Analysis of International payment operation by letter of credit at VPBank – Giang Vo branch

11 Part 3: Analysis of International payment operation by letter of credit at VPBank – Giang Vo branch .... 13 3.1 Situation of international payment by letter of credit at VPBank – Gian

TABLE OF CONTENT

PREFACE 1

Part 1: Internship dairy 3

1.1 Information of the mentor 3

1.2 Detailed internship dairy 3

Part 2: Introduction of VPBank and VPBank – Giang Vo Branch 7

2.1 General information about VPBank 7

2.2 Development history of VP Bank 7

2.3 Vision, mission, development strategy and core value of VPBank 9

2.4 Introduction about VPBank – Giang Vo Branch 10

2.4.1 Organogram of VPBank – Giang Vo branch 10

2.4.2 Scale of VPBank – Giang Vo branch 10

2.4.3 Banking activities of VPBank – Giang Vo in the recent years (2011 – 2013) 11

Part 3: Analysis of International payment operation by letter of credit at VPBank – Giang Vo branch 13

3.1 Situation of international payment by letter of credit at VPBank – Giang Vo branch 13

3.2 Import L/C 14

3.2.1 General 14

3.2.2 Product description 14

3.2.3 Benefit 15

3.2.4 Condition and application process 15

3.2.4.1 Issuance of import L/C 15

3.2.4.2 Amendment of import L/C 15

3.2.4.3 Guarantee/Authorization of Shipping 15

3.3 Export L/C 16

3.3.1 General 16

3.3.2 Product description 16

3.3.3 Benefits 16

3.3.4 Conditions and application process 16

3.3.4.1 Notification/Amendment of L/C 16

3.3.4.2 Receiving and checking export documents 17

3.3.4.3 Conditions of discount documents 17

3.4 Assessment of the international payment operation by L/C at VPBank – Giang Vo branch 17

3.4.1 Advantages 17

3.4.2 Disadvantages 18

Part 4: Comments about the internship 19

4.1 Guidance for the internship 19

4.2 The internship period 19

4.3 Using the data and original document 19

Conclusion 20 Reference

Appendix

Along with the growth of international trade relations, various kinds of payment method have been developed, such as remittance, collection, documentary credit, etc While the first two methods bring disadvantages for either the seller or the buyer and the bank, as an intermediary, bears little responsibility to make payment; the last one is considered to be much better in terms of protecting interests for all stakeholders Moreover, payment by letter of credit is favorable to small and medium enterprises which hold the highest proportion in this type of service

Realizing the importance of the issue, I decided to have my mandatory summer internship at SME department , VPBank - Giang Vo branch (Hanoi), which is in charge

of making payment by letter of credit My report would cover all knowledge, experiences and skills I have gained after four weeks, including four separated parts:

- Part 1: Internship dairy

- Part 2: Introduction of VP Bank and VPBank – Giang Vo branch

- Part 3: Analysis of International payment operation by letter of credit at VPBank – Giang Vo branch

- Part 4: Comments about the internship

I am delighted to express my deepest appreciation to Associate Professor Trinh Thi Thu Huong – FTU for instructing me from the very initial step I would like to thank Ms Le Thi Bich Thuy, branch director and Mr Nguyen The Dan, head of SME department, together with all colleagues at VPBank Giang Vo for their dedicated supports during the previous time

Due to the limit on my knowledge and the time of the internship, some mistakes might be inevitable in spite of my best efforts Hence, any constructive feedbacks are highly welcomed and would seriously be taken into consideration

Hanoi, August 2014 Student

Le Quang Minh

PART 1: INTERNSHIP DAIRY

1.1 Information of the mentor

- Full name: Nguyen The Dan

- Title: Head of SME department, VPBank Giang Vo branch

- Mobile phone: 098.8888.628

- Email: thedan@vpb.com.vn

1.2 Detailed internship dairy

Wednesday, July 2

I sent an email to Ms Thuy – Branch director and politely asked for her approval

of my internship Fortunately, she agreed with my request and reminded me some small points about working behaviors and appropriate appearance at the office I took them into consideration seriously as I needed everything would go well

Thursday, July 3

I arrived at the office 20 minutes earlier to ensure no trouble beyond expectation would happen on the road The office is a modern, 7-floor building in the middle of Giang Vo street Despite being well-prepared, I was still quite nervous because this internship marked an important milestone in my student life

Ms Thuy guided me to the SME department and introduced me to the staffs here From now on I would be under the instruction of Mr Dan, head of SME dept When I came to the office, I realized that almost all of the staffs were gentlemen, and they were quite young That made things feel a little easier for me as I thought I could be more intimate with them because of that

As they were very busy to prepare for the weekly team meeting in the afternoon, I had a quick conversation with my mentor in order to schedule the time for me to come and the content of my report He asked me to prepare the outline for the next coming

Friday, July 4

It was my second day at the bank, but the very first day for me to witness the daily life of bank staffs in a professional environment After submitting the outline of

my report to my mentor and receiving some comments, I was guided to pay a visit to every department of the branch Somehow I thought they are all busy and in a hurry The working time here started from 8.30 am and as I saw, everybody seemed to

be very punctual The front of house on ground floor looked clean, tidy, welcoming and functional at all times The second floor consisted of customer service department and administrative department Personal customer department and director room were

on the third floor SME department and meeting room were on the top of the office building

Tuesday, July 8

I was assigned a seat at a cozy meeting table in SME room My mentor gave me a great amount of document to research which related to the bank activities in general including some indicators provided for interns and other internal magazines They were very helpful to me to make this report My mentor also told me that one of most up-to-date sources of information would definitely the company’s website, so I spent time browsing it

Thursday, July 10

I was told to translate some documents from Vietnamese to English The requirements were to be precise and neat since they would be sent to the customers later, so I tried the best I could The hardest part was some technical terms that made confused and browse through sites to find the most accurate ones Fortunately, I did

finish translating that 20 page document by the end of this week and got a compliment, which was very encouraging

Monday, July 14

I approached more closely with the work related to L/C in this week I received a folder containing all relevant documents in 2013 from my mentor and was asked to read carefully before answering him the process I politely asked him to make some copy of them to bring home, as I needed to combine and compare them with what I had been taught at FTU

Wednesday, July 16

I was instructed the role of each document and the order to process them There were quite a lot paper and sometimes I made mistakes, but my mentor was totally dedicated and reminding me stay focused all the times I knew that every tasks related

to banking was very risky, so no error was permitted At the end of the day, I was quite confident to fill in the ‘Application for L/C’

Thursday, July 17 & Friday July 18

The whole two days were spent for researching on ‘Application for L/C Amendment’ and ‘Application for and endorsement of a B/L / assurance of a shipping guarantee’ and some key points in customer care After that, I arranged all the document used recently and filed them to their folder It was the way I revised how to manage tons of documents

Tuesday, July 22

There was a significant increase in the working pace of each staff as they looked busier than ever I was given more tasks, in particular scanning files and putting them into correct folder in the computer, making photocopy of files and numbering documents I was reminded to prepare carefully for the next day to witness real transactions, maybe outdoor ones

Wednesday, July 23 to Friday, July 25

I had chances to witness staffs here handling real cases with the customers As a supporter, I brought a pack containing various kinds of blank forms to deliver to

customer when they needed, and collected fully filled forms Sometimes the situations were quite regular, so tasks were simply checking papers once again and took notes in the recording books Sometimes the cases were abnormal, for instance the documents showed were not in accordance with what stated in the L/C (missing paper, missing pages, unauthorized signatures, etc.) Each time like this, I tried to observe the staffs’ behaviors and attitudes, how to deny, even a loyal customer, without making any offense Communication skills, especially listening, seemed extremely important Occasionally I needed to go to the customer’s office to return some documents

Tuesday, July 29

I continued working as a supporter like the last week I approached the commercial invoice more frequently The invoice resembled the one I had seen during International trade transaction a lot Therefore, I could understand quite a bit For parts that I was unfamiliar with, my mentor was so helpful as he walked through and clearly explained to me My final task of the day was to correct some typo in documents

Wednesday, July 30 to Friday, August 1

I started writing this report During that time, I still support the department with office and administrative work I feel more comfortable while completing my report at the office than at home as I could find any materials or documents there and any explanation could be provided whenever needed In the late afternoon, all staffs stayed one more hour to prepare for the performance at the bank festival which took place on Saturday afternoon This was a great chance for me to make acquaintance with staff from other department and enjoyed another aspect of an officer’s life

PART 2: INTRODUCTION OF VPBANK AND

VPBANK – GIANG VO BRANCH

2.1 General information about VPBank

Company’s name : Vietnam Prosperity Joint-Stock Commercial

Bank (in short: VPBank)

Chairman of the Board of Directors : Mr Ngo Chi Dzung

Chief Executive Office : Mr Nguyen Duc Vinh

2.2 Development history of VP Bank

Vietnam Prosperity Stock Commercial Bank (formerly known as Vietnam Joint-Stock Commercial Bank for Private Enterprises) was established on 12 August 1993 After nearly 20 years

Joint-of operation, VPBank has increased its charter capital to VND5,770 billion, raised the number of transaction points to over 200, and had a workforce of more than 4,000 employees

As a member of the group of 12 leading banks in Vietnam (G12), VPBank is taking steps to reaffirm its reputation as a dynamic bank with stable financial capacity

and responsibility to the community To achieve this ambitious vision, VPBank has implemented an aggressive growth strategy for the period 2012 - 2017 with the support

of McKinsey, one of the world’s leading consulting companies Accordingly, VPBank will focus on organic growth in targeted customer segments, build up foundation systems expeditiously to serve its growth needs, and monitor opportunities in the market actively

The remarkable growth of VPBank is vividly illustrated by the expansion of its branch and transaction office network and the diversity of sales and distribution channels With the motto of “all for customers”, the layout, service model and amenities of transaction points have been completely changed The products and services of VPBank have always been improved and combined with many utilities to increase customers’ benefits, etc These factors have contributed to satisfying existing customers, attracting new customers, thus expanding VPBank’s customer base at a fast pace

To prepare for a stable and sustainable growth, VPBank has conducted comprehensive measures to build foundation systems The Bank has always been the market leader in applying advanced information technology to its products, services and operation system Along with building a strong and effective corporate culture, core human resources management systems have been developed and successfully implemented at VPBank In addition, the Bank has taken steps to develop an independent, centralized, and specialized risk management system which meets international standards and aligns with the Bank’s business strategy While complying with international best practices in corporate governance, VPBank also refines its organizational structure according to a clear and transparent corporate governance policy

With constant efforts, VPBank’s brand has become increasingly stronger and reaffirmed by many prestigious awards such as: The Best Payment Bank awarded by Citibank and Bank of New York, Bank with the most satisfactory service quality for

customers, National Brand in 2012, Top 500 biggest enterprises in Vietnam and many other awards

2.3 Vision, mission, development strategy and core value of VPBank

As one of the earliest-established Joint-stock Commercial banks in Vietnam, VPBank has achieved steady development throughout its history Especially since

2010, VPBank has grown dramatically with the development and implementation of the strategic transformation program diligently with support from one of the world’s leading consulting companies

Following this strategy, VPBank aims to become one of the 5 leading joint-stock commercial banks and one of the 3 leading retail joint-stock commercial banks in Vietnam by 2017 This vision is realized through the two-pronged strategy as follows:

 Aggressive organic growth, focusing on personal and SME customers, and exploiting opportunities in the segment of large business customers and consumer credit

 Building strong foundation systems in terms of organization, human resources, technology, operation, etc

The support for the implementation of the above strategy is the VPBank corporate culture which is nurtured and built on six core values: Customer Focus; Productivity; Ambition; People Development; Trust; Make the Difference

The achievements of this transition period have determined the right strategy, with the positive changes of image, service quality, professionalism, etc The trust of customers for VPBank has also strengthened by the constantly increasing number of new customers and capital mobilization More importantly, VPBank is becoming a desirable destination for talent in the banking and finance industry This key element has been, and will become VPBank’s strategic weapons in the journey towards becoming one of the 5 leading joint-stock commercial banks, and one of the 3 leading retail joint-stock commercial banks in Vietnam by 2017