A Letter of Credit is an Authorization for a certain amount of financial transaction from Bank by Authorized person. In case of West Bengal Financial System, LOC is used for Authorization of monetary transactions for execution of different projects by Works & Forest Divisions. LOC is issued for 4 types of work: – (a) Project / Plan related Work (b) Work Charged Establishment (c) Maintenance Work and (d) Deposit Work.
Finance Department, with the help of National Informatics Centre (NIC), has developed a new system for on-line authorization and sanction of LOC in order to speedy transfer of fund for timely execution of the development works in a transparent way. For this purpose Finance Department in its website [www.wbfin.nic.in] has made necessary link ‘LOC Monitoring System’ [LOCMS] with effect from the financial year 2013-14. All the LOC related works would be processed and monitored through this system.
Expected Benefits of LOCMS
- Minimize the processing time for LOC Issuance
- Speedy Transfer of Funds
- Timely Execution of Developmental Works
- Monitoring of LOC Utilization
- Monitoring of Developmental Works
- Bringing in Transparency
1. Role of the Finance Department:
Finance shall authorize the LOC Issuing Authorities on-line through ‘LOCMS’ for certain amount of fund from time to time for issuing LOC to their authorized LOC Executing Officers (i) for execution of Project/Plan related works and (ii) for Normal Maintenance Works separately.
2. Role of the LOC Issuing Authority:
(a) For Projects/Plan related works: Based on the proposal received from the LOC Executing Officers, the LOC Issuing Authorities shall on-line through ‘LOCMS’ issue LOC to the concerned LOC Executing Officers on specific the Project /Plan basis according to head of account according to priority. The LOC may be for part of the total amount or upto full amount subject to overall authorization of the Finance Department in this respect.
(b) For Maintenance Works: Based on the proposal received from the LOC Executing Officers, the LOC Issuing Authorities shall on-line through ‘LOCMS’ issue LOC to the concerned LOC Executing Officers for normal maintenance works/ Non-Plan Works including work-charged establishment for appropriate required amount, subject to overall authorization of the Finance Department in this respect.
3. Role of the LOC Executing Officer:
(a) For Projects/Plan related works: LOC Executing Officers’ shall upload the proposal request on-line through ‘LOCMS’ for issuing the LOC by filling up the required data in the prescribed format. They may also upload the relevant supporting document through scan.
(b) For Maintenance Works: The LOC Executing Officers shall fill up the prescribed format.
(c) The LOC Executing Officer shall upload the data of the LOC utilized amount cheque Number wise in the ‘LOCMS’ against each LOC and each head of Account in respect of
(i) Project/Plan related works, (i) Maintenance Works and (iii) Deposit Works.