Factors That Hinder the Process of Handling Collateral Assets to Recover Bad Debts at Maritime Commercial Joint Stock Bank, Hanoi Branch

Natural disasters, unexpected risks beyond expectations

Source: Compiled from business performance reports of Maritime Commercial Joint Stock Bank, Hanoi branch.

The above table shows that customers with business losses leading to the inability to repay debts to the Bank have a large proportion of bad debts, accounting for 51.23% of total bad debts.

* The loss caused by the borrowing unit is due to the fluctuation of the supply market, the price of raw materials when borrowing capital from the Bank is purchased at a high price but when there are finished products sold on the market, the price of raw materials is low. The enterprise cannot sell at the production cost to make a profit. In addition, the loss caused by the products produced not meeting the market demand leads to the impact of capital stagnation, making the enterprise unable to recover capital on time. Therefore, there is a loss in business.

Some units borrowed and opened deferred payment L/C at Maritime Commercial Joint Stock Bank, Hanoi branch, signed contracts to import goods with fixed prices and quantities right from the time of signing the contract, the signing time before the Asian financial and monetary crisis took place, so the units had to import goods at high prices. However, when put into production, due to the impact of the Asian financial and monetary crisis in 1997 and 1998, commodity prices decreased and purchasing power decreased. Enterprises borrowing capital could not sell manufactured goods at input costs, and moreover, the purchasing power of the people decreased. Therefore, business losses were inevitable. That is why these units could not pay enough to foreign partners according to the signed contract. Maritime Commercial Joint Stock Bank, Hanoi branch, is the bank that opens deferred payment L/C, which means that the guarantor bank is forced to pay on behalf of customers to comply with the signed contract for partners, which are banks and other organizations.

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• Qos Assurance Methods for Multimedia Communications zt2i3t4l5ee zt2a3gs zt2a3ge zc2o3n4t5e6n7ts low. The EF PHB requires a sufficiently large number of output ports to provide low delay, low loss, and low jitter. EF PHBs can be implemented if the output port's bandwidth is sufficiently large, combined with small buffer sizes and other network resources dedicated to EF packets, to allow the router's service rate for EF packets on an output port to exceed the arrival rate λ of packets at that port. This means that packets with PHB EF are considered with a pre-allocated amount of output bandwidth and a priority that ensures minimum loss, minimum delay and minimum jitter before being put into operation. PHB EF is suitable for channel simulation, leased line simulation, and real-time services such as voice, video without compromising on high loss, delay and jitter values. Figure 2.10 Example of EF installation Figure 2.10 shows an example of an EF PHB implementation. This is a simple priority queue scheduling technique. At the edges of the DS domain, EF packet traffic is prioritized according to the values ​​agreed upon by the SLA. The EF queue in the figure needs to output packets at a rate higher than the packet arrival rate λ. To provide an EF PHB over an end-to-end DS domain, bandwidth at the output ports of the core routers needs to be allocated in advance to ensure the requirement μ > λ. This can be done by a pre-configured provisioning process. In the figure, EF packets are placed in the priority queue (the upper queue). With such a length, the queue can operate with μ > λ. Since EF was primarily used for real-time services such as voice and video, and since real-time services use UDP instead of TCP, RED is generally not suitable for EF queues because applications using UDP will not respond to random packet drop and RED will strip unnecessary packets. 2.2.4.2 Assured Forwarding (AF) PHB PHB AF is defined by RFC 2597. The purpose of PHB AF is to deliver packets reliably and therefore delay and jitter are considered less important than packet loss. PHB AF is suitable for non-real-time services such as applications using TCP. PHB AF first defines four classes: AF1, AF2, AF3, AF4. For each of these AF classes, packets are then classified into three subclasses with three distinct priority levels. Table 2.8 shows the four AF classes and 12 AF subclasses and the DSCP values ​​for the 12 AF subclasses defined by RFC 2597. RFC 2597 also allows for more than three separate priority levels to be added for internal use. However, these separate priority levels will only have internal significance. PHB Class PHB Subclass Package type DSCP AF4 AF41 Short 100010 AF42 Medium 100100 AF43 High 100110 AF3 AF31 Short 011010 AF32 Medium 011100 AF33 High 011110 AF2 AF21 Short 010010 AF22 Medium 010100 AF23 High 010110 AF1 AF11 Short 001010 AF12 Medium 001100 AF13 High 001110 Table 2.8 AF DSCPs The AF PHB ensures that packets are forwarded with a high probability of delivery to the destination within the bounds of the rate agreed upon in an SLA. If AF traffic at an ingress port exceeds the pre-priority rate, which is considered non-compliant or “out of profile”, the excess packets will not be delivered to the destination with the same probability as the packets belonging to the defined traffic or “in profile” packets. When there is network congestion, the out of profile packets are dropped before the in profile packets are dropped. When service levels are defined using AF classes, different quantity and quality between AF classes can be realized by allocating different amounts of bandwidth and buffer space to the four AF classes. Unlike EF, most AF traffic is non-real-time traffic using TCP, and the RED queue management strategy is an AQM (Adaptive Queue Management) strategy suitable for use in AF PHBs. The four AF PHB layers can be implemented as four separate queues. The output port bandwidth is divided into four AF queues. For each AF queue, packets are marked with three “colors” corresponding to three separate priority levels. In addition to the 32 DSCP 1 groups defined in Table 2.8, 21 DSCPs have been standardized as follows: one for PHB EF, 12 for PHB AF, and 8 for CSCP. There are 11 DSCP 1 groups still available for other standards. 2.2.5.Example of Differentiated Services We will look at an example of the Differentiated Service model and mechanism of operation. The architecture of Differentiated Service consists of two basic sets of functions: Edge functions: include packet classification and traffic conditioning. At the inbound edge of the network, incoming packets are marked. In particular, the DS field in the packet header is set to a certain value. For example, in Figure 2.12, packets sent from H1 to H3 are marked at R1, while packets from H2 to H4 are marked at R2. The labels on the received packets identify the service class to which they belong. Different traffic classes receive different services in the core network. The RFC definition uses the term behavior aggregate rather than the term traffic class. After being marked, a packet can be forwarded immediately into the network, delayed for a period of time before being forwarded, or dropped. We will see that there are many factors that affect how a packet is marked, and whether it is forwarded immediately, delayed, or dropped. Figure 2.12 DiffServ Example Core functionality: When a DS-marked packet arrives at a Diffservcapable router, the packet is forwarded to the next router based on Per-hop behavior is associated with packet classes. Per-hop behavior affects router buffers and the bandwidth shared between competing classes. An important principle of the Differentiated Service architecture is that a router's per-hop behavior is based only on the packet's marking or the class to which it belongs. Therefore, if packets sent from H1 to H3 as shown in the figure receive the same marking as packets from H2 to H4, then the network routers treat the packets exactly the same, regardless of whether the packet originated from H1 or H2. For example, R3 does not distinguish between packets from h1 and H2 when forwarding packets to R4. Therefore, the Differentiated Service architecture avoids the need to maintain router state about separate source-destination pairs, which is important for network scalability. Chapter Conclusion Chapter 2 has presented and clarified two main models of deploying and installing quality of service in IP networks. While the traditional best-effort model has many disadvantages, later models such as IntServ and DiffServ have partly solved the problems that best-effort could not solve. IntServ follows the direction of ensuring quality of service for each separate flow, it is built similar to the circuit switching model with the use of the RSVP resource reservation protocol. IntSer is suitable for services that require fixed bandwidth that is not shared such as VoIP services, multicast TV services. However, IntSer has disadvantages such as using a lot of network resources, low scalability and lack of flexibility. DiffServ was born with the idea of ​​solving the disadvantages of the IntServ model. DiffServ follows the direction of ensuring quality based on the principle of hop-by-hop behavior based on the priority of marked packets. The policy for different types of traffic is decided by the administrator and can be changed according to reality, so it is very flexible. DiffServ makes better use of network resources, avoiding idle bandwidth and processing capacity on routers. In addition, the DifServ model can be deployed on many independent domains, so the ability to expand the network becomes easy. Chapter 3: METHODS TO ENSURE QoS FOR MULTIMEDIA COMMUNICATIONS In packet-switched networks, different packet flows often have to share the transmission medium all the way to the destination station. To ensure the fair and efficient allocation of bandwidth to flows, appropriate serving mechanisms are required at network nodes, especially at gateways or routers, where many different data flows often pass through. The scheduler is responsible for serving packets of the selected flow and deciding which packet will be served next. Here, a flow is understood as a set of packets belonging to the same priority class, or originating from the same source, or having the same source and destination addresses, etc. In normal state when there is no congestion, packets will be sent as soon as they are delivered. In case of congestion, if QoS assurance methods are not applied, prolonged congestion can cause packet drops, affecting service quality. In some cases, congestion is prolonged and widespread in the network, which can easily lead to the network being "frozen", or many packets being dropped, seriously affecting service quality. Therefore, in this chapter, in sections 3.2 and 3.3, we introduce some typical network traffic load monitoring techniques to predict and prevent congestion before it occurs through the measure of dropping (removing) packets early when there are signs of impending congestion. 3.1. DropTail method DropTail is a simple, traditional queue management method based on FIFO mechanism. All incoming packets are placed in the queue, when the queue is full, the later packets are dropped. Due to its simplicity and ease of implementation, DropTail has been used for many years on Internet router systems. However, this algorithm has the following disadvantages: − Cannot avoid the phenomenon of “Lock out”: Occurs when 1 or several traffic streams monopolize the queue, making packets of other connections unable to pass through the router. This phenomenon greatly affects reliable transmission protocols such as TCP. According to the anti-congestion algorithm, when locked out, the TCP connection stream will reduce the window size and reduce the packet transmission speed exponentially. − Can cause Global Synchronization: This is the result of a severe “Lock out” phenomenon. Some neighboring routers have their queues monopolized by a number of connections, causing a series of other TCP connections to be unable to pass through and simultaneously reducing the transmission speed. After those monopolized connections are temporarily suspended, Once the queue is cleared, it takes a considerable amount of time for TCP connections to return to their original speed. − Full Queue phenomenon: Data transmitted on the Internet often has an explosion, packets arriving at the router are often in clusters rather than in turn. Therefore, the operating mechanism of DropTail makes the queue easily full for a long period of time, leading to the average delay time of large packets. To avoid this phenomenon, with DropTail, the only way is to increase the router's buffer, this method is very expensive and ineffective. − No QoS guarantee: With the DropTail mechanism, there is no way to prioritize important packets to be transmitted through the router earlier when all are in the queue. Meanwhile, with multimedia communication, ensuring connection and stable speed is extremely important and the DropTail algorithm cannot satisfy. The problem of choosing the buffer size of the routers in the network is to “absorb” short bursts of traffic without causing too much queuing delay. This is necessary in bursty data transmission. The queue size determines the size of the packet bursts (traffic spikes) that we want to be able to transmit without being dropped at the routers. In IP-based application networks, packet dropping is an important mechanism for indirectly reporting congestion to end stations. A solution that prevents router queues from filling up while reducing the packet drop rate is called dynamic queue management. 3.2. Random elimination method – RED 3.2.1 Overview RED (Random Early Detection of congestion; Random Early Drop) is one of the first AQM algorithms proposed in 1993 by Sally Floyd and Van Jacobson, two scientists at the Lawrence Berkeley Laboratory of the University of California, USA. Due to its outstanding advantages compared to previous queue management algorithms, RED has been widely installed and deployed on the Internet. The most fundamental point of their work is that the most effective place to detect congestion and react to it is at the gateway or router. Source entities (senders) can also do this by estimating end-to-end delay, throughput variability, or the rate of packet retransmissions due to drop. However, the sender and receiver view of a particular connection cannot tell which gateways on the network are congested, and cannot distinguish between propagation delay and queuing delay. Only the gateway has a true view of the state of the queue, the link share of the connections passing through it at any given time, and the quality of service requirements of the traffic flows. The RED gateway monitors the average queue length, which detects early signs of impending congestion (average queue length exceeding a predetermined threshold) and reacts appropriately in one of two ways: − Drop incoming packets with a certain probability, to indirectly inform the source of congestion, the source needs to reduce the transmission rate to keep the queue from filling up, maintaining the ability to absorb incoming traffic spikes. − Mark “congestion” with a certain probability in the ECN field in the header of TCP packets to notify the source (the receiving entity will copy this bit into the acknowledgement packet). Figure 3. 1 RED algorithm The main goal of RED is to avoid congestion by keeping the average queue size within a sufficiently small and stable region, which also means keeping the queuing delay sufficiently small and stable. Achieving this goal also helps: avoid global synchronization, not resist bursty traffic flows (i.e. flows with low average throughput but high volatility), and maintain an upper bound on the average queue size even in the absence of cooperation from transport layer protocols. To achieve the above goals, RED gateways must do the following: − The first is to detect congestion early and react appropriately to keep the average queue size small enough to keep the network operating in the low latency, high throughput region, while still allowing the queue size to fluctuate within a certain range to absorb short-term fluctuations. As discussed above, the gateway is the most appropriate place to detect congestion and is also the most appropriate place to decide which specific connection to report congestion to. − The second thing is to notify the source of congestion. This is done by marking and notifying the source to reduce traffic. Normally the RED gateway will randomly drop packets. However, if congestion If congestion is detected before the queue is full, it should be combined with packet marking to signal congestion. The RED gateway has two options: drop or mark; where marking is done by marking the ECN field of the packet with a certain probability, to signal the source to reduce the traffic entering the network. − An important goal that RED gateways need to achieve is to avoid global synchronization and not to resist traffic flows that have a sudden characteristic. Global synchronization occurs when all connections simultaneously reduce their transmission window size, leading to a severe drop in throughput at the same time. On the other hand, Drop Tail or Random Drop strategies are very sensitive to sudden flows; that is, the gateway queue will often overflow when packets from these flows arrive. To avoid these two phenomena, gateways can use special algorithms to detect congestion and decide which connections will be notified of congestion at the gateway. The RED gateway randomly selects incoming packets to mark; with this method, the probability of marking a packet from a particular connection is proportional to the connection's shared bandwidth at the gateway. − Another goal is to control the average queue size even without cooperation from the source entities. This can be done by dropping packets when the average size exceeds an upper threshold (instead of marking it). This approach is necessary in cases where most connections have transmission times that are less than the round-trip time, or where the source entities are not able to reduce traffic in response to marking or dropping packets (such as UDP flows). 3.2.2 Algorithm This section describes the algorithm for RED gateways. RED gateways calculate the average queue size using a low-pass filter. This average queue size is compared with two thresholds: minth and maxth. When the average queue size is less than the lower threshold, no incoming packets are marked or dropped; when the average queue size is greater than the upper threshold, all incoming packets are dropped. When the average queue size is between minth and maxth, each incoming packet is marked or dropped with a probability pa, where pa is a function of the average queue size avg; the probability of marking or dropping a packet for a particular connection is proportional to the bandwidth share of that connection at the gateway. The general algorithm for a RED gateway is described as follows: [5] For each packet arrival Caculate the average queue size avg If minth ≤ avg < maxth div.maincontent .s1 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 15pt; } div.maincontent .s2 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 15pt; } div.maincontent .p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent .s3 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .s4 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s5 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s6 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .s7 { color: black; font-family:Wingdings; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s8 { color: black; font-family:Arial, sans-serif; font-style: italic; font-weight: bold; text-decoration: none; font-size: 15pt; } div.maincontent .s9 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .s10 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 9pt; vertical-align: 6pt; } div.maincontent .s11 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 13pt; } div.maincontent .s12 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 10pt; } div.maincontent .s13 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-d
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Exporting units of the trading partner. Therefore, the debts of enterprises opening deferred payment L/Cs with the Bank have arisen and up to now, most of them have turned into bad debts. For example, the debt of the Electricity - Electronics - Telecommunications - Shipbuilding Company under the Vietnam Shipbuilding Corporation opened 5 deferred payment L/Cs for shipments of electronic equipment and marine instruments imported from Singapore worth nearly 1 million USD but only paid over 700 thousand USD. The Bank had to pay 285,000 USD on behalf of this company. Up to now, the bad debts of this company have arisen for many years, the original bad debt is 195,000 USD.

* Bad debt arises due to the subjective intention of customers not to repay the Bank. The proportion of bad debt arising from this type is low, accounting for only 1.35% of bad debt balance at the branch.

Such as the loan of the Fashion Garment Production Development Company Limited. In November 1996, this company borrowed 150 million VND from the Bank to cooperate with Bat Trang Nam Hai Ceramic Company to produce ceramics for export. The production and business project was very feasible and the Bank decided to lend capital. The company director, Mr. Nguyen Thanh Chung, mortgaged his house and 63 m2 of land .

In Ai Mo village, Bo De commune, Gia Lam district, Hanoi, the value when appraising the mortgaged property is 220 million VND, the loan term is 1 year. The mortgaged property papers to borrow capital from the Bank are completely valid. By 2/98, the company had paid 55 million VND in principal. Due to losses in business, many companies were unable to repay the Bank. The company went bankrupt. The Bank was forced to handle the mortgaged property. However, the mortgaged property, the house above, was sold by Mr. Nguyen Thanh Chung and he fled, and is currently not found. Although when he mortgaged the Bank, Mr. Chung brought the original papers to mortgage (to date, the Bank still holds these papers). However, the Bank still cannot recover and handle this mortgaged property. When investigating the new owner of the house, it was known that this new owner also has completely complete legal documents for the house with confirmation from the local authorities. This document has a higher legal value because the house was sold to a new owner before Mr. Chung mortgaged it to the Bank. After selling the house to the new owner, the new owner did not move in and rented it to Mr. Chung for 6 months. Therefore, when the Bank inspected the mortgaged property before granting the loan, it did not detect any irregularities.

This. Is it true that when transferring the house to the new owner, the local authorities did not collect the documents certifying the ownership of the house and land in Mr. Chung's name? Thus, Mr. Chung intended to defraud the Bank right from the time he borrowed money from the Bank. Currently, the Bank has transferred the documents to the police for investigation.

* Bad debts arise due to force majeure, natural disasters, war... causing unexpected negative changes. This risk of customers causing bad debts at the branch accounts for 2.61% of total bad debts.

* Outstanding bad debt is in the process of collection. At Maritime Bank, there is currently a bad debt in the process of collection. Although there has been a court judgment, the Bank has the right to recover and handle the mortgaged property. However, the enforcement party has not yet completed all the legal procedures to hand over the mortgaged property to the Bank for management and auction.

* Customers use capital for the wrong purpose. The borrower does not comply with the agreement signed in the credit contract. When receiving the loan from the Bank, the customer did not use the capital as agreed in the signed credit contract. In many cases, after delivering the capital, the Bank found that the customer used the capital for the wrong purpose, the Bank immediately suspended the signed credit contract and asked the customer to repay the Bank. However, the customer used the loan for other purposes and was no longer able to repay the Bank in full. The mortgaged property is the property formed from the loan capital. However, because the customer did not comply with the agreement in the credit contract, the Bank did not have the mortgaged property to handle the debt. The type of bad debt arising from this reason was 3,291 million VND, accounting for 4.86% of bad debt.

* Other causes.

The State's macroeconomic policy has not been perfected, causing economic instability. The national legal system with its laws and sub-law documents is not yet fully synchronized and reasonable, and does not ensure a healthy competitive environment for economic activities.

In previous years, sometimes bank credit officers did not properly assess the loan, in some cases credit officers were too confident in the loan.

Regular customers should not need to be closely monitored and loans are based only on the information provided by the business instead of reliable financial data. Internal inspection and control work is sometimes neglected (in the past) so negative activities of customers cannot be detected and prevented in time.

The value of mortgaged assets has decreased. The process of handling mortgaged assets is complicated and has many shortcomings. Administrative procedures are very complicated, and the issuance of mortgaged assets according to the procedure of litigation fees is also very difficult. The rate of investigation, trial and enforcement fees is still high.

2.2.3 Factors that hinder the process of handling mortgaged assets to recover bad debts at Maritime Commercial Joint Stock Bank, Hanoi branch

For debts with collateral, the handling of bad debts is essentially the handling of mortgaged assets. However, the handling of mortgaged assets by the Bank to recover bad debts encounters many difficulties and obstacles. Some of the difficulties include:

- Difficulties caused by the mortgagee

Some borrowers of bank loans try every way to avoid the foreclosure of assets, abscond when the court takes testimony in court, deliberately delay the handling of assets, and when the mortgaged assets have been handled in the economic court, they ask for a final review so that the court must force them to handle them many times. Bankrupt borrowers who are unable to pay their debts must avoid paying their debts, so they do not sign to receive the loan, thus causing difficulties for the bank in carrying out procedures to handle bad debts.

There are customers who borrow money with mortgaged property such as houses and land but the documents are not valid, have not been granted a certificate of land use rights or the certificate of land use rights has not been issued by the right authority. Houses and land are often left by their ancestors, many people do not want to do the licensing paperwork, on the other hand, the high transfer tax causes a mentality of not wanting to complete the owner's profile. Therefore, handling mortgaged property is difficult when bad debts arise.

-The sale of mortgaged assets by the Bank is not favorable. The mortgaged assets do not meet the needs and tastes of the buyer, the assets are old, outdated, and of poor quality.

Quality, psychology of buyers do not want to buy assets of "bankrupt" people, if auctioned then the cost is high.

- Incomplete mortgage documents: Currently, according to the law, the mortgagee must mortgage the original legal documents to the lender. However, many types of assets are not fully documented, especially in the real estate sector (Currently, nationwide, only about 15% to 20% of households have land use right certificates), many types of assets do not have ownership certificates. Therefore, the Bank does not have enough legal basis to handle mortgaged assets, causing long-term outstanding debts.

- The right of the Bank to receive mortgaged and pledged assets has not been promoted. Therefore, when it is necessary to handle mortgaged assets, the mortgagor or pledgee does not hand over the assets to the Bank, or even delays, but currently the State has no legal documents addressing this issue. In some places, the local authorities who manage the borrower's administration do not really support the handling of assets, causing difficulties for the Bank in carrying out procedures for handling assets.

- Current legal procedures are extremely complicated. The examination, inspection and settlement of property disputes by public authorities takes a lot of time. There are cases where, although there has been a court judgment, after a long time, the Bank still does not see the enforcement agency. Many procedures take a lot of time for the Bank. The coordination between sectors and levels in handling mortgaged assets is still not tight, each level has a different perception. The Bank has great difficulty in organizing the auction of assets. For these reasons, many times the Bank does not want to litigate or dispute in court because it takes a lot of time and money, so the Bank often tries to negotiate with customers to find a solution.

- The system of legal documents on procedures, order, and steps for foreclosure and handling of mortgaged assets is not consistent and often contradicts each other. Therefore, it causes difficulties for the Bank in choosing to apply the enforcement provisions.

Above are some of the main difficulties and obstacles that make the handling of bad debts at Hanoi Maritime Commercial Joint Stock Bank slow and not as expected.

2.3 Handling of overdue and bad debts at branches.

2.3.1 Results achieved

The handling of overdue and bad debts in 2001 and 2002 achieved good results. In 2001, Hanoi Maritime Commercial Joint Stock Bank handled 27,972.5 million VND (principal debt), an increase of 25% compared to 2000, and in 2002 it was 25,676.5 million VND (not including interest of 7.345 billion VND). In recent years, overdue debts have decreased, bad debts have increased slightly (due to not being able to handle overdue debts less than 12 months before). This result is the result of the efforts of all Bank staff, credit quality has increased, so over the years, lending activities have become more organized. The branch has fully complied with the regulations of Vietnam Maritime Commercial Joint Stock Bank on pre-, during- and post-loan verification, urging customers to repay principal and interest when due, along with timely staffing for the Business Risk Handling Department, all staff of the Business Risk Handling Department have worked according to specialized regulations to enhance responsibility and focus in debt handling.

2.3.2 The solutions that the Bank offers to handle bad debts are:

- Strengthening staff work. Establishing a business risk handling department. Up to now, the business risk handling department has 8 staff members, all of whom are highly qualified and experienced in debt handling, all newly recruited or transferred from the center, directly managed by a deputy director. Each staff member is assigned specific tasks, enhancing the role of each person while also clearly defining personal responsibilities. The Bank has set out a clear reward and punishment system to encourage staff to work actively and effectively. The specific measures set out are increasingly diverse, in-depth and resolute, suitable to the situation of each customer with overdue debt and bad debt.

The coordination of bad debt handling is actively and closely implemented at the Bank. With the officers in charge of implementing loans that generate bad debt

Must be directly responsible for, urge debt collection, closely coordinate with the risk handling department to provide information exchange and propose the most appropriate solutions.

- Recover by forcing customers to sell mortgaged assets or directly selling mortgaged assets, auctioning assets through auction centers, mobilizing money from other income-generating activities to repay the Bank's debt. Department staff find all means to directly contact customers, investigate, learn, and collect information of each debtor. Thereby, clearly understand the business situation and difficulties customers encounter. Negotiate with customers, propose the most suitable solutions for each customer. For bad debts with mortgaged assets, the Bank resolutely carries out the recovery, prepares documents, completes necessary procedures and legal records, to directly auction assets, or forces customers to repay debts by other sources or customers must auction assets themselves through auction centers.

- For debtors who are slow to pay their debts. The Bank carries out the necessary legal procedures to sue these customers. This is not an optimal solution but is extremely necessary. Once a customer intentionally does not pay the Bank's debt, intentionally does not transfer the mortgaged property to the Bank for the Bank to handle, or has the intention of defrauding and wanting to appropriate the Bank's capital. According to the current law of our country, the Bank has not been equipped with the necessary sanctions by legal agencies to handle debts. Therefore, the Bank needs the cooperation and coordination of the authorities in handling debts. To sue a customer who is slow to pay debt, the Bank often coordinates with functional agencies such as the People's Committee of the province or district in charge, the court (economic court in the area), the police (economic police), the customer's managing units (corporations, parent companies, shareholders...), customers with related companies, the coordination of sectors and levels related to the company...

However, filing a lawsuit for debt is not always favorable, the liquidation of assets is often very complicated and involves many subjects, belonging to all economic sectors, especially if it involves state agencies and officials, then filing a lawsuit is very difficult and time-consuming. Legal procedures such as investigation, trial, and execution of judgments by state law enforcement agencies often take a lot of time. On the other hand, the cost of this work is not

must be small. Meanwhile, the Bank has capital stagnation due to not being able to handle debt, causing difficulties in business operations.

- Conduct investigation and management of companies, detect difficulties and obstacles from customers to come up with appropriate solutions. When a bank has made a loan, the bank officer in charge of the loan is almost like an employee of the customer, they grasp all information, changes from customers or external influences affecting customers. Coordinate with relevant authorities to create conditions for customers to do business effectively. Only when customers do business effectively can the bank recover debts. The bank always implements the motto "The bank's operating efficiency is based on the customer's business efficiency" or in other words, the bank earns credit interest based on the customer's business interest.

Normally, the Bank often adjusts the signed contract such as debt extension, debt rescheduling, debt repayment term adjustment, interest rate exemption and reduction to ensure the principle of debt collection as quickly and as much as possible.

- Propose to the Head Office to consider compensating for risks for some loans. This is an appropriate and necessary measure. Some of the Bank's loans are currently irrecoverable and have no debtors to repay the Bank, some businesses have gone bankrupt, some customers have borrowed from the Bank and have paid part of the debt, the Bank has handled the mortgaged assets but not enough to compensate, to avoid debt the debtor has absconded. Currently, the law enforcement agency has not found out. Therefore, the Bank needs to make provisions for risks to compensate. Because if this loss is not compensated, the Bank's bad debt will be larger, making it difficult for the Bank to manage, operate, and implement business strategies.