Final report - Group 3 - Internationl Payment - Tài liệu tham khảo | Đại học Hoa Sena

MINISTRY OF EDUCATION AND TRAINING HOA SEN UNIVERSITY
FACULTY OF ECONOMICS AND BUSINESS FINAL REPORT INTERNATIONAL PAYMENT Lectures : Lâm Thanh Phi Quỳnh Class : NT317DE01 Group : 03 Members : Trần Bích Nhân (2183674)
Trần Nguyễn Quỳnh Mai (2181692) Châu Thị Băng Châu (2182699) Nguyễn Vy Trâm Anh (2170439)
Phạm Thị Ngọc Thắm (2001819) Võ Minh Duy (2181790) Nguyễn Lý Minh Thư (2172866)
Hồ Chí Minh City, August, 2021
MINISTRY OF EDUCATION AND TRAINING HOA SEN UNIVERSITY
FACULTY OF ECONOMICS AND BUSINESS FINAL REPORT INTERNATIONAL PAYMENT Lectures : Lâm Thanh Phi Quỳnh Class : NT317DE01 Group : 03 Members : Trần Bích Nhân (2183674)
Trần Nguyễn Quỳnh Mai (2181692) Châu Thị Băng Châu (2182699) Nguyễn Vy Trâm Anh (2170439)
Phạm Thị Ngọc Thắm (2001819) Võ Minh Duy (2181790) Nguyễn Lý Minh Thư (2172866) ĐIỂM 7.5 2
Hồ Chí Minh City, August, 2021 3 DISCLAIMER
“We have read and understand violations of academic integrity.
We pledge with personal honor that this work was done on our own
and does not violate academic integrity.”
Date____ month ____ year ______ (Student's name and signature) 4 INTRODUCTION
Facing the trend of the world economy becoming increasingly
internationalized, Vietnam is developing a market economy, opening up,
cooperating and integrating. In the first scenario, international trade and
investment activities emerge as a bridge connecting the domestic economy with
the outside world. To perform this function, connect international banks such as
Import-Export Finance, Foreign Exchange Business, Bank Guarantees in Foreign
Trade, International Payments, especially payments by L/ C… serves as an
essential tool and is becoming increasingly important. On this day, international
payment is an increasingly important service for Vietnamese commercial banks,
an important link in promoting the development of other business activities of the
bank, and ending support and supporting the export - import business activities of
developed enterprises. International payment was born on the basis of
international trade, but whether international trade exists and develops or not
depends on and the payment manager has all information, time, safety. and
correct or not. International trade and payments is inherently complex and risky
compared to domestic trade and payments, because it is governed by local laws
and customs, but also international and national laws.
Therefore, stakeholders and participants in the process of International Trade and
Payment need to have a thorough understanding of not only the technical and
professional processes but also local and international practices, customs, and
laws. economic. The essay with the topic "Causes for commercial banks to
evaluate solvency" of the group 03-08, we study the concepts as well as the
causes of one of the international payment methods- with the goal of helping
people understand and grasp and apply this method in a reasonable and accurate
way. Although we have tried to collect and concentrate our knowledge, our team
still cannot avoid mistakes. We sincerely thank you and look forward to receiving your comments! TABLE OF CONTEN 5
INTRODUCTION...............................................................................................4
TABLE OF CONTENT......................................................................................5
PART 1. THEORETICAL BASIS......................................................................6
1.1. The concept of a bank's credit line, classification......................................6
1.2. What issues do banks usually consider when appraising credit lines
(conditions when appraising limits for businesses)...........................................6
1.3. What is escrow? Classification....................................................................7
Definition:.......................................................................................................... 7
Types of deposit:................................................................................................7 a)
L/C Open Margin:....................................................................................8
b) Guarantee deposit for contract execution:................................................8
c) Margin for multi-industry business purposes:..........................................8
1.4. Conditions when opening Escrow L/C? Notes when depositing to open
LC?....................................................................................................................... 9
Condition:..........................................................................................................9
Notes:............................................................................................................... 10
1.5. The process of depositing funds.................................................................11
It should be noted that:.....................................................................................11
Step 1: Apply for a letter of credit (L/C)..........................................................12
Step 2: The main bank accepts the application and opens a letter of credit for
the business...................................................................................................... 14
Step 3: The banking system operates, transferring letters of credit to partners
and beneficiaries..............................................................................................15
1.6. The benefits when depositing L/C.............................................................15
PART 2. ANSWER THE QUESTION.............................................................18
CONCLUSION..................................................................................................19 6
PART 1. THEORETICAL BASIS
1.1. The concept of a bank's credit line, classification.
A committed credit line is a monetary spending loan balance offered by a
financial institution that cannot be suspended without notifying the borrower. A
committed credit line is a legal agreement outlining the conditions of the credit
line between the financial institution and the borrower.
1.2. What issues do banks usually consider when appraising credit lines
(conditions when appraising limits for businesses)
Depending on each bank, there will be different conditions, but there will be the following main conditions:
● Domestic enterprises have a continuous business period of 12 months or
more from the time of registration. Or have local confirmation of the
actual business time from 12 months.
● Business registration lines are suitable for borrowing loans, business plans,...
● Have a viable business plan, have the full financial capacity, and clear source of repayment.
● Having secured assets with loan security value.
● There are no bad debts at banks or other credit institutions.
Banks often consider what issues to consider when evaluating credit limit commitments :
● First, pay attention to the determining side of the business: grasp the
capacity of the operator, the competitive power of the product, the technical strength…
● Second, quantitative analysis without depending on financial information:
even if financial information is not available, by various methods it is
necessary to grasp and analyze the financial situation of the business. 7
Moreover, it is required to check the suitability between items, the
suitability of the quantitative side compared to quantitative numbers.
● Thirdly, analyze the purpose of using loans: after grasping the situation of
the enterprise, conducting a project analysis based on short-term forecasts.
1.3. What is escrow? Classification. Definition:
An escrow is an amount of money, gemstone or some related important
papers taken into an account, then blocked, strictly controlled in the bank for the
purpose of guaranteeing companies and organizations, when doing projects or investing.
Escrow deposits can be money or precious metals, gems, or valuable papers
that are frozen in banks or credit institutions to ensure the performance of obligations.
Escrow is a legal concept describing a financial instrument whereby an
asset or escrow money is held by a third party on behalf of two other parties that
are in the process of completing a transaction. Escrow accounts might include
escrow fees managed by agents who hold the funds or assets until receiving
appropriate instructions or until the fulfillment of predetermined contractual
obligations. Money, securities, funds, and other assets can all be held in escrow.
It is often suggested as a replacement for a certified or cashier's check.
Escrow is a process used when two parties are in the process of completing
a transaction, and there is uncertainty over whether one party or another will be
able to fulfill their obligations. Contexts that use escrow include Internet
transactions, banking, intellectual property, real estate, mergers and acquisitions, and law, and many more.
Types of deposit: 8
There are 3 most common types of deposit that are commonly seen as L/C
Open Margin, Guarantee deposit for contract execution, Margin for multi- industry business purposes. 9
a) L/C Open Margin:
A letter of credit, or "credit letter" is a letter from a bank guaranteeing that a
buyer's payment to a seller will be received on time and for the correct amount.
In the event that the buyer is unable to make a payment on the purchase, the bank
will be required to cover the full or remaining amount of the purchase. It may be offered as a facility.
Due to the nature of international dealings, including factors such as
distance, differing laws in each country, and difficulty in knowing each party
personally, the use of letters of credit has become a very important aspect of international trade.
L/C is made by the bank and is valid as a letter at the mutual request of the
parties. Contents of L/C are agreements and commitments to pay goods to the exporter.
b) Guarantee deposit for contract execution:
This form is often applied to large-scale construction works with huge
costs. The deposit will be agreed between the investor and the contractor.
Usually, the owner will be forced to deposit with the bank to ensure that the
project is done with the right quality and on schedule. During the construction
process, if there is a problem that is not self-resolved, the investor will use this
deposit to fix and compensate for the damage to the work.
This is a fairly secure form of deposit for both the investor and the project.
This is a safe transaction for both parties to ensure that all issues are followed in a predictable order.
c) Margin for multi-industry business purposes:
A formal technique to secure business and in case of disruption or
production in some fields and other industries.
The reason for this escrow format is because throughout the business
process, the investor must ensure to maintain the minimum amount. 10