'Discounting' of Letter of Credit (LC) is a short-term credit facility provided by the bank. In the Letter of Credit discounting process, the bank purchases the documents or bills of the beneficiary and in return makes him the payment for a security or a fee. So, LC discounting is a term used for ease in place of ‘LC Bill Discounting’, which means discounting of a bill backed by LC. When the Tenor (Payment Method) is usance, the beneficiary is supposed to get payment only on the maturity date (due date). But beneficiary may need funds immediately for various reasons. So, he will contact his bank and request the bank to discount the documents presented under LC to get the immediate payment. The Beneficiary shall be required to pay a fee or discounting charges to the bank, which is termed a Letter of credit discounting charges; it is like interest. 

Discount Process in RIVO:

In RIVO, Beneficiary's bank / Financier is allowed to discount the documents presented under the Export L/C.

During 'Doc presentation' by beneficiary/corporate, under Document Presentation details, the RIVO card shows an option 'Discount the bill' with the options 'Yes' or 'No'. When the beneficiary/corporate selects 'Yes', then the discounting is to be done by the bank for the documents presented, and selecting 'No' notifies the bank that discounting is not required.

Further deal released by beneficiary, the status changed to 'Doc presentation-approved' and once the bank release the deal, status is updated to 'Doc Presented'

Beneficiary bank proceed with “Doc processing” and the status of the deal now changed to “Doc Processed- Clean”.

When the status of the drawing is 'Doc Processed- Clean', under 'Documents' tab, the Bank/Financier will have an additional menu option 'Discount Doc' for each drawing.

This card outlines the key fields and logic involved in capturing and processing discounted bills in RIVO.

Mandatory Fields & Logic

Document Amount & Deal Currency

• Source: Auto-populated from the “Doc Processed - Clean” status.

• Type: Protected field (non-editable).

• Purpose: Represents the face value of the document being discounted.

Discount Percentage

• Type: Percentage field (maximum value: 100%).

• Input: Manually entered by the user.

• Mandatory: Yes.

• Note: Must not exceed 100%.

Discount Amount & Deal Currency

• • Type: Calculated field.

  • Formula: Discount Amount = (Discount Percentage / 100) * Document Amount.

  • Mandatory: Yes.

  • Behavior: Automatically computed based on the entered discount percentage.

Start Date

• Type: Editable date field.

• Mandatory: Yes.

Discount Period

• Type: Numeric input field.

• Mandatory: Yes.

• Behavior: Automatically calculated as Discount period calculated from Start to End Date.

• Note: Input must not exceed the maturity date defined under the LC (Letter of Credit) terms.

End Date

• Type: Date field.

• Behavior: Automatically calculated as Start Date + Discount Period.

• Editable: Yes — can be manually overridden if needed.

• Mandatory: Yes.

Days per Year Calculation

• Type: Drop-down selection.

• Options:

  • 360D Flat 

  • 365D Flat

  • 360D Floating

  • 365D Floating

• Purpose: Used in interest calculation formulas by bank.
• Note: This option is for record-keeping purposes only, used to indicate the interest calculation method applied)
• Flat Rate Calculation – A fixed rate that remains unchanged throughout the entire term.

• Floating Rate Calculation – A rate that fluctuates over time, tied to a benchmark or reference rate.

Interest Amount & Currency

• Type: Numeric input.

• Mandatory: Yes.

• Purpose: Data Capture, Input the exact Interest amount generated by bank for discounting

Net Amount & Currency

• Type: Manual entry.

• Mandatory: Yes.

• Purpose: Represents the final settlement amount after discount and interest.

Attachments

To maintain a complete audit trail and compliance documentation, users can upload supporting documents through the Attachments tab.

Functionality:

• Upload scanned documents, SWIFT messages, approvals, or internal memos.

Recommendation: Attach copies of the discounted bill, LC terms, and interest computation sheets.

Mandatory: No.

Review & Sign

Once all required data is captured and validated:

• Navigate to the Review & Sign section.

• Add Additional Details: This area allows entering any final remarks, instructions, or reviewer notes.

• Tick Sign Icon : Click the signature icon to confirm review and digitally sign off the record.

• Save: Upon saving, the system will display a "Transaction Completed" confirmation pop-up, indicating successful ''Doc Discounted"

When the user signs the "Discount Doc" transaction, the status should be updated as 'Doc Discounted". After 'Doc Discounted' the Bank/Corp user should be able to see the “View” option under the context menu of drawing.

The list of allowed statuses for Discounting:

• Doc Processed- Clean
• Doc Accepted
• Doc discounted

To proceed with the Docs settlement , Refer How to Settle the Document under Export LC in RIVO