4.3.3 Update Parties’ Limits on Amendment of Islamic LC Contract
Oracle Banking Trade Finance allows you to amend Islamic LC contracts. Such amendments may have direct impact on the parties limits defined in the contracts. This section examines the some amendments that is made to an Islamic LC contract and their impact on the parties’ limits.
Increase in Islamic LC Amount
If there is an increase in the Islamic LC amount, based on the amount tag,
the system updates the parties’ limits as follows:
Table 4-13 Parties Limits
| Amount tag | Changes in Parties’ Limits |
|---|---|
| Liability Amount | The liability amount is used to track the delta amount |
| Confirmed Amount | The increased confirmed amount is used to track the parties’ limits |
| Unconfirmed Amount | The increased unconfirmed amount is used to track the limits |
| Non-undertaken Amount | The Islamic LC amount is used to track the limits for the line specified under ‘Non-Undertaken Amount’ |
| Liability Minus Margin | The increased Islamic LC amount is used to track |
After amendment, if there is an increase in the confirmed amount, the
parties’ limits are updated as follows:
| Amount Tag | Changes in Parties’ Limits |
|---|---|
| Liability Amount | The system does not track the limits |
| Confirmed Amount | The increased confirmed amount is used to track the limits |
| Unconfirmed Amount | The increased confirmed amount is deducted from the credit line tracked for the unconfirmed portion |
After amendment, if there is an increase in the undertaking amount, the
parties’ limits are updated as follows:
| Amount Tag | Changes in Parties’ Limits |
|---|---|
| Liability Amount | The system does not change the parties’ limits |
| Undertaken Amount | The increased undertaken amount is used to track the limits |
| Non-undertaken Amount | The increased undertaken amount is deducted |
After amendment, if there is a decrease in the Islamic LC amount, the system
updates the parties’ limits as follows:
| Amount Tag | Changes in Parties’ Limits |
|---|---|
| Liability Amount | The decreased amount is deducted from the credit line tracked for the liability amount |
| Confirmed Amount | The decreased confirmed amount is deducted from the credit line tracked for the confirmed amount |
| Unconfirmed Amount | The decreased confirmed amount is deducted from the credit line tracked for the unconfirmed portion |
| Liability Minus Margin | The decreased Islamic LC amount is used to track the limits for the line specified under ‘Liability Minus Margin |
After amendment, if there is a decrease in the confirmed amount, the system
updates the parties’ limits as follows:
| Amount Tag | Changes in Parties’ Limits |
|---|---|
| Liability Amount | The system does not change the parties’ limits |
| Confirmed Amount | The decreased confirmed amount is deducted from the credit line tracked for the confirmed amount |
| Unconfirmed Amount | The decreased confirmed amount is added to the credit line tracked for the unconfirmed portion |
After amendment, if there is a decrease in the undertaking amount, the
system updates the parties’ limits as follows:;
| Amount Tag | Changes in Parties’ Limits |
|---|---|
| Liability Amount | The system does not change the parties’ limits |
| Non-Undertaken Amount | The decreased undertaken amount is added to the credit line tracked for the non-undertaken portion |
After amendment, if there is a decrease in the collateral amount, the system
updates the parties’ limits as follows:
| Amount Tag | Changes in Parties’ Limits |
|---|---|
| Liability Minus Margin | The decreased collateral amount is used to track the limits for the line specified under ‘Liability Minus Margin’ |
After amendment, if there is a increase in the collateral amount, the system
updates the parties’ limits as follows:
| Amount Tag | Changes in Parties’ Limits |
|---|---|
| Liability Minus Margin | The increased collateral amount is used to track the limits for the line specified under ‘Liability Minus Margin’ |
If the percentage of allocation is modified, the system updates the delta amounts accordingly.
Parent topic: Islamic LC Contract Details Screen Description