Credit risk management at Vietnam International Commercial Joint Stock Bank - Hanoi Branch

Inspection work

- Continue to innovate the inspection and supervision of banks. It is necessary to improve the quality of inspection by promptly grasping modern business and banking services, applying new technologies to continuously monitor commercial banks in two forms: on-site inspection and remote monitoring. On-site inspection increases the effectiveness of handling violations based on documents proving non-compliance with legal regulations due to objective or subjective reasons as a basis for applying specific sanctions. Remote monitoring helps to promptly warn of violations so that commercial banks can take measures to prevent risks in business and credit activities. Implement inspection and supervision in a unified, focused and key manner for credit institutions. Resolutely and promptly handle violations detected through inspection.

- Research, develop and issue legal documents related to banking inspection and supervision activities. The inspection program needs to be developed in detail and scientifically, the collected information needs to be carefully analyzed, avoiding formality; the inspection content must be improved to ensure control of commercial banks, demonstrate the role of warning, preventing and avoiding risks, and not affect the activities of other commercial banks.

- Stabilize the organizational structure of the Banking Inspection and Supervision Agency. Increase the quantity and quality of officers working in banking inspection and supervision. Effectively assign inspectors to monitor and take responsibility for the safety of each branch and credit institution in the area. At the same time, it is necessary to exchange inspectors between branches of the State Bank to ensure objectivity and create a diverse working environment for inspectors to improve their skills and handle situations.

Improving the credit information system of the banking industry (CIC)

- In order to gradually improve and develop the credit information system of the banking sector, the State Bank of Vietnam needs to issue regulations requiring credit institutions and enterprises with credit relationships to provide credit information to the CIC of the banking sector, and there must be regulations on sanctions when credit institutions provide credit information.

incomplete, untimely, and inaccurate. In cases where inaccurate information is discovered, the commercial bank must pay an administrative penalty as well as compensate for damages to other commercial banks that have used the inaccurate information. In addition, there should be regulations on rewards for commercial banks that comply with credit information regulations to encourage commercial banks to improve the quality of information provided.

- The information provided should include qualitative comments on the borrower in addition to quantitative and detailed criteria on related items, for example: borrower status, collateral, loan guarantee status, outstanding loans and credit quality over periods, etc.

- CIC should strengthen the function of checking the accuracy and completeness of information provided by commercial banks. On that basis, periodically every quarter, the whole industry should be notified of the situation of compliance with regulations and administrative sanctions against commercial banks that violate regulations.

3.3.3. Recommendations to Vietnam International Commercial Joint Stock Bank

First, improve recruitment policies, regularly train staff and have reasonable reward policies.

Thanks to the good implementation of personnel work in recent years, Vietnam International Commercial Joint Stock Bank has a team of young, dynamic and well-qualified staff. However, the system still has a surplus of quantity and a shortage of quality, so the work of recruiting, training and arranging staff always plays an important role. The business direction of the Bank in the coming years is to continue to establish more branches, transaction offices, transaction points in potential locations, urban areas, etc. Therefore, personnel work becomes even more necessary.

Staff recruitment: The Bank needs to recruit more staff, especially TD staff, to supplement the force in the branches that are lacking and to expand the operating network. Therefore, the Bank needs to have a reasonable recruitment policy to attract good students from universities in the fields of finance - banking, economics, commerce, engineering, law, etc. as well as people with qualifications, capacity and experience. University graduates are a young, dynamic human resource.

Recruitment policy and recruitment work well implemented will help the Bank attract and select good staff from this human resource.

Training and improving staff qualifications: banking operations, especially credit operations, require continuous updating of professional expertise and legal changes. Therefore, the Bank needs to research and develop specific and regular programs on training, staff development, professional training sessions, etc. for staff at branches throughout the system. At the same time, it is necessary to organize seminars on credit experience, customer classification and assessment skills, etc. For newly recruited credit officers, it is necessary to assign officers with good professional qualifications and extensive experience to guide the work, so that new officers can quickly grasp the content and requirements of the job, and have the opportunity to become familiar with the actual work before starting to take charge of loans.

Reward and treatment regime: Currently, salaries are paid according to each position, linked to productivity, quality and efficiency of work, thanks to which, the awareness and quality of work of officers and employees have had many positive changes. However, to encourage officers to work well and perform well the assigned tasks, the Bank still needs to have more reasonable reward and treatment policies.

Second, continue to develop and improve credit regulations and procedures.

Although Vietnam International Commercial Joint Stock Bank has developed and issued quite complete and scientific regulations on credit operations and other banking operations, in order to adapt to the continuous changes in the business environment and the development of the economy, the Bank needs to continue to develop and improve these regulations regularly: review documents and regulations to see if they are still suitable for the Bank's operational requirements and economic conditions, check whether documents are overlapping or inadequate, issue new documents to replace old documents that are no longer suitable... Completing the system of lending policy regulations is important in directing and guiding operations, so that credit operations are carried out consistently at all branches, minimizing credit risks, and ensuring the Bank's capital safety.

At the same time, the Bank needs to develop and issue a system of qualitative and quantitative indicators to assess the overall credit quality, to serve the management and operation of credit activities at each branch.

CONCLUDE

Credit risk management in banking operations is one of the important tasks in the management and operation of commercial banks, especially in the context of the world economic crisis, from which the Vietnamese economic situation is increasingly difficult, inflation is high, businesses do not have money to pay, do business, leading to the possibility of bankruptcy, banks have difficulty recovering debts, overdue debts, bad debts increase, ...

Based on the application of research methods, closely following the objectives and scope of the research, the thesis has completed the following tasks:

- Learn basic theories of credit risk and credit risk management.

- Analyze the current status of credit risk management of the bank, thereby assessing the causes leading to the shortcomings in credit risk management of Vietnam International Commercial Joint Stock Bank - Hanoi Branch.

- Propose some solutions to enhance the effectiveness of credit risk management for Vietnam International Commercial Joint Stock Bank - Hanoi Branch.

- Make some recommendations to the Government, Ministries and the State Bank.

The author hopes that through this research, the topic will have a small contribution to help Vietnam International Commercial Joint Stock Bank - Hanoi Branch to implement credit risk management more closely, control bad debts, problem debts, identify risks early so that there are effective handling measures, improve credit quality as expected, and be competitive enough with domestic and foreign banks in Vietnam.

LIST OF REFERENCES

1. Legal documents on banking.

2. Mai Kha Hung (2013), Credit risk management of Ho Chi Minh City Housing Development Joint Stock Bank - Hoan Kiem Branch, Hanoi University of Business and Technology.

3. Le Vinh Loc (2014), Credit risk management at Vietnam Export Import Commercial Joint Stock Bank, Ho Chi Minh City University of Economics.

4. Pham Truong Giang (2015), Credit risk management at Vietnam Maritime Commercial Joint Stock Bank, University of Economics, Vietnam National University, Hanoi.

5. Vietnam International Commercial Joint Stock Bank – Hanoi Branch, Balance Sheets for the years 2013, 2014, 2015.

6. Associate Professor, Dr. Dinh Xuan Hang (2012), Textbook of commercial bank credit management, Finance Publishing House.

7. Frederic S.Mishkin (2001), Money, Banking and Financial Markets , Science and Technology Publishing House, Hanoi

8. MSc. Dao Thi Thanh Tu (2014), Building an operational risk management system at Vietnamese commercial banks , Finance Magazine.

9. Dr. Nguyen Minh Kieu (2008), Corporate Finance, Statistical Publishing House, Hanoi.

10. Basel Convention Document.

11. University of Commerce (2011), Commercial banking operations management textbook , Statistical Publishing House .

12. Websites:

www.sbv.gov.vn

www.vib.com.vn

www.moi.gov.vn

http://vi.wikipedia.org/ http://www.tapchitaichinh.vn/