The local currency also indirectly affects credit activities. A country with frequent and unpredictable economic policies will have a negative impact on customers' business activities and affect their ability to repay their debts to the bank.
Political and legal environment
The political environment also greatly affects the credit activities of banks. When the socio-political situation is unstable, not only manufacturing customers but also banks will find it difficult to focus on investment, business expansion, especially credit expansion. Moreover, socio-political instability will lead to loss of confidence of the people as well as domestic and foreign investors, affecting the credit activities of banks.
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The legal environment also has an important impact on the process of managing individual customer relationships of the Bank. Establishing a consistent and synchronous legal framework to regulate economic activities in a market economy is considered a prerequisite to ensure the effective operation of the market. Therefore, the legal factor plays a very important role in the lending activities of banks. The legal factor is also reflected in the State's regulations on banking activities in general and regulations on ensuring credit safety in particular. Appropriate regulations will create conditions for the development of safe banking activities, but if the regulations are not appropriate, it will lead to development inhibition, including affecting the level of safety in banking activities.
Through content analysis of factors affecting the process of managing individual customer relationships, it is shown that in addition to subjective factors originating from the bank such as the viewpoint and orientation of the management of individual customer relationships of the board of directors, credit policies and procedures of the bank, the establishment of organizational structure, authority, personnel of the risk management department, etc., the process of managing individual customer relationships is also affected by objective factors originating from customers, the economic, political and legal environment. Depending on the conditions and level of socio-economic development
and the improvement of the legal environment of each country, as well as the internal problems of the Bank, the process of managing individual customer relationships will be different. The problem is to clearly understand the nature of the influencing factors and know how to apply them creatively and flexibly in the actual circumstances of the Bank to achieve success in managing individual customer relationships.
2.3.3. Causes
Reason
Cause from the Bank
Firstly: Due to the weak capacity and limited experience in managing personal customer relationships of the executive board. As a young bank that has only been in operation for 14 years, BIDV does not have much experience in managing personal customer relationships.
Second, the qualifications of credit officers are limited. Currently, the professional qualifications of bank credit officers mostly stop at the level of following professional procedures, lacking the capacity to analyze and process credit information to protect and monitor loans.
Third, policies on products, partnerships, and customer orientation still have many shortcomings, leading to limitations in the development of some product lines such as consumer cars, studying abroad, etc. Banks still lack strategic orientations and product features that are breakthroughs compared to other banks to be able to dominate the market and increase the proportion of these products in the structure of personal customer credit products. This has led to an excessive focus on real estate products, which is a major risk, especially when the real estate market has major fluctuations.
Fourth: International Bank focuses on expanding personal customer credit to dominate the market and create its own position and name on the financial map of Vietnam, therefore the bank tries to meet the following criteria: Simple in terms of
procedures, quick time... this also greatly affects credit quality, increasing risks for the Bank.
Fifth, the weakness in the internal inspection and control system. Internal inspection work has a stronger point than the State Bank's inspection in terms of timeliness because the inspectors are quick, timely and thorough because the inspection is carried out regularly along with business activities; the faster credit grows, the safer and more effective this system must be to limit the risks that are always hidden in credit activities. However, the inspection and control at the Bank are not really independent and ineffective, the inspection is not carried out regularly, not thoroughly and seriously.
Credit risks can occur due to causes from the Bank and cause great damage to the Bank. However, in addition, the ethics and business management level of the customer are also important factors determining the level of risk in the Bank's lending activities. Especially for personal customer credit, factors belonging to the individual customer are the factors that bring the most risk.
Causes from the customer side
Firstly, the customer's moral character is poor. Besides reputable customers, there are still customers with poor lending awareness, who have the intention of defrauding and misappropriating capital right from the beginning of the loan relationship.
Second, using capital for purposes other than those specified in the credit contract. This case is quite common in the case of individuals borrowing for business purposes. Some customers, when borrowing capital from the Bank, have used it for purposes other than the loan purpose, such as using short-term loans to finance the purchase of fixed assets, real estate, etc. instead of supplementing working capital for business purposes.
Third, risks related to fluctuations in the customer's job such as the customer losing his job, economic difficulties leading to reduced income, or the customer's poor business capacity not being able to overcome difficulties in business operations leading to poor business results and not being able to repay the Bank.
row.
Fourth: Factors related to customer health issues or accidents,
Force majeure risks affecting the health and life of customers causing customers to lose their ability to repay debts to the Bank.
Causes from the economy
Firstly, the unfavorable fluctuations of the economic environment. The rapid and unpredictable fluctuations of the world and domestic markets are the main reasons affecting production and business activities, employment and income of borrowers.
Second, the lack of uniformity and completeness of the legal environment. In recent times, the State has issued many laws and documents guiding the implementation of laws related to banking credit activities. However, the implementation of these laws in banking credit activities is still slow and facing many difficulties.
The third is the information environment, in which the transparency, accuracy, clarity of information and the reliability of the agencies providing it in Vietnam are still very limited. Although the Credit Information Center (CIC) of the State Bank is growing stronger and playing an important role in providing information about customers, conducting analysis, classifying corporate credit, providing warning information, etc., contributing significantly to the development of the Vietnamese banking industry for the purpose of safety and efficiency, the information requirements of banks have not yet been met in a reliable, fast and timely manner.
CONCLUSION OF CHAPTER 2
Above, an overview of the Vietnam Joint Stock Commercial Bank for Investment and Development, in-depth analysis of the current situation of personal customer relationship management, review of the achievements as well as the limitations, and analysis of the causes leading to credit risks. Providing solutions to improve the management of personal customer relationships is an urgent requirement for the Vietnam Joint Stock Commercial Bank for Investment and Development, helping personal customer credit activities achieve high efficiency in the coming time. Based on theoretical analysis and combined with analysis of the current situation, the author proposes a number of solutions and recommendations to improve the management of personal customer relationships of the Vietnam Joint Stock Commercial Bank for Investment and Development.
CHAPTER 3. SOLUTIONS TO IMPROVE CUSTOMER RELATIONSHIP MANAGEMENT IN INDIVIDUAL CUSTOMER LOANS AT HOA BINH INVESTMENT AND DEVELOPMENT JOINT STOCK COMMERCIAL BANK
3.1. Orientations of Hoa Binh Investment and Development Joint Stock Commercial Bank 3.1.1. Overview of the socio-economic development trend of the province
1. Prioritize controlling inflation, stabilizing the economy, and actively implementing solutions to restructure the economy.
Focus on implementing tight, prudent and flexible monetary policies. Closely monitor credit activities of commercial banks; ensure capital for production; strictly control real estate loans; control bad debts, ensure liquidity and safety of the banking system.
Continue to implement the policy of saving regular expenditure. Review and rearrange the public investment portfolio, improve the efficiency of capital use. Strengthen state management of prices; prevent and resolutely handle unreasonable price increases, especially for important raw materials and essential consumer goods. Implement transparent prices of goods, have support mechanisms for the poor and policy beneficiaries. Strengthen information and propaganda work to minimize the impact of price increases due to psychological factors.
Actively and promptly deploy the Government's macroeconomic management and direction measures, especially solutions to restructure the economy, focusing on restructuring public investment, restructuring state-owned enterprises, restructuring the banking system, restructuring industries and regions. Continue solutions to restore economic growth after a year of fighting inflation, ensuring that policies are quickly put into production and life. Focus on removing obstacles and difficulties of enterprises and investors to help economic sectors quickly regain development momentum.
2. Promote the development of dynamic regions; remove difficulties, create conditions for enterprises to develop production, business and expand markets.
Continue to implement solutions and mechanisms for developing the dynamic region of Hoa Binh province until 2015, with a vision to 2020, focusing on developing various types of planning, promoting decentralization to local authorities in the fields of budget and investment; creating an investment environment for businesses; reforming administrative procedures; organizing investment promotion activities;...
While implementing tight financial and monetary policies to control inflation, we must focus on boosting production, developing services and attracting investment. Strongly developing production and business is a fundamental, long-term solution that creates direct and multi-faceted effects.
economic and social life; ensuring increased supply of goods and services, which is both the source of growth and directly contributes to curbing inflation.
Continue to invest in infrastructure, accelerate the progress of investment projects, and soon put completed projects into use to serve economic and social development. Strictly implement Directive No. 1792/CT-TTg dated October 15, 2011 of the Prime Minister on strengthening investment management from state budget capital and government bond capital (restructuring state budget investment and government bond capital towards concentrated investment, improving the efficiency of public investment). Develop a medium-term investment plan until 2015 to harmonize and balance investment needs and capital capacity.
Strengthen measures to remove obstacles such as site clearance, properly implement regulations on investment and business to mobilize resources inside and outside the province for socio-economic development.
Implement well Resolution No. 02-NQ/TU dated June 7, 2011 of the Provincial Party Committee on new rural construction in Hoa Binh province for the period 2011 - 2015, with a vision to 2020, the National Target Program on new rural construction for the period 2011 - 2020. Have practical and effective solutions to promote the potential and strengths of the agricultural sector. In 2012, focus on directing the transformation of agricultural production structure, focusing on developing livestock and agricultural products, clean food, high economic value, creating a food belt in the West of Hanoi city. Focus on removing difficulties, supporting and encouraging the development of agricultural production associated with the development of processing industry.
Promote the development of service sectors with potential and advantages, service sectors with high added value, especially information and communication services, education and training, tourism, finance and business support, etc.
3. Implement well the 2012 state budget estimate
Strengthening the management and operation of state budget collection; strictly implementing the Directives of Party committees and authorities on preventing state budget losses. Promoting land allocation and auctions, especially for projects in Ky Son district and Hoa Binh city to create investment sources for the construction of the Hoa Lac - Hoa Binh city expressway. Solving regular expenditure tasks, creating a strong change in the awareness of saving and fighting waste in the direction, management and operation of the state budget. Improving the efficiency of using state investment capital, strengthening inspection, examination and supervision of the management and use of investment projects using state budget capital, preventing waste and loss right from the time of determining investment policies, investment preparation, site clearance compensation, project implementation and project completion.
4. Continue to take care of ensuring social security and social welfare, focusing on
solve pressing social problems
Developing socio-cultural fields, ensuring social security and welfare, and solving pressing social problems are both goals and requirements of sustainable development. The State prioritizes investment, while promoting socialization and mobilizing resources for development.
Urgently implement the Social Security Strategy for the period 2011 - 2020 and the National Target Program on Sustainable Poverty Reduction. Strive to reduce the poverty rate by 3% to 4% each year and reduce it faster in districts with high poverty rates. Promote the implementation of vocational training programs, especially vocational training for rural workers in conjunction with the process of restructuring the agricultural and rural economy. Continue to effectively implement policies for people with meritorious services, social assistance policies; support to overcome the consequences of natural disasters; social insurance and unemployment insurance policies. Actively implement the National Program on occupational safety and hygiene.
Effectively implement the movement "All people unite to build a cultural life". Implement the Strategy for physical training and sports development and promote the socialization of cultural, physical training and sports activities. Strengthen the management of festivals, cultural and artistic activities, sports, ensure thrift, security and order, preserve fine customs and national cultural identity. Limit the use of state budget to organize festivals. Continue to implement national target projects and programs in the field of information and communication; improve the quality of information, press and publishing activities. Promote the right to mastery and ensure the freedom of citizens, while strengthening discipline. Implement well ethnic and religious policies. Actively implement the National Target Program on gender equality and do a good job of protecting mothers, caring for and educating children.
Focus on implementing solutions to ensure traffic order and safety. Effectively restrain and prevent all types of crimes and social evils.
5. Promote the development of science and technology and strengthen protection and improvement
environment
Focus on implementing provincial-level science and technology programs and projects. Effectively manage the provincial Science and Technology Development Fund; encourage enterprises to innovate technology, especially high technology, technology that saves raw materials and energy. Strongly develop science and technology services, especially information services, consulting, brokerage, technology appraisal, assessment, intellectual property, standards and technical regulations.
Strengthen the effectiveness and efficiency of state management in the field of natural resource and environmental protection. Decentralize management associated with enhancing responsibility; at the same time, strengthen inspection, examination and handling of violations, especially in resource exploitation activities. Strictly handle violations and projects that do not meet environmental requirements. Encourage economic sectors to invest in and apply science and technology.