1. Letters of Credit
  2. Introduction

1.1 Introduction

A Letter of Credit as an instrument of international trade is one of the most secure methods for a seller to be paid. Besides credit risk considerations, LCs is the customary business practice for long distance trade and a particularly important commission earning service for any bank.

Features
  • The LC module supports the processing of all types of documentary and clean LCs. It can handle all activities during the lifecycle of an LC.
  • Generation of messages and advices for all the applicable events, and the update of account balance. The system also handles the collection of various commissions and charges defined for an LC.
  • The product definition function enables you to create products for specific services you offer. This offers your customer flexibility as well as quick and efficient processing of contracts.
  • The details of documents, free format messages, and commodities are defined only once and can be retrieved whenever needed. This reduces the effort involved in the capture of LC details, thus rendering it faster and error free. The flexibility built into the system ensures that you can modify these details to suit the requirement of each LC.
  • The template and copy features further simplify, the input processing, for contracts.
  • The Central Liability sub-system automatically controls the booking of an LC against the credit lines assigned to the customer before the bookings are made.
  • The module supports automated follow-up for commission and charge payments, confirmation and acknowledgements.
  • Graphic User Interface (GUI) facilitates ease of input. Pick-lists have been provided wherever possible. This makes the module both efficient and easy to use.
  • The media supported include Mail, Telex and S.W.I.F.T.
  • Oracle Banking Trade finance provides you with the facility to calculate the cash collateral either as a percentage of the LC amount or as a fixed amount. Cash collateral advice will be generated for its collection.
  • Sanction Check for LC Contracts based on the branch parameter maintained
  • Swift Character substitution for X and Z character set
  • Provision to validate message generation during contract save
  • Limit tracking for Liability Minus Margin for Import LC
  • Event Reversal for Import and Export LC
  • Silent Confirmation for export letters of credits, where the bank adds the confirmation to the letters of credit at the request of the beneficiary without the knowledge of issuing bank