Process ID Event Process Title Description of Process Output
LC-1 OCR Received Receive Manual
OCR The OCR received from another division (after approval from their hierarchy) is entered. The OCR Entered LC-2 Details entered and initiate approval process Entering Of Details in the form. The details of the OCR are keyed in the system by the accountant and it is saved and it goes for an approval process. Details entered and bank nominated; workflow initiated LC-3 Approval Process Approver nominates bank and approve the OCR The approver gets a notification in his screen about the same OCR that is saved. When it is opened he selects the bank and approves the OCR. His approval initiates another workflow which sends a notification to the requestor whether his OCR got approved or rejected. OCR approved and sent to bank LC-4 Approach Bank for LC The OCR is sent to the bank along with other documents to open a new LC against the supplier.
LC-5 Approval by Bank Bank Approval Bank receives the OCR and as per the understanding between GBFT and the respective bank, it opens a new LC in favour of the supplier against a facility available. There can be two situations at this point. One that bank approves the LC and the other that it is rejected.
LC-6 Change the bank and send again Change the bank and send again for approval If the request for LC is rejected by a particular bank, the approver once again nominates another bank and it is sent to that bank for approval.
LC-7 Details Entry Details entered and initiate approval process When bank opens an LC against the supplier, then it gives a new reference number for that LC. This number has to be entered in the system along with other details such as LC Amount, Date opened, valid till, Exchange rate and opening charges.
LC-8 Supplier intimated and shipping Supplier intimated and shipping process starts As soon as the LC is opened in favour of the supplier, the issuing bank requests the confirming bank to intimate the credit and notify the supplier of the opening of credit and the terms to be complied with by the company to be entitled to the benefit under the credit. Once all this finishes, the shipping process starts. The seller arranges for the contracted goods to be shipped, obtains stipulated documents including Bill Of Lading from the Master of the Vessel and tenders them to the confirming
Process ID Event Process Title Description of Process Output
bank. LC-9 Goods received Goods received The goods are received by the divisions along with other documents (commercial invoice, packing list and shipping details). GBFT is intimated and shipping adviceareentered against a single LC. Then the shipment is recorded in the system against the particular LC. Multiple shipments as they arrive are entered against a single LC. On the other hand, there goes on another process between the supplier and the bank: The supplier is paid by the confirming bank once the documents are confirmed. Confirming bank presents credit documents to issuing bank and it is paid with its cost and commission. When the supplier gets paid, the process is known as Acceptance.
LC 10 Invoice Creation Invoice Creation Process After the Acceptance by bank, the invoice will be created in GBFT AP against supplier based on the payment term and due date to bank
LC-11 Handover of Document Document handover The issuing Bank releases the documents (mainly Bill of Lading) to the buyer after insisting on the buyer to reimburse the cost and commission. This release of documents is known as Retirement of Shipment
LC-12 Payment to Bank On the due date, there are two options with GBFT. 1. They can pay the bank on the due date and take over the Bill of Lading. In this case, the amount gets settled through the current bank account of GBFT. 2. If GBFT fails to pay the bank, the Acceptance converts into a TR. TR is again created between bank and GBFT on the basis of trust agreement between them. TR is accepted by GBFT with payments terms as agreed.
LC-13 Payment of TR On the due date, TR is paid by GBFT along with the interest. .