9.2.1 Note on Transfers from Import and Export Islamic LCs
How Transfers from Import LCs are Processed
While transferring an import LC, the original LC is modified to include the additional details of the transferred LC. For instance, the new beneficiary and new advising are added to the existing list of parties.
In Oracle Banking Trade Finance Cloud Service, the transfer made from an LC is taken as a new event ‘TRNF’. Availment made by the new beneficiary against the transferred LC is tracked against the original LC.
How Transfers from Export LCs are Processed
In the case of an Export LC, a new LC is opened for each transfer that you make from the original LC. The transfer amount is taken as the new LC amount.
On authorizing the transfer,
- An availment to the tune of the transferred amount is made against the original LC i.e. the outstanding amount of the Original LC is reduced by the transfer amount
- A new LC is created based on the transfer details that you specified
The transferred LC is separated from the original LC. Availment made from the
new LC will not affect the outstanding of the Original LC.
- First beneficiary of Export LC will be counterparty of Transfer LC with party type FBN
- FBN will be applicable only for Transfer LCs
- Charges applicable for Transfer LC will be borne by first beneficiary. Charges include advice, amendment, cancel, close and reopen charges
- Addition, Deletion and modification of First beneficiary party is not allowed.
- New advice LC_AMD_RESPONSE introduced, in mail format, to be sent to first beneficiary during confirmation / rejection of Transfer LC amendment or cancellation with appropriate response message.
- Advices of transfer LC will be sent to first beneficiary as per below
table:
Life cycle Transfer LC Life cycle Event Advice Party Type Transfer LC amendment without confirmation AMND AMD_IMP_CR FBN AMND LC_AM_INST_COPY FBN Transfer LC amendment with confirmation – Initiation AMNV AMD_IMP_CR FBN AMNV LC_AM_INST_COPY FBN Transfer LC amendment confirmation AMND LC_AMD_RESPOSNE FBN Transfer LC amendment Rejection AREJ LC_AMD_RESPOSNE FBN Transfer LC Cancellation without confirmation CANC LC_CANCEL_ADV FBN Transfer LC Cancellation confirmation initiation AMNV LC_CANCEL_ADV FBN Transfer LC Cancellation confirmation CANC LC_AMD_RESPOSNE FBN Transfer LC Cancellation Rejection AREJ LC_AMD_RESPONSE FBN Transfer LC Close CLOS LC_CLOSE_ADV FBN