Import LC

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WELCOME TO OROMIA
INTERNATIONAL BANK
NEW CBS (TRADE AND FINANCE
TRAINING SESSIONS)
TRAINING OBJECTIVES
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 The general objective of this training is to familiarize the

trainees with new CBS (Trade and Finance Modules)
Specificobjectives
The trainee will learn how to handle Import LC by using
new CBS modules
TOPICS TO BE COVERED
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 HOW TO ADD IMPORT LC TEMPLATE

 HOW TO OPEN IMPORT LC
 HOW TO CREATE IMPORT LC AMENDMENT
 HOW TO INCREASE/ DECREASE LC CASH MARGIN
 HOW TO HANDLE IMPORT LC DOCUMENTS
 DIFFERENT WAYS OF IMPORT LC DOCUMENTS SETTLEMENT
 (SIGHT SETTLEMENT, OVERDRAFT SETTLEMENT)
 IMPORT LC INQUIRIES
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Centralized
import l/c
Handling Import L/C by BANKS system
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 The BANKS core banking system handles all activities

of import L/C in centralized system.
In this new system, all activities of import L/C are handled
centrally using system functions for each activities of the
L/C.
Even though ,these activities are done centrally, all data
bases are updated for each L/C branches.
Import L/C Templates
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 Import LC Templates are used when centralized import LC is issued in
order to create MT 700 swift message from the templates.
 The templates are added at center (IBSD) one time ,but if there is a need
to change or add another template, import L/C template system functions

are used to handle these activities.
L/C Template con’d
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The following LC templates are required while adding initial import LC on

the system:
 L/C required documents
 L/C additional conditions
 L/Cs charges instructions
 Instruction to Pay / Accep / Nego bank
 Sender to Receiver Information

Maintain General Import L/C Template
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The following functions are used to handle the templates for import
L/C
* Templates are added at the Head Office (IBSD)
Add L/C Template (H51ILT10)
Change L/C templates(H51ILT20)
Display L/C templates(H51ILT40)

Maintain General Import L/C Template con’d
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Add L/C Template (H51ILT10)

 This function is used to add a general LC template such as L/C
required documents, L/C additional conditions & others that will be
used while the L/C is opened.
 More than one templates can be added under each specific template.
For example, L/C required documents used for the shipment of goods
by vessel is different from the shipment by Air. Therefore, each
required template number should be inserted & it must be edited as
per application for L/C.
Maintain General Import L/C Template con’d
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Change L/C Templates(H51ILT20).

 This function is used to change the template name or parts of the
existing template from the head office
Display L/C Templates(H51ILT40)
 This function is used to display the templates related to import LC.

Maintain Initial Centralized Import L/C
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 After all requirements to open import L/C are fulfilled, the activities
for import L/C opening are handled under this master function.
 The following functions are used while centralized import L/C is issued.
 H51ICL10- Add Initial Centralized LC
 H51ICL20 -Modify Initial Centralized LC
 H51ICL30-Delete Initial Centralized LC
 H51ICL40-Display Initial Centralized LC

Maintain Initial Centralized Import L/C Con’d
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 H51ICL50-Approve an Initial Centralized LC
 H51ICL60 -Display LCs for Approval
 H51ICL70-Display Initial LC by Send Status
 H51ICL80 -Transfer Initial LC to Permanent

SUMMARIZED IMPORT LC OPENING FUNCTIONS
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 H51ICL10- ADD INITIAL CENTRALIZED LC
 H51ICL50-APPROVE AN INITIAL CENTRALIZED LC
 H51ICL80 -TRANSFER INITIAL LC TO PERMANENT
H48SWM H48SWM
H51IC H51IC H51IC 60 A0 SEND
APPROV MT 700
L10 L50 L80 E MT 700 TO
AT HO SWIFT
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H51ICL10- Add Initial Centralized LC

 This is a centralized an online function used to add initial import LC information on the
system.
 While we capture the initial L/C on the system, there are required fields to be inserted.
 It is also used to copy data from customers existing LC data if the previously opened
L/C is expected to have similar information with the new L/C to be opened
 While using this function, charge values are displayed from bank charges set ups.
 But , fixed charges like swift charge is inserted manually.

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 The system can also display cash margin facility either from bank margin set up
or from customer facility record if the customer has margin facility that has been
added centrally.
 If the importer has margin facility, the facility number which were generated by
the system while it was added for that customer must be inserted on required
field of margin facility number. But, this number must be availed by Credit
department to Import L/C unit before the L/C is opened.
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 L/C Reference number is also generated by the system.
 There are two types of reference number generated by the system while maintaining
import L/C.
 These reference numbers are generated while adding initial L/C as a temporary
reference number and when transferring initial L/C to permanent as permanent

reference number.
 The reference number for beginning of any new year is changed by the system and its
serial number starts from 1, and it increases by 1 for every new import LC.
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Format For Initial Import L/C is 48/XX/YYYYYY

 Where
 48, Represents temporary import L/C
 XX, Represents year of L/C issuance
 YYYYYY, Represents a serial number, automatically generated by the
system, starting from 1 and incremented by 1. At the beginning of any
new year, the LC serial number starts from 1, and it increases by 1 for
every new import LC.
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Permanent Reference Number

This reference number is generated by the system as permanent when
Initial L/C is transferred to permanent
Format for permanent reference number is 21/XX/YYYYYY
Where
 21, Represents Permanent import L/C
 XX, Represents year of L/C issuance
 YYYYYY, Represents a serial number, automatically generated by the
system, starting from 1 and incremented by 1.
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 H51ICL20 -Modify Initial Centralized LC

 This function is used to modify financial and non financial data of
initial LC.
 It can also modify approved initial import L/C even though a pop up
message will be displayed to give a warning message that the LC was
approved. In this case the user can get two options: Either to Continue
and modify the LC or exit the function.
 After modification the LC needs to be approved again.
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H51ICL30-Delete Initial Centralized LC
This function is used to delete the initial centralized LC .
When the initial import L/C is deleted, the system generates
another initial import L/C reference number for the next

L/C to be opened.
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H51ICL40-Display Initial Centralized LC

 When initial centralized import L/C reference number is inserted for
specific branch of customer L/C, this function is used to display all

financial and non financial information of that initial centralized import
LC data.
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H51ICL50-Approve an Initial Centralized LC

 This function is used to approve single initial import LC by
providing specific initial reference number
 It is also used to produce the swift message 'MT 705 Pre-Advice of a
Documentary Credit', if it is required to be sent to the advising bank
before sending original swift message .
 When we are going to approve the initial centralized import L/C,
head office approval flag will be active. This approval flags are:
Approve & Not approve
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 The initial L/C can be approved by selecting ‘approve’ or it

can be disapproved by selecting ‘not approve’.
 The approved initial import L/C can be modified in case
there is a need to modification.
 This function can also help us to complete any missed
information while capturing the initial centralized import
L/C.
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H51ICL60 -Display LCs for Approval

 This function is similar with the function approve initial import L/C
(H51ICL50), but the latter is used to display all initial import L/C
waiting for approval by inserting L/C source code 1 as bank system.
 It is used to avoid entering each initial import L/C Reference Number
one by one for approval.
 The authorized user can approve any of the displayed Initial LCs by
putting the cursor on the button beside initial centralized L/C reference
number and pressing on the LC to be approved.
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H51ICL80 -Transfer Initial LC to Permanent

 This function is used to transfer an initial centralized LC to permanent after
the LC has been approved.
 This function will run through the head office, but all the database updates
are in the entered LC branch.
 All necessary financial transactions are passed while the initial centralized
import L/C is transferred to permanent
 The permanent centralized import L/C reference number is generated at this
stage
 The system can also enable online printing of the necessary customer advice
tickets
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 While transferring initial import L/C to permanent, the option to

create MT 700 is as follows:
o Yes
o No
 If the first option ‘Yes’ is selected, MT 700 will be created.
 After the message is created it should be approved & sent to swift server
by using the following functions
o Approve swift messages from head office (H48SWM60)
o Send Swift Message to Swift-alliance (H48SWMA0)
Maintain Import L/C Amendments
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 Any financial and non financial parties of the L/C can be amended
using system functions under Maintain static data for import

L/C.
 Swift messages and financial entries can be created when

amendments are made on centralized import L/C
Maintain Static Data For Import L/C
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The following functions are used to process import L/C

amendments after the L/C has been transferred to
permanent.
 H51ILC20-Modify Static Data for Import LC
 H51ILC80-Increase / Decrease LC Charges
 H51ILC90- Display Static Data for Import L/C
 H51ILCB0-Amend a Documentary Credit with Swift Message
 H51ILCE0-Request for LC Cancelation

Maintain Static Data For Import L/C con’d
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 H51ILCF0- Reject Request for LC Cancelation

 H51ILCG0- Cancel Import LC and Return Cash Margin
 H51ILCH0-Display LC According to Advising Bank Reference
 H51ILCI0- Display LCs by Beneficiary Name
 H51ILCJ0-Create Free Format Swift Message
 H51ILCK0-Handling Different Charges on the LC
 H51ILCL0-Import LC Acknowledgement
 H51ILCZ0-Cancel Last Daily Transaction for Import LC
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H51ILC20-Modify Static Data for Import LC

 This function will allow us to change non financial data for the import LC’s
from the head office .
 The function can also create MT 700 & MT 705 if they were not created while
the L/C was opened
 To amend the static data of import L/C ,the following should be inserted from
head office
 Branch Code of customer L/C
 LC Reference Number
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H51ILC80-Increase / Decrease LC Charges

 This function is used to increase/decrease the LC charges by the head
office, but it will do all the financial transactions and the database
updates for importer L/C branch.
 By using this function, any charges that were used for import L/C
issuance can be either decreased or increased as per their requirement.

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H51ILC90- Display Static Data for Import L/C

 The users can view the import LC’s data by inserting the full or part of the reference number
(branch code, reference type, reference year, reference number).
 If the entire key is entered, then the function will display the data for the entered key.
 If part of the reference number(key) is entered, for example if branch code & year of the
L/C is entered, then the function will display the data of the first reference number
generated by the system for that year. Then all the records can be seen by using tab key
,key ‘page down or key ‘page up' to navigate between the displayed records.
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H51ILCB0-Amend a Documentary Credit with Swift Message

 If parties of the L/C are agreed to make an amendment on the L/C, the function
Amend a Documentary Credit with Swift Message, which is used to change terms
and conditions of the specific import L/C.
 This function also enable us to produce the following SWIFT messages
 MT 707 -Amendment to a Documentary Credit
 MT 747 -Amendment to an Authorization to Reimburse
 To amend the L/C, Branch of importer and L/C reference number must be entered.
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 This messages will be created at the head office while the L/C is amended.
 After the message is created, it should be approved & send to swift alliance using the
following system functions of head office:
 H48SWM60-Approve swift messages from head office
 H48SWMA0 -send swift message to swift-alliance(server)
 When the message is received by swift section, the process to send the message to
respective correspondent bank continue at swift section

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All necessary charges for L/C amendments and any other required financial entries are passed
when import L/C is amended.
H51ILCE0-Request for Delete LC
 In case the importer requested cancelation of the L/C, request for delete the L/C should
be sent to advising bank to know the consent of the beneficiary before directly deleting
the L/C.
 This function is, therefore, used to make request for deleting (cancellation) of LC’s.
 If the request is approved by the beneficiary, then the LC can be deleted by using
function “Delete Import LC H51ILCG0”.
 If the request is rejected, then it can be cancelled by using the function “reject request
for delete LC H51ILCF0”.
 The system also support to produce and send MT707 .
 To make deletion request ,the user should input branch of importer and L/C reference
number
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H51ILCF0- Reject Request for Delete LC

 If the beneficiary has not accepted deletion request made on the L/C,
the function reject request for delete L/C is used to remove
deletion request made on the L/C.
 During the process a popup message will be displayed having two
options “Yes” and “No” in order to allow the user to confirm the
rejection process by pressing “Yes” or to cancel the rejection by pressing
“No”.
 This function will not do any financial transactions but it will only
update the Letter of Credit Table in the system
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H51ILCG0- Delete Import LC and Return Cash Margin
 If the request to delete import is approved by the beneficiary, then the LC can be deleted by using the function
delete the import LC and return cash margin to the customer.
 When processing cancellation of the L/C, the system will do all the financial transactions and database updates for
the deleted LC’s .
 In order to delete the L/C, the following data should be inserted:
 Branch Code of customer L/C
 LC Number
 Customer Number
 LC currency Type
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H51ILCH0-Display LC According to Advising Bank Reference

 If the reference number of advising bank was added on the L/C up on
receiving an acknowledgement of the L/C from the bank, this function

will help us to display all LCs record’s .
 This reference number is used in case the message of advising bank is
received without stating our related L/C reference number.

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H51ILCI0- Display LCs by Beneficiary Name

 If the user inputs beneficiary name or part of the beneficiary name
on required field, this function will display all LCs numbers which
have beneficiaries name similar to the input name.
 It will also display the maturity date and the balance for each LC’s.
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H51ILCJ0-Create Free Format Swift Message

 In case there is a requirement to create the message on import L/C, this function is used to produce
one of the following swift messages for the specific import LC through the head office .
 MT799 -Free Format Messages
 MT999 -Free Format Messages
After the message is created in the head office ,it should be approved & sent to swift server by using the
following system functions :
 H48SWM60: Approve Swift Message From Head Office
 H48SWMA0: Send Swift Messages To Swift-alliance
 The function is also used to collect charges from beneficiary’s account if it is applicable.
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H51ILCK0-Handling Different Charges on the LC
We will use this function to handle different types of import LC charges and it will run from head office.
The function will handle the following types of charges:
Paying other banks commission:
This type of charges will be used incase we want to pay other banks claim related to advising Import L/Cs.
Deducting our commission & charges:
This type of charges will be used in case the bank wants to collect any charges related to handling import
L/Cs.
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 When we are going to pay other banks claim for charges, this function will have
an option to produce one of the following Swift messages:
 MT103 -Single Customer Credit Transfer
 MT202 -Institution Transfer
 MT799 -Free Format Message
After one of the above message is created, it must be approved & sent to swift
server using the following functions
 H48SWM60: Approve Swift Message From Head Office
 H48SWMA0: Send Swift Messages to Swift-alliance

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H51ILCL0-Import LC Acknowledgement
 We use this function after MT 700 has been sent to our correspondent bank & when 730 is
received from the bank.
 If there is SWIFT interface with our core banking system, this function is used to upload
the data from MT 730 of inward swift message by entering message date & reference.
 After the data is extracted from MT730, the following database changes will be done:
o Update advising bank reference in LC table.
o Create the detailed record in LC Detail Table.
o Update SWIFT related table in the system.

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H51ILCZ0-Cancel Last Daily Transaction for Import LC

 If we want to cancel the transaction made on the L/C, the function cancel last daily transaction
for import L/C is used .
 To delete the transaction which was done on import L/C, transaction date must be same with
banking operation date and that transaction must be the last for that specific L/C.
 If more than two transactions are made on specific L/C with different transaction sequence ,Assume
Transaction Sequence 5 & 6 & on the same date and if we want to cancel Transaction Sequence 5,1st
Transaction Sequence number 6 must be deleted before deleting Transaction Sequence number 5.
The following required data must be inputted to cancel the transaction
 Branch Code
 LC Number
 Transaction Sequence Number( last Transaction Sequence)
Maintain L/C Cash Margin
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 When letters of credit is issued 100% margin or in case the customer has facility,
proportion of margin facility is deducted from customer account and held under
payable-margin until the related LC is settled. However, after the LC has been
issued, the amount of L/C margin can be increased or decreased due to different
reasons.
To handle these issues, we use the following LC cash margin system functions
 H51LCM10 -Increase LC Cash Margin
 H51LCM20-Return LC Cash Margin
 H51LCM30- Display Cash Margin by Customer Number

Maintain L/C Cash Margin
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H51LCM10 -Increase LC Cash Margin

 If the amount of L/C cash margin to be collected from customer account was
not fully taken when Import L/C was opened; we use this function to collect
the remaining cash margin from customer account
H51LCM20-Return L/C Cash Margin
 If the amount of cash margin that was collected from customer account was
more than the amount to be collected , we use this function to return the
excess amount of cash margin to customer account.
Maintain L/C Cash Margin con’d
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H51LCM30- Display Cash Margin by Customer Number

 When we want to see the outstanding cash margin balances for specific
customer, we use the function Display Cash Margin by Customer

Number
 When the user enters branch code, customer number &
currency code of cash margin, the function displays a summary of

all cash margin balances held under each LC for that customer.
Maintain Inward Negotiable Import L/C Documents
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All activities regarding to import documents such as:
 Receiving and registering
 Examining the documents and communicating discrepancies in case the

document is not compliant (has a discrepancy)
 Settlement of the documents from customer account
 Transferring the shipment to documentary overdraft (Advance against Import

Bills) in case the customer has insufficient fund and
 Preparing any necessary payment authorization are handled when the
document is received.
Maintain Inward Negotiable import L/C Documents
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 The following system functions are used to process the activities related to Import L/C
documents (Handling Import L/C Documents)
 H51INC10-Add Inward Negotiable Documents
 H51INC20-Amend/Accept Negotiable Documents
 H51INC30-Delete Inward Negotiable Documents
 H51INC40- Display Inward Negotiable Documents
 H51INC50-Issue Shipping Guarantee and Delivery

Maintain Inward Negotiable import L/C Documents
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 H51INC60- Display Shipping Guarantee by Customer
 H51INC80-Transfer Shipment to Documentary Overdraft (Advance
against Import Bills)
 H51INC90 -Transfer Shipment to Accepted Guaranteed Draft
 H51INCA0- Accept Documents with Discrepancies
 H51INCB0- Settle Sight Import LC Shipment

SUMMARIZED IMPORT LC DOCUMENT HANDLING PROCESS
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 OPTION 1: COMPLIANT DOCUMENT (CLEAN)

 H51INC10-Add Inward Negotiable Documents (Compliant)
 H51INCB0- Settle Sight Import LC Shipment (If customer has sufficient
balance for settlement) (OR)

 H51INC80-Transfer Shipment to Documentary Overdraft (Advance against
Import Bills), if customer has no balance for settlement
 H51DOC60-Settle Documentary Overdraft (Settle Advance against import

bills) H51INC10 H51INCB0 H51INC80 H51DOC60
SUMMARIZED IMPORT LC DOCUMENT HANDLING PROCESS
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 OPTION 2: INCOMPLIANT DOCUMENT (DISCREPANT DOCUMENT)

 H51INC10-Add Inward Negotiable Documents (Incompliant)
 H51INCA0- Accept Documents with Discrepancies
 H51INCB0- Settle Sight Import LC Shipment (If customer has sufficient
balance for settlement) (OR)

 H51INC80-Transfer Shipment to Documentary Overdraft, if customer
has no balance for settlement
 H51DOC60-Settle Documentary Overdraft (Settle Advance against import bills)
H51INC10 H51INCA0 H51INCB0 H51INC80 H51DOC60
SHIPPING GUARANTEE(DELIVERY ORDER) HANDLING SUMMARY
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 H51INC50-Issue Shipping Guarantee and Delivery
 H51INC10-Add Inward Negotiable Documents (Compliant)
 H51INCB0- Settle Sight Import LC Shipment
 H51LCM20-Return L/C Cash Margin ( Refund the remaining
cash margin held for the Issued Shipping Guarantee)
H51INC50 H51INC10 H51INCB0 H51LCM20

Maintain Inward Negotiable import L/C Documents con’d
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H51INC10-Add Inward Negotiable Documents

 Upon the arrival of the document from negotiating bank, each presented document
must be checked against the L/C terms and conditions.
 After examining the documents either it is compliant or not, this function is used to
add these documents on the system.
 There is required field on the system to identify the documents status as compliant
or not compliant.
 When the document are added on the system financial transactions are not passed.
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 After the process of adding the documents on the system, shipment number
is generated by the system for each documents automatically.
 The shipment number starts from 1 and increased by 1 for every partial
shipment. This shipment number is used to know:
 Which shipment to settle
 Which shipment is to be transferred to documentary overdraft or accepted

guaranteed drafts
 Number of partial shipments made on the specific L/C
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 The automatic generation of the same shipment will be generated while using this
function and the function ‘Issue shipping guarantee and delivery order ‘.
 This means, if a shipment was started with a shipping guarantee and delivery order
because the goods of the shipment have arrived before receiving the original
negotiable documents, then the shipment number is generated by the function
‘Issue shipping guarantee and delivery order’.
 The same shipment number will be generated when we will receive and add the
original documents for which shipping guarantee and delivery order was issued.
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 In case the documents are presented with discrepancies, this function is used to create
discrepancies notification swift messages such as:
 MT 734 –Advice of Refusal
 MT799 –free format message
 MT 999-free format message
After the message is created, it should be approved & send to swift alliance using the
following system functions of head office:
 H48SWM60-Approve swift messages from head office
 H48SWMA0 -send swift message to swift-alliance(server

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H51INC20-Amend/Accept Negotiable Documents

 This function is used to modify financial or non financial shipment data created by online
function ‘Add Inward Negotiable Documents (H51INC10)’.
 It can also create swift messages 734, 799 and 999 in the head office automatically in case
the inward negotiable document was discrepant.
 These created messages should be approved in the head office using function "Approve swift
messages from head office"(H51SWM60). After the message is approved, it should be sent
to the SWIFT server using function H51SWMA0.
 All required fields’ that has been filled while adding inward negotiable documents
(H51INC10) can be modified using this function.
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 To amend/accept negotiable documents, the following data should be
filled:
 Enter Customer Branch
 Input L/C Reference Number
 Input Shipment Number

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H51INC30-Delete Inward Negotiable Documents

 In case we want to delete the shipment that has been added on the system using
online function add Inward Negotiable Documents (H51INC10), we use this
deletion function.
 The shipment can be deleted:
 If the shipment was not transferred to the accepted guaranteed drafts in case
deferred L/C shipment
 If the shipment was not transferred to the documentary overdrafts (advance against
import).
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 To delete the documents, the following requirements should be
inputted:
 Enter Customer Branch
 Input L/C Reference Number
 Input Shipment Number
 Press enter
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H51INC40- Display Inward Negotiable Documents

o This function is used to display the Inward negotiable document by shipment number.
o If the whole key is entered for that shipment, this function will display all the records
according to the entered key and the user can use key 'page up' and key 'page down' to
navigate between the displayed records.
o But if the user inputs L/C reference number , then the function will display all the records of
the 1st shipment only.
o Therefore, entering the whole key for specific L/C is the best way to view specific shipment
of the L/C documents
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H51INC50-Issue Shipping Guarantee and Delivery

 This function is used to Issue Shipping Guarantee and Delivery Order in case the goods are
arrived before original Documents are received from the negotiating bank
 To issue this delivery order, additional cash margin should be taken from customer account & 110 %
cash margin is kept under margin payable until the original L/C documents will be received & settled.
 The system calculates this additional cash margin amount from the additional cash margin rate .
 The system can also collect delivery order commission as per bank charge set up.
 When the original inward negotiable documents are received after delivery order was issued, the
system can validate when the original document will be captured on the system as the deliver order
was issued for this shipment.
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H51INC60- Display Shipping Guarantee by Customer

 This function is used to display all issued shipping guarantee and delivery orders for the
customer.
 When we input branch code, customer number & currency code of cash margin, the function
will displays all L/Cs with their respective cash margin & document balance for which
shipping guarantee has been issued for that customer under each L/C shipment number.
 We can also view detailed information about the issued shipping guarantee and delivery
orders by putting the cursor on the button beside L/C reference number and press "CTRL +
W“ or click on that button.
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H51INC80-Transfer Shipment to Documentary Overdraft (Advance

against Import Bills)
 This function is used in through head office but it will do all the financial
transactions for entered customer branch.
 As it is known, compliant sight import L/C documents should be paid within
five working days after the document is presented at our counter.
 But, if the document is identified as discrepant, negotiating bank should be
notified within these stated days (5 working days).

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 If the document is complying or the discrepancies are accepted by the
importer, the document should be either directly settled by deducting

customer account for settlement or transferred to documentary over draft
(Advance against Import Bills) in case the customer has insufficient fund.
 This function is used to transfer compliant document or non compliant
accepted by importer to Documentary Overdraft in case the customer has

insufficient balance.
67
 This function can also enable us to create the following swift messages
while the shipment is transferred to documentary overdraft.
o MT752-Authorization to Pay, Accept or Negotiate
o MT756-Advice of Reimbursement or Payment
o MT799-free format message

68
o MT103 -Single Customer Credit Transfer
o MT202 -General Financial Institution Transfer
o MT732-Advise of Discharge
After the message is created, it should be approved & send to swift alliance using
the following system functions of head office:
 H48SWMA0 -send swift message to swift-alliance (server)

69
H51INC90 -Transfer Shipment to Accepted Guaranteed Draft

 Letters of credit can be issued by sight or deferred payment.
 In case the L/C is issued by deferred payment, the payment for this L/C is not effected on sight basis.
 It will be paid & settled when the draft will be matured.
 Before the shipment is transferred to accepted guaranteed draft, the primary information of inward
negotiable documents must be added on the system using the functions ‘add inward negotiable
document ‘like that of L/C by sight payment.
 The function ‘transfer shipment to Accepted Guaranteed Draft (H51INC90)’ is used to transfer this
shipment to an accepted and guaranteed draft up on acceptance of the document by importer.
70
 To transfer this shipment to accepted guaranteed draft the following is

required:
 The shipment should be compliant (without discrepancies)
 The shipments with discrepancies should be accepted by the customer
o When the shipment is transferred to accepted guaranteed draft, part or
the entire cash margin on the LC is changed to cash margin against the
accepted guaranteed draft.
71
 This function can also enable us to create the following swift messages while the
shipment is transferred to accepted guaranteed draft .

After the message is created, it should be approved & sent to swift alliance using
 H48SWMA0 -send swift message to swift-alliance(server

72
H51INCA0- Accept Documents with Discrepancies

 Based on customer response to the discrepancies of document that
has been notified ,this function is used to add the customer acceptance
or refusal of the discrepancies.
 If the customer accepted the discrepancies, then the shipment can be
settled, transferred to Documentary Overdraft or Accepted Guaranteed
Drafts.
 However, if the customer refused the Discrepancies, then the shipment
will wait as discrepant until it will be waived by the importer
Maintain Inward Negotiable Import L/C Documents con’d
73
H51INCB0- Settle Sight Import LC Shipment

 When sight L/C negotiable document is complied with L/C terms and
condition, and in case the document is discrepant but accepted by the

importer and if the customer has sufficient fund for settlement, this
function is used to settle this shipment.
74
 On settling Sight Import LC Shipment , the system will do the following:
 Debit payable-cash margin
 Debit customer account for the remaining cash margin/rate difference
 Credit correspondent account with shipment amount
 Reverse outstanding L/C memo accounts
 Create the necessary FCY position accounts if importer currency account
code is different from the currency code of the shipment.

75
 This function can also enable us to create the following swift

messages while the shipment is settled.
o MT752-Authorization to Pay, Accept or Negotiate
o MT756-Advice of Reimbursement or Payment

76
o MT732-Advise of Discharge
After the message is created, it should be approved & sent to swift alliance
using the following system functions of head office:
 H48SWMA0 -send swift message to swift-alliance(server)

Maintain documentary Over Draft(Advance against Import Bills)
77
 After the shipment transferred to Documentary Overdraft (Advance

against import bills), the document is handled using the following
system functions.
 H51DOC20-Display Documentary Overdraft by Document Sequence
 H51DOC30- Display Documentary Overdraft by Customer Number
 H51DOC50-Delete Documentary Overdraft
 H51DOC60-Settle Documentary Overdraft (Settle Advance against import

bills)
Maintain documentary Over Draft con’d
78
H51DOC20-Display Documentary Overdraft by Document Sequence

 If the user inputs branch code, LC number and Documentary overdraft number
& press enter, then the function will display all the records related to the input
key of the documents and the user can use key 'page up' and key 'page down' to
navigate between the displayed records.
79
H51DOC30- Display Documentary Overdraft by Customer Number

 If we want to see all outstanding documentary over draft of a customer , this
function is used to display a summary of all information’s on the Documentary

overdrafts for that customer.
 To display & see the information under this function, the user should input
branch code, customer number & currency code of documentary over draft.
80
 While using this function ,it will show the following information's
 Document Amount.
 Document currency.
 Documentary overdraft amount.
 Documentary overdraft balance.
 The user can also see detailed information about a specific Documentary overdraft
record by putting the cursor on the button beside L/C reference of that documentary
overdraft number and by pressing (CTRL+ W) or by clicking on that button.
81
H51DOC50-Delete Documentary Overdraft

 This function is used to delete Documentary overdraft for Import LC’s.
 The documentary overdraft can be deleted if the following conditions are fulfilled:-
 Documentary overdraft originating date not equal to banking operation date.

 The Documentary overdraft is not settled yet
 If Documentary overdraft originating date is equal to banking operation date ,then the
documentary overdraft can be cancelled by using function H51ILCZ0 "cancel last daily trans.
for import LC“
 When documentary over draft is deleted, its status is returned back to import L/C Inward
Negotiable Documents
82
H51DOC60-Settle Documentary Overdraft

 In case the customer has sufficient balance & ready for settlement of
outstanding shipment of documentary over draft (Advance against import

bills), we use the function Settle Documentary Overdraft .
 They system calculates interest on the amount of documentary over draft
shipment. To calculate the interest, the system uses the bank’s interest rate set
ups for advance against import bills.
 The necessary accounting transactions are passed when the document is settled.
Maintain Documentary Over Draft con’d
83
 On settling documentary over draft Shipment , the system will do the

following:
 Debit customer account for the amount of documentary over draft plus
interest earned on advance against import bills
 Credit the amount of documentary over draft
 Credit interest earned on advance against import bills
 Create the necessary FCY position accounts if applicant currency account

code is different from the currency code of documentary over draft
Maintain Accepted guaranteed Draft Cash Margin
84
 After the shipment of import L/C documents are transferred to

accepted guaranteed draft, any changes on cash margin of the draft can
be handled using the following system functions:
o H51DCM10-Increase LC Draft Cash Margin
o H51DCM20 -Return / Decrease LC Draft Cash Margin
o H51DCM30 -Display LC Accepted Guaranteed Draft Cash Margin

Maintain Accepted Guaranteed Draft Cash Margin con’d
85
H51DCM10-Increase LC Draft Cash Margin

 If we want to increase the amount of Document draft cash margin that was held
under payable margin, we use this function to collect this margin from customer
account.
H51DCM20-Return L/C Cash Margin
 If the amount of document draft cash margin that was held under payable margin
when shipment was transferred to accepted guaranteed draft is required to be
returned, we use this function to return the excess amount of this margin to
customer account.
Maintain Accepted Guaranteed Draft Cash Margin con’d
86
H51DCM30 -Display LC Accepted Guaranteed Draft Cash

Margin
 If the user enter branch code, customer number & cash margin currency, it
shows a summary of all the cash margin balances for each document draft for
that customer.
 The user can also see detailed information about a specific document draft by
putting the cursor on the button beside that document draft and pressing
(CTRL +W) or clicking on that button.
Maintain Accepted Guaranteed Draft
87
 After Import L/C document is transferred to accepted guaranteed draft, the

following system functions are used to process any activities related to the
shipment under accepted guaranteed draft .
 H51AGD30- Display A.G. Draft of LC by Draft Number
 H51AGD40- Display A.G. Draft of LC by Customer Number
 H51AGD50- Delete A.G. Draft of Outward LC
 H51AGD60- Modify Expiry Date for Accepted Guaranteed Draft
 H51AGD80- Settle Accepted Guaranteed Draft by Shipment
 H51AGD90- Transfer A.G. Draft to Paid
Maintain Accepted Guaranteed Draft con’d
88
H51AGD30- Display A.G. Draft of LC by Draft Number

 If we input branch Code, LC reference and Draft Sequence number,
this function displays the information related to that specific accepted

guaranteed draft shipment.
89
H51AGD40- Display A.G. Draft of LC by Customer Number

 If we want to see all outstanding accepted guaranteed draft of a
customer, this function is used to display a summary of all
information’s on the accepted guaranteed drafts for that customer.
 To display & see the information under this function, the user should
input branch code, customer number & currency code of accepted

guaranteed draft
90
 While using this function, it will show the following information's
 Draft Amount.
 Cash Margin Balance
 Maturity Date
 Settlement Date
 The user can see detailed information about a specific accepted guaranteed draft record
by putting the cursor on the button beside L/C reference of each accepted guaranteed
draft and by pressing (CTRL+ W).
91
H51AGD50- Delete A.G. Draft of Outward LC

 This function is used to delete an A.G. Draft for Import LC Document.
 The draft can be deleted if the following conditions are fulfilled:
 If the draft originating date is not equals to the banking operation date
 The draft amount must be equal to the draft balance to ensure that the draft isn’t transferred to the
paid draft.
 But ,if Documentary overdraft originating date is equal to banking operation date ,then the
documentary overdraft can be cancelled by using function H51ILCZ0 “Cancel last daily trans.
for import LC
92
 When accepted guaranteed draft is deleted, the status of the shipment

is returned back to Inward negotiable documents and the system will
create all the necessary financial transactions.
 To delete the shipment of accepted guaranteed draft, the following Requirements
should be inputted:
 Branch Code
 L/C Number
 Draft Sequence Number
 Transaction Sequence #
93
H51AGD60- Modify Expiry Date for Accepted Guaranteed Draft

 Based on the agreement of parties of the L/C, to increase or
decrease the expiry date of accepted draft ,this function will allow us
to amend the maturity date for an accepted guaranteed draft.
 The system also allows to collect applicable charges that are related
to this process by debiting customer account.

94
 To amend the expiry date of the draft, the following data should be entered:
o Branch Code
o L/C Number
o Draft Sequence Number

95
H51AGD80- Settle Accepted Guaranteed Draft by Shipment

 When the due date of accepted guaranteed draft mature and the customer has sufficient
balance and ready for settlement, we will use this function to settle the accepted guaranteed
draft.
 The total amount required from the customer to settle the accepted guaranteed draft
amount is calculated by the system automatically. Any charges related to settle accepted
guaranteed draft is also calculated by the system as per bank charges set up for accepted
guaranteed draft.
96
 To settle this draft ,the following data should be provided on the

respective fields of the system:
 Branch Code
 L/C Reference
 Shipment Number
97
 On settling accepted guaranteed draft of L/C shipment, the system will do the following:
 Debit customer account for the remaining of cash margin plus any charges to be collected
while settling the draft.
 Credit correspondent account with document amount
 Create the necessary FCY position accounts if applicants currency account code is
different from the currency code of the shipment.
98
 This function also enable us to create the following swift messages through the
head office while the shipment is settled.

99
After the message is created, it should be approved & sent to swift

alliance using the following system functions of head office:

100
H51AGD90- Transfer A.G. Draft to Paid

 It is a process of transferring the accepted guaranteed draft to the paid
when the accepted guaranteed draft is matured and in case there is no

sufficient balance in the customer’s account to settle the draft and pay
the proceed to negotiating bank.
 The paid accepted and guaranteed draft amount is calculated
automatically by the system.

101
 To transfer this draft ,the following data should be provided on the
respective fields of the system:
 Branch Code
 L/C Reference
 Shipment Number
102
On transferring the shipment of accepted guaranteed draft to paid, the system will
do the following transactions:
 Debit paid drafts accounts of accepted guaranteed draft for the remaining cash
margin
 Credit correspondent account with shipment amount
 Create the necessary FCY position accounts if different currency codes are involved
in transactions
103
 This function can also enable us to create the following swift

messages through the head office when the shipment is transferred
to paid drafts:

104
 After the message is created, it should be approved & sent to swift alliance using

Maintain Paid Accepted Guaranteed Draft
105
 Any activities related to accepted guaranteed draft that has been
transferred to paid due to insufficient balance of customer account is

handled using the following functions:
o H51PAD10 -Settle Paid Accepted Guaranteed Draft
o H51PAD20 -Display Paid Drafts by Draft Number
o H51PAD30-Display Paid Drafts by Customer Number

Maintain Paid Accepted Guaranteed Draft con’d
106
H51PAD10 -Settle Paid Accepted Guaranteed Draft

 When the customer has sufficient fund to settle the amount of accepted
guaranteed draft that was transferred to paid, the function, we use

Settle Paid Accepted Guaranteed Draft (H51PAD10).
107
 To settle paid accepted guaranteed draft, the following data is used:
 Branch Code
 L/C Reference
 Paid Draft Sequence Number
 When settling this draft the necessary accounting transactions are

passed.
108
H51PAD20 -Display Paid Drafts by Draft Number

 When we input branch code , L/C reference & paid currency code, this
function is used to show the information's related to that specific

paid A.G. draft.
109
H51PAD30-Display Paid Drafts by Customer Number

 If We enter branch code, customer number & currency code of paid
accepted draft on required fields ,this function displays a summary of

all paid drafts for that customer.
 We can also see detailed information about each specific paid draft by
putting the cursor on the button beside L/C reference of that draft and
pressing (CTRL +W)
110
Thank You
!!!!!!!!!!!!

Import LC

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 The general objective of this training is to familiarize the

 HOW TO ADD IMPORT LC TEMPLATE

 The BANKS core banking system handles all activities

 Import LC Templates are used when centralized import LC is issued in

order to create MT 700 swift message from the templates.

to change or add another template, import L/C template system functions

The following LC templates are required while adding initial import LC on

 Sender to Receiver Information

Add L/C Template (H51ILT10)

Change L/C templates(H51ILT20)

Display L/C templates(H51ILT40)

Add L/C Template (H51ILT10)

Change L/C Templates(H51ILT20).

existing template from the head office

Display L/C Templates(H51ILT40)

 This function is used to display the templates related to import LC.

 H51ICL20 -Modify Initial Centralized LC

 H51ICL30-Delete Initial Centralized LC

 H51ICL40-Display Initial Centralized LC

 H51ICL50-Approve an Initial Centralized LC

 H51ICL60 -Display LCs for Approval

 H51ICL70-Display Initial LC by Send Status

 H51ICL80 -Transfer Initial LC to Permanent

 H51ICL10- ADD INITIAL CENTRALIZED LC

 H51ICL50-APPROVE AN INITIAL CENTRALIZED LC

 H51ICL80 -TRANSFER INITIAL LC TO PERMANENT

H51ICL10- Add Initial Centralized LC

 But , fixed charges like swift charge is inserted manually.

 L/C Reference number is also generated by the system.

reference number and when transferring initial L/C to permanent as permanent

Format For Initial Import L/C is 48/XX/YYYYYY

Permanent Reference Number

 H51ICL20 -Modify Initial Centralized LC

H51ICL30-Delete Initial Centralized LC

This function is used to delete the initial centralized LC .

When the initial import L/C is deleted, the system generates

another initial import L/C reference number for the next

H51ICL40-Display Initial Centralized LC

specific branch of customer L/C, this function is used to display all

H51ICL50-Approve an Initial Centralized LC

 The initial L/C can be approved by selecting ‘approve’ or it

H51ICL60 -Display LCs for Approval

H51ICL80 -Transfer Initial LC to Permanent

 While transferring initial import L/C to permanent, the option to

using system functions under Maintain static data for import

 Swift messages and financial entries can be created when

The following functions are used to process import L/C

 H51ILC80-Increase / Decrease LC Charges

 H51ILC90- Display Static Data for Import L/C

 H51ILCB0-Amend a Documentary Credit with Swift Message

 H51ILCE0-Request for LC Cancelation

 H51ILCF0- Reject Request for LC Cancelation

H51ILC20-Modify Static Data for Import LC

H51ILC80-Increase / Decrease LC Charges

issuance can be either decreased or increased as per their requirement.

H51ILC90- Display Static Data for Import L/C

H51ILCB0-Amend a Documentary Credit with Swift Message

 MT 707 -Amendment to a Documentary Credit

 MT 747 -Amendment to an Authorization to Reimburse

following system functions of head office:

 H48SWM60-Approve swift messages from head office

 H48SWMA0 -send swift message to swift-alliance(server)