SOLUTIONS FOR DEVELOPMENT OF DEPOSIT DEPOSIT ACTIVITIES AT INDUSTRY AND TRADE BANK NGU HANH SON BRANCH

DUY TAN UNIVERSITY INSTITUTE OF INTERNATIONAL TRAINING FACULTY OF ECONOMIC MANAGEMENT VIET MY (PSU) GRADUATE THESIS COURSE SOLUTIONS FOR DEVELOPMENT OF DEPOSIT DEPOSIT ACTIVITIES AT INDUSTRY AND TRADE.

DUY TAN UNIVERSITY INSTITUTE OF INTERNATIONAL TRAINING FACULTY OF ECONOMIC MANAGEMENT - VIET MY (PSU)  GRADUATE THESIS COURSE SOLUTIONS FOR DEVELOPMENT OF DEPOSIT DEPOSIT ACTIVITIES AT INDUSTRY AND TRADE BANK NGU HANH SON BRANCH MENTOR: MBA NGUYEN NHU HIEN HOA STUDENT: PHAN VIET HANG CLASS: K24PSU-QNH ID NUMBER: 24202409992 Da Nang, 2022 GUARANTEE I certify that this Graduation Thesis is the result of my work and the guidance of Ms Nguyen Nhu Hien Hoa I hereby declare that the data and research results in the Thesis are truthful I understand that this Dissertation may be reproduced and/or communicated for the sole purpose of detecting plagiarism I understand and undertake that if I violate the commitment, I will be sanctioned according to current regulations of Duy Tan University (DTU) Da Nang, May…, 2022 Student Phan Viet Hang ACKNOWLEDGEMENTS To complete this thesis, first of all, I would like to express my deep gratitude to Ms Nguyen Nhu Hien Hoa, who wholeheartedly guided me throughout the writing process I would also like to thank the management and accounting department of Joint Stock Commercial Bank for Industry and Trade - Ngu Hanh Son branch in Da Nang city for creating conditions for me to complete this report Due to limited time and limited understanding, errors will inevitably occur when completing this report Therefore, I look forward to comments from the teachers as well as the accounting department of the Joint Stock Commercial Bank for Industry and Trade - Ngu Hanh Son branch Da Nang, May …, 2022 Student Phan Viet Hang LIST OF ACRONYMS CB SBV IACB CTB IR SVD AOM PP Commercial Bank State Bank Industrial and Commercial Bank Central Bank Interest rate Savings deposit Amount of money Proportion TABLE OF CONTENTS LIST OF TABLE PREAMBLE Urgency of the topic As the economy is growing, the need for capital is always a top priority To develop socio-economic needs a lot of capital, commercial banks, a sanction in the financial market, operating in the field of currency business, capital plays a very important role The main activity of commercial banks is lending, so in order to meet the demand of the market, banks will have to mobilize capital from outside Raising capital will help the bank earn more income from loans and collect service fees, it will help the bank survive and develop The past two years have been a difficult time for banks, with the Covid-19 epidemic causing workers to quit, many businesses defaulting, and unable to pay loans The epidemic has affected the global economy and the Vietnamese economy, so banks have to change customer segments and switch to potential individual customers After researching on capital mobilization activities at Vietinbank Ngu Hanh Son, I feel that deposit mobilization plays an important part in the bank's operations With the desire to effectively develop deposit mobilization activities of Joint Stock Commercial Banks in general and Joint Stock Commercial Bank for Industry and Trade of Vietnam Ngu Hanh Son Branch in particular, I would like to choose the topic "Solutions to develop mobilization activities" Savings deposit at Vietinbank – Ngu Hanh Son Branch” Research objective - Research the basic issues of deposit mobilization activities of commercial banks - Analyze and evaluate the current status of deposit mobilization activities of individual customers at Vietinbank Ngu Hanh Son - Propose some solutions and recommendations to increase deposit mobilization at Vietinbank Ngu Hanh Son Research question - What is savings deposit mobilization at commercial banks? What are the contents of deposit mobilization activities, what are the factors affecting deposit mobilization activities? - What is the status of savings deposits at Bank for Industry and Trade, Ngu Hanh Son branch? - What solutions can help the Bank develop savings deposit activities of individual customers? Objects and scope of research - Research object: deposit mobilization activities at commercial banks - Research scope: deposit mobilization activities of Vietinbank, Ngu Hanh Son branch - Research period: period 2019-2021 Research Methods The thesis uses the methods of description - explanation, comparison comparison, analysis - synthesis The thesis also collects more information related to the research problem from reference books and data from Vietinbank Ngu Hanh Son Thesis structure In addition to the introduction and conclusion, the main content of the thesis is presented in chapters: - Chapter 1: Theoretical basis of deposit mobilization activities at commercial banks - Chapter 2: The situation of deposit mobile activities at industry and trade bank Ngu Hanh Son branch period of 2019-2021 - Chapter 3: Some solutions to develop deposit mobilization activities at Bank for Industry and Trade Ngu Hanh Son branch CHAPTER THEORETICAL BASIS ON DEPOSIT DEPOSIT ACTIVITIES AT COMMERCIAL BANKS 1.1 THEORETICAL BASIS ON CAPITAL MODIFICATION ACTIVITIES AT COMMERCIAL BANKS 1.1.1 The concept of capital source of commercial banks “The capital of a commercial bank is the monetary value created or mobilized by the commercial bank itself and used to lend, invest or perform business services other” (Don, N D (2007) Commercial banking) Thereby, we see that capital includes equity capital and borrowed capital In terms of the nature of the capital of CB, it is the idle money in the population and economic organizations that are concentrated by the bank to carry out business activities: lending, guaranteeing, leasing, etc increase cash flow 1.1.2 Meaning of capital mobilization activities of commercial banks 1.1.2.1 For economy Deposit mobilization from individual customers increases savings for the economy when idle capital is used efficiently and profitably instead of storing it as unprofitable cash On the other hand, through individual transactions with banks, the Government can monitor and regulate the economy more proactively 1.1.2.2 For the bank In the current retail banking trend, it can be said that deposits from individual customers play a very important role in the business activities of CB Deposits from individual customers not only meet loan capital needs, contribute to increasing liquidity, but also determine the bank's brand and reputation 1.1.2.3 For customers Deposit mobilization provides individual customers with a safe place to store their assets, temporarily storing capital when idle; At the same time, it also provides customers with a profitable investment savings channel Moreover, this is a condition for customers to access other convenient and fast banking services such as: bank payment, transfer, loan in a more convenient way Capital mobilization will help encourage people to use payment services, send money through banks, etc., thereby reducing risks and dangers in storing assets in cash 1.2 THEORETICAL BASIS ON SAVING DEPOSIT MOBILE ACTIVITIES FOR PERSONAL CUSTOMERS AT COMMERCIAL BANKS 1.2.1 The concept of savings deposit mobilization Personal deposit account is a deposit account with a term or demand balance opened by an independent individual in the name of the account holder Thus, individual customer's deposit is money deposited by an independent individual into a commercial bank for the purpose of serving non-cash payment, savings and other purposes Mobilization of deposits from individual customers of CB is defined as the receipt of deposits from individual customers in the form of demand deposits, time deposits, savings deposits, certificates of deposit and other forms of deposit receipt according to the principle of full refund of principal and interest to depositors as agreed 1.2.2 Classify 1.2.2.1 Sort by term - Demand savings deposit: A deposit that can be withdrawn at any time, but payment instruments cannot be used to pay other people This deposit balance is not large, but less volatile, so for this type of deposit, CB often pay higher interest rates on payment deposits - Term savings deposit: A deposit with an agreement on the time of deposit and withdrawal, with a higher interest rate than a demand deposit This type of savings is not to improve and perfect their products and services Avoid one-way information from professional departments to self-assess and improve their quality; The department must have a responsible person and be in charge of a Deputy Director to research, analyze and promptly report to the Director in order to make correct and timely decisions: - Strengthen the advertising, promotion and marketing of deposit accounts through various forms of communication such as: + Issuing periodical publications, leaflets, posters about existing deposit products to distribute to customers when they come to the bank to transact or visit + Increase the branch's presence to the public such as through television, radio, and local newspapers + For places that not have the conditions to receive the message that the bank has transmitted by the above forms, the bank can send employees to go there to advise and market let them know This solution is expensive in terms of time and effort, but it is very effective for the bank because the customer can be explained and clearly understand the message that the bank wants to say - In times when banks increase deposit deposit mobilization, the bank can advertise products with attractive promotions to depositors Corresponds to each deposit level offered by the bank will receive corresponding gifts such as receiving a discount coupon at the supermarket, or a domestic trip, or a sweepstakes ticket - Organize periodic customer meetings to create long-term relationships with customers Every year on major holidays, the bank can send flowers to congratulate, organize exchanges with its traditional customers on holidays, Tet With the care to maintain each relationship with such customers, the customer will will maintain trust with the bank more More importantly, it is from customers who bring the bank's brand to many others, thus contributing effectively to the mobilization of deposit accounts at the branch 3.2.5 Diversify capital raising products In addition to the existing savings forms at the bank, the bank can also research and develop other forms by the following measures: - Conduct market research, market segmentation to come up with capital mobilization products suitable to deposit customers and deposit location characteristics; develop preferential policies on interest rates, promotion programs suitable for each market segment, diversify and perfect the product portfolio system, increase product utility, and cross-sell products - Designing product and service packages combining lending, payment, and capital mobilization Groups of products and services suitable for individual customer groups such as officials, students, farmers, pensioners, etc - Consumption savings: for individual customers who have a need to buy houses or means of living but are currently unable to Every month, customers will deduct part of their income and deposit it into a consumer savings account at the bank At a certain time, if the customer needs to withdraw money for shopping, the bank can combine consumer savings products and consumer loans with preferential interest rates so that customers can buy valuable assets The value is higher than the initial estimate, which may encourage customers to choose this economical product - Saving housing: People who have the need to build a house or buy a house, but their own financial resources are not enough, so they want to gradually deposit money in the bank until at some point withdraw to build or build a house For this type of deposit, the bank should have preferential policies, such as for customers who regularly deposit money at the bank, they have a need for capital to build a house but the savings are not enough, the Customers can base on actual capital needs for additional support 3.2.6 Technological innovation Promote the application of information technology, informatics and electronics in banking service activities In which, strongly developing payment activities, ensuring to meet the payment needs with many utilities, high convenience, fast speed and convenient procedures are always attractive factors to attract customers to have relationships with customers bank This will be the basis for the development of capital mobilization, growth and expansion of deposits from the population Currently, the transaction time can be prolonged, especially with large deposits, which is the stage of money classification and counting Therefore, in addition to the staff who can support and guide customers, banks also need to equip modern money counters with high ability to detect counterfeit money, and at the same time count old and new money accurately absolute Thus, the transaction time will be shortened without creating stress for customers to deposit money The Bank equips all departments with computers to apply modern computer software in the management and inspection of banking activities Install more multifunctional information systems such as: intranet, internet as the basis for timely, accurate, and quality information collection and exploitation for customers when they need it, just enter The machine is able to know the details of the transactions that the customer has been performing In short, banks need to continue to innovate technology, making the most of the advantages that technology brings In particular, the conversion process absolutely does not allow errors and mistakes to arise, affecting the legitimate interests of depositors, causing distrust in them, creating bad public opinion about the bank 3.2.7 Create credibility and preserve it for the bank The prestige of the Bank of Vietnam has been obtained today, it is a great effort of all staffs of the bank in the past time Especially with the activity of mobilizing idle money from the public, prestige is a very important factor, it is the basis for customers to trust deposit Therefore, with the trust that the bank has left to the people of the city in general and the people in the area in particular, the bank needs to preserve and promote this advantage To this well, one of the things that banks must is regularly maintain, improve and improve the quality of customer service With good service quality, the bank will gain the loyalty of customers with them, on the contrary, the bank will easily be turned away by customers to find other banks to transact As follows: - Customers need to receive a warm welcome from the bank staff, avoiding creating stress for customers right from the moment they step into the banking area Customers must be guided by staff from convenient parking spaces, to directing the entrance to the counter, or seating to wait at crowded times, etc to create a comfortable transaction space for customers best - The bank can reserve a small space on the transaction floor to serve customers at times when there are many people waiting, such as consulting and introducing the utility of current products and services at the bank, how to use the card, what are the benefits of the card, etc., so that the people waiting can't see the waste of time waiting - Staff at the deposit counter must be able to observe the transaction scene well At times of crowds, it is necessary to recognize who came first and who came later to have the best remedy Whoever comes first will serve first and vice versa The most important thing is that the staff must give customers a feeling that they are always respected after each transaction, meeting the needs of customers to learn about deposits Doing this, the bank will be more successful in maintaining customer loyalty to the bank 3.3 SOME RECOMMENDATIONS 3.3.1 For the State Bank of Vietnam The State Bank must provide a system of synchronous, clear and transparent legal documents to create conditions for banks to operate safely and effectively Create a healthy competitive environment in banking activities, especially in capital mobilization, to avoid a race in deposit interest rates Step by step create an negotiable interest rate mechanism for banks to be more proactive and appropriate in their business operations The State Bank should continue to implement synchronous solutions to expand non-cash payments and encourage transactions through the banking system From there, creating motivation for banks in deploying products and services for science and technology such as money transfer services, card products, capital mobilization products, etc., at the same time, making payments through the banking system The bank helps bring transparency in the customer's financial source, enabling banks to easily appraise their finances when granting a loan limit to the customer Improve the effectiveness of inspection work and the legal effect of the State Bank, focusing on measures to overcome shortcomings, handling and correcting, resolutely dealing with detected violations, proactively synchronizing with relevant agencies and departments to contribute to creating favorable conditions in the operation of the bank, gradually improving to build a developed banking system For the Head Office, it is necessary to have proper support in building the branch such as strengthening the technical facilities for the branch, supporting the training to improve the professional skills of staff at the branch It is advisable to apply an interest rate policy suitable to each locality, with close coordination of information from the central two directions about the branch and vice versa 3.3.2 For the bank itself Strengthening the construction of facilities, in which it is important that the branch office needs to have additional changes in size, facilities, machinery and equipment at the transaction counter to create favorable conditions and increase the number of customers strengthen financial potential as well as trust with customers when coming to the transaction The branch needs to set up a separate department to monitor and conduct the mobilization of savings deposits at the branch in order to create favorable conditions for customers to come and transact and monitor customers as well as ensure deposit confidentiality CUSTOMER is tightened It is advisable to expand home banking services such as Home banking, Mobie banking and other forms of term savings specified by the customer with an negotiable interest rate based on market capital supply and demand At the same time, it is necessary to apply diversification of deposit forms such as cumulative savings, ladder savings, etc to attract the amount of idle money lying in the population Strengthening the staff of staff operating at the branch and having full-time staff in the residential deposit operation department Further diversifying and enhancing the benefits of banking services to attract customers to the bank 3.3.3 For relevant departments and agencies The State Bank of Vietnam branch in Da Nang city advises the Party committees, local authorities and focal points to coordinate with law enforcement agencies in order to create favorable conditions for the bank to quickly handle collateral, loans state debt, manage healthy business activities As follows: - It is necessary to have specific regulations, reform procedures as well as help customers with notarization procedures when required by the bank - Agencies such as the Department of Finance, Pricing, Taxation and Audit need to have stricter regulations in compliance with the Ordinance on Statistical Accounting and Pricing for businesses and create favorable conditions for banks in the future valuation of collateral Avoiding the situation that enterprises wrong bookkeeping, making it difficult for banks to determine and miscalculate investment capital - Strengthening the role of mass organizations in order to propagate and disseminate to people the awareness of saving and saving As well as helping people to be aware of the importance of small capital sources in the city for the economic development of the city and the country, so that when they have a need to save and accumulate, they will turn to them with the bank - It is necessary to accelerate the equitization of state-owned enterprises in order to issue more shares of the company to the public in order to attract more medium and long-term capital for the society, to meet the demand for medium and long-term capital long-term economic investment CONCLUSION CHAPTER Based on the theoretical basis of efficiency in raising savings deposits in Chapter 1, combined with the analyzed situation and existing limitations in savings deposit mobilization activities for individual customers For the period of 2019-2021 in Chapter 2, Chapter presented solutions and recommendations to effectively develop savings deposits of individual customers at Bank for Industry and Trade, Ngu Hanh Son branch in the past few years next BIBLIOGRAPHY Nguyen Minh Kieu (2010), Modern commercial banking, Statistical Publishing House Tran Huy Hoang (2010), Banking Administration, Labor and Social Publishing House Nguyen Dang Don (2009), Currency and Banking, National University Publishing House, Ho Chi Minh City Nguyen Thi Mui (2008), Commercial Banking Administration, Hanoi Financial Publishing House Nguyen Thi Mui (2010), Commercial banking textbook, Publishing House Finance, Hanoi Tran Thi Hai Yen (2014), Solutions to Improve the Efficiency of Deposits from Individual Customers at Joint Stock Commercial Bank, Master's Thesis University of Economics Ho Chi Minh City Vu Thi Thuy Truc (2018), Solutions to Improve the Efficiency of Deposit Mobilization for Individual Customers, Master's Thesis - University of Economics Ho Chi Minh City Joint Stock Commercial Bank for Industry and Trade of Vietnam (2019-2021), Annual Report Website: http://www.sbv.gov.vn 10 Website: www.vietinbank.vn ... SITUATION OF DEPOSIT MOBILE ACTIVITIES AT INDUSTRY AND TRADE BANK NGU HANH SON BRANCH PERIOD OF 20192021 2.1 OVERVIEW OF INDUSTRIAL TRADE BANK NGU HANH SON BRANCH 2.1.1 The process of formation and development. .. economic status of the Vietnam Bank for Industry and Trade 2.2 THE STATUS OF DEPOSIT DEPOSIT AT INDUSTRY AND TRADE BANK NGU HANH SON BRANCH 2.2.1 Products to mobilize savings deposits of individual... savings deposits at Bank for Industry and Trade, Ngu Hanh Son branch? - What solutions can help the Bank develop savings deposit activities of individual customers? Objects and scope of research