Table of Contents
Revolving
Transaction LITREV
This transaction is used to revolve an import L/C. Revolving Letters of Credit typically support business contracts with a large number of regular shipments. Whilst the business can be supported with standard L/C's, an importer may insist on a revolving L/C in order to:
- Reduce the use of the limits assigned by the bank. The full size of the business contract would tie up a large part of the credit line the bank has granted and would therefore limit other financing transactions that the importer may need.
- Reduce the cost, because L/C commission is charged based on the amount and duration of the bank's commitment that may be reduced to the individual shipment.
The following characteristics of revolving L/Cs are supported:
Cumulative / Non-cumulative
- If the credit is marked as 'cumulative' this means that irrespective of what was drawn previously, the remaining available amount is retained and increased with the full revolving amount on the revolving date. This also includes any tolerance that is left over from the previous revolve date.
- If the credit is marked 'non-cumulative', any unutilized amount is lost and the available amount is raised to the value of the next shipment.
Letters of credit can revolve at the time of utilization or periodically on a specific date. In each case the revolving may be immediately and without specific instructions from the applicant or upon request of the applicant.
Revolving Type “Revolving upon utilization”
- Sample revolving clause: “L/C for EUR 100.000,00 +/-10% is revolving 5 times up to a maximum amount of EUR 660.000,00. The credit will revolve automatically after each shipment.”
- As there is no period set for revolving, the L/C will revolve upon utilization. If “Awaiting Applicant's request” flag is not selected, the transaction Send, Accept and Settle Documents (BRTPAY) will therefore create a pending entry in the To-Do list in order to remind the user to handle the revolving L/C transaction.
Revolving Type “Revolving Periodically”
- Periodical revolving can be applicable when the revolving clause calls for delivery of a certain quantity within certain intervals, for example: “Revolving on the first of every month for the delivery of goods as per proforma invoice…”
- If the user has entered a revolve date, this date will be used to create a diary entry in the system for the next revolution of the L/C.
Awaiting Applicant's Request
- The bank may reserve the right to revolve the credit after receipt of applicant's instructions and credit approval. In this case, the system will automatically add a diary entry 5 working days before the next revolving date.
Requirements
An existing Import L/C contract which is open and not closed.
The contract must be marked as revolving and the maximum number of permitted revolvings may not have been reached.
For incoming allNETT / RIVO messages see Overview of Incoming messages - allNETT / RIVO.
Transaction Control
Fees
| Fee Code | Set as Default | Units | from | until | Comment |
|---|---|---|---|---|---|
| LIFHAN | Yes | 0 | today | today |
Commissions
Results of this Transaction
Diaries
For more information see TRNDIA Diaries.
| Action | Description | Diary | Follow-up Transaction | Comment |
|---|---|---|---|---|
| Replace | Next revolving instructions received? | Next Revolve Date + 5 Working Days | Common Messages | If Revolving L/C and “Awaiting Applicant's Request” checked and “Revolving Type” not “Revolving upon utilization” and “Next Revolve Date” filled. |
| Create | Next revolving | Next Revolve Date | Revolving | If Revolving L/C and “Awaiting Applicant's Request” checked and “Next Revolve Date” filled. |
Updating/Storing of Amounts (CBS)
Liability (LIA)
Outgoing Correspondence
Details on creation of messages can be found under DOCEOT Messages. For outgoing allNETT / RIVO messages see Overview of Outgoing messages - allNETT / RIVO.
| Name of Message | Receiver | Message ID | SWIFT | TCO | DTA/DTE | Comment |
|---|---|---|---|---|---|---|
| Acknowledgment | Applicant's Bank/ Applicant | LITAPL1 | 730 | |||
| Revolving Notice | Advising Bank/ Beneficiary | LITADV1 |
Release
Source in Transaction
Transaction Panels
Revolving L/C
Liability
Settlement Details
Settlement
Bookings
Cash Cover
DTAEA Fields
DTALC Fields
Completion
Incoming Tag 72/79
Messages
Compliance
Attachments
Fee Conditions
DTAG Fields
Revolving L/C
Datafields
| Datafield | Description |
|---|---|
| Own Reference | cf Appendix A, Table LID field OWNREF |
| Currency | cf Appendix A, Table CBB field CUR |
| Nominal L/C Amount | This field contains the nominal amount of the letter of credit. cf Appendix A, Table CBB field AMT |
| Additional Amount | If this box is checked, additional amounts are available under the contract and an additional panel is available to enter details. |
| Currency | cf Appendix A, Table CBB field CUR |
| Open Amount | This field contains the amount available under the letter of credit. cf Appendix A, Table CBB field AMT |
| Revolving Flag | cf Appendix A, Table LID field REVFLG |
| Authorized to Pay, Accept, Negotiate | This field indicates the bank authorized to pay, accept, negotiate or incur a deferred payment for the L/C. |
| Available by | cf Appendix A, Table LID field AVBBY |
| Red/Green Clause | cf Appendix A, Table LID field REDCLSFLG |
| Opening Date | cf Appendix A, Table LID field OPNDAT |
| Shipment Date | cf Appendix A, Table LID field SHPDAT |
| Date of Expiry | cf Appendix A, Table LID field EXPDAT |
| Place of Expiry | cf Appendix A, Table LID field EXPPLC |
| Form of Documentary Credit | cf Appendix A, Table LID field LCRTYP |
| Name | cf Appendix A, Table PTS field NAM |
| Reference for Address (Optional) | cf Appendix A, Table PTS field REF |
| Name | cf Appendix A, Table PTS field NAM |
| Reference for Address (Optional) | cf Appendix A, Table PTS field REF |
| Name | cf Appendix A, Table PTS field NAM |
| Reference for Address (Optional) | cf Appendix A, Table PTS field REF |
| Revolving Type | cf Appendix A, Table LID field REVTYP |
| Revolving Times | cf Appendix A, Table LID field REVTIMES |
| Number of Revolvings under L/C | cf Appendix A, Table LID field REVNBR |
| Revolving Date | cf Appendix A, Table LID field REVDAT |
| Awaiting Applicant's Request | cf Appendix A, Table LID field REVAWAPL |
| Revolving Clause | cf Appendix A, Table LIT field REVCLS |
| Credit is Marked as Cumulative | cf Appendix A, Table LID field REVCUM |
| Notes to Applicant | cf Appendix A, Table LIT field REVNOTES |
Compliance
DTAG Fields
