Click to edit Master text styles

Second level
TRADE FINANCE
Third level
TRADE FINANCE

Before we proceed with business, please share what you

understand by trade finance and how you think your bank is
handling this area.

2
DOCUMENTARY CREDIT UCP ARTICLE2

Documentary Credit and Standby Letter of Credit mean any

arrangement, whereby a bank (the Issuing Bank) acting at the
request and on the instructions of a customer (the Applicant) or on
its own behalf
i. is to make a payment to or to the order of a third party (the
"Beneficiary"), or is to accept and pay bills of exchange (Draft(s))
drawn by the Beneficiary, or
ii. authorizes another bank to effect such payment, or to accept and
pay such bills of exchange (Draft(s)), or
iii. authorizes another bank to negotiate, against stipulated
document(s), provided that the terms and conditions of the Credit
are complied with.

3
TRADE FINANCE

• Trade Finance module supports the recording and administration of

Letter of Credits and Documentary Collections.
• Fully integrated with the other T24 modules such as Limits,
Accounting, Position Management, Customer Portfolio, Delivery and
Security features.
• Transactions can be denominated in any currency.
• Drawings made under LC can be in a currency other than the
currency mentioned in the parent LC.
• Advices, Covering Letters, L/C documents, S.W.I.F.T messages etc.,
are automatically produced and advised.
• Preview of the documents that will be printed through the Delivery
system, is a special feature.

4
WHAT AREAS DOES THE TRADE FINANCE MODULE COVER

Trade Finance Module supports the recording and administration of

the following :
• Letters of Credit-
• Import
• Export

• Documentary/Clean Collections
The TF Module is equipped to deal with
• Input processing
• Checking processing
• Documentary processing
• Enquiries and Reports

5
TF PROCESSING

• Input processing:
all inputs pertaining to LC s, Collections, Drawings and the
necessary advices, messages to be generated, delivered-online
processing
• Charge Processing:
Default charges, recording of all charges to collect, when to collect,
amend, waive as well as view the position of charges
• Document Processing:
Where the necessary clauses, text etc., of the documents are
covered and the SWIFT messages etc., are processed
• Enquiries
Reports and messages generation

6
SALIENT FEATURES OF TF

• Set up of different product types (product designer)

• Set up of different pricing conditions and plans
• Different Financing products
• Online link to Limit processing
• Control of message production at transaction level (including the
carrier, address, sending time)
• Preview functions (at input and authorisation stages)
• Free format S.W.I.F.T / Telex messages
• Link to Accounting procedures
• Report generation (for MIS and other requirements

7
CORE TABLES LINKED TO TF

Some of the core tables/applications linked to TF module are:

holiday
customer account agency

NOSTRO.account VOSTRO.account country

Currency market
Currency.parameter currency

8
GLOBUS MODULES LINKED TO LETTERS OF CREDIT

LETTERS OF CREDIT AND DRAWING APPLICATIONS ARE ALSO

LINKED TO
• LIMIT (COLLATERAL LINKED)
either by setting up specific limits for applicants or through a
system default limit created automatically
• DELIVERY
• ACCOUNTING

9
IMPORT LC MECHANISM

Exporter Importer
London CONTRACT OF SALE INDIA
(beneficiary) (Applicant)

LC APPLICATION
Forwards LC

Midland Bank Bank in India

London Opens LC and sends
(Advising Bank) (issuing bank)

10
IMPORT LC MECHANISM

Importer
Exporter India
Ships goods
London (Applicant)
(beneficiary)

PAYMENT REIMBURSED
Presents documents
and gets payment

Bank in London
Sends Reimbursement Bank in India
(Advising Bank)
(issuing bank)

11
Letter of Credit

1. Importer desires to import machinery worth USD 100,000 from a

London Supplier.
2. The London supplier of machinery becomes an Exporter in UK.
3. Both Exporter and Importer executes a contract of Sale. (This is
step 1). This can be outside the purview of the Bank concerned.
4. The exporter faces country risk, buyer (importer) risk, exchange
risk etc., in this kind of an international trade. In order to safe
guard himself against these risks, he requests the importer to
arrange for an LC to be issued favoring him, so that he can get the
payment immediately after shipping the goods under the L/C.

12
Letter of Credit

5. Importer approaches a/his Bank for issuing an LC, covering the cost
of goods and shipment (Step 2).
6. After verifying the credit worthiness of the importer, his past track
records and Credit lines available, the bank opens a Letter of Credit
in favor of the London Exporter (beneficiary) and delivers it to the
correspondent bank in London (Correspondent). (Step 3)
7. After receiving the LC, the Bank (the exporter’s Banker) advises the
LC to the London Exporter. (Step 4)
8. Based on LC the exporter can avail pre-shipment or post-shipment
advances from his banker. This will augment his resource. He
procures materials and manufactures the machinery and ships to
the Importer as per LC terms. (Step 5).

13
Letter of Credit

9. Simultaneously with the shipping, the exporter also prepares

documents like invoice, bill of exchange/ airway bill, insurance
documents as per the LC terms and conditions and present them to
his banker for negotiation. (step 6).
10. Then, the correspondent Bank scrutinizes the documents and verify
whether they are in STRICT CONFORMITY TO THE TERMS AND
CONDITIONS OF THE LC and makes payment to the Exporter,
STRICTLY IN TERMS OF THE LC (Step 7).
11. Then the advising Bank submits the negotiated documents to the
issuing bank for obtaining reimbursement. If the documents have
been submitted as per LC terms then the issuing bank/confirming
bank has to make the payment without fail.

14
Letter of Credit

• Under LC the issuing bank undertakes the payment of the bill if documents
have been submitted as per LC terms. Issuing Bank cannot revert its
position after issuing the LC. So the bank in india will reimburse the amount
to the Bank in London. (step 7)
• Now the Bank in India recovers the amount of bill of exchange from the
importer and hands over the document to the Indian Importer. (step 8)
• Under this arrangement both the exporter and importer need not worry
about the country risk, buyer risk, seller risk etc. Exporter gets his payment
immediately after the shipment. Importer gets his goods, in terms of his
contract.
• The instrument LC is a safe mode of trade for both the exporter and the
importer.
NOTE: Banks deal only with Documents under the LC and not with any
goods shipped.

15
DIFFERENT TYPES OF LCS

• Revocable / Irrevocable
• Confirmed / Unconfirmed
• Revolving / Non-Revolving
• Cumulative / Non-Cumulative
• Red-Clause
• Transferable/Non-Transferable
• Back-to-back
• Assignment
• Sight
• Deferred Payment
• Acceptance (with usance tenor)

16
LC - INITIATION

• Various parties to an LC are: (Major/basic)

• Applicant /Openerimporter –buyer who receives the goods and
makes payment under the LC
• Beneficiary exporter – seller Recipient of LC who submits
documents under LC, on shipment of goods
• Issuing/Opening Bank Bank that opens the LC on behalf of the
applicant
• Advising Bank Bank that advises the LC to the beneficiary
• Confirming Bank Bank that confirms the LC- not mandatory
• Negotiating Bank Bank that negotiates documents under LC
• Reimbursing BankBank that reimburses the payment
• Same Bank can play the roles of Advising, Confirming and
Negotiating Bank.
• Issuing Bank can also be the Reimbursing Bank

17
LC - INITIATION

Life of an LC starts with the application from a client(opener)

for issue of an LC at the Bank.

Some common operations in the LC cycle:

• Pre-advise new Letter of Credit contract
• Open new LC/ Documentary Collection contract - Import
• Amend an existing LC/ Documentary Coll.contract -Import
• Advise/Confirm an LC - Export
• Drawings against Documents under LC –Import/Export
• Negotiation / Advance - Export
• Reimbursement /Payment- Import

18
LC OPERATIONS

• P Pre-advise a Letter of Credit. Accepts a reduced amount of

information regarding LC and when authorised, generates appropriate
advices for despatch to the parities in the transaction
• O Open a New LC. Also for converting a pre-advised LC in to a Live LC.
At this point, the credit limits are checked and utilised; contingent
accounting entries are raised and initial charges may be taken
• A Amend an LC. Allows details to be modified.Amendment advices are
generated for despatch to parties of transaction, if required.
• C Take a direct charge Charge input is performed, but charges are
immediately transferred to LC.ACCOUNT.BALANCES where they can
be amended in a limited way.
• T Trace a Documentary Collection. Generates a tracer message such
as S.W.I.F.T. MT 420
• D Decision on LC Amendments. For amendments where beneficiary’s
consent is required, table LC.Amendments is used . Amendments
are stored separately and effected after the consent is received through
this operation

19
LC - INITIATION

Life of an LC starts with the application from a client(opener)

for issue of an LC at the Bank.
Some common operations in the LC cycle:
• Pre-advise new Letter of Credit contract
• Open new LC/ Documentary Collection contract - Import
• Amend an existing LC/ Documentary Coll.contract -Import
• Advise/Confirm an LC - Export
• Drawings against Documents under LC –Import/Export
• Negotiation / Advance - Export
• Reimbursement /Payment- Import

20
LC OPERATIONS

• P Pre-advise a Letter of Credit. Accepts a reduced amount of

information regarding LC and when authorised, generates appropriate
advices for despatch to the parities in the transaction
• O Open a New LC. Also for converting a pre-advised LC in to a Live LC.
At this point, the credit limits are checked and utilised; contingent
accounting entries are raised and initial charges may be taken
• A Amend an LC. Allows details to be modified.Amendment advices are
generated for despatch to parties of transaction, if required.
• C Take a direct charge Charge input is performed, but charges are
immediately transferred to LC.ACCOUNT.BALANCES where they can
be amended in a limited way.
• T Trace a Documentary Collection. Generates a tracer message such
as S.W.I.F.T. MT 420
• D Decision on LC Amendments. For amendments where beneficiary’s
consent is required, table LC.Amendments is used . Amendments
are stored separately and effected after the consent is received through
this operation

21
SOME STANDARD TABLES

MAJOR STATIC TABLES: OTHER TABLES:

UNDER LC:
• LC.TYPES LC.TXN.TYPE.CONDITION
• LC.CLAUSES LC.ACCOUNT.BALANCES
• LC.ADVICE.TEXT LC.GEN.CONDITION
• LC.ENRICHMENT LC.GROUP.CONDITION
• LC.PARAMETERS LC.CUSTOMER.CONDITION
• LC.AMENDMENTS
• UNDER DRAWINGS:
• DRAWINGS.TYPE
• DRAWINGS.NEGOTIATION
• DRAWINGS
• DR.DISCREPANT.TYPE

22
IMPORTANT TABLES

The two major applications which are closely related in Trade

Finance are
• Letters of Credit
• Drawings
– LC is for the purpose of establishing a credit line – an
initial liability or the request to make a collection
– Drawings are used for the purpose of making Payments
and Reimbursements under the LC or otherwise.

23
LC.TYPES

• One of the primary tables to be looked into before establishing an LC is

LC.TYPES. This table contains the standard short names of the various
types of LCs with the corresponding CATEGORY Codes under which the LC
types should be reported.(Range allowed 23000-23999) Use of the LC.TYPE
is essential in building the foundation of the Trade Finance set-up for
accommodating transactions from clean collections to complex
documentary credits through the various phases of opening, drawing and to
maturity.
NOTE:
• It is essential that a category code exists for the type before creation.
• Do not modify the category codes or clean.credit fields, if any LC
transactions are existing with this LC type in the Live or Unauthorized files,
since any modifications may lead to conflicts in ASSET.TYPE in CRF(Central
Reporting File) entries.
• Category of an LC can be changed, after it has been opened, through an
internal amendment

24
LC.TYPES EXAMPLES

25
LC .TYPES

26
LC .TYPES

• This is the first level file in the GLOBUS Trade Finance

Module,which holds static data meant for LC s and Drawings.
• Parameter file can contain one record for each Company.
• The fields which are required for LC processing and which cannot be
obtained from other tables are to be mentioned in this table.
• Facilitates the addition, amendment and deletion of fields on the
record.
• Holds static data that is standard for LC s and Drawings processing.

27
LC.PARAMETERS

This table operates in three different areas such as:

1. Input-default - such as closure days, reimburse days etc.,
2. Entry-generation - such as credit/debit to various accounts (Customer
and internal)
3. End of the Day process (Pre-advise days etc.,)

28
LC.PARAMETERS

29
LC.PARAMETERS

30
LC.PARAMETERS

31
LC.PARAMETERS

32
LC.PARAMETERS

33
TIME-SAVER TABLES

• LC s usually contain lengthy descriptions of documents. There are

some useful time-savers, for entering such details of the LC
• Document descriptions can be entered as freeform text or, if there
is a standard type, the document details can be entered as a
codeword from LC.ADVICE.TEXT. Full text details appear in the
contract record, can be modified, and will be written to the advices
(whether printed or S.W.I.F.T).
• A similar feature exists for clauses. These can be entered as
freeform text or as a codeword from LC.CLAUSES .
• LC.ENRICHMENT is another table that holds narrations for short
codes and abbreviations, enabling the user to expand the meaning
of these codes into their own terms

34
LC.CLAUSES

Standard LC clauses are held in this table. They can be included in

an LC or Collection by use of the corresponding code without
having to resort to typing the lengthy, standard clauses. This is a
supportive table for the LC Application. CLAUSES.TEXT(M.V field
153), in the LC application gets populated with the data.

35
LC.ADVICE.TEXT

Holds static narrative information of standard data for use in the

printed advices and documents. It enables the short codes to be
entered (encouraging fast and accurate input) but full and
descriptive text is substituted and may be modified within the
contract. The application is fully multi-lingual. Field (87)
DOCUMENT.TEXT in the LC application takes the relevant data.

36
LC - ENRICHMENT

• This application holds longer descriptions for the codes and

abbreviations used in LC input that are not obtainable from other
files in GLOBUS. This enables the user to expand the meaning of
each of these codes into their own terms. Mainly used for basic LC
details. A support file for the enrichment data required to be
displayed while inputting LC transactions.

37
LC - INITIATION

• LC input will contain the relevant details of the Applicant, the

Issuing Bank, the Advising Bank and the Beneficiary. Apart from this
other details like the type of LC, Currency, Principal Value, Validity
Date, Shipping requirements, Documents to accompany the Bill of
Exchange etc should also be defined for opening an LC
• Preview of an LC input is possible at INAU status, in order to
facilitate corrections, if any, before validation. Links are obtained
through the PGM.FILE (LC) and LC.PARAMETERS (field-
backward.delivery)

38
LC IMPORT-PRE ADVICE LETTER

39
LC - INITIATION

40
LC - INITIATION

41
LC - INITIATION

42
LC - INITIATION

43
LC - INITIATION

44
PREVIEW OF AN LC

45
AMENDMENTS

• Amendments to LC can be Internal or External.

• For Internal amendments:
– No Advice is generated
– No amendment Number is generated
– Field Amendment.del is set to ‘NO’

• For External Amendments:

– Advice is required to be sent
– Generates Amendment Number
– Field Amendment.Del is set to ‘Yes”

46
LC.AMENDMENTS

• This table is used for inputting amendments which require

beneficiary’s concurrence.
• Status of amendment will be kept ‘Pending” till the beneficiary
approves the amendment
• Even if an amendment is PENDING through this table, still an
amendment can be input through the corresponding LC Application
after G12.1.release.
• We can effect amendments through a customized VERSION set-up
specifically to deal with amendments. However, if there are many
things that may require amending we can have one large VERSION
detailing all fields or we can set-up a VERSION that deals with
specific types of amendments

47
LC.AMENDMENTS

• Introduction of ‘D’ operation in LC

• 2 New fields in LC:
- AMEND.NO
- AMEND.STATUS
• Can Approve or Reject the amendment
• Entries are passed only during amendment Approval or Rejection
• A separate limit line when amendment made
• When approved, the LC line is increased or decreased based on the
amendment
• The amendment line is reversed off
• Drawings cannot be done when LC amendments are pending
• Status in LC.AMENDMENTS changes as per the authorised LC record.

48
LC.AMENDMENTS

LC amount gets changed

Liability portion and LCCY portion changes

49
CHARGES AND COMMISSIONS UNDER TF

• Setting up charges and commissions

• L/C types and operations
• General conditions for client groups
• Direct charges
• Record of L/C charges

50
CHARGES AND COMMISSSIONS

• Banks collect various types of Charges & Commissions for Trade

Finance activities such as LC opening, advising, confirming,
amending, negotiating, collections etc
• These are collected from Opener or Beneficiary or any Third party
• Collected immediately or any time later
• Can be uniform or customer specific
• Calculated on LC amount + Positive Tolerance
• Can be amortized or accounted immediately
• Separate currency market can be defined and invoked for charges
under LC and Drawings through LC/Parameters (field
Chg.Curr.Market)

51
CHARGES UNDER TF

• The LC.TXN.TYPE.CONDITION table is used to define default charges for Trade

Finance products such as Letter of Credit/ Documentary Collections and Drawing
types. Each input into the Letter of Credit system will have a set of default charges in
this file set up.
• The defaulting mechanism works by defining in this file a record corresponding to
each type of L/C (LC.TYPE), together with the operations that can be performed.
This Table is linked to tables such as
• CONDITION.PRIORITY
• LC.TYPES
• FT.CHARGE.TYPE
• FT.COMMISSION.TYPE
• LC.GEN.CONDITION
• LC.GROUP.CONDITION
• LC.CUSTOMER.CONDITION

52
Default Trade Finance Charges

• LC.TXN.TYPE.CONDITION : The key to this table should be a

combination of the LC Type along with the Operation code of LC or
the Drawing type.
• This table is used to define default charges for trade finance
products. This would ensure that when a specific deal type is
entered the correct charges, fees and commissions are applied in
accordance with the bank’s scale of fees.
• Charges can be defined for each product (as defined on the
LC.TYPES application), for each operation on those products (such
as pre-advising, opening and amending the letter of credit etc.), and
for each drawing and type of drawing made under an LC product.

53
CHARGES AND COMMISSIONS

• LC.GROUP.CONDITION
– ID = Condition group code
– Rate.spread
– Percentage to be charges for charge and commission types
– CUSTOMER.CHARGE
– System defaults group conditions for specific customer
– Specify group condition per application

• For Ad-hoc charges

– Link FT.CHARGE.TYPE or FT.COMMISSION.TYPE
– Party charged

54
CHARGES UNDER AMENDMENT

• Charges along with tax can be recovered through the application

LC.AMENDMENTS with the status of '2' or NULL in the field
CHARGE.STATUS. However, if the charge amount is not input and
has to be calculated by the system, then the CHARGE.BASE.AMT is
mandatory (FIELD No 43). This is to enable the system to calculate
the quantum on which the charge is to be calculated. If
CHARGES.ACCOUNT is input in the Letter of Credit, the same is now
defaulted in LC.AMENDMENTS.
• If tax is set for the CHARGE.CODE input, it is calculated and stored
in the same multi-value. The tax however will be calculated only if
the CHARGE.STATUS is set to 2.
• In the event of LC.TXN.TYPE.CONDITION defined for Amendment of
a LC.TYPE, it is defaulted when an amendment is done. These
charges are appended to LC.ACCOUNT.BALANCES with the LC
number as the reference.

55
CONDITION.PRIORITY

• To enable need based grouping for charges and commissions, it is

essential to set the CONDITION. PRIORITY file for Letter of Credit
properly
• This should take care of the present as well as future business
needs.

56
LC.TXN.TYPE.CONDITION

• When we create a VERSION for import LC s – (operation such as pre

advise, open etc.,) we will have the LC.TYPES record default in the field
LC.TYPE and the OPERATION field will be also be defaulted as ‘P‘ or ‘O’ etc.,
this will select the relevant LC.TXN.TYPE.CONDITION record and apply the
charges and conditions
We can also set up default charges to special clients
To amend the default charges for special clients or those belonging to a pre-
defined group the following condition group files need to be set up:
• LC.GEN.CONDITION - general condition
• LC.GROUP.CONDITION – group condition
• LC.CUSTOMER.CONDITION – for a specific customer
• All charges are automatically updated in the CUSTOMER.CHARGES file

57
FT.CHARGE.TYPE

58
FT.COMMISSION.TYPE

59
LC.TXN.TYPE.CONDITION

60
LC.GEN.CONDITION

• This file holds the general conditions pertaining to the Trade

Finance Customers/groups

61
LC.GROUP.CONDITION

• In this table, the user can define specific conditions regarding

charges and commissions for a group of customers in the TF
department.

62
LC.CUSTOMER.CONDITION

• This file enables the user to define customer specific conditions on

Charges/commissions and Provisions.
• Defining Provision conditions specific to a customer is a special
feature of this table.
• When Provision conditions such as Percentage, Provision Debit and
Provision Credit accounts are defined, these conditions are
defaulted whenever an LC record is input for the customer and
Provision field is set to Yes.
• The conditions specified here can however, be overridden in the
individual LC record as per the requirements of the User.

63
LC.CUSTOMER.CONDITION

64
LC.ACCOUNT.BALANCES

• System generated file. – ID of Record = LC Number

• Contains authorised charges under a single LC transaction.
• Record is automatically created, up-dated and maintained by the
system
• All charges from the contract LC record to this new record in order
to reduce the size of the LC file
• Any claimed charge can be settled through this application.
• Charges can also be reversed through this application.
• Record is automatically closed and written to History when the LC is
closed from the system.

65
LC.ACCOUNT.BALANCES

66
MORE ON CHARGES

• Charges can be accounted in any currency.

• Discount accruals can be performed daily, weekly, monthly or at any
other frequency.
• Charges accruals are performed monthly.

67
DELIVERY- ACTIVITY CODE

• First step in the process of Delivery is for GLOBUS to allocate an

activity code number for the transactions.
• GLOBUS will determine the code based on the data and fields
populated.
• This is Hard-coded and system- generated.
• Descriptions are held in EB.ACTIVITY

68
SAMPLE ACTIVITY CODES

1000 LC Opening and Pre-advice

2000 LC Amendment/Charges/Tracing
3000 Drawings - Sight Payments
4000 Drawings - Usance Payments
5000 LC Shipping guaranteed
100 Outward
200 Inward
400 Export
00 Input/Authorisation (Default)
01 Opening Input/Authorisation
02 Pre-advice Input/Authorisation
11 L/C Expired on LC.EXPIRY date
12 Pre-advice Expiry on LC>EXPIRY
date
90 Reversal / Authorisation

69
LC-DELIVERY

• By using Delivery application we can redefine, amend advices, documents

and covering letters.
• Each LC type will have its own application format designed in
DE.FORMAT.PRINT and selected in the LC.TYPES Record.
• Inward delivery of SWIFT messages could be accommodated for message
types MT700 series by using the application- LC.IN.PROCESSING.
• Drawings application is used for collection of funds or for making payments.
Payments can be made even to the parties not involved in the LC, through
this application.
• System automatically liquidates all maturing contracts on maturity date and
generates necessary payment advice in advance.
• You may also set up free format messages for S.W.I.F.T. and Telex in the
Soft Delivery system of T24.  The application name for this process is
EB.FREE.MESSAGE .

70
OUTPUT OF LCS AND OTHER DOCUMENTS/ MESSAGES

MT 700 series for LCs and MT 400 series for Documentary Collections
SOME IMPORTANT MESSAGE REFERENCES
• MT 700 Issue of LC
• MT 705 Pre-Advice
• MT 707 Amendment
• MT 710 Advice of another Bank’s LC
• MT 720 Transfer
• MT 730 Acknowledgement of receipt of LC / advice for charges
• MT 732 Advice of Discharge (to Beneficiary - Discrepant documents
• MT 734 Advice of Refusal (of Discrepant Documents)
• MT 742 Reimbursement Claim
• MT750 Advice of Discrepancies (Negotiating Bank to Opening Bank)

71
MESSAGE REFERENCES- CONTD

• MT 752 Authorisation to pay, accept, negotiate documents

• MT 756 Advice of reimbursement/payment
• MT 754 Advice of Payment/acceptance/negotiation of documents
• MT 790 Advice of Charges debited
• MT 791 Request for payment of charges
• MT 400 Advice of payment
• MT 410 Acknowledgement
• MT 412 Advice of Acceptance
• MT 430 Amendment Instruction-collections

72
DRAWINGS

• Once the goods have been despatched and the appropriate

documents have been presented to the Bank for payment (either
directly or through an advising bank) and if the documents are in
order, then we will input a drawing.
• Drawings will record the transaction, altering credit limits and
accounting appropriately. It will automatically make the required
payment(s), perhaps via S.W.I.F.T., and advise the various parties if
required. Charges could also be taken at this point.
• Drawings can be made only if the LC is opened and if the draw
type is the same as the LC type defined in the LC

73
DRAWINGS

• Drawings could be in a different currency from that of the draw

down account.
• The payment date can be future or back valued.
• The date entered here will be the date that CRF, Statement, and
Category entries will be generated for this L/C. If the date specified
is in the future, then the end of day batch of this date will generate
the required entries.
• The Fully Utilised or not field provides the user with the ability to
indicate that no further drawings will be made under the letter of
credit.

74
DRAW.TYPES

• Drawing Types
– AC Acceptance
– DP Deferred Payment
– RP Release Payment
– SP Sight Payment
– CH Collection of deferred charge in AC/DP

• Amendments to Drawing Types

– MA On line maturity of AC
– MD On line maturity of DP
– AD Amendments to SP drawings

75
DRAWINGS

• For Drawing types of 'AC' and 'DP', a term or usance credit is established
whereby the funds will be debited and paid on the MATURITY.REVIEW date
specified.
• If 'SP' is entered, then both Payment and reimbursement is made on the
VALUE.DATE specified.
• For 'AC' and 'DP' type drawings, once the maturity review date is reached
and the drawing undergoes maturity processing, then the Drawing type will
automatically change to 'MA' (From 'AC'), and 'MD' (From 'DP'), indicating
that these deals are now matured.
• When a drawing type of RP is used for an Export LC, this will generate a
message (MT754) acknowledging documents were presented in accordance
with the terms and conditions of the underlying credit and also a claim for
reimbursement (MT742). Alternatively, an Import LC will generate the
release of a payment, to the beneficiary, in the form of a Customer Transfer
(MT100).

76
DRAWINGS

• When correct documents are presented, AC and DP used as per tenor.

These may be discounted by the bank.
• RP - For export LC, this will indicate that documents are presented as per
LC terms and will generate a claim for reimbursement. In import LC will
generate release of payment to beneficiary in the form of customer
transfer.
• SP – Payment made immediately to the beneficiary or collecting bank with
reimbursement claimed from applicant or opening bank.
• In Drawings application charges can be collected via CH operation code to
collect deferred charge of a particular AC or DP type of drawing.
• While amending an existing drawing,
• MA and MD allow on-line maturity. If they had been discounted, drawings
can’t be changed.
• AD allows amendment to SP drawing (in a very limited way as payment has
been effected - details of documents can be changed)

77
ACCOUNTING IN DISCREPANT PROCESSING

2 entries are raised:

- Normal Collection entry
- A contingent entry – PAYRES
When the document is Accepted
- Contingent entry is reversed out
- Normal Acceptance entries are passed

78
DISCREPANT PROCESSING

• Globus allows processing of drawings with discrepancies.

• DR.DISCREPANT.TYPE is the table that enables customising various
types of discrepancies.
• Fields:
– DISCREPANT.TYPE
– IN.DISCREPANCY
– PAYRES.PARTY

79
DISCREPANT PROCESSING

• Can be set up for Export/Import

• The Risk party can be decided
- ISSUING.BANK
- PRESENTOR.CUST
• Activity can be chosen
• Message can be chosen
• Trace.date/Discrepancy field validations
• Payment Under Reserve can be chosen

80
DR.DISCREPANT.TYPE

81
DR.DISCREPANT.TYPE

82
LIMIT AND DISCREPANT PROCESSING

• If ISSUING.BANK is chosen as the Risk Party,then the Limit set for

the Issuing Bank is hit.
• If PRESENTOR.CUST is chosen as the Risk Party, his Limit is hit. On
Acceptance, the Presentor's limit is reversed out and the bank’s
limit is hit.

83
MESSAGING IN DISCREPANT.TYPE

• The Activity chosen in Discrepant table will override the actual

activity.
• The Message class can also be chosen
• Based on the Discrepant type chosen, a message on the
discrepancy found can be sent only to the customer or both to the
customer and the bank.

84
DRAWINGS

85
DRAWINGS

86
DRAW.NEGOTIATION

• A front-end tool to input multiple Drawings in to DRAWINGS

Application.
• Mostly used for Mixed-Payment type negotiations
• Facilitates inputting of more than one Drawing through a single
window, instead of opening a number of Drawings for Mixed
Payments.
• Once authorised, data is locked and cannot undergo any changes.
• Existing records on the table can only be Seen or Printed.
• Id is DNXXXXXXXX (XXXXXX- stands for the LC number)

87
DRAW.NEGOTIATION

88
DRAW.NEGOTIATION

89
BROKERAGE

• GLOBUS facilitates collection of Agency charges on Letter of Credit

Drawings. An agent is a broker or middleman between the importer and the
exporter and gets his fee or commission from the Letter of Credit Drawings
amount as a percentage or flat amount.
• The brokerage details are entered on the Drawings contract where
required.
• Brokerage may be settled in any currency defined on the broker record. The
amount of the brokerage is held in three places, which may be in three
different currencies.
BROKERAGE                - Held in the currency of the
drawing.
BROKER.AMOUNT        - Held in the broker currency.
BROKER.AMT.LCY        - Local currency equivalent
of the BROKER.AMOUNT

90
DISCOUNTED DRAWINGS

• Beneficiary of an Export Usance transaction may wish to receive funds in

advance of the maturity date.
• Their bank may discount the drawing and pay the proceeds to them after
collecting discount charges for the remaining period.
• At maturity, the Issuing / Remitting bank will reimburse beneficiary’s bank.
• Export LC is opened through appropriate LC.TYPE
• Discounted through DR application by giving details of
– Discount rate
– Discount amount
– Load rate
– Load amount

• Special instructions are given through clauses.text

91
INTEREST RELATED LC DEPENDENCIES

• BASIC.RATE.TEXT and PERIODIC. INTEREST are the tables used in

Discounted Drawings using tiered system of rate calculations.
• The Table may be automatically updated or interfaced daily with an
external feeder such as Reuters or maintained manually by the
User.
• Periodic Interest keys are generated daily by the system.

92
ASSIGNMENTS

• TF application allows assignment of proceeds.

• If the beneficiary informs the bank of assignment, this may be noted in the
LC itself by use of the fields ASSN.REFERENCE, ASSN.CUSTNO, ASN.ADD,
ASSN.AMOUNT and ASSN.NOTE.
• As a beneficiary may like to assign the proceeds to multiple persons, this
set of fields is multi valued
• Actual assignment and payment of proceeds happens only when drawing is
input.
• Entering the information in LC makes the input in drawings simpler.. Details
may be entered in Export LC application itself. But the details can be
completely changed during drawings even if not specified earlier.
• Wherever an assignee has not been specified in the LC but has to be
introduced in DRAWINGS, reserved word TPPAY can be used in the field
ASSIGNMENT.REF

93
STAGES IN DOCUMENTARY COLLECTION

SEQUENCE OF DRAWING.TYPES:
• CO when there are discrepancies in documents/processing
documentary collections and documents are sent for collection
• CC used to chase Drawings sent for Collection (from CO to
CC)
• CR used to signify that the drawing sent for collection has been
rejected by the issuing bank
• FR Final Rejection

94
Documentary Collections

• Collections are handled in GLOBUS by the Trade Finance module. These can
be inward or outward; clean or documentary being part of an LC.
• There are VERSIONs supplied as examples but using the LC.TYPES, the user
can create a database of collection types with the charges defaulted as per
their scale of charges.
Some types are :
• Documents against Payment (DP)
• Documents against Acceptance (DA)
• Discounting of Acceptance Collections
• Sight Payments (SP)
• Mixed Payments
• Clean Collections.

95
COLLECTIONS

• Once a payment is received from the receiving bank, a simple

DRAWING VERSION is used for debiting the NOSTRO and crediting
the bank’s client (or bank’s own account).
• Using the same facilities for collections as for LCs allows the
flexibility to set-up the type of transaction required by the business.
• Inward collections are treated in the same manner, and
documentary collections (whether linked to an LC or not) are
handled as well.

96
DIRECT COLLECTION ALLOTMENT

• New front end called DIR.COLL.ALL

• Can allot different reference numbers to customers in ranges
• Can use them while creating an LC
• Can be used as a mnemonic to retrieve an LC of a particular
customer.
• Cannot allot the same number across LCs

97
DIRECT EXPORT COLLECTION REFERENCES

• Direct Collection References are used when an Exporter desires to

send the documents directly to his buyer, without routing them
through the bank, but desires to get the payment through the Bank
• The Bank may give the customer a series of pre-allocated reference
numbers or pre-printed documents to use for sending direct to
buyers. The GLOBUS internal reference number can only be
assigned when the details of the collection are known. The
DIR.COL.ALL application allows sets of numbers to be pre-allocated
to a customer and used as alternative references to collections.
• The reference consists of an optional alphabetic prefix and a serial
number. Consistency should be followed in allocation of references.
A reference from the allocated series can be entered in the
DIRECT.COLL.NO field of a LC. Then the customer number and
reference number can be used as a key to the deal record

98
EXPORT LETTERS OF CREDIT

• Export Letters of Credit are handled and are treated in a similar

manner as to that of the the Import LC s.
• The Import LC opened by the issuing bank will be the Export LC at
the counters of the Advising Bank who in due course we may
undertake to accept documents from the beneficiary under the
terms of the credit.
• The same conditions can apply in as much as the credits can be at
sight, acceptance or deferred payments and scale of charges is
related to the role of the exporter's bank.

99
EXPORT LC

• GLOBUS supports the creation of the LC manually or on a semi-

automatic basis on the receipt of an incoming S.W.I.F.T message.
The same processing is made as in the case of import, but in this
instance, it would be in the opposite role.
• On receipt of the incoming S.W.I.F.T message, with proper
interfaces, the LC comes to IHLD status, automatically. It is then
entered in the books upon authorisation.
• Relevant messages are: MT 730 - acknowledgement
MT1730- advice to beneficiary

100
TRACERS

• Tracers are a tool for chasing a Documentary Collection . The frequency can
be set from the COUNTRY table or EB.FREE.PARAMETERS
• Once a Collection is scheduled, the EB.FREE.MESSAGE gets written with the
relevant details. TRACER.STATUS as 'SCHEDULED', DATE as the next
Tracer date and may or may not contain the respective frequency.
• User has the option to define the frequency for the specific input.
• When the realization of the proceeds takes place an override message is
generated to inform that further Tracers would be stopped. Then the Status
is changed to STOP.
• Similarly in the case of Import Collection documents or Collection Drawings
under Import Letter of Credit, these Tracers may be sent to the Importer
with the appropriate message at the frequency  decided by the User.
• The field TRACER.DATE and TRACER.DAYS are supported from the LC
application and the field TRACE.DATE from the Drawings application. For a
Collection Drawing under a Letter of Credit, the TRACE.DATE is a
mandatory input.

101
DOCUMENTS UNDER TRUST

• When a discrepant document is received,documents may be

released to the importer, without receiving the payment, at the
discretion of the Bank, under TRUST.
• Bank can also register this activity in LIMIT.PARAMETER, both for
LC and DRAWINGS. The consol entries generated for these types of
"Trust" related transactions bear the ASSET.TYPE as TRCOLL
instead of COLL.

102
TRUST RELEASE

• The relevant fields open up when the DR.TYPE is CO(llection) and

they are:
– TRUST REL. (ACCEPT/RELEASE/REJECT)
– TRACE.DATE
– DISCREPANCY
• The functionality is made available to the Banker to ascertain at any
point of time the exposure on a Customer even if the document
were under collection, because the same are no longer held with
the Bank. 
• As these transactions hold a separate ASSET.TYPE, the same may
come handy to meet the MIS requirement of assessing the quantum
of document released under Trust. These however are not relevant
to Export documents.

103
Example Versions

• From Pre-Advice to Export Letter of Credit

• Amend an Export Letter of Credit
• Direct Charge Processing
• Reversal of a Letter of Credit
• Sight Payment Drawing under an Export Letter of Credit
• Deferred Payment Drawing under an Export Letter of Credit
• Acceptance Drawing under an Export Letter of Credit
• Discount of Acceptance / Deferred Payment Drawing under an Export Letter
of Credit
• Straight Discount of Deferred Payment Drawing under an Export Letter of
Credit
• Straight Discount of Acceptance Drawing under an Export Letter of Credit

104
Example Versions

• Deferred / Acceptance On-line Maturity Drawing under an Export

Letter of Credit
• Drawing under Import Letter of Credit Sight
• Drawing under Import Letter of Credit Acceptance
• Drawing under Import Letter of Credit Deferred Payment
• Documents sent for Collection
• Documents sent for Acceptance
• Collection Tracer
• Collection Rejection
• From Collection to Sight Payment
• From Collection to Acceptance

105
Example Versions

• From Collection to Deferred Payment

• Incoming Collections
• Outgoing Collections
• Amendments to Collections

106
ENQUIRIES AND REPORTS

Enquiries and Reports will be required on various events in TF

operations like,
• Outstanding LC s
• Outstanding drawings
• Outstanding acceptances & deferred payment drawings
• History of charges and payments
• Alternative to history processing
• Collections due

107
ENQUIRY

• The ENQUIRY application may be used to write enquiries for the

Trade Finance application.
• LC.SUMMARY ENQUIRY provides an overview of an individual letter
of credit including its drawings history.
• The Enquiry DR.DISC.SUMMARY provides an overview of all the
amendments made under a Discounted Drawing. It takes the ID of
the Drawing and fetches all the amendments made under that
Drawing.

108
WORKSHOP 1

• Create a new LC.TYPES (after creating a new Category Code)

• Create a new LC.CLAUSES
• Define a new LC.ADVICE.TEXT

109
WORKSHOP 2

1. Pre-Advise a sight, revolving, confirmed,LC for USD 100000- in the

name of ABC Corporation, on behalf of XYZ Company with Expiry
date, shipping details, documents to accompany etc.,
2. Link all relevant tables.
3. Verify charges being appropriated correctly
4. Preview the S.W.I.F.T. advice at input stage before authorisation
5. Authorise the LC and then Open the same

110
WORKSHOP 3

For the same LC opened earlier,

• Amend the date of expiry
• Amend the list of document
• Input a Charge Operation
• Check charges LC.ACCOUNT.BALANCES
• Check the messages to be generated

111
WORKSHOP 4

Exporter has presented documents under the LC opened

earlier. Deal with the documents under
1. SP DRAWINGS FOR A PORTION
2. Collection basis for another portion
Pass through the various CO,CC,CR,FR stages

112
WORKSHOP 5

• ENQUIRY:

• View LC.SUMMARY for the LC created in Workshop 2

• View LC.CLAUSES created in W.S 1

• View LIAB.LC

113
LIMTS AND TF

• Setting a limit for a client in GLOBUS allows the lender to control

exposure to that client and also to monitor their own overall
position.
• The limit will enable the clients transactions to be processed without
problem provided the transaction falls within the agreed limit.
• The application will also allow clients to draw facilities in different
currencies and will re-calculate the outstanding amounts into the
currency of the limit.

114
LIMITS AND TF

• For an import letter of credit, limit is set up for the importer.

• For an export letter of credit, limit is set up for the bank that
‘opened’ the LC.
• For an export letter of credit where the bank that ‘opened’ the LC is
either the Head Office or a branch or a subsidiary company, the
limit customer will be the bank itself.
• Limits can be updated in several ways; it is possible to define
default limits where the drawing (issuance drawings) under an LC
uses the same limit. Hence, as the contingent liability of the LC itself
is reduced, the DRAWINGS create a corresponding increase. Of
course separate limits can also be defined.

115
LIMIT

• If no limit is set up for the customer, then the system will automatically
check the LIMIT.PARAMETER table and default a reference to the
corresponding type of LC/DRAWINGS and populate the relevant field
(port.limit.ref), for each LC transaction.
• The customer for whom limit will be checked is the customer in the field
CON.CUS.LINK.
• If no limit exists for the customer, an override message will be displayed at
the time of committing the input.
• LCs can be used as items of Collateral either individually or through a
portfolio. Limit update has to be input for the first of series of amendments
for a given LC. It is a onetime input.
• Setting it to ‘Y’ will enable limit updates to take place when amendment
record is authorised. If set to ‘NO’, no update takes place.
• Limits are not applicable for an advised letter of credit.

116
LIMITS AND LC AMENDMENTS

• The field LIMIT.UPDATE has to be input for the first of the series of
amendments for a given LC. It is a one-time input. Setting this to
YES will enable the limit update to take place once an amendment
record is authorized. This limit update happens only for the portion
of amendment when there is an increase in the liability of the Letter
of Credit and it is posted as a separate line at first. Only after
approval of the amendment this second line is deleted and the
original LC line is impacted.
•  If the LIMIT.UPDATE is set to NO, no limit update would take
place on authorization of the amendment. However when the same
is 'Approved' in the Letter of Credit the limit is updated.

117
LIMITS AND PROVISIONING

• Provision processing is also known as Margin processing.

• For a customer with a standard provision account and percentage,
we can set-up the LC.CUSTOMER.CONDITION file with the defaults
for the provision account/percentage by Letter of Credit type.
Note : Throughout the Trade Finance module this
processing will be referenced as Provision processing

118
LIMITS AND PROVISION

• Provision is closely linked with limit.The limit record is updated only

to the extent it is not covered by provision. Where margin is taken,
limit is impacted after netting the margin amount.
• Choice for this function is left to the user, through the field
LIMIT.WITH.PROVISION in the table LC.PARAMETERS.
• Provision/cash cover/margin/collateral, can be credited to an
interest bearing account or to an internal account, as per the choice
of the parties concerned.
• Provision account may have values set up in the table,
LC.CUSTOMER.CONDITION. Or else, internal account based on
Prov.categ input in LC.PARAMETERS is used.
• Values set up at the parameter level, default at the record level but
have the ability to override at record level.

119
MORE ON PROVISION

• In case of partial confirmation, amount considered for provision

account is from the value input in the field CONF.AMT in the LC
application.
• TF module also provides for a refund or release of the provision at
the time of settlement or as required at any time earlier.
• Provision can be taken even for more than 100% of the LC value
under certain circumstances. LC + ve Tolerance value can be
added to the LC value for the purpose of provisioning.
• In a mixed payment LC, the provision is distributed among different
portions
• Proportionate Provision will be refunded to the original account
during a normal drawing.

120
LIMITS AND PARTIAL CONFIRMATION

• The limit should be affected for the confirmed part as that is the
exposure the has, for the LC opening bank.
• Alternately, it may choose to have 2 limits – One for the confirmed
part and another for the Unconfirmed part (Information line).
• For updating the limits the relevant limit lines are hit for the
respective amounts. This is done as defined in the
LIMIT.PARAMETER for the confirmed portion and the information
limit line for the unconfirmed portion. By default the limit line for the
unconfirmed Letter of Credit is the Information line.

121
LIMITS AND PARTIAL CONFIRMATION

• There may be instances where the Bank may choose not to hit the
information limit line for the unconfirmed portion in a partially
confirmed Letter of Credit. This is controlled from the
LC.PARAMETERS at the field UNCONFIRMED.LIMIT. When this is set
to YES the unconfirmed limit line, in absence of any user input into
the field UNCONF.LIMIT.REF. in the Letter of Credit, is hit with the
information line and when set to NO, limit update happens only for
the confirmed portion.
• UNCONFIRMED.LIMIT is input only once at the time of installation or
upgrade. Once the Parameter record is authorized the same cannot
be changed. Reason being, the Bank may have only one stand of
either having an unconfirmed limit update or not. It generally will not
vary from one Letter of Credit to another.  
• At the time of input of LC, the fields CONFIRMATION.AMT and
UNCONF.LIMIT.REF. open up, prompting input. 

122
GRACE PERIOD

• Additional Interest Component in terms of number of days

• Available only for Discounted Drawings with Interest rate
• Amortization only till the maturity date of Drawings
• Not available in DR.DISC.AMENDMENTS

123
SYSTEM MAINTAINED TABLES

GLOBUS maintains a number of Tables generated by the

system
• LC.APPLICANT
• LC.BENEFICIARY
• LC.DISCOUNT.BALANCES
• LC.ISSUING BANK
• LC.NEGOTIATE
• LC.PARENT.DRAW
• LC.REVOL
• LC.TRANSFERABLE

124
REPORTS GENERATION

GLOBUS facilitates generation of a number of Reports

• For the effective handling of TF activities
• for the MIS purposes
• for monitoring and follow up purposes
Most of these Reports can be customised

125
REPORTS

• List of all LCs by type and Currency

• List of all outstanding LCs by Customer and Issue date
• List of LCs by Beneficiary
• List of all LCs by expiry date
• Collections Due Report
• Outstanding Acceptance/Deferred Payment Drawings Report
• List of all Pre-advised LCs

126
DELIVERY

GLOBUS BANKING MODULES

OUTWARD MESSAGE

INWARD MESSAGE
DELIVERY

MESSAGE MANAGEMENT

CUSTOMER NAME AND ADDRESS

STATIC INFORMATION

127
TERMINOLOGY USED IN DELIVERY

• DE Delivery in the programs

• O or I Outward or Inward message flow
• Mapping fields required for messages from the raw application data.
• Formatting getting the message ready for a specific output e.g. SWIFT,
PRINT
• Queues, in the processing and management of messages the control of
messages within a queue and the movement between them is half of
the work required
• Phantom processes which do not require a terminal attached while
they are running.
• MM abbrev within Delivery for message management and not
Money Market
• Header Starting point for Audit trail in Delivery. Header provides the
unique ref which is passed back to the application.

128
MESSAGE IDENTIFIER

• UNIQUE identifier
XYYYYMMDDSSSSSSS
X is “D” for Outward or “R” for Inward
– YYYYMMDD is the date
– SSSSSSSis the time to 1/100ths of a second
• e.g. D199502124062500
• With copy number
• UNIQUE identifier
XYYYYMMDDSSSSSSS.N where “N” is the copy number
• Copy number is not added for Inward messages
• The Header expands for every copy of the message created

129
MESSAGE IDENTIFIER

• Outward messages can have more than one copy eg SWIFT

statement and paper statement
• To identify different messages, the message id is appended with the
copy number.
• This UNIQUE key is used throughout the life of the message
regardless of which queue the message is currently in.
• Once the message has been through DE.MAPPING a record is
created on the header file DE.O.HEADER with this key.

130
MESSAGES

1. Go to the EB.MESSAGE.CLASS application and set up individual files for the various
message classes that you need (i.e., ADVICE, CONFIRMATION ETC,)
2. Make entries in the following fields after you have created record(s) with unique
name in step 1:
GB.DESCRIPTION
CLASS.ID
CLASS.CONTROL
3. Go to the LC.PARAMETERS application and make the following entries in the fields
listed below:
a. In the field named BACKWARD.DELIVERY enter either a Y or N for Yes or No.
b. In the field named LC.CLASS.TYPE enter the name of the L/C class type of
message.  There are different message classes pre-defined in the T24 system. 
Expand this field, as many times as necessary to input all of the L/C message class
types that you need.

131
MESSAGES- contd

4. In the field named EB.CLASS.NO in LC.PARAMETERS type the name

of the class message from the list (located in the
EB.MESSAGE.TYPE application) that you have pre-defined in the
T24 system.  (These are user created messages and are not pre-
defined in T24 as are the LC.CLASS.TYPE message entries above in
step b). 
5. Go to the DE.FORMAT.PRINT application and set up the various
message advice types that you need.  Either enter new numbers for
new formats that you need (note that you will also have to set up
corresponding files with the same number in DE.MESSAGE and
DE.MAPPING if you enter new message numbers OR use the
existing file formats in the DE.FORMAT.PRINT, DE.FORMAT.SWIFT,
DE.FORMAT.TELEXF, and DE.FORMAT.TELEXP applications as
supplied with the T24 system.

132
TO CONTROL MESSAGE OUTPUT IN THE LC
AND DRAWINGS APPLICATIONS

• For L/Cs, enter information in the fields as shown in the

table below:

133
SOFT DELIVERY SYSTEM

• Once an LC is input with all required details, the user can launch a
preview of the messages that are applicable for the activity.
‘Delivery Preview’ is shown under an icon, in the Toolbar. This
needs to be triggered after completing the input, at INAU status,so
that preview can be launched. After launching the preview, the
delivery related fields in LC would have been populated as shown
here and the user can determine whether to send it or not. In
addition to that, the user can also override the carrier of the
message if required.

134
SCREEN SHOT OF FIELDS RELEVANT
TO DELIVERY

135
DRAWINGS

136
SOFT DELIVERY SYSTEM

• Delivery and Document production is one of the most important

areas in Trade Finance
• Soft delivery concept enables the user to control the delivery system
according to his requirements at the transaction level itself.
• User can decide the time and type of message he wants to produce
• LC and Drawings employ the mechanism through EB.ACTIVITY and
EB.ADVICES for the delivery process.
• Preview of the document is possible.
• For Usance delivery, number of days prior to maturity when the
message should be generated, can also be specified.

137
Soft Delivery

• The Trade Finance application automates the production of

S.W.I.F.T messages in the 700 and 400 ranges (700 for letters of
credit and 400 for documentation collections. The system also
generates MT100 (currently 103) and MT200 series messages for
payment under transactions.
• Globus Soft Delivery system controls the messages that should be
generated at various stages of the life cycle of the transactions.
• It enables creation of documents during transaction processing.

138
DELIVERY

• The two major, relevant LC.PARAMETERS fields responsible for the

delivery messages are
1. Delivery with Discrepancies(field 62) -If set to Yes, delivery
messages will be generated irrespective of the discrepancies.
2. Take over Process(field 75) - If set to Yes, no delivery will be
produced. This field is generally used in implementation, while
taking over old data.
• Another important factor to note is that message type of MT750
(advice of discrepancy) is produced, in case of ELCs- determines
whether message is to be produced if there are no discrepancies in
the Drawings contract.

139
Swift Messages

Swift messages have fixed format with specific tags

Tag 40 A is for mentioning Form of Documentary Credit (such as
Revocable, transferable etc.)
Tag 45A is for description of goods.
Tag 46A is for the documents required.

• Maximum size of message is 2000 characters.

• If message is larger, then it is kept in repair queue.
• Ensure that the relevant mandatory inputs are made in order to
generate the message

140
CUSTOMISING PRINTED
DELIVERY OUTPUT

• All communication for third parties (called messages) generated by

the Trade Finance module can be despatched using a number of
techniques the most common of which are via S.W.I.F.T. and via
printed output. The use of printed output is particularly common in
Trade Finance due to the number of parties to a contract who are
not banks and thus are not on the S.W.I.F.T. network.
• Trade Finance takes full advantage of THE sophisticated ability of
GLOBUS to customise printed output in order to enable each user of
the application to produce third party printed documentation that
reflects their own requirements. Customising is done through the
Application DE.FORMAT.PRINT

141
DE.FORMAT.SWIFT

• Defines how data content of a message is to be converted for

SWIFT.
• Header and trailer are standard and generated by automatic
process.
• Converts incoming SWIFT messages for processing by various
Banking applications.
• Used to define various tags and fields to be attached under those
tags, with appropriate conversion and calculation.

142
INWARD DELIVERY DE 1…

Receipt of messages through telex, swift etc

Awaiting test key verification

Inward carrier control module

Inward repair queue

Inward message queue

Inward formatting modules

Inward repair queue

GLOBUS BANKING APPLICATIONS

143
Document display

• The DRAFT.PRINT field in THE APPLICATION LC specifies the

requirement of document display and its contents can be defaulted
from LC.PARAMETERS
• The record input is not complete at preview stage of the message
• Set the DRAFT.PRINT field to “N” and repeat the <F5> or
“Commit”. At the authorisation stage (since no input may take
place), the user is presented with the offer of displaying preview.
Replying “N” will proceed with authorisation while replying “Y” will
invoke message preview. At this point, the user may reject the
displayed preview by entering  <F1> in Classic or [Cancel] in
GUI/Desktop after which authorisation will not take place.
• The DRAT.PRINT field in DRAWINGS performs similar function

144
Accounting procedure

TF APPLICATION

STMT.ENTRY CONSOL.ENT.TODAY
CATEG.ENTRY CONTRACT FILES

AC
RE.CONSOL.SPEC.ENTRY

DOES NOT
P/L KEY A/L KEY UPDATE ON-
A/L KEY
LINE, ONLY
AT EOD

CONSOLIDATED REP.BASE
RE.CONSOL.SPEC.ENTRY

A/L P/L

145
ACCOUNTING

• The movements for account are generated in STMT.ENTRY file and

the movements for P/L are generated in CATEG.ENTRY file.
• The RE.CONSOL.SPEC.ENTRY file is so named as it contains the
special entries used to update the balances on the consolidation
files. These entries comprise the entries that are not passed
through the CATEG.ENTRY or STMT.ENTRY files. The nature of
entries held in this file includes, inter alia;
i. Accounting entries raised for contracts
ii. Accrual/suspense entries raised for Accounts or Contracts
iii. Capitalisation entries for such Accruals
iv. Contingent entries raised by the system for FX, LC etc.
v. Movement Entries
vi. Entries raised for revaluation during End of Day

146
ACCOUNTING

• The entries for a contract are first generated in the file

CONSOL.ENT.TODAY and by running the End Of Day, these entries
will be generated in the file RE.CONSOL.SPEC.ENTRY Then
according to the CONSOLIDATE.COND file, the consolidation keys
are created and recorded in the CRB which are the
« Consolidate.Asst.Liab » and « Consolidate.Prft.Loss » files.
• Some entries such as accruals, contract event modification will be
generated in the file RE.CONSOL.SPEC.ENTRY by running the End of
Day.
• Unlike many other modules, in Trade Finance, we shall be seeing lot
of contingent entries.

147
SOME RELEVANT DATA
ON TF ACCOUNTING

• Accounting is done through the Financial Accounting Procedure

• Accounting entries are generated at Export, Import (at Issuing,
Advising and Drawings) and Charges level
• Asset.Type exclusively for TF are mostly Contingent
• Pre-advise, Issue, Collection, Advice, Confirmation,Open etc., are all
Contingent type of entries.
• Payment under Reserve entries are non-contingent type
• The only STMT and CATEG entries raised for LC s are for charges.
The rest are CRF contingent entries.

148
TF ACCOUNTING

• Relevant Category codes for TF is in the range of 23000-23999.

• Transaction Codes, by which the transaction details are identified
for STMT.ENTRY and CATEG.ENTRY are in the range of 500-599 for
TF module.
• Most of the entries in TF module are of RECONSOL.SPEC.ENTRY
nature and hence are not online entries, but updated only at EOD
• Contingent entries are either single sided entries or self balancing
contingents.
• Choice depends on the option chosen by the user in the
CONSOLIDATE.COND file- field No 25. If set to ‘Y’, self balancing
accounting entries are passed.

149
EXAMPLE OF ACCOUNTING
ENTRIES IN TF

• For Import sight LC

CR/DR ACCOUNT SE/CE/ REMARKS

SPEC

Cr O/s credit unused spec new

Cr O/s credit unused spec Inc-amendment

Dr O/s credit unused spec Dec-amendment

Dr O/s credit unused spec Liq-Payment

Cr NOSTRO acc /beneficiary SE Pay Cr

Dr Customer SE Pay Dr

150
ACCOUNTING ENTRIES

• In case of charges, when collected, the files that are updated are
STMT.ENTRY and CATEG.ENTRY for Customer account and P/L
categories respectively.
• In case of Claimed charges (not yet recovered), the Spec entry file
is updated.
• The transaction entries can be checked through the ENQUIRY-
TXN.ENTRY for LC opening and Drawings.
• At EOD, the Batch entry is LC.END.OF.DAY
• At SOD, the Batch is LC.START.OF.DAY

151
ASSET.TYPE

• Asset.Type is the last element of CRF key. This enables

identifying the nature of the key like,
– Contingent/Non-Contingent
– P/L Item
– Debit or Credit

• The codes are Hard-coded.

• There are a number of exclusive contingent/non-contingent
asset types for TF module, such as
Pre-advise,Issue,Def Pay,Collection, Advice, Open, Pay Res
and so on.,

152
CONTINGENT ENTRIES

• As mentioned earlier, lot of contingent entries are passed in TF

module.
• For the contingent entries, it is possible to show single sided entry
or self balancing contingents. This depends on the option chosen in
CONSOLIDATE.COND file (Field No.25 – Conti.Self.Bal – Y or N)
• If self balancing entries are to be raised, this field will be set to Y.
• Self balancing entries will be raised whenever a non FX contingent
entry is generated. The system will take the contingent entry and
create a balancing entry of the equal and opposite amount.
• The first batch run after this field is set to Y will run a job to create
the balancing entries for the above mentioned contingent types.

153
CONSOL.ENTRY

154
STMT.ENTRY

155
CATEG.ENTRY

156