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  • Users can replace all paper applications and tasks for their Import Letter of Credit through the Import Documentary Letter of Credit (IDLC) module. After creating the IDLC application in the Trade Portal, the application is sent through the bank for processing and is then issued by the bank as an Import Documentary Letter of Credit.

  • An Import Documentary Letter of Credit (IDLC) is an undertaking issued by a bank in favour of a beneficiary, which substitutes the bank's creditworthiness for that of an applicant. In a broad sense, an Import Documentary Letter of Credit is simply a letter of instruction issued to a beneficiary (seller) by a Bank at the request of its customer (buyer). In a narrower sense, it is a specialised, technical instrument used to pay for a shipment of goods or services from one party to another.

    Trade involves buyers and sellers seeking to exchange goods or services despite their differences in language, national customs, and credit procedures and accounting practices. Historically, merchants have sought ways of minimising these differences and facilitating trade. The special protection and opportunities offered by Import Documentary Letter of Credit apply to both domestic and international trade.

Importing Letter of Credit

From the Global Trade homepage, select Trade to access the full Import Product suite.

Initiation of an Import Documentary Letter of Credit can be done in three ways:

 

  1. Create a new Import Documentary Letter of Credit by entering all the details.
  2. Copy an Import Documentary Letter of Credit from a similar IDLC that already exists in the system. This will allow Users to quickly create an application, by entering or updating only the details that differ from the existing IDLC.
  3. Create an Import Documentary Letter of Credit based on a Pre-format. The information from the pre-format is entered automatically into the IDLC application, and user needs to enter the details that relate to the specific transaction. From the pre-format, the details of the application are saved for future use. Users only need to enter related data specific to this action.

When creating a new Import Documentary Letter of Credit without pre-formats or copy from an existing IDLC, Users can initiate an Import Documentary Letter of Credit (IDLC) application by going from the Global Trade homepage, select Trade to access the Import Product Suite and select Create/Amend L C on the right side of the page.

When on this Create/Amend L C screen, any detail field with a red asterisk is a mandatory field and requires to have details provided.

  • With the Lookup tool, select the desired customer name
  • Once back on the Create/Amend L C screen, select the Creation Method Lookup, which will show the options of:
    1. Create New: If you select create a new you can create a new Import Documentary Letter of Credit by entering all the details
    2. Copy Transaction: If you select copy transaction, the Pre-Format Code and Description fields remain inactive. The Exporter Reference Number field remains active.
    3. Create from Pre-Format: If you select create from pre-format, the Pre-Format Code and Description fields become active, and the Copy from Applicant LC Reference Number field remains inactive
  • The Customer ID, Transaction Status, Branch Code, Legal Vehicle, and Department are dependent on the selected criteria. These fields auto-populate when Creation method and Trade Initiator are selected.
  • If all the fields are correct, select Continue

When looking at the Party Details section:

  • In Applicant LC Reference Number field, a unique reference number should be entered
  • The Issuing Bank LC Reference Number is a unique number pre-assigned by Commonwealth Bank, which will be displayed on the IDLC application once the application is processed and issued.
  • The Applicant Name, Address and Applicant Country / Jurisdiction will be auto populated from Trade Initiator.
  • Beneficiary Name, Address, Beneficiary Country/ Jurisdiction, Contact Person, Telephone Number and Fax Number need to be either entered by the user or populated via the Library Lookup tool for each field
  • The Advising Bank Country field can be selected from the Advising Bank defined for the counter party selected from the Trade Counter Party Library. 
    Note: The parties mentioned must be pre-defined in the respective libraries in order to populate these fields.
  • Select Transaction Details from the bottom of the screen / the next dropdown section of details once all Party details are entered.

When looking at the Transaction Details section:

  • The Form of Documentary Credit and Applicable Rules will be prepopulated.
  • The Currency Lookup field can be inserted using the Currency Library Dialog Box. Users can select a currency from the list and then enter the IDLC amount in the next field.
  • In the field Available By, choose the settlement (payment) type for the Letter of Credit.
  • In the field Available With, choose the appropriate party that will process the final settlement.
  • Select the Notify by Lookup to select the desired Communication Code.
  • The Up To and Tolerance +/- are mutually exclusive. You cannot enter information in both fields.
  • For Drafts Required select the check box for Yes if drafts are required, otherwise ensure No is selected.
  • For Drawn On, populate this field using the Library Lookup.
  • Select Expiry Date Lookup, select the Calendar button to choose a date when the IDLC will expire. The date entered here is the final/latest date on which drafts and/or documents can be presented to a bank for negotiation or payment.
  • The Tenor dropdown allows the user to select from "Sight" or "Usance" terms. If Usance was selected in Tenor, then Days and Tenor Terms details also need to be completed.
  • The Confirmation Instructions dropdown allows Users to select from Confirm, May Add or Without of the IDLC. Once one of these are chosen for the Confirmation, it will automatically add the following clause "Confirmation on Credit is required" to the IDLC
  • Once the required Transaction Details are completed, select the next section to complete: Conditions link.

When looking at the Conditions section:

  • Select the Transport Document Lookup icon to display a standard list of records. Users can then select from the list the relevant Transport Document.
  • The Marked Freight dropdown will have two options to select: Prepaid or Collect
  • Select the Lookup icon for Consigned to for access to the Counter Party Library. Users can review and select from the provided list the correct Counter Party.
  • Select the Lookup icon for the Notify field to access the Counter party Library list. This will show a prepopulated list from the Counter Party Library to be reviewed and select the correct Counter Party Name from the list.
  • The Text field is a free-form text where Users can enter or copy and paste in for any relevant dates.
  • The Insurance Policy field will be enabled once the Insurance Policy check box is selected.
  • Once all details and fields are provided, select Shipment Tab

When looking at the Documents section:

  • Select the Transport Document Lookup icon to display a standard list of records. Users can then select from the list the relevant Transport Document.
  • The Marked Freight dropdown will have two options to select: Prepaid or Collect
  • Select the Lookup icon for Consigned to for access to the Counter Party Library. Users can review and select from the provided list the correct Counter Party.
  • Select the Lookup icon for the Notify field to access the Counter party Library list. This will show a prepopulated list from the Counter Party Library to be reviewed and select the correct Counter Party Name from the list.
  • The Text field is a free-form text where Users can enter or copy and paste in for any relevant dates.
  • The Insurance Policy field will be enabled once the Insurance Policy checkbox is selected.
  • Once all details and fields are provided, select Shipment tab

When looking at the Goods section:

  • Partial Shipment user can select the desired fields: Not allowed, Conditional and Allowed. Not allowed will be populated by default.
  • Transshipment will have Not Allowed by default. Users can select Allowed, Conditional and Not allowed
  • Ship from and Step to, Country, Port of Loading, Discharged and Shipment Terms will have a Lookup Tool function where user can select from a Library.
  • Terms is a free-format field to type relevant data.
  • Presentation Period will be prepopulated to 21 days and can amended.
  • Latest Shipment Date will have a Calendar Lookup Tool available.
  • Insurance Covered by will have three options: Buyers, Shipper or Ultimate Buyer
  • The Goods Description and Additional Goods fields have Lookup Tool function to the Goods Description Library where user can select the desired field.
  • Once all the required fields are completed, select Submit

  1. Select Trade from the Global Trade homepage
  2. Under Import Letter of Credit select Authorise
  3. Once the IDLC is submitted/confirmed, it will be routed to the "To Authorise" queue and will require an Authoriser to approve the transaction before it is released to the bank for processing. The snapshot above illustrates the Transaction Review screen where all the transactions pending authorization will be displayed.
  4. Once Authorizer reviews, they will have four options: To Authorise, Modify, Send to Repair and Delete:

    Authorise - Authorises the transaction and sends transaction for processing.
    Modify - Opens the transaction for editing.
    Send To Repair - Sends the transaction back to the maker for repair.
    Delete - Deletes the transaction.

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