Business development solutions of VPFC Petroleum Finance Joint Stock Corporation towards Financial Group

9. Recommendations to the State Bank

The State Bank is the advisory body for the Government in developing and promulgating the Government's Decree on the organization and operation of financial institutions. Therefore, in order to create a legal environment and favorable conditions for the capital potential of financial companies in general and PVFC in particular, it is necessary to:

9.1. On capital mobilization

+ More flexible regulations on capital mobilization terms of financial companies, should not limit the term to over 1 year because enterprises in the Corporation and Group have almost no idle capital in 1 year. At the same time, expanding the scope and flexibility of capital mobilization terms is not contrary to the provisions of law but will create conditions for financial companies to be able to accumulate and concentrate idle capital, contributing to serving the capital needs of the Corporations and Groups, creating a driving force to promote the process of industrialization and modernization of the country.

+ Reduce cumbersome administrative procedures and impractical regulations in applying for permission to issue corporate bonds and construction bonds.

9.2. On capital use

The State Bank needs to have separate, appropriate regulations for financial companies in Corporations and Groups regarding loan ratio limits and limits.

9.3. Foreign exchange operations

The relationship between Corporations, Groups and closely related foreign and international organizations requires the use of convertible currencies such as USD, EURO... Therefore, financial companies including PVFC require

It is necessary to soon carry out foreign exchange activities like commercial banks to attract a large source of foreign currency for the country.

10. Recommendations to the Oil and Gas Group

The Group needs to clearly define the functions and tasks between the finance department of Petro VN and PVFC. The functions and tasks of PVFC are financial intermediaries, connecting Petro VN, member enterprises with domestic and international financial institutions. Therefore, the Group needs to clearly assign tasks to PVFC to enhance independence and autonomy, assign PVFC to develop capital mobilization plans through the issuance of Group bonds and act as an issuing agent. In addition, entrust PVFC to act as a representative in mobilizing capital from domestic and foreign credit institutions, and entrust PVFC to manage self-accumulated capital for reinvestment.

CONCLUDE

Since joining the WTO, in accordance with the commitment roadmap, facing the urgent requirements of international economic integration to expand the Financial-Banking market, large financial institutions along with commercial banks are facing many challenges and great opportunities to develop into financial groups, strong Financial-Banking groups. Becoming a financial group is an attractive trend, but it does not mean that any financial institution can easily achieve it. In addition to huge financial potential, financial institutions must also meet the basic requirements of organization, operational structure, and personnel, according to international standards. PVFC's orientation towards a financial group is also in line with objective conditions and meets the urgent needs of the current financial market. Through the thesis research, the following results have been drawn:

1- Generalize about financial companies, financial groups and their characteristics, advantages, and necessity in the financial-monetary market, draw lessons to build financial groups, financial-banking groups in general and for PVFC in particular when Vietnam is in international economic integration, especially in the financial market.

2- Analyze the current status of business activities and traditional operations of PVFC, draw out the advantages and disadvantages, thereby evaluating the conditions for building a financial group according to the Corporation's orientation until 2010.

3- Also on the basis of studying solutions to develop PVFC's business activities, these solutions will increase the ability to mobilize and use capital reasonably while promoting the Corporation's key service sector, which is financial services. The thesis has researched and built a detailed and feasible roadmap to establish a financial group.

4- Make some recommendations to the State and relevant agencies in removing difficulties and obstacles as well as creating an open legal environment to facilitate the good implementation of proposed solutions.

The Financial Group model is still very new to Vietnam today. The thesis only stands on a very small perspective and only specifically stops at the Petroleum Finance Joint Stock Corporation. There will certainly be many issues that need further research to further improve the financial market in Vietnam, many attractions but also many challenges.

REFERENCES

1) Huynh Ngoc Hanh, Research on Finance-Banking Group, College of Finance and Economics, NCKH internal journal, No. 46

2) Nguyen Dai Lai - Identification of financial groups - Proposing concepts and recommendations for commercial banks in Vietnam, research topic - State Bank.

3) Le Van Sang - Tran Quang Lam, Transnational corporations on the threshold of the 21st century, Social Science Publishing House

4) Master Phan Anh Tuan - Lecture outline of monetary and financial theory 2006

5) Vu Huy Tu - Economic group model in industrialization and modernization

6) Economic Research Journal No. 315, August 2004, No. 329, October 2005. No. 367, June 2006

7) Banking and Finance Magazine No. 15 (August 2006); No. 6 (June 2006); No. 17/2006

8) Vietnam Securities Magazine No. 4 (April 2005)

9) State Organization Magazine 1/2007

10) Financial report of Petroleum Finance Joint Stock Corporation 2001-2007

11) Dang Thi Hong Loan - 2006 Thesis: Research on the operations of some financial groups in the world and experiences for Vietnam http://www.kiemtoan.com.vn

http://pvfc.com.vn http://www.centralbank.vn/vn/home/tinnghiencuu http://www.forbes.com http://www.vneconomy.vn

http://www.sbv.gov.vn/vn/home/tinnghiencuu.jsp?tin=276

LIST OF TABLES AND CHARTS

Name

Content	Page
Table 1	The difference between finance company and commercial bank	5
Table 2	List of 7 largest corporations in the world in 2006	14
Table 3	PVFC's business performance 2001-2007	42
Table 4	PVFC's expected business investment structure in 2008	45
Table 5	Personal loan interest rate table at PVFC	46
Table 6	Capital holding ratio of Oil and Gas Group at PVFC	61
Diagram	Organizational structure of Petroleum Finance Joint Stock Corporation PVFC	32