5. Processing Islamic Bills

5.1 Introduction

A contract is an instruction, wherein, a customer (drawer) approaches your bank to purchase, negotiate, discount, or send for collection, a financial instrument called a bill. This written instrument is an instruction instructing the drawee of the bill to pay a certain sum of money in favor of your bank or at the order of your bank.

Such an instruction involves a sequence of events, but is treated as one contract in Oracle FLEXCUBE.

A Bills Contract would, therefore, require information on:

• Who is the Drawer of the bill?
• Who is the Drawee of the bill?
• Is the bill drawn under an LC?
• Is it a Sight or Usance bill?
• The operation that your branch is performing on the bill
• The amount for which the bill is drawn and the currency in which it is expressed
• Details of the parties involved in the bill
• Details of the collecting bank (for export bill) or the remitting bank (for import bills)
• Details of the merchandise that was traded
• The documents that should accompany the bill
• Specifications for the transportation of the consignment
• The Insurance Company and the Policy Number

You have defined products to group together or categorize bills, which share broad similarities. Under each product that you have defined, you can enter specific bills, based on the needs of your customers. Each of these will constitute a contract. While products provide a general framework and serve to classify or categorize bills, contracts are customer specific.

By default, a bill inherits all 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 a bill involving a product.

This chapter contains the following sections

• Section 5.2, "Invoking the Islamic BC Contract Detailed Screen"
• Section 5.3, "Details of a Bill"
• Section 5.4, "Messages"
• Section 5.5, "Remarks"
• Section 5.6, "Common Group Message"
• Section 5.7, "Amend the Bill Amount"

5.2 Invoking the Islamic BC Contract Detailed Screen

You can invoke the ‘Islamic Bills and Collections Contract Detailed’ screen by typing ‘IBDTRONL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button. All the operations for which you have access rights under Islamic Bills & Collections will be displayed. Select ‘New’ from the Actions menu in the Application tool bar or click new icon. The ‘Islamic Bills and Collections Contract Detailed’ screen with no values in the fields is displayed.

If you are calling a contract that has already been entered, select Summary under Contract Input. 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.

Through the screens that follow in this section, you can process all type of bills - Import and Export (both domestic and international).

You can choose to enter the details of a contract either by:

• Copying the details, from an existing contract and changing only those details that are different for the contract, you are entering
• Using your keyboard and the option lists that are available at the various fields, to enter the details of the bill afresh

To facilitate quick input, you only need to enter the product code. Based on the product code you choose, many of the fields will be defaulted. You can over write these defaults to suit your requirement. You can also add further, which are specific to the bill like the bill amount.

Acknowledgement Reference Number

Specify the acknowledgement reference number. Alternatively, you can select the reference number from the option list. The list displays all the acknowledgement reference numbers and type of registration maintained at registration screen which are authorized and unprocessed.

Note

System will update the status of registration as ‘Processed’ and contract reference no at registration screen, if acknowledgement reference number is captured at contract screen and (new) contract is created.

Product Code

Enter the code of the product to which you want to link the contract. You can select an authorized product code from the adjoining option list. The contract will inherit all the attributes of the product you have selected.

Product Description

This is a description of the product code that you have selected.

Contract Reference

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.

User Reference

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. However, the number, thus generated will be non-editable.

Note

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.

Fund Id

Select the fund id from the adjoining option list. The system defaults the value of Default Mudarabah Fund as fund id.

Operation

The operations that you can perform on a bill are determined by the type of bill you are processing. The operation that you perform on a bill, also determines 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 a bill has been listed below:

Incoming (International and domestic)	Outgoing (International and domestic)
Advance	Negotiation
Payment	Payment
Discounting	Discounting
Collection	Collection
Acceptance	Acceptance
	Purchase

The ‘Islamic Bills and Collections Contract Detailed’ screen is designed to contain 11 tabs along the lines of which, you can enter details of the contract. The 11 tabs are:

Main	Click on this tab to enter the essential details of the bill you are pro­cessing.
Details	In this screen, you can enter the fields that provide detailed informa­tion about the contract.
Additional	In this screen, you can provide additional information on the contract.
Parties	In the screen that corresponds to this tab, you can enter details of all the parties involved in the bill. This screen, along with its fields, has been detailed under the head ‘Entering Party Details’.
Document	In the screen corresponding to this tab, you can enter details of the documents required under an Islamic bill and the clauses that should accompany the documents. You can also specify details, of the mer­chandise that was traded and the shipping instructions based on which, the goods were transported.
Exception	Click on this tab to enter details of the exception tracers that should be generated for the exceptions that occur while processing the bill.
Discrepancies	In the screen that corresponds to this tab, you can enter details of the discrepancies that occur while processing the bill. The screen also captures details of the tracers that should be gener­ated for Reserve exceptions.
Rollover	Click on this tab to maintain rollover details for the bill.
Drafts	Click on this tab to view the components that make up the Bill Amount.
Insurance	Click on this tab to associate the appropriate Insurance Company with the Bill contract.
Invoice	Click this tab to define the invoice margin that should be withheld whenever an invoice is raised against a discounted bill.
Packing Credit	Click on this tab to maintain the packing credit details.
Purchase Details	Click on this tab to maintain the purchase details.
Multi Tenor	Click on this tab to maintain the multi tenor details.

On the ‘Islamic BC - Contract Input’ screen, there is also a horizontal toolbar. The links on this toolbar enable you to invoke a number of functions that are vital to the processing of a bill. These links have been briefly described below:

Events	Click this link to view details of the events, accounting entries and Messages generated for each event in the lifecycle of a bill.
Advices/FFT	In the screen corresponding to this link, you can view, suppress and prioritize the advices that are to be generated for a contract. You can also specify the FFTs and Instructions that should accom­pany the advices generated for the bill.
Settlement	This invokes the Settlement screen. Based on the details that you enter in the settlement screens, the bill will be settled. The details of these screens have been discussed in the Settlements manual.
Split Settlements	Click on this link to specify split settlement details of the bill.
Collateral	In the screen that corresponds with this link, you can reduce the cash offered as collateral for the LC to which the Bill is associated.
Charges	Click thislink to invoke the Contract Charge Details screen. The Charges and Fees manual details the entire procedure of applying charges to a bill.
Tax	This link invokes the Tax services. On invoking this function you can define a tax scheme, the rule details and the amount details of the contract. The Processing Tax manual details the entire procedure of 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 a bill’.
Import License	Click this link to capture import license details,
MIS	Click this link to define MIS details for the bill.
Finance Preference	Click on this link to invoke the Finance Preference screen. You can maintain the details of the Finance.
Drawer/Drawee IC	Click this link to invoke the ‘Drawer/Drawee Profit and Charges’ screen. You can define the Profit and charge components at the time of initiation of contract.
Brokerage	Click this link to specify the details of the broker and brokerage.
Linkage Details	Clicking this link invokes the Contract Linkages screen. Here, you can link the bill to funds available in an account or deposit.
FX Linkage	This link invokes a screen in which you can link a bill involving a spe­cific counterparty with FX deals involving the same counterparty.
Fields	Click this link to enter values for custom fields associated with the bill.
Effective Profit Rate	Click on this link to invoke the Commission and Charges Transfer Screen.
Profit Dates	Click on this link to capture forfeiting profit computation dates.
Finance Accounts	Click on this link to preview the linked finance details.
Profit	This link invokes the Profit and Charges or Fees (ICCF) service. The Processing Profit manual deals with the application of profit on a bill.
Message Preview	Click this link to view the messages or advices generated for the con­tract.
Charges/Commission Transfer	Click this link to invoke the ‘Charges/Commission Transfer’ screen.
All Messages	Click this link to view all messages associated to contract.
Remarks	Click this link to invoke the ‘History of Remarks’ screen.
Common Group Message	Click this link to invoke the common group message screen.

Enter valid inputs into all the mandatory fields; or to save the contract. The contract can be saved by either clicking the save icon in the toolbar or selecting Save from the ‘Actions’ menu.

On saving the contract, 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 contract that you have entered should be authorized by a user, bearing a different login Id, before the EOD is run. Once the contract is authorized, the ID of the user who authorized the contract will be displayed in the ‘Auth By’ field.

While authorizing the contract, you can view the values that were modified in a specific version of a bills contract, in the Change Log screen.

Click on the ‘Exit’ button to go back to the Application Browser.

5.3 Details of a Bill

This section contains the following topics

• Section 5.3.1, "Entering Details of a Bill"
• Section 5.3.2, "Main Tab"
• Section 5.3.3, "Details Tab"
• Section 5.3.4, "Additional Tab"
• Section 5.3.5, "Parties Tab"
• Section 5.3.6, "Documents Tab"
• Section 5.3.7, "Exception Tab"
• Section 5.3.8, "Discrepancies Tab"
• Section 5.3.9, "Rollover Tab"
• Section 5.3.10, "Viewing Rollover Details of the Original Bill Contract"
• Section 5.3.11, "Draft Tab"
• Section 5.3.12, "Insurance Tab"
• Section 5.3.13, "Invoice Tab"
• Section 5.3.14, "Packing Credit Tab"
• Section 5.3.15, "Purchase Details Tab"
• Section 5.3.16, "Multi Tenor Tab"
• Section 5.3.17, "Reversing Islamic BC"
• Section 5.3.18, "Viewing Event Details"
• Section 5.3.19, "Reversing"
• Section 5.3.20, "Specifying the Settlement Details"
• Section 5.3.21, "Capturing Split Settlement Details for a Bill"
• Section 5.3.22, "Reducing of the LC Cash Collateral"
• Section 5.3.23, "Viewing Profit Details"
• Section 5.3.24, "Viewing Charge Details"
• Section 5.3.25, "Specifying the Tax Details"
• Section 5.3.26, "Specifying the MIS Details"
• Section 5.3.27, "Utilizing Import Licenses"
• Section 5.3.28, "Maintaining Preferences for Finance"
• Section 5.3.29, ", Maintaining Charge and Profit Components"
• Section 5.3.30, "Capturing Brokerage Details"
• Section 5.3.31, "Linking contracts to accounts and deposits"
• Section 5.3.32, "Linking a Bill to an FX Deal"
• Section 5.3.33, "Specifying the Field Details"
• Section 5.3.34, "Viewing the Effective Profit Rate Details for a Bill"
• Section 5.3.35, "Viewing Profit Dates"
• Section 5.3.36, "Maintaining Finance Accounts"
• Section 5.3.37, "Transferring Commission and Charges"

5.3.1 Entering Details of a Bill

While defining a product, you have already defined a broad outline that will be applicable to all bills involving the product. However, while processing a bill involving a product, you need to enter information specific, to the bill you want to process. This information is captured through the ‘Islamic Bills and Collections Contract Detailed’ screen.

5.3.2 Main Tab

Click on the ‘Main’ tab titled to capture the essential details of the bill.

Customer Details

The bills that you process can be raised against an Islamic LC drawn at an earlier date by another bank or by your bank itself, or the bill might have come to you for collection.

LC Not Advised

Check this box if LC is not advised for a bill by the negotiating bank.

LC Customer

Specify the customer in whose name the LC was drawn.

Specify the ‘LC Customer’ for which you need to maintain. Alternatively, you can select ‘Counterparty’ from the adjoining option list also.

Note

BIC Code appears next to the ‘Counterparty’ only if the BIC Code is mapped with that Cus­tomer Number. If the BIC code is not mapped with that Customer Number then the BIC Code will not appear next to the ‘Counterparty’ in the adjoining list.

LC Customer Name

Specify the LC customer name.

LC Reference

If the export or import bill is under an LC that was advised or issued by your bank, you can enter the Reference number assigned to the LC, by your bank. The option list displays all the available LC contract reference numbers along with the respective user reference numbers.

If the LC module of Oracle FLEXCUBE has been installed at your bank, you can enter the contract reference number assigned by the system to the LC. In which case the following should be true of the LC:

• The status of the LC should be open
• It should be authorized
• The amount for which the bill is raised should be available under the LC

Note

If the bill amount that you specify is greater than the amount available under the LC to which it is associated, you will not be allowed to proceed with the processing of the bill.

Multiple Bills under Same LC

You can book more than one bill under LC, even if the previous bills under the same LC are unauthorized.

When a bill is booked under LC and if any unauthorized bills are available under the same LC with SG linkage, then the system displays an error message. When Bill with SG linkage is not authorized, then no further bill under same LC will be booked until the bill with SG linkage is authorized. Cancellation of SG - CASG, Cancellation of LC – CANC and Availment – AVAL will be triggered during bill authorization.

When a bill is booked under LC, contingent entries are posted from bills. However, contingent entries posted in LC will get released only during authorization of the bills since AVAL event in LC will be fired during authorization.

If a BC is booked under LC when the previous BC is in unauthorized status, then while booking a new BC under the same LC, the amount is displayed in BCDTRONL after deducting the amount of the first BC. In LCDTRONL the LC outstanding amount will be displayed as the full amount itself.

During booking the bill under LC, Transfer Collateral from LC is selected, then collateral is transferred from LC to BC but accounting entries for collateral transfer at BC will happen in INIT event during save of the bill and accounting entries for collateral transfer at LC will happen in AVAL event when the bill is authorized.

Customer ID

In the Contract screen, you can capture details of the party who is your customer. The details of the other parties involved in the bill are captured in the parties' screen.

Specify the ‘Customer ID’ for which you need to maintain. Alternatively, you can select ‘Customer No’ from the adjoining option list also.

Note

BIC Code appears next to the ‘Customer No’ only if the BIC Code is mapped to that Cus­tomer Number. If the BIC Code is not mapped with that ‘Customer Number’, then the BIC Code will not appear next to the ‘Customer No’ in the adjoining option list.

Customer Name

The system displays the name of the customer.

Party Type

Specify the Party Type of the customer. In the case of an Import bill, you should specify details of the Drawee of the bill. If the Drawee is a customer of your bank you should specify the customer reference, assigned to the customer, in the Customer Information File (CIF) of the Core Services module of Oracle FLEXCUBE. The other details of the customer will be automatically picked up.

If you are processing an Export bill, you should specify details of the Drawer of the bill. If the drawer is a customer of your bank, you should specify the customer reference assigned to the customer, in the Customer Information File (CIF) of the Core Services module of Oracle FLEXCUBE. The other details of the customer will be automatically picked up.

Collection Reference

If you are entering the details of a bill that was registered earlier, you should indicate the reference number assigned to the collection, when it was registered. All the details that you specified for the collection, during registration will be defaulted to the ‘Contract’ screen.

For example, a customer of your bank has requested you to collect a sum of money due to him under a bill. You have registered the bill and sent it for collection. The reference number assigned to the bill is - 000COB7993630007.

Bill Details

Currency

Specify the currency in which the bill is drawn.

Amount

Specify the amount for which the bill is drawn.

Amount in Local Currency

System displays the amount for which the bill is drawn, in terms of the local currency.

Outstanding Balance

The outstanding amount which is the amount that is yet to be liquidated under the bill is automatically displayed. In the case of a collection it is computed as follows:

Outstanding Amount = Bill Amount - Liquidation Amount

Rebate Amount

Specify the rebate amount for the reduction of bill amount. You can enter the rebate amount only when the mode is Unlock and the stage is Final.

Transaction Details

In this section, specify the following details:

Base Date Code

The system displays the date by which the tenor specified for the bill becomes effective.

Base Date Description

Enter a description for the Base Date.

Base Date

The base date is the date from which, the tenor specified for the bill becomes effective. The base date is used to calculate, the maturity date of the bill. In effect the tenor of the bill will begin from this date.

Note

When you accept an Inward Bill of Usance without specifying the Base Date, an Accept­ance Advice in an MT 499 format will be generated. When you enter the Base Date for the bill, the Acceptance Advice will be generated in an MT 412 format.

Tenor Days

Usance bills are generally associated with a tenor. The tenor of a bill is always expressed in days. The tenor that you specify for a bill should be within the minimum and maximum tenor specified for the product, to which the bill is linked.

The standard tenor defined for the product associated with the bill is defaulted. You can change the default and specify a tenor, to suit the bill you are processing. If the product to which he bill is associated is defined with the standard tenor as zero, you need to specify the maturity and the expiry date of the bill.

If you attempt to save the bill without entering the expiry or maturity date you will be prompted for an override.

Note

The tenor of a sight bill is always defaulted to zero days. You do not have an option to change it.

Transit Days

The transit days refer to the notional period for the realization of the proceeds of a sight or matured usance bill. The transit days will be used in the computation of the maturity date, of the bill.

Maturity Date

The maturity date is the date on which the bill falls due, for payment. The maturity date is calculated in the following manner, based on the entries made to the previous fields:

Maturity Date = Base date + Tenor + Transit days

You can change the maturity date of a bill that is arrived at using the above method. However, the maturity date that you specify should be later than or equal to the Value date specified for the bill.

Note

For an IBC product under which you may be creating a contract here, you may have cho­sen the ‘Consider as Discount’ option (specified through the ‘ICCF Details’ screen) and you may have specified the profit collection method to be advance (specified through the ‘Islamic Bills and Collections Product Definition - Preferences’ screen). In such a case, you cannot change the ’Maturity Date’ here.

Transaction Date

The transaction date is the date on which, the bill was entered into Oracle FLEXCUBE. The system automatically defaults the transaction date to today’s date. You cannot amend or change the date that is defaulted.

Value Date

The Value date of a bill, is the date from which a bill becomes effective. The accounting entries triggered off by events like input, amendment and liquidation hitting the Nostro and the customer accounts will be passed as of the value date.

The Value date should be earlier than or the same as today’s date. The Value date can be one of the following:

• Today’s Date
• A date in the past
• A date in the future (you can enter a date in the future only if future dating has been allowed for the product)

If you do not enter a value date for a bill, the system defaults to today’s date.

Note

The Value date of a bill should not be earlier than the Start Date or later than the End Date specified for the product, involved in the bill.

Debit Value Date

For accounting entries hitting nostro or customer accounts, you can specify a debit and credit value date that is different from the value date specified for the bill.

The value date of the Bill will be defaulted as the Debit and Credit value date. You have an option to change it to suit the requirement of the bill you are processing. In this case, the value date of the bill will be used only for debiting and crediting GLs involved in the bill.

Credit Value Date

Specify the Credit value date for the bill.

Confirmed Amount

The system displays the confirmed amount.

Unconfirmed Amount

The system displays the unconfirmed amount.

Available Confirmed Amount

The system displays the available confirmed amount.

Available Unconfirmed Amount

The system displays the available unconfirmed amount.

LC Details

Enter the following details:

LC Issue Date

Specify the date on which the LC was issued.

LC Amount

The Letter of Credit Amount gets defaulted from the LC Contract. This is a display only field.

LC Liability Amount

The Letter of Credit Liability Amount also is defaulted from the LC Contract. This is a display only field.

For a collection bill, most of its details are captured during registration. The details of the collection will be displayed in the respective fields of this screen, when you specify the collection reference.

Their LC Reference

If the bill you are processing is drawn under an LC, you should specify the following references:

• The customer in whose name the LC was drawn
• The date on which the LC was issued
• The reference of the LC

Choose the ‘Use LC Ref in Messages’ option if you would like to furnish the related ‘LC Reference Number’ in the messages generated for the bill. If you do not choose this option, Field 20 of the SWIFT messages and the mail messages generated for the bill will furnish the Bill Reference Number.

If ‘LC Not Advised’ is enabled, then original LC reference number of the issuing bank should be provided as ‘Their LC Reference’ number. Their LC Ref number will be defaulted to the ‘Parties’ tab against ‘Issuing Bank’ under field ‘Reference’ during save.

The following fields are not applicable if ‘LC not Advised’ is checked and ‘Their LC Reference’ number is specified:

• LC Customer
• LC Customer Name
• LC Reference No

Reimbursement Days

Enter the Reimbursement Days for the bill you are processing. The Reimbursement Claim for the bill will be automatically generated on reimbursement (working) days prior to the maturity date.

For instance, the maturity date of a bill is 23 March 2001. You specify the Reimbursement days as ‘2’. Two working days prior to the maturity date (i.e., on 21 March 2001), as a part of the BOD process, the Reimbursement Claim (MT742) for the bill will be automatically generated.

Confirmed Amount

When you book a bill contract under a letter of credit, the system displays the current confirmed amount of the letter of credit contract.

Available Confirmed Amount

When you book a bill contract under a letter of credit, the system displays the current available confirmed amount of the letter of credit contract.

Unconfirmed Amount

When you book a bill contract under a letter of credit, the system displays the current unconfirmed amount of the letter of credit contract.

Available Unconfirmed Amount

When you book a bill contract under a letter of credit, the system displays the current available unconfirmed amount of the letter of credit contract.

Liquidation Details

Liquidation Amount

On selection of 'Liquidate' option in tool bar, user can enter the bill amount to be liquidated. This is a display only field showing the actual bill amount which is liquidated once a bill is liquidated.

In this section specify the following details:

Liquidation Date

A liquidation date is meaningful, if you have specified that the bill should be automatically liquidated. By default, the liquidation date of a bill is taken to be the maturity date specified for the bill.

The Auto liquidation function will automatically liquidate the bill on the liquidation date that you specify.

Note

Suppose you are processing an acceptance bill, for which you had specified automatic change of operation from acceptance to advance. Then the automatic processes run as part of EOD or BOD will automatically change the operation of the bill from Acceptance to Advance on its liquidation date.

Profit Liquidation Mode

At the time of final liquidation of principal, you have the option of either recovering profit immediately or later. The profit liquidation mode with ‘immediate’ and ‘deferred’ values are enabled only at the time of final liquidation of principal.

If ‘immediate’ option is selected at the time of final liquidation, of principal, the entire outstanding profit will be liquidated along with the principal and the contract status becomes ’liquidated’.

If ‘deferred’ option is chosen at the time of final liquidation of principal, only principal gets liquidated and recovery of profit gets deferred. The contract status would remain ‘active’. The outstanding profit can be liquidated later either partially in stages or fully through BC profit payment screen. Once the entire outstanding profit is liquidated, contract status will be shown as ‘liquidated’.

In case the rollover of the bill is specified after the maturity date of the bill, the contract will have profit components along with compensation profit on principal as outstanding. You need to specify the mode in which the system liquidates both the profit components i.e. Normal and Penal components by choosing either of the following:

• Immediately: At the time of final liquidation, the system liquidates all outstanding profit components and transfers the outstanding Principal to new Bills Contract.
• Deferred: At the time of final liquidation, the system only transfers the outstanding Principal to new Bills contract without liquidating the profit components. These profit components can be liquidated partially or fully using Bills Payment Online.

Note

Oracle FLEXCUBE does not support backdated or future dated rollover. The value date for the Rollover event will always be the current system date.

In case of auto liquidation, the system will apply ‘Immediate’ mode to liquidate the bill.

Their Charge Currency

When entering the details of a bill, you can capture the charge details of other banks (for instance, the charge levied by the remitting bank on an import bill) in the ‘Their Charge’ fields. In this field you can specify the charge currency.

Their Charge Amount

Specify the charge amount here. In a phased manner, you can settle this charge by debiting your customer and crediting the correspondent bank.

SWIFT Messages for the Documents Received

When you receive a document for Usance LCs, an Authorization to Reimburse Advice in an MT 740 format will be generated.

While indicating the messages that should be generated at the event (INIT), you should also associate the pre-shipped advice tag LC_AUTH_REIMB to the event. When the Islamic Bills Contract is authorized, the MT 740 is generated from the Outgoing Message Browser with the bills contract reference number and it displays all the details of the LC contract excluding the credit amount.

The expiry date of LC contract and maturity date from Bills contract are also displayed in the generated MT740 message. For swift MT740 message, the 31D field will display the expiry date specified in the LC contract and 42P field will display the maturity date specified in the BC contract. But for mail MT740, the system will display both LC and BC dates.

The bill amount that is defaulted includes the contract and its currency. However, the BC amount will be converted to LC contract currency equivalent using STANDARD mid rate in case the LC contract currency is different from the bill contract currency.

Sender to Receiver Info Tag

FFT codes “SND2RECMTxxx” will be used to pick up the sender to receiver information in various swift messages. In the FFT code “MTxxx” will stand for the SWIFT message type in which the FFT code will be picked up. This facilitates defining a separate FFT code for each of the SWIFT message.

This will be applicable for the following swift messges: MT700, 707, 705, 710, 720, 730, 740, 747, 760, 767, 768, 400, 410, 412, 420,422, 430, 734, 732, 742, 756, 750, 752, 754

The various FFT codes for SND2RECMTxxx are maintained in the Free Format Code maintenance screen. During contract processing, based on the event being processed system defaults the advices maintained for the particular event. For messages of SWIFT type ,you can select the corresponding SND2RECMTxxx FFT code from the list of values

In the SWIFT message generated , the tag 72 will be populated with the text associated with the FFT code SND2RECMTxxx attached for the advice at the contract level.System will not validate the FFT code SND2RECMTxxx being attached with the advice. This has to be operationally controlled.

During advice generation, if the FFT code SND2RECMTxxx corresponding to the advice is not attached or if a different SND2RECMTxxx is attached, system will not populate the tag 72 in the advice generated.

Capturing Charge References

When entering the details of a bill, you can capture the charge details of other banks (for instance, the charge levied by the remitting bank on an import bill) in the ‘Their Charge’ fields. In these fields, you can specify the charge amount and the charge currency. In a phased manner, you can settle this charge by debiting your customer and crediting the correspondent bank.

5.3.3 Details Tab

Click the ‘Details’ tab to invoke the following screen.

Here you can capture the following details:

5.3.3.1 Specifying Profit Details

You can specify the period for which, the tenor based profit components of the bill should be calculated.

From Date

The ‘From Date’ that you enter indicates the start date of the profit calculation period. The ‘From Date’ should not be later than today's date. It is mandatory for you to enter a start date for all bills, with at least one tenor based profit component.

To Date

The ‘To Date’ refers to the date up to which the tenor based profit components of the bill should be calculated. The ‘To Date’ that you specify should be greater than or equal to today's date. If the non-compensation profit components of the bill are to be collected in advance, it is mandatory for you indicate a ‘To Date’.

The tenor based profit components of the bill will be calculated for the period between the ‘From Date’ and the ‘To Date’.

Note

For an IBC product under which you may be creating a contract here, you may have cho­sen the ‘Consider as Discount’ option (specified through the ‘ICCF Details’ screen) and you may have specified the profit collection method to be advance (specified through the ‘Islamic Bills & Collections Product Details – Preferences’ screen). In such a case, you cannot change the Profit ‘To Date’ here.

Grace Days

The grace period indicates the period, after the To date specified for a bill within which the compensation profit (if one has been defined for the product to which the bill is linked) will not be applied. This period is defined as a specific number of days and will begin from the date the repayment becomes due. If the repayment is made after the due date, but within the grace period, compensation is not changed.

Compensation profit will be applied on a repayment made after the grace period. The compensation profit will be calculated for the entire period it has been outstanding (that is, from the date the payment was due).

Note

The compensation type Profit Components of a bill will become applicable after the To date + No of Grace days, for compensation defined for the bill.

Allow Prepayment

Indicate if the prepayment for the bill is to allowed or not..

Refund Profit

Check this box to refund profit for the following:

• Reduction of Bill Amount as Rebate
• Reduction of Maturity Date
• Back dated liquidation
• Early Liquidation

Recovery Profit Rate

Specify the recovery profit rate to capture profit rate during refund of profit due to rebate.

Recovery Profit Rate Code

Specify the recovery profit rate code.

Note

If the recovery profit rate and recovery profit code is not specified then the rate applicable for the profit component is considered as recovery profit rate.

Acceptance Commission Details

For Incoming Bills in Acceptance stage you can specify the dates for calculating the commission components.

From Date

Indicate the ‘From Date’.

To Date

Indicate the ‘To Date’.

Based on the preferences for acceptance commission, the system calculates the commission:

• In case the Acceptance commission is collected in Advance, the system liquidates the commission during the INIT event.
• On moving a bill from acceptance to advance, the pending accruals are passed as part of Acceptance to Advance (BADV) event.
• In case the Acceptance commission is calculated in Arrears, the system liquidates the commission during BADV event. However, in case of no change in the operation, the system liquidates the commission during LIQD event.
• Acceptance commission is always calculated based on the original bill amount and From and To dates specified for acceptance commission irrespective of BADV/Liquidation date and Mode of liquidation (Partial or Full liquidation).

Cash Collateral Details

When your bank accepts discounts or advances a bill on behalf of its customers, the bank in reality undertakes to pay even if the confirming bank does not fulfill its obligation, under the bill. Thus, accepting or advancing a bill is a liability for your bank.

Ideally, you would track your exposure to the credit-seeking customer, under a Credit Line. The credit granted to a customer under a Credit Line can be backed by Collateral that the customer offers. Often you may accept cash, as collateral for the bill. For a bill you can specify the following collateral details:

Collateral Description

Specify details of the collateral that is intended for the internal reference of your bank. These details will not be printed on any of the advices generated for the bill.

The Bills – Contract Details screen allows you to accept a decrease in the collateral linked to the bill during liquidation, by specifying the Collateral Contribution.

The accounting roles allowed for the collateral entries are the collateral account / GL role. Typically, the accounting entry setup is to reduce the collateral accounts balance to the extent of payment from the collateral.

The system validates the amount specified as the collateral contribution being used to pay up the bill, is less than or equal to the overall collateral contribution linked to the bill.

The default value for the collateral contribution is displayed based on the total amount being paid. The default value is computed as the percentage of the collateral linked to the bill proportional to the percentage of the bill amount being paid against the outstanding bill amount. This can be modified.

Collateral Currency

Specify the currency in which the cash collateral account is opened.

Collateral Amount

Specify the value of the collateral.

Outstanding Collateral Amount

Outstanding Collateral amount is sum of collateral amount and transferred collateral amount. Outstanding collateral will be updated with Bills Collateral Amount, when you save the contract. This is a display field. Field ‘Outstanding Collateral’ will be updated with remaining collateral amount, after each Bill liquidation.

Transfer Collateral from LC

This is defaulted from the product. However, you can modify it at contract level during bill booking. Later this cannot be changed. This indicates that the collateral amount may be collected from LC as part of Bill availed under LC.

Transferred Collateral gives the LC collateral amount in LC collateral currency to the extent of Bill Booked is transferred to bill.

Liquidate Using Collateral

This is defaulted from the product. However, you can modify this at any point in time prior to bill liquidation. If this is checked, it indicates that the bill should be liquidated using the collateral amount.

If ‘Liquidate Using Collateral’ is checked, then proportionate collateral amount will be used for bill liquidation.

Transferred Collateral Amount

Specify the transferred collateral amount.

Outstanding Collateral

The system displays the outstanding collateral amount.

5.3.3.2 Capturing Charge Details

In this section specify the following details:

Pass our Charges to Drawee/Drawer

During initiation of a bill, you can indicate that the drawer’s charges can be passed on to the drawee. Check against this option to indicate that the remitting bank can pass on our charges to the drawee.

Pass Profit to Drawee/Drawer

During initiation of a bill, you can indicate that the drawer’s profit can be passed on to the drawee. Check against this option to indicate that the same.

Our Charges Refused

During liquidation of an incoming bill, the drawee may refuse to pay the drawers charges. Check against this option to indicate the same.

Your Charges Refused

During liquidation of an incoming bill, the drawee may refuse to pay the charges due. Check against this option to indicate that the drawee has refused to pay the charges due.

Claim Advice in Swift

Check this box to indicate that the Charge Claim Advice (CHG_CLAIM_ADV) that gets generated as part of LQ EOD batch should be in Swift MT799/MT499 Format.

Template ID

Specify the template related to MT799 or MT499 message types. The adjoining option list displays all the templates related to MT799 (if it is under LI) or MT499 (if it is not under LI) message types defined in the ‘Swift FFT Template Screen Maintenance’ screen. You can choose the appropriate one.

Document Details

For the documentary bills that are processed at your branch, you can keep track of the documents that are required under the bill. You can specify the following details:

Letter Dated

The date printed on the covering letter of the documents based on which the contract was entered. This date can be used to retrieve information on pending documents.

Document Original Received

Indicate if the original set of documents that are required under the bill have been received (and the number of copies of the same) or not.

Document Duplicate Received

Indicate if the duplicate set of documents that are required under the bill have been received or not.

Note

If you had unchecked the ‘Document Original Received’ field, you should check the option ‘Document Duplicate Received’ because, the bill contract should be entered based on the first set of documents received.

Acknowledgement Received

Indicate if the acknowledgement has been received or not.

Acknowledgement Date

Specify the date on which the acknowledgement has been received.

Other Details

Collect LC Advising Charges From

Specify the bank from which the LC advising charges should be collected. The drop-down list displays the following options:

• Issuing Bank – If you choose this, the system derives the counterparty details for ISB based on the linked LC and applies LC advising charges accordingly.
• Beneficiary Bank – If you choose this, the system deducts the advising charges from the reimbursement claim and processes the remaining amount. This amount will be mentioned in MT756.
• None – If you choose this, the system will not impose any advising charges

Choose the appropriate one. The amount shown in MT756 is dependent on the bank chosen here. Hence, while generating MT756, the system observes this field and updates the field ‘Amount’ accordingly.

Note

This field is applicable to reimbursement bills only.

Further Identification

Select further identification from the adjoining drop-down list. the options available are:

• Debit
• Negotiate
• Accept
• Reimburse
• Remitted

Cheque Number

In case the payment for the bill has been made by cheque, specify the cheque number here.

Parent Contract Reference

You can view the reference number of the parent contract if the current contract is a child contract.

Finance Contract Reference

This is the reference number of the finance that is created automatically at the time of liquidation of the Bill. You will not be allowed to change this reference number.

Provision Amount

Specify the amount set aside for provisioning.

Remarks

You can enter information describing the contract details here. This will be available when you retrieve information on the contract. These remarks will not be printed on any of the advices generated for the bill.

Contract Status Details

While defining a product, you have also specified the various stages or status that the bill should pass through, if repayment is not made on the due date against a bill. These details are defaulted to all the bills that involve the product.

Status As Of Date

The date on which the bill moved into the status is displayed here.

User Defined Status

The current status of a bill is displayed here. If you have specified the status change as a manual event, you can change the status of a bill from one status to another in this screen. The option list available for this field contains all the lists of Status codes, defined for the product, to which this contract is linked.Contract Derived Status

The system displays the derived status of the bills contract. You cannot modify this.

Contract Derived Status

The system displays the derived status of the contract.

Sanction Check Status

The system displays the status of sanction check once the sanction check is performed at contract level. The system displays any of the following statuses:

• P - Pending, IPending Sanctions Check and contract sent in unauthorized mode
• X - Pending, Pending Sanctions Check and contract sent in auto authorized mode
• A - Approved, Sanction Check Approved
• R - Rejected, Sanction Check Rejected
• N - Not Required, Sanction Check Not Required

Last Sanction Check Date

The system displays the date when last sanction check was performed. This field will store the date on which the response for last sanction check was received.

If the last sanction check date and re-check days is greater than or equal to the current date, then the last sanction check performed is still valid.

5.3.3.3 Processing Sanction Check during Save of a Transaction

When a contract is saved, the system processes the sanction check as follows:

• Check if the MT400 message maintenance is available for the contract.
• Checks if sanction check is required for transaction branch.
• If sanction check is required for transaction branch, then checks if sanction check is required for the product used to book the contract.
• If sanction check is required for the product used to book the contract, then check if sanction check is required for the counterparty of the contract.
• If sanction check is required for the counterparty of the contract, then:
  • From the sanction check preference maintenance, picks the sanction check re-check days for the branch. If there are no maintenance then re-check days will be treated as zero (0).
  • If the last sanction check date for the contract is null or if the last sanction check date plus re-check days is less than the current date then the validity of last sanction check will be expired and it has to be performed again.

• Details of each party will be sent for sanction check as a single request. Response from external system will be updated in sanction check queue for the request.
• The party type field in the above list depends upon the information from parties / broker / agent / insurance / settlement instructions that is being transmitted to the sanctions check queue.
• Sanction check status at the contract level will be updated to ‘P’ if the contract is saved in an unauthorized mode and updated as ‘X’ if the contract is saved in an auto authorized mode. The contract's authorization status in both the cases will be U or unauthorized. The system will then trigger the event SNCK for the contract.
• If last sanction check date plus re-check days is greater than or equal to the current date, it means that the last sanction check performed is still valid. If it is valid, then:
  • The system checks if the parties information maintained in the contract's settlement instructions has changed since the last sanction check. If it is changed, a sanction check request is generated and placed in sanction check queue even though last sanction check is still valid.
  • If there are no changes in parties information, it means that sanction check is not required and sanction check request will not be made.

• Information will be placed in sanction check queue only if data is available in Parties tab for the party type.
• Any contract that is in ‘X’ or ‘P’ status cannot be authorized or modified. It can only be deleted. If a contract or event in ‘X’ or ‘P’ status is deleted, then the associated sanction check request should also be deleted.

Receipt of Response from Sanction Check System and Post Response Processing

 

• Sanction check system will provide a response for the request. This response will be updated as the contract's sanction check status. The response can be as follows:
  • A - Approved: This indicates that the contract passed sanction check.
  • R - Rejected: This indicates that the contract failed sanction check.

• If the contract's sanction check response status is approved and the contracts sanction check status is ‘P’, it can be authorized and processed further.
• If the contract's sanction check response status is approved and the contract's sanction check status is ‘X’, then the post sanction check process will automatically authorize the contract. Any override generated as part of this authorization will be logged.
• The last sanction check date will be updated with the response date.
• If the contract's sanction check response status is rejected, then irrespective of the contract's sanction check status (P or X), the contract remains unauthorized. The only option allowed for such contracts is modification or deletion.
• If sanction check is not required at transacting branch, counterparty or product level, then the contract's sanction check status will be updated to ‘N’ and information will not be placed in the sanction check queue. The last sanction check date will not be updated with the current date.

5.3.4 Additional Tab

Some events are triggered automatically when the batch process is run as part of the EOD or BOD. Batch processing preferences for a product is specified in the Bills - Product Preferences screen. The preferences indicated for the product involved in the bill will be defaulted. You can change these defaults to suit the requirements of the bill you are processing.

Click on the ‘Additional’ tab titled to capture the essential details of the bill.

Product Defaults

Auto Status Control

A status change is one in which the status of a bill changes or moves, from one defined status to another. In the Bills - Product Preferences screen, you can indicate whether the bills linked to the product, should move from one status to another, automatically or manually. The preference indicated for the product involved in the bill, will be defaulted. You can change the default for the bill.

If you specify that status changes have to be carried out automatically, the status of the bill will be automatically changed, after the specified number of days. If not, you have to change the status of a bill through the Bills -Contract Details screen.

You can indicate other preferences for the status change like should the change be in the forward or reverse direction, through the Bills - User Defined Status Maintenance screen.

Even if the product, to which a bill is associated, is specified with automatic status change, you can manually change the status of the bill, before the automatic change is due.

However, if a product associated with the bill has been specified with manual status change, you cannot specify automatic status change for the bill.

Note

You will be allowed to specify whether automatic status change should be in the forward or reverse direction in the Status Maintenance screen, only if you specify that automatic status change is allowed.

Auto Liquidate

The components of a bill can be liquidated automatically or manually. In the Bills - Product Preferences screen you can indicate the mode of liquidation. The preference indicated for the product involved in the bill, will be defaulted. You can change the default.

If you choose the automatic mode of liquidation, the bill will be automatically liquidated, on the day it falls due, by the Contract Auto Liquidation function run as part of the BOD processing. If a bill for which you have specified auto liquidation matures on a holiday, the bill will be processed based on your holiday handling specifications, in the Branch Parameters table.

• If you have specified that the processing has to be done on the last working day before the holiday, a bill maturing on a holiday will be liquidated during the EOD processing, on the last working day before the holiday.
• If you have specified that the processing, has to be done only up to the system date, then the bills maturing on a holiday will be processed on the next working day after the holiday, during the BOD process.

If you do not specify auto liquidation, you have to give specific instructions for liquidation through the Manual Liquidation screen, on the day you want to liquidate the bill.

Link To Finance

Check this box if you want to link an export bill contract to a finance. This is defaulted from the product level. You are allowed to modify this.

Advance by Finance

Oracle FLEXCUBE provides the facility to book finance through the Bills module. Check this option to book a finance while liquidating the bills. Once you have selected this option, you need to specify the finance product and the bridge GL in the consecutive fields.

Note

You are allowed to create finance only for import bills that are of Acceptance type.

Crystallization of a bill occurs when ‘Advance by Finance’ has been selected for the bills product on final liquidation of the bill.

Refer the section ‘Crystallization of bills’ in this chapter for further details.

Once the Import Bill contract is liquidated using Finance, then on final liquidation of the import bill contract the status of the contract is changed to ‘Devolved’. i.e If the Bill Amount and Liquidation Amount is found to be the same in the Main tab, the status is changed to ‘Devolved’.

Allow Rollover

Specify whether the Bill contract can be rolled over into a new bill. This field is enabled only if you have opted for the rollover option at the product level. You can choose to change this option during initiation or amendment of the Bill.

Note

If the box is unchecked, the Bill contract will not be rolled over even though rollover is spec­ified at the product level.

Settle Available Amount

Oracle FLEXCUBE allows you to check if there are sufficient funds available in the customer’s account. The system will settle the acceptance to the debit of whatever funds are available in the account and auto creates a loan for the shortfall amount. If there is no sufficient balance available in the customer’s account even after considering the OD limits, then the loan will be created for the entire Bill Liquidation amount.

Check this box to verify the customer balance and in turn to create the loan for the shortfall amount during liquidation. You can also amend the settlement account.

Note

This field is enabled only if the ‘Advance by Loan’ field is checked. The customer balance check and loan creation is not applicable during Auto liquidation and will be applicable only for Manual Liquidation.

Use LC Reference in Message

Choose the ‘Use LC Ref in Messages’ option if you would like to furnish the Related LC Reference Number in the messages generated for the bill. If you do not choose this option, Field 20 of the SWIFT messages and the mail messages generated for the bill will furnish the Bill Reference Number.

LC Detail in Payment Message

If this option is checked then MT756 (Advice of reimbursement or Payment) is generated with tag32B containing the LC Contract Currency and Amount.

Available for Rediscount

A discounted bill, which is in the final stage, can be made available for re-discounting. You can indicate that a bill is eligible for rediscounting, by checking the field. The discounted bill will be reported available for rediscounting, when they are in final stage but not yet matured.

Note

No processing will be done, based on your specifications to this field. It only helps retrieve information, on discounted bills available for rediscounting. The Bills eligible for Redis­counting report, lists the bills that are eligible for rediscounting. Based on the report you can send a discounted bill for rediscounting.

Auto Change of Operation Acceptance to Advance

If you are processing an acceptance type of bill, you can indicate whether the bill should be automatically converted, into an advance type of bill on its liquidation date.

Brokerage Details

Allow Brokerage

This preference is defaulted from the product screen.

Brokerage To Be Paid By Us

Check this box to indicate that the brokerage will be paid by the importer or exporter depending on the bill product.

Note

This field is enabled only if the box ‘Allow Brokerage’ is checked.

ICCF Pickup Details

For any export purchases, you can indicate whether you want to levy the charges and profit in the ICCF pickup currency or the contract currency for the customer.

When you invoke the contract, the bill currency you select will be taken by default as the ICCF pickup currency. However, you can change this currency for the customer. For this, you need to specify the following:

ICCF Pickup Currency

Indicate the currency in which profit and the charge pickup will happen for the contract.

Exchange Rate

Indicate the exchange rate between ICCF pickup currency and contract currency.

Note

You are not allowed to change the ICCF pickup currency for EIM (Effective Profit Method) contracts. It gets defaulted to the contract currency and will be disabled here.

• You have to manually select the settlement account for BC module tags in the ICCF pickup currency. Settlement pickup of ICCF and charge tags will happen based on the ICCF pickup currency.
• In case where the charges and profit are based on ICCF pickup currency, you have to maintain the ICCF rule as follows:

  Transaction currency (Rule currency)	ICCF Pickup Currency
  Basis Amount Currency	ICCF Pickup Currency
  Charge Currency	ICCF Pickup Currency
  Booking Currency	Charge Currency

Floating rate pickup and customer margin pickup for profit components will be based on ICCF pickup currency. Therefore, you need to maintain the floating rate code and customer margin for the respective ICCF pickup currency.

In addition, if you want to apply charges in ICCF pickup currency, then you have to define the charge component with amount tags suffixed by _ICCY. If charge components are defined with normal bills amount tags, then charges will be computed in contract currency. Thus, you can apply charges in contract currency or ICCF pickup currency based on basis amount tag of a charge component.

Margin Details

Enter the following details.

Liquidated Amount

While processing a collection type of bill, partial liquidation is allowed. In this field you can indicate the amount that has been liquidated under a collection.

Outstanding Amount

The outstanding amount, which is the amount that is yet to be liquidated under the bill, is automatically displayed. In the case of a collection it is computed as follows:

Outstanding Amount = Bill Amount - Liquidation Amount

For bills other than collection type the bill amount will always be equal to the liquidation amount.

Forfait Details

Request Date

Specify the date on which your customer requests for bill forfaiting.

Document Submission Date

The requestor of forfaiting will invariably submit a document. This may or may not happen on the date of request. So you can capture the date of submission of the forfaiting document here.

Note

These two fields are only meant for information purpose. The system performs no process­ing or validation on them.

5.3.5 Parties Tab

In the ‘Islamic Bills and Collections Contract Detailed’ screen, you have already specified details for the Counterparty of the bill. Click the ‘Parties’ tab to record details pertaining to all the parties involved in a bill.

The documents, tracers, advices and messages that are generated for the bill will be sent to the concerned parties based on the details you specify in this screen.

You can capture the following details of the parties involved in the bill you are processing:

• The party type of the customer
• The CIF ID assigned to the party
• The country to which the party belongs
• The party’s mail address
• The language in which tracers and messages should be sent to the party
• The media through which all tracers and advices should be routed
• The party’s address (es) for the given media

The following table contains a list of party types that can be involved in all types of bills:

Party Type	Party Description
DRAWER	Drawer
DRAWEE	Drawee
ISSUING BANK	Issuing Bank
NEG BANK 1	Negotiating Bank 1
NEG BANK 2	Negotiating Bank 2
BENEFICIARY	Beneficiary
ACCOUNTEE	Accountee
CASE NEED	Case Need
GURANTOR	Guarantor
ACCEPTING BANK	Accepting Bank
DISCNTING BANK	Discounting Bank
REMITTING BANK	Remitting Bank
COLLECTING BANK	Collecting Bank
REIMBURSING BANK	Reimbursing Bank
CONFIRMING BANK	Confirming Bank
FORFAITING HOUSE	Forfaiting Bank/Insti­tution
CLB	Claiming Bank

The parties that can be involved in a bill depend on the type of bill you are processing and on the operation that you perform on the bill. The following table indicates the parties that can be involved based on the operation that you perform on the bill:

Bill Type	Operation	Parties Applicable
Incoming	Pay and Advance	Accountee (if different from Drawee) Issuing Bank (your bank) Negotiating Bank Reimbursing Bank Drawer Drawee
Incoming	Acceptance	Accountee (if different from Drawee) Issuing Bank (your bank) Negotiating Bank Accepting Bank (your bank) Drawer Drawee
Incoming	Discount	Beneficiary Accountee (if different from Drawee) Discounting Bank Negotiating Bank Reimbursing Bank Remitting Bank Drawer Drawee
Outgoing	Negotiation	Negotiating Bank 1 Negotiating Bank 2 Reimbursing Bank Confirming Bank Issuing Bank Drawer Drawee
Outgoing	Pay	Negotiating Bank 1 Negotiating Bank 2 Reimbursing Bank Confirming Bank Drawer Drawee
Outgoing	Acceptance	Accepting Bank Issuing Bank Reimbursing Bank Negotiating Bank 1 Negotiating Bank 2 Confirming Bank Drawer Drawee
Outgoing	Discounting	Discounting Bank Issuing Bank Reimbursing Bank Negotiating Bank Confirming Bank Drawer Drawee
Incoming and Outgo­ing	Collection	Through Bank Guarantor Collecting Bank Remitting Bank Drawer Drawee

While processing an outgoing collection bill, you have the option to change the party that you specified earlier as the:

• Collecting Bank, and
• Drawee

To change the collecting bank you need to first change the Party Type of the previous collecting bank to ‘Prev Collecting Bank’. Thereafter, select the new collecting Bank from the option list. An amendment advice is sent to the previous collecting bank requesting them to transfer the documents to the new collecting bank and a remittance letter is generated to the new collecting bank.

To change the Drawee of a collection bill, you need to change the party type of the previous Drawee to ‘Prev Drawee’ and select a new drawee from the option list.

Similarly, to change the Drawee of an Incoming Bill, you need to change the party type of the previous Drawee to ‘Prev Drawee’ and select a new drawee from the option list.

Note

You can use a particular CIF ID only once in a bill that you process.

The details on central liability tracking that feature on this screen have been covered in the chapter titled Specifying Central Liability tracking details.

Limit

Specify the following details:

Operation

When you click ‘Default’ button, the system defaults the operation specified in the main screen.

Party Type

This indicates the type of the party whose credit limits need to be tracked.

If you click ‘Default’ button, in the first row, the system defaults the party type based on the details maintained under ‘Parties’ tab of ‘Islamic BC Contract Details’ screen. However, you need to make sure that the mandatory party details have been maintained under ‘Parties’ tab of the screen.

When you add another row to the list, you can manually select the party type as required. If you leave it blank, the system will automatically update the party type when you save the contract.

Party Id

Specify the ‘Party Id’ for which you need to maintain. Alternatively, you can select ‘Customer No’ from the adjoining option list also.

Note

BIC Code appears next to the ‘Customer No’ only if the BIC Code is mapped with that Cus­tomer Number. If the BIC code is not mapped with that Customer Number then the BIC Code will not appear next to the ‘Customer No’ in the adjoining option list.

The list displays all the valid parties maintained in the system. On selecting the party ID, the following details are displayed:

• Party Name
• Country
• Language
• Party Reference
• Address

Customer No

Specify the customer number of the party whose credit limits need to be tracked. The option list displays the customer numbers of all the parties selected under ‘Parties’ tab. Choose the appropriate one.

You need to make sure that the customer number corresponds to the party type selected above. If the customer number and party type do not match, the system displays an error.

JV Parent

When you click ‘Default’ button, the system defaults the joint venture customer number of the party. This customer number is defaulted based on the details maintained in ‘Joint Venture’ sub-screen of ‘Customer Maintenance’ screen.

Liability ID

When you click ‘Default’ button, the system defaults the liability number from ‘Joint Venture’ sub-screen of ’Customer Maintenance’ screen.

Linkage Type

Specify the linkage type. The drop-down list displays the following options:

• Facility (Credit Line)
• Collateral Pool
• Local Collateral
• Collateral

Choose the appropriate one.

Linkage Reference No

Specify the reference number that identifies the facility or collateral pool. The option list displays all valid facilities and collateral pools specific to the liability. Choose the appropriate one.

In case you choose the same linkage reference for more than one record in the list, the system displays an override message. You may choose to cancel or proceed with the selection.

% Contribution

Specify the proportion of limits to be tracked for the credit line or collateral pool for the joint venture customer. When you click ‘Default’ button, the system defaults the percentage of contribution maintained under ‘Joint Venture’ sub-screen of ‘Customer Maintenance’ screen.

It is mandatory to indicate the percentage of contribution if the party is a customer under joint venture. This is not applicable to customers who are not a part of joint venture.

Note

For one joint venture, the total percentage of contribution in all applicable credit lines to­gether cannot be more than 100%.

Amount Tag

Specify the amount tag. The system tracks the limits for non joint venture customers based on the amount tag. The amount tags applicable to Islamic BC contracts are listed below:

• Bill Amount
• Amount Purchased
• Confirmed Amount
• Unconfirmed Amount

Choose the appropriate one. If you do not specify the amount tag, the system will track the limits based on the bill amount or the amount purchased for a combination of customer, liability and facility.

For joint venture customers, you need to choose ‘Bill Amount’ as the amount tag. Other amount tags are not applicable to joint ventures.

Amount

When you click ‘Default’ button, the system defaults the amount tracked for each credit line. In case of joint venture customers, the system derives the amount as follows:

• In case PUR and DIS operations, amount is derived on the basis of the Amount Purchased
• In case of other operations, amount is derived on the basis of the Bill Amount

In case of non joint venture customers, the amount is calculated based on the percentage of contribution.

For joint venture customers, the total bill amount is shared by different facilities/pools based on the percentage specified.

The total percentage of contribution for the joint venture customers need to be 100%. Otherwise, the system displays the error message as “(EL-CUST01) Sum total of limits percentage contribution should be 100”

For non joint venture customers, the system tracks the limits based on the amount tag.

When an Islamic BC contract is reversed, limit update happened during Islamic BC contract booking will also be reversed. The available amount of the limit line will be reinstated to the extent of Islamic LC availment amount and the matured amount of the limit will be reduced to the extent of Islamic LC availment amount.

When an Islamic BC contract booked under an Islamic LC is reversed, the following events will be triggered in the same sequence.

1. RAVL-Triggered on the Islamic LC contract for reversal of the corresponding availment
2. RVSG- Triggered on the Islamic LC contract for reversal of the cancellation of the Shipping Guarantee, when an SG is linked
3. RVCA- Triggered on the shipping guarantee contract for roll back of cancellation of the Shipping Guarantee, when an SG is linked
4. REVR-Triggered on the Islamic BC contract for reversal of the contract.

5.3.6 Documents Tab

A bill, as an instrument of trade finance, involves trade transactions. Such transactions involve merchandise, a mode of transportation and documents that accompany the goods in the case of a documentary bill.

You can specify document, goods and shipping details only for documentary bills under an LI or not under an LI. You can specify these details in the Islamic Bills and Collections Contract Detailed’ screen by clicking on the tab titled ‘Documents’.

If the Islamic LC module of Oracle FLEXCUBE has been installed at your bank, and the documentary bill is under an Islamic LC, then the document, goods and shipping details will be automatically picked up on specifying the reference number of the related Islamic LC. You will not be able to amend the details, defaulted from the related Islamic LC.

5.3.6.1 Specifying Details of the Documents Applicable to a Bill

There are some standard documents that may be required under a documentary bill. For documentary bills not under an LI, the documents specified for the product to which the bill is linked, will be defaulted to this screen. The details specified for these documents like the document type, description, the clauses specified for the document are also defaulted from the product. You can edit the list of documents, as well as the contents of the documents to suit the bill you are processing.

As two sets of documents are sent or received for a bill, there is a provision to capture details regarding the documents sent in both mails. The first set is recorded as I Mail and the second as II Mail. In this field you can also capture the number of documents issued along with the number of documents required. The data is captured in NN/MM format where NN denotes number of documents required and MM signifies number of documents issued.

If the LI module of Oracle FLEXCUBE has been installed at your bank, and the documentary bill is under an LI, the documents picked up, when you specify the reference number of the related LI. You will however, not be able to amend the list of documents defaulted from the related LI.

The IBC Contract online function will validate whether the supplied document reference has a shipping guarantee against it. This will be done only for import bills and if the ‘Validate shipping guarantee’ field is checked for the document code in the document codes maintenance.

The following processing will be carried out after capturing the document reference in documents screen of import bills.

• For the document code, Oracle FLEXCUBE will check if the validate shipping guarantee flag is ‘Y’ in the document code maintenance
• If the above condition is satisfied, the system will check if the document reference exists in any of the shipping guarantee for the same document code.
• If a document reference exists then the system gives an override ‘ Document reference exists for the shipping guarantee’
• If a document reference is not found then the system gives an override ‘ Document reference does not exist for the shipping guarantee’

Note

IBC Upload processing will validate the document reference against shipping guarantee documents if the bill is import LC and validate shipping guarantee for the document code is ‘Y’.

You can add to or delete from the list of documents that are defaulted from the product. To add to the list of documents defaulted for a bill, click add icon and select the code that identifies the 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 bill you are processing, highlight the document code and click delete icon.

5.3.6.2 Specifying Clauses for a Document

There are some standard clauses, which should appear on the documents required under a documentary bill. In this screen you can indicate the clauses that should accompany a document

For documentary bills not under an LI, the clauses that you specified for a document, while defining the product are defaulted to this screen. In addition, the details specified for these clauses, like its description, are defaulted from the product.

When you highlight a document code, all the clauses defined for the document are displayed. You can add to or delete from the list of clauses that are defaulted. To add to the list of clauses defaulted for a bill, click add icon and select the code that identifies the clause, from the list of clauses maintained, in the Clause Maintenance screen. The description of the clause will be displayed, based on the clause code that you select. To delete a clause that is not required for the bill you are processing, highlight the clause code and click delete icon.

If the LI module of Oracle FLEXCUBE has been installed at your bank, and the documentary bill is under an LI, then the clauses specified for documents will be automatically picked up, when you specify the reference number of the related LI. You will not be able to amend the list of clauses, defaulted from the related LI.

5.3.6.3 Specifying Goods and Shipment Details for a Bill

There are certain standard requirements and conditions associated with the shipment of the merchandise, based on which the bill was drawn. You can specify the following shipping details for a bill.

• The location from which the goods transacted under the bill were shipped
• The destination to which the goods transacted under the bill were dispatched or transported
• The latest date by which shipment should be made
• The date on which the shipment was made
• The carrier that carried the goods
• The date on which the goods arrived at its destination
• Besides these details, you can also specify details like:
  • Was trans-shipment allowed
  • Was partial shipment of the goods allowed

A bill is an instrument of payment, for trade transactions. Trade transactions involve goods that are transported from one destination to another. You have maintained the list of standard goods that are traded, in the ‘Goods Maintenance’ screen.

Goods Code and Description

After you select the code that identifies the goods, its description (which contains details of the merchandise traded) will be picked up and displayed automatically.

You can edit the description that is defaulted to suit the requirements of the bill you are processing. Your can also enter specifications such as the quality and quantity of the merchandise.

If the Islamic LC module of Oracle FLEXCUBE has been installed at your bank, and the bill is under an Islamic LC, the goods will be defaulted, when you specify the reference number of the related Islamic LC. You will however, not be able to amend the list of clauses defaulted from the related Islamic LC.

5.3.7 Exception Tab

Tracers are reminders, sent to various parties involved in a bill indicating that an exception that has occurred, while processing the bill.

To specify the tracers that should be generated for each exception, click on the tab titled ‘Exception’ in the ‘Islamic Bills and Collections Contract Detailed’ screen.

In this screen, you can capture tracer details for the following exception events:

• Payment Exception
• Acceptance Exception

The details specified for the product involved in the bill will be defaulted. You can change the defaults to suit the requirements of the bill you are processing.

There are two types of messages that can be sent, each time an exception tracer is generated. One to the party who needs to be reminded, to take action to resolve the exception (exception tracer) and the another to the party, who needs to be informed about the current status of the exception (advice of fate tracer).

In this screen, you can specify details for the generation of both types of messages.

5.3.7.1 Specifying Details for the Receiver of the Tracer

In this section you need to specify the following details:

Tracer Required

You can indicate whether the exception tracer is applicable to the bill you are processing. You can select one of the following options:

• Required -If you specify that a tracer is applicable to a bill, you should also specify the number of tracers that should be generated, for the exception.
• Not Required -You can select this option to indicate that the exception tracer is not applicable, to the bill you are processing.
• Till resolved -If you indicate that the tracer should be generated until the exception is resolved, you need not specify the number of tracers that should be sent. This is because the tracer will be generated at the frequency that you specify, until the exception is resolved.

Tracer Frequency

You can specify the frequency (in days) with which, the tracer should be generated to the concerned parties (after the Start days) involved in the bill.

Tracer Receiver

You can specify details of the party, who needs to be reminded to take action to resolve the exception. Select the party type from the option list that is available. The tracer will be generated to the customer linked to the party type, in the Parties screen.

Tracer Medium

For each of the exception tracers that you specify for a bill, you can also indicate the medium through which the tracer should be generated.

The preferred medium specified for the product to which the bill is linked is defaulted. The media supported include:

• Mail
• Telex
• SWIFT

If the tracer is generated through SWIFT an MT420 will be generated.

Tracers to be Sent

If you have indicated that the tracer is applicable, to the bill you are processing, you should also specify the maximum number of tracers that should be generated, for each of the exception events.

The number of copies specified for the product to which the bill is linked will be displayed. You can change the default and specify a number, to suit the bill you are processing.

If you have indicated that the tracer should be generated until the bill is resolved, the value 9999 is displayed, indicating that the tracer will be generated until the exception is resolved.

Tracer Sent

Exception tracers can be generated, only after the maturity date of the bill. While creating a product, you have also indicated the number of days that should elapse after the Bill matures on which the first tracer should be generated.

By default, the system calculates the date on which the first tracer should be generated, based on the maturity date specified in the contract screen and on the number of days specified for the product, involved in the contract.

You can change the default and specify a start date, to suit the requirement of the bill you are processing. The system also displays the number of tracers, already sent to the concerned party.

Manually Generate

Oracle FLEXCUBE allows you to generate tracers for bills manually. To generate a specific tracer for a bill manually, unlock the bill contract, and check the box ‘Manually Generate’ for the tracer concerned.

Note

On manual generation of a tracer, the system calculates the Next Tracer Date according to the defined tracer cycle.

Tracer Start Date

Exception tracers can be generated, only after the maturity date of the bill. While creating a product, you have also indicated the number of days that should elapse after the Bill matures on which the first tracer should be generated.

By default, the system calculates the date on which the first tracer should be generated, based on the maturity date specified in the contract screen and on the number of days specified for the product, involved in the contract.

You can change the default and specify a start date, to suit the requirement of the bill you are processing. The system also displays the number of tracers, already sent to the concerned party.

Previous Tracer Date

This is the date on which the last tracer was sent to the party indicated in the tracer Receiver field.

Next Tracer Date

This is the date on which the next tracer will be generated to the party indicated earlier.

Pay Message Date

Enter the date on which you send the acceptance message to the remitting bank (in the case of an Import bill). In the case of an export bill this is the date specified on the acceptance message received from the collecting bank.

This field is for information purposes only.

Non Pay Message Date

Enter the date on which you send the non-payment message to the remitting bank in the case of an export bill. In the case of an export bill this is the date specified on the non-payment message received form the collecting bank.

On entering the nonpayment message date the event -- REFP (refusal to pay) is triggered. The accounting entries defined for the event will be passed and the advices will be generated.

Under Protest

Check this option to indicate that you want to protest the bill.

Protest Date

When the exception has not been resolved by the concerned party, even after a number of tracers have been sent, you may want to protest the bill. You can specify the date on which the protest advice needs to be generated, to the concerned party.

5.3.7.2 Viewing Tracer Updates

You can visit this screen to view the current status of the tracers generated for the bill. The system displays the following information:

• The date on which the last tracer was sent.
• The date on which the next tracer will be generated.
• The number of tracers that have been sent to the concerned party, till date.

5.3.7.3 Specifying Advice of Fate for Payments

The advice of fate is sent to keep a party involved in the bill informed about the current status of an exception. An advice of fate is generated, along with the exception tracer and at the frequency specified for, the exception tracer. You can specify the following preferences for the generation of an:

• Advice of Fate (payment)
• Advice of Fate (acceptance)

Advice Required

You can indicate whether the advice of fate should be generated, to a party involved in the bill. You can indicate one of the following options:

• Required -If you specify that a tracer is applicable to a bill, you can also specify the number of tracers that should be generated. This option is defaulted while processing an Import Bill.
• Not required - You can select this option to indicate that the exception tracer is not applicable to the bill you are processing. This option is defaulted while processing an Export Bill.
• Till resolved -If you indicate that the tracer should be generated until the exception is resolved, you need not specify the number of tracers that should be sent. This is so because the tracer will be generated until the exception is resolved.

Note

While processing an export bill the ‘Advice of Fate Required’ field is automatically default­ed to ‘Not Required’.

Receiver of Advice

You can specify details of the party, who needs to be informed, about the current status of the exception. Select the party type from the option list of valid parties that you specified, in the parties screen.

The advice will be generated to the customer, linked to the party type, in the Parties screen.

Advice Medium

For each of the advice of fate that should be generated for a bill, you can indicate the medium through which the advice should be generated. You can select a media type from the option list available. The valid media include:

• Mail
• Telex
• SWIFT

If the advice is generated through SWIFT an MT422 will be generated.

Previous Date

The system displays the date on which the last advice was sent to the party.

Advice Sent

The system displays the number of advices sent to the party.

Next Date Advice

The system displays the date on which the next advice would be sent to the party.

Manually Generate

An advice of fate tracer is generated at the frequency with which, the related exception tracer is generated. If you want to generate the advice of fate immediately, check against manually generate. If you do not check against it, the message will be generated automatically, as part of the end of day processes on the day it falls due.

5.3.7.4 Viewing Advice Updates

You can visit this screen, to view the current status of the advices of fate generated for the bill. The system displays the following information:

• The number of tracers that have been sent to the concerned party, till date
• The date on which the last tracer was sent
• The date on which the next tracer will be generated

5.3.8 Discrepancies Tab

You can register the discrepancies that you encounter while processing a bill, in the Discrepancies screen. To invoke this screen click on the tab titled ‘Discrepancies’ from the ‘Islamic Bills and Collections Contract Detailed’ screen.

Discrepancies are likely to be found, while processing Incoming or Outgoing bills that are under LCs.

5.3.8.1 Specifying Discrepancy Details

You have specified the discrepancies and assigned codes to them, in the ‘Discrepancy Code Maintenance’ screen. In this screen, you can select the discrepancies that are applicable to the bill you are processing. The description associated with the discrepancy code will be automatically picked up from the discrepancy code maintenance screen.

In this screen, you can also indicate whether the discrepancy has been resolved. The date on which it was resolved will be automatically displayed.

5.3.8.2 Specifying Reserve Exception Details

In this section specify the following details:

Tracers Required

You can indicate whether the reserve exception tracer is applicable, to the bill you are processing. You can indicate one of the following:

• Applicable -If you specify that a tracer is applicable to a bill, you can also specify the number of tracers that should be generated for the exception.
• Not Applicable -You can select this option to indicate that the exception tracer is not applicable to the bill you are processing.
• Till Resolved -If you indicate that the tracer should be generated until the exception is resolved, you need not specify the number of tracers that should be sent. This is so, because the tracer will be generated until the exception is resolved.

Tracers to be Sent

If you have indicated that the tracer is applicable, to the bill you are processing, you should also specify the maximum number of tracers that should be generated for each of the exception events.

The number of copies specified for the product, to which the bill is linked, will be displayed. You can change the default and specify a number to suit the bill you are processing.

If you have indicated that the tracer should be generated until the bill is resolved, the value 9999 is displayed, indicating that the tracer will be generated until the exception is resolved.

Tracer Medium

For each of the exception tracers that you specify for a bill, you can also indicate the medium through which, the tracer should be generated.

The preferred medium specified for the product, to which the bill is linked, is defaulted.

The media supported include:

• Mail
• Telex
• SWIFT

If the tracer is generated through SWIFT an MT420 will be generated.

Note

An override message is displayed if you enter an export bill in final stage with unresolved discrepancies. Similarly if you attempt to move a bill that has unresolved discrepancies to the final stage an override is sought.

Tracer Frequency

You can specify the frequency (in days) with which the tracer should be generated to the concerned parties (after the Start days) involved in the bill.

Trace Receiver

You can specify details of the party, who needs to be reminded to take action to resolve the exception. Select the party type of the party, from the option list that is available. The tracer will be generated to the customer linked to the party type, in the Parties screen.

Tracer Start Date

Exception tracers can be generated for a bill, only after the maturity date of the bill. While creating a product, you have indicated the number of days that should elapse after the Bill matures, on which the first tracer should be generated.

By default, the system calculates the date, on which, the first tracer should be generated, based on the maturity date specified in the contract screen and on the number of days specified, for the product involved in the contract.

You can change the default and specify a start date, to suit the requirement of the bill you are processing. The system also displays the number of tracers already sent to the concerned party.

Previous Tracer Date

Specify the date on which the last tracer was sent to the party.

Next Tracer Date

Specify date on which the next tracer will be generated.

Reserve Release Date

Enter the date on which the reserve was released that is the date on which you received the reserve advice from the Issuing bank or the Drawee.

Discrepancies Approval Date

Specify the date on which the discrepancies were approved.

Under Reserve

Check this option to indicate that the discrepancy is under reserve.

5.3.8.3 Viewing Tracer Updates

You can visit this screen to view the current status of the reserve exception. The system displays the following information:

• The date on which the last tracer was sent
• The date on which the next tracer will be generated
• The number of tracers that have already been sent, to the concerned party till date

5.3.9 Rollover Tab

A contract that is marked for rollover will be rolled over with all the terms of the original contract. However, you can change certain terms by specifying them in the ‘Rollover Details’ screen.

In the ‘Islamic Bills and Collections Contract Detailed’ screen, click the ‘Rollover’ tab to go to the rollover details screen.

You need to specify the following additional details for the rollover of the bill:

5.3.9.1 Specifying the Transaction Details for the Bill

In this section specify the following details:

Base Date

The base date is used to calculate the maturity date of the bill. In effect the tenor of the bill will begin from this date. The current system date will be displayed in this field and you cannot change the default value.

Base Date Description

The description of the instruction will be automatically picked up and displayed. You can edit the description of base date that is defaulted, to suit the requirements of the bill you are processing.

Bill Tenor

Specify the number of days for the tenor. The system will use the number of days to arrive at the maturity date for each tenor. The minimum/maximum tenor specified in the product underlying the contract has to be adhered to.

Transit Days

The transit days will be used in the computation of the maturity date, of the bill. Enter the transit days for the bill.

Maturity Date

The maturity date is the date on which the bill falls due, for payment. The maturity date is calculated in the following manner, based on the entries made to the previous fields:

Maturity Date = Base date + Tenor + Transit days

You can change the maturity date of a bill that is arrived at using the above method. However, the maturity date that you specify should be later than or equal to the Value date specified for the bill.

5.3.9.2 Specifying the Preferences for Profit Liquidation

In this section specify the following details:

Profit Liquidation Mode

Profit components of a bill can be liquidated immediately or deferred to a later date. In the Rollover screen, under ‘Profit Liquidation Preference’, you can indicate whether the mode of liquidation is to be immediate or deferred.

Choose ‘Immediate’ to liquidate the profit components at the time of Rollover. If you choose ‘Deferred’ from the option list, the system defers the liquidation of profit components to a later date. You can choose to pay the profit components fully or partially subsequently.

5.3.9.3 Specifying Profit Computation Dates

In this section specify the following details:

From Date

The system starts the computation of profit from the date specified here.

To Date

Once you have specified the start date for profit computation, you have to indicate the end date for calculating the profit. The minimum/maximum profit rate specified in the product underlying the contract has to be adhered to.

5.3.9.4 Rollover of a Contract

The roll over of a bills contract is possible only if:

• It is an import advance bill
• The bill is in the final stage
• Rollover is initiated on or after the maturity date of the bill
• The contract status is active and authorized
• ‘Allow rollover’ option is maintained for the bill at the product level
• The event roll is maintained for the product

If you have marked a bill for roll over, the system liquidates the original bill and creates a new rolled over bill based on the details you have maintained through the Rollover screen.

A new event Roll will be triggered when a bill is rolled-over and the system:

• Routes the outstanding principal through the roll over Bridge GL. In case the liquidation mode is ‘Immediate’ for the contract, the outstanding profit is collected in the ROLL event.
• Passes entries for the principal amount in the INIT event

If a bill has to be rolled-over:

• The Maturity Date should be past its Base date
• The value of date of the bill should not be null or less than the ‘From date’ maintained in the ‘Rollover details’ screen.

5.3.10 Viewing Rollover Details of the Original Bill Contract

You can view the values that were maintained in the specific version (Parent and Child) of a bills contract. In the ‘Islamic Bills and Collections Contract Detailed’ screen, click on the ‘Rollover’ tab.

5.3.11 Draft Tab

You can capture amounts for the different components of a bill. Click the ‘Drafts’ tab from the ‘Islamic Bills and Collections Contract Detailed’ screen to capture the different component amounts. The components for which you can capture this information are:

• Cost of goods
• Insurance amount
• Profit amount
• Freight charges

  

5.3.12 Insurance Tab

You can associate the name of an insurance company to the bill contract being processed. Click the ‘Insurance’ tab from the ‘Islamic Bills and Collections Contract Detailed’ screen.

Select the appropriate insurance company code from the option list. The list will display all authorized and active company codes. Upon selection of the company code, the following details will be automatically displayed by the system:

• Insurance Company Name
• Address of the company
• Telephone Number
• Fax Number

On receiving the policy, you can also specify the Insurance Policy Number in this screen. The Reference Number of the bill contract will also be defaulted to the screen.

Note

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 (The override can be configured to be an ignore message or an error message depending on your requirement). On confirmation of the override, the company code will be automatically changed to ‘XXXXXXXXX’. The system will not perform any validations. Subsequently, you can specify any company name to be associated with the contract. However, no details will be populated in this case.

5.3.13 Invoice Tab

When an invoice is raised against a discounted bill, you can specify a margin of the invoice amount that should be withheld. Click the ‘Invoice’ tab from the ‘Islamic Bills and Collections Contract Detailed’ screen to invoke this screen.

5.3.13.1 Specifying Invoice Details

You need to specify the following details of the invoice you are raising for the bill:

• The identification number of the Invoice that you are entering
• The date on which the invoice was raised
• The amount for which the invoice was raised

The invoice amount is taken to be in the currency of the bill against which it was raised. You can enter several invoices against a bill. However the total invoice amount should be less than or equal to the bill amount of the bill against which he invoice is raised.

5.3.13.2 Specifying Margin Details

You can indicate the manner in which the margin to be discounted should be derived. You can express the margin as:

• A percentage of the bill amount
• A flat amount

If you specified percentage, indicate the percentage of the bill amount that should be retained as a margin.

If you specified amount, indicate the margin amount. If a margin is applicable, the outflow on the value date (the date on which the accounting entry is passed pertaining to the day you actually fund your customer) is the amount you get by subtracting the margin amount from the bill amount. On the maturity date of the contract, the inflow is the bill liquidation amount and the outflow is the margin amount.

The sum of the invoice amounts that you specify should be less than or equal to the total bill amount.

5.3.13.3 Liquidating the Margin

If you are liquidating the margin that you retained for a bill, specify the amount to be liquidated here.

The Outstanding Margin Amount applicable to the bill at any point in time is displayed in the ‘Outstanding Margin Amount’ field. The margin that you liquidate should be less than or equal to the outstanding margin amount.

5.3.14 Packing Credit Tab

Packing Credit is a Finance or Cash Credit facility sanctioned to an exporter at the Pre Shipment stage to facilitate purchase of raw materials at competitive rates, produce goods per requirement of the customer and finally organize packing for onward export.

You can capture credit details in the ‘Packing Credit’ tab of the IB contract screen. To invoke this screen, in the ‘Islamic Bills and Collections - Contract Input - Detailed’ Screen, click the ‘Packing Credit’ tab.

The Packing Credit Subsystem includes the following as detailed under.

IB-CI Linkage/Settled Finance

Sequence Number

Specify the order in which the system liquidates attached multiple loans. You need not maintain bridge GLs within CI Products which allow creation of these CI accounts as the system replaces the credit settlement bridge with the bridge GL that the IB product maintains, automatically.

CI Account Number

Select the CI Account Number from the option list provided.

Event Code

The system defaults the appropriate event code while attaching CI for liquidation and attempting to save. These include INIT (in case of initial Discount, Purchase or Negotiation operation) and LIQD, BPUR, BDIS, LPUR and LDIS events.

Outstanding Amount

The system displays the outstanding amount of the CI contract while attaching the same. Click ‘P’ to populate information to the field.

Currency

The system displays the outstanding currency of the CI contract while attaching the same. Click ‘P’ to populate information to the field.

Settled Amount

The system displays the loan amount settled against each event in the CI currency, while liquidating the loan from the bill.

5.3.14.1 Processing Packing Credits

You can attach Packing Credits during purchasing, discounting or liquidation of an Export Bill. The Oracle FLEXCUBE system throws an error if you attempt to attach CI accounts during any other event than the latter ones or INIT events on account of direct purchases, discounts and negotiations.

The system allows linking only active and authorized CI accounts created with the ’Packing Credit’ flag enabled at the contract level. You cannot enable auto liquidation for these accounts. Further these accounts need to have an outstanding CI amounts as greater than zero. The counterparty involved remains as the one on the bill .The system also allows linking of multiple bills to the same account.

Note

You must enter Pre-Payment Details for Products with the Packing Credit flag enabled to avoid a CI error on attempting to save.

If the total value of a CI contract attached to a bill exceeds the Purchase or Liquidation amount, the system displays an override on attempting to save. In case of change of operation from Discount to Collection or Purchase to Collection, another override is displayed on saving that event to manually reverse CI Payments in the contract.

If you create a Bill under the product with the flag ‘link to loans’ enabled, you can attach the Packing Credit during the BPUR or LIQD events only if no BLNK event has been fired in the CI contract failing which an error is thrown on attempting to save. You can link the Bill to the CI after attaching the Packing Credit to the latter. You cannot create a CI where its value is greater than difference of the Outstanding Bill Amount and the Purchase Amount. During the LPUR event an override alerts you of the soft linked outstanding loans. You need to handle this operationally by manually liquidating the loan outstanding and then input such liquidation amount in Islamic BC. Alternatively the system credits the customer’s CASA account with such difference liquidation amount.

When the system authorizes the event in which the CI is linked, the LIQD event in CI is also authorized. Some limitations in this regard though are noteworthy:

• If at anytime the event linking the CI to the Bill is deleted, the corresponding finance event in the CI is also deleted .It is not possible though to delete such Liquidation Event from the CI Payments screen.
• If a Bill is reversed the system does not reverse the Finance but rather it displays an override to manually reverse of the finance on saving, if CI linkages exist in the contract.

On linking and saving a BC contract liquidation of the linked CI Account is triggered. You do not require maintaining a separate Bridge GL in the CI Product, as the system automatically replaces the Credit Settlement Bridge with the Bridge GL in the Islamic BC Product. In case of a Purchase or Discount operation the system converts the purchase amount to CI currency and credits the same into the Bridge GL maintained in the Islamic BC Product.

5.3.14.2 Liquidating a Packing Credit Loan

In Islamic BC Products when FX is linked but the CI Account attached is in the LCY of the branch the effective LCY exchange rate is used for Finance liquidation, In case multiple FX contracts are used, the system arrives at an effective Purchase or Liquidation rate by using the method of weighted averages. If the finance currency is different from the Bill currency, then the Finance Rate from the Rate Type at the Product level is used. The Finance liquidation happens to the extent of the Purchase Amount and the excess amount if any is credited to the customer’s account.

Again during Bill Purchase or Discount Liquidation, when funds are received from a Nostro Account if a CI is attached, the system liquidates any Finance attached per the effective LCY Collection Rate or the Rate Type at the product level in that order, if in LCY. The effective Purchase or Liquidation Rate used during Bills Purchased Asset creation is again used during Asset Liquidation. The excess proceeds then if any are credited to the customer in that order. Again when no Purchase, Discount or Negotiation occurs the system directly liquidates any existing Finance and credits excess proceeds to the customer.

Note

The Tag ‘LOAN_LIQD_AMT’ includes both the Outstanding Principal and profit compo­nents put together while the system uses the Tag ‘AMT_PURCHASED’ if the customer’s CASA account needs to be credited.

Let us illustrate accounting entries for appropriate events using conditions bulleted below:

• Pre-Shipment finance offered in LCY = 9,000 INR
• Loan Outstanding to date (Principal + Interest) = 10,000 INR
• Bill Amount = 600 USD
• Effective LCY Exchange Rate (effective purchase or liquidation rate) USD/INR = 50
• Purchase Amount = 300 USD

5.3.15 Purchase Details Tab

Purchase details of a bill can be captured in the ‘Purchase Details’ tab. To invoke this screen, in the ‘Bills and Collections - Contract Input - Detailed’ Screen, click the ‘Purchase Details’ tab.

 

You can link pre-shipment loans availed by exporters such that they be adjusted against outgoing Bills, Discounting of Bills or Purchase of Bills .The system then liquidates the loan and credits only the remaining proceeds to the exporter's settlement account.

You can also allow CI accounts linkages and purchase details only for export bills i.e. for product of type ‘E’. Further you can link CI accounts using the ‘Packing Credit’ subsystem during the following events:

• Purchase (BPUR)
• Discount (BDIS)
• Liquidation of purchase and discount (LPUR and LDIS)
• Liquidation (LIQD) event

INIT event of the Islamic BC but only where initial operation is ‘PURCHASE’ or ‘DISCOUNT’ or ‘NEGOTIATION’

You can also select the ‘Packing Credit Product’ check box under ‘Account Preferences’ in the CI Product Preferences Screen to allow linking with bills. CI account creation also involves the packing credit field, the value of defaults from the one maintained at CI Products.

Note

The system throws an error if you enter purchase details for events other than Purchase (BPUR), Discount (BDIS), Liquidation of Purchase and Discount (LPUR and LDIS), Liqui­dation (LIQD) and ‘INIT’ in Islamic BC when the initial operation are ‘PURCHASE’, ‘DIS­COUNT’ or ‘NEGOTIATION’ only.

You can attach a CI to multiple bills such loan to the bill linking is possible only during the final stages. You can modify a linked CI account only in attached corresponding events before saving, Post authorization de-linking or modifications are not possible at any stage of the contract.

Liquidation of an attached CI during a corresponding event is possible either to the extent of the purchase amount (in case of purchase and discount) or the liquidation amount (in case of liquidation of bill) while the amount in excess is credited to the customer.

You can attach the same CI that is linked to BPUR and BDIS events for liquidation to LPUR and LDIS events if the outstanding CI amount is not zero. You can also attach another active and authorized CI account having a non-zero outstanding amount to another bill belonging to the same customer, Such CI accounts are not enabled for auto liquidation or attached to any other bill. You cannot validate a CI Contracts and Bills against their creation dates.

The following amount tags are available in this module.

Module	Amount Tag	Description
IB	LOAN_LIQD_AMT	Finance liquidated amount
IB	AMT_PURCHASED	Amount tag used during customer CASA credit
IB	COLL_LIQ_AMT	Amount tag used for Nostro debit to be credited to the customer
IB	COLL_LIQ_AMTEQ	Amount tag used for credit to the customer.

Purchase Details

Purchase Amount

Specify the value of the Bill purchased. Partial purchases are allowed where the amount tag ‘AMT_PURCHASED‘ indicates the amount used for the purchase.

Note

For multi tenor bills, the system defaults the sum of total discounted amount from multi-tenor tab.

Unlinked FX Rate

Specify the unlinked FX rate. This is the rate at which the system liquidates an LCY Loan utilizing a part purchase amount to which no FX is attached.

Effective Purchase or Liquidation Rate

This rate is defaulted by the Oracle FLEXCUBE system if FX is linked to IB. You can use this rate to liquidate a CI in the LCY of that branch. The Oracle FLEXCUBE system finally arrives at the Effective Purchase /Liquidation rate by using the method of weighted averages. The FX sequence used for arriving at the Effective FX rate remains in the sequence used while initially attaching the same.

Effective Collection Liquidation Rate

This rate is also defaulted if FX is linked to IB and is applied in case of liquidation of CI when it is in the LCY of the branch. The liquidation event of the bills (LPUR, LDIS and LIQD events) are triggered during subsequent to the initial operations of bill purchase, discount, negotiation or normal liquidation events during the life cycle of the IB if a finance is attached. The effective collection liquidation rate is arrived at by the weighted average method discussed in the example of effective purchase or liquidation rate mentioned above.

Margin Details

Amount or Percentage

The system will always calculate the margin amount on the bill amount. You can indicate the manner in which the margin to be discounted should be derived. You can express the margin as:

• A percentage of the bill amount
• A flat amount

Margin

Specify the margin of amount of percentage to be retained. If you specified percentage, indicate the percentage of the bill amount that should be retained as a margin.else specify the amount,

Eligible Amount

If a margin is applicable, the system will arrive at the ‘Eligible Amount’ by subtracting the ‘Margin Amount’ from the bill amount. The bill amount will not be considered as the eligible amount. The outflow on the value date (the date on which the accounting entry is passed pertaining to the day you actually fund your customer) is the eligible amount.

The following example will illustrate the calculation:

For example, a bill contract has the following details:

• Bill Amount – 1000
• Total Invoice – Amount
• Margin Percentage – 10%

Calculation will be as follows:

Margin Amount – 10% of Bill Amount = 100

Hence, Eligible Amount = Bill Amount - Margin Amount = (1000 – 100) = 900

The Bill Amount will not be altered and remain at 1000.

On the maturity date of the contract, the inflow is the bill liquidation amount and the outflow is the margin amount.

The sum of the invoice amounts that you specify can be greater than or equal to the total bill amount

Liquidated Amount

While liquidating a bill, the margin you retain for a bill during the discount is proportionally released and displayed here.

Outstanding Amount

The Outstanding Margin Amount applicable to the bill at any point of time is displayed here. The margin that you liquidate should be less than or equal to the outstanding margin amount.

5.3.16 Multi Tenor Tab

Multi Tenor details of a bill can be captured in the ‘Multi Tenor’ tab. To invoke this screen, in the ‘Islamic Bills and Collections - Contract Input - Detailed’ Screen, click the ‘Multi Tenor’ tab.

You can maintain the following multi tenor parameters here:

Serial Number

Serial number for each split is incrementally defaulted here.

Base Date

Specify base date of the split from the adjoining calendar. You can modify the base date even after first authorization.

Note

Base date can be future date.

Base Date Code

Specify a valid base date code which provides additional information for the maturity period, from the adjoining option list.

Value Date

Specify value date of the split from the adjoining calendar. You can modify the value date even after first authorization.

Note

Value date can be future date.

Value date for all the splits should be the same.

Tenor

Specify tenor of the split in days. You can modify tenor days even after first authorization.

Transit Days

Specify transit days of the split. You can modify transit days even after first authorization.

Maturity Date

Specify maturity date of the split from the adjoining calendar. You can modify the maturity date even after first authorization.

Maturity date is calculated as the sum of Base Date + Tenor + Transit Days for each split.

Note

Tenor entered across multiple splits must be unique. The system will not allow saving of multi tenor bill with more than one split having the same maturity date

While liquidating multi tenor contracts, the system liquidates the splits of different tenors in the ascending order of their maturity dates.

Split Percentage

Specify percentage of the split you need to use to calculate the Bill Amount.

Note

If the bill amount is directly entered and the split % is not maintained, then the system will not compute split % by default.

If both the split % and bill amount are maintained, then the system recalculates the bill amount based on the split % maintained.

Bill Amount

System calculates and displays the bill amount of the bill based on the split % maintained; however, you can directly specify bill amount, if needed.

Note

If you specify bill amount and split % is already maintained, then the system recalculates the bill amount based on the split % maintained.

Discount Amount

Specify discount amount of the bill discounted by the bank, if a multi tenor contract operation is maintained as ‘Discount’ directly or when the multi tenor contract operation is changed from ‘Collection’ or ‘Acceptance’ to ‘Discount’ due to amendment. You can specify the discount amount for each split; however, it is mandatory to specify at least for a single split.

Rebate Amount

Specify amount which you need to reduce as a rebate from the split amount, during amendment of the bill.

Note

You can either decrease or increase bill amount at the initial stage; however, at the final stage you can only decrease the bill amount and is treated as ‘Rebate’ given to the cus­tomer.

Exchange Rate

Specify exchange rate for each split, if the operation ‘Discount’ or ‘Negotiation’ and the bill currency is different from the local currency.

Note

The weighted average of the exchange rate maintained for all the splits is considered while financing.

Discounted Amount

Total amount discounted for each split is defaulted here.

Liquidation Amount

Specify liquidation amount for each split you need to liquidate.

Note

During liquidation, if the liquidation amount is not maintained for any of the splits, then the system displays an error message.

Liquidated Amount

Total amount liquidated till date for the split is displayed here, for each split.

From Calculation Date

Specify date from when you need to compute Profit for the split.

System validates the date to be later than the value date of the split. If it is earlier, then the system displays an error message. If the date is not entered, then the system defaults the value date of the split here.

You can specify the date even when the operation is changed to ‘Discount’. System validates the date to be later than the application date of the split. If it is earlier then the system displays an override message. If the date is not entered, then the system defaults the application date of the split here.

To Calculation Date

Specify date till when you need to compute Profit for the split.

System validates the date to be earlier than the maturity date of the split. If it is later, then the system displays an error message. If the date is not entered, then the system defaults the maturity date of the split here.

User Defined Status

Specify contract status of the split for each split. The option list displays all valid statuses of the split. Select the appropriate one. However; if it is a new action, then the system defaults the status as ‘NORM’.

Status can be different for each split as the due date is different. The worst status is updated in ‘Details’ section of the contact.

Status as of Date

Status of the split as of date is displayed here and is updated when the status changes. If the action is new, then it is defaulted with value date of the split.

Note

When an auto status change batch is run and the status of a split in multi tenor bill is prior to the status manually updated in the ‘Details’ tab, then the system considers the status of the bill for GL movement.

Under Protest

Check this box if you need to generate ‘PROTEST_NONPAY’ advice for a split.

If this check box is checked, then while generating the advice the system will provide the split bill amount and not the total bill amount.

Protest Date

Specify date when the protest was generated.

5.3.16.1 Validating Multi-Tenor Details

As the values maintained in Multi Tenor tab are not applicable for other tabs, the system defaults and validates the following values maintained for multi tenor bills in Multi Tenor tab when a Bill is saved:

• Defaults the base date with the earliest base date maintained for splits in the Multi Tenor tab.
• Defaults the base date code with the base date code for the earliest base date maintained for splits in the Multi Tenor tab.
• Defaults the value date with the earliest value date maintained for splits in the Multi Tenor tab.
• Recalculates the tenor based on the base date and maturity date updated in the main screen.
• Defaults the value of ‘Transit Days’ as Zero, which cannot be amended later.
• Defaults the maturity date with the latest maturity date maintained for splits in the Multi Tenor tab.
• Defaults the purchase and discount amount with the sum total of the discount amount maintained for each split, if the operation is ‘Discount’.
• Defaults the negotiation amount with the total bill amount maintained, if the operation is ‘Negotiation’.
• Defaults the liquidation amount with the sum total of the liquidation amounts maintained for each splits.
• Defaults the liquidation date with the earliest maturity dates of the split, if date is not maintained. If the liquidation date is not maintained, then the system validates for the maturity date to be the earliest of the maturity dates maintained for the splits and displays an error message if it is later than the earliest maturity date.

Note

You will not be able to amend these fields later.

5.3.16.2 Processing Finance for Multi Tenor Bills

The system processes finance components assigned to the respective event as below:

Finance Liquidation, Finance Accrual & OD Accrual

 

• ‘From Date’ and ‘To Date’ maintained in the ‘Details’ tab is considered for finance calculation and ‘From Date’ and ‘To Date’ maintained in the ‘Multi Tenor’ tab is considered for other components.
• Finance components are maintained at the product level for a Multi Tenor contract. In the finance subsystem, based on the number of splits available, different sub-components are defaulted internally for each split with different ‘From Date’ and ‘To Date’.
• Initially, finance rate maintained for a component at the product level is defaulted for each sub-component; however, you can modify or waive off the same for each split, if needed.
• Finally, the sum total of the subcomponent finance amount is computed as the finance component maintained for the product.
• If the basis amount tag for an finance component is BILL_ELG_AMT, then the margin amount is adjusted to the bill amount of all the splits, proportionally.
• Overdue finance components are split as component + Split Serial number.
• The accrual finance is calculated and the corresponding accounting entries are posted.
• If the bill is not liquidated, then the penalty finance components are accrued. Penalty start date for each split component is computed based on the grace days on finance end date of each split.
• You can view the details of the sub components in the Finance sub screen of the contract.

Floating Type of Finance

 

• The system defaults the floating rate of each component based on the split amount and split tenor.
• The sub-components are processed with the corresponding split amount and split tenor to get floating profit rate.
• If customer Margin is maintained for the customer and currency combinations, then the system will process the bill amount for each split to derive the customer margin to be applied for the profit component calculated for the respective split.

Handling Refund of Finance

 

• Oracle FLEXCUBE facilitates refund of finance for the following.
  • Reduction of Bill Amount for a Split
  • Reduction of Maturity Date for a Split
  • Liquidation of a Split prior to its maturity date
  • Back dated Liquidation of a Split

• The system calculates the finance amount for refund for the respective split based on the serial number of the split changed.

Effective Finance Rate & Discount Accrual

If a Finance component is marked as discount, then the system calculates the effective finance rate and the daily discount accrual based on the intermediate cash flows for different tenors and amount dues.

5.3.16.3 Amending Multi Tenor Bills

After a multi tenor contract is authorized for the first time, addition and deletion of splits is disabled. However; Bill amount of the Multi Tenor Bills can be amended at the initial stage using Bills Online Screen. Also, you can amend rebate amount at the split level at the final stage.

To amend bill amount, the changed amount needs to be entered at each split level. Then the system defaults this amount as the bill amount in the main tab. When a contract is saved, the system reduces Bill Amount of the contract and the respective split by the Rebate Amount. Rebate on a split bill amount is collected from the customer’s account, if it is processed on a discounted or negotiated portion.

After an amendment is saved, the system validates for the changed split amount of each split to be lesser than the liquidated amount of the split. If so, then the system will display an error message.

If ‘Recovery Interest Rate’ or ‘Recovery Rate Code’ is specified at the contract level and there is a Rebate on Split Bill Amount, then the finance is refunded or recollected for each split.

5.3.16.4 Processing MT Messages for Multi Tenor Contracts

When an MT202 is received with an amount lesser than the due amount of the split with earlier maturity date and if the amount is more than the tolerance level, then the system moves the message to ‘Pending Liquidation’ status.

When an MT202 is received with an amount greater than the due amount of the split, then the system adjusts the remaining amount towards the subsequent splits.

When an MT430 is received for a Multi Tenor contract, the message will be logged as repair contract with the following repair reason:

Multi Tenor contract. This message has to be processed manually

5.3.17 Reversing Islamic BC

The section contains the following details:

• Section 5.3.17.1, "Reversing Islamic BC"
• Section 5.3.17.2, "Procedure for Reversing Islamic BC"
• Section 5.3.17.3, "Contract Reversal"
• Section 5.3.17.4, "Event Reversal"

5.3.17.1 Reversing Islamic BC

You can reverse any particular version of the Islamic BC contract or entire Islamic BC, This can be achieved through reversal operation. The Reversal of an Islamic BC should be authorized by a user, bearing a different User ID, before the End of Day Operation begins.

5.3.17.2 Procedure for Reversing Islamic BC

Click on the ‘Reverse’ icon once you view the Islamic BC details in the Detailed View screen.

You can select either of the options for reversal:

• Contract Reversal
• Event Reversal

 

Oracle FLEXCUBE will prompt you to confirm the reversal of the Islamic BC.

5.3.17.3 Contract Reversal

On selecting ‘Contract reversal’, system will reverse the Islamic BC contract. A Reversed Islamic BC will not be available for any further operations.

‘REVR’ event will be triggered which updates the contract status as ‘Reversed’. This will reverse the liability entries passed for the Islamic BC to ensure that the credit limit that was taken by the Islamic BC is released and is available for future utilization. In addition to this, Charges, Commission, Limits Utilization and Accounting entries will also be reversed on contract reversal.

5.3.17.4 Event Reversal

In case of ‘Event Reversal’, system will reverse the last version creating event along with the non-version creating events (if any) in between the current version and previous version. This reinstates the contract to the version corresponding to the version of the immediate previous event of the reversed event.

‘REVE’ event will be triggered and reverse the associated events, but the contract status will be available as ‘Active’. However, you cannot reverse the last event reversal even though it is a version creating event.

This will also reverse the liability entries passed for those particular reversed Islamic BC events to ensure that the credit limit that was taken by the Islamic BC is released and is available for future utilization.

Reversal of the event will have impact on the below details

• Accounting entries- Negative entries will be posted for the reversed BC events
• Commission
• Charges
• Limit utilization

You cannot reverse more than one event at the same time or reverse a cancelled or closed Islamic BC contract.

When there is only one version available for the contract and if you select ‘Event Reversal’, the system displays an error message and in this case you need to select ‘Contract Reversal’.

5.3.18 Viewing Event Details

Click the ‘Events’ button in the ‘Islamic Bills and Collections Contract Detailed’ screen, to invoke the ’Event Details’ screen.

The details of events, that have already taken place on the contract, will be displayed along with pending events. The date on which the event took place will also be displayed.

Click the ‘Accounting Entries’ to view the accounting entries for the event. Click the ‘Message’ button to view messages applicable to the event. Click the ‘Exit’ button to return to the IBC Contract Detailed screen.

5.3.18.1 Viewing the Accounting Entries Passed for the Bill

From the ‘Islamic Bills and Collections Contract Detailed – ‘Event Details’ screen, click ‘Accounting Entries’ to view the accounting entries for the event. The details of the accounting entries that were passed for the event can be viewed here.

The accounting entries that are passed depend on the type of bill you are processing.

The following information is provided for each event:

• Branch
• Account
• Transaction Code
• Booking Date
• Value Date
• Dr/Cr indicator
• Currency
• Currency
• Amount in contract currency
• Amount in local currency
• All the overrides that were allowed for an event will also be displayed

5.3.18.2 Viewing the Advices Applicable to a Contract

Click the ‘Messages’ button from the ‘Events’ screen to view the list of advices applicable to a particular event in the lifecycle of the bill.

The following details of a message are displayed:

• The message type
• The Name and ID of the recipient of the message
• The status of the message
• The status of the test
• Authorization status
• DCN

To view the text of a message, highlight the message and click on the ‘Message’ button.

Print Button

Click the print button to print the advices that are generated. When you click the EXIT button the system displays a message if the advices are printed for the first time, Click OK if the print is successful.Click the ‘Exit’ button to exit the screen.

Note

When Duplicate Advice Tracker field is checked and you click the EXIT button on the ad­vice generation screen, the system displays a message “Print Successful?”. Click OK but­ton to confirm the successful printing. Every subsequent print of the advices will be considered as duplicate advice. For more information on Duplicate Advice Tracker refer to section “Messaging Branch Parameters Maintenance” in the Core User Manual.

5.3.19 Reversing

Specifying Advices, FFTs and Instructions for a Bill

The advices that have to be generated for an event during the lifecycle of a bill are specified for the Product involved in the bill. While processing a bill, you can:

• Specify the advices that should be generated for the bill
• Suppress the generation of any of the advices not applicable to the bill
• Indicate the priority with which the advice should be generated
• Indicate the Free Format Texts and Instructions that should accompany the advices

From the ‘Islamic Bills and Collections Contract Detailed’ screen, click the ‘Advices/FFT’ button. The ‘Advices/Free Format’ screen will be displayed.

5.3.19.1 Specifying Advice Details

The advices inherited from the product involved in the bill you are processing will be displayed in the Advice Code field.

Medium

If advices are to be generated, for the bill you are processing, it is mandatory for you to also specify the medium through which an advice is to be transmitted. An advice that is generated can be transmitted Mail, TELEX, or SWIFT. You can select the appropriate medium code from the option list.

Party Type

Specify the party type.

Party ID

Specify the party ID.

Party Name

Specify the party name.

Priority

For messages sent through media like SWIFT or TELEX, you can specify the priority with which the advice should be generated. By default, the priority of all advices is marked as Normal. You have the option to prioritize advices to one of the following options:

• Normal
• Medium
• High

Note

However, you can change the priority of an advice to Urgent only for Payment Advices.

Suppress

By default, all the advices that have been defined for a product will be generated for the bills involving it. As certain advices may not be applicable to the bill you are processing, you can suppress its generation by indicating the same in this screen.

5.3.19.2 Specifying FFTs for a Bill

Free Format Texts (FFTs) may be a set of statements that should be printed on the advices generated to the parties, involved in the bill. Additional information that should be a part of the bill instrument can be entered in the form of an FFT.

While defining a product, you also specify the FFTs that should accompany an advice generated for a bill, involving the product. These FFTs will appear when you select an advice code. This indicates that the FFTs that you specify will appear on the advice which is highlighted.

If the Applicable Rule in the ‘LC Product Preferences’ screen is selected as ‘OTHR’, you need to specify a rule narrative for the LC Product. If the Rule Narrative exceeds the limit predefined (35 characters), the same can be defined as a Free Format Text. For BC contracts, FFT codes are associated with advices in the LC contract.

The 47A and 47B tags are linked to FFT codes. The message types supported by 47A tag are:

• MT700
• MT710
• MT720

Message Types supported by 47B tag are:

• MT701
• MT711
• MT721

You can add to or delete from the list of FFTs that are defaulted from the product involved in the bill.

To add an FFT to the list, click add icon and select the code that identifies the FFT, from the option list. The description of the FFT is automatically picked up and displayed. You can edit the FFT description that is defaulted to suit the requirements of the bill you are processing.

To delete an FFT from list, highlight the code that identifies the FFT and click delete icon.

Note

If an Advice of Fate (MT 422) is to be generated for an event, it is mandatory that you enter a description for the following FFT codes:

• SND2RECMT422 (FIELD 72)
• ADVFATEPQRY (FIELD 75)
• ADVFATEPANS (FIELD 76)

5.3.19.3 Specifying Instructions for a Bill

You have defined instructions and assigned codes to them, in the ‘Instruction Code Maintenance’ screen. These instructions can be sent, along with the advices that are generated, to the parties involved in the bill.

When you select an advice code, the advice code is displayed in the 'Instruction section, of the screen. This indicates that the Instructions that you choose will appear on the advice, which is displayed.

The Instruction Codes indicated for the product to which the bill is associated will be defaulted to this screen. You can add or delete instruction codes, from the defaulted list of Instructions that accompanies an advice generated for the bill.

You can add to or delete from the list of Instructions, defaulted from the product involved in the bill.

The list of instructions associated with an advice is displayed. You can add to or delete from the list of defaulted instructions.

To add an Instruction to the list, click add icon and select the code that identifies the FFT, from the option list. The description of the FFT is automatically picked up and displayed. You can edit the description that is defaulted.

To delete an instruction from the list, highlight the code that identifies the Instruction and click delete icon.

5.3.20 Specifying the Settlement Details

Click the ‘Settlement’ button from the ‘Islamic Bills and Collections Contract Detailed’ screen to invoke the ‘Settlement Details’ screen.

For more details on specifying the Settlement Details Refer ‘Settlements’ User Manual under ‘Modularity’.

 

5.3.21 Capturing Split Settlement Details for a Bill

You can capture split settlement details for the bill using the ‘Split Details’ screen by clicking ‘Split Settlements’ button in the ‘Islamic Bills and Collection - Contract Input - Detailed’ screen.

On clicking the Split Settlement button, if you have checked the ‘Settle Available Amount’ box in the ‘Additional’ tab of the Contract screen, then the system will check for the customer balance. If there is no sufficient balance in the Customer account including the OD limit, then the available amount will be adjusted towards the Bill Liquidation Amount.

5.3.21.1 Basis Details

Amount Tag

The bill amount tag defined for the current event in the bills contract is displayed here. It is picked up from those defined for the INIT event. You cannot change them.

CCY

The currencies associated with the amount tags (as picked up from the INIT event) are displayed here. You cannot change them.

Amount

The amount for each amount tag (picked up from the INIT event) is displayed here. You cannot change them.

5.3.21.2 Split Details

S. No

The system generates a running sequence number for each split record. You cannot modify it. The system automatically generates the sequence number on introducing a new split.

Amount Tag

The selected amount tag in the basis details section is displayed here in the split details section. If there are no settlement tags for the event being processed, the system will display an error.

Amount

Specify the split amount for the split amount tag. The sum of amount should not be greater than the basis amount. The system calculates the amount on the basis of the split percentage. You cannot leave this field blank.

Percentage of Proceeds

Specify the split percentage of the Bill Amount for each account. The sum of split amounts should be equal to the total amount specified for the corresponding basis amount tag. You cannot leave this field blank.

Customer

Specify the customer to whom the split amount should be assigned. The adjoining option list displays all the customers maintained in the system. You can select the appropriate one.

Branch

The system displays the branch where the settlement account for the split amount tag resides. The adjoining option list displays all the valid branches in the system. You can choose the appropriate one.

Account Currency

The settlement account currency for the split amount tag is defaulted based on the settlement account chosen. You cannot change it.

Account

Select a valid account for the specified settlement account branch, from the option list.

Loan Account

Check this box if you want the split amount to be booked as a loan. The split settlement amount entered as the Loan Amount is used to create the loan contract. You can select more than one Account as Loan account. This is enabled only for settlement tags BILL_LIQ_AMT or BILL_LIQ_AMTEQ.

Exchange Rate

If the basis amount currency is different from the settlement account currency, you need to specify the exchange rate that should be used for conversion.

Negotiated Cost Rate

Specify the negotiated cost rate that should be used for foreign currency transactions between the treasury and the branch. You need to specify the rate only when the currencies involved in the transaction are different. Otherwise, it will be a normal transaction.

The system will display an override message if the negotiated rate is not within the exchange rate variance maintained at the product.

Negotiated Reference Number

Specify the reference number that should be used for negotiation of cost rate, in foreign currency transaction. If you have specified the negotiated cost rate, then you need to specify the negotiated reference number also.

Note

Oracle FLEXCUBE books then online revaluation entries based on the difference in ex­change rate between the negotiated cost rate and transaction rate.

5.3.22 Reducing of the LC Cash Collateral

While processing a bill against an LC, you can reduce the cash offered as collateral for the LC.

From the ‘Islamic Bills and Collections Contract Detailed’ main screen click the ‘Collateral’ button. The LC Cash Collateral screen is displayed. You can reduce the cash collateral amount by the amount being availed through the bill. If you make an availment against an LC and do not reduce the cash collateral, an override message is displayed.

5.3.22.1 Specifying Collateral Details

Collateral

Here you can specify the collateral details

Currency

Specify a valid currency for the collateral. The adjoining option list displays all valid currencies maintained in the system. You can select the appropriate one.

Percent

The system displays the percent.

Exchange Rate

The system displays the exchange rate.

Collateral Amount

Specify the collateral amount.

Description

Provide a brief description of the collateral.

Adjustment

Here you can specify the adjustment details.

Type

Indicate the adjustment type. You can select one of the following options.

• Increase
• Decrease

Amount

Specify the amount.

Note

Oracle FLEXCUBE will not automatically reverse the cash collateral when an availment is made against an LC.

5.3.23 Viewing Profit Details

Click the ‘Profit’ button from the ‘Islamic Bills and Collections Contract Detailed’ screen to invoke the ‘ICCF screen.

For more details on viewing Profit Details, refer ‘Interest’ User Manual under ‘Modularity’.

5.3.24 Viewing Charge Details

Click the ‘Charges’ button from the ‘Islamic Bills and Collections Contract Detailed’ screen to invoke the ‘Charge Details’ screen.

For more details on viewing Charge Details, refer ‘Charges_Fees’ User Manual under ‘Modularity’.

5.3.25 Specifying the Tax Details

Click the ‘Tax’ button from the ‘Islamic Bills and Collections Contract Detailed’ screen to invoke the ‘Tax Details’ screen.

For more details on specifying Tax Details, refer ‘Tax’ User Manual under ‘Modularity’.

5.3.26 Specifying the MIS Details

Click the ‘MIS’ button from the ‘Islamic Bills and Collections Contract Detailed’ screen to invoke the ‘MIS’ screen.

Refer the Products User Manual under Modularity for further details on capturing MIS details.

5.3.27 Utilizing Import Licenses

You can link the import license to an import Islamic BC contract and update the utilization amount or quantity for the linked import licenses. Click on ‘Import License’ to invoke the import license screen

Import License No

Select the import license number from the adjoining option list.The import licenses maintained for the party type ‘Applicant’ in the Import License Maintenance screen is displayed in the option list.

Goods Code

Select the goods code from the adjoining option list.

Goods Short description

The system displays the goods code description maintained in the ‘Bills and Collections Commodity Code Maintenance’ screen.

UoM/Currency

The system displays the unit of measurement or currency captured for the goods code of import license.

Note

If the basis is ‘Quantity’, then the system displays the UoM maintained for the goods code.

If the basis is ‘Amount’, then the system displays the currency maintained for the import license.

Qty/License Amount

The system displays the Quantity or License Amount captured for the goods code of import license.

Qty/License Amt Already Utilized

The system displays the sum total of Quantity or License Amount already utilized for the goods code.

Qty/License Amt Already Reinstated

The system displays the sum total of Quantity or License Amount already reinstated for the goods code.

Available Qty/License Amt

The system displays either the Available Quantity or Available License Amount for the goods code.

Qty/License Amt Utilized

Specify the quantity or the license amount utilized.

Note

If the license utilization basis is Quantity, then the system defaults the License Amount Uti­lized as Quantity Utilized * Rate/Unit.

Qty/License Amt Reinstated

Specify the quantity or the license amount reinstated.

Note

• If the License Amount Utilized is maintained for an goods code of an import license, then the system allows reinstatement of the license amount.
• The ‘Qty/License Amt Reinstated’ should be less than or equal to the sum total of Qty/License Amount Utilized - Qty/License Amt Reinstated.
• You can enter either Qty/License Amount Utilized or Qty/License Amt Reinstated for a goods code.

Note

If the good is classified either as Licensed or as Prohibited and the import licence details are not entered in the LC or BC contract screens, then the system displays an override message as “Import license details are not entered for the contract.”

After authorization, you cannot modify or delete import licenses linked to an Islamic BC contract.

5.3.28 Maintaining Preferences for Finance

From the ‘Islamic Bills and Collections - Contract Input - Detailed’ screen, click ‘Finance Preference’ button. The ‘Finance Preference’ screen is displayed. In this screen you can maintain the details for the finance.

To recall, you have the option to create a loan from bills module. In case you opt for this option, the preferences you maintain in this screen will be used to create a loan during liquidation of bills.

Contract Reference Number

The system displays the contract reference number.

Currency

The system will display the local currency of the Branch in which the loan is initiated. You cannot change this value.

Tenor

Here you need to indicate the tenor for each loan being maintained. The tenor is expressed in days. The minimum/maximum tenor specified in the loan product underlying the contract has to be adhered to.

Units

Specify the units in which the tenor is specified.

Event Sequence Number

The system displays the event sequence number.

Crystallization Type

The crystallization type is displayed here. If the Bill is to be crystallized and if the crystallization type is set to linked finance, the system does not allow payments of the bill after the bill has been linked to finance.

Bill Amt to be Crystallized and Collateral to be liquidated

The bill amount to be crystallized is the remaining portion of the bill amount. This is equal to the difference between the Bill outstanding amount and the bill amount to be crystallized (+ LC Charges) minus the collateral to be liquidated, is liquidated from the customer account. The balance of the collateral remains in the Bills Collateral GL.

Liquidate charge/comm. On LC

Liquidation of charges and commission transferred from LC happens only on crystallization of the Bill. Liquidation of charges and commission transferred from LC is not allowed from any other event in the bill.

The flag indicates if the charges and commision that have been transferred onto the bill from the LI are to to be liquidated from the customer account on crystallization of the bill or trasferred to the loan.

If selected, system liquidates LC charges and commision from the customer account else, it is transferred to the loan.

Rate

Mid Rate

Select the rate to be applied for the conversion. The options available are Buy rate, Mid Rate or the Sell Rate.

Rate Code

The rate code will be used to pick up the exchange rate. The rate codes maintained through the ‘Standard Rate Code Maintenance’ screen will be available for selection in the option list provided. Select the appropriate rate code for the loan.

Exchange Rate

For a customer availing any Relationship Pricing scheme, the customer specific exchange rate derived by adding the original exchange rate and the customer spread maintained for the relationship pricing scheme gets displayed here.

If Relationship Pricing is not applicable, Exchange Rate will be the same as the Original Exchange Rate.

For more details on customer specific exchange rates, refer the section titled ‘Specifying Pricing Benefit Details’ in Relationship Pricing user manual.

Rate Type

The Rate Type indicates whether the rate to be applied for the conversion is the Buy rate, Mid Rate or the Sell Rate. Select the appropriate rate type from the drop down list.

Original Exchange Rate

The base/actual exchange rate between the Contract currency and Collateral currency gets displayed here.

Loan/Finance Value Date

The system displays the debit value date. However, you can amend this field.

For tracking the receivable from the current date, the system will create the loan one day prior to the debit value date and liquidate on the debit value date. In such cases, you can specify the loan value date as 1 day prior to the debit value date, so that, the system will create the loan (having 1 day as tenor) as of that date and will mature on the debit value date.

Maturity Account

You should specify the settlement account for the loan. You can choose a valid account number from the list of values that is available.

Maturity Date

The system accepts the maturity date in the crystallization preference screen of the Bill. If the finance to be created is call finance (finance for which the maturity date is not known), the same is defaulted to NULL

Note

• For Murabaha, CRST event will be triggered during liquidation of bills with advance by loan option. In CRST, loan will be created for the bill amount plus the LI charges and commision transferred from LI which are collected in the current bill.
• Partial Liquidation is not allowed for Murabaha transaction.

5.3.29 , Maintaining Charge and Profit Components

In the ‘Islamic Bills and Collection Contract Details’ screen, click ‘Drawer/Drawee IC’ link to invoke the ‘Drawer Charges’ screen. In this screen, you can define the charge and profit components at the time of initiation of contract.

Specify the following details in this screen:

Contract Reference Number

The system will default the Contract Reference Number from the main screen.

Start Date

Specify the Start date for profit details. Start date cannot be less than bill booking date.

5.3.29.1 Profit Tab

Specify the following details pertaining to profit:

Profit Details 1

Specify the following details:

Component

The system displays the profit component.

Component Description

Specify the description of the profit component.

Component Currency

The system will default the bill currency from the main screen.

Profit Details 2

Specify the following details:

Component

The system displays the profit component.

Component Description

Specify the description of the profit component.

Component Currency

The system will default the bill currency from the main screen.

Profit Details 3

Specify the following details:

Component

The system displays the profit component.

Component Description

Specify the description of the profit component.

Component Currency

The system will default the bill currency from the main screen.

Profit Rate

Specify profit rate. Profit rate cannot be greater than 100.

Profit Basis

Select the profit basis from the drop-down list. You have the following options:

• Actual/360
• Actual/365
• Actual/364
• 30(Euro)/360
• 30(US)/360
• 30(Euro)/365
• 30(US)/365
• 30(Euro)/Actual
• 30(US)/Actual
• Actual/Actual
• 30(Euro)/364
• 30(US)/364

Profit Amount

Specify the profit amount. It is the profit to be levied on drawer only at the time of liquidation.

Waive

Select the waiver from the drop-down list. You have the following options:

• Yes - If you select this option, then there will be no implications of calculated profit amount
• No - If you select this option, then you can modify the calculated profit amount

System considers the period between the start date and the date of liquidation for calculating profit amount.

During liquidation, system calculates and displays the amount for each of the defined component.

5.3.29.2 Charge Tab

In the ‘Drawer Charges’ screen click ‘Charge’ tab to maintain the charge details

Specify the following details in this screen:

Contract Reference Number

The system displays the contract reference number.

Start Date

Specify the Start date for profit details. Start date cannot be less than bill booking date.

Specify the following details pertaining to the charges.

Charge Details 1

Specify the following details:

Component

The system displays the charge component.

Component Description

Specify the description of the charge component.

Component Currency

The system will default the bill currency from the main screen.

Charge Details 2

Specify the following details:

Component

The system displays the charge component.

Component Description

Specify the description of the charge component.

Component Currency

The system will default the bill currency from the main screen.

Charge Details 3

Specify the following details:

Component

The system displays the charge component.

Component Description

Specify the description of the charge component.

Component Currency

Specify the currency of the charge component.

Waive

Select the waiver from the drop-down list. You have the following options:

• Yes - If you select this option, then there will be no implications of calculated charge amount
• No - If you select this option, then you can modify the calculated charge amount

Charge Percentage

Specify charge percentage. It cannot be greater than 100.

System calculates the final charge based on this value.

Charge Amount

The charge amount is the charge to be levied on drawer/drawee.

In case of Partial Liquidation, system calculates the drawer’s/drawee’s Profit and Charges in full and recovers during the first liquidation. Profit is calculated till maturity date of bill. During liquidation the remaining Bill amount, the drawer’s/drawee’s Profit and Charges are not applicable. During liquidation, system calculates and displays the amount for each of the defined component.

5.3.30 Capturing Brokerage Details

You can capture the brokerage details for a IB contract and set your preferences for sharing the brokerage amount among multiple brokers using ‘Brokerage’ screen. To invoke the screen, click ‘Brokerage’ button on ‘Islamic Bills and Collections Contract Detailed’ screen.

Contract Reference

The system displays the reference number of the contract.

Contract Currency

The system displays the currency of the bills contract. You cannot modify the contract currency.

Brokerage Percentage

Specify the percentage of the contract amount that should be paid as brokerage. Based on the percentage set here, the system calculates the brokerage amount. The brokerage amount calculation takes place at the Bills contract level.

In case of Bills contracts, you may directly enter the brokerage amount. However, if you specify the brokerage percentage as well as the amount, the system ignores the amount and calculates it afresh based on the percentage specified here.

Brokerage Amount

Specify the brokerage amount to be paid. However, if you have entered the brokerage percentage, the system ignores the amount mentioned here and calculates it afresh based on the brokerage percentage.

You can directly enter the contract amount for Bills contracts only.

Brokerage Details

You can share the brokerage amount among multiple brokers. Click add button to add more brokers to the list.You can define the percentage of brokerage amount to be paid to each broker selected under this list

Broker

Specify the broker ID. The option list displays all valid broker IDs maintained in the system. Choose the appropriate one.

You can maintain multiple records for the same broker ID.

Broker Name

Based on the broker ID selected, the system displays the name of the broker.

Broker Account

Specify the broker account. The option list displays all valid accounts maintained for the selected broker along with the Nostro accounts and GLs for which posting is allowed. Choose the appropriate one.

Broker Currency

The system displays the currency of the selected broker account.

Percentage

Specify the percentage of total brokerage amount that should be paid to the selected broker. This will make the selected broker eligible for that percentage of the total brokerage amount shown above.

You can allot a specific percentage of the brokerage to each broker selected here. The system will verify whether the percentages allotted for all brokers together equals to 100 or not.

Amount in Account Currency

The system displays the portion of brokerage amount allotted to the selected broker in terms of local currency.

Exchange Rate

The system displays the exchange rate between the local currency and the account currency. This rate is used to convert the brokerage amount into the account currency. You can modify the exchange rate.

Amount in Contract Currency

The system calculates and displays the portion of brokerage amount allotted to the selected broker in terms of contract currency.

Original Exchange Rate

The system displays the actual exchange rate. This rate is inclusive of all available customer spreads.

Negotiated Rate

Specify the rate of exchange agreed upon after the negotiations with the broker.

The system will display an override message if the negotiated rate is not within the exchange rate variance maintained at the product.

Negotiation Reference Number

Specify the negotiation reference number.

Once you have captured the details, save the contract. The system allows modification of brokerage details until its liquidation.

The system will default the brokerage details to the bill contracts associated with this LI. You may modify the brokerage details at the bills contract level.

You can use ‘Exchange Rate’ button to get the exchange rates between the broker account currency and bill currency for all the brokers listed in the screen.

The system defaults the brokerage details in ‘Spilt Settlements’ screen. Those details are then used in settlements. You can enter the routing details for the messages in case the settlement takes place through Nostro account. If you modify the default brokerage details in ‘Split Settlements’ screen, the system displays an error message.

During liquidation of the brokerage, the system generates credit advices for each of the brokers involved.

5.3.31 Linking contracts to accounts and deposits

You can ‘link’ a deposit or an account to a bill contract. Linking a deposit or account to a bill means:

Type of linkage	It implies:
Linking a deposit	The entire bill 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 outstanding bill amount. A deposit can be linked to more than one contract provided 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. An account can be linked to any number of contracts provided a balance greater than or equal to the total amount outstanding in the linked con­tracts is available.

The entire contract amount, or a portion of it, can be linked to any number of deposits and accounts, or both.

From the ‘Islamic Bills and Collections Contract Detailed’ screen, you can invoke the ‘Linkages Details’ screen by choosing the ‘Linkages’ button.

In this screen, you can specify any account maintained with you and indicate the funds that you would like to block.

5.3.31.1 Specifying the Type of Linkage

In the Contract Details screen, you can specify the type of linkage. The bill can be linked to a:

• Deposit
• Customer account

5.3.31.2 Specifying the Details of the Linkage

If the bill you are processing 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 bill, and a Maturity Date that is the same as, or later than that of the bill.

If you link the bill to an account, you must specify the account number. The account has to be a Current or Savings Bank account.

Currency

The currency of the deposit or account to which the bill is linked is displayed once the linkage details are specified.

Exchange Rate

If the currency of the bill is different from the currency of the deposit or account to which it is linked, the mid-rate for the day will be picked from the Exchange Rate table, and displayed in the screen.

Linked Amount

In this screen, you should also indicate the contract amount that has to be linked to the deposit or account. This amount can be the entire bill amount, or a portion of it. The ‘Amount Available for Linkage’, in the specified deposit or account, is arrived at taking into account the other linkages and uncollected funds, and the unauthorized balance (in case an account).

The system will display the following amounts, once you specify the Linked Amount:

• Amount linked to each contract or account
• The contract amount that has not been linked, in the case of a partial linkage

5.3.32 Linking a Bill to an FX Deal

Oracle FLEXCUBE allows you to link a bill involving a specific counterparty with FX deals involving the counterparty. This feature guards you against exchange rate fluctuations. For instance, in case cross currency settlements are made for a bill, you would, typically, enter into a forward deal with the counterparty (or ask the counterparty to enter into a forward deal).

Click the ‘FX Linkage’ from the ‘Islamic Bills and Collections Contract Detailed’ screen to invoke the ‘FX Linkage’ screen.

You can link one or more FX deals to a bill. The value of an FX deal should not exceed the value of the bill it hedges. If you link several FX deals to a bill, the total value of all the deals should not exceed the bill amount.

5.3.33 Specifying the Field Details

Click the ‘Field’ button from the ‘Islamic Bills and Collections Contract Detailed’ screen to invoke the ‘Fields screen.

Refer the Products User Manual under Modularity for further details on capturing Field details.

5.3.34 Viewing the Effective Profit Rate Details for a Bill

You can view the effective profit rates applied for the contract through the ‘Effective Profit Rate’ screen. Click the ‘Effective Profit Rate’ button to invoke this screen.

In this screen you will be able to view the Effective Profit Rate and the date from which profit rate is effective.

5.3.35 Viewing Profit Dates

Click the ‘Profit Dates’ button from the ‘Islamic Bills and Collections Contract Detailed’ screen to invoke the ‘Profit ’ screen.

For more details on viewing Profit Dates, refer ‘Interest’ User Manual under ‘Modularity’.

5.3.36 Maintaining Finance Accounts

From the ‘Islamic Bills and Collections Contract Detailed’ screen click on the ‘Finance Accounts’ button. The ‘Finance Account’ screen will be displayed. In this screen you can view the details for the loan or finance accounts.

You can view the following details in this screen:

• Contract Reference
• Account
• Currency
• Amount

Note

If Multiple Asset Details flag is checked in the product level and the goods details are cap­tured in contract level, then the multiple asset details of the Islamic Loan created must con­sider the goods details of the IB transaction.

 

5.3.37 Transferring Commission and Charges

Clicking ‘Charges Transfer’ button in the ‘Islamic Bills and Collections Contract Detailed’ screen invokes the ‘Commission and Charges Transfer’ screen.

Here, you can specify the charges/commission to be collected/ transferred as a part of the bill being created. You can view the component wise outstanding charges and commission for the LC against which the Bill is being availed.

This screen maintains no default values for the commission and charges that are being passed over the bill. It is mandatory to input these amounts in this screen if the bill is under an LC and there are charges defined for the LC to be collected as a part of the bill. The amount transferred onto the Bill for a component is internally allocated amongst the various events of the LC during which the component is charged.

The commission and charges transferred from LC to the bill are internally stored to the extent of the transfer performed. If the same is fully transferred then it is marked as liquidated.

If no accounting is maintained for the event when the charges to be transferred from LC onto Bills are input, no accounting gets passed even though it can be defined for a subsequent/past event.

If the amount due for the LC component is the same as the amount transferred, the system marks the same as liquidated internally in the LC module. Hence, it will be unavailable for transfer to subsequently created bills from the LC/onto the same bill in subsequent events. Also, when the charges/commission for a component is marked as transferred no accounting is performed for the charges in the further events, though it may be defined.

When the transfer accounting/no transfer accounting is passed, the system internally marks the component as transferred in the bills module and updates the LC module with the amount paid as the amount transferred. The charges transferred from LI will be liquidated only during final liquidation.

Further transfers for the component will be allowed to the extent of the ‘un-transferred charge / commission’. This is to facilitate commission components which could be periodic, wherein you can transfer a component completely, which might subsequently (due to the periodicity) be reapplied for the LC, which you may wish to transfer.

5.4 Messages

This section contains the following topics

• Section 5.4.1, "Previewing Messages"
• Section 5.4.2, "Viewing Message/Advice"
• Section 5.4.3, "Printing Message/Advices"
• Section 5.4.4, "Viewing all Messages"

5.4.1 Previewing Messages

You can preview the messages or advices that will be generated for the contract using ‘Message Preview’ screen. To invoke this screen, click ‘Message Preview’ button.

For the contract, you can view the following details of the messages:

• The document number generated for the message/advice
• Type of message generated for the event
• Customer ID of the receiver of the message/advice
• Name of the receiver of the message/advice
• Media of transmitting the message/advice (Mail/SWIFT)
• SWIFT message type of the message
• Status of the message/advice

If the contract is authorized. you cannot use the message preview feature. The ‘Message Preview’ button will be disabled in that case.

5.4.2 Viewing Message/Advice

Select a message/ advice and click ‘View’ button to view the complete message/advice. The system will display the following details in a new window.

You can view the following details:

• Reference number of the message/advice
• Document number generated for the message/advice
• Version number of the message/advice
• Receiver/sender of the message
• Type of the message
• Type of the SWIFT message
• Complete text of the message/advice
• Remarks, if any
• Reject reason, if any
• Message trailer

5.4.3 Printing Message/Advices

From the ‘Message Preview’ screen, you can print or spool a message/advice using ‘Report Options’ screen. Select the message/advice and click ‘Print’ button to print the message/advice.

5.4.4 Viewing all Messages

Click ‘All Messages’ button to invoke the ‘View Message’ screen. This screen displays all the incoming and outgoing messages associated to the contract.

The following details are displayed:

Contract reference number

Displays Reference number of the contract, for which messages are generated.

Message Date

Displays the message generation date or received date

Direction

Displays whether the message is an incoming or outgoing message

DCN

Displays document reference number of a contract.

Media

Displays whether the message is a swift message or mail message

Message Type

Displays the type of message

Swift Message Type

Displays the Swift MT number of the message sent or received

Receiver/Sender

Displays Receiver or Sender ID.

Name

Displays the name of the Sender or Receiver

Message Status

Displays current status of message

Test Status

Displays the test status

Authorized

System displays whether the status is authorized or unauthorized.

Acknowledgement Status

Displays the Ack/Nack status of a message

PDE Flag

Displays the PDE flag

Select a message and click on Message button to view details of the message.

5.5 Remarks

Click Remarks button to view all the intructions captured on every transaction of the contract in ‘History of Remarks’ screen.

The system displays the following:

Contract Reference Number

The sytem displays the contract reference number

Serial Number

The system displays the serial number.

Event

The system displays the event code of the event.

Date

The system displays the date on which the instructions were captured

User Identification

The sytem displays the user id of the user who created the notes

Remarks

The sytem displays the instructions that the user captures

5.6 Common Group Message

You can generate common group messages that need to be sent to a group using the Common Group Message screen. Click on ‘Common Group Message’ to open this screen. .

For field descriptions of the above screen refer the section ‘Common Group Message Maintenance’ in chapter titled ‘Defininig Free Format Messages’ in ‘Messaging System User Guide’.

You can enter the details of the message and the message is saved when the contract is saved.. The saved messages can be viewed in the message preview subsystem before authorization. On authorization of the contract, the message is generated. After authorization, the messages can be viewed from ‘All Messages’ subsystem and ‘Events’ subsystem.

The common group messages which are supported are listed below:

MT	MT Name
n90	Advice of Charges, Interest and Other­Adjustments
n91	Request for Payment of Charges, Inter­est and Other Expenses
n92	Request for Cancellation
n95	Queries
n96	Answers
n98	Proprietary Message
n99	Free Format

5.7 Amend the Bill Amount

This section contains the following topics

• Section 5.7.1, "Amending the Bill Amount"
• Section 5.7.2, "Specifying advices for the amendment"
• Section 5.7.3, "Maintaining Event Details"
• Section 5.7.4, "Maintaining Profit Details"
• Section 5.7.5, "Maintaining Charges Details"
• Section 5.7.6, "Maintaining Tax Details"
• Section 5.7.7, "Viewing Different Versions of a Bill"
• Section 5.7.8, "About Templates"
• Section 5.7.9, "Deleting a Contract"
• Section 5.7.10, "Specifying Counterparty Details"
• Section 5.7.11, "Viewing the Media Addresses of a Customer"
• Section 5.7.12, "Viewing Islamic BC Contract"

5.7.1 Amending the Bill Amount

You have the option to amend decrease) the bill amount for incoming and outgoing bills. You can amend a bill through Islamic Bills and Collections Contract - Detailed screen. You can.amend the bills using ‘Rebate Amount’.

You need to maintain the following details:

Specifying the Bill Reference Number

In this screen, you need to first indicate the reference number of the bill on which you want to make the amendment.

Bill Amount

The original bill amount of the bill that you selected is displayed; you can amend the amount (decrease) suitably.

There is no limit on the number of amendments that can be made to the bill amount for a collection. However, for the amendment to be effective it should be authorized.

Value Date

The Value date, is the date from which the amendment becomes effective. The accounting entries triggered off by the amendment event hitting Nostro and other accounts will be passed as of the value date.

The Value date should be earlier than or the same as today’s date. The Value date can be one of the following:

• Today’s Date
• A date in the past
• A date in the future (you can enter a date in the future only if future dating has been allowed for the product)

If you do not enter an amendment value date, the system defaults the Bill Value Date.

Note

The amendment value date should not be earlier than the Start Date or later than the End Date specified for the product, involved in the bill.

Debit Value Date and Credit Value Date

For amendment related accounting entries hitting nostro or customer accounts, you can specify a debit and credit value date that is different from the amendment value date.

The amendment value date is defaulted as the Debit and Credit value date. You have an option to change it to suit the requirement of the bill you are processing. In this case, the amendment value date is used only for debiting and crediting GLs involved in the bill.

Maturity Date and Profit Rates of a Bill

You can extend/reduce the maturity date either before or after the maturity date. You also have the option of amending the profit rates. You will be allowed to amend profit rates for main profit component and compensation profit component provided that the component is of a fixed type.

Both these amendments can be done for advance and arrears type of collection, through the IBC Contract On-line screen after unlocking a contract. If the collection type is of advance, then you have to define accounting entries for profit adjustment (with _ADJ tags) and liquidation (with _LIQD tags) in amendment event.

You have the option of amending maturity date and profit rate together as well. Maturity date or profit rate amendment is allowed for any value date (past/present/future). However, the value date you specify should be within the profit start date and profit end date of a bills contract.

To amend the profit rate you have to access the Profit Rate screen by clicking the ‘Profit’ button.

For details on specifying profit details for a contract, refer to the ICCF Details explained in the Profit section of this manual.

The value date you specify for the amendment can be current/back/future date. After you save your amendment, the accounting entries will be passed for the additional profit or excess profit with the specified value date.

Note

You are allowed to delete an amendment only if it is still unauthorized. Subsequently the contract will be reinstated to previous state.

5.7.2 Specifying advices for the amendment

The advices defined for the amendment event (AMND) will be defaulted together with the FFTs and Instructions linked to them.

While processing a bill, you can:

• Suppress the generation of an advice
• Indicate the priority with which the advice should be generated
• Indicate the Free Format Texts and Instructions that should accompany the advices

In the case of an outgoing bill, an MT 430 is sent. For an incoming bill, an MT 900 is sent to the remitting bank seeking permission for the amendment. When the confirmation is received from the remitting bank, you can make the necessary amendment.

Medium

If advices are to be generated, for the event, it is mandatory for you to also specify the medium through which an advice is to be transmitted. An advice that is generated can be transmitted Mail, TELEX or SWIFT You can select the appropriate medium code from the option list.

Priority

For messages sent through media like SWIFT or TELEX, you can specify the priority with which the advice should be generated. By default, the priority of all advices is marked as Normal.

You have the option to prioritize advices to one of the following options:

• Normal
• Medium
• High

Note

However, you can change the priority of an advice to High only for Payment Advices.

Suppress

By default, all the advices that have been defined for the event will be defaulted to this screen. As certain advices may not be applicable to the bill you are processing, you can suppress its generation.

5.7.2.1 Specifying FFTs for an Advice

The list of FFTs associated with an advice is defaulted. You can add to or delete from the list of defaulted FFTs.

To add an FFT to the list, click add icon and select the code that identifies the FFT, from the option list. The description of the FFT is automatically picked up and displayed. You can edit the FFT description that is defaulted.

To delete an FFT from the list, highlight the code that identifies the FFT and click delete icon.

5.7.2.2 Specifying Instructions for an Advice

The list of instructions associated with an advice is displayed. You can add to or delete from the list of defaulted instructions.

To add an Instruction to the list, click add icon and select the code that identifies the FFT, from the option list. The description of the FFT is automatically picked up and displayed. You can edit the description that is defaulted.

To delete an instruction from the list, highlight the code that identifies the Instruction and click delete icon.

5.7.3 Maintaining Event Details

Events are maintained through the ‘Events’ screen. Click the ‘Events’ button in the ‘Islamic Bills and Collections Contract – Detailed’ screen to invoke this screen.

Specifying Settlement Instructions

Through the settlement screens, you can view the fund accounts to which entries for the applicable charges and taxes are posted. These details are available in the ‘Settlement Details’ screen. Click the ‘Settlement’ button in the ‘Islamic Bills and Collections Contract - Detailed’ screen to invoke the ‘Settlement Details’ screen.

For more details on specifying the Settlement Details Refer ‘Settlements’ User Manual under ‘Modularity’.

5.7.4 Maintaining Profit Details

Click the ‘Profit’ button to invoke the ‘ICCF’ screen. Through this screen you can manage and view the profit details you are creating.

For more details on maintaining Profit details, refer ‘Interest’ User Manual under ‘Modularity’.

5.7.5 Maintaining Charges Details

Click the ‘Charges’ button to invoke the ‘Charge Details’ screen. Through this screen you can manage charge details you are creating.

For more details on maintaining Charges details, refer ‘Charges_Fees’ User Manual under ‘Modularity’.

5.7.6 Maintaining Tax Details

Click the ‘Tax’ button to invoke the ‘Tax Details’ screen. Through this screen you can manage tax details you are creating.

For more details on maintaining Tax details, refer ‘Tax’ User Manual under ‘Modularity’.

5.7.7 Viewing Different Versions of a Bill

When you enter a bills contract, it is allotted the version number 1. From then on, each amendment that you make to the contract results in the next version of the contract being created. In Detailed View screen of a contract the latest version will be displayed. To navigate between the various versions, use back arrow button for previous and forward arrow button to go to the next version.

5.7.8 About Templates

5.7.8.1 Saving a contract as a template

To create a template, you should store a bill that you have entered as a template. Enter all the details of the bill, before you save it as a template.

To store a contract as a template, click on ‘T’ in the tool bar, or choose Template from the Processing sub menu of the Actions Menu.

5.7.9 Deleting a Contract

A contract can be deleted only by the user who entered it. If a contract has to be deleted and the user who input the same is not available to do it, you can reassign the contract to another user so that the other user can delete it. Typically, this situation may arise during EOD operations, when a contract that is not authorized has to be deleted and the user who input it has left office for the day.

You can invoke the ‘Islamic Bills and Collections Contract Reassign’ screen by typing ‘IBDTREAS’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button. The operations for which you have access rights will be displayed.

To reassign a contract to another user, the following steps are required:

• Step 1 - Indicate the product associated with the bill. You can select a product code from the option list, which contains a list of the authorized products that you have created.
• Step 2 - Indicate the contract reference number of the bill you wish to reassign, to another user. You can select a reference number from the option list, which contains a list of all the active bills.
• Step 3 -Select the User ID of the user to whom you, are assigning the contract

Note

This user to whom you reassign a contract should have access rights to enter bill con­tracts.

Your User ID will be defaulted from the login screen. Click the ‘Exit’ button if you do not want to save the details that you entered.

5.7.10 Specifying Counterparty Details

In the Contract screen, you can also capture details of the party who is your customer.

For an Import bill

In the case of an Import bill, you should specify details of the Drawee of the bill. If the Drawee is a customer of your bank you should specify the customer reference, assigned to the customer, in the Customer Information File (CIF) of the Core Services module of Oracle FLEXCUBE. The other details of the customer will be automatically picked up.

For an Export bill

If you are processing an Export bill, you should specify details of the Drawer of the bill. If the drawer is a customer of your bank, you should specify the customer reference assigned to the customer, in the Customer Information File (CIF) of the Core Services module of Oracle FLEXCUBE. The other details of the customer will be automatically picked up.

The details of the other parties involved in the bill are captured in the ‘Parties’ screen.

5.7.11 Viewing the Media Addresses of a Customer

When you specify the CIF ID of the counterparty involved in a bills contract, the Media Address details that you have maintained for the customer will be displayed. These details are displayed in the ‘Customer Addresses Maintenance’ screen.

You can invoke the ‘Customer Addresses Maintenance’ screen by typing ‘MSDCUSAD’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Note

When you specify the CIF ID, the system checks whether you have maintained multiple media addresses for the customer. If you have maintained multiple media addresses, a list of all the media addresses will be displayed in a separate window.

Viewing the BIC Details of a Customer

When the media type of the party is SWIFT, and the customer address you have specified happens to be a BIC customer, the system automatically displays the related BIC details in the BIC Code Details screen (‘ISDBICDE’).

5.7.11.1 Fund Asset Management

The settlements processing is enabled only if ‘Allow Corporate Access’ has been checked while defining branch parameters in the Branch Parameters – Detail View screen.

• If ‘Allow Corporate Access’ is checked for a fund branch and the fund is Portfolio type, then during settlement processing, the settlement account is chosen based on the settlement instructions maintained for the counterparty.
• If ‘Allow Corporate Access’ is not checked for a fund branch, then the settlement processing is disabled and the settlement account remains as a fund branch account maintained for the fund.
• If the corporate account exists in different branch then the Inter branch account/GL maintenance is used for resolving the bridge account.

5.7.11.2 Indicating Preferences for the Profit Components

Rate Type

You can indicate the profit rate type that is to be picked up and applied to the finance contracts involving the product. The options available for the rate type are:

• Fixed
• Floating
• Special

Choose the appropriate option from the drop down list.

Usage

The usage indicates the time at which the rate change has to be applied to the finance contract in case the profit is floating rate type. The options available are:

• Auto - rate change is triggered automatically when the rate associated with a rate code changes.
• Periodic – rate change is triggered at pre-defined dates.

Rate Code

Profit of the contract is computed on the basis of the Rate code associated with it. This field is enabled only if you have opted for ‘Floating’ rate type for the finance.

Rate

In case you choose the rate type as Fixed, you can specify the rate that is to be used for computing the profit of the contract.

Spread

You have to indicate the spread that can be applied on the floating rate.

Basis

The profit basis indicates the method in which the tenor for profit has to be calculated, if their application is tenor based. It could be one of the following:

• (Euro)/ 360
• (US)/ 360
• Actual/ 360
• (Euro)/ 365
• (US)/ 365
• Actual/ 365
• (Euro)/ Actual
• (US)/ Actual
• Actual / Actual

The Profit Basis defined for the product involved in the contract will be displayed. You can change it here to suit the bill you are processing.

The minimum/maximum rate specified in the finance product underlying the contract has to be adhered to.

Amount

In the case of ‘Special’ rate type, the profit component is expressed as an amount and not as a rate. This amount should be specified when the finance is liquidated.

5.7.11.3 Booking a Finance through Bills Contract

During liquidation of a bill, you have the option to book finance. This value will be defaulted from the product and you can choose to change it, if required. Once you check this option, the system will create a finance based on the Finance preferences you have maintained.

In an IBC module, creation of the finance is possible only at the time of Final liquidation and not during Auto or Partial Liquidation.

In case you delete the bill, the finance that is created through the bills contract will also be automatically deleted. However, deletion of the finance alone is not possible. In case of reversal of a bill, the system displays an override.

You cannot authorize the new finance contract outside the bill contract. When the liquidation of the bill is authorized, the finance also gets authorized.

5.7.12 Viewing Islamic BC Contract

You can view the Islamic BC contract using ‘Islamic Bills and Collections - Contract Input - Summary’ screen. To invoke this screen, type ‘IBSTRONL’ in the field at the top right corner of the Application tool bar and click the adjoining arrow button.

You can click ‘Search’ button to view all the pending functions. However, you can to filter your search based on any of the following criteria:

Authorization Status

Select the authorization status of the contract from the drop-down list.

Contract Reference

Select the contract reference number from the option list.

Product

Select the product code from the option list.

Branch

Specify the branch code on which you want to query for contract details, from the adjoining option list. This list displays all valid branch codes maintained in the system. You can select the appropriate one.

Contract Status

Select the status of the contract for which you want to check the pending function from the drop-down list.

User Reference

Select the contract amount from the option list.

Counterparty

Select the contract amount from the option list.

When you click ‘Search’ button the records matching the specified search criteria are displayed. For each record fetched by the system based on your query criteria, the following details are displayed:

• Authorization Status
• Contract Status
• Contract Reference
• User Reference
• Product
• Counterparty
• Bill Currency
• Bill Amount
• Rebate Amount
• Transaction Date
• Value Date
• Maturity Date
• Operation
• Stage
• Tenor
• Outstanding Balance
• Status
• Characteristics
• Event Code
• Party Type
• Beneficiary
• Branch
• Source Reference

Click ‘Advanced Search’ to query a contract based on any of the following details:

• Authorization Status
• Contract Status
• Contract Reference
• User Reference
• Product
• Counterparty
• Branch