LC Reimbursement (LCR) — Full Product Flow

Overview

The Letter of Credit Reimbursement (LCR) product manages the reimbursement lifecycle between an issuing bank and a reimbursing bank. Unlike the ILC product (which originates from the applicant side), LCR is driven by incoming SWIFT messages from the issuing bank — primarily MT740 Authorization to Reimburse — and progresses through authorization, amendment, acknowledgment, claim verification, refusal, payment, and closure.

Key Characteristics

• Message-driven — The incoming MT740 from the issuing bank is the product's single entry point: processing it creates the authorization and the Reimbursement Master.
• Multi-event lifecycle — Seven distinct events (RAUTH, RAMD, RACK, RCLMV, RRFS, RPAY, RCLS), each with maker–checker workflow, release tabs, and accounting effects.
• Claim-centric — The presenting bank submits MT742 (claim) which is verified against the authorization; outcome drives settlement (MT756) or refusal (MT744).
• Amount tracking — The ReimbursementMaster tracks amount (authorized), utilizedAmount (claimed), outstandingAmount (remaining drawable), and availableAmount (authorized − utilized − outstanding).
• Status state machine — ReimbursementEventStatus flows: AUTHORIZED → AMEND / ACKNOWLEDGED → CLAIMED → PAID / REFUSED → CLOSED.

End-to-End Flow

flowchart TD
    RAUTH["1 · RAUTH
Authorization (MT740 in)"]
    RM[("Reimbursement Master
created from the MT740
status: AUTHORIZED")]
    RAMD["2 · RAMD
Amendment (MT747 in)"]
    RACK["3 · RACK
Acknowledgment (MT799 / MT730 out)"]
    RCLMV["4 · RCLMV
Claim Verification (MT742 in)"]
    RRFS["5 · RRFS
Claim Refusal (MT744 in / out)"]
    RPAY["6 · RPAY
Payment Advice (MT756 / MT202 out)"]
    RCLS["7 · RCLS
Closure (MT799 out)"]

    RAUTH -->|"creates"| RM
    RM -->|"amend"| RAMD
    RAMD -->|"amended"| RM
    RM --> RACK
    RM -->|"claim"| RCLMV
    RCLMV -->|"clean claim"| RPAY
    RCLMV -->|"discrepant"| RRFS
    RRFS -->|"re-claim"| RCLMV
    RPAY -->|"fully paid / expired"| RCLS
    RCLS -->|"closed"| RM

    classDef startNode fill:#0b1d3a,color:#fff,stroke:#1e6fba,stroke-width:2px
    classDef masterNode fill:#1e6fba,color:#fff,stroke:#0b1d3a,stroke-width:2px
    classDef eventIn fill:#1a5a2a,color:#fff,stroke:#2a7f2a,stroke-width:2px
    classDef eventManual fill:#4a4a4a,color:#fff,stroke:#777,stroke-width:2px
    classDef eventOut fill:#5a3a00,color:#fff,stroke:#6a4c00,stroke-width:2px
    class RAUTH startNode
    class RM masterNode
    class RAMD,RCLMV,RRFS eventIn
    class RACK,RCLS eventManual
    class RPAY eventOut
        

Where It Starts

• An incoming MT740 (Authorization to Reimburse) from the issuing bank is filed on the Incoming LC Reimbursement (MT 740) screen — the product's single entry point.
• Clicking Authorization parses the message, creates the Reimbursement Master (LC reference, amount, expiry and parties come straight from the MT740) and opens the Authorization (RAUTH) form.
• From then on the master (menu: LC Reimbursement Master) is the control hub — live statistics (available / outstanding / utilized) and every later event hang off it.

Event Catalog

Every event below is pre-configured in the product's event setup and drives which screens, queues, and messages are offered to operations staff. All events use the standard Create/Update/Approval/Cancellation policy quartet via createStandardPolicies().

All events use 4-queue maker–checker (Input → Update → Approval → Cancellation). Mandatory SWIFT messages must be generated on the Swift tab before final approval.

Parties & Shared Platform

Parties on every Reimbursement

How Every Event Runs (Shared Plumbing)

Operations staff experienced with one stage will recognize every other stage — the mechanics differ only in the data captured. Three mechanisms apply throughout:

Product Configuration

Everything the stage sections describe as per event configuration is defined once, up front, on the Product Configuration screen. One Product record owns the reimbursement setup (product code RIB): identity fields and the Reimbursement Configuration block on Main Details, plus seven setup tabs that feed the queues, charges, SWIFT messages, checklists and postings each event uses. The reimbursement block appears when the product type is LCR.