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, 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.
- 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.