Study On The Optimization Of Internal Control Of Credit Business In X Branch Of Bank Of China

Commercial banks are the most important forms of the financial system in China,the study of how to do a great job in the internal control of commercial banks has become an important part of China's financial system and this cannot be ignored.In recent years,with the increasing emphasis on internal control of financial institutions,managers of commercial banks have become more and more interested in the specific steps and implementations of internal control.As credit business being the most important asset business of banks,its internal control system directly determines whether a bank can survive in the market or not.In September 12,2014,the China Banking Regulatory Commission issued the revised "Internal Control Guidelines for Commercial Banks" by the CBRC,40,2014.The "Guide" is divided into general principles,internal control responsibilities and internal control measures of internal control,security,internal control evaluation,internal control supervision and Annex 7 chapters 51,and shall come into force from the date of issuance.After the promulgation of the "guidelines",the goal of state-owned commercial bank's credit business internal control will now be how to innovate and improve in order to adapt to the trend of time.How should state-owned commercial banks trying to focus on the way to modify and make up their own credit business internal control system in order to stand firm in the cruel financial market becomes the very urgent problem for them to solve.The study which aims on the state-owned commercial bank credit business internal control system is the key of solving these problems.Although in recent years there are many other scholars doing research on the internal control of commercial bank of China and they also has obtained certain achievement,the specific research for this special group of the listed state-owned commercial banks remains few,and the study for the state-owned commercial banks internal control is even fewer.Four major listed state-owned commercial banks are faced with the full opening of the global financial market and participation in international competition along with the enormous pressure and a wider range of business risks.The acceleration of the improvement of the listed state-owned commercial bank internal control construction is both required from the enhancement of international competitiveness,safeguard for the economic security of the state and from promotion of economic development and support of the adjustment of economic structure.In the process of the operation of listed commercial banks,credit business is the most important part.Currently the international economic situation remains complex,with their special economic forms,the credit business internal control system of the state-owned listed banks should be focusing on how to get perfection both from management to employees,from strategic planning to daily operations and from the control environment to layers of supervision to consolidate.That is the most need-to-solve problems of China's state-owned commercial banks in current economic system.This paper intends to treat Bank of China,X branch as the research object and focus on the credit business of the internal control of the five elements:control environment,risk assessment,control activities,information and communication,and supervision as well as credit business internal control system of the overall situation,existing problems and hidden dangers which seeks to solve these problems by giving suggestions.This study aims to make overall conclusions of the credit business in the industry of widespread problems through the analysis of specific cases,and tries to discuss how to solve the problems and improve the solution for internal control system of credit business of commercial bank,as well as help commercial banks to recognize credit business internal control system and internal control elements of the existence of defects,in order to improve the development related problems in the future course.The questionnaire of this paper mainly presents the employees and the managements' understanding and evaluation of the existing internal control system of the X branch.In addition to a large number of questionnaires issued to the bank employees and management layer,researches also include face to face communication with employees or managements,analysis of access surveys,telephone surveys and observation and investigation of information to explore their daily work of internal control and the aim was to find out whether enough attention was paid to internal control and whether the implementation of internal control was reasonable and effective.Through the records of interview survey and telephone survey and the results of a questionnaire survey analysis and comparison,the author found that the credit departments of X branch of Bank of China's internal control has the following problems:(1).Business environment is not perfect enough and enterprise culture of internal control is not deep enough;(2).The risk assessment system has a defect and is unable to react quickly against changes in the market;(3).Control activities should be strengthened.Authorization relies on experience too much;(4).Information and communication has problems,communication with the customer focuses too much on marketing;(5).Supervision still has loops,a blind spot of auditing and approving is difficult to avoid.After the analysis of the lack of specific forms one by one,suggestions and optimization scheme are designed to solve these problems and puts forward.Which are:strengthen the hierarchy of the bank and cultural penetration,improve the internal control by creating a good environment;introduction of a new type of risk assessment process to strengthen the ability of risk identification;reasonable arrangements of clerks to consolidate control activities;rely on the information system,establish healthy communications within the bank and with the customers and work with the audit department to strengthen cooperation to achieve transparent and fair supervision.Every aspect are aimed at specific issues and the specific situation existing in the credit department and introduce the method to find out leaks and weakness within the system.This essay intends to be something helpful to the internal control reconstruction and optimization of credit departments of X branch of Bank of China and to help the credit department and credit business develop in a sustainable,steady and healthy way.