A method and system for processing fibre channel frames is provided. The method includes, assigning a virtual lane for a frame based on a hop count for the frame; determining if the assigned virtual lane has available credit; and transmitting the frame if credit is available. The system includes, a fibre channel fabric switch element including a receive port for receiving fibre channel frames, which includes a look up table to assign a virtual lane based on a hop count of the frame; and a transmit port that receives a primitive with the assigned virtual lane by the receive port and the transmit port includes a credit control module that determines if an assigned virtual lane can transmit a frame based on available credit.