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Difference between revisions of "IS480 Team wiki: 2015T1 A3xy ProjectOverview"

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(business scenario added)
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'''Business Scenario'''<br/><br/>
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<ol class="d">
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  <li>A Singapore based importer and a China based exporter agree to conduct business. The exporter wants a letter of credit to guarantee payment.</li>
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  <li>The importer applies to his bank for a letter of credit in favour of the exporter.</li>
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  <li>The importer's bank approves the credit risk of the importer, issues and forwards the credit to its correspondent bank (advising). The correspondent bank is usually located in the same geographical location as the exporter (beneficiary).</li>
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  <li>Advising bank will authenticate the credit and forward the original credit to the exporter (beneficiary).</li>
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  <li>The exporter (beneficiary) ships the goods, then verifies and develops the documentary requirements to support the letter of credit. </li>
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  <li>The exporter presents the required documents to the advising or confirming bank to be processed for payment.</li>
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  <li>Advising or confirming bank examines the documents for compliance with the terms and conditions of the letter of credit.</li>
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  <li>If the documents are correct, the advising or confirming bank will claim the fund by debiting the account of the issuing bank.</li>
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  <li>Advising or confirming bank will forward the documents to the issuing bank.</li>
 +
  <li>Issuing bank will examine the documents for compliance. If they are in order, the issuing bank will debit the importer's account.</li>
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  <li>Issuing bank then forwards the documents to the importer. </li>
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</ol>
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<br/><br/>
 
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Revision as of 20:16, 17 August 2015


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HOME

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ABOUT US

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PROJECT OVERVIEW

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PROJECT MANAGEMENT

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DOCUMENTATION

 
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Project Description

The purpose of the project is to develop a Trade Finance portal and integrate it into the existing SMU tBank architecture. This application will be a self-service channel for “corporate customers” (students) to implement a number of financial instruments related to international trade, such as; Letter of Credit, Bill of Exchange, Bill of Lading, Bank Guarantee, Documentary Collection, Open Account, Export Factoring. Another deliverable will be an end-to-end trade simulator that can be used in the classroom to illustrate the movement of goods and trade documents across the relevant parties, eg; Importer, Exporter, Freight Forwarder, Issuing Bank, Advising Bank.

The proposed web application, SMU tBank Trade Finance will consist of the following modules:

Importer
LC Application
LC Amendment
Document Acceptance
Import Notifications
Request Shipping Guarantee
Request Trust Receipt
LC Status
Payment


Exporter
Accept LC
Accept LC Amendment
Document Presentation
Import Notifications
Request Banker's Guarantee
Request Bill Discounting
LC Status
Payment


Business Scenario

  1. A Singapore based importer and a China based exporter agree to conduct business. The exporter wants a letter of credit to guarantee payment.
  2. The importer applies to his bank for a letter of credit in favour of the exporter.
  3. The importer's bank approves the credit risk of the importer, issues and forwards the credit to its correspondent bank (advising). The correspondent bank is usually located in the same geographical location as the exporter (beneficiary).
  4. Advising bank will authenticate the credit and forward the original credit to the exporter (beneficiary).
  5. The exporter (beneficiary) ships the goods, then verifies and develops the documentary requirements to support the letter of credit.
  6. The exporter presents the required documents to the advising or confirming bank to be processed for payment.
  7. Advising or confirming bank examines the documents for compliance with the terms and conditions of the letter of credit.
  8. If the documents are correct, the advising or confirming bank will claim the fund by debiting the account of the issuing bank.
  9. Advising or confirming bank will forward the documents to the issuing bank.
  10. Issuing bank will examine the documents for compliance. If they are in order, the issuing bank will debit the importer's account.
  11. Issuing bank then forwards the documents to the importer.