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Administrator Training Manual

Documentary credits

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Document number: Authorized by: R N NAGARAJ

VersionRev: Signature/Date:

1.0

Document revision list


Ver.Rev Date Author Description

1.0

20-07-2003

Anil.Mirchand ani

Original version Finacle 7.0

2004 Infosys Technologies Limited, Bangalore, India

All rights reserved by

Infosys Technologies Limited, Electronics City , Hosur Road, Bangalore 560 100 India.

No part of this volume may be reproduced or transmitted in any form or by any means electronic or mechanical including photocopying and recording or by any information storage or retrieval system except as may be expressly permitted. This Training manual has been written and produced by the FINACLE -USER EDUCATION TEAM of Infosys Technologies Limited.

Infosys believes that the information in this publication is accurate as of its publication date. This document could include typographical errors, omissions or technical inaccuracies. Infosys reserves the right to revise the document and to make changes without notice. Infosys acknowledges the

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TABLE OF CONTENTS
1 OVERVIEW..................................................................................................................1 2 SECTION OBJECTIVE..............................................................................................4 3 PROCESSES INVOLVED ..........................................................................................5
3.1.1 FLOW CHART FLOW OF DC:..........................................................................................5 3.1.2 FLOW OF DC EXPLAINED :...................................................................................................6

4 DBA RELATED ACTIVITIES.................................................................................7


4.1 4.2 INITIAL SET UP OPERATING SYSTEM LEVEL........................................7 INITIAL SET UP APPLICATION LEVEL.....................................................7
4.1.1 VALUES SET IN CUST-OPTION FILE................................................................................7 4.2.1 REFERENCE CODES...............................................................................................................7 4.2.2 EXCEPTIONS ........................................................................................................................8 4.2.3 ACCOUNT PLACEHOLDERS.................................................................................................9

4.3

PARAMETER SET UP..........................................................................................9

4.3.1 BANK / SOL LEVEL PARAMETERS.....................................................................................9 4.3.2 SOL/SCHEME/REGISTER/CURRENCY LEVEL PARAMETERS......................................10 4.3.3 DC CHARGES SET UP..........................................................................................................10 4.3.4 DOCUMENTARY CREDITS REGISTER MAINTENANCE ..............................................12

5 GENERAL USER ACTIVITIES.............................................................................16


5.1 OUTWARD DOCUMENTARY CREDIT.........................................................16
5.1.1 MAINTENANCE :...................................................................................................................16 5.1.2 AMENDMENT (A) : ..............................................................................................................24 5.1.3 UTILISATION - OTHERS (U) ..............................................................................................26 5.1.4 REINSTATEMENT (R):.........................................................................................................26 5.1.5 HISTORY INQUIRY - (H):.....................................................................................................27 5.1.6 TEXT DETAILS (T) :...........................................................................................................28 5.1.7 MESSAGE DETAILS (M) :....................................................................................................29 5.1.8 STATUS CHANGE OF AMENDMENT (S) :.......................................................................30 5.1.9 FOREIGN BILLS DETAILS (B)...........................................................................................31 5.1.10 MARGIN SCREEN (K) :......................................................................................................32 5.1.11 PAYMENT SYSTEM DETAILS (J).....................................................................................34 5.1.12 SWIFT DETAILS (8) ...........................................................................................................35 5.1.13 OTHER INQUIRY OPTIONS :.............................................................................................37

5.2

INWARD DOCUMENTARY CREDITS ..........................................................38

5.2.1 MAINTENANCE (IDCM).......................................................................................................38 5.2.2 TRANSFER : (F) ....................................................................................................................43 5.2.3 AMENDMENT (A) :.............................................................................................................43 5.2.4 PC A/CS LINKED TO DC (P) :..............................................................................................44 5.2.5 DISBURSEMENT LIST (E) :..................................................................................................46 5.2.6 VIEW MESSAGE HISTORY (@)..........................................................................................46

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5.2.7 PAYMENT SYSTEM DETAILS ( J ):...................................................................................48 5.2.8 PROCESS MESSAGE (W) :....................................................................................................48

5.3 5.4

AMORTIZATION OF CHARGES......................................................................49 SWIFT MESSAGES............................................................................................54

6 RELATED MENU OPTIONS.................................................................................56 7 RELATED TABLES ..................................................................................................57 8 BATCH JOBS.............................................................................................................57 9 UPLOAD OPTIONS................................................................................................57 10 MRTS / MRRS / SAMPLE REPORTS ..............................................................58
10.1.1 DC PRINTING.......................................................................................................................58 10.1.2 DC REPORTS AND ADVISES (DCRPTS):.........................................................................59 10.1.3 COVERING LETTER TO DC OPENER ( DCRPTS):.......................................................60 10.1.4 COVERING LETTER TO CORR BANK ON DC OPENING (DCRPTS): ........................61 10.1.5 ADVISE TO BENEFICIARY ON AMENDMENT TO DC (DCRPTS) ..........................63 10.1.6 ADVISE TO CORRESPONDENT BANK ON AMENDMENT (DCRPTS):......................64 10.1.7 PRINTING OF CUSTOMISED DC REPORTS ...................................................................65 10.1.8 DEFAULT MRTS AVAILABLE........................................................................................65

11

FLASHBACK ........................................................................................................66

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1 OVERVIEW
Documentary Credits (DC) is an important part of the Trade Finance Module. This section covers the entire life cycle of DC, starting from the parameter set up, issuance, modification, amendments etc . The banking concepts related to Documentary Credits are also discussed as part of this section. Finally there is a section dealing with reports.

DOCUMENTARY CREDIT
A Documentary Credit (also called as Letter of Credit in some Countries) is an undertaking by a bank to the Beneficiary (Exporter/ seller) that it would make payment to him against presentation of documents drawn in terms of the credit. The Documentary Credit (DC) would be issued at the request of the customer (Importer /buyer) of the bank.

DC is a widely prevalent mechanism for settlement of trade in international trade. It assures the exporter of payment. Also, he is assured that the importer is bonafide and that the formalities in the importers country regarding the import have been complied with. As far as the importer is concerned, he will pay for the import only on receipt of the documents conforming to the terms and conditions of the credit.

UCPDC (Art 2) defines a DC as under: any arrangement whereby a bank (the issuing bank) acting at the request and on the instructions of a customer (the applicant for the credit) or on its own behalf undertakes i) To make a payment to or to the order of the third party (the beneficiary) or is to accept and pay the bills of exchange (drafts) drawn by the beneficiary; or ii) Authorizes another bank to effect such payment or accept and pay such bills of exchange (drafts); or iii) Authorizes another bank to negotiate, against stipulated documents provided that the terms and conditions of the credit are complied with.

PARTIES TO A DOCUMENTARY CREDIT


The parties to a Documentary credit are defined as follows:

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Training Document Beneficiary The seller of goods or services to whom the Documentary credit is
addressed. The party entitled to its benefits.

Applicant or Account Party The buyer of goods or services who requested the
Documentary credit to be issued.

Issuing Bank The primary financial institution that initiates and writes the
Documentary credit extending their guarantee and liability to pay if the terms and conditions are fulfilled.

Advising Bank The bank, usually in the beneficiary's country, whose primary job
is to pass on the Documentary credit to the beneficiary. The advising bank is principally a correspondent bank of the issuing bank which means that the two parties have exchanged authenticating procedures, and may have also established accounts with each other. An important part of passing on a Documentary credit to a beneficiary is verifying its authenticity. When the advising bank authenticates the credit, they are saying it is a genuine instrument from the named issuing bank. They are not commenting on the creditworthiness of the bank or its country. This procedure gives the seller some protection against fraudulent instruments. That is why it is common practice to have letters of credit advised to a seller through a correspondent bank. The advising bank may receive the Documentary credit by mail, telex, cable, or S.W.I.F.T.

Confirming Bank A separate financial institution requested by the issuing bank


to add their guarantee of payment or acceptance to the credit instrument. It is necessary for this bank to establish a credit line or facility for the issuing bank in order to agree with this request. The confirming bank is usually but not necessarily the advising or drawee bank. The beneficiary cannot request on its own for a bank to confirm a Documentary credit. The request must come through the issuing bank. Therefore, a seller should ask the buyer to authorize the issuing bank to request confirmation.

Reimbursing Bank Sometimes the issuing bank names a bank where it keeps
funds in the currency of the Documentary credit to pay drawee or negotiating banks on its behalf. This bank is known as a reimbursing bank, and is usually named under the special instructions portion of the Documentary credit.

Negotiating Bank A bank either nominated by the beneficiary under a freely


negotiable Documentary credit or designated as a restricted negotiating bank by

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the issuing bank. Allows more flexibility in making payment, and enables beneficiaries to present documents for payment to their local international bank.

FEATURES OF DOCUMENTARY CREDIT MODULE :

The following features are supported in Finacle:

Issuance of DC Maintenance of liability of the Bank / Parties Creation of contingent transactions Advising of a DC Amendment of a DC (Value / Validity / General amendment) Reinstatement of DC Transferring of the DC to a third party Calculation of charges for various activities either in Home currency or
in DC currency

Amortization of charges. Maintenance of Margins by way of cash and lien as security DC History maintenance Maintain Bank/country limits
Linking with the Bills module Linking with BG module Linking with Forward Contract module

Maintenance DC / Amendment Texts Generation of DC / Amendments texts in Mail / Telex / Swift formats. Maintenance of messages of Drawee / Drawer / Negotiating Bank Opening/Modifying/Amending/Advising/utilising DC across SOLS Sharing of Bank charges across SOLs

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SECTION OBJECTIVE

By the end of this section you should be able to

Set up different types of registers for Documentary Credits Perform various functions like issue, amendment, utilization etc. Create set of text templates to be used in the DC. Inquiry on Documentary Credits Generate different types of reports

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3
3.1.1

PROCESSES INVOLVED
FLOW CHART FLOW OF DC:
1 - Purchase/Sale Agreement between Buyer & Seller
SELLER / BENEFICIARY

9 Buyer exchanges documents for goods.

BUYER / APPLICANT

5The seller produces and ships the goods to the buyer and presents the documents to the NEGOTIATING BANK (may be his/her bank)

NEGOTIATING BANK

RE-IMBURSING BANK

8 Buyer's bank debits buyer's account and releases DC documents

3 Buyer's Bank Issues the LC and transmits a copy to the sellers bank via SWIFT 2 The Buyer Applies for a Letter of Credit to his/her bank

6 The Seller's Bank or the Negotiating Bank examines the documents, pays the seller and sends the documents to Issuing/buyer's bank

7 The buyer's bank (or the RE-IMBURSING BANK) examines the documents and re-imburses the seller's or NEGOTIATING bank

BUYER's BANK / ISSUING BANK

4Seller's Bank Confirms the advised LC and sends it to Seller

BUYER's BANK / ISSUING BANK / CONFIRMING BANK

CORRESPONDENT / ADVISING BANK

3 THE LC can also reach the Seller's Bank via a CORRESPONDENT/ ADVISING BANK

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3.1.2 FLOW OF DC EXPLAINED :


(Following is a simple cycle of a DC)

1. The buyer fills out a Documentary credit application which satisfies the terms of the purchase agreement plus the requirements of customs law, shipment, and document coordination.

2. The bank issuing the Documentary credit (usually the buyer's bank), rechecks the application to ensure that it is complete and workable. The Documentary credit is then issued after the buyer's credit facilities are verified.

3. The issuing bank transmits the Documentary credit to a correspondent bank by telex, S.W.I.F.T., or airmail and asks them to advise or confirm/the/instrument.

4. The correspondent bank receives the Documentary credit, checks authenticity, records, and transmits the instrument to the seller or beneficiary, and adds their confirmation if requested. Upon receipt of the Documentary credit, the seller should carefully review it to determine whether he or she can comply with its performance requirements and whether it is acceptable from a credit standpoint.

5. Upon determination that the Documentary credit is acceptable, the seller should ship the goods precisely pursuant to its terms and conditions. The seller must prepare documents exactly as required and then present them to the proper paying bank. The proper paying bank may be any bank specified in the Documentary credit to accept, pay, or negotiate. This may be the advising bank, confirming bank, issuing bank, or (on a freely negotiable credit) any bank that is willing to negotiate.

6. When the paying bank receives the documents, it will examine them to determine if they are in order pursuant to the Documentary credit's terms and conditions. If in order, the bank may pay, accept, or negotiate as required by the Documentary credit. The paying bank will transmit the documents to the issuing bank and request reimbursement. Reimbursement may

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come direct from the issuing bank or the issuing bank may have instructions added to the Documentary credit to reimburse on another bank or to simply charge its account. 7. Upon receiving the documents, the issuing bank will examine them to ensure that they are in order as specified and then reimburse the negotiating bank. For time drafts, reimbursement is made at maturity of the Banker's Acceptance. 8. The issuing bank debits the buyer's account and releases the documents. 9. The buyer exchanges the shipping documents for the goods.

4
4.1

DBA RELATED ACTIVITIES


INITIAL SET UP OPERATING SYSTEM LEVEL

4.1.1 VALUES SET IN CUST-OPTION FILE

Nil

4.2

INITIAL SET UP APPLICATION LEVEL

4.2.1 REFERENCE CODES


At the time of DC Register opening, following reference codes should be in place Reference type Where / How useful ? Shipment Mode Follower Mode Transmission mode

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Shipment Mode &: refers to the mode through which the goods specified under the DC, have to be shipped (Air, Sea, Land, etc) and the route the follower mail takes after the DC is issued.

4.2.2

EXCEPTIONS

EXCEPTION EVENT DURING WHICH THE EXCEPTION IS RAISED DESCRIPTION Limit Node Expired When the limit node attached to the DC has expired DC Sanction if the Sanction period for the DC is completed. (bod_date > Expired DC sanctions expiry date specified in FPCM Party's Exceeded System Modified Limit Charges if the partys liability limit is exceeded by the DC. Available amount of DC > (Sanctioned Limit of DC Utilised limit) if the charges are modified during a particular event of the DC.

Max. Validity The maximum validity period for the DC has exceeded ie. Exceeded (Expiry_date open_date) > Max. Valid. allowed(days) set in DCRM Action after DC Some action is being taken on a DC after it has expired. expiry dt Cryst. liability If crystalised liability (Fructified DC amount under bills + exists Fructified DC amount without bills )> 0 exists for a particular DC. Agnst House If the field House Air Bill = YES in ODCM at the time of airways bill issue Margin not yet if (Cash Margin percentage + Lien Margin percentage) at time of recovered issue < the value set in the field DC margin percentage in FPCM Usance maximum If the usance period has exceeded the max usance period set in exceeded the DCRM option. Max. negot.days If the negotiation period has exceeded the max negotiation period exceeded set in the DCRM option No documents/ If there are no documents (no text for text type neither C nor conditions D) attached with a DC this is raised. Acct.Bal. not Bal. Of the party_acct < total charges collected.

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Training Document sufficient Back Dated Bod_date > dc_open_date. Transaction Party Cautioned If the party to whom the DC is being is a cautioned party as per Exception the FPCM option then this exception is raised. Inward DC Max Validates whether the effective maximum advance value of the Advn exceeded Inward DC is exceeded while doing amendment or transfer event of the DC Outward DC Validates whether the current value of the outward DC exceeds exceeds export the effective maximum advance value of the export order linked advn to the DC

4.2.3 ACCOUNT PLACEHOLDERS


Liab. Dr. A/c Pl.holder: This account is used for maintaining to the Banks liability. account by type DOCCR. customer liability as a contra

The account attached to this place holder should be a partitioned

Liab. Cr. A/c Pl.holder: This is the account indicates the total amount of DCs issued by the Bank on behalf of various customers. This also should be partitioned by type DOCCR

Margin Cr A/c Pl.holder: Wherever margin money is collected for issue of DC, it will be credited to this account This can be partitioned by type DOCCR

P&L Account Place Holder: Account attached to this place holder is used to credit the Commission income on amortisation. This is specified in HPTTM option. (This is required to be created if the bank is going to amortise the charges).

4.3

PARAMETER SET UP

4.3.1 BANK / SOL LEVEL PARAMETERS


Nil

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4.3.2 SOL/SCHEME/REGISTER/CURRENCY LEVEL PARAMETERS


nil

4.3.3 DC CHARGES SET UP


Banks levy charges for various DC activities. In Finacle, they are created using the option HPTTM. Amortization of charges is also supported for the various DC related events.

Five types of charge calculation methods are

available - Charge Code (Created using

HASTM option), Fixed Amount, Variable amount, Formula based (MRT), SCRPT (script based). HASTM option is used to set up differential charge percentage based on the amount involved. The charges are basically event based i.e., charges are calculated on occurrence of an event. The events for the DC related charges are

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EVENT ID -

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Purpose DC Issue DC Advice DC amend DC No Bill utilisation DC Reinstatement DC Transfer DC Close.

Finacle

DCISS DCADV DCAMD DCNBL DCREN DCTRN DCCLS -

Note : For more details on HPTTM , please refer the document on Charges . Amortize (/null) : Whether the charges for a particular DC related Event type/event_id combination is to be amortised over the period of the DC or not is decided by this field. This field is default populated as null (amortisation not required). If checked, the P&L Account Placeholder field becomes mandatory.

P&L Account Place Holder: This is the Income account credited during amortisation process. This field is a co-mandatory field. It is mandatory only if field Amortize field is checked. Only OAB Scheme type accounts are to be entered.

Minimum Amount for Amortization: Banks

may follow a policy of amortizing

commission only if the amount is large. The threshold value will be captured in this field. When the commission amount derived is less than the amount mentioned in this field, though credited to the Advance income account, will be transferred to P&L Account on running of amortisation process (explained later). currency. This has to be in charge collection

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4.3.4 DOCUMENTARY CREDITS REGISTER MAINTENANCE

The basic parameters relating to Register through this option.

the features of Documentary Credits are set in a

The default data values for Documentary Credits (DC)

(which are issued/advised) are set-up here.

The system broadly classifies the DC as Inland / Foreign - Outward / Inward. Further classification of Registers according to Banks' own requirement is possible. The DCs can be classified according to Usance period, currency, etc. The Registers' code and their default values are defined through DCRM option. For ex.

Outward DC Sight Usance Sight

Inward DC Usance

Menu Option : DCRM

+------------------------------------------------------------------------------+ | dcff0001 | | Function M MODIFY IMPORT DC Register BACK TO BACK ABIMP Documentary Credits Register Maintenance 30-07-2003| | | | | | | | | | | | | |

+------------------------------------------------------------------------------+ |------------------------------------------------------------------------------| | Description LC ISSUED Number Gen. Type S SYSTEM GENERATED Number Gen. Code ABIMP IMPORT Gen. Liab.Tran.? Y Contingent Accounting in HC? Y Liab. Cr. A/c Pl.holder DCISS-BANK Liab. Dr. A/c Pl.holder DCISS-CUST 10.0000 SHIPMENT BY SEA SWIFT Max. Valid. Allowed(days) Max. Usance Allowed(days) Max. Negot. Allowed(days) Agent Code 365 180 21 Mode 004 Mode 005 | Inward/Outward O | Type of Credit F | Charge | | CCY | Tolerance pcnt | Shipment | Follower OUTWARD DC FOREIGN DC

Code AMORTISE-FXD

| Cont. Rate Code BCB

| Internal Limits Reqd? | Transferable ? N

Margin A/c. IndicatorH HOME CURRENCY |

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| Revolving ? N | Max. Reinst. | Back to Back ? N | Manual Upload? N 0

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| | | |

Margin Cr A/c Pl.holder DCMARGIN

+------------------------------------------------------------------( ==>> )----+

In the of DC Register Maintenance (DCRM) screen Inward/Outward : This is to identify the Purpose of DC. (I - Inward DC OR O - Outward DC). Once the value is set, it is NOT modifiable Type of Credit : The type of credit is to identify the DC as I - Inland DC or F - Foreign DC. This field is also not modifiable once set. Charge Code : As stated earlier, this is the charge code, created through HPTTM option.

The details of charges to be collected are specified here. The different DC event types for which charges set up can be done are DCISS (for DC issue), DCAMD (amendment of DCs issued), DCREN (reinstatement of a revolving DC), DCADV (DC advising), DCCLS (DC closure charges), DCTFR (charges during DC transfer), DCNBL (charges during DC Utilisation without bills). The set up for amortisation is also done through HPTTM. Cont. Rate Code: The exchange rate code, the corresponding rate of which has to be

applied for creating contingent liability transactions. The rate code is defaulted to DC level and can be modified at the DC level.

Tolerance pcnt: The amount in percentage above/below the current value of the DC up to which the beneficiary can withdraw. The value can be either negative or positive. This is defaulted at the time of issue/advise of the DC.

Internal limits reqd? : Based on the value of this flag, the bank can track the exposure of the bank towards a particular entity. User can change this field value up to verification of the respective entities. The valid values for this flag are : A - to exclude from all internal limits (implies no limits are updates) B - to exclude from bank limit, C - to exclude from Country limit, Y - to exclude from Buyers limit,

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Null - For monitoring all limits

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The value is defaulted to the DC level and modifiable there. Country limit will be updated during Export DC Advice. Bank limit will be updated during DC issue. Customer limit will be updated during DC issue. Manual Upload : This field is used at the time of migrating from an existing system or an uncomputerised system to Finacle. This field will have value Y, until all the uncomputerised/(existing sytem) data is uploaded. When the value is Y, it allows the user to input a DC which has expired. Once all the DCs are uploaded, this field should be made as N, so that user will not be able to input the DCs whose expiry date is less than BOD date. Max. Reinst.: Indicates the max. no. of times the DC can be re-instated. This field is enterable only if the Revolving flag is set to Y.

If the bank wants contingent liability entries to be passed on issue of a documentary credit or on advice of confirmed DCs, the Gen Liab Transaction flag should be set . User has the option of maintaining liability accounts either in Home Currency or in DC currency. If contingent liability entries are to be passed in respective DC currencies, then user will have to open as many office accounts. The contingent accounts can be partitioned by type DOCCR or ASSET, so that DC-wise break up of liability will be available, in the contingent accounts. The following fields are related to contingent liability creation. Gen. Liab.Transactions? : Banks which do not have the policy of creating contingent

accounting for DC activities, should set the value of this flag as N. If this flag is set as Y ,then in case of outward DCs , liability transactions will be created, at the time of issue of the DC. (In case of Inward DCs (advice), if Add Confirmation flag in IDCM is set as Y, only then the contingent accounting entries will be generated.) Contingent Accounting in HC?: This field is used to decide the currency of contingent liability transactions. It can be Y (for passing contingent transactions in Home currency), or N (for contingent transaction in DC currency). Margin A/c. Indicator : This field decides whether the margin is to collected in the home currency (H) or the DC currency (D).

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Margin Cr A/c Pl.holder: Once the above field is specified, this place holder has to be specified. Margin money collected for the DC, be credited to the accounts attached to this placeholder. The accounts can be partitioned by type DOCCR. User has to ensure to open margin accounts in different currencies if the bank decides to collect the margin in the DC currency.

On <F6> the screen is as under :

+------------------------------------------------------------------------------+ | dcff0001 Documentary Credits Register Maintenance 30-07-2003| | | +------------------------------------------------------------------------------+ | Function M MODIFY DC Register ABIMP | |------------------------------------------------------------------------------| | | | Limit Node Expired DA3 LIMIT NODE EXPIRED | | DC Sanction Expired DB2 DC SANCTION EXPIRED <MANAGER> | | Party's Limit Exceeded DC2 PARTY'S LIMIT EXCEEDED <MANAGER> | | System Charges Modified DD1 SYSTEM CHARGES MODIFIED | | Max. Validity Exceeded DE2 MAX. VALIDITY EXCEEDED < MANAGER > | | Action after DC Expiry Date DF3 ACTION AFTER DC EXPIRY DT | | Cryst. Liability Exists DG2 CRYST. LIABILITY EXISTS < MANAGER > | | Agnst House Airways Bill DH1 AGNST HOUSE AIRWAYS BILL | | Margin not yet Recovered DI2 MARGIN NOT YET RECOVERED < OFFICER > | | Usance Max. Exceeded DJ2 USANCE MAXIMUM EXCEEDED < MANAGER > | | Max. Negot.Days Exceeded DK2 MAX. NEGOT.DAYS EXCEEDED < MANAGER > | | No Documents/ Conditions DL3 NO DOCUMENTS/ CONDITIONS | | A/c. Bal. not Sufficient DM2 ACCT.BAL. NOT SUFFICIENT <MANAGER> | | Back Dated Issue of DC DN2 BACK DATED ISSUE OF <MANAGER> | | Party Cautioned Exception DO2 PARTY CAUTIONED EXCEPTION <MANAGER> | +------------------------------------------------------------------------------+

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+------------------------------------------------------------------------------+ | dcff0001 Documentary Credits Register Maintenance 30-07-2003| | | +------------------------------------------------------------------------------+ | Function M MODIFY DC Register ABIMP | |------------------------------------------------------------------------------| | | | Inward DC Max. Advn Exceeded DP2 ADVANCE AMT EXCEEDED<MANAGER> | | Outward DC exceeds Export Ord Advn DQ2 OUTWARD DC EXCEEDS EXPORT ORD ADVN | | | | | | | | | | | | | | | | | | | | | | | | | | | +------------------------------------------------------------------------------+

The above exceptions have already been explained.

5
5.1

GENERAL USER ACTIVITIES


OUTWARD DOCUMENTARY CREDIT

5.1.1 MAINTENANCE :
The Menu option ODCM is used to issue and maintain Documentary credits established . The function block has the following options :

SMCI VXL-

Issue Modify Copy Inquire Verify Cancel List

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The screen is as under : ZD-

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Close Delete

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+------------------------------------------------------------------------------+ |dcff0003 Outward Documentary Credits Maintenance 27-11-2002 | | Outward DC Maintenance | |------------------------------------------------------------------------------| |Function M MODIFY DC Register IMP-F IMPORT BACK TO BACK | |DC SOL ID 027 DC No. 027-20030707 | |------------------------------------------------------------------------------| |Applicant ABM ANIL B MIR Charge ID | |Applicant A/c. 0270502046 INR 027 ANIL B MIRCHANDANI | |Drawee Name ANIL B MIRCHANDANI Address C/O INFOSYS TECH LIMITED, | |Date of Opening 27-11-2002 HOSUR ROAD, | |Date Of Expiry 31-01-2004 BANGALORE 571 229 | |Place of Expiry CALIFORNIA, USA Party Limit ID EL-INR /LC | |DC Open Value USD 20,000.00 Limit Margin % | |Tol Pcnt (+) (-) | |Rate Code& Rate TTS 50.0000 Unver DCs total HC 0.00 | |DC Curr. Value USD 20,000.00 Date Of Closing | |DC Avail Value USD 20,000.00 FWC SOL/Cntrct No. / | |DC Avail Value INR 9,60,000.00 Vrfd Y Status Issue | |DC Addn/Int. Amt 0.00 Pcnt Det | |------------------------------------------------------------------------------| |Option | +--------------------------------------------------------------------(==>>)----+

In the above screen:

Tol Pcnt : The percentage of DC value which is allowed to be overdrawn or underdrawn vis -a -vis the open value. DC Tolerance percentage field values can be positive, negative or both as per DC terms.

A)

If only + tolerance is entered, then the available amount of documentary credit

will be as documentary credit issued amount plus the '+' tolerance percentage equivalent of DC value. Contingent liability amount will be for higher value (DC value + Tolerance).

B)

If -

tolerance is used then the available amount of documentary credit will be

same as documentary credit issued amount. Contingent liability amount will be for the documentary credit issued amount. Closure of LC will be permitted only when the DC available value is less than or equal to the '-' tolerance percentage equivalent of current value. (this is applicable only when the dc negative tolerance field is entered).

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Example: DC open value = USD1000 Negative Tolerance = 10%

DC open value = USD 1000 DC Current value = USD 1000 DC avail Value = USD 1000 DC utilised amount = 0

When the available value is less than or equal to USD100 (i.e. 10% of the DC value), DC closure will be permitted. C) If '+ and -' Tolerance fields are entered, then the available value will be increased with the positive tolerance amount over and above the documentary credit issued amount. Contingent liability amount will be inclusive of additional tolerance amount. But closure of LC will be permitted, when the LC available value is less than or equal to the negative tolerance percentage . Charge Id represents the mode in which the bank charges their customers for

establishment of the DC. This is created through HPTTM) and is defaulted from DCRM) Applicant & Drawee name can be different. However, Applicant a/c should belong to the Applicant (else warning will be shown at the time of accept). Pcnt. Tolerance is the amount in percentage above the current value of the DC upto which the Beneficiary may utilise. DC Curr value represents DC open value + or DC Amendment Amt DC Avail value represents { (DC Current_Value DC Carved Amt) * [1 + (Tolerance Percent/100)] } (Int_add_amount) (Bills lodged) Party LimitId : Through LNM option, the user has to capture the details of the sanction given to the customer. The process is called creation of a limit node. Each DC issued is (No_bill_Utilised

amount) (No_bill_Fructified amount) (Advance amount) + (reinstated amount) +

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attached to limit node, thus controlling the overall exposure of the bank towards the customer. This limit is updated during DC issue / amendment. Limit Margin %: The percentage amount of DC value which has to be reduced from the Drawing power of the limit node specified above (as margin for the DC issue). Unverified DC Tot : is the total available value for all unverified DCs opened for the party. Status : This field is auto-updated by the system depending on the event which has

occurred. The different values are Issue Advised Amendment Reinstatement Bill Utilisation Utilisation Transfer Closed Deleted

On <accept>, the next screen comes up as under :

+------------------------------------------------------------------------------+ |dcff0003 Outward Documentary Credits Maintenance 27-11-2002 | | Outward DC Maintenance | |------------------------------------------------------------------------------| |Function M MODIFY DC Register IMP-F IMPORT BACK TO BACK | |DC SOL ID 027 DC No. 027-20030707 | |------------------------------------------------------------------------------| | Usance 0 SIGHT Carved Amount 0.00 | | Tenor Details ON PRESENTATION Reinst Amount 0.00 | | Last Date of Shipment 15-01-2004 BillFruct Amt 0.00 | | Available With ANY BANK NoBillFruct Amt 0.00 | | Avail. by Detail BY PAYMENT Advance Amount 0.00 | | Beneficiary Code MCCORMICK Negotiation Period 16 | | Name : MCCORMICK INGREDIENTS LTD Transferrable Y Red Letter? N| |NEW JERSEY COUNTY SHOP, Part Ship. ? N TransShipmnt N| |NEW JERSEY, Back to Back? Y HouseAir Bill N| | Revocable ? 2 Deferred N| | Country USA UNITED STATE OF AME Revolving ? N No. Amendment | | Utilised Amt-With Bill 0.00 Reinst Type Day | | - Without Bill 0.00 Reinstatements Max./Min. | | Issuing Bank COSMOS THE COSMOS CO- Other Bank Ref No. | | Issuing Branch 028 KOREGAON PARK FD Ref No. | +--------------------------------------------------------------------(==>>)----+

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In the above screen

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Utilised Amount Bills, Without Bill; Bill Fruct Amt, NoBill Fruct Amt & Num of reinstatement, carved amount & reinstated amount fields will be updated by the system as and when the relevant event occurs. Advance Amount : If Red Letter? = Y, user will be able specify the amount in this field. The DC Avail Value will be correspondingly reduced from the DC Current value. Issuing Bank / Branch can be other than the bank / branch named in HSCFM menu option for the SOL. Last date of shipment : Last date for shipment + Days for negotiation should be equal to or greater than the date of expiry (specified in the previous screen) Carved Amount indicates the value of amendment which has not yet been

accepted/rejected by the beneficiary. Bill Fruct Amt is the amount that has been fructified due to delinking of the bill. NoBillFruct Amt backed by bills. Other Bank Ref No is the reference number assigned by the corresponding bank. is the amount fructified through utilisation of the DC which are not

+------------------------------------------------------------------------------+ |dcff0003 Outward Documentary Credits Maintenance 27-11-2002 | | Outward DC Maintenance | |------------------------------------------------------------------------------| |Function M MODIFY DC Register IMP-F IMPORT BACK TO BACK | |DC SOL ID 027 DC No. 027-20030707 | |------------------------------------------------------------------------------| | Correspondent Bank BOFC UNION BANK OF CALIFORNIA | | Correspondant Branch NY UNION BANK OF CALIFORNIA | | Address 350 CALIFORNIA STREET | | SAN FRANCISCO CA 94104 | | | | Advising Bank | | Advising Branch | | Address | | | | | | Negotiating Bank BOFC UNION BANK OF CALIFORNIA | | Negotiating Branch NY UNION BANK OF CALIFORNIA | | Address 350 CALIFORNIA STREET | | SAN FRANCISCO CA 94104 | | | +--------------------------------------------------------------------(==>>)----+

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+------------------------------------------------------------------------------+ |dcff0003 Outward Documentary Credits Maintenance 27-11-2002 | | Outward DC Maintenance | |------------------------------------------------------------------------------| |Function M MODIFY DC Register IMP-F IMPORT BACK TO BACK | |DC SOL ID 027 DC No. 027-20030707 | |------------------------------------------------------------------------------| | Reimbursing Bank CITI CITI BANK | | Reimbursing Branch NY NEW YORK, CITI BANK | | Address 3425, CITI PLAZA, | | 34 NORTH AVENUE, | | Agent Commission Consolidated/Shipping Agents | | Nostro A/c. ID USD-NR | | Establish Mode Follower Mode Code 005 | | Shipment Mode 004 SHIPMENT BY SEA Back To Back DC No. SLSL | | Drawee Details Charges Outside Cntry O | | Purchase Ord No. Date | | Last Amend Date No. Conf. Reqd N By A | | Foreign Loan Pre Advice Flg Date Pre Advice Ref | | DC Valid Country : 1. 2. Origin of Goods 1. 2. | | Beneficiary Charges Text ID D103714 | | Ship.Terms 001 COST COST, INSURANCE & FREIGHT | +--------------------------------------------------------------------(==>>)----+

In the above screen <List> facility is available in Establishment Mode, Shipment Mode, Follower Mode Code, Consolidated/Shipping Agents, Shipment Terms fields Nostro Acct No The value specified as NOSTRO a/c for the DC currency through CNCM menu option, is populated by default. User can modify the account number if more than one NOSTRO a/c has been identified for the DC currency through CBAM menu option. Purchase Ord No : The field Purchase Ord no accepts export orders belonging to the service outlet of the outward DC being issued. User can press <LIST> key and view a list of purchase orders opened by the same customer (Customer corresponding to applicant of DC). CLOSED export orders will not be listed. On selection of an export order from the list, the field Date will be filled up with order date of the export order.

If the field Purchase Ord no is filled up with a valid purchase order, then during <ACCEPT> of GENERAL DETAILS section while verifying the DC, validation as to the DC current value is less than or equal to the export orders max available advance amount will

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be done. This validation will be done through the new exception code Outward DC exceeds export advn specified in DCRM. given. The next screen comes on pressing <F6>. The information in this screen is just for information purposes. Application also checks if the operative party code matches with the customer id of the export order number. Else a warning message will be

+------------------------------------------------------------------------------+ |dcff0003 Outward Documentary Credits Maintenance 27-11-2002 | | Outward DC Maintenance | |------------------------------------------------------------------------------| |Function M MODIFY DC Register IMP-F IMPORT BACK TO BACK | |DC SOL ID 027 DC No. 027-20030707 | |------------------------------------------------------------------------------| | Commodity Code 001 AGRICULTURAL PRODUCTS | | Commodity Desc | | | | | | Licence Code : 001 OPEN GEN. LICENSE (OGL) | | Licence Desc : | | | | | | Port of Origin : PORT BLAIR Port of Destn KANDLA | | Payment Details: | | | | | +--------------------------------------------------------------------(==>>)----+

+------------------------------------------------------------------------------+ |dcff0003 Outward Documentary Credits Maintenance 27-11-2002 | | Outward DC Maintenance | |------------------------------------------------------------------------------| |Function M MODIFY DC Register IMP-F IMPORT BACK TO BACK | |DC SOL ID 027 DC No. 027-20030707 | |------------------------------------------------------------------------------| | DC charge Ref Code 1 | | | | DC charge Ref Code 2 | | | | DC charge Ref Code 3 | | | | Linked Shipping Guarantee Amt in DC CCY 0.00 USD | | | | Utilised Amount - Guarantees in DC CCY 0.00 USD | | | | Utilised margin - Shipping Gte in DC CCY 0.00 USD | | | | Internal limits reqd? | | | | | +--------------------------------------------------------------------(==>>)----+

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If some special charges are to be calculated for a particular type of LC, the identification of such DCs can be done through the Ref Code 1 /2 /3. HRRCDM Type 96 These codes are created through

Linked Shipping Guarantee Amt in DC Crncy, Utilised Amount - Guarantees in DC Crncy, and Utilised margin - Shipping Gte in DC Crncy fields are updated by the system depending on the respective operations. Linked Shipping Guarantee Amt in DC Crncy linked to this DC. Utilised Amount - Guarantees in DC Crncy reflects the total value of bills realised (& drawn represents the value of guarantees issued

under this LC), for which Shipping guarantee was issued. Utilised margin - Shipping Gte in DC Crncy shows the value of DC margin transferred as BG margin, while issuing the Shipping Guarantee.

On <ACCEPT> from the margin screen, user will be shown the charges due to the bank for the event. This is dependent on the charge code specified at the Register level. The logic for the charge calculation is in turn specified through HPTTM event.

Internal limits reqd? : The value is defaulted from the register. This is not relevant in case of DC issue.

OUTWARD DC (SUB-OPTIONS) :
A H G U T R D S B L AMENDMENT HISTORY INQUIRY GENERAL DETAILS UTILISATION WITHOUT BILLS TEXT DETAILS REINSTATEMENT AUDIT INQUIRY STATUS CHANGE OF AMENDMENT FOREIGN BILL DETAILS CHARGE DETAILS

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N M K I 7 8 9 @ J MARGIN HISTORY MESSAGE DETAILS MARGIN SCREEN

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INLAND BILLS DETAILS USER DEFINED ACTION SWIFT DETAILS LIMIT DETAILS INQUIRY VIEW MESSAGE HISTORY PAYMENT SYSTEM DETAILS

5.1.2 AMENDMENT (A) :


Amendments to the DCs established can be made effected through ODCM menu, SubOption - A. Combination of three types of amendments is possible. Viz., Change in value, validity, and general. An amendment involving (a) Enhancement/Reduction of the value, (b) Extension of the validity and (c) General amendment can be specified :

+------------------------------------------------------------------------------+ |dcff0005 Outward Documentary Credits Maintenance 19-07-2003 | | | |------------------------------------------------------------------------------| |Function M MODIFY | |DC No. 027-20030707 Option A Amendment | |------------------------------------------------------------------------------| |Operation E ENHANCEMENT DC Avail.Value USD 20,000.00 | |Amount USD 1,000.00 DC CurrentValue USD 20,000.00 | |Tol pcnt (+) 10.0000 (-) Usance 0 SIGHT | |Int. Percent Expiry Date 31-01-2004 | |Int. Amount 0.00 Last Date of Shipment 15-01-2004 | |Amend Rate 50.0200 Negotiation Days 16 | |Charge Code DCADV INR Amendment Date 27-11-2002 | |Calculate Charges N Amendment Status A Accepted | |Particulars | |Limit Margin % Charges Outside Cntry O | |Beneficiary Charges Created By | | Created On | |------------------------------------------------------------------------------| | | +--------------------------------------------------------------------( ==>> )--+

In the above screen Amendment Status reflects the current status of the amendment as to whether it has been A -Accepted / W - Waiting for acceptance / R -Rejected by beneficiary. Unless one amendment is either accepted or rejected, the applicant will not be able to issue

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another amendment to the DC. The defaulted status is A. On < F6 > the next screen comes up as shown below:

+------------------------------------------------------------------------------+ |dcff0005 Outward Documentary Credits Maintenance 19-07-2003 | | | |------------------------------------------------------------------------------| |Function M MODIFY | |DC No. 027-20030707 Option A Amendment | |------------------------------------------------------------------------------| |Reimbursing Bank CITI CITI BANK | |Reimbursing Branch NY NEW YORK, CITI BANK | |Address 3425, CITI PLAZA, | | 34 NORTH AVENUE, | | | | | | | |------------------------------------------------------------------------------| | | +------------------------------------------------------------------------------+

So as part of amendment, users can either add/modify the Reimbursement Bank.

On

<ACCEPT> of the above screen, the following charge calculation screen is displayed to the user (calculating the charges as per the definition given in the charge event id specified; Event type is DCAMD). The user has the option to modify the charges (as per the HPTTM set up) .

+------------------------------------------------------------------------------+ |dcff0011 Outward Documentary Credits Maintenance 19-07-2003| | DC Charge Calculation | |------------------------------------------------------------------------------| | Event A Amendment 0001 DC No. 027-20030707 | | Open Value USD 20,000.00 Available value 20,000.00 | |------------------------------------------------------------------------------| | D/C A/c. ID CCY Calculated Amount Collected Amount | | Description Dr. Consol | |------------------------------------------------------------------------------| |* C 02750-0004 INR 700.00 700.00 | | N | | | | | | | |----------------------------------------------------------------------------- | | C 02750-0004 INR 700.00 700.00 | | N | | Oper A/c. 0270502046 Rate Code TTS Rate 1.0000 | +------------------------------------------------------------------------------+

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5.1.3 UTILISATION - OTHERS (U)


It is possible that some of the DCs are not utilized at all for some trade reasons (Bills not drawn). In that case the user can use this option and specify in the particulars field, that utilization by bills has not taken place & mark the value as reversed without utilization. This will ensure that System will pass appropriate Liability entries and the DC value is reduced.

+------------------------------------------------------------------------------+ |dcff0007 Outward Documentary Credits Maintenance 19-07-2003 | | Documentary Credits Utilisation | |------------------------------------------------------------------------------| |Function M MODIFY | |DC No. 027-20030707 Option U Utilisation | |------------------------------------------------------------------------------| |Utilisation Date 27-11-2002 Current Value USD 20,000.00 | |Utilization Amount USD 1,320.00 Avail. Value USD 20,000.00 | |Fructify Utilisation ? N | | | |Reinstatement Date Bill Util. USD 0.00 | |Reinstatement Amt USD 0.00 Other Util. USD 0.00 | | Reinst. Amt. USD 0.00 | | | | | |Charge Code DC NOBILL CHARGS | |Calculate Charges ? N Created By | | Created On | |Particulars | | | +------------------------------------------------------------------------------+

In the above screen, Fructify Utilisation refers to crystallisation of the liability. By default the value for the field is N. If there is no utilisation under the DC, then the user will be required to invoke this In that option And set the appropriate value to Y or N depending on the situation. However, this field can also be used differently when manual system is being computerised. scenario, this field can be used to specify the amount of bill, which has been dishonoured.

5.1.4 REINSTATEMENT (R):


The user needs to invoke this reinstatement sub-option, to reinstate the DC value.

Reinstatement is possible if the DC is a Revolving DC. The screen interface is the same as

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that of Utilisation without bills, except that User will be able to enter only Reinstatement details. and NOT the Utilization details.

+------------------------------------------------------------------------------+ |dcff0007 Outward Documentary Credits Maintenance 24-07-2003 | | Documentary Credits Reinstatement | |------------------------------------------------------------------------------| |Function M MODIFY | |DC No. ODCM-F-7 Option R Reinstatement | |------------------------------------------------------------------------------| |Utilisation Date Current Value USD 10,000.00 | |Utilization Amount USD 0.00 Avail. Value USD 10,000.00 | |Fructify Utilisation ? | | | |Reinstatement Date 27-11-2002 Bill Util. USD 0.00 | |Reinstatement Amt USD 2,000.00 Other Util. USD 0.00 | | Reinst. Amt. USD 0.00 | | | | | |Charge Code LIZ | |Calculate Charges ? Y Created By | | Created On | |Particulars REINSTATMENT OF LC | | | +------------------------------------------------------------------------------+

5.1.5 HISTORY INQUIRY - (H):


Inquiry about the DC history (various events that has taken place for a particular DC) is done using this sub-option. No modification is allowed during this operation.

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+------------------------------------------------------------------------------+ |dcff0003 Outward Documentary Credits Maintenance 27-11-2002 | | Outward DC Maintenance | +-----dcfl7012-----------------------------------------------------------------+ | EVENTS FOR DC NUMBER ^027-20030707^ | +------------------------------------------------------------------------------+ | Event Type ISSUE Event Text ID D103714 | | Event No. 0001 Bill No. / | | Event Status Transfer DC No. | | Event Date 27-11-2002 Transferee Code | | Expiry Date 31-01-2004 Negot Days 16 Usance | | Ship Date 15-01-2004 Limit Margin % 0.0000 | | Event Amount 20,000.00 Tol Pcnt (+) 0.0000 (-) 0.0000 | | Current Value 20,000.00 Int. Amt 0.00 | | Charges? Int. Pcnt 0.0000 | | Chrg Tran. ID Verified? Y Transacting SOL 027 | | Liab Tran. ID SD181186 Enterer ID KVS2 | | Rate 50.0000 Verifier ID KVS1 | | Remarks DC Opening Verified Date 07-07-2003 | | < Use Next Record and Previous Record Keys to Scroll Records > | +------------------------------------------------------------------------------+

User has to use the <key next record> to see the next or previous events which have taken place on a DC. Details like charge and liability transactions are also reflected.

5.1.6 TEXT DETAILS

(T) :

The various Texts like documents required, Conditions, Instructions, etc are maintained here. The Text Types available are: A (amendment) / C (conditions) / D (documents) / I (instructions)

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+------------------------------------------------------------------------------+ | dcff0002 Outward Documentary Credits Maintenance 24-07-2003| | Text Maintenance | |----+===================================================================+-----| | Fun| INS | Line 009/010 | Col 01/65 | Chars 00350/26000 | | | Tex| a) Invoice in 4 copies including original -| | |----| |-----| | Mod| b) Bills of exchange in duplicate | | | Tex| c) Airway bill - full set mentioning notify party as ourselves. -| | |----| |-----| | | d) Packing list - 3copies -| | | a) | |b) B | | | e) Inspection certificate issued by M/s. Kandell consultants -| | | | | | | | | | | | ` | | | | ` | | | |-------------------------------------------------------------------| | | |Press <key-help> for help on this editor | | | +===================================================================+ | | | | | +------------------------------------------------------------------------------+

In the data block, user can type Cntrl N key to bring up a text edit box to input the data. swift. The length of data which can be input is restricted to the field length allowed by

The user can either type the Texts here. or can create templates through TXTMNT option and copy them here depending on the specific requirement.

5.1.7 MESSAGE DETAILS (M) :


The message details (Drawer messages, Drawee messages, Negotiating Bank messages) are maintained along with the date. It is possible to maintain 14 lines of messages, each line of approx 60 characters.

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+------------------------------------------------------------------------------+ | fxff0046 Outward Documentary Credits Maintenance 24-07-2003 | | Message Maintenance | |------------------------------------------------------------------------------| |Func M MODIFY DC Ref. No. 027-20030707 Msg Class M | |------------------------------------------------------------------------------| |S.No. Date Message Text | |------------------------------------------------------------------------------| | 1 27-11-2002 Reinstated for 100USD | | 2 | | 3 | | 4 | | 5 | | 6 | | 7 | | 8 | | 9 | | 10 | | 11 | | 12 | | 13 | | 14 | +------------------------------------------------------------------------------+

5.1.8 STATUS CHANGE OF AMENDMENT (S) :


After a DC is amended , the user is required to update the Status of the Amendment by using this sub-option to one of the values viz: A - Accepted, R - Reject or W - Waiting for Acceptance. By default the value will be A-Accepted,. The user can change the If the amendment takes place with the status as W Waiting for status as per the need.

acceptance then the status has to be changed to either Accepted or Rejected. Till then the amount (if amended) will be reflected as a carved amount in the general details screen. is effected.

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+------------------------------------------------------------------------------+ |dcff0005 Outward Documentary Credits Maintenance 24-07-2003 | | | |------------------------------------------------------------------------------| |Function M MODIFY | |DC No. 700 Option S Status Change of Amendment | |------------------------------------------------------------------------------| |Operation E ENHANCEMENT DC Avail.Value USD 5,375.55 | |Amount USD 3,375.55 DC CurrentValue USD 5,375.55 | |Tol pcnt (+) (-) Usance 0 SIGHT | |Int. Percent Expiry Date 27-11-2002 | |Int. Amount 0.00 Last Date of Shipment 27-11-2002 | |Amend Rate 50.0000 Negotiation Days 0 | |Charge Code LIZ Amendment Date 27-11-2002 | |Calculate Charges N Amendment Status W Waiting For Acceptance | |Particulars | |Limit Margin % Charges Outside Cntry O | |Beneficiary Charges Created By ANIL2 | | Created On 24-07-2003 | |------------------------------------------------------------------------------| | | +--------------------------------------------------------------------( ==>> )--+

5.1.9 FOREIGN BILLS DETAILS (B)


The user view the list of the various bills which are lodged under a DC. This is a useful option, as generally the enquiry from customers will be based on the DC references available with them.

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+------------------------------------------------------------------------------+ |dcff0003 Outward Documentary Credits Maintenance 24-07-2003 | | Outward DC Maintenance | +-----dcfl7013-----------------------------------------------------------------+ | EVENTS FOR DC NUMBER 77221 | | | |------------------------------------------------------------------------------| | Bill ID Bill Event CCY/Amt Bill Liability Event Date Tran. ID | | Bill SOL ID Func CCY & Amount CCY & Liability | |------------------------------------------------------------------------------| |77221 G USD USD 01-10-2002 SD159184 | |027 1,000.00 1,000.00 | |77221 R USD USD 01-10-2002 SD159196 | |027 1,000.00 0.00 | |77221 Z USD USD 01-10-2002 | |027 1,000.00 0.00 | |77221-1 G USD USD 01-10-2002 | |027 2,000.00 2,000.00 | |77221-1 R USD USD 01-10-2002 SD159209 | |027 2,000.00 0.00 | |77221-1 Z USD USD 01-10-2002 | |027 2,000.00 0.00 | +------------------------------------------------------------------------------+

5.1.10

MARGIN SCREEN (K) :

System is capable of collecting/maintaining margins either as Cash Margin or as Lien margin. Margins held can be modified during the life of DC, by using the K (margin details screen) option. This screen is a multi record screen as shown under.
+------------------------------------------------------------------------------+ | bafe3275 Outward Documentary Credits Maintenance 07-02-2002| | Margin Details | |------------------------------------------------------------------------------| | Function C Collect Margin Percentage 10.0000 | |------------------------------------------------------------------------------| | Action Type Margin/Lien Margin CD Collected Amount Released Amount Del| | C/R C/L Acct Crncy Dnm (Margin Crncy) (Margin Crncy) Flg| |------------------------------------------------------------------------------| |* C C DC-ISSUED INR 12900.00 0.00 | | C L 0000003100000888 INR 3000.00 0.00 | |------------------------------------------------------------------------------| | C C DC-ISSUED INR 12,900.00 0.00 | | Oper/Transfer Acct 0000000100001595 INR Rate Code/Rate / 0.0000 | | Rel Amt INR 12,900.00 Remarks | |------------------------------------------------------------------------------| | Entity Amount 129,000.00 INR Cash margin 0.00 | | MinMarginReqd 12,900.00 INR Lien margin 0.00 | | Total margin held 0.00 | +------------------------------------------------------------------------------+

The margin screen has the function block where the user can enter the valid values

( Collect ) , R (Release) , T (Transfer) , A (Accept and Quit) and Q(Quit) . The Margin percentage specified for the customer is defaulted from the CUMM option and is protected.

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However, user can change the amount (based on the percentage to be colleted) at the time of collecting the margin.

On <Key-Accept> the user will be taken to the multi record block where he can enter the margin details. Suppose the user has entered C and wants to collect, the fields will have the following meaning :

Type C/L = C for Cash Margin and L for Lien Margin. Margin/Lien Account - This is the margin credit account (office account ) in case of cash margin which is default populated from the register level or the customer operative account in case of Lien margin. Collected amount - Amount to be collected will be accepted here. This amount is to be given in the Margin office account currency. Released amount - This will be protected in this case. Del Flg - Y / N Oper Acct / Transfer Acct - This is applicable only for cash margin . This is the customer operative account which will be debited. It can be in any currency. Rate Code - This will be meaningful when the margin account and operative account are in different currencies. If the user wants to Release margin. All the earlier verified collections will be displayed. The fields will have the following meaning. Cash / Lien - will be populated and protected. Margin / Lien Account - will be populated and protected . Collected Amount - Will be populated with the earlier collected amount and protected. Released Amount - User can enter the amount to be released Del Flg - Y /N Oper Acct / Transfer Acct - In case of cash margin it will be populated with the account from which margin was collected. But the user can change this.

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Rate Code - This will be meaningful when the margin account and operative account are in different currencies. Suppose the user wants to transfer margin from Documentary Credits to Bank Guarantee, function code will be T. All the earlier verified collections of the Documentary Credits will be displayed. The fields will have the same meaning as in Release. Oper Acct / Transfer Acct - This will be the account into which the transferred margin has to be collected. The margin transactions are created using MTT script B2K_Margin TransactionScrpt.scr. The transaction is created on verification of the entity.

5.1.11

PAYMENT SYSTEM DETAILS (J)

Menu : ODCM J option


+------------------------------------------------------------------------------+ | bafe3382 Outward Documentary Credits Maintenance 30-07-2003| | Payment System Data | +------------------------------------------------------------------------------+ | Paysys Id SWIFT | | Paysys Free code 1 | | Paysys Free code 2 | | Paysys Free code 3 | | Paysys Free code 4 | | Paysys Free code 5 | | | | | | | | | | | | | | | | | | | | | | | +------------------------------------------------------------------------------+

Through J option, user will be able to specify the payment system through which the transmission of the message has to take place. PaySys Id is created through HRRCDM. Free Codes 1 to 5 are available as input to build additional logic for charge calculation, based on a particular paysys id. Before visiting the Swift Details option, it is mandatory to visit Payment system details option.

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5.1.12

SWIFT DETAILS (8)

If the user wants the system to generate swift message (MT 700 / MT 740 / MT 707 / MT 747), user has to COMPULSORILY visit sub-option 8 of ODCM. On execution of the suboption, user will be shown a list of mandatory/non-mandatory messages which can be generated/sent for the particular event.
+------------------------------------------------------------------------------+ | bafe3381 Outward Documentary Credits Maintenance 30-07-2003| | Messages List | |------------------------------------------------------------------------------| | MT No Description Type Of Msg Mand Flg| |------------------------------------------------------------------------------| | | |*700 MT 700 S Y | | 740 AUTHORISATION TO REIMBURSE S N | | | | | | | | | | | | | | | | | | | |------------------------------------------------------------------------------| | 700 MT 700 S Y | | | +------------------------------------------------------------------------------+

Users has to use the <explode> key on mandatory messages, to see the full details of the message

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+------------------------------------------------------------------------------+ | bafe3359 Outward Documentary Credits Maintenance 30-07-2003| | MT700 | +------------------------------------------------------------------------------+ |SOL ID : 027 Entity Type/ID : DOCCR/ | |Execution Date : 27-11-2002 Status : R READY | |Urgent/Normal : N NORMAL Type of Message : S SWIFT STP Indicator : N | |Sender BIC : COSMOINBBXXX Receiver BIC : BOFCUS33XXX PDE Flag : N | |Failure Reason : | | | |Sequence of total 27: 1/1 | |Form of Doc. Credit 40A: IRREVOCABLE TRANSFERABLE | |Doc. Credit Number 20: 027-20030707 | |Pre Advice Reference 23: | |Date of Issue 31C: 27-11-2002 | |Date & Place of Expiry 31D: 31-12-2002 CALIFORNIA, USA | |Applicant Bank 51A: | |A: COSMOINBBXXX | |D: | | | | | +------------------------------------------------------------------(===>>)-----+

+------------------------------------------------------------------------------+ | bafe3359 Outward Documentary Credits Maintenance 30-07-2003| | MT700 | +------------------------------------------------------------------------------+ |Applicant 50: | | ANIL B MIRCHANDANI INFOSYS TECH LIMITED | | BANGALORE 571 229 | |Beneficiary 59: | | MCCORMICK INGREDIENTS LTD NEW JERSEY COUNTY SHOP, | | NEW JERSEY, | |DC Amount 32B: USD 20,000.00 | |Percent Amount Tolerance 39A: 0/ 0 | |Max. Credit Amount 39B: | |Additional Amounts Covered 39C: | | INTEREST AMT: 0.00 INTEREST PCNT: 0.0000 | | | |Available With..By.. 41A: BOFCUS33XXX BY PAYMENT | |D: | | | | | | | +-------------------------------------------------------------------(==>>)-----+

By default it is the Sender BIC, Doc. Credit Number, DC Amount fields cannot be changed. However, by modification of the message generating script, it possible to make a field as either editable or non-editable.

The changes done at the message level will not be written back to the The changed values will be stored only at the History of original and changed values at the message level is

database at the entity level. message level. available in the message history.

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Training Document Note: If the creation of SWIFT messages at the time of issuance of a DC is
missed out then it will not be possible to generate MT700 in the ODCM - Modify mode.

5.1.13

OTHER INQUIRY OPTIONS :

The charges recovered, the history of margins held, the Inland bills drawn on the Openers of the DC, Limit Details Inquiry can also be viewed by invoking L, N, I, 9 options.

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5.2

INWARD DOCUMENTARY CREDITS

5.2.1 MAINTENANCE (IDCM)

Details of documentary credits to be advised to the beneficiary of the DC are maintained here. The functions available are :

E M C I V X L Z D-

Advise Modify Copy Inquire Verify Cancel List Close Delete

W Process Message.

Other sub-options like reinstatements, transfer, etc are possible to be executed using this option.

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+------------------------------------------------------------------------------+ | dcff0013 Inward Documentary Credits Maintenance 24-07-2003 | | | |------------------------------------------------------------------------------| |Function M MODIFY DC Register EXP-F IMPORT BACK TO BA | |DC SOL ID 027 DC No. IDCM-F-1 | |------------------------------------------------------------------------------| | Benef. Name LIZ LIZZIE DC CCY USD US DOLLAR | | Address INFOSYS TECHNOLOGIES LIMITED DC Open Val 10,000.00 | | BANNERGHATTA ROAD Rate NOR 50.0000 | | BANGALORE ,KARNATAKA -560076 Tol Pcnt (+) (-) | | Appl. Name MAM MAMATHA Curr. Value USD 10,000.00 | | Address INFOSYS TECHNOLOGIES Avail.Value USD 10,000.00 | | ASS Avail.Value INR 3,00,000.00 | | . ,. -12121 Date of Opening 21-09-2002 | | Iss.Bank BOFC UNION BANK OF CALIFO Date of Expiry 21-09-2002 | | Branch NY UNION BANK OF CALIFORNIA Last Date of Shipmt 21-09-2002 | | 350 CALIFORNIA STREET Negotiation Days 0 | | SAN FRANCISCO CA 94104 Other Bnk Ref. No. IDCM-1 | | Status: Advised Verified? Y | |------------------------------------------------------------------------------| | Option | +------------------------------------------------------------------------------+

In the above screen, Benef. Name: This is the customer id created using the option CUMM. instead of the customer id. Appl. Name: This is the code of the applicant created using the option CUMM for inland DCs and FPCM for foreign DCs. Curr. Value: Current value of the DC. This can be total of the DC value and the amendment value. Other Bnk Ref.Num: This is the reference number given by the issuing bank. However, if the

beneficiary is not a customer of the bank, it is possible to use the name of the beneficiary,

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+------------------------------------------------------------------------------+ | dcff0013 Inward Documentary Credits Maintenance 25-07-2003 | | | |------------------------------------------------------------------------------| |Function M MODIFY DC Register EXP-F IMPORT BACK TO BA | |DC SOL ID 027 DC No. IDCM-F-1 | |------------------------------------------------------------------------------| |Utilised Amount -Thro' Bill 0.00 Revocable DC ? 2 | | Others 0.00 Revolving DC ? Y | |Fructified Amount -Thro' Bill 0.00 Drawn On Other Banks ? N | | Others 0.00 Pre Advised DC ? | |Transferrable DC Y DC No. Pre Advise Date | |Confirmed DC ? Y Confirmed By O OTHERS Pre Advise Ref | |Add Confirmation N Limit ID Int. Rate | |Charge ID LIZ Int. Amt 0.00| |Usance (Days) 0 SIGHT Tenor Details | |Party A/c. ID LIZINR INR 027 LIZZIE | |Drawee Details Commdty Cd 001 AGRICULTUR | |Commodity Details | | | | | | | +--------------------------------------------------------------------(==>>)----+

Utilised Amount: indicates the amount already utilized either by bill or by any other instrument. Fructified Amount: Part of the utilized amount that was fructified through the bill or through any other instrument. Add Confirmation is set to Y, : This field accepts Y or N values. If you are required to Add

Confirmation to the DC, then, the value of this field should be set to Y. Else N. If value the Issuing banks exposure will be updated and also contingent liability the transactions are created. The user is required to give the Limit Id, for updating

issuing bank limit (bank exposure). The value in this field can be changed from N to Y, through Modify function also . If the value in the field Add Confirmation is changed, the contingent transactions will get created during the <commit> of modify event. Party Acct. Num: This is the operative account of the party from which the charges are to be debited. Drawn On Other Banks ?: This flag is used to indicate whether the DC is drawn on other bank. (restricted for negotiation to other bank).

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+------------------------------------------------------------------------------+ | dcff0013 Inward Documentary Credits Maintenance 25-07-2003 | | | |------------------------------------------------------------------------------| |Function M MODIFY DC Register EXP-F IMPORT BACK TO BA | |DC SOL ID 027 DC No. IDCM-F-1 | |------------------------------------------------------------------------------| |Correspondant Bank COSMOS UET BANK OF INFOSYS | |Correspondant Branch 027 DECCAN GYMKHANA | |Address MILLENIUM TOWER, BHANDARKAR ROAD, | | DECCAN GYMKHANA | | | |Advising Bank COSMOS UET BANK OF INFOSYS | |Advising Branch 027 DECCAN GYMKHANA | |Address MILLENIUM TOWER, BHANDARKAR ROAD, | | DECCAN GYMKHANA | | | |Negotiating Bank COSMOS UET BANK OF INFOSYS | |Negotiating Branch 027 DECCAN GYMKHANA | |Address MILLENIUM TOWER, BHANDARKAR ROAD, | | DECCAN GYMKHANA | | | +--------------------------------------------------------------------(==>>)----+

+------------------------------------------------------------------------------+ | dcff0013 Inward Documentary Credits Maintenance 25-07-2003 | | | |------------------------------------------------------------------------------| |Function M MODIFY DC Register EXP-F IMPORT BACK TO BA | |DC SOL ID 027 DC No. IDCM-F-1 | |------------------------------------------------------------------------------| |Reimbursing Bank CITI CITI BANK | |Reimbursing Branch NY NEW YORK, CITI BANK | |Address 3425, CITI PLAZA, | | 34 NORTH AVENUE, | | NEW YORK | |DC charge Ref Code 1 | |DC charge Ref Code 2 | |DC charge Ref Code 3 | |PC Margin pcnt 10.0000 | |PC Max. Advance AmtINR 2,70,000.00 | |Available By | |Max. No. of Reinstatements 10 | |Internal limits reqd? | |Date of Closing | |Port of Origin : Port of Destn : | +------------------------------------------------------------------------------+

PC Margin pcnt

: This field is used to

arrive at the maximum amount that can be

sanctioned / disbursed to a packing credit account or to running packing credit accounts when an inward DC number is directly linked to the such accounts / disbursements. When an existing inward DC is modified, and this margin percentage is changed, then validation is done to check whether any packing credit accounts or disbursements to running packing credit accounts have been effected by linking this inward DC. If found,

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set at the

then a suitable validation , for the exception Inward DC Max Advn exceeded register level is done.

PC Max Advance Amt INR : This is a display field, which shows the maximum PC advance value in Home currency. Internal limits reqd?: following values. 'B' to exclude from Bank Limit, 'C' to exclude from Country Limit, 'Y' to exclude from Buyers Limit, 'A' to exclude from All Limits, Null for monitoring All Limits. If the DC being advised is a confirmed DC, (& if this field is NULL), system will update the Bank limit of the correspondent bank and the limit set for the country of the Applicant (other party). If the user does not want the bank or the country limit to be updated, value as A can be used. the This field as already specified at the register level accepts

The sub options that are available for inward DC:

A H M G U T R D S F L 8 7 P E

AMENDMENT HISTORY INQUIRY MESSAGE DETAILS GENERAL DETAILS UTILISATION OTHERS TEXT DETAILS REINSTATEMENT AUDIT INQUIRY STATUS CHANGE OF AMENDMENT TRANSFER CHARGES LIST SWIFT DETAILS USER DEFINED ACTION PACKING CREDIT ACCOUNTS LINKED TO INWARD DC DISBURSEMENTS LINKED TO THIS DC (MADE ON RPC

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@ J

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ACCOUNTS) VIEW MESSAGE HISTORY PAYMENT SYSTEM DETAILS

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5.2.2 TRANSFER : (F)


This operation refers to transferring of the DC to a third party at the request of the Beneficiary and with the concurrence of the Opening Bank.
+------------------------------------------------------------------------------+ |dcff0015 Inward Documentary Credits Maintenance 25-07-2003 | | Transfer of Documentary Credits | |------------------------------------------------------------------------------| |Function M MODIFY | |DC No. IDCM-F-1 Option F Transfer of DC | |------------------------------------------------------------------------------| |Transfer Amount USD 2,300.00 DC CCY Value USD 10,000.00 | |Tranfer DC No. 30230-344 DC Avail Value USD 10,000.00 | |Date of Transfer 27-11-2002 | |Negotiable Days | |Date of Expiry 21-09-2002 | |Last Date Of Shipment 21-09-2002 | |Name and Address PONU PONURAJ TRADERS | |Of Transferree SANTACRUZ | | | | | |Charge Code LIZ | |Calc Charges ? N | |Remarks | | | +------------------------------------------------------------------------------+

If the Transferees record is not available to be input, the same can be created, by using the <explode> function from Name & Address of Transferee field.

5.2.3 AMENDMENT

(A) :

The functionality is similar to the one explained earlier for Import LCs in ODCM.

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+------------------------------------------------------------------------------+ |dcff0005 Inward Documentary Credits Maintenance 25-07-2003 | | | |------------------------------------------------------------------------------| |Function M MODIFY | |DC No. IDCM-F-1 Option A Amendment | |------------------------------------------------------------------------------| |Operation E ENHANCEMENT DC Avail.Value USD 10,000.00 | |Amount USD 1,300.00 DC CurrentValue USD 10,000.00 | |Tol pcnt (+) 0.0000 (-) 0.0000 Usance 0 SIGHT | |Int. Percent Expiry Date 21-09-2002 | |Int. Amount 0.00 Last Date of Shipment 21-09-2002 | |Amend Rate 50.0000 Negotiation Days 0 | |Charge Code LIZ Amendment Date 27-11-2002 | |Calculate Charges Amendment Status W Waiting For Acceptance | |Particulars | |Limit Margin % Charges Outside Cntry O | |Beneficiary Charges Created By | | Created On | |------------------------------------------------------------------------------| | | +--------------------------------------------------------------------( ==>> )--+

5.2.4 PC A/CS LINKED TO DC (P) :


Through this sub-option, user can view the various Packing credit accounts (Non RPC) to which the DC is linked. . On <accept> from the sub-option block, the user is taken to Account selection screen.

+------------------------------------------------------------------------------+ |bafl2004 Inward Documentary Credits Maintenance 25-07-2003| | Account Selection and List | +------------------------------------------------------------------------------+ | Selection Criteria | |SOL ID 027 DECCAN GYMKHANA A/c. Label | |CCY INR INDIAN RUPEE A/c. Ownership | |GL Subhead Code A/c. Prefix | |Scheme Code A/c. Short Name | |Cust. ID LIZ Ledger No. | |Employee ID A/c. Status | |A/c. Manager ID Mode of Operation | |Freeze Code Minor A/c. | |Freeze Reason Code Open Date - Low | |Location Code Open Date - High | |Guarantee Cover Code Close Date - Low | |Nature of Advance Close Date - High | |Purpose of Advance Include Closed A/c. ? N | |AND or OR FLAG A FOR ANDING THE FILTERATION CRITERIA Lien Flg | |Operation I ACCOUNT INQUIRY Min. Bal. D| |Addl criteria ind P Max. Bal. C| |Purge Alwd Flg ( ==>> ) | +------------------------------------------------------------------------------+

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On <Accept> from this screen, system will allow the user to specify either the Export Order Number or the Inward DC reference to see the corresponding PC accounts (Non Running PCs)

+------------------------------------------------------------------------------+ |bafl2004 Inward Documentary Credits Maintenance 25-07-2003| | Account Selection and List | +------------------------------------------------------------------------------+ | Selection Criteria | |SOL ID 027 DECCAN GYMKHANA A/c. Label | |CCY INR INDIAN RUPEE A/c. Ownership | |GL Subhead Code A/c. Prefix | |Scheme Code A/c. Short Name | |Cust. ID LIZ LIZZIE Ledger No. | |Employee ID A/c. Status | |A/c. Manager ID Mode of Operation | |Freeze Code +------------------------------------------------------+| |Freeze Reason Code | SOL ID No. || |Location Code | || |Guarantee Cover Code | Export Order Ref 027 || |Nature of Advance | || |Purpose of Advance | Inward DC 027 MTB-2 || |AND or OR FLAG A| || |Operation I+------------------------------------------------------+| |Addl criteria ind P PACKING CREDITS Max. Bal. C| |Purge Alwd Flg ( ==>> ) | +------------------------------------------------------------------------------+

On further <ACCEPT> following pattern

of

the above screen,

systen displays the PC accounts in the

+------------------------------------------------------------------------------+ |bafl2004 Inward Documentary Credits Maintenance 25-07-2003| | Account Selection and List | |------------------------------------------------------------------------------| |A/c. Selected :1 | |Total Dr. (INR): 1,00,000.00 Total Cr. (INR): 0.00 | |Total Dr. (FX): 0.00 Total Cr. (FX): 0.00 | |------------------------------------------------------------------------------| | A/c. ID CCY SOL ID A/c. Name A/c. Bal. ( ) | | A/c. Open Date Export Ord Ref No./Inward DC No. A/c. Bal. (FX) | | ---------------- --- -------- ------------------------ ----------------------| | LIZ3 INR 027 LIZZIE 1,00,000.00 Dr | | 11-11-2001 IDC/EXP0270011 0.00 C| | | | | | | | | | | +------------------------------------------------------------------------------+

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5.2.5 DISBURSEMENT LIST (E) :


Through this sub-option, users can view the disbursements made to RPCs to which this DC is attached.

+------------------------------------------------------------------------------+ | dcff0013 Inward Documentary Credits Maintenance 25-07-2003 | | | +------------------------------------------------------------------------------+ |pcfl0001 Disbursement List | | | +------------------------------------------------------------------------------+ | A/c. ID Disb ID Disb Amt Utilization Amt CCY | +------------------------------------------------------------------------------+ | | | ELRPC-1 D1573 500.00 1,000.00 USD | | | | | | | | | | | +------------------------------------------------------------------------------+ +------------------------------------------------------------------------------+

All other Options/sub-options function on the same lines as in an Outward DC.

5.2.6 VIEW MESSAGE HISTORY (@)


This sub-option is used to view the various SWIFT messages which has been exchanged during the life cycle of the DC. The first screen interface is a selection criteria as under :

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+------------------------------------------------------------------------------+ | bafe3248 Inward Documentary Credits Maintenance 25-07-2003| | | |------------------------------------------------------------------------------| | Func Code I | |------------------------------------------------------------------------------| | SOL ID 027 DECCAN GYMKHANA | | Paysys ID SWIFT SWIFT-Payment System | | In/Out Ind Urgent/Normal | | Series MT No. | | Entity Type DOCCR Entity ID ABDCEXP1 | | Receiver BIC Sender BIC | | Tran. ID Tran Date | | STP Flg Sender Ref | | Manual/System Status | | | | Execution Date From To | | Value Date From To | | Created Date From To | | Created User ID | | | +------------------------------------------------------------------------------+

+------------------------------------------------------------------------------+ | bafe3248 Inward Documentary Credits Maintenance 25-07-2003| | SWIFT Messages - Selection List | |------------------------------------------------------------------------------| | Options : P - Print F - Transfer to File D - Detail Report A - Advice | |------------------------------------------------------------------------------| | Opt MT No. Entity Type / Id Recvr BIC Out/In Related Exec. Date| | Verfd? Prio STP flg Message Type Status Messages Value Date| | --- ------ ------ ----------------------- ------ -------- ----------| |> 720 DOCCR / ABDCEXP1 COSMOINBBXXX O 27-11-2002 | | Y N Y S N | | | | | | | | | | +-------------------------------------------------------------+ | | |Press <ACCEPT> after entering P - Print F - Transfer to File | | | |D - Detail Report A - Advice.Press <EXPLODE> after entering | | | |L-Latest O-Original R-Related Latest G-Related Orig | | |-----------+-------------------------------------------------------------+----| | __ 720 DOCCR ABDCEXP1 COSMOINBBXXX O 27-11-2002 | | Y N Y S N | +------------------------------------------------------------------------------+

These messages are generated through the payment system module set up (please refer the the Payment system manual for details). The user can perform additional functions by keying the valid values in the option block as seen above.

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5.2.7 PAYMENT SYSTEM DETAILS ( J ):


This sub-option is visited to specify the payment system by which payment will be effected. (Refer to the payment system module manual). The screen interface is as under :
+------------------------------------------------------------------------------+ | bafe3382 Inward Documentary Credits Maintenance 25-07-2003| | Payment System Data | +------------------------------------------------------------------------------+ | Paysys Id SWIFT | | Paysys Free code 1 | | Paysys Free code 2 | | Paysys Free code 3 | | Paysys Free code 4 | | Paysys Free code 5 | | | | | | | | | | | +------------------------------------------------------------------------------+

5.2.8 PROCESS MESSAGE (W) :


This option is used to process the incoming SWIFT messages. These messages may be received directly into the system or uploaded in the system as per the set up done in the payment system module. On selecting the W option, the user has to specify the register under which the DC has to be processed. On <accept>, the user gets the following screen :

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+------------------------------------------------------------------------------+ | dcff0013 Inward Documentary Credits Maintenance 25-07-2003 | | | |---------+--fxfl8027----------------------------------------------------------+ |Function | Inward Message List | |DC SOL ID|--------------------------------------------------------------------| |---------| SOL ID 027 Paysys ID MT No. | | Benef. N| Status R CCY Code Sender Bic | | Addre|--------------------------------------------------------------------| | | MT No. Sender Ref No. Sender BIC Status | | | ---------------------------------| | Appl. Na| 700 ABIMPC3 BONYUS33XXX R | | Addre| | | | | | | | | Iss.Bank| | | Branch | | | | | | | | | | | |---------+--------------------------------------------------------------------+ | Option | +------------------------------------------------------------------------------+

The user has to select the necessary message which needs to be processed and then proceed with the normal functions.

5.3

AMORTIZATION OF CHARGES

As the charges collected on a DC event for future period, banks may like to treat the charges as ADVANCE INCOME at the time of collection and may like to amortise the same over the period of the DC. Facility is available in the system to do the same. Charges can be amortized in charge collection currency only. Charges are amortized from the issue date of the DC. Charges are amortized up to the Expiry date of the DC. Income account will not be credited at time of issue of DC, but will be credited only at the end of each amortization period (depending on amortization frequency), after amortization process is run.

An example for the above process can be : Let us assume that a bank has earned an income of INR 1000 on issuance of a DC. The tenor of the DC spans for 1 year and the bank recognizes all income falling due in a quarter as income earned into its P&L account. Based on this, INR 750 / - needs to be credited to the Income earned in Advance account and INR 250/- to be credited to P&L for charges

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pertaining to the running quarter, on the last day of that quarter. At the end of one year, the entire amount would have been transferred to the credit of the P&L account. If the DC is extended, the previous amortized amount is not changed. The system will amortize the charges over the extended period. If the tenor of the DC or BG is reduced, the charges yet to be amortized, will be amortized over the remaining period. If a DC / BG is closed before the actual expiry date, the entire un-amortized portion can be amortized on the date of the closure as part of amortisation process. An example for the above process can be Let us assume that a DC with a tenor of one year opened for USD 100000. Charges collected are INR 12000, amortized over a period of 12 months @ 1000 per month. In the sixth month, the client through an amendment reduces the tenor of the DC by two months. By such time, the bank has already amortized INR 6000. The balance would in this case be amortized equally over the remaining period of 4 months. Similarly, if the DC is extended, then the un amortized commission will be amortized over the extended period. Only Straight-Line Method of Amortization is applied to these charges where the amortization will be considered proportional to the ratio of current amortization period over total period for amortization. The period will be considered in days. An example for the above process can be Let us assume that a DC with a tenor of one year opened for USD 100000. Charges collected are INR 12000, amortized over a period of 12 months. Amortization frequency is monthly. (Tenor: 01/01/01 to 31/12/01) Step 1 System to calculate the Per Day charge levied by the bank to the customer, i.e. INR 12000 / 365 = INR 32.87 / Day Step 2 On the date of Amortization, (derived based on the frequency specified by the user) the amount to be transferred to the P&L account, i.e. On 31st Jan in above example, amount to be transferred to P&L would be INR 32.87 X 30days = INR 1019.178. This process should be continued till the expiry date. On the last day of amortization, the remaining balance in

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the advance account will be completely reversed, as the entire commission would have been transferred to the P&L. Step 3 Amendment to the Instrument where the period can be extended/new charge can be collected during the lifetime of the DC. In the example Increase to the DC Tenor : In the sixth month, the client through an amendment increased the tenor of the DC by two months. Additional commission of INR 2000 was also collected. By such time, the bank has already amortized INR 4964.384 (collected earlier) The total outstanding commission now available with the bank for amortization is INR 7035.616 + INR 2000. The outstanding period is 7 months + 2 months. Hence, the system would now need to re-calculate the per day charge for the instrument as follows INR 9065.616 / (214 + 59) (INR 9065.616 arrived as INR 7035.616 + INR 2000, Number of Days are the outstanding 214 from June to December 31st + the additional 2 months) Hence, INR 33.09 / Day The balance will be amortized equally over the remaining period. (i.e. on 30th June INR 33.09 X 30 Days = INR 992.92) Reduction in the DC Tenor Assume that in the sixth month, the client through an amendment reduces the tenor of the DC by two months. The balance would in this case be amortized equally over the remaining period On closure of the DC, as part of amortisation run, the entire un-amortized commission will be transferred to the P&L account.

The amortization process can triggered manually as well as by setting up a batch job to be run at a pre-determined frequency. The menu option to be invoked for amortizing the charges manually/online mode is CAM. The Screen interface is given below :

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+------------------------------------------------------------------------------+ |bafe3353 BG/DC Charges Amortization Process 10-07-2003| | | |------------------------------------------------------------------------------| | | |Sol Set ID : 027 DECCAN GYMKHANA | | | |Report To : MANAGER | | | |Currency Code : INR INDIAN RUPEE | | | |Entity Type : B BANK GUARANTEE | | | |Entity ID : BGABM3 | | | |Collect Today(Y/N) : N | | | |Amortize Till Date : 27-11-2002 | | | +------------------------------------------------------------------------------+

The user to specify, among other things, the following parameters in the above screen Collect Today flag - It is default populated as N. If the CAM is run with value set to Y, then the entire un amortised amount will be amortised immediately. User would resort to this, when he does not want to wait till the next amortisation frequency for amortising the charges collected. Ideally this may be the case when a. b. charge un-amortised is less than the minimum amount for amortization (set up in HPTTM); and the BG is prematurely closed;

Amortize Till Date is the date up to which amortization needs to be done.

The amortisation process can be also automated i.e., can be set as a batch job through the BJSTM menu option.

The accounting entries which are passed as under : 1) At the time of Issue of Guarantee Dr Customer Operative A/c Cr Advance Income A/c

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2) On running CAM

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Dr Advance Income A/c (to the extent of Amortised Amount) Cr P & L A/c.

CAM execution will result in generation of following reports regarding the amortisation done : 1. 2. 3. Success Report Failure Report Summary Report

It is also possible to set the amortisation process of a batch job, to ensure that the amortisation happens at a pre-determined frequency. However, Bank may want to amortise the entire commission collected in some cases, without following the frequency defined, e.g., where a BG/DC is pre-closed or when the commission amount is equal to minimum commission. To meet both these conditions (amortise at regular frequency and jump the frequency in select cases), two separate batch jobs are to be set up by the bank, for amortization. One job for regular amortization, (with frequency set as per the banks policy). The other job is to be set with frequency as daily and Collect Today Flag = Y. It will pick up all the those records that required to be amortized completely, on the same day. E.g. charge amount is less than the minimum amount for amortization (set up in HPTTM) the BG/DC is closed

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5.4

SWIFT MESSAGES

Generation of messages Finacle presently supports generation of MT700, MT701, MT707, MT710, MT711, MT730, MT740, MT747 messages related to Documentary Credit. The general pre-requisites for generation of SWIFT messages are

a) Under HSCFM menu, field Swift Messages Allowed should be Y b) BIC of the message generating SOL should have been specified while defining the branch at HBRTM menu. c) The Bank/branch mentioned in ODCM / IDCM menus as Correspondent / Advising Bank/Branch should be swift enabled. This is done through HBRTM option d) Arrangements(Y/N) = Y for branch in HBRTM option. If BKE Arrangements(Y/N) = N, but user still wants to send, swift message, subject the other conditions (specified above) being satisfied, system will generate MT799 formatted message. The message generation events & the message numbers are as BKE

Message No MT700/701

Finacle event

MT740

MT710/711 MT730 MT707

MT747

On <commit> in ODCM option, (during DC issue) provided the Correspondent Bank is swift enabled. On <commit> in ODCM option, (during DC issue) provided the Reimbursing Bank is swift enabled. MT740 can also be generated during an amendment, if the Reimbursement Bank is specified for the first time during amendment. On <commit> in IDCM option, (during DC advice) provided the Advising Bank is swift enabled. On <commit> in IDCM option, (during DC advice) provided the Issuing Bank is swift enabled. On <commit> in ODCM option, (during amendment to DC) provided the Correspondent Bank is swift enabled. On <commit> in ODCM option, (during amendment to DC) provided the Reimbursing Bank is swift enabled.

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After the message is formed, user will be able to modify the details when the message is shown to the user (in ODCM/IDCM option), depending on the logic written in the respective scripts. The generated messages will be in Not ready status by default. The status can be changed as R (ready for transfer), either during verification event of the entity or through option SMM. Only messages in R status will be transmitted.

+------------------------------------------------------------------------------+ | bafe3248 Swift Messages Maintenance 31-07-2003| | | |------------------------------------------------------------------------------| | Func Code M MODIFY | |------------------------------------------------------------------------------| | SOL ID 027 DECCAN GYMKHANA | | Paysys ID SWIFT SWIFT-Payment System | | In/Out Ind O Urgent/Normal N NORMAL | | Series MT No. 700 MT 700 | | Entity Type DOCCR Entity ID | | Receiver BIC Sender BIC | | Tran. ID Tran Date | | STP Flg Sender Ref | | Manual/System Status R MESSAGE READY | | | | Execution Date From 27-11-2002 To 27-11-2002 | | Value Date From To | | Created Date From To | | Created User ID | | | +------------------------------------------------------------------------------+

In the above screen,

Entity type field accepts PTRAN (TRANSACTION ID), CREDITS), BNKGR (BANK GUARANTEE), FBILL (ACCOUNTS) as valid values;

DOCCR (FOREIGN

(DOCUMENTARY BILLS), ACCNT

Status field accepts 'N' (Message Not Ready), 'R' (Message Ready), 'T' (Message Transferred), 'D' (Message Deleted), S (Message To Be Resent), 'P' - Processed, 'E'-Error, 'O'- Others as valid values.

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Once the message is generated/sent, if the message has to be resent for whatever reason, the same can be done through SMM option. On generation of the message, status of the message, will be N by default. During verification, the user should make the status flag as R, if message is complete and ready for transmission. For more details about the swift message generation and transmission, please refer to Payment Systems document.

RELATED MENU OPTIONS


Sl. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 MENU OPTION IDCM ODCM DCRM TXTMNT DCQRYM DCRPTS DCPRINT DCGPR DCREG DCLIABRG DCSTMT DCEXPLST DCQRY DCQRYM SMM SMI TRSWIFT DCQRYP CAM DESCRIPTION Inward Documentary Credits Maintenance Outward Documentary Credits Maintenance Documentary Credits Register Maintenance Text Maintenance Query and Modify Documentary Credits DC Reports and Advises DC Printing DC General Purpose Report Printing Documentary Credits Register Printing Documentary Credits Liability Register Statement of Documentary Credit Report on Expiring Documentary Credits Query on Documentary Credits Query and Modify Documentary Credits Swift Message Maintenance Swift Message Inquiry Swift Message Transfer Printing of DC reports from DC Query BG/DC Charges Amortization Process

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RELATED TABLES
Sl. No. 1 2 3 4 5 6 7 8 9 10 11 Table Name EDT EDT_MOD DCMM DCM0 DCRM DCR0 DCXM DCX0 DCEM SMH CAMT Table Abbreviation EXP_ORD_DET_TABLE EXP_ORD_DET_MOD_TABLE DC_MAST_MAIN_TABLE DC_MAST_MOD_TABLE DC_REGISTER_MAIN_TABLE DC_REGISTER_MOD_TABLE DC_TEXT_MAIN_TABLE DC_TEXT_MOD_TABLE DC_EVENTS_TABLE SWIFT_MSG_HISTORY_TABLE CHRG_AMORT_DETAILS_TBL

BATCH JOBS
bafe3353 dcfe5071 1 BG/DC Charges Amortization Process 1 FORM Statement of Documentary Credit

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NIL

UPLOAD OPTIONS

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10.1.1

MRTS / MRRS / SAMPLE REPORTS


DC PRINTING

User will be able to take the print-out of the DC by using option DCPRINT. At the time of execution of this option user will be able to specify whether he wants the DC to be generated in the mail format or the telex format depending on the mode of transmission of the DC. It should be appreciated here that the format of DC either for transmission by mail or telex is specified by the user through the mrt file. The mrt file name has to be specified to the system through ROTM menu option, so that the value gets defaulted to the user on execution of DCPRINT option

Menu Option : DCPRINT


+------------------------------------------------------------------------------+ |dcff0004 DC Printing 25-07-2003| | | +------------------------------------------------------------------------------+ | | | Type of DC I INLAND DC | | DC Register ABEXP IMPORT BACK TO BACK LC ISSUED | | DC No. To | | Party Code ABM ANIL B MIRCHANDANI | | CCY | | Limit Node / | | Opening Date To | | Expiry Date To | | Closed DCs | | Down Load to PC N | | File Name on PC | | | +------------------------------------------------------------------------------+ | DC PRINT DETAILS | |Format(T/M) | |Test Key | +------------------------------------------------------------------------------+

It should also be appreciated here that it possible to down load the DC text into your PC for onward transmission through telex. specify the Test Key also. If the transmission is by telex, user will be able to

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10.1.2

DC REPORTS AND ADVISES (DCRPTS):

This option is used to generate the letters and the advises to be sent to the opener of the DC, advising bank, reimbursing bank, correspondent bank, beneficiary.

Based on the choice, the letters and the advises to be generated are listed.

+------------------------------------------------------------------------------+ |dcff0006 DC Reports and Advises 25-07-2003| | | +------------------------------------------------------------------------------+ | DC No. : ABIMPC1 DC Type : O OUTWARD DC | | | 1. Letters | 2. Advises | | Enter Your Choice : 1 | | | | OUTWARD DOCUMENTARY CREDITS - LETTERS | | | | 1. Covering Letter to Opener on Opening of DC | | 2. Covering Letter to Opener on Amendment to DC | | 3. Covering Letter to Advising Bank on Opening of DC | | 4. Covering Letter to Advising Bank on Amendment to DC | | 5. Covering Letter to Reimbursing Bank on Opening of DC | | 6. Covering Letter to Reimbursing Bank on Amendment to DC | | 7. Covering Letter to Correspondant Bank on Opening of DC | | 8. Covering Letter to Correspondant Bank on Amendment to DC | | | | Letter No.: | +------------------------------------------------------------------------------+

Enter your choice of Letter to be generated. Above are the list of letters to be generated.

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+------------------------------------------------------------------------------+ |dcff0006 DC Reports and Advises 25-07-2003| | | +------------------------------------------------------------------------------+ | DC No. : ABIMPC1 DC Type : O OUTWARD DC | | | | 1. Letters | 2. Advises | | Enter Your Choice : 2 | | | | DOCUMENTARY CREDITS - ADVISES | | | | 1. Advise to Beneficiary on amendment to DC | | 2. Advise to Advising Bank on amendment to DC | | 3. Advise to Reimbursing Bank on amendment to DC | | 4. Advise to Correspondent Bank on amendment to DC | | 5. Advise to Reimbursing Bank on Opening of DC | | | | Letter No. : | | | | Event No. : | | | +------------------------------------------------------------------------------+

Above are the list of advises to be generated. The report is generated using mrt file. The mrt file name used for all the above letters/ advises are specified using ROTM option.

10.1.3

COVERING LETTER TO DC OPENER ( DCRPTS):

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---------------------------------------------+ |CANARA BANK | |KUMTA | |THIS IS CREATED FOR IN | | | |BANGALORE | |KARNATAKA - 560076 | +---------------------------------------------+ Date : 15-04-2003 To, +------------------------------------------------+ | ABC TRADING CO LTD | | DSDFSF, ASDFASDFD | | ASDFASDFSDSSADF | | BANGALORE ,KARNATAKA -560089 | +-----------------------------------------------+ Dear Sirs, Reg : Our Irrevocable Documentary Credit No. DC1000EXP Dtd. 01-03-2003 for USD 1,000.00 As per your instructions, we have opened the Documentary credit mentioned above. A copy of the same is enclosed for your reference. Discrepancy if any to be brought to our notice immediately to send the amendment. In the absence of any information from you, we assume that the Documentary credit is established as per your instructions. Please note that we have debited your account towards our charges.

Thanking you, Yours faithfully,

...................... Authorised Signatories

10.1.4

COVERING LETTER TO CORR BANK ON DC

OPENING (DCRPTS):

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+---------------------------------------------+ |CANARA BANK | |KUMTA | |BANGALORE | |KARNATAKA - 560076 | +---------------------------------------------+ Date : 15-04-2003 To +-----------------------------------+ |CHASE MANHATTAN BANK | |11,WALL STREET, NY | | |1231, ASDFSDFDS ASDFSFSD ASDFSDFSFSSD SSDFSD +-----------------------------------+ Dear Sirs, Reg : Our Irrevocable Documentary Credit No. DC1000EXP Dtd. 01-03-2003 for USD 1,000.00 Opener :ABC TRADING CO LTD At the request of the openers, we have opened the above credit as under: Advised through: +-----------------------------------+ |STATE BANK OF INDIA | |SBI-TOKYO BRANCH | | | +-----------------------------------+

Yours faithfully

...................... Authorised Signatories

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10.1.5

ADVISE TO BENEFICIARY ON AMENDMENT TO DC

(DCRPTS)

+---------------------------------------------+ |CANARA BANK | |KUMTA | |THIS IS CREATED FOR IN | | | |BANGALORE | |KARNATAKA - 560076 | +---------------------------------------------+ Date : 15-04-2003 To +-----------------------------------+ |SAMSUNG ELECTRONICS, | |SAMSUNG TOWERS | |TOKYO, JAPAN | | | +-----------------------------------+ Advised through: +---------------------------------+ |STATE BANK OF INDIA | |SBI-TOKYO BRANCH | |1231, ASDFSDFDS ASDFSFSD | |ASDFSDFSFSSD SSDFSD | | | +---------------------------------+

Dear Sirs, Reg : Our Irrevocable Documentary Credit No. DC1000EXP Dtd. 01-03-2003 for USD 1,000.00 Opener : ABC TRADING CO LTD At the request of the openers, we have amended the subject credit as under: 1. The value of the DC reduced by USD 250 to USD 1750. All other terms remain unaltered. All other terms and conditions remain unchanged . Please attach this amendment to the original credit as this forms an integral part there of .

Yours faithfully

...................... Authorised Signatories

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10.1.6

ADVISE TO CORRESPONDENT BANK ON

AMENDMENT (DCRPTS):
+---------------------------------------------+ |CANARA BANK | |KUMTA | |THIS IS CREATED FOR IN | | | |BANGALORE | |KARNATAKA - 560076 | +---------------------------------------------+ Date : 15-04-2003 To +------------------------------------+ |CHASE MANHATTAN BANK | |11,WALL STREET, NY | | | | | +------------------------------------+ Amendment No. 1 Dear Sirs, Reg : Our Irrevocable Documentary Credit No. DC1000EXP Dtd. 01-03-2003 for USD 1,000.00 Opener : ABC TRADING CO LTD At the request of the openers, we have amended the above credit as under: 1. The value of the DC reduced by USD 250 to USD 1750. All other terms remain unaltered. All other terms and conditions remain unchanged. Please attach this amendment to the original advise as this forms an integral part thereof. Yours faithfully Advised through: +---------------------------------+ |STATE BANK OF INDIA | |SBI-TOKYO BRANCH | |1231, ASDFSDFDS ASDFSFSD | |ASDFSDFSFSSD SSDFSD | | | +---------------------------------+

...................... Authorised Signatories

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10.1.7

PRINTING OF CUSTOMISED DC REPORTS

Users generate various DC related reports in the formats they require by defining the same in an MRT. Input into these MRTs pre-determined by Infosys. However, using the manu On execution of option DCQRYP, users will be able to filter the input into MRTs also.

DCQRYP, user will be required to select the mrt he wants to use and then he will be taken to the DCQRY selection screen, where he can decide the inputs into the MRT.

10.1.8

DEFAULT MRTS AVAILABLE

SL. NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

OPTION CODE IN ROTM MENU DCPRINTMAILMRT DCPRINTTELEXMRT DC_ADVB_AMENDMENT DC_ADVB_OPENING DC_ADV_REIMB_ON_OPENIN DC_AMEND_ADV_ADVISINGBANK DC_AMEND_ADV_BENEFICIAR DC_AMEND_ADV_CORRBANK DC_AMEND_ADV_REIMBBANK DC_CORR_AMENDMENT DC_CORR_OPENING DC_EXPIRY_LIST_MRT DC_LIAB_CRNCY_WISE_MRT DC_LIAB_PARTY_CRNCY_WISE_M RT DC_OPENER_AMENDMENT DC_OPENER_OPENING

When used ? / What is the output Mail format of a DC Telex format of a DC Letter to Advising Bank of amendment Letter to Advising Bank of DC opening Letter to Reimbursing Bank of DC opening Letter to Reimbursing Bank of DC amendment DC amendment advice to the beneficiary DC amendment advice to the Correspondent Bank DC amendment advice to the Reimbursing Bank DC amendment advice to the Correspondent bank DC opening advice to the correspondent Expired DC report Currency-wise DC opened report Party-wise / currency-wise DC opened report DC amendment advice to opener DC issue advice to the opener

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Register-wise report of DCs opened Covering Letter To Reimbursing bank of DC Amendment Covering Letter To Reimbursing bank at the time of DC Issue

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FLASHBACK
Different registers can be opened using the option DCRM. System creates the liability transactions for all the DCs lodged under the registers
for which the Gen. Liab. Transaction flag is set to Y.

It is possible to connect the limit node to the documentary credits. Charges/amortization of charges are calculated based on the HPTTM setup. ODCM is the option for the outward documentary credits. These are also called as
import documentary credits.

IDCM is the option for the inward documentary credits. These are also called as
export documentary credits.

It is possible to maintain the text as part of the documentary credits. DC text can be created/maintained by using the menu option TXTMNT and can be
attached to the documentary credits at a later date.

The transmission of the DC can be done by swift. Messages in the swift approved
formats, are generated by the system, automatically on happening of relevant events

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Sl No 1 2 3 4 5 6 7 8

QUESTIONS Creation of Registers are a must for capturing DC details DC number generation can be automated It is possible to maintain separate sequences of DC numbers for different Applicants Every time a DC is modified, the system recalculates charges. System calculated charges can be modified by the user Before verification of the DC, any of the users can modify the DC details It is possible to maintain customer-wise DC contingent liability accounts DC Curr Value and DC Avail Value fields in ODCM may show different values at same time System will accept any of the values available from the <list> function for the field Nostro Acct No in ODCM option User will be able to specify a date prior to BOD as Expiry Date in a DC Last Date of Shipment + Negotiation Period should always be equal to Date of Expiry in Finacle System will automatically mark the lien on the account specified, irrespective of the nature on the account, if specified in the margin details of the DC.

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Training Document 13 Generation of Swift messages are dependent on the profile of the bank/branch to which 14 the message has to be sent. The contra contingent accounts should be partitioned accounts

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Add two placeholders for acting as contingent liability placeholders through option APHM. Open two office accounts of OAB type using option ACMDB for using as contingent liability accounts. Attach the account placeholders created earlier. Create one customer id (CUMM) and a foreign party code (FPCM) Open a SB account to the customer created above and put through some amount to the credit of this account. (for charge recovery and margin recovery) Create a limit node for the customer (LNM) Create a charge code each for the events DCISS, DCADV & DCAMD Create two registers one for import DC and one for export DC (DCRM menu option) Create a template for Documents, Instructions, Conditions relevant to a Dc through TXTMNT option. Issue a DC (ODCM Function - S) on behalf of the customer created above, in favour the foreign party created above. In the DC specify the limit id as the one created above. Also copy the Documents, Instructions, Conditions created earlier, (through option T). Commit the DC details and note the number. Get the DC verified by another user (ODCM Function V). Take a print of the DC through option DCPRINT option. Go to the Background menu and view the text generated. Generate different reports through DCRPTS menu option Effect an amendment to the above DC through ODCM function M & option A. Note to mark the Status of amendment as A. Get the DC amendment verified by another user (ODCM Function V). Effect a utilisation of the DC, through U option (ODCM function M and option U). After the event, check the value of the DC. Through I function of ODCM, view all the events which have happened on the Dc (ODCM I H option). Through N option check the margin details. Set up LC Limit for a correspondent bank through HBKTM. Also specify the country limit for the country of the export LC applicant through COUNTRYM option. Capture the details of an export DC through IDCM

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option, with beneficiary as your customer. Set Confirmation reqd = Y and the Internal limits reqd? to A. Note down the DC number and get it verified by another user. Check the exposure position through LNM option. Effect an amendment to the above export DC. Check the details of the DC after verification of the amendment through History details option.

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