1. Trade Finance - Automated End of Day User Guide
  2. Annexure A - List of End of Cycle Functions
  3. EOD and BOD Batch Jobs
  4. Reinstatecontracts

3.2.29 Reinstatecontracts

All Islamic LC contracts, for which you had specified automatic reinstatement, is reinstated when the batch process for the day, is run as part of BOD. The revolving details specified for the Islamic LC, in the Contract Main screen, are used to reinstate the contracts. The reinstatement is done subject to the Maximum Liability and the Maximum Islamic LC Amount allowed for the contract. The unutilized credit is removed from the contingent entries for noncumulative Islamic LCs.

For Islamic LCs that revolve in time, the Islamic LC Amount and the Maximum Liability Amount is reset based on the frequency of reinstatement (the value of frequency is either Days or Months depending on the ‘Units’ you specify for the contract). In the case of an Islamic LC, which revolves in value, the Islamic LC amount is reset when the current availability under the Islamic LC is reduced to zero. Thus, the reinstatement for Islamic LCs which revolve in value is done during the beginning of the day on the next day.

It is done after the availment that makes the current availability to zero is made. When Islamic LCs are automatically reinstated, the necessary accounting entries and advices specified for the event code REIN (reinstatement), is passed automatically. As a part of the BOD process, this function reinstates all the revolving Islamic LCs (specified with automatic reinstatement), which needs to be reinstated. This is determined by two factors:
  • Whether the Islamic LC revolves in time and the next revolving date is less than or equal to the current date or
  • The Islamic LC revolves in value and the unavailed amount under the Islamic LC, is reduced to zero by the availments that were made.
During EOD, the auto reinstatements scheduled for the next day is done under the following conditions:
  • The next day is a holiday
  • You have specified in the Branch Parameters table, that events scheduled for a holiday should be processed, on the working day before the holiday. If the next working day happens to fall in the next month, this function will pick up only Islamic LCs that have their next revolving date within the same month. The processing for such Islamic LCs is done during BOD on the next working day.
All contracts that were automatically reinstated on a day will appear in the Activity Report for the day. The exceptions encountered during the reinstatement i.e. the contracts, which should have got reinstated, but were not, will figure in the Exception Report.

Parent topic: EOD and BOD Batch Jobs