Evaluation of the quality of savings deposit services at the Bank for Agriculture and Rural Development, Thua Thien Hue branch - 1

used are exploratory factor analysis (EFA) and regression analysis. And the results will be used to draw conclusions.

 Exploratory factor analysis EFA method: To reduce and summarize observed variables into concepts. Through factor analysis to determine the relationship of many identified variables and find representative factors of observed variables.

Regression model testing:

The regression model chosen to be built is a multiple linear regression model with the form:

Y = β 0 + β 1 X 1 + β 2 X 2 +…+ β n X n

In which: Y: Service quality of the Agricultural and Rural Development Bank, Hue branch

β k: Individual regression coefficient of the kth variable X i : Independent variable in the model

Method of testing the reliability of the scale through Cronbach alpha reliability coefficient:

According to researchers:

+ 0.8 < Cronbach's Alpha <1 : the measurement scale is the best

+ 0.7 < Cronbach's Alpha < 0.8 : usable measurement scale

+ Cronbach's Alpha >= 0.6: the measurement scale can be used

6. Structure of the thesis

-Part 1: Problem statement

-Part 2: Research content and results

Chapter 1: Overview of the research problem.

- Present the theoretical basis of concepts, basic operations and services of commercial banks.

- Present the practical basis on the quality of deposit services of Vietnamese commercial banks in general and the State Bank of Vietnam - Thua Thien Hue branch in particular.

Chapter 2: Evaluation of deposit service quality at the Bank for Agriculture and Rural Development, Hue branch.

- General overview and situation of organization, personnel, business activities and deposit mobilization activities of the State Bank of Vietnam - Thua Thien Hue branch.

- Identify factors affecting the quality of savings deposit services at the Bank for Agriculture and Rural Development, Thua Thien Hue branch, then use the regression model to measure the impact of factors on the quality of savings deposit services of the Bank for Agriculture and Rural Development, Thua Thien Hue branch.

Chapter 3: Solutions to improve the quality of deposit services at the Bank for Agriculture and Rural Development, Hue branch .

- Orientation for deposit services of the State Bank of Vietnam, Thua Thien branch

Hue.

- Propose solutions to improve the quality of deposit services at

State Bank of Vietnam, Thua Thien Hue branch.

Part 3: Conclusion and recommendations.

PART II: RESEARCH CONTENT AND RESULTS CHAPTER 1: OVERVIEW OF THE RESEARCH PROBLEM

1.1. Theoretical basis

1.1.1. General overview of commercial banks

1.1.1.1. Definition, functions and roles of commercial banks

a. Definition of commercial bank

Along with the development of commodity production and circulation, commercial banks were born and became a lubricant for the economic machine to operate smoothly and smoothly. Commercial banks were formed and existed as an objective necessity to meet the needs of the commodity economy. The more commodity production and circulation developed, the more the need for exchange between regions increased. However, due to the differences between regions in terms of currency as well as geographical differences, the need for money exchange as well as deposit and payment on behalf of merchants appeared. And it was also thanks to the activity of receiving deposits and payment on behalf of merchants that money holders held a large amount of money, from which they easily carried out lending activities due to the anonymity of money. Commercial banks were born from that time along with its basic operations. Up to now, through many ups and downs of the economy, the operations of commercial banks have expanded continuously, not only in scale and quality, but also in quantity and types of services, increasingly expanding to meet the needs of customers. Since then, commercial banks have become an indispensable part of the economy, and their operations have a strong influence on the development of the economy. Over a relatively long period of time with economic fluctuations, many concepts of commercial banks have been formed .

According to the Law on Credit Institutions, “A commercial bank is a type of credit institution that is allowed to carry out all banking activities and other related activities. This Law also defines : a credit institution is a type of enterprise established under the provisions of this Law and other provisions of law to conduct monetary business, provide banking services with the content of receiving deposits and using deposits to grant credit and provide payment services.”

Thus, commercial banks are important financial intermediaries between borrowers and lenders, thereby making profits for themselves.

b. Functions of commercial banks

In general, commercial banks have 3 basic functions:

- Financial intermediary function: Commercial banks play an intermediary role in performing operations including credit granting, payment, foreign exchange trading, securities trading and many other brokerage activities.

- Money creation function: is the function of creating currency to contribute to increasing the amount of currency to serve the needs of transferring and developing the economy.

- Production function: includes mobilizing and using resources to create "products" and banking services for the economy.

c. The role of commercial banks in the development of the economy

- Commercial banks are the place that provides capital for the economy.

The birth of commercial banks is the key to help those who need capital to have capital and those who have temporarily idle capital to earn capital interest. Banks also balance capital in the economy to help economic components develop together. Banks mobilize temporarily idle capital from businesses and individuals, then supply it to places that need capital to reproduce with more modern equipment, creating new, better products with higher profits. The more society develops, the more the demand for capital for the economy increases, no organization can meet it, only banks - a financial intermediary can stand up to regulate and distribute capital to help all economic components develop together in a harmonious, balanced and stable manner.

- Commercial banks are the bridge between businesses and the market.

In a market economy, businesses do not produce anything but must always answer three questions: what to produce? How to produce? And for whom to produce? That means producing according to market signals. The market requires businesses to produce products with better quality, better designs, and in line with consumer tastes. To do so, businesses must invest in

investment by modern technological lines, the level of staff and workers must be improved and trained... These activities require businesses to have a large amount of investment capital and only banks can meet the demand. Banks will help businesses make their improvements, have quality products at low prices, and improve competitiveness.

- Commercial banks are the State's tool for regulating the macro economy.

In a market economy, commercial banks, as the monetary center of the entire economy, ensure the harmonious development of all economic components when participating in production and business activities. It can be said that each fluctuation of the bank has more or less influence on other economic components. Therefore, the effective operation of commercial banks through their business operations is really a good tool for the State to conduct macroeconomic regulation of the economy. Through credit and payment activities between banks in the system, commercial banks have directly contributed to expanding the amount of money supply in circulation. On the other hand, by lending capital to components in the economy, commercial banks have led cash flows, gathered and divided capital in the market, controlled them effectively, ensuring timely and adequate supply of capital needs for the reproduction process as well as performing the role of indirect macroeconomic regulation of the economy.

- Commercial banks are the link between the national financial system and the international financial system.

Nowadays, in the trend of globalization of the world economy with the formation of a series of economic organizations, free trade areas, making trade relations, circulation of goods between countries in the world more and more expanded and become urgent and necessary. The finance of a country needs to integrate with world finance. Commercial banks are intermediaries, bridges to carry out integration. Nowadays, foreign investment is an important investment direction and brings many profits. At the same time, countries need to export goods in which they have comparative advantages and import goods in which they lack. Commercial banks with business operations such as: receiving deposits, lending, guarantees... and especially international payment operations, have contributed to creating conditions, promoting foreign trade to constantly expand and develop.

1.1.1.2. Basic operations of commercial banks

- Capital mobilization: this is considered an input activity for the business of commercial banks. It plays a very important role for all sectors of the economy through providing favorable conditions for depositing idle money of the population into economic organizations. According to the law on credit institutions, capital mobilization activities include the following operations:

- Deposit receiving business: this is the banking activity of receiving deposits from individuals, organizations and businesses for payment or for the purpose of preserving assets so that commercial banks can mobilize them. In addition, commercial banks can also mobilize idle money from individuals or households deposited in the bank for the purpose of preserving or earning interest on the deposit.

- Issuance of certificates of deposit, bonds and other valuable papers to mobilize capital from domestic and foreign organizations and individuals. Commercial banks mostly use this service to attract relatively long-term and stable capital, to ensure investment capacity and the ability to provide sufficient medium- and long-term credit for the economy. Moreover, this service also helps commercial banks minimize risks and increase capital stability in business operations.

- Borrowing capital between credit institutions: is a business that is frequently used to create capital for business by borrowing from credit institutions in the money market and borrowing from the State Bank in the form of rediscounting or secured loans... In which, loans from the State Bank are mainly to create balance in capital management of the commercial bank itself when it cannot balance its capital sources on the basis of on-site exploitation.

Other mobilization operations: in addition to the above three operations, commercial banks can also create business capital for themselves through acting as agents or entrusting capital to domestic and foreign organizations and individuals. This is an irregular capital mobilization of commercial banks. Usually, to receive this capital, banks must set up projects for each subject or group of subjects suitable for the loans.

- Capital use operations

- Lending activities: is the most important activity that determines the success or failure of a bank because this is the main profit-making activity of banks. Therefore, this is the most risky business. To avoid credit risks, loan management is carried out strictly, especially with large loans and long terms. Therefore, banks must divide credit into many different forms for easy management purposes.

- Treasury operations: this operation reflects the process of using capital of commercial banks for different purposes to ensure the safety of current payment capacity as well as the ability to pay quickly of commercial banks and to implement the regulations on compulsory reserves by the State Bank. This is a non-profitable asset or low-profitable but highly liquid asset.

and are considered as cash. Therefore, banks must maintain this asset at a reasonable level to ensure both liquidity and profitability.

- Financial investment operations: in addition to credit operations, commercial banks also use capital mobilized from the population and socio-economic organizations to invest in the economy in forms such as capital contribution, capital contribution, securities trading on the market... and directly earn profits on those investments.

- Other operations: Commercial banks carry out business activities such as: trading in foreign currencies, gold, silver, metals, and gemstones ; providing consulting services, treasury services, trust and agency services, and insurance services...

- Other intermediary services

In addition to traditional activities including deposit mobilization, credit granting and providing payment and treasury services, commercial banks can also perform a number of other activities, including:

- Payment services: it can be said that banks are the treasurers of the economy; businesses and economic organizations do not have to waste time after buying or selling goods and services because payments will be made quickly and accurately by banks.

- Consulting and brokerage services: banks act as intermediaries in buying and selling securities, advising investors in buying and selling securities, real estate, etc.

- Other services: banks manage assets, keep gold, money, rent safes, security...

1.1.2. Mobilizing deposits of commercial banks

1.1.2.1. Overview of capital mobilization of commercial banks

- Concept of capital of commercial banks

Economists have defined the concept of commercial bank capital as follows: "Commercial bank capital is the monetary values ​​created or mobilized by the commercial bank itself and used for lending, investing or performing other business services."

The above concept has fully stated the components that make up the capital of a commercial bank. In essence, the capital of a commercial bank includes the monetary resources of the bank itself and of those who temporarily have idle capital. Customers transfer money to the bank for different purposes: either to earn interest, or to collect, to spend or to use other products and services of the bank. This is the customer transferring the right to use capital to the bank and the amount of money that the bank must pay or provide services is the price of the right to use those monetary values. Thanks to having capital, banks can conduct business: lending, guaranteeing, leasing... In general, the capital of the bank often controls all decisions regarding the implementation of the functions of the commercial bank.

- The importance of capital mobilization

Although capital mobilization does not bring direct profit to the bank, it is a very important business. Without capital mobilization, it is considered as if there is no commercial banking activity. To have capital for its activities, the bank must mobilize capital from customers. Therefore, capital mobilization is very important to the bank as well as to customers.

- For the economy

In the economy, savings are often small and scattered, and the pioneer in assembling capital most effectively is the commercial banks. Through capital mobilization channels, savings are converted into investment, contributing to increasing the efficiency of the economy. For those with idle capital: capital mobilization by banks will first of all help them with interest or payment services, while the money is not dead, always mobilized and circulated.

For those who need capital: they will have the opportunity to expand investment and develop production and business from the bank's mobilized capital.

Capital mobilization by banks helps the economy achieve capital balance and improve capital efficiency. Investment opportunities always have conditions to be implemented. The process of expanded reproduction will be easier to implement with capital mobilization by commercial banks. However, capital mobilization can be done through many channels: stock market, state budget... but in the current conditions of our country, capital mobilization through commercial banks is still the main and most important form.

- For commercial banks

Capital mobilization contributes to providing capital for banks to carry out other business operations. Without capital mobilization, commercial banks will not have enough capital to finance their operations. On the other hand, through the trust of customers in the bank. From there, commercial banks have measures to continuously improve capital mobilization activities to maintain and expand relationships with customers. It can be said that capital mobilization contributes to solving the "input" of the bank.

- For customers

Capital mobilization is not only important for banks but also for customers. Capital mobilization provides customers with a channel for saving and investing to make their money profitable, creating opportunities for them to increase their consumption in the future. On the other hand, capital mobilization also provides customers with a safe place to store and accumulate temporarily idle capital. Finally, capital mobilization helps customers have the opportunity to access other banking services, especially payment services through banks and credit services when customers need capital for production, business or need money for consumption.

Nowadays, there is a close relationship between commercial banks and corporate customers as well as other organizations, in which banks both provide banking services and perform capital mobilization. Specifically, commercial banks receive direct salary payments for employees working in businesses and other organizations through the Direct Credit service. By directly crediting salaries to customers' accounts opened at the bank, commercial banks also perform capital mobilization.