Internship Report at military bank - dien bien phu branch

International payment activities in banking system have currently played a more and more important role in the external economy affair. With the help of international payment tools, economic and commercial relationships among international business partners have been enhanced across the world, expanded export import credit as large volume of international transaction has made significantly every single second time.

LIST OF ABBREVIATION 2

LIST OF TABLES AND DIAGRAM 2

INTERNSHIP DIARY 3

1- INTRODUCTION OF MILITARY BANK – DIEN BIEN PHU BRANCH 6

1.1 Introduction of Military Commercial Bank 6

1.1.1 History and development 7

1.1.2 Business performance in recent years 8

1.2 Introduction of Dien Bien Phu Branch 8

1.2.1 Main business activities 9

1.2.2 Organizational structure 9

2- ANALYSIS OF DIFFCULITIES AT THE BRANCH FROM OBSERVATION 11

2.1 Current situation 11

2.2 Consequences 12

2.3 Solutions 14

3- COMMENT AND CONCLUSION 14

3.1 Comment on internship period 14

3.1.1 Benefits 15

3.1.2 Limitations 15

3.2 Suggestions for university 16

3.3 Conclusion 17

REFERENCE

International payment activities in banking system have currently played a more and more important role in the external economy affair With the help of international payment tools, economic and commercial relationships among international business partners have been enhanced across the world, expanded export import credit as large volume of international transaction has made significantly every single second time.

Acknowledging this major role of international payment methods, Military Commercial Joint – Stock Bank, which is the leading commercial bank in Vietnam has made a strong focus on its international settlement department to help the foreign trade transactions completed as quickly and smoothly as possible Therefore, writer decided to choose Military Commercial Bank as the place for internship After a five – week time as an intern in the back office of Military Bank -Dien Bien Phu Branch, the writer got to know the real working environment and have a general idea of procedures in the banking service The purpose of this report

is to explain what the intern did and learnt during internship period (July 1 st , 2013 till July 31 th , 2013) The structure of this report is designed in three parts:

Part 1: Overview of Military Commercial Bank and Dien Bien Phu Branch

Part 2: Analysis of difficulties at the branch from observation

Part 3: Comment and conclusion

In this paper, the writer would like to send great thanks to Vice Professor Dr Trinh Thi Thu Huong – vice president of Faculty of Economics and International Business, who has given enthusiastic instruction for the writer; to Ms Huyen, Mrs Thu and Ms Lien who directly instructed the writer for their gracious help of creating opportunities and good conditions for the writer to take part in several activities during this time.

LIST OF ABBREVIATION

MB Military Commercial Joint - Stock Bank

LIST OF TABLES AND DIAGRAM

Table 1.1 Fundamental information of Military Commercial Bank……….p 08 Table 1.2 MB’s business performance 2010 - 2011 (VND billion)……… p.10 Diagram 1.1 Organizational structure of MB Dien Bien Phu branch p.11

INTERNSHIP DIARY

Week 1 (July, 1 st – July, 5 th ) Letter of Credit

1

- Learnt about Dien Bien Phu Branch’s organizational structure and working environment

- Learnt how to scan B/W or color, use photocopy machine

- Read 4 sales contracts and 4 applications and required documents for opening L/C

2

- Observed Ms.Thư checked customers’ account balance and made a minute of hand-over documents for customers

- Presented 1 documents to be signed by the Head of Credit Support Department

3

- Observed Ms Thư amended telegram of L/C to be opened and updated received document database ( which date and time, customer’s code, currency)

- Double - checked L/C document preparation of customers

- Presented 3 documents to be signed by the Head of Credit Support Department

4 - To be given permission of having a day off

5

- Observed Ms Thư corrected application for irrevocable L/

C for customers, updated request of L/C payment and entered the transaction into accounts

Week 2 ( July, 8 th – July, 12 th ) Telegraphic transfer

8

- Double – checked to see whether all important information

in telegram paper and notification of money transfer are exactly matched

- Arranged documents (telegram, application for money transfer, money transferring statement)

- Photocopy documents

9 - Double - checked documents upon 2 criteria: accuracy

(including red stamp and authentic signature) and adequacy

- Observed Ms Lien checked customer’s account balance

- Presented telegraphic transfer application to be signed initially by the Head of Credit Support Department

10

- Scanned black and white payment orders for storage in database

- Arranged documents

- Double – checked to see whether all important information

in telegram paper and notification of money transfer are exactly matched

11

- Presented telegraphic transfer applications to be signed initially by the Head of Credit Support Department

- Observed Ms Lien checking customer’s account balance and updating collected documents database

- Classified documents

12 - To be given permission of having a day off

Week 3 ( July, 15 th – July, 19 th ) Credit

15 - Observed Ms Thu making a request paper of removing

mortgage of land use right and property connected to land transference

- Observed Ms Thu received documents for checking accuracy then double – checked them

16 - Scan documents for storage

- Photocopy documents

17

- Observed Ms Thu making a request paper of removing mortgage of land use right and property connected to land transference

- Photocopy papers

18 - Double-check financial confirmation reports

19 - To be given permission of having a day off

Week 4 ( July, 22 th – July, 26 th )

22 - Observed Ms Thu made a minute of hand-over documents

for customers and updated collected document database

- Presented documents to be signed by the Head of Credit

Support Department

23 - To be given permission of having a day off

24

- Double - checked customers’ applications for L/C

- Scanned notification

- Arranged payment L/C applications and photocopy documents

25

- Observed Ms Thư amended telegram of L/C to be opened and updated received document

- Double - checked L/C document preparation for customers

- Presented 3 documents to be signed by the Head of Credit Support Department

26

- Double – checked to see whether all important information

in telegram paper and notification of money transfer are exactly matched

- Arranged and photocopy documents (telegram, application for money transfer, money transferring statement)

Week 5 ( July, 29 th - July, 31 th )

29

- Scanned black and white payment orders for storage in database

- Arranged documents (telegram, application for money transfer, money transferring statement)

- Arranged payment L/C applications

31

- Presented telegraphic transfer applications to be signed initially by the Head of Credit Support Department

- Double – checked to see whether all information in telegram paper and notification of money transfer are exactly matched

I - INTRODUCTION OF MB – DIEN BIEN PHU BRANCH 1.1 Introduction of Military Commercial Bank

1.1.1 Fundamental information

Table 1.1 Fundamental information of Military Commercial Bank

Bank’s name Ngân hàng Thương mại cổ phần Quân Đội Bank’s name in English Military Commercial Joint- Stock Bank

Logo

Chartered capital VND 10,000,000,000,000 (Ten thousand

billion Vietnam Dong)

Headquarters No 21 Cat Linh Street, Ba Dinh District, Hanoi

(Source: www.mbbank.com.vn)

Business registration certificate No.: 0100283873 by Hanoi Agency for Planning and Investment Initial issuance: September 30, 1994

The 27th amendment: December 31, 2010 License No.0054/NH-GP issued

on September 14, 1994 in conjunction with Decision 194/QĐ - NH5 on September

14, 1994 by the State Bank of Vietnam

1.1.2 History and development

Initially established to provide various financial services for military corporations, MB was founded on November 4, 1994 under Business Registration Certificate No.0100283873 issued on September 30, 1994 by Hanoi Department for Planning and Investment and Banking License No.0054/NH-GP issue on September

14, 1994 by the State Bank of Vietnam

Over the last 19 years, MB has continued to grow rapidly and aimed to become a holding corporation, with MB (one of Vietnam’s top commercial joint stock banks) as the parent company, and five subsidiaries, demonstrating themselves as widely recognized brand name in the financial services (including banking, insurance and securities) and the real estate service in Vietnam With its broad variety of service and product offerings, MB has experienced robust growth, expanding its operations into new branches of the service that reach beyond its traditional market During the last six years, MB has consistently been rated in the

“A” category by the State Bank of Vietnam, the most prestigious category for banks according to SBV’s ranking

From a mere VND 20 billion of chartered capital at establishment, mainly contributed by the founding shareholders and 25 employees, today MB’s chartered capital has increased by 500 times to VND 10,000 billion MB now has tens of thousands of shareholders and over 4,000 employees and staff members (the figure

is over 4,620 if taking into account those from all of MB’s subsidiaries) MB has proved to have solid financial capacity and a vigorous competitive position The bank’s total assets have witnessed rapid growth, reaching VND 175,610 billion as of June 30, 2012 Today, MB is one of the top domestic commercial joint stock banks

in terms of both total assets and chartered capital

1.1.3 Business performance in recent years

Table 1.2 MB’s business performance from 2010 to 2011 (VND billion)

Capital mobilizing

from economic

organizations and

individuals

Total outstanding

Profit before tax 2,288 2,625 3,090

(Source: MB’s financial statement 2010 -2012)

1.2 Overview of Dien Bien Phu Branch

In June 2005, the MB’s headquarter office moved from 28A Dien Bien Phu St

to 21 Lieu Giai St Since then, Military Bank’s Dien Bien Phu branch was turned into class I branch, formerly the Bank's Head Office MB’s Dien Bien Phu branch acts as an independent accounting unit and operates to enhance development and reputation of the Military Commercial Joint – Stock bank

MB’s Dien Bien Phu Branch is the largest branch which has 4 transactional offices located in Ly Nam De St., Nguyen Bieu St., Giang Vo St., and Hoang Cau

St It has been under control of Military Commercial Joint- Stock Bank

1.2.1 Main business activities

 Engage in commercial banking activities in accordance with regulations issued by the Governor of the State Bank of Vietnam;

 Engage in provision of derivatives products in accordance with legal regulations;

 Act as an agent for insurance and other related services in accordance with legal regulations;

 Engage in trading bonds and other valuable papers in accordance with legal regulations and

 For business activities that are subject to special licensing, the Bank only engages in these businesses when it meets conditions as specified by legal regulations

1.2.2 Organizational structure

Director of Branch

By the end of July, 2013, the total number of employees in MB’s Dien Bien Phu Branch has reached 150 Its organizational structure is depicted as the following table:

Diagram 1.1 Organizational structure of MB Dien Bien Phu branch

Vice -Director Vice - Director

(Source https://www.mbbank.com.vn/gioithieu/Pages/default.aspx)

2 - ANALYSIS OF DIFFCULITIES AT THE BRANCH FROM

OBSERVATION

2.1 Current situation

The first difficulty at the branch is that they have separated locations of two departments At Dien Bien Phu Branch, there have been two teams are working and co-operating simultaneously One team is called “Customer Relation Department”, which is the front office deals with all individual and enterprise customers, is at the branch, 28A Dien Bien Phu St.; and the other is called “Support Credit Department”, who supports for the former team, is located 38 Dien Bien Phu St regarding to handle all paperwork procedures and check documents thoroughly before submitting them to the Head Office Due to those characteristics, activities of two those departments are extremely inter-connected, so that there are always lots of

Accounting

Department

Administratio

n & Human Resources

Individual Customer Relation Department

Enterprise Customer Relation Department

International Payment Enterprise Credit

interaction processes between two teams per day For example, in L/C opening procedure, upon receiving the buyer's application in the front office, the credit supporting team checks the credit of the applicant and the contents of the application

as well to see whether they generally are consistent with national and international banking and legal requirements or not If the application is satisfactory to the bank, the buyer and the issuing bank, i.e, MB will sign an agreement to open a documentary credit The credit must be written and signed without delay by an authorized person of the bank in front office team Then, customers’ applications are allowed to be transferred to the Head Office for processing However, due to limited space, the support credit team’s office room is located far from the front office 500 meter away Therefore, it takes time for required documents to be presented and signed by vice – director of the branch in the front office

Let’s take another example in T/T procedure to see how it goes with this difficulty, let’s say a staff has been receiving a application then checking customers’ accounts All is proper After getting the Head’s initial signature in the back office

at 38 Dien Bien Phu St., staff from back office is required to get immediately vice – director’s signature whose office is currently at 28A Dien Bien Phu St So, it takes lots of his time and effort to walk here and there back and forth due to huge amount

of paper needs to be approved per day In this case, we even have not mentioned to other problems in reality such as customer does not provide enough and proper required documents or staff makes mistakes which have not been discovered by anyone yet until the boss figures out in composing documents so he has to begin all over again

Another difficulty the writer witnessed at the branch during internship is computer’s operating rate is noticeably slow It is the fact that when processing more than 5 files, computer is possibly over – loaded then frozen up at that moment Furthermore, it often appears a window displaying expired date of anti-virus software which is likely to distract the staff’s full concentration on work Sometimes, the rate of internet connection is rather slow as well