LV Thạc sỹ_Solutions to prevent risks in international payment by letter of credit at BIDV dong do branch

ACKNOWLEDGMENT The report is the result of my internship in the International Payment Department of BIDV Dong Do branch – Ha Noi By that time, I have worked with a great number of people whose contribution to the research It is a pleasure to convey my gratitude to them all in my humble acknowledgement In the first place, I would like to express my thanks to Mr … for his supervision, guidance and encouragement during this time I appreciate all his time and effort in helping me during the time of my internship In the next place, I would like to express many thanks to all staffs in BIDV Dong Do branch in general and in International Payment Department in particular, for their warm treatments and enthusiastic helps during my internship I am very grateful to Mrs …, my supervisor in Dong Do branch office, for her encouragements and guidance Besides, I gratefully acknowledge all lectures and officers from Advanced Finance Program for their shared knowledge and experiences Last but not least, I would like to delivery my gratitude to all of my classmates in advanced class intake 50 Their supports are one thing making this thesis possible CONTENTS Page ABBRIVATION LIST OF TABLES .6 LIST OF FIGURES INTRODUCTION .7 CHAPTER I: OVERVIEW OF INTERNATIONAL PAYMENT USING LETTER OF CREDIT (L/C) AND RISKS PREVENTION IN THESE ACTIVITIES 10 1.1 International payment 10 1.1.2 Roles of international payment 10 1.1.3 Methods of international payment 12 1.2 Letter of Credit method 14 1.2.2 Pros and Cons of L/C method 14 1.2.4 Process of L/C 17 1.2.5 Types of L/Cs 19 1.3 Risk in international payment by L/C 20 1.3.1.2 Technical risks .22 1.3.1.3 Ethical risks 24 1.3.1.4 Political risks .25 1.3.1.5 Objective risk .25 1.3.2 Some method for preventing risks in international payment by L/C 26 1.3.2.1 Improve quality of liquidator and credit staff .26 1.3.2.2 Build complete procedure for L/C transaction .27 1.3.2.3 Setting collateral and buying insurance 27 1.3.2.4 Documents about preventing risks in L/C method .27 1.3.3 Criteria for assessing risks .29 Page 1.3.3.1 Level of collaterals .29 1.3.3.2 Compulsory loan 30 1.3.3.3 Overdue debts 30 1.3.3.4 Extra criteria 31 Conclusion of Chapter I 32 CHAPTER II: THE REAL SITUATION OF RISKS MANAGEMENT IN INTERNATIONAL PAYMENT USING L/C AT BIDV DONG DO BRANCH 33 2.1 Background of BIDV Dong Do branch 33 2.1.1 Foundation and development 33 2.1.2 Organization structure .35 2.1.3 Main products and services .40 2.1.4 Key financial indicators 41 2.2 Special Characteristics affecting international payment activities at Dong Do branch 42 2.3 Real situation of risks in International payment using L/C in Dong Do branch 44 2.3.1 Performance of international activities 44 2.3.2 Real situation of risk prevention in international payment using letter of credit at BIDV Dong Do branch .47 2.3.2.1 Recognition of risks .47 2.3.2.2 Measures of risks 49 2.3.2.3 Solutions from BIDV Dong Do branch 51 2.3.2.4 Criteria of risks in BIDV Dong Do branch 52 2.4 Overall assessment of risks prevention in L/C activities at BIDV Dong Do branch .54 Page 2.4.1 Achievement 54 2.4.2 Limitations 55 2.4.3 Reasons for limitations 56 2.4.3.1 Objective reasons 56 2.4.3.2 Subjective reasons 57 Conclusion of chapter II .58 CHAPTER III: RECOMMENDATION TO RESTRICT RISKS IN INTERNATIONAL PAYMENT USING LETTER OF CREDIT AT BIDV DONG DO BRANCH 59 3.1 Opportunities and challenges for BIDV Dong Do in restricting risks in L/C transactions 59 3.2 Directions to restrict risks in L/C transactions for BIDV Dong Do branch 60 3.3 Recommendation to prevent risks in international payment using L/C method at BIDV Dong Do branch 61 3.3.1 Recommendation for BIDV Dong Do branch .61 3.3.1.1 Maintaining and enhancing the inspection and supervision 61 3.3.1.2 Maintaining and continuously improving quality of liquidator staff 62 3.3.1.3 Expanding partnership and agency relationship with foreign banks 62 3.3.1.4 Recommendation for professional activities 63 3.3.1.5 Recommendation for limiting damage when risks occur 64 3.3.2 Recommendation for the Government 65 3.3.2.1 Creating a favorable regulation environment for international activities .65 Page 3.3.2.2 Facilitating the development of exchange market and interbank foreign exchange market .65 Conclusion of Chapter III .67 CONCLUSION 68 REFFERENCES 69 ABBRIVATION BIDV Bank of investment and development of Viet Nam L/C Letter of credit Page COD Cash on Delivery CAD Cash after Delivery ATM Automated teller machine CRM Customer relationship management BSC BIDV security company ROA Return on Assets ROE Return on Equity BOD Board of Directors LIST OF TABLES Table 1: Key financial indicators .41 Table 2: Weight of L/C in international payment at BIDV Dong Do .45 Page Table 3: Value of Importing L/C in BIDV Dong Do 46 Table 4: Value of exporting L/C in BIDV Dong Do 46 Table 5: Collateral for L/C at BIDV Dong Do 52 Table 6: Compulsory loans for L/C at BIDV Dong Do 53 LIST OF FIGURES Figure 1: Process of L/C 17 Figure 2: Organization Structure of BIDV Dong Do .36 INTRODUCTION Rationale Today, in the rapid trend of integration and globalization of the world, international trading activities are growing stronger and stronger and keeping a Page very important role in the period of industrialization and modernization of our country Export and import become essential bridges for our country to engage with the active diversified economic life Though that, one nation can reach abundant source of materials, expand market and promote the development of domestic production As the result, it brings higher profit for producers, exporters and importers, contributing significantly to the development of the country as a whole It is possibly said that international payment plays key role in development of international trading Serve as a catalyst for the development of foreign trade, the international payment activities are also constantly being expanded and improved To match the diversity and richness of the commercial relationship, it has established many different payment methods such as remittance method (Remittance), mandated collection method (Collection) and Letter of Credit method (Letter of Credit – L/C) Compared to the first two methods which are detrimental to one of two parties, buyer or seller, where the commercial bank is just intermediary and shall not be bound to pay, the documentary credit method had proved to be superior when it ensures benefits for all parties involved The main advantage of this method is the reason why it is preferred Letter of Credit itself proved that it has many preeminent advantages, but it is not the payment method that can avoid risks for the parties to the absolute The fact has shown that almost Vietnamese parties taking part in international payment are young and somehow lack of experience In such situation, Vietnamese commercial banks and enterprise have encountered many difficulties with risks incurring in the process of international payment using L/C method In some case, the damage even reaches millions of dollars Therefore, developing and perfecting the process of international payment activities, especially researching and preventing the risks occurred in L/C method is one of the most frequent concerns of any bank Page Despite being one of the best and biggest banks in Vietnam, BIDV also is not an exception The risks occurring during international payment using Letter of Credit cause many difficulties to business activities of BIDV, not only in financial factors but also in reputation of the bank Therefore, after practicing at department of international payment at BIDV Dong Do branch, stemming from above knowledge, I decided to go with the thesis: “Solutions to prevent risks in international payment by Letter of Credit at BIDV Dong Do branch” This thesis studies about the theories of international payment using letter of credit method, the risks contained in this method and the solutions to restrict these risks After that, this thesis studies about the current situation of international payment by L/C method at BIDV Dong Do branch, before providing some recommendations for both the government and the bank in order to restrict these risks at the bank Research Objectives Through this thesis, I intend to propose some possible solutions and recommendations for the bank and the government in order to restrict risks in international payment activities by L/C method at BIDV Dong Do branch In the thesis, these objectives will be reached by learning about the overview informational about risks in international payment using L/C, analyzing the real situation of risks prevention in Dong Do branch From those, appropriate solutions and recommendations can be provided Research scope This thesis focuses on researching on the business performance of international payment activities by using Letter of Credit method at Bank for Investment and Development of Vietnam – Dong Do branch Page All data presented in this thesis research illustrates the real situation of international payment operation at Dong Do branch during three recent years from 2008 to 2010 and vision to 2015 Research methodology In my thesis research, both qualitative and quantitative research method are used Qualitative method concerns about the causes of risks and the impacts of them on international payment activities by L/C method at the branch Meanwhile, quantitative method concerns about data, information of three recent years, using statistic, analysis, and making comparison in order to have a practical view about the real situation of risks and performance of risks prevention activities at BIDV Dong Do branch Research structure My thesis research consists of four main parts: Chapter I: Overview of international payment using Letter of Credit (L/C) and the risks prevention in these activities Chapter II: The real situation of risks prevention in international payment using Letter of Credit (L/C) ay BIDV Dong Do branch Chapter III: Recommendation to prevent risks in international payment using Letter of Credit (L/C) ay BIDV Dong Do branch Page  It is thank to the high quality of liquidator and credit staff, the branch has nearly eliminated the technical risks in international payment using L/C method The branch has recruited young, talented, enthusiastic and professional staff at international payment department and credit department With their talents, enthusiasm and professional skills, the liquidator of the branch will check the documents in L/C transactions carefully and be able to find out any intentional or unintentional errors if they exist while the credit staff can assess the financial situation of customers more accurately, therefore they can nearly eliminate technical risks and somehow even ethical risks in L/C transaction at the branch  In three recent years, the rates of compulsory loan that the branch has to make to customers are maintained at a quit low level, around 2-3% It means that the branch has been somehow successful in reducing the risks that the customers will payback money lately which causes difficulties to the branch in capital recovering Moreover, in these years, the cases that customers become unable to pay back to the branch and have the compulsory loans become overdue debts are very rare, meaning that the branch has been successful in preventing risks of losing money due to weak financial conditions of customers  Many high technologies and applications had been applied in the international payment activities of the branch, making these activities become much more accurate and effective Moreover, these high technological applications also contribution to risks prevention activities of the branch, raising the quality of the transaction process and the safety of the process much more, therefore, attracting more export and import companies to go to the bank 2.4.2 Limitations  At BIDV Dong Do branch, the percentage of customers that have the collateral level below 15% when requesting to open a L/C is still very high, Page 55 around 75 – 80% Moreover, the average collateral level at the branch tends to gradually increase in three recent years Although almost customers of the branch in international payment are large export – import companies with long relationship with the bank, the low level of collateral may cause the bank to face with many potential risks Moreover, although the rate of compulsory loans of the branch is still low, however this rate has increased gradually in three recent years from 2.20 to 2.77% It means that in some cases, the branch has assessed the financial situation and business performance of customers somehow inaccurately, and the number of these cases is increasing gradually  BIDV Dong Do branch has just made some solutions to detect and prevent risks in international payment using L/C method However, the branch still does not have specific solutions in order to limit the damage caused by these risks In cases unavoidable risks such as disasters, floods, etc occur, it is no doubt that the bank will suffer damage without any reduction Moreover, the branch has somehow too much on preventing technical risks when somehow forget about other types such as ethical risks and political risks, which can cause many damage for the bank 2.4.3 Reasons for limitations 2.4.3.1 Objective reasons  L/C method itself is related to many different factors, many parties taking place in many different countries with different political and economical background, so the L/C method itself contains some kinds of risks that is very difficult to be eliminated Moreover, the only basis for L/C transactions is the documents, however in some cases in which the regulations about these documents are different in different countries, leading to disputes and misunderstanding during the documents checking process, causing risks to banks, importers and exporters Page 56  The global economy in general and Vietnamese economy in particular is still in process of recovering after recession in 2008 Therefore, in this period, business activities of Vietnamese enterprises and corporations, including large ones that are customers of BIDV Dong Do branch in international payment, are facing many difficulties As the result, it is quite difficult for these companies to maintain its stability in financial conditions, thus increasing the possibility of risks occurring when they participating in international payment activities 2.4.3.2 Subjective reasons  In many cases the decision to open L/C for customers of Dong Do branch is based on relationship but not on the assessment about customers’ financial condition and business activities If the customers are larger enterprises and corporations that have long and close relationship with the branch and their transaction histories are good, Dong Do branch usually uses the financial assessment from formal transactions and does not make any assessments about their current situation, or even open L/C for them with collateral of 0% These ways of handling of BIDV Dong Do branch, although they strengthen the relationship between the bank and its loyal customers, however also can bring lots of potential risks to the bank  Because the branch has not experienced large losses and damages from risks in international payment using L/C method for a long time, so the branch still does not aware accurately about the potential losses and damages that it will suffer when risks occur Base on their strengths such as high quality of staffs, high technological applications, good procedure in doing L/C transactions, etc, the branch is somehow too confident about its ability in risks prevention in L/C activities and does not have specific solutions in dealing with some kind of unavoidable risks like disasters, conflicts, and limiting losses and damages from these risks Page 57 Conclusion of chapter II In Chapter II, the thesis has shown following information: The thesis has shown the overview about BIDV Dong Do branch, its history and development, and also its general business performance through its key financial indicators In addition, information about performance of international payment activities in the branch is also shown in this chapter In chapter II, the thesis has focused on the specific kinds of potential risks in international payment activities at Dong Do branch, the damages and losses that these risks can cause and the possibility of these risks to happen This chapter also provides information about solutions that the branch has taken in order to prevent risks and their result through the criteria of assessing risks as indicators In the next step and also the most important step, chapter II of the thesis shows the assessments about risks prevention in international payment using L/C at BIDV Dong Do Based on recognitions, measures of risks and criteria above, chapter II shows the achievements and limitations of the branch in risk prevention These assessments will be uses as basis for solutions and recommendations that will be shown later in chapter III Last but not least, the thesis provides some possible reasons for limitations in risks prevention at the bank Since then, acknowledging and understanding these reasons are essential to provide possible and suitable solutions in chapter III Page 58 CHAPTER III: RECOMMENDATION TO RESTRICT RISKS IN INTERNATIONAL PAYMENT USING LETTER OF CREDIT AT BIDV DONG DO BRANCH 3.1 Opportunities and challenges for BIDV Dong Do in restricting risks in L/C transactions Opportunities In 2012, Vietnamese and global economy have been recovering, proving many opportunities for businesses and banks to stabilize, expand and improve their business activities In recent years, as the result of the recovering in the economy as a whole, production performance of enterprises and corporations that have long relationship with BIDV Dong Do branch become much better and their export and import activities also become much more vibrant This situation provides many opportunities for BIDV Dong Do to improve and expand its business activities including international payment activities using L/C method in general and the risks preventions activities in L/C transactions in particular Besides, the international cooperating relationship between our country and foreign countries has been expanded and improved significantly, facilitating Vietnamese banks to build up relationship with foreign banks and vice versa This is an opportunities for BIDV Dong Do branch in particular and BIDV banking system in general to expand their relationship and set up partnership with foreign banks Good relationship and partnership with foreign banks will bring to the bank a very important condition in order to restrict risks in international payment using letter of credit method Challenges In the next period, although the economy has signs of improvement and recovering, the economy as a whole is still in the recession In addition, the sources of FDI, FII, and ODA are predicted to be reduced in 2012 Therefore, Page 59 firms and enterprise still face to many difficulties in doing business, and import – export activities are not exceptions Because they face to many difficulties in doing business, so the their risks of suffering losses and damage or even bankruptcy also increase, leading to the higher risks for the bank in case the export – import enterprises that open L/C at the bank suffer losses and lose their ability to pay back money to the bank As the result, this is a challenge for the bank to restrict risks when corporate with these enterprises in international payment using L/C method Besides, in the year 2012, in many large countries such as the U.S., China, Russia, France, the elections will be held New leaders with new leadership systems and new policies will be established in these countries These changes in political systems may somehow create political risks to international payment using L/C method for Vietnamese banks in general and BIDV Dong Do branch in particular In addition, the situation in some areas such as North – Korea, Syria, North – Africa areas, are predicted to be very unstable, leading to many potential risks to the bank when doing international payment transactional with individuals and corporation in these areas Last but not least, technology is also developing every minute every second all over the world, bringing with it the development of high – technology criminal and fraud Therefore, the bank must understand clearly and promptly take appropriate and timely actions to avoid risks from being defrauded by criminal 3.2 Directions to restrict risks in L/C transactions for BIDV Dong Do branch BIDV Dong Do branch considers letter of credit method is primarily source of revenue in the international payment activities And in order to improve the quality and efficiency of these activities, ricks prevention activities play a very important role Therefore, BIDV Dong Do has established Page 60 some general orientations and directions for preventing risks in L/C transaction services at the bank in the future as follows:  Increases the value of international payment by export and import L / C through issuing appropriate and timely policies  Develop a good marketing policy to attract customers to use bank services  Continue operating risks prevention policies in order to restrict risks in L/C transactions  Eliminate the case that customers cannot pay back money to the bank in time and even cannot pay back the compulsory loan and go to overdue debt  Enhance the relationship with formal customers as well as find and establish relationship with new customers  Set the targets to some key ratios and criteria of risks prevention in L/C for the next period as below: o Total revenue from L/C activities increases up by 20% o Compulsory loan rate decreases to 2.5% o Overdue debt rate reduces to 0% 3.3 Recommendation to prevent risks in international payment using L/C method at BIDV Dong Do branch 3.3.1 Recommendation for BIDV Dong Do branch 3.3.1.1 Maintaining and enhancing the inspection and supervision The inspection of controlling and regulating the professional activities in recent years has always been taken seriously in BIDV Dong Do branch The branch always strictly follows the directions in regulations implementing, the inspection plans, and the control of BIDV However, better safe than sorry, in the near future, BIDV should further strengthen the internal controls activities, prevent malpractice situation in which the discrepancies in the documents have not been detected In addition, Dong Do branch should also request the central international payment office of state to send officials to periodically check the international payments activities, the implementation of international payment Page 61 regulations, regulations on raising capital and foreign exchange activities of the branch to promptly detect errors and misleading expression, and then have timely and accurate regulating actions before risks and complex situations occurring 3.3.1.2 Maintaining and continuously improving quality of liquidator staff High staff quality is strength of Dong Do branch, especially in international transaction department and credit department Thus, in order to prevent risks in L/C activities and compete effectively with other banks, Dong Do branch should establish a specific plan to continuously improve its staff’s quality, both in knowledge, profession and ethic, to maintain this strength If the quality of the staff becomes worse, it will limit the ability to advice, contact, and monitor information from customers, and reduce the ability to avoid moral hazard and risks So in the next time, Dong Do branch should set up appropriate plans to maintain and improve the quality of staff, and also open more courses to improve professional level staff Moreover, the branch also should strengthen the supervising and monitoring activities inside the branch in order to prevent mistakes or even corruption that can cause adverse effects to the image of the bank 3.3.1.3 Expanding partnership and agency relationship with foreign banks An international payment using L/C method process requires at least two banks involved Because of this, the establishment and expansion of banking agents play important roles in the development of international payment activities in general and L/C activities in particular Therefore, BIDV Dong Do branch should be better to have better policies to build up and strengthen the relations with foreign banks To get reliability from partners, the branch, first, has to maintain their own current reputation and build up their images as a young, prestigious, dynamic, bank with full of potential This investment Page 62 requires a comprehensive, long term and cannot be achieved in a short time Besides, BIDV Dong Do branch should be nimble, flexible in its foreign policies Once doing this well, the bank will not only take advantage of opportunities quickly, but also will be able to avoid the potential risks Moreover, before doing business with any bank that the bank also needs proper evaluation of the financial situation and the goodwill of partners 3.3.1.4 Recommendation for professional activities As issuing bank In the first place, the staffs working in this area need to hone their professional mastering of risks regulations such as UCP to detect errors in order to protect customers in time Besides, the improvement of assessing ability to understand the financial situation of import enterprises is also important The branch should make the importers aware of the obligation to pay for the issuing bank and the independence of the letter of credit from the contract because a risk occurs to the issuing bank when the buyer refused to make payment to the bank due to the wrong imported products or forgery of documents Furthermore, banks need to improve the ability to detect forged documents to limit the risk and help protect the interests of customers In addition, the bank should analyze more carefully the strengths and weakness of the customers, give advice and consult customers, enabling them to avoid risk in business as well as in international payments in addition to active to find customers Besides, banks also need to be tougher and stricter when asking customers to accept an unconditional payment, asking them to accept a level of collateral when opening L/C in many cases and when enforcing penalties for committing acts of fraud from customers in order to prevent the potential risks to the bank Page 63 As confirming bank When being the confirming bank, BIDV Dong Do branch should check the documents in L/C carefully before paying for the beneficiaries In addition, the bank should also advise and consult the beneficiaries carefully to help them prepare the documents in accordance with requirements in L/C to limit the risks for both sides Moreover, the bank should be careful when discounting the L/C produced and sent by mail or even refuse discounting the L/C with bill of lading issued by unreliable transportation enterprises Moreover, the branch should not discount the documents in the following circumstances: the imported or exported products are kinds of sensitive products, the branch has little information about the customers or the presented documents are not in accordance with the provisions of the L/C 3.3.1.5 Recommendation for limiting damage when risks occur The branch should has provisions for losses and damages from L/C activities and keep it in full and in accordance with the classification based on the type of debt discount of export documents, payment commitments under letters of credit The bank should also set up and adjust the collateral for letter of credit issued under increasing margin for customers that usually pay late or have sensitive products in export and import In addition, the bank should buy insurance for L/C contract that has large amount of payment or in transactions that are predicted to have high level of risks Last but not least, the branch also can use information from credit information services of the State Bank (CIC) as a useful source to support the evaluation of business performance of customers Page 64 3.3.2 Recommendation for the Government 3.3.2.1 Creating a favorable regulation environment for international activities Our country‘s regulations in international payment sector are still not consistent, completed, so businesses and commercial banks participating in these transaction will face many risks Therefore, the concretization of the regulations, issued guidelines for international payment using L/C method is very necessary To achieve efficiency in the economy, the coordination and implementation of sync, the consistency of the relevant ministries such as the General Administration of Customs, Ministry of Commerce, Chamber of Commerce and Industry of Vietnam could not be missing As mentioned above, the legal framework or legislation of international payment adjustment is not just talking about specific written guidelines on this business but also the broader law governing documents involved in or support such as foreign exchange control regulations or the regulation on discounting of import and export documents, etc Therefore, the improvement of these regulations which can ensure compliance and facilitate the international payment using L/C method is also a compelling need 3.3.2.2 Facilitating the development of exchange market and interbank foreign exchange market Abundance of foreign currency reserves is an indispensable necessity for the bank to perform its functions in intermediating activities of international payment activities in general and L/C activities in particular Therefore, the completion and development of the foreign exchange market, foreign exchange market inter-bank is one of the compelling need Through the diversification of foreign currencies are exchanged and other forms of transactions such as sale and purchase right (Spot), limited sales period (Forward), sale with options (Option), the future contracts (Future), etc, the government can help the foreign Page 65 exchange market more active, making exchange rate close to reality Besides, the foreign exchange market inter-bank, which is the exchange market where foreign currency can be traded between banks together, need more flexible mechanisms and regulatory because through this market, the State Bank may adjust the final rate in a most flexible and accurate way Thus, implement this solution also means reducing the risk of exchange rate, contributing to improving the quality of promoting the development of international payments Page 66 Conclusion of Chapter III Based on information analyzed in chapter II about the risks situation in international payment using L/C method, in chapter III the thesis suggests some possible solutions and recommendation in order to preventing risks in these activities Firstly, in this chapter, the thesis shows the directions and orientations of development of BIDV Dong Do branch for the period 2012 – 2015 Secondly, the thesis has provide some possible solutions in order to prevent risks in international payment using L/C activities at BIDV Dong Do branch such as continuously improving the quality of staff, enhancing and expanding the relationship with foreign partners, etc The basis for these solutions are regulations of the government, international regulations in international payment as mentioned in UCP 500, 600 and the real situation of risks in international payment activities at Dong Do branch Besides, there are some recommendations for government have been provided in the thesis in order to facilitate the international payment activities and contribute to prevent risks in these activities, especially by L/C method Page 67 CONCLUSION International payment by letter of credit method is the method that is mostly used by importers and exporters all over the world due to its advantages beyond other methods Over recent years, a foreign trade activity of our country’s economy has made great development, leading to the rapid development of international payment using this method at the bank commercial banks in the country However, due to some reasons such as the level of knowledge of foreign traders are quite low, the international rules are not strictly uniform, different in foreign languages and low technology, etc, has made international payment by documentary credit by banks Vietnam trade offer did not meet the quality requirements of customers in domestic and especially foreign customers Quality of products and services are required to be better, but it is also unlimited and there is hardly a criterion that is reasonable for assessment to be applied for this object The desire to make quality of service better and better is the objective that BIDV Dong Do branch must reach to in order to survive and develop in the fierce competitive environment in the world today This is never an old problem; it always has plagued the administrators and managers, especially managers of bank which provide complex intangible services Within the limitation of the thesis perhaps I have not provided a lot of ideas for solving the problem but these solutions provided may probably be somewhat useful for limiting risks in international payment using letter of credit method in commercial banks to Vietnam in general and BIDV Dong Do branch in particular Page 68 REFFERENCES Vietnamese Phan Thị Thu Hà (2007) Ngân hàng thương mại Nhà xuất Đại học Kinh tế quốc dân, Hà Nội GS Đinh Xn Trình (2007), Giáo trình Thanh tốn quốc tế ngoại thương, NXB Giáo dục, Hà Nội BIDV Dong Do (2010) Báo cáo tài 2010 BIDV Dong Do (2010) Tài liệu triển khai kế hoạch kinh doanh 2010 BIDV Dong Do (2010) Báo cáo kết kinh doanh phòng giao dịch quốc tế 2008 – 2009 – 2010 BIDV Dong Do (2010) Quy trình thực giao dịch chứng từ 2010 Khương Thanh Tùng “Giải pháp hạn chế rủi ro toán quốc tế phương pháp giao dich chứng từ Eximbank” - 2008 English Peter S Rose and Sylvia C Hugins (Eighth edition) Bank management and Financial services Ichard D Irwin, Inc Website Ngọc Khánh (05/12/2009), “Đừng để rủi ro toán L/C” http://www.vietship.vn/showthread.php?t=719 Hạn chế rủi ro toán theo L/C http://xuatnhapkhauvietnam.com/han-che-nhung-rui-ro-trong-thanh-toantheo-lc.html Page 69 ... Do branch Chapter III: Recommendation to prevent risks in international payment using Letter of Credit (L/C) ay BIDV Dong Do branch Page CHAPTER I: OVERVIEW OF INTERNATIONAL PAYMENT USING LETTER. .. practicing at department of international payment at BIDV Dong Do branch, stemming from above knowledge, I decided to go with the thesis: “Solutions to prevent risks in international payment by Letter. .. situation of risks in International payment using L/C in Dong Do branch 44 2.3.1 Performance of international activities 44 2.3.2 Real situation of risk prevention in international