International settlement operation a case study of agribank cho lon

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMIC HOCHIMINH CITY  - PHAN MANH HA INTERNATIONAL SETTLEMENT OPERATION: A CASE STUDY OF AGRIBANK CHO LON In Banking and Finacial Ology code: 60.31.12 MASTER’S THESIS Supervisor : Dr.TRAN HUY HOANG Ho Chi Minh City – 2010 i Acknowledgment The process of this master thesis writing was a wonderful learning experience on my academic life which was filled with challenges and rewards The completion of the present study leads a new beginning and a step forward towards my future This preface provides a welcomed opportunity and chance to acknowledge the help and assistance of the people who with their intellectual insights or constructive criticism, other times in the form of friendship have helped me to develop this research Specially, I would like to extend my appreciation to Mr Jerry and Mr.Gary for their valuable and enthusiastic support of English First, I would like to express my sincere gratitude to supervisor, Associate Professor Ph.D Tran Huy Hoang at the Faculty of Banking, for his valuable supervision, never-ending support and encouragement during this process I am very thankful to him, that he has given me this pleasure to use his valuable comments, feedbacks and suggestions during the time that I have been working on this thesis and he has presented a new world for my further academic research Outside of academia, I would like to thank all my friends and colleagues for their fully support and finally, the great thanks are directed to my family; My father; that have taught me to get the priorities straight and to focus on the whole instead of getting lost in the details; My mother who has meant me the real meaning of patience and helped me by her advices to have this thesis finished on schedule and finally; my brothers and sisters for continues support along the way Finally warm thanks go to University of Economic HoChiMinh City for having developed this post-graduate course in English the first time and sharing consideration during this period of hard work Phan Manh Ha August 2010 HoChiMinh City, Vietnam ii Table of Contents Acknowledgment i Table of contens .ii List of tables vii List of diagrams vii List of charts viii Introduction 1 Rationale of thesis The thesis’s research questions and research objectives: 2.1 Research questions 2.2 Research objectives Scope and limitation of thesis: Research Methodology The thesis’s structure: Chapter 1: International settlement operation of commercial banks in context of international economic integration 1.1 Integration into the world economy in field of banking and finance 1.1.1 Common issues of integration into the world economy 1.1.2 Economic integration in field of banking and finance .6 1.2 The international settlement operation of commercial banks 1.2.1 Concepts 1.2.2 Role and the objective necessity of developing and improving international settlement operation of commercial banks 10 1.2.2.1 For the economy 11 1.2.2.2 For the enterprises 11 1.2.2.3 For the state management 12 1.2.2.4 For commercial banks 12 1.2.3 Means of international settlement operation 13 1.2.3.1 Bill of exchange 13 1.2.3.2 Promissory Note Payment: 15 1.2.3.3 Check 15 1.2.3.4 Payment card 16 1.2.4 Common methods of international settlement operation 16 1.2.4.1 Remittance 16 1.2.4.2 Collections 18 1.2.4.3 Documentary credit .21 1.3 Factors influencing international settlement operation of commercial banks 26 1.3.1 Objective factors 26 1.3.1.1 Globalization and economic integration 26 1.3.1.2 Development of information technology .26 1.3.1.3 .3 Practices and standards of international settlement operation 26 1.3.1.4 Level of development and open of economy 28 1.3.1.5 Macro economic policies of government 28 1.3.1.6 Competition of other commercial banks .28 1.3.2 Subjective factors 29 1.3.2.1 Policy of customer care and developing products, services of commercial banks .29 1.3.2.2 Policy of foreign affairs 30 1.3.2.3 Development level of banking technology 31 1.3.2.4 .4 Structure of organization and management for international settlement operation .31 1.3.2.5 Knowledge, ability of dealers in international settlement operation31 1.3.2.6 Other activities in relation with international settlement operation of commercial banks .31 1.4 Some standards to evaluate the performance in international settlement operation of commercial banks 32 1.4.1 Security and exactness 32 1.4.2 Quickness and Timeliness 33 1.4.3 Logic settlement process .33 1.4.4 Satisfaction of Customer .34 1.5 Some experience of developing and improving international settlement operation of other commercial banks in the world .34 1.5.1 Citi Bank .34 1.5.2 Hongkong and Shanghai Banking Corporation 36 Conclusion of Chapter 37 Chapter 2: Research Methodology 38 2.1 Research design 38 2.2 Data collection 40 2.3 Data Analysis 44 Conclusion of Chapter 47 Chapter 3: Current status of international settlement operation at Agribank Cho Lon 48 3.1 Overview of organization and activities at Agribank Cho Lon 48 3.1.1 History of foundation and development .48 3.1.2 Organizational structure .49 3.1.3 Review of some main business activities of Agribank Cho Lon 49 3.1.3.1 Capital Mobilization .49 3.1.3.2 Loan .51 3.1.3.3 Foreign exchange trading and international settlement operation 53 3.2 Current status of international settlement operation at Agribank Cho Lon 55 3.2.1 Legal basis of international settlement operation at this branch 55 3.1.1.1 International legal documents .55 3.1.1.2 National legal documents .56 3.2.1.3 Agribank’s documents of internal regulations of international settlement operation 56 3.2.2 Current status of international settlement operation at Agribank Cho Lon 57 3.2.2.1 Customers of international settlement operation at this branch .57 3.2.2.2 Current status of some main methods of international settlement operation deployed at the branch .62 Remittance 62 Collection .65 Letter of credit 66 3.3 General comments of international settlement operation at Agribank Cho Lon 68 3.3.1 The results 68 3.3.2 Shortcomings .71 3.3.3 Causes of shortcomings 74 3.3.3.1 Objective causes 74 3.3.3.2 Subjective causes 77 Conclusion of Chapter 80 Chapter 4: Solutions for developing and improving international settlement operation at Agribank Cho Lon 81 4.1 Some orientation of international settlement operation at Agribank Cho Lon81 4.1.1 Some orientation of foreign economic development of Vietnam from 2006 to 2010 81 4.1.2 Main orientation of international settlement operation at Agribank Cho Lon 82 4.2 Some viewpoint of international settlement operation 83 4.3 Solutions for developing and improving international settlement operation at Agribank Cho Lon .84 4.3.1 Establishing customer policy and marketing policy suitable for diffusion of products and services of the branch 84 4.3.2 Modernization of banking technology 86 4.3.3 Proposing a policy of service diversification .88 4.3.4 Improving management model, procedure of international settlement operation .90 4.3.5 Well organizing foreign exchange trading, acting on initiative to have foreign currency source suitable for requirement of the international settlement operation at the branch 93 4.3.6 Solution for increasing quality of human resource .94 4.3.7 Increasing quality of control and internal audit 96 4.3.8 Constantly paying attention to establishment of business culture style at the branch 96 4.4 Recommendations .98 4.4.1 For the government, ministries, departments and industries concerned 98 4.4.2 For State bank 99 4.4.3 For customers 100 4.4.4 For Agribank .100 Conclusion of Chapter 101 Conclusion 102 Appendices 103 List of References .110 vii List of Tables Table 2.1 Exhibition of payment sales under method of remittance 45 Table 3.1 Capital source of Agribank Cho Lon in recent years 50 Table 3.2 Some items of outstanding debts at Agribank Cho Lon 2006-2009 52 Table 3.3 Some main items of foreign exchange trading and international settlement operation at Agribank Cho Lon 54 Table 3.4 Sales of some main customers in international settlement operation at the branch in 2009 .58 Table 3.5 Sales of some main import export commodities at the branch 61 Table 3.6 Payment sales under method of remittance 63 Table 3.7 Payment sales under method of collection 65 Table 3.8 Payment sales under method of letter of credit 67 10 Table 3.9 Some indicators of loans for import and export at the branch 70 11 Table 3.10 Some key indicators for comparison .72 12 Table 3.11 Comparison of export payment and import payment at the branch 73 List of Diagrams Diagram 1.1 Process of remittance operation 17 Diagram 1.2 Process of collection operation .19 Diagram 1.3 Process of documentary credit 23 viii List of Charts Chart 3.1 Capital source of Agribank Cho Lon 2006-2009 .51 Chart 3.2 Outstanding debts at Agribank Cho Lon 2006-2009 53 Chart 3.3 Main items of foreign exchange trading and international settlement operation at Agribank Cho Lon 54 Chart 3.4 Sales of some main customers in international settlement operation at the branch in 2009 .59 Chart 3.5 Customer’s assessment of international settlement operation 60 Chart 3.6 Sales of some main import export commodities at the branch 62 Chart 3.7 Payment sales under method of remittance 64 Chart 3.8 Payment sales under method of collection 66 Chart 3.9 Payment sales under method of letter of credit 67 10 Chart 3.10 Some key indicators for comparison .72 11 Chart 3.11 Comparison of export payment and import payment at the branch 73 INTRODUCTION Rationale of thesis Vietnamese economy has widely integrated itself into the regional and world economy Along with other activities, foreign trade has constantly affirmed to an important role in Vietnam economic development Commercial banks, by launching the international settlement operation have, according to the “Open Door Policy” on integration, become undeniably essential to the development of the economy of this country In addition, to better promote their role and position in speeding up foreign trade activities, the system of commercial banks in Vietnam have continuously worked to develope and improve the international settlement operation In these recent years, the efforts of the system of Vietnam commercial banks have fostered advantageous conditions for the international settlement operation to become increasingly enhanced day by day, fulfilling the basic requirement of open process and integration of economy However, international settlement operation must undergo legal systems and complicated overseas practices, if it was not to be fully understood, risks that include economic, politic and social losses would inevitably arise Lessons learned from the past strongly suggest that the working of Vietnam commercial banks are not to be ignored The international settlement operation of Agribank has now been deployed for 10 years, yet Agribank has been encountering countless difficulties and insufficiencies in the widening of its active market share In the context of integration into the world economy alongside tough competition, commercial banks must incessantly develop and widen their trade activities Among those banks, the international settlement operation was utilized in order to broaden and improve to meet customer needs Furthermore, the operation helped increase the bank’s income and enhance APPENDICES APPENDIX Results of a survey of 50 customers in the international settlement operation at Agribank Cho Lon Unit: Customer No CRITERIA Các sản phẩm, dịch vụ Thanh toán quốc tế cung cấp cho khách hàng (nhiều sản phẩm-d Products,servicesof theinternation settlement operation providing for customers (many products and services, th Results Việc đáp ứng nhu cầu ngoại tệ Chi nhánh khách hàng thời gian qua The foreign currency needs of customers were satisfied Results Thời dịch nhánh Thanh t gian khách hàng giao quốc tế Chi Processing time of transactions of the international settlement operation at the branch Results Chi nhánh áp dụng việc thu phí Thanh tốn quốc tế khách hàng thời gian qua The fees/cha Results hàng thời gian qua Việc tư vấn lĩnh vực Thanh toán quốc tế khách The consultancy in the field of the international settlement operation Results Thái độ phục vụ giao tiếp cán - nhân viên Chi nhánh khách hàng The attitude and behaviour of the staf at the branch Results Công tác marketing, khuyến mãi, chăm sóc Chi nhánh5 khách hàng thời gian qua The marketing, promotion, customer care of the branch for customers Results 41 Data Source: Based on a survey of 50 customers in the international settlement operation at Agribank Cho Lon SURVEY RESULTS: Criteria of products, services of the international settlement operation providing for customers: 50% of customers voted that it was good and diversified, 50% of them considered it fairly acceptable, and none of customers thought that it was bad Criteria of satisfying foreign currency needs of customers: 50% of customers very satisfied with foreign currency supply of the branch, 34% of them considered it fair and 16% of customers did not satisfied Criteria of processing time in the international settlement of transactions at the branch operation: 78% of customers agreed that transaction time was fast, 22% of them chose average vote Criteria of the fees/charges the branch applied for the international settlement operation: 30% of customers said that the charges of the branch were high, 62% of customers considered they were fair and 8% of customers regarded them as low Criteria of the consultancy of international settlement: 66% of customers highly appreciated the advisory work, 34% of them made the choice on average assessment Criteria of the attitude and behavior of the staff at the branch: 88% of customers were very please with manner of the staff , the other thought it was normal Criteria of the marketing, promotion, customer care of the branch for customers: 18% of customers indicated that it was good, 82% considered it was normal Conclusion: Through survey with 50 customers having international payment transactions at the branch, the results showed that 51.14% of customers believed that the international settlement operation of Agribank Cho Lon was good, 42.29% of them considered it average and 6.57% regarded it as poor Thus, although the branch has changed business strategies to adapt to new conditions of economy and the policies of the State in recent years , customers were still not really satisfied the present operation of the branch APPENDIX TRƯỜNG ĐẠI HỌC KINH TẾ TP.HCM UNIVERSITY OF ECONOMICS HCMC KHOA NGÂN HÀNG FACULTY OF BANKING PHIẾU KHẢO SÁT ( Survey ) Kính thưa q khách hàng Trong khn khổ thực đề tài nghiên cứu khoa học “Mở rộng hồn thiện hoạt động Thanh tốn Quốc tế Ngân hàng No&PTNT Chi nhánh Chợ Lớn”, tác giả lập bảng câu hỏi khảo sát để phục vụ đề tài nghiên cứu Chân thành cám ơn Quý khách hàng dành chút thời gian quý báu để trả lời câu hỏi xin vui lòng gửi lại bảng câu hỏi trả lời trực tiếp cho tác giả gửi địa ghi sẵn phong bì đính kèm Dear Customer In the framework of implementation of scientific research on "Expanding and improving the international settlement operation at Agribank Cho Lon", the author created a questionnaire of survey to serve the research above Sincerely thank all customers for spending some precious time to answer the questions below and please send back the questionnaire directly to the author or send to the address written on the envelope available attached BẢNG CÂU HỎI (Questionnaires ) - Các sản phẩm, dịch vụ Thanh toán quốc tế cung cấp cho khách hàng (nhiều sản phẩmdịch vụ, chất lượng…của sản phẩm - dịch vụ) Products, services of the international settlement operation providing for customers (many products and services, the quality of the products – services,…) - Tốt (Good) □ - Tạm (Acceptable) □ - Chưa tốt (Not good) □ - Việc đáp ứng nhu cầu ngoại tệ Chi nhánh khách hàng thời gian qua The foreign currency needs of customers were satisfied - Đầy đủ (Fully) □ - Tạm (Acceptable) □ - Chưa đủ (Not enough) □ - Thời gian khách hàng giao dịch Thanh toán quốc tế Chi nhánh Processing time of transactions of the international settlement operation at the branch - Nhanh (Quick) □ - Tạm (Acceptable) □ - Còn chậm (Slow) □ - Chi nhánh áp dụng việc thu phí Thanh toán quốc tế khách hàng thời gian qua The fees/charges the branch applied for the international settlement operation - Cao (High) □ - Tạm (Acceptable) □ - Thấp (Low) □ - Việc tư vấn lĩnh vực Thanh toán quốc tế khách hàng thời gian qua The consultancy in the field of the international settlement operation - Tốt (Good) □ - Tạm (Acceptable) □ - Chưa tốt (Not good) □ – Thái độ phục vụ giao tiếp cán - nhân viên Chi nhánh khách hàng The attitude and behaviour of the staff at the branch - Tốt (Good) □ - Tạm (Acceptable) □ - Chưa tốt (Not good) □ – Công tác marketing, khuyến mãi, chăm sóc Chi nhánh khách hàng thời gian qua The marketing, promotion, customer care of the branch for customers - Tốt (Good) □ - Tạm (Acceptable) □ - Chưa tốt (Not good) □ Một lần cám ơn quan tâm giúp đỡ hợp tác Quý khách hàng Thanks again for the care, help and cooperation of all customers QUÝ KHÁCH HÀNG TÁC GIẢ KHẢO SÁT CUSTOMERS AUTHOR OF CUSTOMER SURVEY ) Phan Mạnh Hà APPENDIX LIST OF EXPERTS OF INTL' SETTLEMENT OPERATION IN DICUSSION GROUP No 10 Full name Đào Hồng Chính (MBA) Trịnh Thế Việt (MBA) Nguyễn Chí Thành (MBA) Nguyễn Thị Ái Thơ (MBA) Phan Mạnh Hà Nguyễn Thị Ngọc Bích Nguyễn Thị Thu Hằng Ngơ Trần Kiến Quốc Phạm Đức Trị Lục Thảo Phương Hà Position Vice Director Vice Director Vice Director Manager of Credit Deputy Manager of Intl' Settlement Manager of Intl' Settlement Deputy Manager of Intl' Settlement Specialist of Foreign exchange control Manager of Intl' Settlement Specialist of Intl' Settlement Organization Agribank Cho Lon Agribank Cho Lon Agribank Cho Lon Agribank Cho Lon Agribank Cho Lon Agribank District 10 Agribank Miền Đông State Bank of Vietnam Tin Nghia JSC Bank Vietinbank Vung Tau APPENDIX RESEARCH PROCESS Literature Review Theoretical issues of international settlement First draft of questionnair es Group Discussions Afecting factors to international settlement operation Standards for accessing quality of international settlement operation Historical data analysis questionnaires Data Processing Group Discussions Final draft of questionnai re Survey by Research Report LIST OF REFERENCES Vietnamese References  GS TS Hoàng Văn Châu (2002), Giáo trình vận tải giao nhận ngoại thương NXB Khoa học kỹ thuật  PGS TS Nguyễn Hồng Đàm (2003), Giáo trình vận tải bảo hiểm ngoại thương, NXB giao thông vận tải  GS Đinh Xn Trình (2006), Giáo trình tốn quốc tế, NXB Lao động Xã hội  Quốc hội, Pháp lệnh Ngoại hối số 28/2005/PL-UBTVQH11.(13/12/2005)  Chính phủ, Nghị định 160/2006/NĐ-CP (28/12/2006) việc quy định chi tiết thi hành Pháp lệnh Ngoại hối  Ngân hàng nhà nước, Quyết định số 283/2000/QD-NHNN 14 (25/08/2000), quy chế bảo lãnh ngân hàng  Ngân hàng nhà nước, Quyết định số 386/2001/QD/NHNN (04/11/2001), sửa chữa số điều định số 283/2000/QD-NHNN  Ngân hàng nhà nước, Quyết định số 711/2001/QD-NHNN (25/5/2001), quy chế mở thư tín dụng trả chậm  Ngân hàng nhà nước, Quyết định số 1437/2001/QD-NHNN (19/11/2009), quy định việc mua, chuyển, mang ngoại tệ nước người cư trú Việt Nam  Ngân hàng nhà nước, Quyết định số 226/2002/QĐ-NHNN (26/3/2002), việc toán qua tổ chức cung cấp dịch vụ toán  Ngân hàng No & PTNT Việt Nam, Quyết định số 1998/QĐ-NHNo-QHQT (15/12/2005), việc ban hành quy trình hoạt động tốn quốc tế hệ thống Ngân hàng No & PTNT Việt Nam  Ngân hàng No & PTNT Việt Nam, Quyết định số 388/HĐQT-QHQT (09/05/2005), việc ban hành quản lý giao dịch ngoại hối hệ thống Ngân hàng No & PTNT Việt Nam  Ngân hàng No & PTNT Việt Nam (2010), Tài liệu tổng kết đánh giá hoạt động sản phẩm dịch vụ kinh doanh ngoại hối Ngân hàng No & PTNT Việt Nam năm 2009, kế hoạch phát triển năm 2010 Foreign References  International Chamber of Commerce (2007), The uniform customs & practice for documentary credit, 2007 Revision, ICC Publication No.600  Internatonal Chamber of Commerce (2007), International Standard Banking Practice for the Examination of Documents under Documentary Credit, Revision 2007, Publication 68  Internatonal Chamber of Commerce (2007), Uniform rules for Bank to Bank reimbursements under Documentary Credit, Publication 725  James W.Kolari and Benton E.Gup (2005), Commercial banking, John Wiley & Son, Inc  Jane E Hughes and Scott B MacDonald (2002), International Banking, Addison-Wesley Publishing Company  Kiaus Tay (2010), Risk participation, distribution and forfaiting, OCBC bank  Maurice D.Levi (1996), International Finance, MacGraw-Hill, Inc  Merrill Lynch (2010), Automated supply chain financing, Bank of America  Ng Ka Hwa (1996), Commercial banking in Singapore, Addison-Wesley Publishing Company  William G Zikmund (1999), Business Research Methods, The Dryden Press, Harcourt Brace College Publishers News, magazines  Agribank, Annual reports from 2006 to 2009  International Operation Department at Agribank Cho Lon, Annual reports from 2006 to 2009  State Bank of Vietnam, Annual reports from 2006 to 2009 TABLE OF CONTENTS INTRODUCTION 1 Rationale of thesis .1 The thesis’s research questions and research objectives: 2.1 Research questions 2.2 Research objectives .2 Scope and limitation of thesis: Research Methodology .3 The thesis’s structure: Chapter 1: International settlement operation of commercial banks in context of international economic integration 1.1 Integration into the world economy in field of banking and finance .5 1.1.1 Common issues of integration into the world economy 1.1.2 Economic integration in field of banking and finance 1.2 The international settlement operation of commercial banks 1.2.1 Concepts 1.2.2 Role and the objective necessity of developing and improving international settlement operation of commercial banks 10 1.2.2.1 For the economy 11 1.2.2.2 For the enterprises 11 1.2.2.3 For the state management 12 1.2.2.4 For commercial banks 12 1.2.3 Means of international settlement operation 13 1.2.3.1 Bill of exchange 13 1.2.3.2 Promissory Note Payment: 15 1.2.3.3 Check 15 1.2.3.4 Payment card 16 1.2.4 Common methods of international settlement operation 16 1.2.4.1 Remittance 16 1.2.4.2 Collections 18 1.2.4.3 Documentary credit 21 1.3 Factors influence international settlement operation of commercial banks 26 1.3.1 Objective factors .26 1.3.1.1 Globalization and economic integration 26 1.3.1.2 Development of information technology 26 1.3.1.3 Practices and standards of international settlement operation 26 1.3.1.4 Level of development and open of economy 28 1.3.1.5 Macro economic policies of government .28 1.3.1.6 Competition of other commercial banks 29 1.3.2 Subjective factors 29 1.3.2.1 Policy of customer care and developing products, services of commercial banks 29 1.3.2.2 Policy of foreign affairs 30 1.3.2.3 Development level of banking technology .30 1.3.2.4 Structure of organization and management for international settlement operation .31 1.3.2.5 Knowledge, ability of dealers in international settlement operation 31 1.3.2.6 Other activities in relation with international settlement operation of commercial banks 31 1.4 Some standards to evaluate the performance in international settlement operation of commercial banks 32 1.4.1 Security and exactness 32 1.4.2 Quickness and Timeliness 33 1.4.3 Logic settlement process 33 1.4.4 Satisfaction of Customer 34 1.5 Some experience of developing and improving international settlement operation of other commercial banks in the world 34 1.5.1 Citi Bank 34 1.5.2 Hongkong and Shanghai Banking Corporation 36 Conclusion of Chapter 37 Chapter 2: Research Methodology .38 2.1 Research design .38 2.2 Data collection 40 2.3 Data Analysis 44 Conclusion of Chapter 47 Chapter 3: Current status of international settlement operation 48 at Agribank Cho Lon 48 3.1 Overview of organization and activities at Agribank Cho Lon 48 3.1.1 History of foundation and development .48 3.1.2 Organizational structure 49 3.1.3 Review of some main business activities of Agribank Cho Lon 49 3.1.3.1 Capital Mobilization 49 3.1.3.2 Loan 51 3.1.3.3 Foreign exchange trading and international settlement operation .53 3.2 Current status of international settlement operation at Agribank Cho Lon55 3.2.1 Legal basis of international settlement operation at this branch .55 3.1.1.1 International legal documents 55 3.1.1.2 National legal documents 56 3.2.1.3 Agribank’s documents of internal regulations of international settlement operation .56 3.2.2 Current status of international settlement operation at Agribank Cho Lon 56 3.2.2.1 Customers of international settlement operation at this branch 57 3.2.2.2 Current status of some main methods of international settlement operation deployed at the branch 62 Remittance 62 Collection 65 Letter of credit 66 3.3 General comments of international settlement operation at Agribank Cho Lon 68 3.3.1 The results .68 3.3.2 Shortcomings 71 3.3.3 Causes of shortcomings 74 3.3.3.1 Objective causes 74 3.3.3.2 Subjective causes 77 Conclusion of Chapter 80 Chapter 4: Solutions for developing and improving international settlement operation at Agribank Cho Lon 81 4.1 Some orientation of international settlement operation at Agribank Cho Lon 81 4.1.1 Some orientation of foreign economic development of Vietnam from 2006 to 2010 81 4.1.2 Main orientation of international settlement operation at Agribank Cho Lon 82 4.2 Some viewpoint of international settlement operation 83 4.3 Solutions for developing and improving international settlement operation at Agribank Cho Lon 84 4.3.1 Establishing customer policy and marketing policy suitable for diffusion of products and services of the branch 84 4.3.2 Modernization of banking technology 86 4.3.3 Proposing a policy of service diversification 88 4.3.4 Improving management model, procedure of international settlement operation 90 4.3.5 Well organizing foreign exchange trading, acting on initiative to have foreign currency source suitable for requirement of the international settlement operation at the branch 93 4.3.6 Solution for increasing quality of human resource 94 4.3.7 Increasing quality of control and internal audit 96 4.3.8 Constantly paying attention to establishment of business culture style at the branch 96 4.4 Recommendations 98 4.4.1 For the government, ministries, departments and industries concerned 98 4.4.2 For State bank 99 4.4.3 For customers 100 4.4.4 For Agribank 100 Conclusion of Chapter 101 CONCLUSION 102 APPENDICES 103 LIST OF REFERENCES .110 University of Economics HCMC (UEH) Master of Banking Master’s Thesis: “INTERNATIONAL SETTLEMENT OPERATION – A CASE STUDY OF AGRIBANK CHO LON” A The rationale of the thesis  In the context of integration into the world economy alongside tough competition, commercial banks had to incessantly develop and widen their trade activities International settlement operation is one of the most important aspects of service that commercial banks of many countries are being aware of to improve and develop because banks can well carry out their strategies of customer and increase their income On the other hand, if this operation is done well, foreign economic activities will be enhanced, good reputation and trade mark of bank will be highly appreciated in the world banking community  Evaluating the performance of international settlement operation at Agribank Cho Lon leads to realization of the scientific base to develop and improve this operation in Agribank system B Thesis’s importance, contribution The thesis delved into details of research and accomplished some main tasks hereunder:  First, it mentioned and interpreted arguments about international settlement operation and it clearly explained role and objective necessity of enlargement and upgrading of this operation at commercial banks in the context of international economic integration  Second, it presented factors influencing international settlement operation and standards assessing quality of this operation at commercial banks  Third, it analyzed current situation of international settlement operation at Agribank Cho Lon in period from 2006 to 2009  Forth, on the basis of analyzing current status of international settlement operation at Agribank Cho Lon, the thesis pointed out achievements, shortcomings and causes of these drawbacks (comprising objective causes and subjective causes)  Fifth, after referring to significant orientations in foreign trade of the Party and the State, important targets of this operation at the branch, ideas for development and improvement of international settlement operation at commercial banks, the thesis offered some possible solutions and recommendations to contribute to enlargement and progress of international settlement operation at Agribank Cho Lon, ... performance measurement of the international settlement operation at Agribank Cho Lon The questionnaires were designed to collect data related to international settlement operation at Agribank Cho Lon. .. is a lack of secondary data In this case, secondary data concerning performance and performance measurement of the international settlement operation at Agribank Cho Lon was insufficient, making... research investigator also determine the source of information Source of data are collected from banking magazines and annual reports of State bank of Vietnam, annual reports of Agribank Data of