Solutions to promote the efficiency of lending activities for individual customers at Military Commercial Joint Stock Bank

Continue to maintain a high proportion of profitable assets, but adjust to reduce loan balance and increase investment structure in total assets to meet the requirements of diversifying loan portfolio and minimizing risks. Total assets at the end of 2013 were estimated at 190,000 billion VND, outstanding loans increased by 12 .

Promote the development of financial service provision activities to enhance competitiveness and raise the bank's income by the end of 2013 to VND 3,400 billion.

Promote business activities on the foreign exchange market to ensure the balance of capital sources and use of capital, ensure stable and effective solvency, develop foreign currency trading activities, exchange interest rate change.

Continue to invest in modern equipment, upgrade facilities to increase business efficiency. Actively develop card issuance and payment activities, develop ATM system based on the bank's investment.

3.1.2. Development of the network of activities

Actively expanding and improving the quality of the network of branches and transaction offices across the country. Prioritize the expansion of transaction points in big cities, key economic areas, economic centers, new urban areas, densely populated areas and with decent incomes.

Simultaneously with the development of the operation network, MBBank will focus on recruiting, training, fostering and improving staff qualifications to meet the increasing service requirements.

3.1.3. Maintain low bad debt ratio

Keeping the bad debt ratio under control below 2.5%, striving to limit the bank's credit risk loss at MBBank's quality standards. Priority is given to researching solutions to prevent and limit losses and impacts of domestic and international markets.

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3.1.4. Continue to maintain and develop business activities

By 2013, along with the development of business activities, MBBank's risk management capacity must maintain its prestige, style and position, and must be higher than that of state-owned commercial banks.

3.2. Solutions to boost the efficiency of lending to individual customers at Military Commercial Joint Stock Bank

3.2.1. Improve the quality of information collection

For the appraisal to be good, it is required to have all the necessary information for the appraisal process. The source of information collected is mainly from borrowers, but this information is not always accurate, so for a good appraisal, the credit bureau needs to collect information from other sources such as:

Direct interview with borrowers: during the interview, it is necessary to clarify information such as loan purpose, financial situation and ability to repay. It is important to pay attention when interviewing directly that credit officers are not only good at their profession but also know many other fields, especially they must understand the psychology of the interviewees.

Collecting information from the outside: the outside information can collect individuals around the borrower.

Establish an appraisal fund and equip technical and material foundations for this work.

3.2.2. Completing the credit process for individual customers

To promote the efficiency of lending activities , MBBank is more active in implementing new credit models and processes, with the aim of both improving the efficiency of loan management (through the formation of an important credit department). customer system, credit management and debt management), while focusing on business expansion. Clearly define the division of expertise in customer service and risk assessment, and at the same time specialize in the granting of credit to corporate or individual customers, separating contact, customer marketing, and revenue collection. collect customer information, loan information and evaluate the feasibility of loan options.

First, banks need to develop policies to minimize risks in lending activities that may occur. In particular, special attention should be paid to avoiding the pursuit of profit, leading to reduced lending efficiency. In the regulations on collateral in lending, banks should not attach importance to collateral as a safe support to ensure credit. If possible, it is advisable to accept the collateral as valuable papers, easy to convert into money, less risky.

Post-borrowing supervision and inspection is an urgent requirement for banks in general and credit officers in particular. In this work, the bank needs to be more proactive, which helps the bank to detect signs of risk early. Not only stopping at the financial statements, the credit officers need to actively go down to the premises to check, the inspection must be suitable for the business line, it should be conducted once a quarter. Monitor the market situation, production and business industries of customers that are affected by bank loans. Re-evaluate the collateral at the current price if it is reduced compared to the mortgage price, requiring additional collateral or the corresponding decrease in the outstanding balance. For large loans, a specialized evaluation department is required. Banks need to regulate the credit disbursal to customer base to collect debt when due.This regulation shows the close attention of the bank and creates favorable conditions for customers to improve their sense of responsibility for loans.

Timely reporting as required is a strong support for loan control and management. Periodically, the content of the report is applied as follows: Reports to the Board of Directors and General Director are gathered weekly, monthly or quarterly, focusing on the general assessment, management strategy and remedial measures. The report to the professional leaders should be periodically daily and go into depth and detail into each type of risk.

3.2.3. Monitor your loan closely

For commercial banks, completing the loan is just the beginning of the lending process.

A loan process is only complete when the customer repays the loan and the bank closes the application. To further promote the efficiency of lending activities, minimize arising risks and propose effective measures to handle problem loans.

After disbursing the loan to the customer, the credit bureau must regularly monitor the customer's loan use process. This is very necessary because it helps the credit bureau to detect arising problems early, and promptly propose appropriate handling measures to the situation. Therefore, the credit bureau must always make full use of the meetings with customers when they come to the bank to pay interest, when visiting in person... to help the credit bureau know:

The sense of responsibility of customers for bank loans through whether they avoid meeting, enthusiastically discuss with the credit officers about problems related to the loan, or neglect to repay the loan?.

Assess the solvency of the customer through visiting and talking to see if there may be any particular reasons for the customer's ability to repay the debt?

Re-evaluate the actual value of the loan's special assets, whether that value is enough to recover the debt or not if the borrower becomes insolvent. Since then, MBBank has made timely adjustments in the supply of loans for corresponding collateral assets. If the value of the security property decreases, negotiate with the customer to reduce the outstanding balance in accordance with the permitted regulations.

The above information must be regularly updated by the staff in the form of reports and working minutes attached to the loan application. Firmly grasping the situation with a high sense of responsibility is the best key to help CBs closely manage loans as well as promptly detect and handle problem loans to achieve the desired effect. Limiting the moral hazard from borrowers contributes to boosting the bank's lending performance.

3.2.4. Improve qualifications of credit officers

The training center, in collaboration with related professional departments and external agencies, organizes professional training, has a methodical and practical integration training program for new employees, ensuring when official employees understand and strictly comply with internal regulations,….

Building a portfolio of intensive professional training for staff, especially risk management courses (identification, measurement, classification, administration, ...) to help MBBank staff have a standardized risk approach squid.

Business units need to organize self-training courses, exchange experiences, discuss new processes. Service quality management departments of specialized banks need to strengthen the inspection and assessment of service quality at the Transaction Office.

Develop and complete policies on recruitment, training, evaluation and treatment of employees (salaries, bonuses, insurance...); apply mechanisms to improve labor productivity, review applied labor indicators (PIs) to be able to perfect the reasonable salary and bonus regimes for employees with good practice. perform well on assigned tasks. MBBank should promote trade union work and cultural meetings between the Board of Directors and employees to improve corporate culture, create connections and retain people who are enthusiastic about MBBank.

3.2.5. Strengthening internal inspection and control in the bank

Internal control in lending activities is an important step, through internal control violations can be detected and corrected. In strengthening control, MBBank needs to take a number of measures as follows:

Strengthening staff for the control department, officers must be capable people, have seniority in the bank's operations. With professional standards, ethics and understanding of local banks' operations, internal control officers will actively contribute to reducing bank risks.

Strengthen the application of information technology in management and administration, especially financial management, transaction management and asset management. This will create an automatic, regular and continuous monitoring mechanism.

The internal control department must submit periodic reports according to the timely information regime to ensure the safety of transactions at the bank.

Every 6 months evaluates the implementation of the business process, detects inadequacies for a complete and timely adjustment.

3.2.6. Improve the effectiveness of marketing activities

Making people understand about banks and the benefits that banks bring to them is very necessary to expand lending. If this propaganda is done well, it will be effective in changing people's habit of saving for consumption and fear of borrowing. Thereby, it will increase the number of customers, contributing to promoting the development of consumer lending. To do so, banks need to expand their marketing activities and need to do the following:

Propaganda and advertising right at the bank by arranging for customers to observe and see images of the bank, its products and services.

Bank officers are the epitome of the bank, so the bank staff should be aware that: “Each bank officer is the most active and effective propagandist about lending policy in general and for the bank. science and technology loans in particular”. To do so, there must be an appropriate remuneration regime for the bank's own employees.

Send officials to go closely to each agency and unit to propagate and disseminate lending operations so that people can understand the benefits that loan products bring to them. At the same time, it is necessary to have the enthusiastic support of the leaders so that the access to and gathering of the needs of the people as well as the smooth conduct of the business can take place.

Every year, the bank organizes customer conferences and seminars, thereby creating a closer relationship with customers, in order to evaluate the advantages and disadvantages of consumer lending activities. Measures to improve service quality. Through customer conferences, helping the bank understand difficulties, answer customers' questions, assess and capture new needs arising from customers, thereby offering a way to supply products. , improve products to best suit the needs of customers.

In addition, completing the website: www.mbbank.com.vn is increasingly rich and detailed, meeting the increasing information needs of customers not only at home and abroad.

3.2.7. Consulting service development

In order for the service business to soon become a sharp tool in attracting customers, increasing mobilized capital, and at the same time increasing income, in addition to the services applied MBBank should conduct the following services: :

Consulting service on banking law: MBBank can help many individuals and businesses understand to properly comply with current laws such as: Civil Law, Law on Special Asset Evaluation, Economic Law, etc.

Financial consulting services: helping businesses in financial planning, financial analysis or tax planning…

Investment consulting services, information consulting: guiding customers to build a project, choose production products, calculate funding sources for the project with the most profitable loan interest rate... Consulting on participation money market, time to invest in gold or foreign currency...

3.3. Some recommendations

3.3.1. Recommendations to the State Bank and the Government

3.3.1.1. Recommendations to the State Bank

The State Bank should promulgate and complete synchronously relevant laws and documents to create a solid economic and legal environment for the operation of commercial banks. The documents include: Government Decree, Decision and Circular of the Governor of the State Bank to guide the implementation of two banking laws, namely the Law on the State Bank and the Law on Credit Institutions.

The SBV needs to implement a strict audit regime: this task, on the one hand, helps the bank in the appraisal and approval of loan applications of customers to be more accurate, the financial statements of customers need to reflect accurately reflect the actual situation, and at the same time, the collection of customer information must also be conducted smoothly and accurately.

The State Bank should issue joint circulars to guide the handling of mortgaged and pledged assets of credit institutions. It is proposed that the SBV needs to write off debts or compensate banks with overdue debts for objective reasons.

In the current economic conditions, our country's Credit Information Center (CIC) has not been timely enough, so it is recommended that the State Bank of Vietnam correct the operation of the Credit Information Center from updating data, provide accurate and timely data.

In addition, the SBV needs to strengthen inspection and supervision: Inspection and supervision need to be carried out regularly in various forms in order to promptly prevent violations of regulations of the State Bank. Therefore, the State Bank should develop an additional plan to exchange inspectors between branches of the State Bank to ensure objectivity and create a diverse working environment for inspectors to improve their professional skills. In addition, the SBV needs to build a team of inspectors and supervisors who are standard in banking operations, regularly update knowledge on modern banking services and business operations, and apply new technologies to supervise the banking operations. continue the commercial banks.

Moreover, to perform the role of risk prevention warning for commercial banks, the SBV needs to conduct research and orientate activities to prevent and limit credit risks; selectively absorbing the experiences of developing countries to help commercial banks grow safely and be able to compete with foreign credit institutions.

3.3.1.2. Recommendations to the Government

The Government needs to take effective measures in macroeconomic management policies, create an open and safe legal environment, in line with the market mechanism, and perfect laws to create a legal corridor. firmly for credit institutions to operate smoothly.

Maintaining a stable and solidly developing economy, encouraging the formation and development of money markets, capital markets, and stock markets, creating a premise for promoting innovation and innovation in banking technology in Vietnam. step by step integration into the world banking.

In addition, the Government needs to issue a mandatory audit regime, in the immediate future, for large enterprises and large projects; provide information between the bank and government agencies, apply discipline in reporting and providing information.

3.3.2. Recommendations for Military Commercial Joint Stock Bank

3.3.2.1. Develop a reasonable credit policy

Credit policy plays a very important role in orienting the bank's lending activities, helping credit officers to identify target customers, assess the risk level of customers, and make appropriate decisions. appropriate incentives for customers with loan needs. A reasonable credit policy is one that ensures the regulations of the State Bank, increases credit growth for the bank and ensures to limit credit risks for the bank when developing credit policies. Some points to keep in mind are as follows:

MBBank needs to focus on consolidating and developing its main business activities and eliminating inefficient risky business areas.

Banks should focus their credit on industries and fields that are both in line with the bank's operational direction and in the group of industries encouraged by the government and the SBV in the socio-economic development strategy. 2011-2020 period and prioritize capital for industrial development, ancillary, production - processing, small and medium enterprises . These are potential customers with high growth potential in the coming time, so the demand for bank loans will increase. Therefore, it is necessary to develop appropriate policies to attract good quality customers in this group.

MBBank needs to develop a strategy to make a difference compared to commercial banks, so it should aim to increase the quality of services brought to customers such as building a quick credit process, providing staff to guide customers in detail. enough about the product, there are many utility products included.

It is necessary to aim at diversifying loan portfolios and setting appropriate credit limits for each customer group and separate economic group to avoid concentration risks.

3.3.2.2. Completing internal processes, delineating responsibilities and functions of relevant departments

MBBank needs to review the regulations on lending activities of specialized banks to make sure it is appropriate and feasible, including a number of regulations on credit operations that can be used by the whole system to reduce the amount of money. amount of text and avoid overlap. It is necessary to prescribe a coordination process between the Centralized Credit Processing Center and the Business Unit to check the compliance with the conditions for approval, management, monitoring, inspection and supervision of the volume and quality of assets. ensure to develop customers, improve credit quality.

Reviewing a number of regulatory documents of the Bank of Financial Institutions such as Regulations on Investment in Corporate Bonds, Credit Approval Process for Financial Institutions Monetary Business Process, Foreign Exchange Transactions, Transaction processing,…. in order to create consistency, logic, improve control efficiency, and reduce risks in foreign exchange and interbank transactions.

Regularly update changes of regulatory documents of the State Bank and the government to promptly adjust the system of regulatory documents in MBBank to ensure that it is always adapted to the requirements and orientation of the State Bank.

3.3.2.3. Completing the organizational model mechanism towards improving management capacity

MBBank needs to develop supporting mechanisms and tools, and need more help desks for important committees such as the Risk Management Committee, the Credit and Investment Appraisal Committee. Due to the fact that in many activities of the Board of Directors such as loan re-appraisal or long-term business strategy development, the Board of Directors almost lacks objective information on the content of approval, most of which is based on the explanation of the Board of Directors. executive to make decisions that would lead to a lack of objectivity and transparency. With more departments and tools to support the Strategy Committee, the Risk Management Committee will help the Board of Directors plan an objective and effective strategy.

The bank needs to develop a regulation on demarcation of powers and responsibilities of business and support divisions to avoid overlapping functions and tasks, and facilitate coordination between departments to implement effective operational processes. more fruitful.

In addition, the bank must improve the conditions and standards of management capacity, work experience and professional qualifications for key leadership and management positions of the bank. The Bank can invite reputable and experienced people to join the positions of independent members in the committee under the Board of Directors to avoid the situation of a closed structure that easily gives rise to locally beneficial decisions for key members. of the Board of Directors rather than the common interests of the majority of shareholders.

MBBank must implement sound internal business policies and processes, effectively apply advanced management and administration methods in accordance with international practices, standards and legal regulations. .

Moreover, it is very necessary to restructure and rearrange business, administrative and executive functions; reasonable arrangement of managerial and business staff of the bank with high qualifications, sense of responsibility and good professional ethics.

SUMMARY OF CHAPTER 3

The entire chapter 3 has outlined the business orientation as well as the goals of Military Commercial Joint Stock Bank in the coming time. In addition, Chapter 3 also provides some solutions and recommendations for the State Bank, the Government and especially the Military Commercial Joint Stock Bank in order to promote the efficiency of lending activities. for individual customers at the bank.

CONCLUDE

Lending activities at commercial banks have always been a key activity of banks, and lending products for science and technology are playing an increasingly important role in the bank's lending product system. Science and technology lending has not been as effective as expected. Because of this, the promotion of efficiency is decisive for the lending activities of banks. On the basis of theoretical and practical research at Military Commercial Joint Stock Bank, the thesis has completed the following contents:

First, generalize the general theories of banking lending, lending to science and technology, the necessity of lending efficiency to science and technology, influencing factors and criteria for evaluating the effectiveness of lending to science and technology. with science and technology.

Second, analyze and evaluate the current situation of lending to science and technology at Military Commercial Joint Stock Bank in recent years. From there, the obtained results as well as the remaining limitations and causes can be drawn.

Third, the thesis proposes solutions to promote the efficiency of lending activities for science and technology at MBBank and proposes some recommendations to MBBank, the State Bank and the government.

Due to limited professional knowledge and practical experience, it is difficult to avoid shortcomings in the research process. I look forward to receiving suggestions and comments from the teachers in the school's thesis grading committee to make my thesis more complete. I would like to sincerely thank the guidance and enthusiastic guidance of the teachers, especially the help of Ms. Th.s. Le Thi Ha Thu who helped me complete this thesis.

Thank you sincerely!

REFERENCES

1. Assoc. Dr. Mai Van You (2009), Textbook of commercial banking, Finance Publishing House.

2. Dr. Nguyen Minh Kieu (2009), Textbook of commercial banking, Statistical Publishing House.

3. Banking Academy (2010), Banking and Monetary Textbook, Statistical Publishing House.

4. State Bank (2001), Decision No. 1627/2001/QD-NHNN promulgating the Regulation on lending by credit institutions to customers.

5. State Bank (2005), Decision 493/2005/QD-NHNN promulgating Regulations on classification of debts, setting up and use of provisions to handle credit risks in banking activities of organizations credit 6. State Bank (2007), Decision No. 18/2007/QD-NHNN on amending and supplementing a number of old articles of Regulation on debt classification, setting up and use of provisions for settlement Credit risk in banking activities of credit institutions issued under Decision No. 493/2005/QD-NHNN.

7. State Bank (2011), Circular No. 14/2011/TT-N NN stipulating the maximum deposit interest rate in USD of organizations and individuals at credit institutions.

8. State Bank (2011), Circular No. 20/2011/TT-N NN stipulating the purchase and sale of foreign currency in cash by individuals with credit institutions.

9. Government of the Socialist Republic of Vietnam (1999), Decree 178/1999/ND-CP on loan guarantees of credit institutions 10. Military Commercial Joint Stock Bank (2010, 2011, 2012), Annual Report.

11. Military Commercial Joint Stock Bank (2010, 2011, 2012), Financial report.

12. Military Commercial Joint Stock Bank (2013), Prospectus.

13. Websites:

http://www.MBBankbank.com.vn/gioithieu/Pages/default.aspx

http://vneconomy.vn/