Lifecycle of LGR-Issued Digital Standard Letter of

Credit for Multi-Commodity Trading Companies

Q. Can you also go over each box in the diagram and assess if there is any system or process involvement from LGR?

A. Producer should be given access to the LGR digital platform where as they can attach the Sales Agreement between trading co and them. Box
No.1.

A. End users should be given access to LGR digital portal to attach sale agreements with trading company. Box No.2.
Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies
A. End User will attach the banking instrument issued by them favoring trading company along with Performa invoices issued by trading
company by taking access in LGR digital system. Box No.3.

A. Producer will access the LGR digital platform and will attach the 100% advance payment request against the already attached sale
Agreement and upon attachment of the request the payment will automatically be triggered and the funds will be transferred to the
producers account. Box No.4
A. Box No.5, after receipt of payment and before physical goods transfer from producer to the trading company, producer will take access
on LGR digital platform and attach all the shipping documents on LGR platform. The LGR platform on receipt of requisite documents will
issue or trigger goods delivery receipt which will be given to trading company for release of goods. Such process will also enable the
trading company to sell the goods to end users. Box No.6.
A. The end users will attach Performa invoices issued by trading company and take access in LGR digital platform and transfer the payment
to the account of Trading company. Box No.7. On receipt of payments from the end users along with the Performa invoices the
payments will be automatically triggered and liability / loan of trading company will be settled by parts or in one full payment issued
against the banking instrument.
Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies
Supply Chain & Trade Finance.

Producer

Ground
Trading
Transportat
Co.
ion.

Port
LGR
Authorities

Producers
Shipping
Bank
Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies
Supply Chain & Trade Finance.

Importer / Trading Co

Flow of Goods

Exporter / Producer

4 Most Important Documents to be shared. 1. Performa Invoice. 3. Letter of Credit.

2. Insurance Policy. 4. Bill of Lading.

Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies
Supply Chain & Trade Finance.

Events 1. Letter f Credit Issuance. 2. Shipping and Inspection process.

3. Money Transfer.

Participants: Shipping Company------ International Shipping.

Producer.
Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies

Trading Company. Supply Chain & Trade Finance.

Port Authorities.

Custom Authorities.

Producer / Trading Co. Bank

 Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies

Exporter
Road Transport Port Of Loading Port of Discharge

Supply Chain & Trade Finance.

Importer
Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies
Supply Chain & Trade Finance.

Issuance of Letter of Credit

Validated By : International Shipping.
Importers Bank.
Port Of Loading.
Port of Discharge.
After Validation : Exporters Bank Accepts Letter of Credit.
Acceptance Acknowledgment attached in the system.
Inspection : By the Issuing Authority.
Certificate Issuance
Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies
Supply Chain & Trade Finance.

Inspection : International Shipping.

Certificate Validated By Importers Bank.
Port Of Loading.
Port of Discharge.

Bill of Lading Issued : International Shipping.

Validated By Importers Bank.
Port Of Loading.
Port of Discharge
Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies
Supply Chain & Trade Finance.

Shipment Will Move By Road : International Shipping.

To Port of Loading Validated By Importers Bank.
Port Of Loading.
Port of Discharge

Shipment Received from : International Shipping.

From Port of Loading to port of Importers Bank.
Discharge and Validated by Port Of Loading.
Port of Discharge.
Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies
Supply Chain & Trade Finance.
Shipment Off Loaded at : International Shipping
Port of Discharge and Importers Bank.
Inspected by Customs Port Of Loading
Validated BY Port of Discharge

Shipment Reached The : Importers Bank / Importer.

Importer and Money is Exporter / Exporters Bank.
Transferred from Importer
Or its Bank to Exporter
Validated By
Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies
Supply Chain & Trade Finance.
Benefits:

 Increased Speed and Reduced Errors: (a) Replaces Physical Documents and
 Privacy and Transparency
Processes, So physical transportation
documents not required, leading to
fewer delays.
(b) Rekeying of information eliminated
across the ecosystem.
(c) Shipment information and status
accessible to relevant stakeholders
instantaneously and simultaneously.
: (a) Limits view of information to the
appropriate parties. Provides end to
end visibility of cargo information for
all relevant stakeholders.
Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies
Supply Chain & Trade Finance.

 Scalable Ecosystem : (a) No single owner of the network;

participants can easily ‘plug in’ to
the information value chain to
enable trade.
(b) Neutral network lowers adoption
barrier for key participants with
‘veto power’ vs centralized solution
because:
1- Benefit of reducing paper and
digitization accrue to overall
industry.
2- No one player gains unfair
advantages.
(c) Decentralized ledger is immutable and
validated by all participants, fostering trust.
Lifecycle of LGR-Issued Digital Standard Letter of
Credit for Multi-Commodity Trading Companies