4.9.22.3 Processing LC Fees

Oracle Banking Corporate Lending processes the following two types of fees for an LC type of drawdown:

• Fee based on LC outstanding: This fee is applicable for the following LC types:
  • Standby LC
  • Commercial LC
• Issuance fee that is paid only to the LC issuing bank.

The amount tags STANDBY_LCOS and COMMERCIAL_LCOS captures the outstanding LC balance for the two LC types, respectively. The system tracks the value date wise balances by taking into consideration all activities that alter the balance. This includes Initiation, Payments, and Value Dated Amendments, and so on.

For processing issuance fee, you need to first identify the participants who would be LC issuers. This is done at the tranche level. Each issuer is given a unique issuing bank number – ISSUER1, ISSUER2 and so on up to ISSUER10. Issuance fee is paid to the issuer of the LC. You can select the issuer at the drawdown level. The list maintained for the tranche defaults to the drawdown. You have to select an issuer from this list.

The basis amount tags ISSUER1_LCOS, ISSUER2_LCOS, to ISSUER10_LCOS associated with ISSUER1, ISSUER2 to ISSUER10, respectively, is used to track the outstanding amount of all the LC drawdowns for that issuer.