Trade Finance
Trade finance is process of financing commerce, which is both domestic and international trade based transactions. It comprises a seller, a buyer along with other service providing institutions to facilitate transactions such as banks, insurers, credit rating agencies etc. It may be considered as a tool to safeguard the user against the distinct risks present in doing international trade viz. fluctuations in currency conversions, political conditions, creditworthiness of the buyer etc. Some of the majorly used tools are Letter of Credits, Bills and collections, Guarantees.
To support smooth functioning of these facilities there are few supporting features built around them viz. Beneficiary Maintenance, Customer Acceptance of the Bills and LC discrepancies and Line Limits utilizations.
Beneficiary Maintenance
This feature enables maintenance of customers’ beneficiary for whom the customer intends to create a trade finance instrument. In-order to effect the faster application, the user needs to store the details of the beneficiary. This is a one-time activity and the detail can be modified as and when required. Beneficiary can be added, modified and viewed and can be assigned to different trade finance transactions. Different API’s are written for viewing the list of beneficiaries, for adding new ones and deleting the existing beneficiaries. These APIs are as listed below:
Inquiry:
View List of all the beneficiaries of the user.
View the details of a particular beneficiary.
Transact:
The maintained beneficiaries can be easily selected during the payment. This is a one-time activity required to be done by the users. Below mentioned APIs are used for the purpose:
Creates a beneficiary for LC, Bills, Guarantee
Update existing beneficiary details of the user
Delete existing beneficiary
Letter of Credit
It is a financial tool which acts as an obligation of the issuing bank to pay the agreed amount to the seller on behalf of the buyer, if buyer provides compliant documents about those goods as specifically mentioned in the sales contract or purchase agreement to the advising bank. Both the import and Export LCs are supported by system. LC module also supports creating amendments and viewing them. Import LC application can be saved as a draft or as a Template (Public/Private) while creating a LC. And these can be further used to complete the transaction at a later date. Bills and Guarantees linked to the LC can be seen. Also, the advices and SWIFTs exchanged for the LC are available. Below are the list of APIs for this:
Inquiry:
Fetch details of the letter of credit represented by the unique ID.
Lists all templates created for letter of credits.
Lists all drafts created for letter of credits.
Fetch the saved template details of the user
Fetch the saved draft details of the user
Fetch the details of advices generated for the letter of credit
Lists all amendments done to the Letter of Credit
Reads amendment details of an amendment done to a letter of credit
Lists all amendments done on letter of credit for user's acceptance
Fetches list of all incoterms available for letter of credit
Lists all bills associated with letter of credit
Lists all guarantees associated with letter of credit
Reads swift message details for letter of credit
Fetch list of all commission and charges for letter of credit
Fetches list of goods and it's description
Transact:
Create a Letter of Credit or save it as a draft or template
Updates templates and drafts for letter of credit
Deletes a draft or template saved for letter of credit
Initiates an amendment on letter of credit
Initiates customer acceptance for amended letter of credit
Updates details of a selected letter of credit
Bills and Collections
Bill collection is a trade transaction, in which the exporter forwards the required commercial documents to the importer’s bank, against which the payment is to be done. Banks facilitates documents movement, makes the required checks and then process payments to the exporter against the bill.
Import bill collection offers a view about the collection from the point of view of an importer and export bill collection offers the same from the point of view of an exporter.
Below are the list of APIs for this:
Inquiry:
Fetch list of all the bill templates.
Fetch the list of all the Bill Drafts.
Fetch the details of a selected Bill Template
Fetch the details of a selected Bill Draft
Fetch the details of advice issued by the bank against a Bill.
Fetch the description of the base date
Fetch the list of bills having discrepancies associated with them
Reads a particular discrepancy associated with the Bill
Provides summary of bill payable and bill receivable to a party
Fetches the swift messages associated with a particular Bill.
Fetches the bank instructions associated with the bill.
Fetches details of the Bill on the basis of a unique identifier
Lists down all the bills on the basis of search criteria provided by the user.
Transact:
Initiate the customer acceptance for discrepancies received in the Bill.
Deletes a Bill template/Draft.
Generates a Bill or Bill draft/template.
Updates/Modifies the data of a Bill Template/Draft.
Guarantees
It is a contract done by bank for its customer, who has signed an agreement to purchase goods from a supplier and agrees to fulfil any financial obligations to the supplier in case of default. In other words, if the debtor fails to settle a debt, the bank will cover it. Using this option, user can apply for an Outward Bank Guarantee. Details about Parties, Commitment Details, Bank Instructions and other Guarantee details are captured. While initiating a Guarantee, an option to save it for lateral usage in forms of drafts and templates is available. Request for amendment can be sent and received amendment requests can be approved. Further Swifts and advices exchanged can also be seen.
Below are the list of APIs for this:
Inquiry:
Read details of the selected bank guarantee amendment
Lists bank guarantee amendments of selected Bank Guarantee
Fetches details of Bank Guarantee of the user
Lists Bank Guarantee Templates of the user
Lists Bank Guarantee Drafts of the user
Fetches details of the selected Bank Guarantee Template
Fetches details of the selected bank guarantee draft
Fetches details of Bank Guarantee advice
Fetches details of Bank Guarantee swift message
Lists charges and commissions levied for Guarantee
Lists types of Bank Guarantee
Transact:
Updates the details of draft or template of Bank Guarantee
Deletes bank guarantee draft/template
Initiates a Bank Guarantee or save it as draft/template
Updates details of draft or template of bank guarantee saved by user
Documents
Doing a trade transaction requires some documents to be the part of application, and for which there are different categories maintained and for each category there are some documents list which are considered valid proof. For enabling this feature, following APIs are there:
Inquiry:
Fetch list of document categories available
Fetch list of documents mapped to a document category
Summary
Once the corporate user is having many trade instruments running live, a summary of his transactions in accordance to the latest expiry dates can be listed for ease of tracking. Following is the API for the same:
Inquiry:
Fetch list of trade transactions which are due to expire on or before given date