Dr/Cr
COL_CUST_ACC
MARGIN_AMT_DECR
Cr
LCCOLL_INT_ACCT
MARGIN_AMT_DECR
Dr
On cancellation of LC, the collateral margin amount collected from customer is debited back
to the customer.
Refund of Commission during Cancellation of LC
The following accounting entries are passed for refunding the commission during cancellation of
LC.
Role
14.2.20
Amount Tag
Dr/Cr
COMM_CUST_ACC
REFUND_COMMISSION
Cr
LCCOMM-ISSINC
REFUND_COMMISSION
Dr
TRGN: Generation of Tracers
None
14.2.21
AATC: Amendment from Advice to Confirm
Role
Amount Tag
Dr/Cr
LC_OCU
LIAB_OS_AMT
Cr
LC_OCU_OFFSET
LIAB_OS_AMT
Dr
LC_OCU
ADV_LIAB_OS_AMT
Cr
LC_OCU_OFFSET
ADV_LIAB_OS_AMT
Dr
LC_CNF
CNF_LIAB_OS_AMT
Dr
LC_CNF_OFFSET
CNF_LIAB_OS_AMT
Cr
14.2.22
RASN: Reassign an LC
None
14-14
14.2.23
RAVL: Reversal of Availment
Fetch entries for last availment event and reverse them.
14.2.24 MAMD: Margin Amendment
This event is triggered on Liquidation of the Linked Bills Contract.
MARGIN_AMT_DECR = (Import Bills % + Issue of LC % ) * Bill Liquidation Amount
Role
Amount Tag
Dr/Cr
COL_CUST_ACC
MARGIN_AMT_DECR
Cr
LCCOLL_INT_ACCT
MARGIN_AMT_DECR
Dr
On liquidation of bills, the collateral margin amount is proportionately given back to customer.
14-15
15. Annexure B - Events and Advices for LC
15.1 Event - Advices for LCs
This Annexure contains details of the suggested messages that can be generated for the LC
module. The annexure lists details of the suggested messages event-wise.
15.1.1 LC Events
The following is an exhaustive list of events that can take place during the lifecycle of an LC. In
the subsequent paragraphs we shall examine the messages for each of the events listed below.
Event Code
Event Description
Remarks
ACCR
Accrual (Of Commission)
All Types
AMND
Amendment
All Types
AOCF
Amendment from open to
open and confirm
Import only
APAC
Amend - Pre-advice to Adv &
confirm
Export Only
APAD
Amendment from Pre-advice
to advice
Export Only
AVAL
Availment
Only For LC’s
BADV
Booking Of An LC With
Operation Advise
Export LC Only
BANC
Booking Of An LC With
Operation Advise And
Confirm
Export LC Only
BCFM
Booking Of An LC With
Operation Confirm
Export LC Only
BISS
Booking Of An LC Or
Guarantee Issue
Only For Import LC, Standby LC, Clean LC,
Shipping Guarantee And Guarantee
(Open or Open & Confirm)
BPRE
Booking Of An LC With
Operation Pre-Advise
Export LC Only
CALC
Periodic commission
calculation
All types
CANC
Cancellation of an LC
All Types
15-1
Event Code
Event Description
Remarks
CLIQ
Commission Liquidation
All Types
CLOS
Closure Of An LC Or
Guarantee
All Types
RASN
Re-assign an LC contract
All types
RAVL
Reversal of Availment
All types
REIN
Reinstating An LC
Revolving LC’s
ROPN
Reopening Of An LC
All Types
REVR
Reversal of contract
All types
ROPN
Reopening of an LC
All types
TRGN
Generation of tracers
All types
REIS
Reissue of Guarantee
Guarantee Only
15.1.2 LC Messages
The exhaustive list of messages that can be generated during the lifecycle of an LC are listed
below:
Message
Mail
Telex
SWIFT
From
To
L/C Instrument
Y
Y
Y
ISB
ABK/BEN
Amendment Instrument
Y
Y
Y
ISB
ABK/BEN
Guarantee Instrument
Y
Y
Y
ISB
ABK
Guarantee Amendment
Y
Y
Y
ISB
ABK
Debit Advice
Y
Y
Y
ISB /ABK
APP/BEN
Credit Advice (Generated
automatically on Reversal)
Y
Y
Y
ISB /ABK
APP/BEN
Charge Claim Advice
Y
Y
Y
ISB /ABK
APP/BEN
Cash Collateral Advices
Y
Y
Y
ISB /ABK
APP/ISB
Reimbursement Advice
Y
Y
Y
ISB
RIB
Cancellation Advice
Y
N
N
ISB/ ABK
ABK/APP/
BEN/RIB/ATB
Pre Advice Telex: MT-705
Y
Y
Y
ISB
ABK/BEN
15-2
Message
Mail
Telex
SWIFT
From
To
Reimbursement Advice Telex:
MT-756
Y
Y
Y
ISB
ABK/BEN
ACK of an Import LC: MT-730
Y
Y
Y
ABK
ISB
ACK of Receipt Of
Amendment To LC
Y
N
N
ABK
ISB
Authorization to Reimburse:
MT-740
Y
Y
Y
ISB
REB
Amendment to Authorization
to Reimburse: MT-740
Y
Y
Y
ISB
REB
When No ABK
Y
N
N
ISB
BEN
Pre-Advise To BEN
Y
N
N
ABK
BEN
Change From Pre-Advice To
Advice
Y
N
N
ABK
AT/BEN
Change From Pre-Advice To
Advice And Confirm
Y
N
N
ABK
ATB/BEN
Change From Advice To
Advice And Confirm
Y
N
N
ABK
ATB/BEN
Amending An Import Credit,
No ABK
Y
N
N
ISB/ ABK
BEN
Amending An Export Credit
Previously Advised Or
Confirmed, Via ATB
Y
N
N
ABK
ATB
Acknowledgment Tracer
Y
N
N
ISB
ABK
Confirmation Tracer
Y
N
N
ISB
ABK
Charges And Commission
Tracer
Y
N
N
Issuing
/ABK
APP/BEN/ ABK
/ATB/ISB
Insurance Advice
Y
N
N
ISB
Insurance Company
Fax 700/707/LC confirmation
Mail Message to counterparty
Y
N
N
ISB
Counterparty
ACK of LC Reimbursement:
MT-747
Y
Y
Y
REB
ISB
15-3
15.1.3 Generating Multiple Copies of LC Instrument
You can generate multiple copies of the LC instrument with the same data and also specify
different headers for each of the copy that you generate. To generate multiple copies, you need
to maintain specific details in the following screens:
1) Format File Maintenance Screen
To generate multiple copies, you need to maintain a file format that will be used for the message
and advices. For the LC_Instrument advice, you must associate the ‘NUMCOPIESX’ advice tag,
where X denotes the number of the copy that is generated. Here you can specify different
headers for each copy.
Refer to the Maintaining Advice Formats chapter of Messaging System user manual for the
procedure to define file formats.
2) Customer Address Maintenance Screen
In this screen, you need to specify the number of copies allowed for the message type
LC_Instrument. The system generates the number of copies specified for the instrument at the
time of authorization for the customer address maintained in the screen.
Refer to the Maintaining Addresses for a Customer chapter of Messaging System user manual for
maintaining addresses for the customer.
3) Outgoing Message Browser
When you are generating multiple copies of the original message, the system classifies the
outgoing message as original or a copy in the Outgoing Message Browser.
The ‘Copy’ box indicates whether the outgoing message is a copy and in the ‘No of Copy’ field
the number of that message is also displayed. This will help you keep count of the number of
copies that is generated for the same message.
Refer to the Processing Outgoing Messages chapter in Messaging System user manual for
further details on the Outgoing Message Browser.
15.1.4 Generating Fax 700/707 LC Confirmation Mail Message Copy to
Counterparty
You can generate Fax 700/707 LC confirmation Mail Message copy to counterparty. To do this,
you need to maintain specific details in the following screens:
1) Format File Maintenance Screen
To generate Fax 700/707 LC confirmation Mail Message copy, you need to maintain a file format
that will be used for the message and advices. For the LC_Instrument advice, you must associate
the ‘FAX_DUPLICATE’ advice tag, which carries the address of the receiver and a copy of the
original message.
15-4
The advice format vs. message type mapping for the new message types should be as follows.
Module
Message type
Media
LC
LC_INSTRUMENT_FAX
FAX
LC
LC_AMND_INSTR_FAX
FAX
Refer to the Maintaining Advice Formats chapter of Messaging System user manual for the
procedure to define file formats.
2) Customer Address Maintenance Screen
In this screen, you need to specify the format for the message type LC_INSTR_COPY and
LC_AM_INST_COPY. The system generates the fax message for LC confirmation for the
customer address maintained in the screen.
The customer address maintenance for media FAX should be as follows
Module
Message type
Format
LC
LC_INSTR_COPY
FAX_DUPLICATE
LC
LC_AM_INST_COPY
FAX_DUPLICATE
Refer to the Maintaining Addresses for a Customer chapter of Messaging System user manual for
maintaining addresses for the customer.
Party type abbreviations:
This is an exhaustive list of the parties that can be involved in an LC.
Code
Party Type
APP
Applicant
ACC
Accountee
ISB
Issuing Bank
ABK
Advising Bank
BEN
Beneficiary
ATB
Advise through bank
RIB
Reimbursing Bank
REIS
Reissue of Guarantee
15-5
15.1.5 LC event - Messages
15.1.6 BISS: Booking of an Import LC
Event
Message/Advice
From
To
BISS
LC_REIMB_ADV
ISB
RIB
BISS
ISB_BEN_CL
ISB
BEN
BISS
LC_AMND_INSTR
ISB
ABK/BEN
BISS
LC_CHC_MSG
ISB
ABK
BISS
LC_CASH_COL_ADV
ISB/ ABK
APP/ISB
BISS
LC_DR_MSG
ISB
APP/ABK
BISS
LC_INSTRUMENT
ISB
ABK/BEN
BISS
GUARANTEE
ISB
ABK/BEN
BISS
LC_REIMB_ADV
ISB
ABK
BISS
LC_RIM_MSG
ISB
RIB
BISS
LC_INSTR_COPY
ISB
BEN
15.1.7 AVAL: Availment under LC
Event
Message/Advice
From
To
AVAL
LC_CHC_MSG
ABK
ISB
AVAL
LC_DR_MSG
ABK
BEN
15.1.8 CLOS: Closure of an LC / Guarantee
None
15.1.9 REIN: Reinstatement of an LC / Guarantee
Event
Message/Advice
From
To
REIN
LC_AMND_INSTR
ISB
ABK/BEN
REIN
LC_CHC_MSG
ISB/ABK
APP/BEN
REIN
LC_DR_MSG
ISB/ABK
APP/BEN
REIN
LC_INSTRUMENT
ISB
ABK/BEN
15-6
15.1.10
BADV: Advising an LC
Event
Message/Advice
From
To
BADV
LC_ACK_ADVICE
ABK
ISB
BADV
LC_CHC_MSG
ABK
ISB
BADV
LC_DR_MSG
ABK
BEN
BADV
LC_ACK_ADVICE
ABK
ISB
15.1.11
BCFM: Confirming an LC
Event
Message/Advice
From
To
BCFM
LC_ACK_ADVICE
ABK
ISB
BCFM
LC_CHC_MSG
ABK
ISB
BCFM
LC_CASH_COL_ADV
ABK
ISB
BCFM
LC_DR_MSG
ABK
BEN
BCFM
LC_ACK_ADVICE
ABK
ISB
15.1.12
BPRE: Pre-advising an LC
Event
Message/Advice
From
To
BPRE
LC_ACK_ADVICE
ABK
ISB
BPRE
LC_ATB_MSG
ABK
ATB
BPRE
LC_CHC_MSG
ISB/ABK
ABK/ISB
BPRE
LC_ACK_ADVICE
ABK
ISB
BPRE
LC_PA_MSG
ISB
ABK
BPRE
PADV_CL
ABK
ATB
BPRE
PADV_CL
ABK
BEN
15.1.13
BANC: Advising and Confirming an LC
Event
Message/Advice
From
To
BANC
LC_ACK_ADVICE
ABK
ISB
BANC
LC_CHC_MSG
ABK
ISB
15-7
Event
Message/Advice
From
To
BANC
LC_CASH_COL_ADV
ABK
ISB
BANC
LC_DR_MSG
ABK
BEN
BANC
LC_ACK_ADVICE
ABK
ISB
15.1.14
REIS: Reissue of Guarantee
Event
Message/Advice
From
To
REIS
LC_INSTRUMENT
ISB
ABK/BEN
REIS
GUARANTEE
ISB
ABK/BEN
REIS
LC_PRE_ADVICE
ABK
ISB
15.1.15
AMND: LC Amendments
Event
Message/Advice
From
To
AMND
LC_AMD_MSG
ISB
ABK
AMND
AMD_EXP_CR
ABK
ATB
AMND
AMD_EXP_CR
ABK
BEN
AMND
LC_ACK_AMND
ABK
ISB
AMND
LC_CASH_COL_ADV
ABK
ISB
AMND
LC_DR_MSG
ABK
BEN
AMND
LC_AMD_AUTH_REB
ISB
RIB
AMND
AMD_IMP_CR
ISB
BEN
AMND
GUA_AMD_INSTR
ISB
ABK
AMND
LC_AMND_INSTR
ISB
ABK/BEN
AMND
LC_CHC_MSG
ISB/ABK
ISB/ABK
AMND
LC_DR_MSG
ISB/ABK
APP/BEN
AMND
LC_INSTRUMENT
ISB
ABK/BEN
AMND
GUA_AMD_INSTR
ISB
ABK/BEN
AMND
LC_REIMB_ADV
ISB
ABK
AMND
LC_REIMB_ADV
ISB
RIB
15-8
Event
Message/Advice
From
To
AMND
LC_AM_INST_COPY
ISB
BEN
For the generation of outgoing MT707 from an incoming MT707, you need to link the message
type ‘AMD_EXP_CR’ to the ‘AMND’ event of the product. In case of LC amendment, if the media
is ‘SWIFT’ and message type is ‘AMD_EXP_CR’, the system will generate MT707. During
generation of MT707 to the advice through bank, field 30 will be updated with the date in ‘Issuing
Bank Amendment Date’ field. If the amendment date is null, then field 30 will not updated.
In response to MT700 and MT707, Oracle FLEXCUBE also allows you to generate MT730 as an
acknowledgement of LC creation or amendment respectively. During LC amendment, MT730 is
generated along with the advise ‘LC_ACK_AMND’ if the media is ‘SWIFT’ and message type is
‘LC_ACK_AMND’.
15.1.16
REVR: Reversal
Event
Message/Advice
From
To
REVR
LC_CNC_MADV
ISB
APP/ABK
REVR
LC_CR_MSG
ISB/ABK
APP/BEN
15.1.17
ACCR: Accrual of Commission
None
15.1.18
CALC: Periodic Commission Calculation Date
None
15.1.19
CLIQ: Liquidation of Commission
Event
Message/Advice
From
To
CLIQ
LC_DR_MSG
ISB/ABK
APP/BEN
15.1.20
ROPN: Reopening of an LC
Event
Message/Advice
From
To
ROPN
LC_CHC_MSG
ISB/ABK
ISB/ABK
ROPN
LC_DR_MSG
ISB/ABK
APP/BEN
Event
Message/Advice
From
To
ROPN
LC_INSTRUMENT
ISB
ABK/BEN
15-9
Event
Message/Advice
From
To
ROPN
GUARANTEE
ISB
ABK/BEN
15.1.21
TRGN: End of Day Check for Tracers
Event
Message/Advice
From
To
CHTR
ACK_TRACER
ISB
ABK
CHTR
CHG_COM_TRACER
ISB/ABK
APP/BEN/ABK/ATB /ISB
CHTR
CON_TRACER
ISB
ABK
15.1.22
CANC: Cancellation of an LC
Sl No
15.1.23
Event
Message/Advice
From
To
CANC
LC_CANCEL_ADV
ISB
ABK/APP/BEN/RIB
CANC
LC_CANCEL_ADV
ABK
BEN/ABK/ATB/RIB
APAC: Amendment from Pre-advice to Advice and Confirm
Event
Message/Advice
From
To
APAC
PADV_TO_ADVCON
ABK
ATB
APAC
PADV_TO_ADVCON
ABK
BEN
APAC
PADV_TO_ADVCON
ABK
ATB
APAC
PADV_TO_ADVCON
ABK
BEN
APAC
AMD_EXP_CR
ABK
ATB
APAC
AMD_EXP_CR
ABK
BEN
APAC
LC_ACK_AMND
ABK
ISB
APAC
LC_CASH_COL_ADV
ABK
ISB
APAC
LC_DR_MSG
ABK
BEN
15.1.24
APAD: Amendment from Pre-advice to Advice
Event
Message/Advice
From
To
APAD
LC_AMD_MSG
ISB
ABK
APAD
AMD_EXP_CR
ABK
ATB
APAD
AMD_EXP_CR
ABK
BEN
15-10
Event
Message/Advice
From
To
APAD
LC_ACK_AMND
ABK
ISB
APAD
LC_DR_MSG
ABK
BEN
AATC
LC_AMD_MSG
ISB
ABK
AATC
ADV_TO_ADVCON
ABK
ATB
AATC
AMD_EXP_CR
ABK
ATB
AATC
AMD_EXP_CR
ABK
BEN
AATC
LC_ACK_AMND
ABK
ISB
AATC
LC_DR_MSG
ABK
BEN
15.1.25
RASN: Reassign an LC
None
15.1.26
RAVL: Reversal of availment
None
15.1.27
CALC: Periodic commission calculation
None
15.1.28
Advice Generated for the Insurance Company
The LC_INSURANCEADV message is generated by the bank and sent to the Insurance
Company at the time of Opening (BISS) and Amendment (AMND) of LC contract.
An insurance company advice gives details of the deal.
INSURANCE ADVICE
To,
_INSURANCECO_
_INSURANCECO_ADDR1_
_INSURANCECO_ADDR2_
_INSURANCECO_ADDR3_
15-11
_INSURANCECO_ADDR4_
Dear Sirs,
SUB:
Open Policy/Cover No
: _INSURANCECO_POLICYNO_
Our Letter Of Credit No. : _USERREFNO_
DATED : _ISSUE_DATE_
This is to advise you that we have today established the subject
Letter of Credit the details of which are as under. Kindly provide
us with Insurance Policy/Certificate/Declaration/Cover Note, which
ever is applicable, at your earliest
L/C No.
:
_CONTREFNO_
_IRREVOCABLE_
Amount
:
Expiring On
ABOUT _LC_CCY_
:
_LC_AMOUNT_
_EXPIRY_DATE_
Opener of L/C: _APP_NAME_
_APP_ADDR1_
_APP_ADDR2_
_APP_ADDR3_
_APP_ADDR4_
Merchandise
:
_GOODS_DESCR_
Shipment From :
_FROM_PLACE_
To
:
_TO_PLACE_
By
:
_SHIPMENT_DET_
Not Later Than: _LATEST_SHP_DATE_
15-12
CFR
Partial Shipment
:
_PARTIAL_SHP_
Transshipment :
_TRANS_SHP_
Yours faithfully For Investbank PSC
[FILE COPY]
15.1.29
Advice Generated for Counterparty
The LC_INSTR_COPY and LC_AM_INST_COPY message types will be processed and an
advice will be generated by the bank and sent to the counterparty at the time of LC confirmation.
The advice format maintenance will be as follows:
FAX_DUPLICATE
_ADDRESS_
_ORIGINALMESSAGE_
LC Contract processing will specify the receiver of the new message types as the applicant.
The message processing function will process confirmation / duplicate messages on the basis of
the following:

If the original message is not processed, then the original message will be processed first
before generation of confirmation/duplicate message.

If the status of original message is Repair then the duplicate message will also be in the
same status.

If the original message is generated, then the same message is copied to the duplicate
message.

The _ORIGINALMESSAGE_ advice tag will be populated with the actual message body
of original message.

The additional tags which will be updated for duplicate messages are Receiver address
and sender address.

The advice generation process will fetch the above tags and forms the message for
duplicate messages.
15-13
16. Annexure C - SWIFT Category 7 Messages
16.1 List of SWIFT Messages
The following messages are supported in the LC module.
Message
Description
LC Type
MT 700
Issue of LC
Import LC, Standby
LC, Clean LC
MT 701
Continuation of MT 700
Import LC, Standby
LC, Clean LC
MT 705
Pre-Advice of LC
Import LC, Standby
LC, Clean LC
MT 707
Amendment to LC
Import LC, Standby
LC, Clean LC
MT 710
Advice of a Third Bank’s Documentary
Credit
MT 711
Continuation of MT 710
MT 720
Transfer of a LC
MT 721
Continuation of MT 720
MT 730
Acknowledges receipt of MT 700
MT 732
Advice of Discharge
MT 734
Advice of Refusal
MT 740
Authorization to Reimburse
MT 742
Reimbursement Claim
MT 747
Amendment to an Authorization to
Reimburse
MT 750
Advice of Discrepancy
MT 752
Authorization to Pay, Accept or
Negotiate
MT 754
Advice of Payment/Acceptance
MT 756
Advice of Reimbursement or Payment
Export LC
Import LC, Standby
LC, Clean LC
16-1
Import LC, Standby
LC, Clean LC
Message
Description
LC Type
MT 760
Issue of a Guarantee
Guarantee, Shipping
guarantee
MT 767
Guarantee Amendment
Guarantee, Shipping
guarantee
MT 768
Acknowledges receipt of MT 767
Guarantee
MT 769
Advice of Reduction or Release
MT 790
Advice of Charges, Interest and Other
Adjustments
MT 791
Request for Payment of Charges,
Interest and other expenses
MT 792
Request for cancellation
MT 795
Queries
MT 796
Answers
16-2
17. Annexure D – SFMS Messages
17.1 Introduction
Structured Financial Messaging Solution (SFMS) is a secure messaging standard that serves as
a platform for intra-bank and inter-bank applications like National Electronics Funds Transfer
(NEFT), Real Time gross Settlement (RTGS) and so on. It is an Indian standard that is similar to
the SWIFT standard used for financial messaging globally.
This chapter describes the SFMS messages generated by Oracle FLEXCUBE and the incoming
SFMS messages that are supported by Oracle FLEXCUBE for the LC module. It contains formats
of the outgoing messages and the maintenances required for performing straight-through
processing of incoming messages. It also contains the details of the corresponding fields in the
LC contract for the tags present in the incoming messages.
17.2 Outgoing SFMS Messages
The outgoing SFMS messages that are supported for the LC module are listed in the table below:
SFMS Message
Description
IFN 700/701
LC_INSTRUMENT
IFN 707
LC_AMND_INSTR
IFN 710/711
ADV_THIRD_BANK
IFN 720/721
TRANSFER_LC
IFN 730
LC_ACK_AMND
IFN 730
LC_ACK_ADVICE
IFN 740
LC_AUTH_REIMB
IFN 747
LC_AMD_AUTH_REB
IFN 760
GUARANTEE
IFN 767
GUA_AMD_INSTR
IFN 768
GUA_ACK_ADVICE
IFN 799
CLOS_REIM_AUTH
The messages are explained in detail in the subsequent sections.
It is assumed that Possible Duplicate Emission (PDE) and Possible Duplicate Message
(PDM) is set to ‘No’. This is generally added by SFMS when it seems that the message being
generated has been transmitted previously.
17-1
17.2.1
IFN 700/701
The IFN 700/701 message is generated for LC issuance. The table given below describes the
fields, format and derivation logic for the IFN 700 message:
Status
Field
Description
Content
and
Options
Derivation Logic
M
27
Sequence of total
1!n/1!n
Sequence of total is derived based
on the number of 700 & 701's sent
for this IFN 700 Message. If there
aren’t any IFN 701 sent then this
field will have the value 1/1
M
40A
Form of documentary credit
24x
Based on the product type and
Revocable flag this tag is
evaluated. Tag values will follow
the codes defined in the SWIFT
format for MT 700.
M
20
Documentary Credit number
16x
If "User reference number in
Messages" is checked in LC
Branch Parameter maintenance
then system will populate user
reference number for the contract
otherwise system will populate the
contract reference number.
O
23
Reference to pre-advice
16x
This field will have the value
"PREADV/" + the Preadvice
description entered in the
documents tab.
O
31C
Date of issue
8!n
Issue date of the LC
M
31D
Date and place of expiry
8!n29x
Expiry Date and Expiry Place of
the contract.
O
51a
Applicant Bank
A or D
Populated with the address details
given for the Party type APB in the
contract. Only 51D generation is
supported.
M
50
Applicant
4*35x
Populated with the address details
given for the Party type APP in the
contract.
M
59
Beneficiary
[/34x]
4*35x
Populated with the address details
given for the Party type BEN in the
contract.
17-2
Status
Field
Description
Content
and
Options
Derivation Logic
M
32B
Currency Code, Amount
3!a15d
For an LC Product system will
populate Contract amount. For a
Guarantee or Advice of Guarantee
product system will populate the
outstanding LC Amount.
O
39A
Percentage Credit amount
tolerance
2n/2n
Positive tolerance and negative
tolerance of the contract.
O
39B
Maximum Credit amount
13x
Hardcoded to 39B:NOT
EXCEEDING
O
39C
Additional amounts covered
4*35x
"Additional Amounts covered" in
the contract.
M
41a
Available with ….. by …..
A or D
If the "Credit Available with" is a
valid IFSC code then system will
select the option 41A otherwise
system will select 41D and
populate with the value. Settlement
Method selected in the contract will
decide the "By" clause.
O
42C
Drafts at …..
3*35x
Draft's Description
O
42a
Drawee
A or D
If the Drawee Name given in the
Drafts screen is a valid BIC then
system will go for option A
otherwise option D will be chosen.
System will populate only the BIC
code for Option A and Drawee
Name, Address line 1 to 3 for
Option D.
O
42M
Mixed Payment details
4*35x
If the Credit Mode is Mixed
Payment then system will populate
Credit Details in this Tag
O
42P
Deferred payment details
4*35x
If the Credit Mode is Deferred
Payment then system will populate
Credit Details in this Tag
O
43P
Partial shipments
1*35x
If Partial Shipment is chosen at the
contract level then system will
populate "ALLOWED" otherwise
"NOT ALLOWED"
O
43T
Transhipment
1*35x
If Transhipment is allowed then
system will populate "ALLOWED"
otherwise "NOT ALLOWED"
17-3
Status
Field
Description
Content
and
Options
Derivation Logic
O
44A
Loading on
board/dispatch/taking in
charge at/from
1*65x
From Place in the contract.
O
44B
For transportation to ….
1*65x
To Place in the contract.
O
44C
Latest date of shipment
8!n
Latest Shipment Date in the
contract.
O
44D
Shipment period
6*65x
Shipment Period in the contract.
O
45A
Description of goods/services
100*65x
This tag is populated with the
Goods Description, Shipment
Details, and Shipping remarks. If
INCO_TERM_REQD is set at the
param level then INCO_TERM
details are also appended to tag
45A. For Stand By LC's 45A is not
required.
O
46A
Documents required
100*65x
Document details and clause
details are taken to generate this
tag.
O
47A
Additional conditions
100*65x
Apart from FFT code,
"SND2RECINFO" and FFT code
starting with "INSTRUCTION" all
other FFT code description will get
populated in this tag.
O
71B
Charges
6*35x
Charges from Beneficiary in the
Contract
O
48
Period for presentation
4*35x
Period for Presentation in the
contract.
M
49
Confirmation instructions
7!x
If the operation is Open and
Confirm then this tag will have the
value "CONFIRM". If the operation
is "Advice and Confirm" then this
tag will have the value
"WITHOUT". If the operation is
Open or Advice and if May confirm
is not selected at the contract level
then this tag will have the value
"WITHOUT". If the operation is
Open or Advice and May confirm is
chosen at the contract level then
this tag will hold the value "MAY
ADD"
17-4
Status
Field
Description
Content
and
Options
Derivation Logic
O
53a
Reimbursing bank
A or D
If the other Address details are
provided for Reimbursing Bank
then system will select Option A
otherwise system will go for Option
D. For option A system will
populate the Address given in the
other address. For Option D
system will pick up the address
given for the Party in the party
details screen.
O
78
Instructions to the
paying/accepting/negotiating
bank
12*65x
FFT code starting with
“INSTRUCTION” is populated in
this tag.
O
57a
'Advise Through' bank
A,B or D
If the other Address details are
provided for Advise Through Bank
then system will select Option A
otherwise system will go for Option
D. For option A system will
populate the Address given in the
other address. For Option D
system will pick up the address
given for the Party in the party
details screen.
O
72
Sender to receiver
information
6*35x
FFT code “SND2RECINFO” is
populated in this tag.
The Network Validated Rules for MT 700 are given below:

C1 - Either field 39A or 39B, but not both, may be present (Error code(s): D05).

C2 - When used, fields 42C and 42a must both be present (Error code(s): C90).

C3 - Either fields 42C and 42a together, or field 42M alone, or field 42P alone may be
present. No other combination of these fields is allowed (Error code(s): C90).Standards
Release Guide 2003 - Final edition - February 2003 5 SWIFTStandards - Category 7 MT
700

C4 - Either field 44C or 44D, but not both, may be present (Error code(s): D06)
The table given below describes the fields, format and derivation logic for IFN 701 message:
Status
Field
Description
Content
and
Options
Derivation Logic
M
27
Sequence of
total
1!n/1!n
Sequence of total is derived based on the
number of 701's sent for this IFN 700
Message. If there are no IFN 701 sent then
this field will have the value 1/1
17-5
Status
Field
Description
Content
and
Options
Derivation Logic
M
20
Documentary
credit number
16x
If "User reference number in Messages" is
checked in LC Branch Parameter maintenance
then system will populate user reference
number for the contract otherwise system will
populate the contract reference number.
O
45B
Description of
goods and/or
services
100*65x
This tag is populated with the Goods
Description, Shipment Details, and Shipping
remarks. If INCO_TERM_REQD is set at the
param level then INCO_TERM details are also
appended to tag 45B.
O
46B
Documents
required
100*65x
Document details and clause details are taken
to generate this tag.
O
47B
Additional
conditions
100*65x
Apart from FFT code, "SND2RECINFO" and
FFT code starting with "INSTRUCTION" all
other FFT code description will get populated
in this tag.
There are no Network Validated Rules for this message.
17.2.2
IFN 710/711
The IFN 710/711 message is generated for advising an LC. The table given below describes the
fields, format and derivation logic for IFN 710 message:
Status
Field
Description
Content
and
Options
Derivation Logic
M
27
Sequence of total
1!n/1!n
Sequence of total is derived based
on the number of 710 & 711's sent
for this IFN 710 Message. If there
are no IFN 711 sent then this field
will have the value 1/1
M
40B
Form of documentary credit
2*24x
Based on the product type and
Revocable flag this tag is
evaluated. Tag values will follow
the codes defined in the SWIFT
format for MT 700. If the operation
is Advice and Confirm or Open
and Confirm or Confirm then
system should include "ADDING
OUR CONFIRMATION" otherwise
system should include "WITHOUT
OUR CONFIRMATION"
17-6
Status
Field
Description
Content
and
Options
Derivation Logic
M
20
Sender's references
16x
LC Contract reference number
M
21
Documentary Credit number
16x
If it is an Import LC then system
will populate Contract reference
number in this tag otherwise
system will look for the reference
number provided in the parties
screen for the party type
ISSUING_BANK
O
23
Reference to Pre-advice
16x
This field will have the value
"PREADV/" + the Preadvice
description entered in the
documents tab.
M
31C
Date of issue
8!n
Issue date of the LC
M
31D
Date and place of expiry
8!n29x
Expiry Date and Expiry Place of
the contract.
M
52a
Issuing bank
A or D
If the Party Issuing Bank has a
valid BIC code in Address line1
then system will populate option A
otherwise option D will get
populated with the address details
O
51a
Applicant Bank
A or D
If the Party Applicant's Bank has a
valid BIC code in Address line1
then system will populate option A
otherwise option D will get
populated with the address details
M
50
Applicant
4*35x
System will populate the
Applicant's address from the
parties tab in the contract screen.
M
59
Beneficiary
[/34x]
4*35x
System will populate the
Beneficiary's address from the
parties tab in the contract screen.
M
32B
Currency Code, Amount
3!a15d
If it’s an LC then system will
populate Contract amount. If it’s a
Guarantee or Advice of Guarantee
product then system will populate
the outstanding LC Amount.
O
39A
Percentage credit amount
tolerance
2n/2n
Positive tolerance and negative
tolerance of the contract.
O
39B
Maximum credit amount
13x
Hardcoded to 39B:NOT
17-7
Status
Field
Description
Content
and
Options
Derivation Logic
EXCEEDING
O
39C
Additional amounts covered
4*35x
"Additional Amounts covered" in
the contract.
M
41a
Available with …… by ……
A or D
If the "Credit Available with" is a
valid IFSC code then system will
select the option 41A otherwise
system will select 41D and
populate with the value.
Settlement Method selected in the
contract will decide the "By"
clause.
O
42C
Drafts at ….
3*35x
Draft's Description
O
42a
Drawee
A or D
If the Drawee Name given in the
Drafts screen is a valid BIC then
system will go for option A
otherwise option D will be chosen.
System will populate only the BIC
code for Option A and Drawee
Name, Address line 1 to 3 for
Option D.
O
42M
Mixed Payment details
4*35x
If the Credit Mode is Mixed
Payment then system will populate
Credit Details in this Tag
O
42P
Deferred payment details
4*35x
If the Credit Mode is Deferred
Payment then system will populate
Credit Details in this Tag
O
43P
Partial shipments
1*35x
If Partial Shipment is chosen at the
contract level then system will
populate "ALLOWED" otherwise
"NOT ALLOWED"
O
43T
Transhipment
1*35x
If Transhipment is allowed then
system will populate "ALLOWED"
otherwise "NOT ALLOWED"
O
44A
Loading on
board/dispatch/taking in
charge at /from
1*65x
From Place in the contract.
O
44B
For transportation to ….
1*65x
To Place in the contract.
O
44C
Latest date of shipment
8!n
Latest Shipment Date in the
contract.
17-8
Status
Field
Description
Content
and
Options
Derivation Logic
O
44D
Shipment period
6*65x
Shipment Period in the contract.
O
45A
Description of goods/services
100*65x
This tag is populated with the
Goods Description, Shipment
Details, Shipping remarks
O
46A
Documents received
100*65x
Document details and clause
details are taken to generate this
tag.
O
47A
Additional conditions
100*65x
Apart from FFT code,
"SND2RECINFO" and FFT code
starting with "INSTRUCTION" all
other FFT code description will get
populated in this tag.
O
71B
Charges
6*35x
Charges from Beneficiary in the
Contract
O
48
Period for presentation
4*35x
Period for Presentation in the
contract.
M
49
Confirmation instructions
7!x
If the operation is Open and
Confirm then this tag will have the
value "CONFIRM". If the operation
is "Advice and Confirm" then this
tag will have the value
"WITHOUT". If the operation is
Open or Advice and if May confirm
is not selected at the contract level
then this tag will have the value
"WITHOUT". If the operation is
Open or Advice and May confirm
is chosen at the contract level then
this tag will hold the value "MAY
ADD"
O
53a
Reimbursing bank
A or D
If the other Address details are
provided for Reimbursing Bank
then system will select Option A
otherwise system will go for Option
D. For option A system will
populate the Address given in the
other address. For Option D
system will pick up the address
given for the Party in the party
details screen.
O
78
Instructions to the
paying/accepting/negotiating
12*65x
FFT codes starting with
“INSTRUCTION” are populated in
17-9
Status
Field
Description
Content
and
Options
bank
Derivation Logic
this tag.
O
57a
'Advise through' bank
A, B or D
If the other Address details are
provided for Advise Through Bank
then system will select Option A
otherwise system will go for Option
D. For option A system will
populate the Address given in the
other address. For Option D
system will pick up the address
given for the Party in the party
details screen.
O
72
Sender to receiver
information
6*35x
FFT codes “SND2RECINFO” are
populated in this tag.
The Network Validated Rules for the MT 710 are given below:

C1 - Either field 39A or 39B, but not both, may be present (Error code(s): D05)

C2 - Standards Release Guide 2003 - Final edition - February 2003 51 SWIFTStandards
- Category 7 MT 710 When used, fields 42C and 42a must both be present (Error
code(s): C90).

C3 - Either fields 42C and 42a together, or field 42M alone, or field 42P alone may be
present. No other combination of these fields is allowed (Error code(s): C90).

C4 - Either field 44C or 44D, but not both, may be present (Error code(s): D06)
The table given below describes the fields, format and derivation logic for IFN 711 message:
Status
Field
Description
Content
and
Options
Derivation Logic
M
27
Sequence of
total
1!n/1!n
Sequence of total is derived based on the
number of 710 & 711's sent for this IFN 710
Message. If there are no IFN 711 sent then
this field will have the value 1/1
M
20
Sender's
reference
16x
LC Contract reference number
M
21
Documentary
Credit number
16x
If it is an Import LC then system will populate
Contract reference number in this tag
otherwise system will look for the reference
number provided in the parties screen for the
party type ISSUING_BANK
O
45B
Description of
goods/services
100*65x
This tag is populated with the Goods
Description, Shipment Details, Shipping
remarks
17-10
Status
Field
Description
Content
and
Options
Derivation Logic
O
46B
Documents
required
100*65x
Document details and clause details are
taken to generate this tag.
O
47B
Additional
conditions
100*65x
Apart from FFT code, "SND2RECINFO" and
FFT code starting with "INSTRUCTION" all
other FFT code description will get populated
in this tag.
There are no Network Validated Rules for this message.
17.2.3
IFN 707
The IFN 707 message is generated during LC amendments. The table given below describes the
fields, format and derivation logic for the message:
Status
Field
Description
Content
and
Options
Derivation Logic
M
20
Sender's reference
16x
If "User reference number in Messages"
is checked in LC Branch Parameter
maintenance then system will populate
user reference number for the contract
otherwise system will populate the
contract reference number.
M
21
Receiver's reference
16x
Reference number provided in the
parties tab for the party
CONFIRMING_BANK or
ADVISING_BANK or BENEFICIARY will
get populated in this tag. Selection for
reference number will happen in the
same sequence as listed above. If
reference number is not provided for any
of the above listed parties then system
will populate NONREF.
O
23
Issuing bank's
reference
16x
Not Supported
O
52a
Issuing bank
A or D
If the other Address details are provided
for Issuing Bank then system will select
Option A otherwise system will go for
Option D. For option A system will
populate the Address given in the other
address. For Option D system will pickup
the address given for the Party in the
party details screen.
O
31C
Date of issue
8!n
Issue date of the LC
17-11
Status
Field
Description
Content
and
Options
Derivation Logic
O
30
Date of amendment
8!n
Date of amendment from the contract
event log.
O
26E
Number of
Amendment
2n
Amendment Number in the Contract
M
59
Beneficiary (before this
amendment)
[/34x]
4*35x
Populated with the address details given
for the Party type BEN in the contract.
O
31E
New date of expiry
8!n
If there is a change in the Expiry Date of
the contract then system will pickup the
latest expiry date, if there is no change
then system will not populate this tag.
O
32B
Increase of
documentary credit
amount
3!a15d
For Guarantee and Advice of Guarantee
products, this tag will hold the difference
between the new contract amount and
the old outstanding LC Amount provided
the difference is positive. For LC product
this tag will hold the difference between
the new contract amount and old
contract amount provided the difference
is positive.
O
33B
Decrease of
documentary credit
amount
3!a15d
For Guarantee and Advice of Guarantee
products, this tag will hold the difference
between the old outstanding LC Amount
and new contract amount provided the
difference is positive. For LC product this
tag will hold the difference between the
old contract amount and new contract
amount provided the difference is
positive.
O
34B
New documentary
credit amount after
amendment
3!a15d
For guarantee and advice of guarantee
this will have the latest outstanding LC
Amount and for LC this will have the
latest contract amount.
O
39A
Percentage credit
amount tolerance
2n/2n
If the positive and negative tolerance is
not provided or zero system will skip this
tag otherwise it will populate the latest
positive and negative tolerance.
O
39B
Maximum credit
amount
13x
If 39A is not generated then system will
populate this tag with value "NOT
EXCEEDING".
O
39C
Additional amounts
covered
4*35x
Additional Amount covered in the
contract
17-12
Status
Field
Description
Content
and
Options
Derivation Logic
O
44A
Loading on
board/dispatch/taking
in charge at /from
1*65x
If the "From Place" is modified during
Amendment then the system will
populate this tag with "From Place"
otherwise it will skip this tag.
O
44B
For transportation to
….
1*65x
If the "To Place" is modified during
Amendment then the system will
populate this tag with "To Place"
otherwise it will skip this tag.
O
44C
Latest date of
shipment
8!n
If the "Latest shipment date" is modified
during Amendment then the system will
populate this tag with "Latest shipment
date" otherwise it will skip this tag.
O
44D
Shipment period
6*65x
Shipment Period in the contract.
O
79
Narrative
35*50x
Apart from FFT code, "SND2RECINFO"
and FFT code starting with
"INSTRUCTION" all other FFT code
description will get populated in this tag.
O
72
Sender to receiver
information
6*35x
FFT code "SND2RECINFO" are
populated in this tag.
The Network Validated Rules for MT 707 are given below:

C1 - If either field 32B or 33B is present, field 34B must also be present (Error code(s):
C12).

C2 - If field 34B is present, either field 32B or 33B must also be present (Error code(s):
C12).

C3 - If field 23 is present, field 52a must also be present (Error code(s): C16).

C4 - Either field 39A or 39B, but not both, may be present (Error code(s): D05).

C5 - Either field 44C or 44D, but not both, may be present (Error code(s): D06).

C6 - At least one of the fields 31E, 32B, 33B, 34B, 39A, 39B, 39C, 44A, 44B, 44C, 44D,
79 or 72 must be present (Error code(s): C30).

C7 - The currency code in the amount fields 32B, 33B, and 34B must be the same (Error
code(s): C02).
17.2.4 IFN 720/721
The IFN 720/721 message is generated during LC transfer. The table given below describes the
fields, format and derivation logic for IFN 720 message:
Status
Field
Description
Content
and
Options
17-13
Derivation Logic
Status
Field
Description
Content
and
Options
Derivation Logic
M
27
Sequence of total
1!n/1!n
Sequence of total is derived based
on the number of 720 & 721's sent
for this IFN 720 Message. If there
are no IFN 721 sent then this field
will have the value 1/1
M
40B
Form of documentary credit
2*24x
Based on the product type and
Revocable flag this tag is
evaluated. Tag values will follow
the codes defined in the SWIFT
format for MT 700. If the operation
is Advice and Confirm or Open
and Confirm or Confirm then
system should include "ADDING
OUR CONFIRMATION" otherwise
system should include "WITHOUT
OUR CONFIRMATION"
M
20
Transferring bank's reference
16x
Transfer To LC Contract reference
number
M
21
Documentary Credit number
16x
If it is an Import LC then system
will populate Contract reference
number in this tag otherwise
system will look for the reference
number provided in the parties
screen for the party type
ISSUING_BANK in the Parent LC
O
31C
Date of issue
8!n
Issue date of the transferred LC
M
31D
Date and place of expiry
8!n29x
Expiry Date and Expiry Place of
the transferred LC
O
52a
Issuing bank of the original
D/C
A or D
If the Party Issuing Bank has a
valid BIC code in Address line1
then system will populate option A
otherwise option D will get
populated with the address details
M
50
First beneficiary
4*35x
Beneficiary in the Parent LC
Contract
M
59
Second Beneficiary
[/34x]
4*35x
For Export LC Second Beneficiary
details are populated in the tag.
For Import LC, This tag will hold
the party other than BEN
M
32B
Currency Code, Amount
3!a15d
Transfer Amount
17-14
Status
Field
Description
Content
and
Options
Derivation Logic
O
39A
Percentage credit amount
tolerance
2n/2n
Positive tolerance and negative
tolerance of the contract.
O
39B
Maximum credit amount
13x
Hardcoded to 39B:NOT
EXCEEDING
O
39C
Additional amounts covered
4*35x
"Additional Amounts covered" in
the contract.
M
41a
Available with …… by ……
A or D
If the "Credit Available with" is a
valid IFSC code then system will
select the option 41A otherwise
system will select 41D and
populate with the value.
Settlement Method selected in the
contract will decide the "By"
clause.
O
42C
Drafts at ….
3*35x
Draft's Description
O
42a
Drawee
A or D
If the Drawee Name given in the
Drafts screen is a valid BIC then
system will go for option A
otherwise option D will be chosen.
System will populate only the BIC
code for Option A and Drawee
Name, Address line 1 to 3 for
Option D.
O
42M
Mixed Payment details
4*35x
If the Credit Mode is Mixed
Payment then system will populate
Credit Details in this Tag
O
42P
Deferred payment details
4*35x
If the Credit Mode is Deferred
Payment then system will populate
Credit Details in this Tag
O
43P
Partial shipments
1*35x
If Partial Shipment is chosen at the
contract level then system will
populate "ALLOWED" otherwise
"NOT ALLOWED"
O
43T
Transhipment
1*35x
If Transhipment is allowed then
system will populate "ALLOWED"
otherwise "NOT ALLOWED"
O
44A
Loading on
board/dispatch/taking in
charge at /from
1*65x
From Place in the contract.
17-15
Status
Field
Description
Content
and
Options
Derivation Logic
O
44B
For transportation to ….
1*65x
To Place in the contract.
O
44C
Latest date of shipment
8!n
Latest Shipment Date given during
Transfer Operation.
O
44D
Shipment period
6*65x
Shipment Period given during
Transfer Operation.
O
45A
Description of goods/services
100*65x
This tag is populated with the
Goods Description, Shipment
Details, Shipping remarks
O
46A
Documents received
100*65x
Document details and clause
details are taken to generate this
tag.
O
47A
Additional conditions
100*65x
Apart from FFT code,
"SND2RECINFO" and FFT code
starting with "INSTRUCTION" all
other FFT code description will get
populated in this tag.
O
71B
Charges
6*35x
Charges from Beneficiary in the
Contract
O
48
Period for presentation
4*35x
Period for Presentation in the
contract.
M
49
Confirmation instructions
7!x
If the operation is Open and
Confirm then this tag will have the
value "CONFIRM". If the operation
is "Advice and Confirm" then this
tag will have the value
"WITHOUT". If the operation is
Open or Advice and if May confirm
is not selected at the contract level
then this tag will have the value
"WITHOUT". If the operation is
Open or Advice and May confirm
is chosen at the contract level then
this tag will hold the value "MAY
ADD"
O
78
Instructions to the
paying/accepting/negotiating
bank
12*65x
FFT codes starting with
“INSTRUCTION” are populated in
this tag.
17-16
Status
Field
Description
Content
and
Options
Derivation Logic
O
57a
'Advise through' bank
A, B or D
If the other Address details are
provided for Advise Through Bank
then system will select Option A
otherwise system will go for Option
D. For option A system will
populate the Address given in the
other address. For Option D
system will pick up the address
given for the Party in the party
details screen.
O
72
Sender to receiver
information
6*35x
FFT codes “SND2RECINFO” are
populated in this tag.
The Network Validated Rules for MT 720 are given below:

C1 - Either field 39A or 39B, but not both, may be present (Error code(s): D05).

C2 - When used, fields 42C and 42a must both be present (Error code(s): C90).

C3 - Either fields 42C and 42a together, or field 42M alone, or field 42P alone may be
present. No other combination of these fields is allowed (Error code(s): C90). 78
Standards Release Guide 2003 - Final edition - February 2003 MT 720 SWIFTStandards
- Category 7

C4 - Either field 44C or 44D, but not both, may be present (Error code(s): D06)
The table given below describes the fields, format and derivation logic for IFN 721 message:
Status
Field
Description
Content
and
Options
Derivation Logic
M
27
Sequence of
total
1!n/1!n
Sequence of total is derived based on the
number of 720 & 721's sent for this IFN 720
Message. If there are no IFN 721 sent then
this field will have the value 1/1
M
20
Transferring
bank's reference
16x
Transfer To LC Contract reference number
M
21
Documentary
Credit number
16x
If it is an Import LC then system will populate
Contract reference number in this tag
otherwise system will look for the reference
number provided in the parties screen for the
party type ISSUING_BANK in the Parent LC
O
45B
Description of
goods and /or
services
100*65x
This tag is populated with the Goods
Description, Shipment Details, Shipping
remarks
17-17
Status
Field
Description
Content
and
Options
Derivation Logic
O
46B
Documents
required
100*65x
Document details and clause details are taken
to generate this tag.
O
47B
Additional
Conditions
100*65x
Apart from FFT code, "SND2RECINFO" and
FFT code starting with "INSTRUCTION" all
other FFT code description will get populated
in this tag.
There are no Network Validated Rules for this message.
17.2.5
IFN 730
The IFN 730 message is generated for LC acknowledgements. The table given below describes
the fields, format and derivation logic for the message:
Status
Field
Description
Content
and
Options
Derivation Logic
M
20
Sender’s
reference
16x
If "User reference number in Messages" is
checked in LC Branch Parameter
maintenance then system will populate user
reference number for the contract otherwise
system will populate the contract reference
number.
M
21
Receiver’s
reference
16x
Reference number provided in the parties tab
for the party ADVISING_BANK or
ISSUING_BANK or APPLICANT will get
populated in this tag. Selection for reference
number will happen in the same sequence as
listed above.
O
25
Account
Identification
35x
Account for ISB provided in the contract
M
30
Date of message
being
acknowledged
8!n
System will send the Acknowledgement Date
if provided otherwise issue date
O
32a
Amount of
charges
B or D
Charge Amount and Currency from ISB
O
57a
Account with
Bank
A or D
Not Supported
O
71B
Charges
6*35x
Charge from Issuing Bank
O
72
Sender to
Receiver
6*35x
FFT code "SND2RECINFO" are populated in
this tag.
17-18
Status
Field
Description
Content
and
Options
Derivation Logic
information
The Network Validated Rules for MT 730 are given below:
17.2.6

C1 - Either field 25 or 57a, but not both, may be present (Error code(s): C77).

C2 - If field 32D is present, field 57a must not be present (Error code(s): C78).
IFN 740
The IFN 740 message is generated for authorization to reimburse. The table given below
describes the fields, format and derivation logic for the message:
Status
Field
Description
Content
and
Options
Derivation Logic
M
20
Documentary
credit number
16x
If "User reference number in Messages" is
checked in LC Branch Parameter maintenance
then system will populate user reference
number for the contract otherwise system will
populate the contract reference number.
O
25
Account
identification
35x
Account for ISB provided in the contract
O
31D
Date and place
of expiry
8!n29x
Expiry Date and Expiry Place of the contract.
O
59
Beneficiary
[/34x]
4*35x
Populated with the address details given for
the Party type BEN in the contract.
M
32B
Credit Amount
3!a15d
If this message is generated from the module
LC, If it’s an LC then system will populate
Contract amount. If it’s a Guarantee or Advice
of Guarantee product then system will
populate the outstanding LC Amount.
If this message is generated from BC module
then system will populate the Bill Amount in LC
Currency.
O
39A
Percentage
credit amount
tolerance
2n/2n
Positive tolerance and negative tolerance of
the contract.
O
39B
Maximum credit
amount
13x
Hardcoded to 39B:NOT EXCEEDING
O
39C
Additional
amounts
4*35x
"Additional Amounts covered" in the contract.
17-19
Status
Field
Description
Content
and
Options
Derivation Logic
covered
M
41a
Available with
…… by ……
A or D
If the "Credit Available with" is a valid IFSC
code then system will select the option 41A
otherwise system will select 41D and populate
with the value. Settlement Method selected in
the contract will decide the "By" clause.
O
42C
Drafts at ….
3*35x
Draft's Description
O
42a
Drawee
A or D
If the Drawee Name given in the Drafts screen
is a valid BIC then system will go for option A
otherwise option D will be chosen. System will
populate only the BIC code for Option A and
Drawee Name, Address line 1 to 3 for Option
D.
O
42M
Mixed Payment
details
4*35x
If the Credit Mode is Mixed Payment then
system will populate Credit Details in this Tag
O
42P
Deferred
payment details
4*35x
If the Credit Mode is Deferred Payment then
system will populate Credit Details in this Tag
For BC Module system will populate the Bill
Maturity Date
O
71A
Reimbursing
Bank’s charges
3!a
If the Reimbursing Bank Charges is "Ours"
then system will populate "OUR", if its
"Claimants" then system will populate "CLM".
O
71B
Other charges
6*35x
Charges from Beneficiary in the Contract
O
72
Sender to
receiver
information
6*35x
FFT codes “SND2RECINFO” are populated in
this tag.
The Network Validated Rules for MT 740 are given below:
17.2.7

C1 - Either field 39A or 39B, but not both, may be present (Error code(s): D05).

C2 - When used, fields 42C and 42a must both be present (Error code(s): C90).

C3 - Either fields 42C and 42a together, or field 42M alone, or field 42P alone may be
present. No other combination of these fields is allowed (Error code(s): C90).

C4 -Either field 58a or 59, but not both, may be present (Error code(s): D84)
IFN 747
The IFN 747 message is generated when an amendment is done to an Authorization to
Reimburse. The table given below describes the fields, format and derivation logic for the
message:
17-20
Status
Field
Description
Content
and
Options
Derivation Logic
M
20
Documentary
Credit number
16x
If "User reference number in Messages" is
checked in LC Branch Parameter maintenance
then system will populate user reference
number for the contract otherwise system will
populate the contract reference number.
O
21
Reimbursing
Bank’s
reference
16x
Reference number provided in the parties tab
for the party REIMBURSING_BANK will get
populated in this tag. If reference number is not
given then system will default "NONREF"
M
30
Date of the
original
authorisation to
reimburse
8!n
LC Creation Date
O
31E
New Date of
expiry
8!n
Not Supported
O
32B
Increase of
documentary
credit amount
3!a15d
For Guarantee and Advice of Guarantee
products, this tag will hold the difference
between the new contract amount and the old
outstanding LC Amount provided the difference
is positive. For LC product this tag will hold the
difference between the new contract amount
and old contract amount provided the difference
is positive.
O
33B
Decrease of
documentary
credit amount
3!a15d
For Guarantee and Advice of Guarantee
products, this tag will hold the difference
between the old outstanding LC Amount and
new contract amount provided the difference is
positive. For LC product this tag will hold the
difference between the old contract amount and
new contract amount provided the difference is
positive.
O
34B
New
documentary
credit amount
after
amendment
3!a15d
For guarantee and advice of guarantee this will
have the latest outstanding LC Amount and for
LC this will have the latest contract amount.
O
39A
Percentage
Credit amount
tolerance
2n/2n
If the positive and negative tolerance is not
provided or zero system will skip this tag
otherwise it will populate the latest positive and
negative tolerance.
17-21
Status
Field
Description
Content
and
Options
Derivation Logic
O
39B
Maximum
Credit Amount
13x
If 39A is not generated then system will
populate this tag with value "NOT
EXCEEDING".
O
39C
Additional
amounts
covered
4*35x
Additional Amount covered in the contract
O
72
Sender to
receiver
information
6*35x
FFT code "SND2RECINFO" are populated in
this tag.
O
77A
Narrative
20*35x
Not Supported
The Network Validated Rules for MT 747 are given below:
17.2.8

C1 - At least one of the fields 31E, 32B, 33B, 34B, 39A, 39B, 39C, 72 or 77A must be
present (Error code(s): C15).Standards Release Guide 2003 - Final edition - February
2003 135 SWIFTStandards - Category 7 MT 747

C2 - If either field 32B or 33B is present, then field 34B must also be present (Error
code(s): C12).

C3 - If field 34B is present, either field 32B or 33B must also be present (Error code(s):
C12).

C4 - Either field 39A or 39B, but not both, may be present (Error code(s): D05).

C5 - The currency code in the amount fields 32B, 33B and 34B must be the same (Error
code(s): C02).
IFN 760
The IFN 760 message is generated for guarantee. The table given below describes the fields,
format and derivation logic for the message:
Status
Field
Description
Content
and
Options
Derivation Logic
M
27
Sequence of
total
1!n/1!n
Sequence of total is derived based on the
number of 760's sent for this Contract. Since a
SWIFT message is restricted to the maximum
input message length, more than one MT 760
may
be required to accommodate all the details of
the guarantee.
17-22
Status
Field
Description
Content
and
Options
Derivation Logic
M
20
Transaction
Reference
number
16x
If "User reference number in Messages" is
checked in LC Branch Parameter maintenance
then system will populate user reference
number for the contract otherwise system will
populate the contract reference number.
M
23
Further
identification
16x
If it’s a Guarantee Issue then system will
populate "ISSUE" otherwise system will
populate "REQUEST"
O
30
Date
8!n
Issue date of the guarantee
M
77C
Details of
Guarantee
150*65x
Apart from FFT code, "SND2RECINFO" and
FFT code starting with "INSTRUCTION" all
other FFT code description will get populated in
this tag.
O
72
Sender to
receiver
information
6*35x
FFT codes “SND2RECINFO” are populated in
this tag.
There are no Network Validated Rules for this message.
17.2.9 IFN 767
The IFN 767 message is generated when a Guarantee is amended. The table given below
describes the fields, format and derivation logic for the message:
Status
Field
Description
Content
and
Options
Derivation Logic
M
27
Sequence of
total
1!n/1!n
Sequence of total is derived based on the
number of 767's sent for this Contract. Since a
SWIFT message is restricted to the maximum
input message length, more than one MT 767
may
be required to accommodate all the details of
the guarantee.
M
20
Transaction
Reference
number
16x
If "User reference number in Messages" is
checked in LC Branch Parameter maintenance
then system will populate user reference
number for the contract otherwise system will
populate the contract reference number.
17-23
Status
Field
Description
Content
and
Options
Derivation Logic
M
21
Related
Reference
16x
Reference number provided in the parties tab
for the party ADVISING_BANK will get
populated in this tag. If reference number is not
given then system will default "NONREF"
M
23
Further
identification
16x
If it’s a Guarantee Issue then system will
populate "ISSUE" otherwise system will
populate "REQUEST"
O
30
Date
8!n
Issue date of the guarantee
O
26E
Number of
Amendment
2n
Amendment Number in the Contract
M
31C
Date of Issue
or Request to
Issue
8!n
Guarantee Issue Date
M
77C
Amendment
details
150*65x
Apart from FFT code, "SND2RECINFO" and
FFT code starting with "INSTRUCTION" all
other FFT code description will get populated in
this tag.
O
72
Sender to
receiver
information
6*35x
FFT codes “SND2RECINFO” are populated in
this tag.
There are no Network Validated Rules for this message.
17.2.10
IFN 768
The IFN 768 message is generated to acknowledge a Guarantee or an amendment to a
Guarantee. The table given below describes the fields, format and derivation logic for the
message:
Status
Field
Description
Content
and
Options
Derivation Logic
M
20
Transaction
Reference
number
16x
If "User reference number in Messages" is
checked in LC Branch Parameter
maintenance then system will populate user
reference number for the contract otherwise
system will populate the contract reference
number.
17-24
Status
Field
Description
Content
and
Options
Derivation Logic
M
21
Related
Reference
16x
For Export LC, Reference number provided in
the parties tab for the party ISSUING_BANK
will get populated in this tag.
For Import LC, Reference number provided in
the parties tab for the party
APPLICANTS_BANK or ISSUING_BANK will
get populated in this tag. Selection for
reference number will happen in the same
sequence as listed above.
O
25
Account
Identification
35x
Account for ISB provided in the contract
M
30
Date of Message
being
Acknowledged
8!n
For Export LC, Reference Dated provided in
the parties tab for the party ISSUING_BANK
will get populated in this tag.
For Import LC, Reference Dated provided in
the parties tab for the party
APPLICANTS_BANK or ISSUING_BANK will
get populated in this tag. Selection for
reference number will happen in the same
sequence as listed above.
O
32a
Amount of
charges
B or D
Charge Amount and Currency from ISB
O
57a
Account with
bank
A, B or D
Not Supported
O
71B
Details of
Charges
6*35x
Charge from Issuing Bank
O
72
Sender to
receiver
information
6*35x
FFT code "SND2RECINFO" are populated in
this tag.
The Network Validated Rules for MT 768 are given below:
17.2.11

C1 - Either field 25 or 57a, but not both, may be present (Error code(s): C77).

C2 - If field 32D is present, field 57a must not be present (Error code(s): C78).

C3 - If field 71B is present, field 32a must also be present (Error code(s): C33)
IFN 799
The IFN 799 message will be generated for Free Format messages. The table given below
describes the fields, format and derivation logic for the message:
17-25
Status
Field
Description
Content
and
Options
Derivation Logic
M
20
Transaction
Reference
Number
16x
If "User reference number in Messages" is
checked in LC Branch Parameter maintenance
then system will populate user reference
number for the contract otherwise system will
populate the contract reference number.
O
21
Related
Reference
16x
Reference number provided in the parties tab
for the party ISSUING_BANK will get populated
in this tag.
M
79
Narration
35*50x
Apart from FFT code, "SND2RECINFO" and
FFT code starting with "INSTRUCTION" all
other FFT code description will get populated in
this tag.
There are no Network Validated Rules for this message.
17.3 Incoming SFMS Messages
Oracle FLEXCUBE facilitates the straight-through processing of incoming SFMS messages,
which is similar to the STP done for SWIFT messages. The SFMS messages are either uploaded
into Oracle FLEXCUBE as new LC contracts or trigger changes (events) to the existing LC
contracts. The message upload process takes one message at a time and applies a sequence of
logical steps to derive information required to derive the LC contract upload tables.
The messages that will be handled as part of STP and the operation that the system will perform
for each message are listed below:
Message Type
Description
Operation Performed
IFN 700
Issue of a
Documentary Credit
A New LC Contract will be created
IFN 710
Advice of a Third
Bank’s Documentary
Credit
A New LC Contract will be created
IFN 720
Transfer of a
Documentary Credit
A New LC Contract will be created
IFN 740
Authorisation to
Reimburse
A New LC Contract will be created
IFN 707
Amendment to a
Documentary Credit
Amendment (AMND) event will be triggered on the
existing LC contract
IFN 747
Amendment to an
Authorisation to
Amendment (AMND) event will be triggered on the
existing LC contract
17-26
Message Type
Description
Operation Performed
Reimburse
IFN 768
Acknowledgement of a
Guarantee Message
Acknowledgement Received (ACKB) event will be
triggered on the existing LC contract
IFN 730
Acknowledgement
Acknowledgement Received (ACKB) event will be
triggered on the existing LC contract
IFN 760
Guarantee
Guarantee Reference number LOV in LC Contract
online – Advices tab will list SFMS 760 also. System
will break the message and populate the same into
multiple FFT’s. User has to select the incoming
guarantee during creation.
17.3.1 Maintenances Required
To enable this processing, you need to:

Define preferences for the source code ‘INCOMINGSFMS’ in the ‘Source Code
Preferences Maintenance’ for the LC module.

Define preferences for a branch and message type combination in the ‘STP Preferences
Maintenance’ screen for the each of the SFMS message type
 Maintain a list of amendment fields in the ‘Amendment Maintenance’ screen for the
incoming message IFN 707

Maintain the FFTs UPLD_760A, UPLD_760B, UPLD_760C, UPLD_760D, UPLD_760E
under bills and collection module for the incoming messages IFN 760
 Maintain the Clearing Bank code in the ‘Branch Parameters Maintenance’ screen for
outgoing messages. This will be considered as the sender’s address for outgoing
messages.

Create a dedicated queue to handle the uploaded SFMS messages in the ‘Message
Queue Maintenance’ screen

Define an STP Rule in the ‘STP Rule Maintenance’ screen such that the SFMS
messages are routed to the queue created specifically for SFMS You can define the
conditions for the Rule you have created in the ‘Rule Maintenance’ screen, which you can
invoke by clicking the ‘Show Rule’ button in the ‘STP Rule Maintenance’ screen.

Map the message queue for a combination of Media, BIC/IFCS Code, Currency and
Message Type in the ‘Message Queue Mapping Maintenance’

Create mappings for a Product, Message Type, Queue and Branch combination

Maintain the intra-day batch ‘MSDAUTSF’ to process the incoming SFMS messages in
the ‘Batch EOD Function Inputs’ screen
Refer the following for more information on straight through processing of SFMS messages
17.3.2

The chapter ‘Straight Through Processing – An Overview’ in the ‘Funds Transfer’ User
Manual

The ‘Messaging System’ User Manual
STP Field Specifications for Incoming Messages
17-27
The fields in the LC contract corresponding to the tags in the incoming SFMS messages are
explained below:
17.3.2.1 IFN 700
This message results in the creation of a new LC contract.
Status
Field
Description
Content
and
Options
Derivation Logic
M
27
Sequence of total
1!n/1!n
This tag will denote the number of
701's present for this incoming
700. If there are multiple 701's
present then system will check if all
the required 701's are available in
the incoming browser. If not
available then STP of this contract
is stopped till all 701's reach the
incoming browser. If all 701's are
available then system performs the
STP taking data from the relavent
701's. System find the
corresponding 701's by matching
the Tag 20 of 701's with Tag 20 of
700 stored as Reference number
in the Incoming Browser.
M
40A
Form of documentary credit
24x
Mandatory
M
20
Documentary Credit number
16x
Source Ref in the LC
O
23
Reference to pre-advice
16x
Not Supported
O
31C
Date of issue
8!n
Issue date of the LC
M
31D
Date and place of expiry
8!n29x
Expiry Date and Expiry Place of
the contract.
Closure date is populated with the
sum of Expiry Date and Closure
days maintained at the product.
O
51a
Applicant Bank
A or D
Not Supported
M
50
Applicant
4*35x
Party Applicant
M
59
Beneficiary
[/34x]
4*35x
Party Beneficiary and CIF ID of the
LC Contract
M
32B
Currency Code, Amount
3!a15d
Contract Currency and Contract
amount is populated
O
39A
Percentage Credit amount
tolerance
2n/2n
Positive Tolerance and Negative
Tolerance is populated.
17-28
Status
Field
Description
Content
and
Options
Derivation Logic
O
39B
Maximum Credit amount
13x
Maximum Liab Amount is set to
Contract Amount
O
39C
Additional amounts covered
4*35x
"Additional Amounts covered" in
the contract.
M
41a
Available with ….. by …..
A or D
Credit Available with and
settlement method is populated in
the Contract.
O
42C
Drafts at …..
3*35x
Payment Details in the Contract
O
42a
Drawee
A or D
Payment Details in the Contract
O
42M
Mixed Payment details
4*35x
Payment Details in the Contract
O
42P
Deferred payment details
4*35x
Not Supported
O
43P
Partial shipments
1*35x
If the Tag value is "ALLOWED"
then partial shipment is set to Yes
otherwise No.
O
43T
Transhipment
1*35x
If the Tag value is "ALLOWED"
then Transhipment is set to Yes
otherwise No.
O
44A
Loading on
board/dispatch/taking in
charge at/from
1*65x
From Place in the contract.
O
44B
For transportation to ….
1*65x
To Place in the contract.
O
44C
Latest date of shipment
8!n
Latest Shipment Date in the
contract.
O
44D
Shipment period
6*65x
Not Supported
O
45A
Description of goods/services
100*65x
Goods Description is populated
with this tag value and Goods code
is set to UPLD_GOODS_1
O
46A
Documents required
100*65x
Clause Description is populated
with this tag value and Clause
code is set to CL_A_700_46.
Document Code and Document
description is hard coded to
UPLD_700_46 and "Upload Doc
for 700 for tag 46A"
17-29
Status
Field
Description
Content
and
Options
Derivation Logic
O
47A
Additional conditions
100*65x
This tag value is stored in the FFT
description for the hardcoded FFT
"UPLD_COND_1" for the message
"ADV_THIRD_BANK".
O
71B
Charges
6*35x
Charges from Beneficiary in the
Contract
O
48
Period for presentation
4*35x
Period for Presentation in the
contract.
M
49
Confirmation instructions
7!x
If the tag value is "CONFIRM" then
operation code is set as ANC and
May confirm is set to No. If the
operation code is "MAY ADD" then
the operation code is set to ADV
and May confirm is set to Yes
otherwise operation code is set to
ADV and May confirm is set to No.
O
53a
Reimbursing bank
A or D
If 53A is sent then system
validates if a valid BIC/IFSC
address is provided in this tag
value. System reads the address
maintained for this customer in
Message Address for media Mail
and store it in the parties for the
party type ATB. Other Addresses
is populated with the BIC/IFSC
Code along with the respective
media.
If 53B is sent then system checks if
there exists a record for this name
in the customer maintenance.
System reads the BIC/IFSC
address maintained for this
customer in the Message Address
maintenance for the media
SWIFT/SFMS and the same is
stored in the Other addresses table
O
78
Instructions to the
paying/accepting/negotiating
bank
12*65x
FFT "INSTRUCTION" for the
message type
"ADV_THIRD_BANK" is populated
with this tag value.
17-30
Status
Field
Description
Content
and
Options
Derivation Logic
O
57a
Advise Through' bank
A,B or D
If 57A is sent then system
validates if a valid BIC/IFSC
address is provided in this tag
value. System reads the address
maintained for this customer in
Message Address for media Mail
and store it in the parties for the
party type ATB. Other Addresses
is populated with the BIC/IFSC
Code along with the respective
media.
If 57B is sent then system checks if
there exists a record for this name
in the customer maintenance.
System reads the BIC/IFSC
address maintained for this
customer in the Message Address
maintenance for the media
SWIFT/SFMS and the same is
stored in the Other addresses table
O
72
Sender to receiver
information
6*35x
FFT "SND2RECINFO" for the
message type
"ADV_THIRD_BANK" is appended
with this tag value.
Remarks is populated with this tag
value
17.3.2.2 IFN 710
This message results in the creation of a new LC contract.
Status
Field
Description
Content
and
Options
Derivation Logic
M
27
Sequence of total
1!n/1!n
This tag will denote the number of
711's present for this incoming 710.
If there are multiple 711's present
then system will check if all the
required 711's are available in the
incoming browser. If not available
then STP of this contract is stopped
till all 711's reach the incoming
browser. If all 711's are available
then system performs the STP
taking data from the relavent 711's.
System find the corresponding
711's by matching the Tag 20 of
711's with Tag 20 of 710 stored as
Reference number in the Incoming
17-31
Status
Field
Description
Content
and
Options
Derivation Logic
Browser.
M
40B
Form of documentary credit
2*24x
If the Tag value is
IRREVOLCABLE/REVOCABLE and
TRASNFERABLE then Transferable
in LC Contract is set to Yes
otherwise No.
M
20
Sender's references
16x
Source Ref in the LC
M
21
Documentary Credit number
16x
No Action
O
23
Reference to Pre-advice
16x
No Action
M
31C
Date of issue
8!n
Issue date of the LC
M
31D
Date and place of expiry
8!n29x
Expiry Date and Expiry Place of the
contract.
Closure date is populated with the
sum of Expiry Date and Closure
days maintained at the product.
M
52a
Issuing bank
A or D
Party Issuing Bank details
O
51a
Applicant Bank
A or D
Party Applicant Bank details
M
50
Applicant
4*35x
Party Applicant
M
59
Beneficiary
[/34x]
4*35x
Party Beneficiary and CIF ID of the
LC Contract
M
32B
Currency Code, Amount
3!a15d
Contract Currency and Contract
amount is populated
O
39A
Percentage credit amount
tolerance
2n/2n
Positive Tolerance and Negative
Tolerance is populated.
17-32
Status
Field
Description
Content
and
Options
Derivation Logic
O
39B
Maximum credit amount
13x
Maximum Liab Amount is set to
Contract Amount
O
39C
Additional amounts covered
4*35x
"Additional Amounts covered" in the
contract.
M
41a
Available with …… by ……
A or D
Credit Available with and settlement
method is populated in the Contract.
O
42C
Drafts at ….
3*35x
Payment Details in the Contract
O
42a
Drawee
A or D
Payment Details in the Contract
O
42M
Mixed Payment details
4*35x
Payment Details in the Contract
O
42P
Deferred payment details
4*35x
Payment Details in the Contract
O
43P
Partial shipments
1*35x
If the Tag value is "ALLOWED" then
partial shipment is set to Yes
otherwise No.
O
43T
Transhipment
1*35x
If the Tag value is "ALLOWED" then
Transhipment is set to Yes
otherwise No.
O
44A
Loading on
board/dispatch/taking in
charge at /from
1*65x
From Place in the contract.
O
44B
For transportation to ….
1*65x
To Place in the contract.
O
44C
Latest date of shipment
8!n
Latest Shipment Date in the
contract.
O
44D
Shipment period
6*65x
Shipment Period in the contract.
O
45A
Description of
goods/services
100*65x
Goods Description is populated with
this tag value and Goods code is
set to UPLD_GOODS_1
O
46A
Documents received
100*65x
Clause Description is populated
with this tag value and Clause code
is set to CL_A_700_46. Document
Code and Document description is
hard coded to UPLD_700_46 and
"Upload Doc for 700 for tag 46A"
17-33
Status
Field
Description
Content
and
Options
Derivation Logic
O
47A
Additional conditions
100*65x
This tag value is stored in the FFT
description for the hardcoded FFT
"UPLD_COND_1" for the message
"ADV_THIRD_BANK".
O
71B
Charges
6*35x
Charges from Beneficiary in the
Contract
O
48
Period for presentation
4*35x
Period for Presentation in the
contract.
M
49
Confirmation instructions
7!x
If the tag value is "CONFIRM" then
operation code is set as ANC and
May confirm is set to No. If the
operation code is "MAY ADD" then
the operation code is set to ADV
and May confirm is set to Yes
otherwise operation code is set to
ADV and May confirm is set to No.
O
53a
Reimbursing bank
A or D
If 53A is sent then system validates
if a valid BIC/IFSC address is
provided in this tag value. System
reads the address maintained for
this customer in Message Address
for media Mail and store it in the
parties for the party type ATB.
Other Addresses is populated with
the BIC/IFSC Code along with the
respective media.
If 53B is sent then system checks if
there exists a record for this name
in the customer maintenance.
System reads the BIC/IFSC
address maintained for this
customer in the Message Address
maintenance for the media
SWIFT/SFMS and the same is
stored in the Other addresses table
O
78
Instructions to the
paying/accepting/negotiating
bank
12*65x
FFT "INSTRUCTION" for the
message type
"ADV_THIRD_BANK" is populated
with this tag value.
17-34
Status
Field
Description
Content
and
Options
Derivation Logic
O
57a
'Advise through' bank
A, B or
D
If 57A is sent then system validates
if a valid BIC/IFSC address is
provided in this tag value. System
reads the address maintained for
this customer in Message Address
for media Mail and store it in the
parties for the party type ATB.
Other Addresses is populated with
the BIC/IFSC Code along with the
respective media.
If 57B is sent then system checks if
there exists a record for this name
in the customer maintenance.
System reads the BIC/IFSC
address maintained for this
customer in the Message Address
maintenance for the media
SWIFT/SFMS and the same is
stored in the Other addresses table
O
72
Sender to receiver
information
6*35x
FFT "SND2RECINFO" for the
message type
"ADV_THIRD_BANK" is appended
with this tag value.
Remarks is populated with this tag
value
17.3.2.3 IFN 720
This message results in the creation of a new LC contract.
Status
Field
Description
Content
and
Options
Derivation Logic
M
27
Sequence of total
1!n/1!n
This tag will denote the number of
721's present for this incoming 720.
If there are multiple 721's present
then system will check if all the
required 721's are available in the
incoming browser. If not available
then STP of this contract is stopped
till all 721's reach the incoming
browser. If all 721's are available
then system performs the STP
taking data from the relavent 721's.
System find the corresponding
721's by matching the Tag 20 of
721's with Tag 20 of 720 stored as
Reference number in the Incoming
17-35
Status
Field
Description
Content
and
Options
Derivation Logic
Browser.
M
40B
Form of documentary credit
2*24x
If the Tag value is
IRREVOLCABLE/REVOCABLE and
TRASNFERABLE then Transferable
in LC Contract is set to Yes
otherwise No.
M
20
Transferring bank's
reference
16x
Source Ref in the LC
M
21
Documentary Credit number
16x
No Action
O
31C
Date of issue
8!n
Issue date of the LC
M
31D
Date and place of expiry
8!n29x
Expiry Date and Expiry Place of the
contract.
Closure date is populated with the
sum of Expiry Date and Closure
days maintained at the product.
O
52a
Issuing bank of the original
D/C
A or D
Party Issuing Bank details
M
50
First beneficiary
4*35x
Party Applicant
M
59
Second Beneficiary
[/34x]
4*35x
Party Beneficiary and CIF ID of the
LC Contract
M
32B
Currency Code, Amount
3!a15d
Contract Currency and Contract
amount is populated
O
39A
Percentage credit amount
tolerance
2n/2n
Positive Tolerance and Negative
Tolerance is populated.
O
39B
Maximum credit amount
13x
Maximum Liab Amount is set to
Contract Amount
17-36
Status
Field
Description
Content
and
Options
Derivation Logic
O
39C
Additional amounts covered
4*35x
"Additional Amounts covered" in the
contract.
M
41a
Available with …… by ……
A or D
Credit Available with and settlement
method is populated in the Contract.
O
42C
Drafts at ….
3*35x
Payment Details in the Contract
O
42a
Drawee
A or D
Payment Details in the Contract
O
42M
Mixed Payment details
4*35x
Payment Details in the Contract
O
42P
Deferred payment details
4*35x
Payment Details in the Contract
O
43P
Partial shipments
1*35x
If the Tag value is "ALLOWED" then
partial shipment is set to Yes
otherwise No.
O
43T
Transhipment
1*35x
If the Tag value is "ALLOWED" then
Transhipment is set to Yes
otherwise No.
O
44A
Loading on
board/dispatch/taking in
charge at /from
1*65x
From Place in the contract.
O
44B
For transportation to ….
1*65x
To Place in the contract.
O
44C
Latest date of shipment
8!n
Latest Shipment Date in the
contract.
O
44D
Shipment period
6*65x
Shipment Period in the contract.
O
45A
Description of
goods/services
100*65x
Goods Description is populated with
this tag value and Goods code is
set to UPLD_GOODS_1
O
46A
Documents received
100*65x
Clause Description is populated
with this tag value and Clause code
is set to CL_A_700_46. Document
Code and Document description is
hard coded to UPLD_700_46 and
"Upload Doc for 700 for tag 46A"
O
47A
Additional conditions
100*65x
This tag value is stored in the FFT
description for the hardcoded FFT
"UPLD_COND_1" for the message
"ADV_THIRD_BANK".
O
71B
Charges
6*35x
Charges from Beneficiary in the
17-37
Status
Field
Description
Content
and
Options
Derivation Logic
Contract
O
48
Period for presentation
4*35x
Period for Presentation in the
contract.
M
49
Confirmation instructions
7!x
If the tag value is "CONFIRM" then
operation code is set as ANC and
May confirm is set to No. If the
operation code is "MAY ADD" then
the operation code is set to ADV
and May confirm is set to Yes
otherwise operation code is set to
ADV and May confirm is set to No.
O
78
Instructions to the
paying/accepting/negotiating
bank
12*65x
FFT "INSTRUCTION" for the
message type
"ADV_THIRD_BANK" is populated
with this tag value.
O
57a
'Advise through' bank
A, B or
D
If 57A is sent then system validates
if a valid BIC/IFSC address is
provided in this tag value. System
reads the address maintained for
this customer in Message Address
for media Mail and store it in the
parties for the party type ATB.
Other Addresses is populated with
the BIC/IFSC Code along with the
respective media.
If 57B is sent then system checks if
there exists a record for this name
in the customer maintenance.
System reads the BIC/IFSC
address maintained for this
customer in the Message Address
maintenance for the media
SWIFT/SFMS and the same is
stored in the Other addresses table
O
72
Sender to receiver
information
6*35x
FFT "SND2RECINFO" for the
message type
"ADV_THIRD_BANK" is appended
with this tag value.
Remarks is populated with this tag
value
17.3.2.4 IFN 740
This message results in the creation of a new contract.
17-38
Status
Field
Description
Content
and
Options
Derivation Logic
M
20
Documentary
credit number
16x
Source Ref in the LC
O
25
Account
identification
35x
Account for ISB provided in the contract
O
31D
Date and place
of expiry
8!n29x
Expiry Date and Expiry Place of the contract.
Closure date is populated with the sum of
Expiry Date and Closure days maintained at
the product.
O
58a
Negotiating
bank
A or D
Party Advising Bank details
O
59
Beneficiary
[/34x]
4*35x
Party Beneficiary and CIF ID of the LC
Contract
M
32B
Credit Amount
3!a15d
Contract Currency and Contract amount is
populated
O
39A
Percentage
credit amount
tolerance
2n/2n
Positive Tolerance and Negative Tolerance is
populated.
O
39B
Maximum credit
amount
13x
Maximum Liab Amount is set to Contract
Amount
O
39C
Additional
amounts
covered
4*35x
"Additional Amounts covered" in the contract.
M
41a
Available with
…… by ……
A or D
Credit Available with and settlement method is
populated in the Contract. If Credit Available
with is not ANY BANK then system tries to
resolve the party details for the Party CLB with
the data present in 41D.
O
42C
Drafts at ….
3*35x
Payment Details in the Contract
O
42a
Drawee
A or D
Party Applicant Details
O
42M
Mixed Payment
details
4*35x
Payment Details in the Contract
O
42P
Deferred
payment details
4*35x
Payment Details in the Contract
O
71A
Reimbursing
Bank’s charges
3!a
If the Tag value is CLM then reimbursment
type is set to C otherwise O
17-39
Status
Field
Description
Content
and
Options
Derivation Logic
O
71B
Other charges
6*35x
Charges from Beneficiary in the Contract
O
72
Sender to
receiver
information
6*35x
FFT "SND2RECINFO" for the message type
"LC_ACK_ADVICE" is appended with this tag
value.
Remarks is populated with this tag value
17.3.2.5 IFN 707
This message will result in the amendment of an existing LC contract.
Status
Field
Description
Content
and
Options
Derivation Logic
M
20
Sender's reference
16x
Source Ref in the LC
M
21
Receiver's reference
16x
This tag will be used to pickup the
matching LC Contract for
Amendment.
O
23
Issuing bank's reference
16x
Not Supported
O
52a
Issuing bank
A or D
No Action
O
31C
Date of issue
8!n
No Action
O
30
Date of amendment
8!n
Amendment Date
O
26E
Number of Amendment
2n
Amendment Number in the
Contract
M
59
Beneficiary (before this
amendment)
[/34x]
4*35x
Party Beneficiary and CIF ID of
the LC Contract
O
31E
New date of expiry
8!n
New Expiry Date of the LC
Contract
O
32B
Increase of documentary
credit amount
3!a15d
System will validate if the
Increase Amount + existing
Contract amount is equal to 34B.
O
33B
Decrease of documentary
credit amount
3!a15d
System will validate if the
Increase Amount - existing
Contract amount is equal to 34B.
O
34B
New documentary credit
amount after amendment
3!a15d
New Contract Currency and
Contract amount
17-40
Status
Field
Description
Content
and
Options
Derivation Logic
O
39A
Percentage credit amount
tolerance
2n/2n
Positive Tolerance and Negative
Tolerance is populated.
O
39B
Maximum credit amount
13x
If 39B is sent then positive and
negative tolerance is set to 0
O
39C
Additional amounts covered
4*35x
Additional Amount covered in the
contract
O
44A
Loading on
board/dispatch/taking in
charge at /from
1*65x
From Place in the LC Contract
O
44B
For transportation to ….
1*65x
To Place in the LC Contract
O
44C
Latest date of shipment
8!n
Latest Shipment Date in the LC
Contract
O
44D
Shipment period
6*65x
Shipment Period in the contract.
O
79
Narrative
35*50x
No Action
O
72
Sender to receiver
information
6*35x
FFT "SND2RECINFO" for the
message type "AMD_EXP_CR" is
populated with this tag value.
17.3.2.6 IFN 747
This message will result in the amendment of an existing LC contract.
Status
Field
Description
Content
and
Options
Derivation Logic
M
20
Documentary Credit
number
16x
Source Ref in the LC
O
21
Reimbursing Bank’s
reference
16x
This tag will be used to pickup the
matching LC Contract for Amendment.
M
30
Date of the original
authorisation to
reimburse
8!n
Amendment Date of the LC Contract
O
31E
New Date of expiry
8!n
Not Supported
O
32B
Increase of
documentary credit
amount
3!a15d
System will validate if the Increase
Amount + existing Contract amount is
equal to 34B.
17-41
Status
Field
Description
Content
and
Options
Derivation Logic
O
33B
Decrease of
documentary credit
amount
3!a15d
System will validate if the Increase
Amount - existing Contract amount is
equal to 34B.
O
34B
New documentary
credit amount after
amendment
3!a15d
New Contract Currency and Contract
amount
O
39A
Percentage Credit
amount tolerance
2n/2n
Positive Tolerance and Negative
Tolerance is populated.
O
39B
Maximum Credit
Amount
13x
If 39B is sent then positive and
negative tolerance is set to 0
O
39C
Additional amounts
covered
4*35x
Additional Amount covered in the
contract
O
72
Sender to receiver
information
6*35x
FFT "SND2RECINFO" for the
message type "LC_ACK_ADVICE" is
populated with this tag value.
O
77A
Narrative
20*35x
FFT "NARRATIVE" for the message
type "LC_ACK_ADVICE" is populated
with this tag value.
17.3.2.7 IFN 768
This message will result in the triggering of the ‘ACKB’ (Acknowledgement Received) event for an
existing LC contract.
Status
Field
Description
Content and
Options
Derivation Logic
M
20
Transaction
Reference number
16x
Source Ref in the LC
M
21
Related Reference
16x
LC Contract/User Reference Number
O
25
Account Identification
35x
Account for ISB provided in the
contract
M
30
Date of Message
being Acknowledged
8!n
Issuing Bank Date and
Acknowledgement Date is updated
with this tag value
O
32a
Amount of charges
B or D
Charge Amount and Currency from
ISB in the LC Contract
O
57a
Account with bank
A, B or D
No Action
17-42
Status
Field
Description
Content and
Options
Derivation Logic
O
71B
Details of Charges
6*35x
Charge from Issuing Bank in the LC
Contract
O
72
Sender to receiver
information
6*35x
No Action
17.3.2.8 IFN 730
This message will result in the triggering of the ‘ACKB’ (Acknowledgement Received) event for an
existing LC contract.
Status
Field
Description
Content and
Options
Derivation Logic
M
20
Sender’s reference
16x
Source Ref in the LC
M
21
Receiver’s reference
16x
LC Contract/User Reference Number
O
25
Account Identification
35x
Account for ISB provided in the
contract
M
30
Date of message
being acknowledged
8!n
Issuing Bank Date and
Acknowledgement Date is updated
with this tag value
O
32a
Amount of charges
B or D
Charge Amount and Currency from
ISB in the LC Contract
O
57a
Account with Bank
A or D
No Action
O
71B
Charges
6*35x
Charge from Issuing Bank in the LC
Contract
O
72
Sender to Receiver
information
6*35x
No Action
17.3.3 SFMS Header Block Details
All SFMS messages are required to have a header block. The structure of the block is given
below:
{A:
Block A begin Identifier
B09
Bank Application Identifier- Bank Application Identifier will be picked
up from cstb_param for the param name BANK_IDENTIFIER.
F01
Message Identifier
O
Input/output Identifier ( either I or O)
17-43
999
Message type
XXX
Sub Message type ( For IFN 298C01, this field should be C01, for
IFN100 Message, this field should be XXX)
SBIN0001001
Sender IFSC Code
SBIN0001002
End receiver IFSC Code
2
Delivery notification flag
2
Open Notification flag
2
Non-delivery Warning flag
000
Obsolescence Period
CHODISP092890001
Message User Reference (MUR)
2
Possible Duplicate flag
XXX
Service Identifier
20030909
Originating date
1020
Originating time
2
Testing and training flag
CHONE0209
Sequence Number (9)
XXXXXXXXX
Filler(9)
XXXXXXXXXXXXXXXX
Unique Transaction Reference.
99
Priority Flag
}
Block A end Identifier
Note the following:
 Delivery Notification Flag will be set to 2 (No)
 Open Notification Flag will be set to 2 (No)
 Non-Delivery Warning Flag will be set to 2 (No)
 Obsolescence Period will be set to ‘000’
 Possible Duplicate Emission will be set to 2 (No)
 Service Identifier will be set to ‘XXX’
 Testing and Training Flag will be set to 2 (No)
 Filler will be set to ‘XXXXXXXXX’
 UTR Number will be set to ‘XXXXXXXXXXXXXXXX’
17-44
Priority Flag will be set to ‘99’
17-45
17. Annexure D - Letters of Credit Glossary
17.1 List of Important Terms
The following terms occur in this manual.
Letter of Credit (LC)
This is an arrangement that is irrevocable and thereby constitutes a definite undertaking of the
issuing bank to honour a complying presentation.
Clean or Documentary LC
Clean Letters of Credit require no documents for processing, as opposed to Documentary Letters
of Credit, which require documents.
Applicant
It means the party at whose request the LC is issued.
Beneficiary
It means the party in whose favour a LC is issued.
Import LC
This is an incoming Letter of Credit that involves an applicant who is a customer of the processing
bank.
Export LC
This is an outgoing Letter of Credit that involves the beneficiary who is a customer of the
processing bank.
Guarantees
Guarantee is a form of comfort, issued by the bank to its client, in cases where the bank is not
very comfortable with the credit rating of the customer. Unlike a letter of credit, in which the bank
has to pay on maturity, the amount is payable only on invocation of guarantee by the creditor.
Shipping Guarantee
This is a guarantee extended during the period in which the goods are under transit.
Standby Guarantee
This is a guarantee for performance of a contract. These are immediately realizable whenever
the beneficiary presents a declaration to the issuing bank that the named party has not fulfilled
the terms of contract.
Red Clause LC
This is an LC, the terms of which allow the confirming bank to make advance payments to the
beneficiary before documents are received, towards anticipatory drawings on the part of the
beneficiary.
17-1
Transferable LC
This is an LC, the terms of which allow transference of the LC to other buyers, sellers or parties.
Non-transferable LC
This is an LC, the terms of which disallow transference of the LC to other buyers, sellers or
parties.
Revolving LC
This is an LC, the terms of which allow the restoration of the original LC amount (or the tenor)
after its full settlement, without any further changes to any of the other terms. A revolving LC
could be either revocable or irrevocable.
Non-Revolving LC
This is an LC, the terms of which disallow the restoration of the original LC amount (or the tenor)
after its full settlement. A non-revolving LC could be either revocable or irrevocable.
Sight LC
This is an LC that involves immediate payment to the seller by the negotiating bank. The
payment is later reimbursed by the issuing bank.
Usance LC
This is an LC that involves payment to the seller at maturity i.e., (at a future date). The drawee
bank obligates itself to make the payment.
Open-ended LC
This is an LC that has no definite maturity or expiry date.
Issuing Bank
This is the bank at which a letter of credit is first initiated by the buyer or importer. It is the bank
at which the buyer account is debited for the trade. The advising bank sends the documents for
the trade to the issuing bank, from where they are released to the buyer.
Advising Bank
This is the bank in the LC chain which advises by sending a copy of the LC to the beneficiary.
The advising bank also sometimes acts as the bank will receive and negotiate the documents
from the beneficiary which the seller or exporter involved in a letter of credit receives payment
towards the trade. The issuing bank sends the letter of credit to the advising bank. The
documents regarding the trade are sent to` the advising bank by the seller. The advising bank
then sends the documents to the issuing bank.
Confirming Bank
This is the bank that ratifies the trade involving a letter of credit, to the advising bank. Tracers
(messages) requesting letters of confirmation of the trade are sent to the confirming bank.
Confirmation
This is the adding of a separate undertaking by a bank to an LC in addition to that of the bank
issuing it. All LCs lacking specific confirmation notices from any additional banks are considered
unconfirmed.
17-2
Document Code
This is a unique identifier in Oracle FLEXCUBE for a standard paper, file or record that is required
and used in most countries for the processing of a documentary letter of credit.
Document Type
This is a group of similar document codes in Oracle FLEXCUBE. The document type identifies
the nature of all document codes under it.
Clause Code
This is a unique identifier in Oracle FLEXCUBE for a statement that goes along with documents
sent under a letter of credit.
Clause Type
This is a group of similar clause codes in Oracle FLEXCUBE. The clause type identifies the
nature of all clause codes under it.
Goods Code
This is a unique identifier in Oracle FLEXCUBE for the standard stock or commodity that is traded
under a letter of credit.
Text Code
This is a unique identifier in Oracle FLEXCUBE for a set of instructions and statements (the free
format texts) pertaining to the processing of a letter of credit. Standard free format texts do
appear on correspondence and messages sent to the parties involving the letter of credit.
Product
This is an identifier in Oracle FLEXCUBE for any type of service that a bank offers its customers.
A set of attributes and preferences are maintained for the product, which will apply to the
processing of any contracts, transactions or deals involving the product (service).
Product Group
This is a group under which a product is logically classified, under which logically similar products
are placed together.
Product Remarks
It can be descriptive text about a product.
Product Slogan
It can be text or phrase that could be used as a declaration or an announcement of the product,
to customers.
Accounting Head
This is the specific GL created in any module of the Oracle FLEXCUBE system into which the
accounting entry would be posted.
Accounting Role
The general ledgers and sub-ledgers maintained as a chart of accounts in Oracle FLEXCUBE
may be classified logically under different categories, each of which is called an accounting role.
17-3
Amount Tag
This is the amount entry that is passed into a general ledger/sub-ledger in the chart of accounts
for each transaction.
Netting
It amounts to summing of two or more accounting entries passed to an account for the same
event, so as to arrive at a net figure for posting.
Event
This is the occurrence or process that initiates the generation of an advice during the processing
of a contract in Oracle FLEXCUBE.
Transaction Code
This is an identifier for each accounting entry that describes the nature (debit or credit) of the
entry.
Rekey Options
They comprise the fields that are to be keyed in by an authorizer of a transaction, for the purpose
of cross-checking, when the transaction is being authorized. Complete details of the transaction
will only be displayed when the authorizer re-keys the values for these fields.
Positive Tolerance
It indicates the increment, expressed as a percentage that must be made to the amount of a letter
of credit, to arrive at the Maximum LC Amount.
Negative Tolerance
It indicates the reduction, expressed as a percentage that must be made to the amount of a letter
of credit, to arrive at the Minimum LC Amount.
Tenor
This is the period during which a letter of credit is viable or effective.
Commission Calculation Type
This is the basis upon which commission applicable on a letter of credit is to be computed. It can
be computed on a periodic or non-periodic basis.
Commission Collection Type
This is the manner in which commission applicable on a letter of credit can be collected.
Commission could be collected either in advance or as arrears.
Rate Override Limit
This is the limit within which exchange rates (for an LC) are allowed to be changed over and
above the default value, without requiring an override. If the rate variance exceeds this limit, an
override is necessary for the changed rate to be accepted.
17-4
Rate Stop Limit
This is the limit above which a change in exchange rates (for an LC) over and above the default
value cannot be specified. If the rate variance exceeds this limit, the changed rate will not be
accepted.
Tracer Code
This is a unique identifier for a tracer in FLEXCUBE. A tracer is a reminder or intimation,
generated by FLEXCUBE, to be sent to the parties involved in a letter of credit.
Auto Closure
It refers to closing an LC automatically after its expiry date. Usually, the date of automatic closure
is specified for an LC. By default, the date for automatic closure is taken to be 30 days after the
expiry date.
Automatic Reinstatement
This is the automatic restoration of the amount (value) of a revolving letter of credit for which the
unutilized value is zero, in FLEXCUBE. When the Beginning of Day (BOD) process is run on any
given business day, any LC’s’ for which automatic reinstatement of value has been specified are
restored in value, provided the un-availed portion of the amount is zero.
Cumulative (Revolving in time)
This is an attribute of a revolving letter of credit, according to which, the LC amount and
Maximum Liability Amount is reinstated or reset based on the frequency specified for such
reinstatement.
Revolves in Value
This refers to an attribute of a revolving letter of credit, according to which, the LC amount is
reinstated or reset at the point when the availability under the LC is reduced to zero, due to an
availment.
Credit Type
This indicates the type of credit for which the LC is being processed, viz., Straight or Negotiable.
Credit Mode
This indicates the mode of payment through which the LC will be settled - Sight, Acceptance,
Negotiation or Deferred.
Media Type
This is the medium used to send advices to each of the parties involved in a letter of credit.
Partial Shipment
This indicates transportation through shipping, in part, or of a portion of merchandise under an
LC. Partial shipment is allowed only if permitted for the LC.
Trans-shipment
This indicates transportation of merchandise under an LC, by shipping across countries. Transshipment is allowed only if permitted for the LC.
17-5
Reference Number/Account
An LC can be linked to a deposit or a customer account. The reference number identifies the
deposit that the LC is linked to, and the account identifies the customer account.
Linked Amount
This is the portion of the contract amount of a letter of credit contract that is linked to a deposit or
a customer account.
Availment Type
This indicates the nature of any availment under an LC. An availment could be a payment, an
acceptance, or negotiation.
Commission Collection
This indicates the collection of commission applicable on an LC. Commission may be collected
by the issuing bank or the advising bank, for an LC, or against amendments to an LC.
Commission Calculation
This is the computation of commission applicable on a letter of credit.
Limit Tenor Calculation
This is the limit within which the tenor of a tenor-based letter of credit can be set.
Process Till
This parameter indicates how automatic events falling due on holidays will be processed. If the
specification is ‘System Date’, it indicates that all the processing of events will be done till the
system date only. If the specification is ‘Working Day – 1’, all automatic events falling due on the
holiday will be processed by the batch process as part of the End of Day processes on the last
working day before the holiday.
Accrual Entries Level
This refers to the level at which commission accrual entries for letters of credit must be passed,
by the automatic commission accrual process. Two levels are possible – product-level, indicating
that a single entry for all the LCs for which commission was accrued automatically will be passed;
or contract level, wherein accrual entries will be passed for each of the LCs for which commission
was accrued.
Amendment
An amendment is an advice by the issuing bank of any proposed change to the terms and
conditions of a LC. Any term of an LC can be changed or deleted, or new terms can be
introduced, provided the change is acceptable to all parties. The beneficiary and any confirming
bank may choose to accept or reject any amendment generated by the applicant. Under UCP 600
amendment confirmation must be communicated.
Negotiating Bank
This is the bank other than the opening bank authorized within the LC terms to give value for
presentation of conforming documents against a LC. This bank may be the advising or confirming
bank.
17-6
Latest shipment date
This indicates the latest (last) date that may appear as the shipment or on-board date on any
transport documents required by the LC. Unlike expiry dates, latest shipment dates do not extend
because of holidays.
Straight LC
This refers to the LC payable only at the opening bank or a bank specified within the credit.
Transhipment
Transhipment means unloading from one means of transport and reloading to another means of
transport during the carriage from the place of shipment to the place of final destination stated in
the credit.
Partial Shipment
This is a portion of less than the total quantity of an order. An LC must permit partial shipments
otherwise the beneficiary has to ship the full value of the LC in a single shipment.
INCO Terms
INCO terms refer to a set of 13 international standard trade terms. They allow the seller and
buyer to designate a point at which costs and risks of transport are precisely divided between
them.
Draft
This is a financial instrument indicating debt by one party (the drawee who is responsible for
payment) to another (the drawer to whom payment is due). Drafts may be drawn at sight for
immediate payment or after a certain number of days.
17-7
Letters of Credit
[July] [2014]
Version 11.5.0.0.0
Oracle Financial Services Software Limited
Oracle Park
Off Western Express Highway
Goregaon (East)
Mumbai, Maharashtra 400 063
India
Worldwide Inquiries:
Phone: +91 22 6718 3000
Fax:+91 22 6718 3001
www.oracle.com/financialservices/
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