Saturday, 30 June 2018


CHAPTER 37 - KEY PRE REQUISITIES AND CHECK POINTS IN TRADE TRANSACTIONS (Important)

Key things (Pre requisites) require to do Trade transactions through Banks after doing basic formalities like KYC etc.

·         Customer. (Creating Customer is the First step)

·         Accounts. (Creating all types of Bank and Customer Account )

·         Limits.  (Attaching Limits, Limit Procedure will change from Bank to Bank)

·         Collateral or Cash Collateral (Optional).

·         All Parameterization Setup in the Banking Product or Application.

·         Dependent Transactions  (Pre Event) (For Example - To do a LC Document Checking, LC Issuance should have happened, so Document Checking is dependent on Issuance)

Key Checkpoints ( Output )after Completing a Trade Transaction through Banks

·         Journal Entries or Accounting Entries for Charges, Commission, Margin, Amortization and Payment (FT)

Example for Entries - Entries for Charges and Import LC Payment (Fund Transfer)

§  Charges

Debit - Customer Account

Credit - Bank P&L Account

§  Import LC Payment

Debit - Applicant Account

Credit - Nostro Account

Debit - Mirror Account (Nostro Account)

Credit - Route the Funds (to the Beneficiary Bank)

·         Delivery - Swift Advice, Payment Advice and Customer Advice.

·         Limits - Limit Utilization (Will differ From Bank to Bank)

·         Enquiries and Reports (If required). Most Enquiries and Reports are Periodic like for a day or week Etc.)

·         Interfaces - Swift, Funds Transfer System (FTS – Within the country payment in local currency), Anti Money Laundering Check (AML), Email Alerts, SMS Alerts etc

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CHAPTER 41 - CYCLES OF DOCUMENTARY CREDIT, DOCUMENTARY COLLECTION AND GUARANTEES ( Important ) Letter of Credit or Documentary Credit...