12.1.6 Automatic Reinstatement of LC
All LC contracts, for which you had specified automatic reinstatement, will be reinstated when the batch process for the day, is run as part of BOD.
The revolving details specified for the LC, in the Contract Main screen, are used to reinstate the contracts. The reinstatement is done subject to the Maximum Liability and the Maximum LC Amount allowed for the contract. The unutilized credit is removed from the contingent entries for non-cumulative LCs.
For LCs that revolve in time, the LC Amount and the Maximum Liability Amount is reset based on the frequency of reinstatement (the value of frequency can be either Days or Months depending on the Units you specify for the contract). In the case of an LC, which revolves in value, the LC amount is reset when the current availability under the LC is reduced to zero. Thus, the reinstatement for LCs which revolve in value is done during beginning of day on the next day. It is done after the availment that makes the current availability to zero is made.
When LCs are automatically reinstated, the necessary accounting entries and advices specified for the event code REIN (reinstatement), will be passed automatically.
- Whether the LC revolves in time and the next revolving date is less than or equal to the current date or
- The LC revolves in value and the unavailed amount under the LC, is reduced to zero by the availments that were made
- 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 LCs that has their next revolving date within the same month. The processing for such LCs will be done during BOD on the next working day.
Parent topic: Branch Parameters Details