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Creating a Modern Business Culture Environment


Deposits that are “bought back” must be recorded as a deduction from the mobilized source. Therefore, the accounting must provide full information for the preparation of financial statements such as repurchase principal, premium value, accrued interest, etc.

The regime must also stipulate that credit institutions must have separate accounting accounts to track detailed information about repurchased deposit certificates. On that basis, make adjusting entries for preparing financial statements.

The regime prescribes and provides specific guidance on the cases in which securities are allowed to be changed or reclassified after initial recognition in accordance with the spirit of IAS 39.

Fourth: Perfecting the credit accounting system

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First of all, loans are divided into two categories: those with no signs of impairment and those with signs of impairment that require specific provisions. The signs of impairment stated in IAS 39 include both qualitative and quantitative factors, quite similar to the provisions in Article 7 of Decision 493.

Distinguish between general provisions and specific provisions. Accordingly, only specific provisions, which are provisions for each loan and provisions assessed for a specific group, are recognized as expenses. For general provisions, follow IAS 39: General provisions are not allowed to be recognized as expenses in the period because general provisions are made for undetermined losses and therefore do not meet the criteria for expenses.

Creating a Modern Business Culture Environment

Change in the method of calculating specific risk allowances according to IAS 39: Determining the fair value of loans using the discounted cash flow method. Making allowances for the lower difference between the fair value and the book value of the loan.

Change the current regime on accrued interest on loans. Loans classified as group 3 debt and above will stop calculating accrued interest. At the time when the debt is classified as group 5 debt "Debt with the possibility of capital loss", the accrued interest (if any) of the loan will be settled and accounted for in other expenses. The current regime, which stipulates that group 2 debt must stop calculating accrued interest, and immediately settle accrued interest is too cautious and unreasonable.

Due to the automatic processing system, information is updated regularly, the classification


Debt classification as a basis for calculation and provisioning must be made at the time of preparing the financial statements (Monthly/Quarterly/Yearly). According to Decision No. 493/2005/QD-NHNN dated April 22, 2005 issued by the Governor of the State Bank of Vietnam (replacing Decision 488/2000/QD-NHNN) on debt classification, provisioning and use of provisions to handle credit risks in banking activities of credit institutions, the annual financial statements of credit institutions will not accurately record the financial status and business performance of credit institutions at the end of the fiscal year (December 31 of the year), because the basis for calculating provisions is the balance of loan accounts for qualified debts, debts requiring attention, substandard debts, doubtful debts, and debts with the possibility of losing capital at November 30 of the year. The change in the level of credit risk, therefore the change in the risk provision that needs to be set aside in the period from December 1 to December 31, is not reflected. Therefore, Decision No. 493 needs to be amended, in which, in the fourth quarter of the year, at the end of December 31, credit institutions need to review, reclassify loans, and handle any change in the level of credit risk and accordingly, the change in the risk provision that needs to be set aside in the bank's operations.

Fifth: Develop and regulate the business regime for issuing convertible bonds and preferred stocks.

* Accounting for convertible bonds

Correctly apply the requirements and methods according to IAS 39. When issuing convertible bonds, based on the conditions and conversion rates allowed, separate them into Liabilities and Owners' Equity (belonging to other capital components). After initial recognition, the organization must re-evaluate financial liabilities at allocated costs by applying the effective interest method (accounting for interest payments on the Liabilities component is completely in accordance with normal accounting principles).

* Accounting for preferred stock issuance

Preferred shares are complex financial instruments, which are essentially divided into two parts: the debt component and the equity component. The regime needs to specify and guide the calculation and separation of these parts in accordance with the requirements and methods of IAS 39. When issuing preferred shares, based on the conditions and interest rates at a fixed interest rate, they are divided into Liabilities and Equity (belonging to the other capital component). After initial recognition, the organization must re-evaluate financial liabilities at amortized cost by applying the interest rate method.


In fact, the market interest rate at the time of issuance of preferred stock: Total - debt portion = equity portion;

equity valuation + debt valuation = total value.

Sixth: Perfecting the financial reporting regime for credit institutions

Need to add more information that credit institutions must explain on financial statements

(i) Information on business results by segment;

(ii) Detailed explanation of foreign currency trading results, separating the difference between selling and buying prices; and the result from the difference in revaluation exchange rates due to fluctuations in market exchange rates.

(iii) Explain the changes in the value of securities available for sale in case of loss, the results of pre-maturity sales of securities held for payment and the establishment of risk provisions for securities held for payment.

3.2.1.2. Financial system development

Reform the State Bank of Vietnam towards a modern central bank, suitable to Vietnam's conditions and according to international standards in terms of objectives, tools, operational functions, management organization, technology level and human resource quality.

The State Bank of Vietnam operates in the true capacity and fully possesses the characteristics of a central bank in a socialist-oriented market economy, mainly performing the functions of a central bank (bank issuing money, bank of banks, lender of last resort, money market regulator and payment center) and the function of state management of the monetary and banking sector, ensuring the safety of the banking system. The tasks of the State Bank of Vietnam are mainly aimed at stabilizing the value of money, controlling inflation, ensuring the safety of the monetary and banking system, contributing to creating a favorable macro environment for sustainable economic and social growth and development. The State Bank of Vietnam is independent and autonomous in formulating and operating monetary, interest and exchange rate policies. Enhance the role, responsibility and authority of the State Bank in organizing the implementation of strategies, building and operating monetary policies on the basis of clearly defining the authority, tasks and limiting the intervention of relevant agencies in the process of building and implementing monetary policies, monetary laws and banking operations. The relationship between the State Bank and ministries, branches and credit institutions needs to be clearly defined; at the same time, there needs to be close coordination between the State Bank and


authorities, especially the Ministry of Finance, in formulating and implementing monetary policy. The State Bank has key responsibilities and powers in managing and supervising the operations of credit institutions and other organizations with banking activities, and closely coordinates with the Ministry of Finance in managing and supervising the entire financial system. The State Bank does not directly direct operations and intervene in business decisions of credit institutions of all economic sectors. The State Bank has sufficient resources and is relatively independent in terms of operations, organization and finance, operating with a different mechanism from administrative and public service agencies, but under the management and supervision of the Government and the National Assembly.

Renovate the organizational structure of the State Bank from the central to the branches in a streamlined and modern direction. Reorganize the State Bank, rearrange the Departments and Bureaus in the direction of centralized management and operation; improve the research, analysis, forecasting capacity and specialization of the units; clearly define the functions, tasks and coordination relationships between the units. Restructure the State Bank branches in a centralized direction and not apply a uniform organizational structure and functions and tasks to all State Bank branches; at the same time, prepare the necessary conditions to form regional State Bank branches, not necessarily arranging State Bank branches according to administrative boundaries (provinces, centrally-run cities). Reorganize state-owned enterprises under the State Bank in the direction of only retaining the National Money Printing Factory, the remaining enterprises will be converted into ownership through equitization and merger. The State Bank does not assume the function of representing the State owner at credit institutions and enterprises under the State Bank with State capital.

Operate monetary policy according to the principles of prudence, flexibility and efficiency on the basis of modern monetary policy tools and advanced technology. Develop and implement monetary policy according to market principles. Operate monetary policy based on the regulation of money volume; at the same time, build the necessary conditions to gradually shift to operating monetary policy based on the regulation of interest rates. Create the necessary conditions for the State Bank to switch to operating monetary policy according to the inflation targeting mechanism after 2010.

Continue to support the reform of the banking system . Thoroughly and comprehensively reform the system of credit institutions towards modernity, multi-functional operations, diverse types, with strong scale of operations and financial potential to affirm its position in the region.


The focus of developing credit institutions until 2010 will be to continue implementing financial restructuring solutions and the operating model of state-owned commercial banks, gradually equitizing them according to the principle of prudence, allowing foreign investors to buy shares and participate in the management and operation of Vietnamese banks.

It is necessary to fundamentally reform the management mechanism for credit institutions in the direction of enhancing financial, organizational and personnel autonomy, gradually applying international standards in banking operations. Strengthen institutional capacity, expand agency relationships and expand business cooperation with foreign financial institutions to develop service products and technology applications, allowing the establishment of 100% foreign-owned banks in Vietnam.

Fulfilling commitments to join the WTO and opening the banking market according to the announced roadmap, for example, a foreign bank wanting to open a branch in Vietnam needs to have total assets of over 20 billion USD.

In addition, it is necessary to strengthen international cooperation in the field of banking development to be proactive in integration.

Proactively integrate into the international economy in the banking sector according to a roadmap and steps appropriate to the capabilities of the Vietnamese banking system, first of all the competitiveness of credit institutions and the ability of the State Bank to manage and control the system;

Implement the opening of the banking service market according to the roadmap of commitments of the Vietnam - US Trade Agreement, the ASEAN Framework Agreement on Trade and Services (AFAS); at the same time, implement commitments to join the WTO according to the requirements of the WTO/GATS Agreement;

Continue to improve the policy and legal system in accordance with market opening commitments. Gradually loosen access to the banking service market (domestic and foreign) for both providers and users of banking services (domestic and foreign). Create favorable conditions for domestic credit institutions to expand their operations to foreign markets through forms of service provision within the WTO framework, especially commercial presence and cross-border provision;

Participate in international treaties, regional and international forums on currency and banking. Develop multilateral and bilateral cooperation in the field of currency and banking to take advantage of foreign capital, technology and advanced management skills; coordinate with financial inspection and supervision agencies to detect, prevent and control


regional and global risk prevention and management.

3.2.1.3. Development of information technology infrastructure

The process of computerization along with the increasing use of the Internet has led to an information explosion. In particular, banks need solutions to store, manage, protect, distribute and process information such as online payment transactions and ensure the ability to provide services 24/24.

IT infrastructure development solutions for banks include communication infrastructure solutions and network infrastructure solutions.

The solution for the communication cable system is a uniform cable system for data transmission applications (which may include voice, images, etc.), using regional and international standard systems to fully meet all strict requirements on: material quality, design consulting, construction, inspection, system management, warranty, and maintenance for many decades. The cable system and functional rooms must be designed to ensure that they meet the requirements on: raised floors; electrical and UPS systems; lighting systems; grounding and lightning protection systems; ventilation and air conditioning systems; fire and smoke alarm systems; door and safety lock systems.

Banking services are a sensitive field, requiring a very high level of stability and accuracy, requiring to be established on a strong infrastructure system, large bandwidth and high security.

In fact, the structure of a network infrastructure in a bank has many factors to consider. However, it can be temporarily divided into two separate networks: the internal transaction network system and the service provision network system.

The internal transaction network system is an internal data transmission network in the connected bank, including the data transmission network between branches, transaction offices, ATM systems, Call Centers, etc. The requirements for the internal transaction network are high data security, ensuring maximum safety for data on the network; a network model based on centralized management, meeting point-to-multipoint requirements; high, continuous, smooth connection bandwidth and easy to upgrade; simple network management, not requiring too much expertise; easy to expand connection points when necessary, not limited to connection locations; the system must be suitable for the development trend of technology, avoiding the application of outdated technology; there must be backup solutions for the data system and


data transmission; and reasonable equipment usage and investment costs, avoiding having to invest in many expensive, inefficient devices.

The service network system is a transaction network that provides e-banking services to customers. The network system is applied on the basis of available shared networks such as the internet, public telephone network, mobile phone network. E-banking services deployed on this network usually include internet banking, PC banking, phone banking, mobile banking, SMS banking, etc. The requirements for the service network are that the network access port must have extremely high connection bandwidth; mainly meet the maximum need for uploading information; ensure the most optimal and stable transmission; the shared network must have a number of regular users; and easily set up security applications.

The telecommunications industry provides infrastructure for banking technology. However, the relationship between telecommunications units and many banks is only at the level of buying and selling, without taking advantage of each other's advantages for development. If the telecommunications industry cooperates with banks to transmit data, it will bring large and long-term revenue for both parties. This will help the telecommunications industry have large profits for reinvestment, increase the ability to transmit financial data, and provide new services to customers. At that time, the transmitted data will not only be simple financial transactions but also complex transactions such as insurance, securities, investment, real estate, etc., transmitted quickly according to different standards. This method will be more beneficial for banks than establishing separate data transmission lines with high costs and difficult management.

Currently, telecommunications companies in our country are dividing their territories and creating “islands”. The Government and the State Bank can completely break that monopoly by presenting the needs to telecommunications companies through strategic cooperation so that telecommunications partners can sit together, creating a smooth flow in the use of technology infrastructure.

3.2.1.4. Creating a modern business culture environment

In business-to-business relations, business culture may include the business environment in the market, the rules of conduct shared by partners, or traditions or habits specific to each market, country or group of partners. Business culture in communication between businesses is the unwritten rules of conduct, although invisible and not


become legal regulations, but are implicitly understood and accepted by the parties involved. That business culture is very important to conduct business smoothly and successfully.

Business culture must first of all include respect for the law in business such as trademark registration, respect for intellectual property rights (which has long been inaccurately called intellectual property), tax payment, environmental protection, labor protection, etc. as well as legal regulations in business management such as company charters, respect for the rights and interests of shareholders or capital contributors, and respect for minority shareholders. Efforts to form and build a business culture environment must come from both sides, from businesses and from law enforcement agencies and state agencies. Laws must be clear, easy to understand, accurate, not allowing for many different interpretations and interpretations, and must be implemented uniformly, non-discriminatorily and consistently throughout the country for different types of businesses. Law enforcement agencies and state agencies must enforce the law on the basis of respect for businesses. Amendments, changes and supplements to the law are necessary, but must be discussed publicly with businesses, and the announcement and implementation must allow businesses the necessary time to prepare and implement. It requires businesses to have a culture of business, and it also requires state agencies to not only operate properly and fully perform their functions and tasks, but also have office culture and culture in dealing with citizens and businesses. We must work together and strive to build a business culture, we cannot just require one side of the business to have culture and respect the law.

In business relations with partners, business culture must include credibility with partners and customers. Enterprises borrow from banks when the due date comes, they must pay, even if there are difficulties. If they cannot pay on time, they must notify and negotiate with creditors to extend the term. On-time delivery becomes an important requirement of the contract and the competitiveness and reputation of the enterprise. Delivery speed and reliability are important qualities, demonstrating the organizational and management capacity of the enterprise. Product quality and stability of product quality are part of business culture. Advertising enterprises must ensure honesty, cannot exaggerate the truth, exaggerate non-existent properties or effects to deceive customers. The nature of deception is the information asymmetry between enterprises and customers, such as economics.


Modern science has proven that to overcome information asymmetry, it is necessary to implement transparency, publicity and require independent, honest and professionally competent inspection and auditing institutions such as monitoring, auditing and evaluation companies on behalf of customers to confirm the quality of the product.

In relations with employees, business culture not only includes compliance with the law such as paying salaries, bonuses based on contribution or productivity, paying social insurance, implementing labor protection regulations, creating conditions for employees to develop, etc., but also includes building a production and business environment based on the principles of humanity and equality, that is, implementing humanity in its broad sense. A humane business environment is a business environment that encourages creativity and promotes the progress and development of all employees. In today's fiercely competitive business environment, customers always expect new products, designs, packaging and quality to be constantly improved. Humanity in relations between people also includes equality. Equality here is understood as equality in learning and development opportunities, not egalitarianism, leveling between good and bad people, or laxity in labor discipline or business responsibility. A business that wants to develop must have strong motivation, encourage innovation and creativity, and at the same time must have order, discipline, and a strict system of responsibility and sanctions. Lax discipline and fake democracy in a populist style do not ensure business culture.

Business is the pursuit of profit within the framework of law and culture. Pursuing illegal profit will not ensure long-term business. In negotiation, business culture requires finding and accepting a point of compromise, allowing both parties to benefit. Suppressing partners harshly and only thinking about one's own profit will not be able to bring about long-term cooperation. The profits achieved by the enterprise must be shared fairly and reasonably among the capital contributors, employers and employees. An enterprise without profit cannot survive, a bankrupt enterprise will not be able to ensure its minimum commitments. In a healthy competitive business environment, with equal business conditions, only on the basis of efficiency, productivity and high competitiveness can an enterprise make a profit. On the basis of profit, enterprises not only pay taxes but also participate in many charitable and social activities such as:


build charity houses, help the disabled etc.

Foreign language is the window to access the culture of partners and is also the leading means of communication for businesses. Mastering the basic foreign language of business and Internet communication today is English, which is an indispensable condition in business. Using English well can make transactions with most partners from any country because English has been recognized as the language of business. In addition, mastering the languages ​​of partners such as Chinese, French, Spanish, Russian also brings benefits in transactions. The foreign language level that must be achieved must be business English, the foreign language of a professional, surpassing the level of common foreign language to accurately distinguish the subtleties in expression and the accuracy of the contract. If you cannot use foreign languages ​​yourself, depending on an interpreter is a big disadvantage. It is necessary to verify and compare the translation content to avoid harmful mistakes. In different languages, some have developed business language and achieved a high level of precision, while others have not yet developed precise scientific, technological or commercial terminology and expressions. One must be very careful and seek the most precise expression in the contract.

Attitude and communication style are the gateways in relationships with partners, also considered as "silent language". In addition to basic education, politeness and respect for partners, it is necessary to learn basic knowledge about the customs and practices of partners. Punctuality, polite greetings, dress, warm attitude, body language including attitude, movement, gestures, are things to pay attention to in relationships with partners in each country with different cultures.

Religion and belief have different importance depending on the culture. In a multi-religious culture, it is necessary to be very sensitive and sensitive to know the main religion and other secondary religions. The most important thing is not to make any gross mistake that leads to religious misunderstanding in business.

While understanding, respecting and adapting (to a certain extent) to the culture of the partner, one must be steadfast in the national culture and the lasting values ​​of the national culture in business communication. One must be persistent in the requirements and business cultural values ​​of one's own country. If a businessman abandons all the cultural values ​​of his own country, abandons all habits and unconditionally follows all the habits of the partner, then


In the long run, the entrepreneur will lead himself to a dead end. Because the entrepreneur will have to communicate in an environment that he is unfamiliar with and understands less than his partner. Building standards in communication, determining the minimum conditions that cannot be compromised in negotiation and business is vital for every entrepreneur. One should not go from inadequate to excessive, from not knowing anything and not respecting the minimum requirements in the culture of the partner to completely following the partner, abandoning one's own cultural values.

3.2.2. Micro-solution group

3.2.2.1. Business strategy solutions

An important key in management is the direction of business operations or the business strategy of the business. Therefore, in the coming time, Vietnamese commercial banks need to continue to complete their business strategies to set out the future image of their businesses, using that as a guideline for business operations.

Based on the overall business strategy orientation, develop specific action strategies for each business: capital strategy, credit strategy, network strategy, customer strategy... especially focusing on research on banking technology, tools, management skills of a modern commercial bank: risk management, asset-liability management, to put into application.

The key issue that determines the innovation of management methods is people. There should be a policy to retrain managers at all levels and even senior managers to quickly access modern banking management methods. At the same time, there should be policies to attract talent and train human resources suitable to the operational requirements of modern commercial banks.

Based on the requirements of the established development strategy, each commercial bank must develop a project and implement a specific development program on the basis of restructuring the management apparatus, rearranging the branch system, and developing technology to ensure the development strategy goals according to long-term competitive requirements.

3.2.2.2. Establish a suitable organizational structure

In the process of banking modernization, state-owned commercial banks with a long history of operations and traditional banking structures will need to have many changes in their organizational structure.


to be able to keep up with the requirements of a modern commercial bank with new technology and operating in compliance with international standards and practices. In addition, joint stock commercial banks with a relatively modest operating history and characterized by a leaner and more dynamic organizational structure than state-owned commercial banks also need to adjust their organizational structure to ensure compliance with the requirements and technology strategies of modern banks.

In principle, commercial banks need to establish an organizational model that is in accordance with the law, environmental characteristics and business practices, meets the model and requirements of commercial bank management according to international practices and standards, increases competitiveness, and improves the quality and reputation of the bank.

A good organizational model must change the criteria for dividing departments from business type to customer and product objects, ensuring the requirement of focusing on customers and products; increasing the authority and responsibility of the board of directors. The board of directors must be the actual leadership body at the bank; the organizational chart must be clear and simple so that everyone can identify their responsibilities and not have too many people reporting to one person; delegating responsibility to lower levels in the bank and each employee in the bank will work as a profit center; and meeting the risk management requirements of all banking activities.

The following six comprehensive solutions will meet the requirements of an organizational structure suitable for the operations of modern commercial banks.

Firstly, it is necessary to strongly transform from a traditional bank into a unified banking system in the direction of a multi-functional bank, with the Head Office controlling products and financial plans for each target customer group through distribution channels. Therefore, the Head Office will become larger, directly conducting some strategic activities: currency trading, large-scale credit, trade finance... Branches are considered as a distribution and sales channel for the Head Office, and will be narrowed in terms of function, task, scale and scope of operation.

Second, the organizational model needs to be based on functional pillars such as wholesale banking block, retail banking block and network, capital and capital trading block, risk management block, operations block, administration block, etc. to separate functions by block and work according to geographical scope.

Third is to ensure separation between the “Front Office” and “Back Office” business blocks.

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