Module Flow Diagram
Letter of Credit
Functional Flow Diagram

LC Limit Creation:

LC Limit Creation is an activity to capture the bank wise LC limits sanctioned by bank Consortium. The limits can either increased or decreased. Responsible

LC Limit Creation Approval: consortium

This process is used to authorize / approve the LC Limit Creation. The user can also reject the LC Limit Creation during the approval. System will allow user to process further flows against LC Limit Creation after the last level of approval process. Consumption LC Limit Creation Amendment and Approval:

LC Limit Amendment is a process of making the changes in the approved LC Limit. Based on the Bank selection, the information will be fetched and shown from the approved LC Limit. Amendment number will be generated against LC Limit. LC Limit Creation Amendment process will facilitate the user to modify limit increase / decrease based on the LC amount. Approval process will be given as like LC Limit creation Approval. Compoents

LC Request and Approval:

HO / RO / Division / Region / Job will raise the LC Request. Based on the PO information LC request will be created. LCs is of two types (FLC \ ILC). LC value will be calculated based on value of Pro-forma invoice plus interest (if any) with adjustments of PBG and advances (if any). In case of FLCs, LC value is arrived based on transaction currency and exchange rate. Usance period (credit days) and Beneficiary name (name of the supplier) will be displayed from purchase order. Material information will be displayed from purchase order and pre dispatch information will be displayed from Invoice, if there any invoice available at the time of generating the LC request. Approval process will be given as like LC Limit creation Approval, while approval, the user may reject the LC Request.

Application Updation against the LC Request:

After the Approval is given for LC Request, LC application is prepared using MS office and submitted to bank. An internal application number and date of Application will be captured. One LC Request can’t have more than one application.

LC Lodgment and Approval:

After receipt of LC from Bank and on selection of Application Number, basic information will be displayed from LC request details and the same will be captured under lodgment. Remaining information will be entered by the user. Approval process will be given as like LC Limit creation Approval. When LC is lodged the LC limit will be decrease to the extent of LC value.

LC Amendment Request and Approval:

HO / RO / Division / Region / Job will raise the LC Amendment Request. Amendment may require to LC subsequently after LC is opened and lodged. The changes in the existing LC is Captured through this process. Based on the LC number selection, the information will be fetched and shown. Amendment number will be running serial against LC. Shipment information and LC value can be modified. Text field is provided to take note of other changes. Once LC is expired it can’t be amended. Approval process will be given as like LC Limit creation Approval.

LC Amendment and Approval:

LC amendment is a process of modifying the LC. Based on the LC amendment request number selection, the information will be fetched and shown. Amendment number will be running serial numbers against LC number. Based on exchange rate, LC exchange amount will be display.

Approval process will be given as like same as LC Limit creation Request Approval.

Bill Lodgment:

When bank send BOE for acceptance against LC, Bill Lodgment is done. BOE is verified against material receipt at site and approved accordingly. BOE is either accepted in full / Partial / rejected. When it is accepted in full or partial, the liability is created and it will go to next process (Payment by Bank and LC Closure). When it is rejected the liability is not created and BOE may come again after necessary actions by Bank / Suppliers. The above details / actions are captured under Bill Lodgment.

LC Closure:

LC Closure is a process to close the LC. LC is closed partially or fully by payment made on due date or manually after expiry of LC. LC cannot be closed until the payment is made. When LC is closed partially / fully the LC limit will be increased to the extent of paid value.

LC Document Updation:

Original document is received from Bank against accepted BOE, the same will be forwarded to the indenter (HO / RO / Division / Job). These details are captured in this process.

Margin Money and Margin Money Return:

Margin money is a process to deposit money into bank against LC number. Deposit number (FDR), deposit date, deposit amount, maturity date, maturity amount, rate of interest will be captured. Replaced FDR number will be captured, if this FDR is taken against a old FDR. Based on the FDR Number selection, margin money will be returned. Return date, interest amount, TDS amount, Net amount and credit date will be captured.


© URC Infotec Pvt Ltd - CIMS 2018