This is an arrangement that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honor a complying presentation.

Clean Letters of Credit require no documents for processing, as opposed to Documentary Letters of Credit, which require documents.

It means the party at whose request the LC is issued.

It means the party in whose favour a LC is issued.

This is an incoming Letter of Credit that involves an applicant who is a customer of the processing bank.

This is an outgoing Letter of Credit that involves the beneficiary who is a customer of the processing bank.

Guarantee is a form of comfort, issued by the bank to its client, in cases where the bank is not very comfortable with the credit rating of the customer. Unlike a letter of credit, in which the bank has to pay on maturity, the amount is payable only on invocation of guarantee by the creditor.

This is a guarantee extended during the period in which the goods are under transit.

This is a guarantee for performance of a contract. These are immediately realizable whenever the beneficiary presents a declaration to the issuing bank that the named party has not fulfilled the terms of contract.

This is an LC, the terms of which allow the confirming bank to make advance payments to the beneficiary before documents are received, towards anticipatory drawings on the part of the beneficiary.

This is an LC, the terms of which allow transference of the LC to other buyers, sellers or parties.

This is an LC, the terms of which disallow transference of the LC to other buyers, sellers or parties.

This is an LC, the terms of which allow the restoration of the original LC amount (or the tenor) after its full settlement, without any further changes to any of the other terms. A revolving LC could be either revocable or irrevocable.

This is an LC, the terms of which disallow the restoration of the original LC amount (or the tenor) after its full settlement. A non-revolving LC could be either revocable or irrevocable.

This is an LC that involves immediate payment to the seller by the negotiating bank. The payment is later reimbursed by the issuing bank.

This is an LC that involves payment to the seller at maturity i.e., (at a future date). The drawee bank obligates itself to make the payment.

This is the bank at which a letter of credit is first initiated by the buyer or importer. It is the bank at which the buyer account is debited for the trade. The advising bank sends the documents for the trade to the issuing bank, from where they are released to the buyer.

This is the bank in the LC chain which advises by sending a copy of the LC to the beneficiary. The advising bank also sometimes acts as the bank will receive and negotiate the documents from the beneficiary which the seller or exporter involved in a letter of credit receives payment towards the trade.

The issuing bank sends the letter of credit to the advising bank. The documents regarding the trade are sent to` the advising bank by the seller. The advising bank then sends the documents to the issuing bank.

This is the bank that ratifies the trade involving a letter of credit, to the advising bank. Tracers (messages) requesting letters of confirmation of the trade are sent to the confirming bank.

This is the adding of a separate undertaking by a bank to an LC in addition to that of the bank issuing it. All LCs lacking specific confirmation notices from any additional banks are considered unconfirmed.

This is a unique identifier in Oracle Banking Trade Finance for a standard paper, file or record that is required and used in most countries for the processing of a documentary letter of credit.

This is a group of similar document codes in Oracle Banking Trade Finance. The document type identifies the nature of all document codes under it.

This is a unique identifier in Oracle Banking Trade Finance for a statement that goes along with documents sent under a letter of credit.

This is a group of similar clause codes in Oracle Banking Trade Finance. The clause type identifies the nature of all clause codes under it.

This is a unique identifier in Oracle Banking Trade Finance for the standard stock or commodity that is traded under a letter of credit.

This is a unique identifier in Oracle Banking Trade Finance for a set of instructions and statements (the free format texts) pertaining to the processing of a letter of credit. Standard free format texts do appear on correspondence and messages sent to the parties involving the letter of credit.

This is an identifier in Oracle Banking Trade Finance for any type of service that a bank offers its customers. A set of attributes and preferences are maintained for the product, which will apply to the processing of any contracts, transactions or deals involving the product (service).

This is a group under which a product is logically classified, under which logically similar products are placed together.

It can be descriptive text about a product.

It can be text or phrase that could be used as a declaration or an announcement of the product, to customers.

This is the specific GL created in any module of the Oracle Banking Trade Finance system into which the accounting entry would be posted.

The general ledgers and sub-ledgers maintained as a chart of accounts in Oracle Banking Trade Finance may be classified logically under different categories, each of which is called an accounting role.

This is the amount entry that is passed into a general ledger/sub-ledger in the chart of accounts for each transaction.

It amounts to summing of two or more accounting entries passed to an account for the same event, so as to arrive at a net figure for posting.

This is the occurrence or process that initiates the generation of an advice during the processing of a contract in Oracle Banking Trade Finance.

This is an identifier for each accounting entry that describes the nature (debit or credit) of the entry.

They comprise the fields that are to be keyed in by an authorizer of a transaction, for the purpose of cross-checking, when the transaction is being authorized. Complete details of the transaction will only be displayed when the authorizer re-keys the values for these fields.

It indicates the increment, expressed as a percentage that must be made to the amount of a letter of credit, to arrive at the Maximum LC Amount.

It indicates the reduction, expressed as a percentage that must be made to the amount of a letter of credit, to arrive at the Minimum LC Amount.

This is the period during which a letter of credit is viable or effective.

This is the basis upon which commission applicable on a letter of credit is to be computed. It can be computed on a periodic or non-periodic basis.

This is the manner in which commission applicable on a letter of credit can be collected. Commission could be collected either in advance or as arrears.

This is the limit within which exchange rates (for an LC) are allowed to be changed over and above the default value, without requiring an override. If the rate variance exceeds this limit, an override is necessary for the changed rate
to be accepted.

This is the limit above which a change in exchange rates (for an LC) over and above the default value cannot be specified. If the rate variance exceeds this limit, the changed rate will not be accepted.

This is a unique identifier for a tracer in Oracle Banking Trade Finance. A tracer is a reminder or intimation, generated by Oracle Banking Trade Finance, to be sent to the parties involved in a letter of credit.

It refers to closing an LC automatically after its expiry date. Usually, the date of automatic closure is specified for an LC. By default, the date for automatic closure is taken to be 30 days after the expiry date.

This is the automatic restoration of the amount (value) of a revolving letter of credit for which the unutilized value is zero, in Oracle Banking Trade Finance.

When the Beginning of Day (BOD) process is run on any given business day, any LC’s’ for which automatic reinstatement of value has been specified are restored in value, provided the un-availed portion of the amount is zero.

This is an attribute of a revolving letter of credit, according to which, the LC amount and Maximum Liability Amount is reinstated or reset based on the frequency specified for such reinstatement.

This refers to an attribute of a revolving letter of credit, according to which, the LC amount is reinstated or reset at the point when the availability under the LC is reduced to zero, due to an availment.

This indicates the type of credit for which the LC is being processed, viz., Straight or Negotiable.

This indicates the mode of payment through which the LC will be settled - Sight, Acceptance, Negotiation or Deferred.

This is the medium used to send advices to each of the parties involved in a letter of credit.

This indicates transportation through shipping, in part, or of a portion of merchandise under an LC. Partial shipment is allowed only if permitted for the LC.

This indicates transportation of merchandise under an LC, by shipping across countries. Trans-shipment is allowed only if permitted for the LC.

An LC can be linked to a deposit or a customer account. The reference number identifies the deposit that the LC is linked to, and the account identifies the customer account.

This is the portion of the contract amount of a letter of credit contract that is linked to a deposit or a customer account.

This indicates the nature of any availment under an LC. An availment could be a payment, an acceptance, or negotiation.

This indicates the collection of commission applicable on an LC. Commission may be collected by the issuing bank or the advising bank, for an LC, or against amendments to an LC.

This is the computation of commission applicable on a letter of credit.

This is the limit within which the tenor of a tenor-based letter of credit can be set.

This parameter indicates how automatic events falling due on holidays will be processed. If the specification is System Dates, it indicates that all the processing of events will be done till the system date only.

If the specification is ‘Working Day – 1’, all automatic events falling due on the holiday will be processed by the batch process as part of the End of Day processes on the last working day before the holiday.

This refers to the level at which commission accrual entries for letters of credit must be passed, by the automatic commission accrual process.

Two levels are possible – product-level, indicating that a single entry for all the LCs for which commission was accrued automatically will be passed; or contract level, wherein accrual entries will be passed for each of the LCs for which commission was accrued.

An amendment is an advice by the issuing bank of any proposed change to the terms and conditions of a LC.

Any term of an LC can be changed or deleted, or new terms can be introduced, provided the change is acceptable to all parties.

The beneficiary and any confirming bank may choose to accept or reject any amendment generated by the applicant. Under UCP 600 amendment confirmation must be communicated.

This is the bank other than the opening bank authorized within the LC terms to give value for presentation of conforming documents against a LC. This bank may be the advising or confirming bank.

This indicates the latest (last) date that may appear as the shipment or on-board date on any transport documents required by the LC. Unlike expiry dates, latest shipment dates do not extend because of holidays.

This refers to the LC payable only at the opening bank or a bank specified within the credit.

Trans-shipment means unloading from one means of transport and reloading to another means of transport during the carriage from the place of shipment to the place of final destination stated in the credit.

This is a portion of less than the total quantity of an order. An LC must permit partial shipments otherwise the beneficiary has to ship the full value of the LC in a single shipment.

INCO terms refer to a set of 13 international standard trade terms. They allow the seller and buyer to designate a point at which costs and risks of transport are precisely divided between them.

This is a financial instrument indicating debt by one party (the drawee who is responsible for payment) to another (the drawer to whom payment is due). Drafts may be drawn at sight for immediate payment or after a certain number
of days.