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Solutions to enhance capital mobilization at Dong Trieu Branch of Investment and Development Bank - Quang Ninh - 4


To be stable and solid, the branch needs to research to come up with practical, highly feasible measures, coordinated in a synchronous manner to promote the achievements, while overcoming difficulties and shortcomings to create conditions for safe and effective development.

CHAPTER III

SOLUTIONS TO STRENGTHEN CAPITAL MOBILIZATION AT THE BRANCH OF THE BANK FOR INVESTMENT AND DEVELOPMENT OF DONG TRIEU - QUANG NINH.


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I - DEVELOPMENT ORIENTATION OF THE BRANCH OF NHĐT & PT DONG TRIEU - QUANG NINH IN THE FOLLOWING YEARS

The Board of Directors of the Dong Trieu - Quang Ninh Investment and Development Bank Branch sets the goal for the following years to complete and exceed the annual business targets, along with gradually building the Branch into a modern bank with advanced technology, enhancing its reputation in the area. One of the important tasks of the Branch is to maintain mobilized capital, thereby creating conditions for developing business activities and other activities to increase the bank's profits. To implement that strategy, under the management of the Quang Ninh Investment and Development Bank Branch, the Branch has clearly identified the difficulties, challenges as well as opportunities to set out the direction of operations in the following years:

Solutions to enhance capital mobilization at Dong Trieu Branch of Investment and Development Bank - Quang Ninh - 4

+ Objective: stabilize safe and effective business operations, quickly handle backlogs to improve financial situation, create foundation for expanding business operations in the following years, successfully implement the plan to consolidate banking organization and operations.

+ Basic direction: implement reasonable and flexible customer policies, increase effective capital sources, improve the quality of capital use to ensure safety and efficiency, improve existing banking products and services and gradually develop new products. Complete the organizational structure and management mechanism, improve leadership and management capacity, innovate methods.


Working style and customer service to meet business requirements in the new era.

+ Expand credit but ensure quality and capital safety, do not let overdue debt arise from new loans and minimize overdue debt from old loans. Focus on maintaining traditional customers, strengthen relationships with potential customers to expand capital mobilization with low interest rates and develop volume, while improving credit quality. Strengthen and expand types of banking services, gradually increase the service market share of the Dong Trieu - Quang Ninh Investment and Development Bank Branch in the area.

Business objectives in 2006 of Dong Trieu Investment and Development Bank Branch - Quang Ninh:

+ Focus on effectively implementing the bank modernization program.

+ Total mobilized capital reached 170 billion VND.

+ Total outstanding loans reach 155 - 160 billion VND.

+ Improve credit quality, overdue debt ratio below 1.0% of total outstanding balance

in debt.


+ Service revenue accounts for 10% of total income.

+ Achieve internal accounting profit exceeding assigned plan.

II – SOLUTIONS TO STRENGTHEN CAPITAL MOBILIZATION AT THE BRANCH OF THE BANK FOR INVESTMENT AND DEVELOPMENT OF DONG TRIEU – QUANG NINH.

1. Branches need to strengthen and diversify forms of mobilization.

capital movement

Branches need to diversify capital mobilization forms, mobilize in all forms to increase capital sources. Banks can apply the following forms of capital mobilization:

- For non-term deposits: Open various types of accounts to serve customers who regularly transact with the bank. Depending on the type of customer, open a suitable account for them or a customer can open two or three accounts.


account suitable for their business activities. The bank always guides and facilitates customers to transfer the balance of this account to another account easily and conveniently. Expand the general trend of the bank is to open personal accounts for employees of enterprises and in the administrative and career areas. Research the application of current accounts in well-functioning enterprises, high income and with a firm guarantee and commitment. Create conditions for depositors to enjoy banking services such as: fast payment, fast money transfer, overdraft account according to the level agreed with the bank. In addition, the bank continues to invest in new technology and savings forms so that customers can withdraw money by card, by ATM.

- For term deposits: Banks need to diversify in terms, forms and transfers. Currently, banks have many forms of term deposits such as: 1 month, 3 months, 6 months, 9 months, 12 months, 18 months, 24 months, 36 months. In the future, banks need to offer more term deposits with longer terms.

- For savings deposits: Continuously improve and develop existing forms of savings mobilization, and at the same time build new forms of mobilization. In addition to traditional forms of mobilization, banks should form and develop a number of new forms that are both mobilization and lending in order to solve the relationship between capital mobilization and capital use such as: Savings with a purpose, retirement savings, etc.

+ Purposeful savings: This is a form of medium and long-term savings for purposes such as building a house, buying a car , etc. Depositors can negotiate with the bank to deduct a certain amount of money from their monthly salary to transfer to a purposeful savings account. With this account, depositors will receive an interest rate lower than the savings interest rate, but they will be lent money by the bank to carry out the purpose when the savings amount reaches 2/3 of the value of the contract to buy the asset. Currently, this form of savings is being


is of interest to the people, the Branch needs to implement it. This form helps the bank attract more deposits from the population, on the other hand, it helps the bank have more medium and long-term capital.

+ Retirement savings: Retirement savings contracts can be considered a hybrid product between insurance and banking. It is a special type of life insurance provided by banks to the population, filling the gap in this type of product in the Vietnamese insurance market. On the other hand, it is more suitable to the psychological characteristics of Vietnamese people, thanks to the following advantages:

* Provide people with a service to manage their personal savings to ensure their livelihood when they are old or unable to work, without requiring too much paperwork and administrative procedures like other types of insurance.

* The principal amount is not lost if the beneficiary dies before the term, but will be fully inherited according to the law, or can be returned in full with interest (after the term, minimum 10 years) to the beneficiary while he/she is alive, or converted into stable income for life.

* The flexibility of some monetary products is shown in that depositors have full authority to decide on the amount of money and deposit each time depending on their ability to accumulate, not being bound by periodic or fixed limits like insurance payments.

* When providing this type of retirement savings, the bank will exploit the financial advantages of a traditional insurance product. The bank receives and manages a stable, continuous and long-term source of money. Therefore, it has the right to decide to use it for medium and long-term investment.

- As for the form of capital mobilization by issuing valuable papers, the advantage is that the Branch has a stable source of capital, helping to be proactive in business. Therefore, in the coming time, the Branch needs to have measures to mobilize capital from this form, in which the most important is to create prestige in the market.

2. Have appropriate policies to encourage customers to open and use accounts at the Bank.


At the Dong Trieu - Quang Ninh Branch of the Investment and Development Bank, the customer policy has been implemented correctly, but this policy is not yet rich and attractive to customers. For large customers, customers who bring a lot of profit to the Branch, this policy has not really met the requirements of customers. The customer policy is not competitive, at the same time, the capital of the Branch is too small to meet the capital needs of large enterprises, while reputable small and medium enterprises have not yet had much access. Through analyzing the current situation, I would like to present some solutions to encourage customers to open and use accounts at the bank.

2.1.For account opening procedures at the Branch.

The Dong Trieu - Quang Ninh Branch of the Investment and Development Bank should reduce cumbersome procedures for customers who are economic organizations, especially for customers who are not residents in the area. For example, the branch requires customers opening an account at the bank to bring the decision to establish the company, the investment license issued by the competent authority in Vietnam, the document of appointment and assignment for the account holder and the chief accountant. If the branch creates favorable conditions for non-resident economic organizations to open accounts, the branch will attract more foreign currency sources.

2.2. Expanding banking services.

Banking services are a tool for branches to encourage customers to open and use accounts at the branch. To do this, branches need to provide customers with preferential and convenient services such as:

- For customers with foreign currency deposit accounts, the Branch needs to have preferential policies for them during the use of the account such as: when customers withdraw foreign currency from the account, if they want to convert it into VND, the bank will buy foreign currency at a higher price than the price the bank buys from outside customers or buy at the selling price, but the customer must pay a fee (fee level)


low). With foreign currency deposit accounts, banks should have preferential policies for customers on interest rates.

Currently, the services provided by the Branch to customers are still limited, that is, the international money transfer service of the Branch has not been developed. All international payment transactions must be transferred to the superior bank. Therefore, in the coming years, the Branch needs to increase foreign currency resources to promptly fulfill the international payment needs of customers. On the other hand, payment by traveler's checks has not been applied, while tourism services in Quang Ninh province in general and Dong Trieu district in particular are very developed, so the demand for payment by traveler's checks is very large.

2.3. Improve the qualifications of bank staff.

From the awareness of assessing the human factor in the success of all business activities in general and banking business in particular. The Dong Trieu - Quang Ninh Investment and Development Bank Branch has consolidated and perfected its organizational structure, especially innovating the management and operation mechanism, strengthening supervision, internal inspection, financial management and strengthening labor discipline, which are always given attention. To promote the above achievements, the Branch needs to pay more attention to personnel work. This is also the key factor determining the success of the bank. The Bank needs to put competent staff in key positions, hold key positions, have a staff training plan, and have a general performance reward regime. Along with the above activities, the Branch should focus on union activities to create a comfortable atmosphere after work for employees. The Bank can organize competitions for excellent employees of the Branch for all employees, organize sports competitions ... Implement good working attire, civilized and polite at transaction locations.

In addition to recruitment, the Branch should have a plan to train and foster additional knowledge for staff such as:


+ The management board needs to have a training plan to further develop knowledge of administrative management and English to have more theory to apply in practice.

+ For departments that need training in specialized fields such as banking, foreign trade, law, and English for some employees.

To complete the above solutions, the bank's leadership and staff resolved all difficulties at work, demonstrating team spirit and solidarity.


2.4. Modernizing banking technology.

From the awareness of the importance of “technology development” to internationalize services is one of the competitive strategies of the bank. The Dong Trieu – Quang Ninh Investment and Development Bank Branch needs to have technology strategies, including the latest hardware, updated software, open systems and telecommunications networks. In the immediate future, the bank needs to complete the E-Banhk system, especially for the capital mobilization and payment accounting system through the bank because of the importance of this service to the bank.

2.5. Strengthen advertising and propaganda work.

Advertising and propaganda for banking activities is extremely necessary. Advertising content needs to mention issues that viewers are interested in such as deposit interest rates, deposit methods, benefits of opening personal accounts, ATM cards, advertising bank promotional programs such as bonus savings, issuing prepaid interest bills, etc.

In addition to advertising on mass media, Dong Trieu - Quang Ninh Investment and Development Bank Branch can apply direct advertising by printing leaflets. These leaflets are available in boxes and at the savings counters and transaction counters of the Branch's offices. The content of the leaflet includes information about the Branch such as the branch's mobilized capital, interest rates, etc.


mobilization, loan interest rates and other payment services … This is a form of advertising that is cheap, simple and highly effective.

2.6.Building corporate culture.

The issue of corporate culture is still a new issue in Vietnamese enterprises, although it is a fundamental factor, having a great impact on the success or failure of the business. In the period when banks are competing fiercely like today, more than ever, corporate culture has a special importance. It is an intangible asset, a resource that creates competitive advantage.

As a branch with a small scale, building and establishing a standard corporate culture is not possible overnight for the Dong Trieu - Quang Ninh Investment and Development Bank Branch. However, changing the working style, customer service style, relationships between staff in the branch, the working atmosphere of solidarity, joy, and attachment ... will bring great work efficiency. And of course, customers are very confident when working with such a bank.

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