Letter of Credit BANK Sanction Amount Limit

[Former Member]

Hi Experts,

We have a requirement to implement Letter of credit sanction amount limit provided by the BANK.

For e.g. Bank has sanction us credit limit of 20 million USD.

we have open a Letter of credit facility of 10 million USD. and we have draw down 5 Million USD from that facility using bills so the utilized amount is 5 million USD and non utilized amount is 5 million for the letter of credit facility.

The utilized Sanction facility is 10 million USD and non utilized limit is 10 million USD.

Can we map this functionality in Standard SAP ECC 6.0 System. Is there any standard financial instrument available in Standard SAP to fulfill the client requirement.Please also Check is there any standard functionality available in SAP to automatically calculate Bank charges incurred on Letter of Credit financial instrument.

Regards,

Rohit

[former_member198450]

Hi,

I think this can be achiev through facilities functions 56A standard product allignment with 55A.

Also, look for limited management functions it will resolve your issue

Regards,

Jain

[Former Member]

Hi Varghese,

Yes we can use 56A Facility and 55A IRI product type to MAP LC Product.We can use 56A for  Non-Fund Credit limit provided by the bank for LC and then we can use 55A to create LC transaction. But we have  requirement to Link Bills to utilize the open LC. Is this scenario is possible to MAP in standard SAP.

BR,

Rohit

[Former Member]

Hi Rohit,

if a potential system upgrade is in scope for your client , EhP8 has standard functionality for Letter of Credit which can handle the above requirement.

Regards,

Nikhil

[Former Member]

Hi Nikhil,

In EhP8 letter of credit functionality is available under Commodity business function. System upgrade is not in scope and licence cost is very high for Commodity module.

BR,

Rohit

[Former Member]

HI Rohit,

The functionality is a part of Business Function FIN_TRM_TRADE_FIN and not under Commodity Management.

Regards,

Nikhil

[Former Member]

Hi Nikhil,

Thanks !! For correcting me.

BR,

Rohit