| The dealings of international settlement of commercial banks develops at a high speed as a result of the flourish of international trade and transaction, and hence the national commercial banks begin to exploit this field for its high returning rate and promising market. However, the inherent characteristics of this market , such as high risk and new norms, demand us to search for steady developing strategy. The dealings of international settlement comprises of remitting, collection, letter of credit, letter of guarantee and so on. In practice, some of the above mentioned are combined to form various financial products to satisfy customers. Therefore, the dealing is complicated. The dealings of international settlement distinguish from that of domestic settlement denominated in domestic currencies for its specific operating principles: for example, the principles of settling according to contract or agreement, settling according to bills of lading, providing credit for settling and other special principles concerning the legal relationship and process. Understanding these principles will help us recognize the risks of the dealings of international settlement. The essay analyzes Agricultural Bank of China, Chengdu Branch, as an important case. The bank began to do international settling in 1992, almost gave up its total market share after the great adjustment of its operation and the big shrink of this kind of dealings for the deterioration of its operation at the end of 1998. However, it is not accidental. On the contrary, it is very common for commercial banks, especially the state-owned commercial banks in inland China, Why? Many factors are attributable: the institutional transformation of the state-owned commercial banks are far from the expected, lacking effective institution such as self regulation and self development; the distinction between international settling and national settling are not clear; only international department of a commercial bank is authorized to do international settlings, not taking advantage of the marketing resources of the whole bank; lack the market-oriented and client-centered management, lack the scientific management and effective communication; losses occurred as the result of lack of experience and carelessness; the practical dealings deviate from the bank's operating strategies. The essay proposes that commercial banks should base their dealings of international settlement on the expansion of the banks' aggregate dealings; then the essay explores the expansion of the international settlement dealings in the followings aspects: 1. Improve self-regulation, add incentives for the executives of the commercial banks. It is necessary to combine the executives' personal interests with the interests of the bank. The effective methods are regulation and incentives. The key factors include scientific evaluation system for the executives' performance, daily check of their jobs and reasonable responsibility ranges. But in practice, they are often neglected. 2. Form the marketing and aggregate managing ideas to improve the international settling dealings. The product of commercial banks is the service, and accordingly the banks should provide comprehensive financial resolving scheme to their clients, exploiting the visible and invisible resources of the banks, so that both parties can gain. 3. Understand and apply credit lever, and include the international dealings into the aggregate settling service of the bank, credit lever is a double-blades sword, so we should insist secure and stable operation at first. Proving credit and financing in the international settling is an indispensable part of the whole banks' credit management. 4. Set up the efficient management and organization model and improve the operation of the international settling dealing. The model China Ever Bright Bank developed is a good example for us. 5. Segment the market, adopt the active marketing strategy, incubate clients, gain competitive edge and initiat... |
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