Automatic Reinstatement of LC

3.2.15 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 rein- statement is done subject to the Maximum Liability and the Maximum LC Amount allowed for the contract. The un-utilized 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.

As a part of the BOD process, this function reinstates all the revolving LCs (specified with automatic reinstatement), which needs to be reinstated. This is determined by two factors:

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 un-availed amount under the LC, is reduced to zero by the availments that were made

During EOD, the auto reinstatements scheduled for the next day will be 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 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.

Note:

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 rein- stated, but were not, will figure in the Exception Report.

For those products for which accruals/depreciation cycle is due for the day. In case of interfund subscriptions, the system does not calculate the profit for the investing fund.

This is an intra day process that is applicable only to fund branches.

Intra Day Accruals work in line with the normal end of day accruals. Intra day accrual will process in the same manner as an End of Day (EOD) batch. In LC module, it is processed based on the branch level accrual parameters.

Parent topic: EOD and BOD Batch Jobs