This module will not be further enhanced. Support is limited to defect fixing only.

Introduction to Foreign Exchange Operations

The module helps banks stay aligned with the National Bank of Ethiopia's (NBE) directives on Forex operations. The alignment happens through the management of foreign exchange operations including the retention foreign currency accounts along with defining the applicable percentages and liquidation days with exporters, service providers to foreign customers, resident companies, institutions, individuals, and government organizations other than diplomatic mission who continually receives incoming foreign remittances. Moreover the module caters for the generation, utilisation and management of FX permits and purchase orders (unique and sequential) as a way to manage and control the importing and exporting activities.

Retention Accounts

In accordance to the directives of NBE, banks in Ethiopia are authorised to establish retention foreign currency accounts to exporters, service providers to foreign customers, resident companies, institutions, individuals, and government organisations other than diplomatic missions who continually receive incoming foreign remittances.

This functionality allows banks to manage foreign exchange operations. This includes the retention of foreign currency accounts, the definition of applicable percentages and liquidation days with exporters, service providers to foreign customers, resident companies, institutions, individuals and government organizations other than diplomatic missions who continually receives incoming foreign remittances.

There are two types of retention accounts:

• Retention account A where 30% of their earnings are kept in foreign currency and can be used by account holders for an indefinite period of time.
• Retention account B where 70% of account holder’s foreign exchange earnings are kept in this account. Account holders can retain their foreign currency holdings in account B only for 28 days after which they are obliged to sell to commercial banks. After the 28th day, banks are also obliged to convert the balances in account B and pay the Birr equivalent or deposit to their local account.

Users can open two new retention accounts along with the main account. The foreign currency earning, when credited to the main account, will be split into two retention accounts based on the parameter percentage.

The following items have been introduced as part of this functionality:

• The Create Retention Ac field has been introduced in the account property class to allow the creation of two retention accounts along with the creation of the main account.
• The ETFXOP.PARAM,INPUT version allows users to capture the retention account parameter related details.
• The ETFXOP.RETENTION.TRANSFER application is used to store the details of the transactions for the retention accounts.
• The ETFXOP.ACCOUNT.LIST enquiry allows users to list the retention accounts.

Forex Permit Number and Purchase Order Management

In the Ethiopian region, there is a prerequisite for the customers to have permission from the appellant authority, like Central Bank or the bank, for doing an import or export transaction, such as import Letter of Credit (LC), export LC, inward collections, outward collections and so on. This permission comes in the form of a number called forex permit number or purchase order number. The permit numbers are issued with a unique reference number depending on the business nature.

This functionality allows banks to manage the forex permits issued along with the corresponding transaction details and supporting document details that have to be reported every Monday to the Central Bank.

The forex permit number is generated based on the transaction types, like import contracts, import collection drawings, and advance payments and export contracts. The purchase order number is generated when the importer wants to do imports based on cash against a document or documentary collection as a method of payment.

The forex permit number and purchase order number are required at the following stages:

The format of both numbers, forex permit number and purchase order number under the documentary collection method, will have 17 digits.

The following items have been introduced as part of this functionality:

• The ETFXOP.FXPN.PO.DETAILS live application has been introduced to store details related to the forex permit number and purchase order number.
• The ETFXOP.PARAMETER application along with the corresponding ETFXOP.PARAMETER,INPUT version, have been introduced to configure the validity days of the forex permit number and purchase order number, and bank code.
• The ETFXOP.FX.PERMIT.NO local application has been introduced with all the required fields to create the forex permit number. The record Id of this application is FXYYYY-five digits sequential number.
• The ETFXOP.FX.PERMIT.NO,IMEX version has been introduced to generate a forex permit number. The record Id of this version is FXYYYY-five digits sequential number.
• The ETFXOP.PO.NO.ISSUE local application has been introduced with all the required fields to create the purchase order number. The record Id of this application is POYYYY-five digits sequential number.
• The ETFXOP.PO.NO.ISSUE,IMPDC.PO version has been introduced to generate a purchase order number. The record Id of this version is POYYYY-five digits sequential number.
• The ETFXOP.AMEND.FXPN enquiry along with the ETFXOP.FX.PERMIT.NO,AMEND drill down version have been introduced to amend the details of a forex permit number.
• The ETFXOP.AMEND.PO enquiry along with the ETFXOP.PO.NO.ISSUE,AMEND drill down version have been introduced to amend the details of a purchase order number.
• The ETFXOP.REVERSE.FXPN enquiry along with the ETFXOP.FX.PERMIT.NO,REVERSE drill down version have been introduced to reverse a forex permit number. The reversal of a forex permit number is allowed only if it is not linked to an LC, PP.ORDER.ENTRY or MD Deal.
• The ETFXOP.REVERSE.PO.NUMBER enquiry along with the ETFXOP.PO.NO.ISSUE,REVERSE drill down version have been introduced to reverse a purchase order number. The reversal of a purchase order number is allowed only if is not linked.
• The ETFXOP.CANCEL.FXPN enquiry along with the ETFXOP.FX.PERMIT.NO,CANCEL drill down version have been introduced to cancel a forex permit number.
• The ETFXOP.CANCEL.PO.NO enquiry along with the ETFXOP.PO.NO.ISSUE,CANCEL drill down version have been introduced to cancel a purchase order number.
• The ETFXOP.PO.NOS.ISSUED enquiry has been introduced to display all the issued purchase order permit numbers.
• The ETFXOP.FX.PERMIT.NOS.ISSUED enquiry has been introduced to display all the issued forex permit numbers.
• The Forex Permit Number field has been added to the versions of the LETTER.OF.CREDIT, DRAWINGS, MD.DEAL and PP.ORDER.ENTRY applications to allow users to enter the forex permit number.
• The Purchase Order Number field has been added to the versions of the LETTER.OF.CREDIT and DRAWINGS applications to allow users to enter the purchase order number.