5. Processing an Islamic LC Contract

A Letter of Credit contract is an instruction wherein a customer requests the bank to issue, advice or confirm a letter of credit, for a trade transaction. An Islamic Letter of Credit (Islamic LC) substitutes a bank’s name and credit for that of the parties involved. The bank thus undertakes to pay the seller/beneficiary even if the remitter fails to pay.

The sequence of the events involved, in processing the Islamic LC can be considered an Islamic LC contract. The specific letters of credit thus processed for the customers of your bank constitutes a contract.

An Islamic LC Contract would therefore require information on:

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

By default an Islamic LC inherits the attributes of the product to which it is associated. This means that you will not have to define these general attributes each time you input an Islamic LC involving a product.

This chapter contains the following sections:

5.1 Islamic LC Contract Details Screen

This section contains the following topics:

5.1.1 Invoking the Islamic LC Contract Details Screen

You can invoke ‘Islamic LC Contract Input’ screen by typing ‘LIDTRONL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button. Click ‘New’ icon in the application toolbar. The ‘Islamic LC Contract Input’ screen with no values in the fields is displayed.

If you are calling a contract that has already been created, click on Summary view. You can invoke ‘Islamic LC Contract Summary’ screen by typing ‘LISTRONL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button. You can open an existing contract by double clicking the contract.

You can enter the following details here:

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 LC registration screen which are authorized and unprocessed.

The system defaults the details captured in registration screen if acknowledgement is captured on clicking populate (P) button beside Product Code.

If Registration is for LC issuance and product code is selected BG Issue/SG issue, then the system displays configurable override on product default.

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

Select the product from the list of products created in the Islamic LC. Click ‘Populate’ button for details of this product to get defaulted from the Product screen.

Product Description

Product description given for this product gets defaulted from the Product screen.

Contract Reference Number

The Contract Reference Number identifies a contract uniquely. It is automatically generated by the system for each contract. The Contract Reference Number is a combination of the branch code, the product code, the date on which the contract is booked (in Julian format) and a running serial number for the booking date.

The Reference Number consists of a three-digit branch code, a four-character product code, a five-digit Julian Date and a four-digit serial number.

The Julian Date has the following format:

YYDDD

Here, YY stands for the last two digits of the year and DDD for the number of day(s) that has/have elapsed, in the year.

Product Type

The type of product gets displayed here from the product screen, specifying if the product is of type import/export or revolving or non-revolving.

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.

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.

Source Reference

The system automatically generates the Source Reference number. You can change it if required.

This message identification number will be used to identify an incoming message coming from an external system. This is defined as the ICN number. On upload of an incoming message into Oracle FLEXCUBE, this number, given by the external system, will be stored in Oracle FLEXCUBE and passed on to the contract generated as a result of the incoming message. If the incoming message results in an outgoing message, the ICN number will be linked to the outgoing message also.

This number will help you in creating a relationship between the incoming message, the resultant contract in Oracle FLEXCUBE, and the outgoing message, if any.

If an Incoming message results in an outgoing contract (outgoing message), Oracle FLEXCUBE will store the source reference number (ICN Number) at the following levels.

You can capture the same source reference number for LC advising and reimbursement contracts if LC Issuance (MT700) and LC Reimbursement Authority (MT740) are received from the same issuing bank.

Note

The system will not allow to capture, the same source reference number for more than one advising or reimbursing contracts.

Fund ID

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

Operation Code

The operations that you can perform on an Islamic LC are determined by the type of Islamic LC being processed. The operation that you specify will determine the accounting entries that are passed and the messages that will be generated.

You can select operation code from the list of valid operation code value based on Product Type. The type of operation that you can perform on an Islamic LC has been diagrammatically represented below:

 

5.1.2 Specifying Details of an Islamic LC

Through the screens that follow in this section, you can process all types of Islamic LCs (import, export, invoice, clean, guarantees, shipping guarantees).

You can choose to enter the details of a contract using the following methods:

To facilitate quick input, you only need to input the product code. Based on the product code, many of the fields will be defaulted. Overwrite on these defaults to suit your requirement. You can add details that are specific to the Islamic LC like the Islamic LC amount, details of the buyer and the seller, etc.

5.1.3 Uploading Islamic LCs/Guarantees

Oracle FLEXCUBE allows you to a facility to automatically upload Islamic LCs and Guarantees.

The MT 700 and MT 701 messages that you receive can be uploaded into Oracle FLEXCUBE as Islamic LC contracts. Depending on whether confirmation is required, the uploaded Islamic LCs will be of type ‘advice’ or ‘advice and ‘confirm’.

Similarly, you can upload MT 760 messages as Guarantee contracts and copy the details of the incoming guarantee from field 77c (and amend these details, if required). You only need to furnish minimal details such as the Currency, the Amount, the Parties, etc.

Upload processing will also upload the document reference of Shipping Guarantee Contracts.

5.2 Islamic LC Contract Details Screen Description

This section consists of the following topics:

5.2.1 Description of the Islamic LC Contract Details Screen

The Islamic LC Contract Details screen consists of a header and footer that contains fields specific to the contract being entered. Besides these, you will also notice six tabs and a horizontal array of icons along the lines of which you can enter details of the contract. Contract details are grouped into the various screens according to the similarities they share.

The Islamic LC Contract Screen contains six tabs along the lines of which you can enter details of the contract. The six tabs are:

Tabs

Description

Main

Click this tab to enter the essential terms of the Islamic LC. This screen along with its fields has been detailed under the head Entering Main Con­tract Details.

Prefer­ence

Click this tab to set the preferences

Parties

In the screen that corresponds to this tab, you can enter the details of all parties involved in the Islamic LC. This screen along with its fields has been detailed under the head Entering Party Details.

Parties Limit

Click this tab to capture parties limit details

Shipment

In the screen that corresponds to this tab you can enter details of the doc­uments required under an Islamic LC and the clauses that should accom­pany the documents.

Besides, you can also specify a description of the merchandise traded under the Islamic LC and shipping instructions for the transportation of the merchandise.

Goods

Click this tab to capture the goods details

Docu­ments

Click this tab to capture the document details

Tracers

Click on this tab to enter details of the tracers that should be generated for an Islamic LC.

Advices

In the screen corresponding to this tab you can view, suppress and prior­itize the advices that are to be generated for a contract. This screen along with its fields has been detailed under the head Specifying Advises for an Islamic LC.

On the Contract Detailed screen are also displayed a horizontal toolbar. The buttons on this toolbar enable you to invoke a number of functions vital to the processing of an Islamic LC contract. These buttons have been briefly described below.

Buttons

Description

Drafts

Click this button to capture the details of draft drawn for the LC. You can specify the name of the insurance company that is covering the goods traded under the LC.

Commission

On invoking this button Commission details of the contract are dis­played

Charges

This button invokes the Charges and Fees service. On invoking this function you will be presented with a screen where the ICCF rate, amount, currency and the waive charge parameter can be specified. The Processing Charges and Fees manual, details the procedure for maintaining charge rules. It also deals with the linking of a charge rules to a product and the application of the rule on an Islamic LC.

The Processing Commissions manual, details the procedure for main­taining commission rules. It also deals with the linking of a commission rule to a product and the application of the rule on an Islamic LC.

Settlement

Click this button to invoke the Settlement screens. Based on the details that you enter in the settlement screens the Islamic LC will be settled. The details of these screens have been discussed in the Settlements manual.

Tax

This button invokes the Tax services.

The Processing Tax manual details the procedure for maintaining tax rules and schemes. It also deals with the linking of a tax scheme to a product and the application of the scheme on an Islamic LC.

Collateral

In the screen that corresponds to this icon, you can specify details of the cash that you collect as collateral form a customer for the Islamic LC that you process. The details of this screen are discussed under the head Specifying Collateral details for an Islamic LC.

Events

Click this button to view the details of the events and accounting entries that a contract involves.

Linkage Details

Clicking this button invokes the Contract Linkages screen. In this screen, you can link an Islamic LC to a deposit or account, and indicate the funds that you would like to block.

Fields

Click this button to view the user-defined fields linked to the product.

MIS

Click this button to define MIS details for the Islamic LC.

Transfer Details

If the LC is transferred to a new party then a transaction will be popu­lated here. You can only view the details.

IB Linkages

Click this button to specify IB linkages

Split Settle­ment

Click this button to specify split settlement details

Finance Pref­erence

Click this button to invoke the ‘Finance Preference Screen’. You can enter the details of the finance.

Brokerage

Use this button to capture brokerage details for the Islamic LC contract and set your preferences for sharing the brokerage amount among multiple brokers.

All Messages

Click this button to view all messages associated to contract.

Documents

Click this button to capture the customer related documents in central content management repository.

Deferred Profit Com­ponent

Click this button view the components which are transferable to BC in Oracle FLEXCUBE

Remarks

Click this button to view ‘History of Remarks’ screen.

Change Log

Click this button to view the changes made to a particular version of an Islamic LC contract.

Transferred Components

Click this button to view the deferred components details screen.

Insurance

Click this button to capture insurance details for the LC.

Common Message Group

Click this button to invoke the common group message screen.

 

Enter valid inputs into all the mandatory fields or you will not be able to save the contract. After making the mandatory entries for the Islamic LC, save the contract by either clicking ‘Save’ icon in the tool bar

A contract that you have entered should be authorized by a user bearing a different Login ID, before the EOD is run.

Note

You have the option to amend all the unauthorized entries made for an Islamic LC. How­ever, after authorization, certain fields cannot be amended.

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

Hold Support during Islamic LC Issuance [LIDTRONL]

Click HOLD button to support a New operation during Islamic LC Issuance from LIDTRONL. The system is enhanced to support Hold during LC amendment.

However, authorization is not supported for Contracts put on Hold.

5.2.2 Specifying the Main Details of an Islamic LC

While defining a product, you defined a broad outline that can be applied on Islamic LCs. However, while processing an Islamic LC involving a product, you need to enter information specific to the Islamic LC.

This information is captured through the ‘Islamic LC Contract Details Main’ screen.

The following are the features of the contract details main screen.

LC Details

The terms defined for an Islamic LC form the basis on which the Islamic LC will be processed.

Currency

Specify the currency in which the Islamic LC is drawn.

Contract Amount

Specify the amount for which the Islamic LC is drawn.

Tolerance Text

Select the applicable tolerance text from the adjoining drop-down list. The available options are:

Customer

If the applicant is a customer of your bank, specify the CIF ID assigned to the customer, the related details of the customer will be automatically picked up.

If you are processing an Export LC, you should typically specify details of the beneficiary.

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

Note

BIC Code appears for a ‘Customer’ 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’ in the adjoining list.

Customer Name

The system displays the customer name.

Party Type

Specify a valid party type. The adjoining option list displays all valid party types maintained in the system. You can select the appropriate one.

Dated

Enter the date of the Their Reference. This would normally be the date on which you have a correspondence from the party regarding the LC.

Customer Reference

This is the reference of the party whose CIF ID you have input. This will be picked up appropriately in the correspondence sent for the LC.

License Expiry Date

The system displays the license expiry date.

Amount

The system displays the amount for which the LC is drawn.

Expiry Place

Specify the city, country, or the bank where the LC expires.

Applicable Rule

This is defaulted from the product level. The value displayed here cannot be amended.

Issue Date

Enter the date on which the Islamic LC is issued.

Effective Date

In the Islamic LC Contract Details screen, you can capture the Effective Date of a guarantee. The effective date that you capture for a guarantee will be printed on the instrument.

By default, the system displays the Issue Date, in the Effective Date field. You can change the default value (for a guarantee) to a date in the past or future.

As stated earlier, the Effective Date along with the Tenor of the Islamic LC will be used to calculate the Expiry Date of the Islamic LC.

Note

Please note that commission for a guarantee, will be calculated according to your speci­fications for the product that the guarantee involves. In the Islamic LC Product Definition screen, you can indicate if commission is to be calculated from:

Tenor

All Islamic LC contracts will be associated with the standard tenor maintained for the product under which the contract is being processed. The tenor of the Islamic LC will be used in combination with the Effective Date to arrive at the Expiry Date of the Islamic LC, as follows:

Islamic LC Expiry Date = Effective Date + Tenor

However, for a specific Islamic LC contract, you can choose to maintain a different tenor. The tenor of an Islamic LC can be expressed in one of the following units:

Note

If you do not specify a unit, the system will automatically append ‘D’ with the numeric value (tenor) indicating that the tenor is expressed in Days.

Depending on the tenor that you specify, the system will recalculate the Expiry Date. Consequently, the Closure Date that is dependent on the Expiry Date will also be recalculated by the system.

Expiry Date

Specify the date when the LC expires.

Auto Closure

Check this option to indicate that the Islamic LC should be automatically closed.

Note

This field is not applicable for Islamic LC Module Contracts under Islamic LC Product with Product Type `G’ (Guarantee).

Closure Date

The date of closure is based on the ‘Closure Days’ maintained for the product involved in the Islamic LC. The number of days specified as the Closure Days is calculated from the expiry date of the Islamic LC, to arrive at the Closure Date.

Islamic LC Closure Date = Islamic LC Expiry Date + Closure Days

However, you can change the closure date, thus calculated, to any date after the expiry date.

Note

If the closure date falls on a holiday, the system will prompt you with an override message.

Pre Advice Date

Specify date on which the pre-advice was initiated from the adjoining calendar. The current date is defaulted as pre-advice date, if the operation is Pre-advice Islamic LC; however you can change to an earlier date.

Note

Modifications are not allowed after first authorization.

Reference to Pre-advice

Specify reference to the pre-advice, if any, generated for the Islamic LC contract.

A pre-advice is a brief advice of documentary credit sent by the Issuing Bank to the Advising Bank. This is to be followed by the Islamic LC instrument that contains all the details of the Islamic LC. It notifies the recipient that the named buyer has opened an Islamic LC for a specified amount on a named seller (beneficiary).

Note

Modifications are not allowed after first authorization.

top Date

This date will be defaulted to LC Expiry date. Stop date cannot be earlier than Issue date and later than expiry date.

Credit

You can capture the following details.

Type

Indicate the type of credit for which the LC is being processed.

Mode

Indicate the mode of payment through which the LC will be settled.

If you indicate the LC type as sight in the LC Product Definition screen, then you can select the credit mode as:

If you indicate the LC type as Usance in the LC Product Definition screen, then you can choose the credit mode as:

These validations are applicable only if drafts information is maintained in the Drafts sub-system. These validations are applicable for both Import and Export LC products.

Credit Available With

Specify details of the party with whom the credit will be available.

Details

Specify the details of the credit.

Reimbursement Undertaking

You can capture the following details:

Undertaking Expiry Date

Specify the undertaking expiry date.

You can claim the reimbursement only till the undertaking expiry date, else, the system will display the following error message “The undertaking has been expired”.

Undertaking Amount

Specify the amount that can be reimbursed. It can be less than or equal to contract amount.

The system will default the Undertaking Amount value with the Max LC Amount initially when it is created through the incoming MT740. However you can amend this field by adding the undertaking amount.

Availed Undertaking Amount

The system displays the availed portion of undertaken amount.

Note

You can capture the following details.

Revolves In

Islamic LCs can revolve in Time or in Value. Select the appropriate option from the adjoining drop-down list.

Automatic Reinstatement

The mode of reinstatement for a revolving Islamic LC can be either automatic or manual. Check against this field to indicate that the mode of reinstatement is automatic.

This field is applicable only for an Islamic LC revolving in time.

Cumulative

Check this box to indicate that the Islamic LC is cumulative. Leave it unchecked to indicate otherwise.

Frequency

For Islamic LCs that revolve in value, you can specify the maximum number of times the Islamic LC can be reinstated. Based on the value you specify, the Islamic LC Liability Amount will be computed and displayed.

If the number of reinstatements of the Islamic LC exceeds the value you specify, an override message will be displayed when the Islamic LC is saved. This override will have to be ratified at the time of contract authorization.

Units

For Islamic LCs, which revolve in time, the maximum number of reinstatements is calculated based on the Reinstatement Frequency you specify. In the Units field, you can choose one of the following:

Next Reinstatement Date

The system computes and displays the date of next reinstatement based on the value in ‘Units’ field.

Remarks

You can specify remarks here if any.

Finance for Collateral

Check this box if finance for collateral is applicable.

Partial Closure

Check this box to perform partial closure of Islamic LC manually.

You can check this box during the following conditions:

On saving the amendment after checking this option, PCLS event takes place. The Limits, Outstanding Liability and the Cash Collateral are released to the extent of unutilized amount.

Once PCLS event is fired for an Islamic LC contract, system does not allow any operation on the Islamic LC other than LC Closure (CLOS). You can reopen the closed Islamic LC as existing. While reopening the Islamic LCs for which PCLS is fired earlier, the Limits are tracked, OS Liability and Cash collateral is increased to the extent of the amount released as part of PCLS.

After PCLS event takes place on the Islamic LC contract, if the Bill contract to which the Islamic LC is linked is reversed, the corresponding availment of Islamic LC is reversed and the Limits, OS Liability and the Cash Collaterals are updated. The linkages to the Islamic LC are not released automatically as part of PCLS firing during batch. You have to manually release as part of manual partial closure. The above processes are skipped for the Islamic LC contracts under the product for which the ‘Revolving’ option is indicated as ‘Yes’.

The system allows manual partial closure during the partial closure days, until the Islamic LC is closed.

In case of a partially confirmed export Islamic LC contract, the system excludes the bill amount in the initial stage from the confirmed and unconfirmed portions.

Contract Status

Specify the following details:

User Defined Status

Specify the status of the Islamic LC contract. The option list displays all valid statuses that are applicable. Choose the appropriate one.

At the branch level, if you have enabled group level status change for the Islamic LC, the system displays the status of the group with which the Islamic LC is associated. However, you can unlock and modify the statuses of individual contracts. Thus, you can use this field for changing the status of an Islamic LC contract manually.

Derived Status

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

Sanction Check Status

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

Last Sanction Check Date

The system displays the last sanction check date.

For more information on processing sanction check refer ‘Processing Sanction Check’ section in LC user manual.

Debit Account Branch

The system defaults the details of debit account branch. The values can be modified.

Debit Account Currency

The system defaults the details of debit account currency. The values can be modified.

Debit Account

The system defaults the debit account. The values can be modified.

Charges Debit Account Branch

The system defaults the details of charges debit account branch.The values can be modified.

Charges Debit Account Currency

The system defaults the details of charges debit account currency. The values can be modified.

Charges Debit Account

The system defaults the details of charges debit account. The values can be modified.

5.2.3 Viewing the Media Addresses of a Customer

While capturing the details of the counterparty involved in an Islamic LC or Islamic LC transfer contract, the system displays the Media Address details of the customer once you specify the CIF ID assigned to the party.

Note

When you specify the CIF ID, the system will check to see if you have maintained multiple media addresses for the specific 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

If the media type of the party is SWIFT, and the customer address you have specified is a BIC customer, the system automatically displays the related BIC details in a separate window.

5.2.4 Capturing Draft Details

You can capture the details of the draft that is drawn for the Islamic LC, in the ‘Drafts’ screen. In addition, you can also specify the name of the insurance company that is covering the goods traded under the Islamic LC. Click on ‘Drafts’ button in the ‘Islamic LC Contract’ screen to invoke the screen:

5.2.4.1 Specifying Draft Details

In this section, you can specify the following details:

Draft Serial Number

Specify the serial number of the draft.

Draft Tenor

Specify the tenor of the draft.

Credit Days From

Specify the Date from which the tenor of the draft begins.

Amount/Percentage

Specify whether the draft is a percentage of the Islamic LC amount or a Flat amount. Subsequently, specify the Amount or the Percentage (based on your selection).

5.2.4.2 Specifying the Drawee Details

In this section specify the following details:

Drawee

The ‘Drawee’ is the party on whom the draft is drawn. You can select the drawee’s BIC from the adjoining list. This will contain a list of all the open and authorized BIC maintained in the BIC Directory. Click option list to populate the Drawee field with the drawee’s name and address. This information is captured from the BIC directory.

Address

Specify the addresses of the drawee.

5.2.4.3 Specifying the Insurance Details

The following details are regarding the Insurance Company to be associated with the LC.

Company Code

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

Company Name

Specify the full name of the insurance company.

Address

Specify the mailing address of the insurance company being defined. You can maintain a maximum of four lines of address.

Policy Number

Specify the insurance policy number here.

Telephone Number

You can also capture the telephone number of the insurance company.

Fax Number

Specify the Fax number of the insurance company.

Expiry Date

Enter the expiry date of the policy.

Policy Utilized Amount

Specify the utilized amount of the policy.

Cover Date

Specify the cover date.

Insurance Amount

Specify the insurance amount.

Telex

Specify the telex number.

Warehouse Address

Specify the warehouse address.

5.2.4.4 Specifying the Breakup Details

The breakup details of the draft will be displayed here as follows:

The draft amounts for the different components (Insurance, Profit, Invoice and Freight)

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 (based on your requirement, you can configure the override to be a warning or an error message). On confirmation of the override, the company code will be automat­ically changed to ‘XXXXXXXXX’. Subsequently, you can specify any company name to be associated with the contract. The system will not perform any validations. The remaining fields in the screen will be disabled in this case.

5.2.5 Specifying Insurance Details

You can capture the insurance details for an Islamic LC contract in the ‘Customer Insurance’ screen. To invoke this screen, click ‘Insurance’ button in the ‘Islamic LC Contract’ screen.

Here you can capture details for multiple insurance policies.

Policy No

Specify the insurance policy to be considered for the Islamic LC contract. The adjoining option list displays all the valid insurance policies maintained for the Islamic LC customer. You can select the appropriate one.

Currency

The system displays the currency of the chosen policy. If the currency of the Islamic LC is different from the currency of the insurance, then the system will convert the Islamic LC amount to insurance currency using standard mid rate.

Company Name

The system displays the company to which the insurance policy belongs.

Expiry Date

The system displays the date on which the chosen policy expires. If the expiry date of the insurance is prior to the expiry date of the Islamic LC, the system will display an override.

Insurance Amount

The system displays the available amount for the chosen policy in the contract currency. You can change it to suit the contract’s requirements. However, the amount cannot exceed the per bottom limit defined for the policy in the ‘Customer Insurance’ screen. If the amount exceeds the permissible limit, the system will display an override.

The total insurance amount linked to the Islamic LC should not be greater than the Islamic LC liability amount. If the total exceeds the limit, the system will display an override.

Utilization Lcy Amount

In case the contract currency is different from the insurance currency, the system displays the insurance amount in the insurance currency.

5.2.6 Specifying Details of the Parties involved in an Islamic LC

The Parties screen can be used to record the details related to all the parties involved in the Islamic LC. The documents, tracers and messages that are generated will be sent to the parties concerned, based on the details you specify in this screen.

You can maintain the following details here:

5.2.6.1 Specifying Party Details

You should specify the following for each of the parties involved in the Islamic LC:

Party Type

The party type (beneficiary, accountee, applicant, advising bank, issuing bank, reimbursing bank, advice through bank, confirming bank).

Party Description

You can provide the description for the party type here.

Party ID

Specify a ‘Party ID’ for which you need to maintain. Alternatively, you can select the ‘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.

Customer Identification File Identification

The CIF ID assigned to the party, if the party is defined as a customer in Oracle FLEXCUBE. If the applicant (APP) or beneficiary (BEN) is not a customer of your bank, you can use a walk-in customer ID.

Name

Enter the name of the Customer. The party name can be 150 characters in length. However, please note that in the SWIFT messages that you generate only 35 characters will be included.

Country

Enter the country to which the party belongs.

Address 1 to 4

Enter the address of the customer who has initiated the transaction.

Dated

Specify the date of transaction initiation.

Language

Specify the language in which advices should be sent to the customer.

Issuer

The issuer of Islamic LC is a bank or an individual. This is enabled only for the party type ISB (issuing Bank). The party type is defaulted from CIF maintenance. However, you can amend the value before authorizing the contract.

If issuer of Islamic LC is a bank, tags 52A and 52D will be populated. The message Types supported by these tags are MT710/MT720.

If issuer of Islamic LC is not a bank, 52B tag will be populated.

Template ID

Specify the template ID related to MT799 message types from the option list.

Note

You can enter the values only if the ‘Claim Advice in Swift’ field is checked.

5.2.6.2 Specifying the Other Addresses

Following details are displayed here:

The parties involved in an Islamic LC depend upon the type of Islamic LC you are processing. The following table indicates the minimum number of parties required for the types of Islamic LC that you can process.

Islamic LC type

Parties applicable

Mandatory parties

Parties not allowed

Import Islamic LC

Applicant/Accountee

Advising Bank

Beneficiary

Confirming Bank

Reimbursing Bank

Applicant and Benefi­ciary
OR
Accountee and Benefi­ciary

Issuing Bank

Export Islamic LC

Applicant/Accountee

Issuing Bank

Advising Bank

Beneficiary

Confirming Bank

Reimbursing Bank

Beneficiary and Issuing Bank

Advising Bank

Shipping Guarantee

Applicant/Accountee

Advising Bank

Beneficiary

Confirming Bank

Advice Through Bank

Reimbursing Bank

Applicant and Benefi­ciary

Issuing Bank

Guarantee

Applicant and Benefi­ciary

Applicant and Benefi­ciary

Advising Bank

Advise Through Bank

Reimburse­ment Bank

Issuing Bank

Standby

Applicant/Accountee

Advising bank

Beneficiary

Confirming bank

Reimbursing bank

Applicant and Benefi­ciary

Issuing Bank

Clean Islamic LC

Applicant/Accountee

Advising bank

Beneficiary

Confirming bank (for confirmed Islamic LCs only; could be more than one bank)

Applicant and Benefi­ciary

OR

Accountee And Benefi­ciary

Issuing Bank

Note

While processing Islamic LCs and guarantees, you can use the walk-in customer ID for the applicant (APP) and Beneficiary (BEN) party types. However, note that you can use a par­ticular CIF ID only once in an Islamic LC.

Opting to amend Party Details during System Setup

Oracle FLEXCUBE offers you the facility to edit the party details that you capture in the Islamic LC Contract Online screen. You may exercise this option when setting-up the system at your bank

If you opt for the edit facility, you can change the following party and credit details, captured for an Islamic LC, in the Islamic LC Contract Details screen:

Click on the adjoining button, adjacent to the name, address and credit details fields, to invoke a popup window. In this screen, you can edit the party and credit details originally captured for the Islamic LC.

Media Type

The system defaults the media type. You can select a different medium from the adjoining option list.

Address

The system defaults the other address of the party. However, you can modify this.

Account

The system defaults the account number. However, you can modify this.

5.2.7 Specifying Parties Limits

Oracle FLEXCUBE allows you to track the credit limits for joint venture customers who are parties to an Islamic LC contract. Using ‘Parties Limits’ tab, you can track the limits of multiple credit lines in an Islamic LC contract. Click ‘Parties Limit’ tab on ‘Islamic LC Contract Details’.

Specify the following details:

Limits Tracking Required

Check this box to indicate that limit tracking is required for the parties to the Islamic LC contract. If you check this box, the system will let you set the limits for multiple credit lines in the contract. If you do not check this box, the system will not track the parties’ limits.

On checking this box, the system enables ‘Default’ button. You can use this button to get the default values for the parties in the credit lines.

Limit Tracking Tenor Type

Choose the limit tracking tenor type from the following options:

Party Type

Specify 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 joint venture party type based on the joint venture party selected under ‘Parties’ tab of ‘Islamic LC 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.

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..Specify the ‘Customer No’ 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.

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 Number

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:

Choose the appropriate one.

Linkage Reference No

Specify the reference number that identifies the facility, collateral pool or collateral. 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 export and import Islamic LC contracts are listed below:

Amount tags applicable to Export Islamic LC:

Amount tags applicable to Import Islamic LC:

Choose the appropriate one based on the type of Islamic LC contract. If you do not specify the amount tag, the system will track the limits based on the liability amount and facility.

In ‘Parties Limit’ tab choose ‘Liability Minus Margin’ from the ‘Amount Tag’ the ‘Limit Amount’is computed as ‘Current Liability Amount’ minus the ‘Margin Amount’

In ‘Parties Limit’ tab choose ‘Silent Confirmation Amount’ from the ‘Amount Tag’ the amount computed will be ‘Silent Confirmation Amount’ which is the Liability Outstanding Amount. For joint venture customers, you need to choose ‘Liability Amount’ as the amount tag. Other amount tags are not applicable to joint venture customers.

The system verifies the amount tag against the product type. If you choose an amount tag, which is not supported by the product type, the system displays an error message.

Amount

When you click ‘Default’ button, the system defaults the amount tracked for each credit line. In case of joint venture customers, the amount is derived on the basis of the percentage of liability amount. In case of other customers, the amount is derived based on the amount tag specified above.

You can add more rows to the list of credit lines using add button. Similarly, you can remove a selected row from the list using delete button.

Once you have specified the details, save the contract. In case the limit for a credit line has been completely exhausted, the system displays a configurable override message. If you have not used ‘Default’ button while specifying the parties’ limit details, the system will automatically default the details and track the limits based on that.

5.2.8 Updating Parties’ Limits on Amendment of Islamic LC Contract

Oracle FLEXCUBE allows you to amend Islamic LC contracts. Such amendments may have direct impact on the parties limits defined in the contracts. This section examines the some amendments that can be made to an Islamic LC contract and their impact on the parties’ limits.

Increase in Islamic LC Amount

If there is an increase in the Islamic LC amount, based on the amount tag, the system updates the parties’ limits as follows:

Amount Tag

Changes in Parties’ Limits

Liability Amount

The liability amount is used to track the delta amount

Confirmed Amount

The increased confirmed amount is used to track the parties’ limits

Unconfirmed Amount

The increased unconfirmed amount is used to track the limits

Non-undertaken Amount

The islamic LC amount is used to track the limits for the line speci­fied under ‘Non-Undertaken Amount’

Liability Minus Margin

The increased islamic LC amount is used to track the limits for the line specified under ‘Liability Minus Margin’

After amendment, if there is an increase in the confirmed amount, the parties’ limits are updated as follows:

Amount Tag

Changes in Parties’ Limits

Liability Amount

The system does not track the limits

Confirmed Amount

The increased confirmed amount is used to track the limits

Unconfirmed Amount

The increased confirmed amount is deducted from the credit line tracked for the unconfirmed portion

After amendment, if there is an increase in the undertaking amount, the parties’ limits are updated as follows:

Amount Tag

Changes in Parties’ Limits

Liability Amount

The system does not change the parties’ limits

Undertaken Amount

The increased undertaken amount is used to track the limits

Non-undertaken Amount

The increased undertaken amount is deducted from the credit line tracked for the non-undertaken portion

After amendment, if there is a decrease in the islamic LC amount, the system updates the parties’ limits as follows:

Amount Tag

Changes in Parties’ Limits

Liability Amount

The decreased amount is deducted from the credit line tracked for the liability amount

Confirmed Amount

The decreased confirmed amount is deducted from the credit line tracked for the confirmed amount

Unconfirmed Amount

The decreased confirmed amount is deducted from the credit line tracked for the unconfirmed portion

Liability Minus Margin

The decreased islamic LC amount is used to track the limits for the line specified under ‘Liability Minus Margin’

After amendment, if there is a decrease in the confirmed amount, the system updates the parties’ limits as follows:

Amount Tag

Changes in Parties’ Limits

Liability Amount

The system does not change the parties’ limits

Confirmed Amount

The decreased confirmed amount is deducted from the credit line tracked for the confirmed amount

Unconfirmed Amount

The decreased confirmed amount is added to the credit line tracked for the unconfirmed portion

After amendment, if there is a decrease in the undertaking amount, the system updates the parties’ limits as follows:;

Amount Tag

Changes in Parties’ Limits

Liability Amount

The system does not change the parties’ limits

Non-Undertaken Amount

The decreased undertaken amount is added to the credit line tracked for the non-undertaken portion

After amendment, if there is a decrease in the collateral amount, the system updates the parties’ limits as follows:

Amount Tag

Changes in Parties’ Limits

Liability Minus Margin

The decreased collateral amount is used to track the limits for the line specified under ‘Liability Minus Margin’

After amendment, if there is a increase in the collateral amount, the system updates the parties’ limits as follows:

Amount Tag

Changes in Parties’ Limits

Liability Minus Margin

The increased collateral amount is used to track the limits for the line specified under ‘Liability Minus Margin’

If the percentage of allocation is modified, the system updates the delta amounts accordingly. If the parties in the ‘Parties’ tab are changed and the old party happens to be a joint venture party, the limit tracked against all the joint venture customers will be reduced proportionately.

If the new party is a joint venture, the new JV customers along with the relevant details will be defaulted in the ‘Parties Limits’ tab when you click ‘Default’ button. Please notice that this is applicable only to joint venture customers of the changed parties.

5.2.9 Updating Parties’ Limits on Islamic LC Availments

On receipt of the bills or on notification from the negotiating bank, you can record an availment under an Islamic LC. The system updates the parties’ limits during availment of an Islamic LC contract.

At the time of availment, the system reinstates the limits for the lines under the joint venture customers. This reinstatement takes place proportionately based on the percentage of amount utilized.

In case of non joint venture customers, the reinstatement takes place based on the amount tag selected under ‘Parties Limits’ tab. The method of reinstatement for each amount tag is given below:

Amount Tag

Changes in Parties’ Limits

Liability Amount

The limits are reinstated based on the islamic LC amount availed so far

Confirmed Amount

The limits are reinstated based on the confirmed portion of the islamic LC amount availed so far

Unconfirmed Amount

The limits are reinstated based on the unconfirmed portion of the islamic LC amount availed so far

Undertaken Amount

The limits are reinstated based on the undertaken portion of the islamic LC amount availed so far

Non-undertaken Amount

The limits are reinstated based on the non-undertaken portion of the islamic LC amount availed so far

Liability Minus Margin

The limits are reinstated based on the LC amount minus collateral amount availed so far.

5.2.10 Specifying the Media Details for a Party

The advices for a party will be sent to the default media maintained in the Customer Addresses table. If you want to send the advices through another medium, you should indicate it in the Parties screen. The address should be also indicated. The advices will be sent through the new medium, only if you indicate so in the Advices screen of contract processing. If not, the advice will continue to be sent to the default address defined for the party.

You can use this feature to send a one-off advice, through a different medium. For example, for a particular customer, you normally send all advices through mail and hence haven’t defined SWIFT or TELEX advices. For an Islamic LC involving a customer, you want to send the advices through SWIFT. In such a case, you can specify the medium as SWIFT and specify the address only for the Islamic LC you are processing.

5.2.11 Specifying Credit Administration Details

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

5.2.12 Specifying Advices for an Islamic LC

An important part of processing an Islamic LC is the generation of various advices applicable for a contract.

The advices that can be generated for the events that occur during the lifecycle of an Islamic LC are defined for the product, to which the Islamic LC is linked. For example, you may have specified the following advices for a product:

The details of the advices for an event are displayed in the Advices screen. The party type to whom a specific advice should be sent is picked up automatically based on the type of Islamic LC being processed and the parties involved.

From the ‘Islamic LC Contract Details’ screen click on the ‘Advices’ tab. The advices screen is displayed. The advices defined for the event you are processing will be displayed. You can choose to suppress any of them. The address of the party to whom the advice is addressed to will be picked up by default, based on the media and address maintenance for the party.

These can be changed if required. For a payment message by SWIFT, you also have the option to change the priority of the message.

Suppress

By default, all the advices that have been defined for a product will be generated for the Islamic LCs involving it. If any of the advices are not applicable to the Islamic LC you are processing, you can suppress its generation by Checking against the suppress field.

Priority

For a payment message by SWIFT, you also have the option to change the priority of the message. By default, the priority of all advices is marked as Normal.

The priority of a payment message can be changed to one of the following:

Medium

The medium by which an advice will be transmitted and the corresponding address will be picked up based on the media and address maintenance for a customer.

You can, however, change either of these while processing the Islamic LC. Typically, if changed, both of them will be changed.

After selecting the advices to be generated for the Islamic LC, click on ‘Ok’ button to save it. Click on ‘Delete’ button to reject the inputs you have made. In either case, you will be taken to the Contract Main screen.

5.2.13 Specifying the Free Format Instructions that should accompany an Ad­vice

Free Format Text instructions (FFTs) are a set of instructions or statements that are applicable to the Islamic LC that you process. It can be used to enter additional details related to the Islamic LC you are processing. In the Islamic LC Contract - Advices screen you can specify the FFTs that should accompany an advice, generated for an Islamic LC. When you select an advice code on this screen, the advice code together and the party type, to which it is to be sent, is displayed in the FFT section. This indicates that the FFTs that you specify will appear on the advice, which is displayed and will be sent to the party type that is displayed.

All the FFTs defined for the advice, at the product level will also be displayed. You have the option to add to or delete from the list of FFTs defaulted for an advice.

To add an FFT to the list, click on add button in the screen and then on the option list button. Select an FFT code from the option list that is displayed. After selecting the code that identifies the FFT you wish to attach to the advice, its description is automatically picked up and displayed. The FFT description can be changed to suit the requirements of the Islamic LC you are processing.

To delete an FFT from the list, highlight the code that identifies the FFT and click on the delete button in the screen. The free format codes for the following purposes have the fixed codes:

 

SND2REC­MTxxx

Sender to receiver information (Field 72 of SWIFT).

INSTRUC­TION

Instructions to the Paying/Accepting/Negotiating bank (Field 78 of SWIFT).

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 messages: 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.

5.2.14 Specifying Shipping for an Islamic LC

An Islamic LC, which is an instrument of trade finance, involves details of merchandise. Hence, you will need to specify the following details for the Islamic LC:

Click on the tab titled ‘Shipment’ to specify details of the goods and clauses that are part of the Islamic LC instrument.

 

The following are the features of the Contract Ship screen:

5.2.14.1 Specifying Shipment Details for an Islamic LC

There are certain standard clauses and conditions, associated with the shipment of the merchandise traded under an Islamic LC. You can specify the following shipping details for an Islamic LC that you process.

Partial Shipment Allowed

Check this option if partial shipment of the goods is allowed under the LC.

Trans Shipment Allowed

Check this option if Trans-shipment is allowed under the LC

From

The location from which the goods transacted under the LC should be shipped. In international trading parlance, this is called the Loading on board/Dispatch/Taking in charge at/from.

To

The destination to which the goods transacted under the LC should be sent. In international trading parlance, this is called the ‘For transportation’ to.

‘Shipment From’ and ‘Shipment To’ are linked to the tags 44A and 44 B respectively. These tags are applicable to the following message types:

Note

Specifying the ‘Shipment From’ and ‘Shipment To’ is optional.

Shipment Days

Specify the number of shipment days.

If you enter the shipment days and leave the field ‘Latest Shipment Date’ blank, on saving the contract, the system calculates the latest shipment date based on the number of shipment days and the effective date.

However, if you specify the latest shipment date, the system ignores the shipment days specified here. Instead, it recalculates the shipment days based on the latest shipment date and the effective date.

Latest Shipment Date

Specify the latest shipment date.

Besides these details, you can also specify shipping preferences like:

5.2.14.2 Specifying the Port Details

In this section specify the following details:

Port of Loading

Specify the name of the airport from where the goods transacted under the Islamic LC are loaded for shipping.

Port of Discharge

Specify the name of the destination port to which the goods transacted under Islamic LC should be sent.

Note

Port of Loading and ‘Port of Discharge’ are linked to the 44E and 44F tags respectively. These tags are applicable to the following message types:

It is not mandatory to specify the Port of Loading or Port of Discharge.

5.2.15 Specifying Goods Details

You can also specify Preferences for the shipment of goods in the ‘Goods ‘tab. Click ‘Goods’ tab to specify details of the goods and captures unit and price of the goods. The ‘Goods’ tab maintains multiple goods details

The fields are maintained as follows:

Goods Code

Select the Goods code from the list provided.

Goods Description

The system displays the description of the Goods.

Number of Units

The system displays the number of units.

Price Per Unit

The system displays the price per unit.

5.2.16 Specifying Document Details

You can specify the documents that should accompany the goods in the ‘Documents’ tab. Click ‘Documents’ tab to specify details documents and clauses that are part of the Islamic LC instrument.

 

You can specify the following details:

5.2.16.1 Specifying Contract Documents Details

There are some standard documents required under a documentary Islamic LC. In this screen you can specify the documents that are required under the Islamic LC being processed. These details will be a part of the Islamic LC instrument sent to the advising bank, the advice through bank or the beneficiary. All the documents specified for the product to which the Islamic LC is linked will be defaulted to this screen.

Code

Enter the document code.

Type

Enter the document type.

Description

Enter the document description of the document that is defaulted to suit the LC you are processing. This field will be enabled only if the LC type is ‘Shipping Guarantee’, but not mandatory.

During copy operation, the value of this field will not be copied to the new contract.

Reference

Enter the document reference number based on which the Shipping Guarantee issued.

Copy

Enter the number of copies of the document.

Originals

Enter the number of Original documents here.

Original Required

Enter the receipt details here.

You can add to or delete from the list of documents that are defaulted. To add a document for the Islamic LC, click on add button and then on option list positioned next to the Document Code field. Select the code of the appropriate document from the list of document codes maintained in the Documents Maintenance screen. The other details of the document will be defaulted to this screen.

To delete a document that is not required for the Islamic LC, highlight the document code and click on the delete button on the screen.

Specifying the Document Reference

For Shipping Guarantee type of Islamic LCs, you can specify the document reference based on which the Shipping Guarantee is issued in the ‘Doc reference’ field. This field will be enabled only if the Islamic LC type is ‘Shipping Guarantee’. However it is not mandatory to enter the document reference for ‘Shipping Guarantee’ contracts. Documents captured for a shipping guarantee contract, can exist with or without document reference.

During copy operation, the value of this field will not be copied to the new contract.

5.2.16.2 Specifying Clauses for a Document

In addition to the other details, the clauses specified for a document while defining the product, are also defaulted to this screen.

When you highlight a document code, all the clauses defined for the document are displayed in the Clauses window. You can add to or delete from, the list of clauses that are defaulted.

To add a clause to a document for the Islamic LC, click on the add button. Then, click on option list positioned next to the Clause Code field. Select the code of the applicable clause from the list of clause codes maintained, in the ‘Clause Maintenance’ screen. The description of the clause will be defaulted, based on the clause code that you select.

To delete a clause that is not required for the Islamic LC, highlight the Clause code and click on the delete button.

5.2.17 Specifying Tracer Details for an Islamic LC

Tracers are reminders that can be sent to various parties involved in an Islamic LC. The list of tracers that you can send for an Islamic LC is predefined (hard coded in the system) and can be classified into the following types:

You can specify the tracers to be sent for an Islamic LC, in the ‘Islamic LC Contract Tracers’ screen. To invoke this screen, click on the tab titled ‘Tracers’ in the ‘Islamic LC Contract Details’ screen. The ‘Islamic LC Product Tracers’ screen is displayed.

The tracers, specified for the product to which you have linked the Islamic LC, will be defaulted to this screen.

5.2.17.1 Specifying Tracer Details

For the tracer code that is highlighted, the details are defaulted from the product and can be changed to suit the Islamic LC you are processing.. Besides the Tracer Code, the following details will be displayed:

Maximum Tracers

You can specify the maximum number of tracers that should be sent for the Islamic LC. The value is defaulted from the product under which you are processing the Islamic LC.

Start Days

The tracers that you specify for an Islamic LC can be generated only after it has been authorised. Specify the default number of days that should elapse after an Islamic LC has been authorized, on which the first tracer should be sent.

By default, the first tracer for an authorised Islamic LC contract will be sent, after the number of days prescribed for the product under which it is processed.

Frequency

You can specify the frequency (in days) with which the tracer should be re-sent, for the Islamic LC you are processing.

Last Sent On

You can stop the generation of a tracer at any point during the life cycle of an Islamic LC contract.

For instance, you had specified that an acknowledgement tracer is to be generated for a contract. When you receive the acknowledgement from the concerned party, you can disable its generation. At a later stage when you wish to generate the tracer again, you only need to enable it for the Islamic LC by using this facility.

Medium

If you have specified that tracers should be generated for an Islamic LC, you should also specify the medium through which it is to be generated. A tracer for an Islamic LC can be sent through Mail, Telex or other compatible media.

Template ID

Specify the template ID for the SWIFT message type.

If the medium is SWIFT, then the system will generate the tracers in the SWIFT MT799 format based on the template ID mentioned at the Islamic LC Contract level for populating the tag 79.

5.2.18 Specifying Other Details of an LC

The SWIFT messages that are generated require information specific to the Islamic LC you are processing. To specify SWIFT related details invoke the ‘Others’ screen by clicking on the tab titled ‘Preferences’.

The details that you specify in the fields of this screen are picked up for SWIFT messages.

The SWIFT message that utilizes the information that you specify in this screen and the corresponding field of the SWIFT message which carries the input, has been listed below:

Field in Oracle FLEXCUBE

SWIFT Message

Field of the SWIFT message

Charges From Beneficiary

MT700

Field 71B

Additional Amounts Cov­ered

MT 700 & MT 740

Field 39C

Period For Presentation

MT 700

Field 48

Charges From Issuing Bank

MT 730

Field 71B

Account For Issuing Bank

MT 730

Field 57A

Date

MT 730

Field 32D

Period for Presentation

The period of presentation defined for the product - or calculated for the Islamic LC, as the case may be - will be displayed in the ‘Period For Presentation’ field. You can change the default to suit the Islamic LC you are processing.

The system uses the Expiry Date and the Last Shipment Date specified for the Islamic LC you are processing, and arrives at the period of presentation.

For details, refer the heading ‘Specifying the Period of Presentation’ in chapter three, ‘Creating Products’, in the Islamic LC user Manual.

Claim Advice in Swift

Check this box to generate the charge claim advice in MT799 SWIFT format.

This field is initially defaulted from product level. However, you can then check or uncheck it at the contract level.

Template ID

Specify the template ID related to MT799 message types from the option list.

Note

You can enter the values only if the ‘Claim Advice in Swift’ field is checked.

User LC Reference Number

System displays the Contract User Reference as the User LC Reference Number. The reimbursement Islamic LC, under which the bill is availed, and the Export Islamic LC linked to the bill, should contain the same ‘User LC Reference Number’.

Unconfirmed Amount

The system displays the current maximum unconfirmed Islamic LC amount. This amount is derived by deducting the confirmed amount from the maximum Islamic LC amount.

Available Confirmed Amount

The system displays the available confirmed portion of the maximum Islamic LC amount.

Available Unconfirmed Amount

The system displays the available unconfirmed portion of the maximum Islamic LC amount.

Beneficiary Confirmation Required

The system checks this box by default for Letters of Credit. This box is unchecked for ‘Guarantees’. You can operationally control the beneficiary confirmation process for an Islamic LC, but you cannot modify it after the first authorization.

Confirmation Instructions

You can also specify the type of the confirmation instruction that should be sent to the advising/confirming bank if you are issuing the Islamic LC (whether Field 49 of MT 700 should be ‘Without’, ‘Confirm’, or ‘May add’).

Auto Status Change

The system defaults the status of the checkbox based on the product maintenance. However, you can modify this. If you check this box, the system picks up the contract during EOD operations for status processing. If you do not check this, the system will not consider the Islamic LC contract for automatic status processing.

Partial Confirmation Allowed

Check this box to confirm the partial amount. The remaining amount can be confirmed after you receive the approval from the external agent.

Note

This field is initially defaulted from product level. However, you can then check or uncheck it at the contract level.

Confirm Percentage

Specify the percentage of Islamic LC Amount to be confirmed. If percentage is not specified, the system will calculate the percentage based on the confirm Amount specified.

Confirmed Amount

Specify the amount to be confirmed. If Confirm Amount is not specified, the system will calculate the confirmed amount based on the Confirm Percentage specified.

Requested Confirmation Party

Select the confirmation party type. You can select one of the following messages:

5.2.19 Specifying Settlement Instructions

Through the settlement screens, you should specify the customer accounts to which entries for the commissions, charges, taxes and collateral should be posted.

Click on ‘Settlement’ button in the ‘Contract Main’ screen, for a display of the Settlements screen. Besides the account details, you can specify:

Note

If you have specified an account that uses an account class that is restricted for the prod­uct, an override is sought.

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.

Refer to the chapter titled ‘Making an Availment’ in this user manual for details.

5.2.20 Viewing Event Details

The event details screen of contract processing will show the details of the accounting entries generated for an Islamic LC. Click ‘Events’ button in the ‘Islamic LC Contract Detailed View’ screen to go to the ’Event Details’ screen.

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

Click on ‘Accounting Entries’ button to view the accounting entries for the event that is highlighted. Click ‘Message’ button to view the messages applicable to the event. Click on ‘Exit’ button to go back to the ’Event Details’ screen.

5.2.20.1 Viewing the Accounting Entries Passed for the Islamic LC

From ‘Event Details’ screen, click ’Accounting Entries’ button to view the Accounting Entries for the event. The accounting entries that are passed depend on the type of Islamic LC that you are processing.

The following information is provided for each event:

Click ‘Exit’ button to go back to the screen from where you invoked the ‘Accounting Entries’ screen.

5.2.20.2 Viewing the Advices Applicable to a Contract

Click ‘Message’ button from the ’Event Details’ screen to view the list of advices applicable to a particular event in the lifecycle of the Islamic LC.

The following details of a message are displayed:

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 ‘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 field, refer to the section “Messaging Branch Parameters Maintenance” in the Core User Man­ual.

5.2.21 Defining Commission and Charge Details for an Islamic LC

Besides the Islamic LC amount, the other components of an Islamic LC include the commissions that you collect and the charges that you levy on the parties involved in an Islamic LC.

The details of the commissions that can be collected and the procedure of making them applicable to the Islamic LC you are processing have been detailed in the chapter Processing Commissions on an Islamic LC.

The details of the charges that you can levy and the procedure for making them applicable to the Islamic LC you are processing has been detailed in the chapter titled Processing Charges on an Islamic LC.

While defining Accounting Roles for a product you must specify the internal accounts that should be picked up when commissions are collected and when charges are levied.

5.2.22 Maintaining Collateral Details

Islamic LCs that are issued or confirmed are often processed with cash collateral. In cases like a in a Guarantee, you may even take a 100% cash collateral. This is when an applicant is not a customer of your bank and the credit worthiness of the applicant is not known. Details of such cash collateral can be maintained in the Islamic LC Contract - Collateral Details screen. To invoke this screen, click ’Collateral’ button in the ‘Islamic LC Contract Details’ screen. The ‘Islamic LC Collateral Details’ screen is displayed.

The cash collateral percentage is defined for the product under which an Islamic LC is processed. This percentage is picked up by default for the Islamic LC being processed. The following details will be shown for the cash collateral:

5.2.22.1 Specifying Collateral Details

Currency

Specify the currency in which cash is offered as collateral.

Percent

If you specify the cash that is to be collected as collateral as a percentage of the Islamic LC amount, the equivalent amount is displayed. This amount is taken to be in the currency, defined as the collateral currency.

Exchange Rate

If the collateral currency and the currency in which the Islamic LC is issued are different, you should also specify an exchange rate to be used in the conversion. The value of the collateral is determined based on this exchange rate.

Amount

You can specify the cash collateral as an amount. In this case you do not need to specify a percentage. However if you specified the collateral as a percentage of the Islamic LC amount, the actual amount is computed in the collateral currency by the system.

Description

Enter a brief description of the collateral.

5.2.22.2 Specifying adjustment details for a collateral

In this section specify the following details:

Type

At any time during the lifecycle of an Islamic LC, you may want to increase or decrease the value of the cash, accepted as collateral on Islamic LC. This is done by way of an amendment to the Islamic LC.

The cash collateral can be increased or decreased, without changing the Islamic LC amount. On the other hand, a change in the Islamic LC amount may necessitate a change to the collateral amount.

If you wish to increase the collateral amount, indicate Increase on this screen and enter the amount by which, you want to increase the cash accepted as collateral.

If you wish to decrease the collateral amount that you have collected while issuing an Islamic LC, indicate decrease on this screen. Enter the amount by which you want to decrease the cash accepted as collateral.

Amount

Enter the amount by which you want to decrease the cash accepted as collateral.

The collateral deposit account will automatically increase or reduce based on the specifications you make.

Note

If at the time of availment, you want to pay from the collateral account, you can include it in the accounting entries for the event, Availment.

5.2.23 Collateral Transfer from Islamic LC to Bills

If the Collateral Transfer Bridge option is selected in the ‘Letters of Credit Product – Preferences’, then the Collateral amount and currency input allowed on the ‘Bills - Contract Details’ screen are disabled.

You can enter the Collaterals to be transferred from the Islamic LC onto the bill in the COLLATERAL DETAILS screen. The decrease option is defaulted and will not be allowed to change. The amount entered here is displayed in the Bills – contract Details screen if the Collateral Transfer Bridge option is specified. The Collateral Currency is disabled for Bills under Islamic LC.

5.2.23.1 Collateral Tracking subsequent to transfer onto Bills from Islamic LC

Once the collateral gets transferred from Islamic LC onto Bills contract, no further linkage of the collateral is maintained. Hence, subsequent to the linkage, further action on the bill will not back trace the collateral onto the Islamic LC.

5.2.24 Remarks

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

For more details on this screen refer to the section 6.18 titled ‘Remarks ‘in this user manual.

5.3 Contracts to Deposits and Accounts Details

This section contains the following topics:

5.3.1 Linking Contracts to Deposits and Accounts

You can link an Islamic LC contract to deposits and accounts.

Type of linkage

What it indicates

Linking a deposit

The entire Islamic LC amount, or a portion of it, can be linked to a deposit. The outstanding amount in the deposit should always be greater than or equal to the Islamic LC amount.

You can link several Islamic LCs to the same deposit, provided suffi­cient funds are available in the deposit.

 

Linking an account

You can link the entire contract amount or a portion of it, to a savings or current account that is maintained with you. The available balance in the account should always be equal to or greater than the contract amount that is outstanding.

You can link any number of contracts to an account provided a balance greater than or equal to the total outstanding contract amount(s) is available in the account.

Note

Please note that the entire contract amount or a portion of it can be linked to any number of deposits or account or to both.

From the Islamic LC Contract Details screen, you can invoke the ‘Linkages Details’ screen by clicking ‘Linkage Details’ button. In this screen, you can specify any account/deposit with you, and indicate the funds that you would like to block.

Type

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

Linked to reference Number/ Account

If the Islamic LC is linked to a deposit, you should enter the Reference Number of the deposit. The deposit should be a valid contract in Oracle FLEXCUBE, with a Value Date that is earlier than or the same as the Value Date of the Islamic LC contract. The Maturity Date should be the same as, or later than that of the contract.

If the linkage is with an account, enter the account number to which you are linking the Islamic LC. The account you specify has to be a customer account (a Current account or a Savings Bank account). The currency of the deposit or account to which the Islamic LC is linked, is displayed once the linkage details are specified.

Exchange Rate

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

Linked Amount

In this screen, indicate the contract amount that has to be linked to the deposit or account. This amount can be the entire amount of the Islamic LC or a portion of it. The amount available for linkage, in the specified deposit or account, is arrived at, by taking into account other linkages and the uncollected and unauthorized balance (in the case of an account).

Once the linked amount is specified, the system will display the following amounts:

5.3.2 Viewing the Amended Details of a Contract

You can view the changes made in a specific version of an Islamic LC contract. To do this, navigate to the version of the contract that you would like to view in the ‘Contract Details’ screen. Click on ‘Change Log’ button on the ‘Contract Details’ screen.

The fields that were modified in the version will be displayed along with the old (inherited) and the changed values.

5.3.3 Viewing the Deferred Component Details

You can view the components which are transferable to BC in Oracle FLEXCUBE. Click ‘Deferred Profit Components’ button on the ‘Contract Details’ screen to invoke the ‘Deferred Components Details’ screen.

The system will display the deferred component details on this screen. You cannot enter or modify any details here.

5.4 Previewing Messages

Click on 'Message Preview' to view the messages or advices generated for the contract. The screen displays the list of messages/advices.

The system defaults the following in the screen:

Contract Reference

The system displays the current contract reference number.

Document Number

The system displays the generated DCN number of the particular message/advice.

Message Type

The system displays the type of message generated for the particular event.

Receiver

The system displays the customer ID of the receiver of the particular message/advice.

Name

The system displays the name of the receiver of the particular message/advice.

Media

The system displays the media through which particular message/advice is transmitted.

Swift Message Type

The system displays the swift message type of the particular message.

Message Status

The system displays the status of the particular message.

You can select a particular message and click on ‘View’ to preview the message/advice.You can also print the message/advice from the preview screen using the ‘Print’ button.

5.5 Viewing Different Versions of a Contract

When you enter a contract, it is allotted the version number, 1.Every amendment and reinstatement results in the next version of the contract being created.

While viewing the Detailed View screen for a contract, the latest version will be displayed. To navigate between the different versions, use the arrow buttons to view the previous and next version.

5.6 Cancelling an Islamic LC

You may have to cancel an Islamic LC that has been opened, before its Expiry Date. An example for a cancellation is when the trade deal for which the Islamic LC is opened falls through. A cancelled Islamic LC will not be available for any availment. However, you can cancel an Islamic LC that has been availed partially.

In Oracle FLEXCUBE, the following are the prerequisites for cancellation:

The accounting entries for this event are generally the reversal of the accounting entries passed for liability and collateral, when the Islamic LC was opened. In addition, a charge can be levied for cancelling the Islamic LC.

A cancellation advice informing, the advising bank or beneficiary, about the cancellation may be generated.

5.6.1 Procedure for Cancelling an Islamic LC

To cancel an Islamic LC, from the Contract Detailed View, do the following:

You will be prompted to confirm the cancellation.

5.7 Closing, Reopening, and Black listing an Islamic LC

This section contains the following topics:

5.7.1 Closing an Islamic LC

Normally, an Islamic LC that is opened will be negotiated within its expiry date. If the negotiation does not happen even after the expiry date, you can close the Islamic LC.

By closing an Islamic LC, you will be reversing the liability entries passed for the Islamic LC. This ensures that the credit limit that was taken by the Islamic LC is released and is available for future utilization.

In Oracle FLEXCUBE, you can close an Islamic LC under the following circumstances:

The accounting entries defined for this event is generally the reversal of the outstanding liability.

No availment can be made against an Islamic LC that is closed. You should reopen a closed Islamic LC if you have to make an availment against it. This would be required in a situation when the Islamic LC comes in for negotiation after it has been closed. The reopening of the Islamic LC will put back the outstanding liability and availability for the Islamic LC.

5.7.1.1 Closing an Islamic LC automatically

In the Islamic LC Contract Main screen, you can specify the following dates related to the closure of an Islamic LC:

To recall, the date of automatic closure is based on the ‘Closure Days’ maintained for the product involved in the Islamic LC. However, you can change the closure date, to any date, after the expiry date of the Islamic LC.

An Islamic LC that is defined for automatic closure will be closed during the End of Day processes on the closure date.

5.7.1.2 Closing an Islamic LC manually

An Islamic LC that is not defined for automatic closure can be closed any time after its Expiry Date.

By clicking ‘Reopen’ icon in the Toolbar, when the details of the Islamic LC IS displayed in the Detailed View screen.

Oracle FLEXCUBE displays a message prompting you to confirm the closure. The closure of an Islamic LC should be authorised by a user, bearing a different User ID, before the End of Day operations begin.

5.7.2 Reopening an Islamic LC

To avail against a closed Islamic LC, you have to reopen it. This occurs when the Islamic LC comes in for negotiation after it has been closed. The reopening of the Islamic LC will put back the outstanding liability and availability for the Islamic LC.

To reopen a closed Islamic LC, you should have defined the event ROPN for the product under which the Islamic LC is processed. For this event, you should have ideally defined the same entries for the Islamic LC outstanding amount and the liability, as you would for the opening (issue or advice) of an Islamic LC. You can levy a charge for reopening an Islamic LC.

5.7.2.1 Procedure for reopening an Islamic LC

Clicking ‘Reopen’ icon in the tool bar when the details of the Islamic LC are being displayed in the Detailed View screen. Oracle FLEXCUBE will prompt you to confirm the reopening of the Islamic LC. You need to click save icon to reopen the LC.

5.7.3 Black Listing Islamic LCs

You can black list Islamic LCs and collection bills based on a set of criteria that you can define. You can define criteria for black listing Islamic LCs and bills in the ‘Black Listed Transaction Input’ screen invoked from the Application Browser. You can invoke ‘Black Listed Transaction Input’ screen by typing ‘TFDBKLST’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

5.7.3.1 Setting up criteria for blacklisting Islamic LC/Bills

You can set up the following criteria for blacklisting Islamic LCs and Bills:

No of Matches

Now that you have set up the criteria for black listing contracts, you need to indicate the number of the above criteria that should be used to black list Islamic LCs and Bills.

For example, you indicate 2 in the field Number of Matches. All Islamic LCs/Bills that match atleast two of the blacklisting criteria that you specified will be displayed for blacklisting.

After you indicate the blacklisting criteria, click ‘Save’ icon from the tool bar to save the record. A message with the Reference Number of the Islamic LCs / Bills that matches the blacklisting criteria that you specified is displayed. You can choose to blacklist the contract or ignore the message.

If you enter a new Islamic LC/Bill that matches the blacklisting criteria, you will be prompted for an override. Similarly, if you attempt to amend the details of a blacklisted Islamic LC/Bill, you will be prompted with an override.

5.8 Reversing Islamic LC

This section contains the following details:

5.8.1 Reversing an Islamic LC

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

This is applicable for Islamic Guarantees and Standby Letters of Credit.

5.8.2 Procedure for Reversing an Islamic LC

Click the ‘Reverse’ icon once you view the Islamic LC details in the Detailed View screen.You can select either of the options for reversal:

 

Oracle FLEXCUBE will prompt you to confirm the reversal of the LC.

5.8.3 Contract Reversal

On selecting the ‘Contract reversal’, system will reverse the Islamic LC contract. A Reversed islamic LC 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 LC to ensure that the credit limit that was taken by the Islamic LC 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.

5.8.4 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 LC events to ensure that the credit limit that was taken by the Islamic LC is released and is available for future utilization.

Reversal of the event will have impact on the below details

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

5.9 Lodging Islamic Guarantee Claim

This section contains the following topics:

5.9.1 Lodging Islamic Guarantee Claim

You can lodge claim on guarantee contract through ‘Islamic Guarantee Claim Lodging’ screen. You can invoke this screen by typing ‘LIDGCLM’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

You can specify the following here:

Contract Reference

Select the guarantee contract reference number from the adjoining option list.

Claim Sl. No

The system displays the claim serial number.

5.9.2 Specifying Main Details

The system displays the following contract details:

Claim Details

Claim Lodgement Date

Select the date on which claim is lodged.

Claims have to be lodged on or before Guarantee Claim Date. If claims are lodged after the Guarantee Claim date, system displays a configurable override error message.

Claim Date

The claim date should not be greater than the expiry date and the current business date of the system.

Note

If multiple claims are lodged against a contract and the claim date is same for all claims, then the system displays an override message.

Claim Amount

Specify the amount of the claim.

The claim amount should not be greater than the guarantee amount and the outstanding guarantee amount.

Claim Status

The status of the claim is displayed here. The statuses are as follows:

Legal Injunction

Check this box to indicate that there is a legal injunction received against the claim, to be captured during Claim Amendment.

Note

System triggers GCAM event and Claim Status is updated as 'Injunction Received'

Remarks

Specify remarks, if any.

Template Id

Select the template ID from the adjoining option list.Template ID is applicable only when the party type is applicant bank or issuing bank.

Note

The claim message is generated only if the template is selected.

Extend or Settle Details

Extend or Settle

Select the option from the drop-down list. The list displays the following options:

New Expiry Date

Specify the new expiry date. The New Expiry date is mandatory when 'Query to Extend or Settle’ option is selected.

Latest Reply Date

Specify the latest reply date. The Latest Reply date is mandatory when 'Query to Extend or Settle option is selected.

Settlement Details

You can set the following settlement details:

Settlement Account Branch

The system displays the settlement account branch on selection of the debit account number.

Settlement Account Currency

The system displays the settlement account currency on selection of the debit account number.

Settlement Account

The system displays the settlement account details.

Charges Debit Account Branch

The system displays the charges debit account branch on selection of the charges debit account number.

Charges Debit Account Currency

The system displays the charges debit account currency on selection of the charges debit account number.

Charges Debit Account

The system displays the charge debit account details.

5.9.3 Specifying Advice Details

Click on the ‘Advices’ tab to capture the advice details.

Advise Details

Message Type

The system displays the message type of the advice generated.

Party Type

The system displays the party type for which the message is generated.

Party Id

The system displays the party ID for which the message is generated.

Party Name

The system displays the name of the party for which the advice is generated.

Medium

Select the medium through which the message has to be sent from the adjoining option list.

Priority

Select the priority of sending message from the adjoining drop-down list.

Suppress

Check this box to suppress the message.

Charges

The system displays the charges configured.

FFT Details

Free Format Text Code

Select the free format text code from the adjoining option list.

Text

The system displays a brief description on free format text.

5.9.4 Specifying Document Details

Click on “Documents” tab to capture document details.

Documents captured during Guarantee Issuance are defaulted when claim is lodged

Document Code

The code of the document captured during guarantee issuance is defaulted here.

Document Type

The type of document captured during guarantee issuance is defaulted here.

Document Description

The description of the document is defaulted here.

Documents Received

Check this box to indicate that documents are received.

 

5.9.4.1 Event Details

Click on ‘Event’ link of the ‘Islamic Guarantee Claim Lodging’ screen to view the event details.

The system displays the events, accounting entries and advices here.

5.9.4.2 Settlement Details

Click on ‘Settlement’ link of the ‘Islamic Guarantee Claim Lodging’ screen to view the settlement details.

The system displays the settlement information for charges here.

5.9.4.3 Charges Details

Click on ‘Charges’ link of the ‘Islamic Guarantee Claim Lodging’ screen to view the charge details.

The system displays the charges configured for the event at product definition here.

For more details on the Charges Details screen, refer section ‘Contract Charge Details’ in Charges and Fees User Guide under Modularity.

 

5.9.4.4 Tax Details

Click on ‘Tax’ link of the ‘Islamic Guarantee Claim Lodging’ screen to view the tax details.

The system displays the details of the tax configured in the screen.

5.9.4.5 Previewing Message Details

Click on ‘Preview Message’ link of the ‘Islamic Guarantee Claim Lodging’ screen to view the message details.

You can view the message or advice generated in the screen.

For more details on this screen, refer Capturing Additional Details chapter in this user manual.

5.9.5 Remarks

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

For more details on this screen refer to the section ‘Remarks ‘in this user manual.

5.10 Viewing Islamic Guarantee Claim Details

You can view the guarantee claim details maintained in the ‘Islamic Guarantee Claim Lodging’ screen using the ‘Islamic Guarantee Claim Summary’ screen. You can invoke this screen by typing ‘LISGCLM’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

In the above screen, you can base your queries on any or all of the following parameters and fetch records:

Select any or all of the above parameters for a query and click ‘Search’ button. The system displays the following records meeting the selected criteria:

5.11 Guarantee Claim Settlement

This section contains the following details:

5.11.1 Settling Guarantee Claim

You can settle guarantee claims using the ‘Guarantee Claim Settlement’ screen. Claims have to be settled in the sequence it is lodged. All claims in Lodged Status will be available for settlement.

You can invoke the ‘Guarantee Claim Settlement’ screen by typing ‘LIDGCLP’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button. Click New icon.

The following details are captured here:

Contract Reference

Specify the Guarantee contract Reference against which the claim is received by the bank and settlement needs to be done. Alternatively you can also select the contract reference from the drop-down list. The list displays only claims for which the status is ‘Lodged’.

Claim Serial No

Specify the claim serial no. for which settlement needs to be done.System validates that the entered unsettled claim is as per the sequential order of lodgement and status of the claim is ‘Lodged’.

5.11.2 Main Tab

The following details are captured here:

Contract Details

Issue Date

System defaults the contract issue date here.

Expiry Date

System defaults the contract expiry date here.

Claim Date

System defaults the guarantee claim date here.

Claim Expiry Date

System defaults the guarantee claim expiry date here.

Currency

System defaults the guarantee currency here.

Amount

System defaults the guarantee amount here.

Outstanding Guarantee Amount

System defaults the outstanding guarantee amount here.

Counterparty Name

System defaults the name of the counterparty here.

Address

System defaults the address of the counterparty here.

Counterparty Type

System defaults the party type of the counterparty here.

Counterparty Reference

System defaults the reference no. of the counterparty here.

Beneficiary Name

System defaults the name of the beneficiary here.

Address

System defaults the address of the beneficiary here.

Claim Details

Claim Lodgement Date

System defaults the date of claim lodged.

Claim Amount

System defaults the claim payment amount as claim amount.

Remarks

Enter remarks if any for the claim.

Template ID

System defaults the template id of the claim lodged.

Claim Status

System defaults the status of the claim lodged.

Liquidate Using Collateral:

Check this box to indicate if the collateral need s to be utilized for the settlement of the claim.

Claim Payment Amount

System defaults the claim payment amount here.

Remarks

Enter remarks if any for claim payment.

Settle Available Amount

Check this option to debit the available amount from applicant and then create loan for the remaining amount during claim settlement. Settle Available Amount can be selected only when you select the Loan for Claim Settlement, else the system will validate the same.

Payment Details

Collateral Funding By Loan:

Check this box to indicate if collateral needs to be utilised for claim settlement.

Claim Payment Date

System defaults the claim payment date here.

Claim Payment Amount

System defaults the claim payment amount here.

Remarks

Enter remarks if any for claim payment.

Finance for Claim Settlement

System defaults the value maintained at product level. You can check/un-check this box to indicate that finance needs to be created or not for this claim settlement.

Settlement Details

Settlement Account Branch

The system defaults the details of settlement account branch. The values can be modified.

Settlement Account Currency

The system defaults the details of settlement account currency. The values can be modified.

Settlement Account

The system defaults the settlement account. The values can be modified.

Charges Debit Account Branch

The system defaults the details of charges debit account branch.The values can be modified.

Charges Debit Account Currency

The system defaults the details of charges debit account currency. The values can be modified.

Charges Debit Account

The system defaults the details of charges debit account. The values can be modified.Advices Tab

The following details are captured here:

Advice Details

Message Type

System displays the message type of the message/advice generated.

Party Type

System displays the party type for which the message/advice is generated.

Party ID

System displays the party id for which the message/advice is generated.

Party Name

System displays the party name for which the message/advice is generated.

Medium

System defaults the medium in which the message has to be sent for the party. You can modify this.

Priority

System defaults the priority value of sending the message maintained at product level. You can modify this.

Suppress

Check this box to suppress the message.

Charges

System displays the charges for the claim.

FFT Details

Free Format Text Code

Specify the free format text code.

Text

Specify the free format text here.

The details for the following subsystems are defaulted from LC contract level.

Guarantee Collateral will be utilized proportionately for claim settlement and customer available balance will be utilized for the remaining amount. In case of inadequate funds in customer account, finance can be created for the remaining amount. On Save, Loan is created and the generated Loan Reference Number is made available in Linkages Subsystem.

Accounting entries are posted for below:

Advices:

5.11.3 Viewing Guarantee Claim Settlement

You can view the guarantee claim settlement details maintained in the ‘Guarantee Claim Settlement’ screen using the ‘Guarantee Claim Settlement Summary’ screen. You can invoke this screen by typing ‘LISGCLP’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

In the above screen, you can base your queries on any or all of the following parameters and fetch records:

Select any or all of the above parameters for a query and click ‘Search’ button. The system displays records meeting the selected criteria and the following details of the records will be displayed: