INTRODUCTION

For several recent years, Vietnam economy has much developed along with many domestic and international significant events, especially become the official member of WTO. The amount of trading with foreign companies has got a sharp increase, and the volume of imported and exported goods and services has also increased considerably. Therefore, the international payment with foreign companies becomes very important for settling a long time business trading. Acknowledging these requirements, Vietnam Eximbank has made a strong focus on its international settlement department to help the foreign trade carry out as quickly and smoothly as possible.

After a short time as an intern at Vietnam Eximbank Hanoi Branch, I have gained a lot of practical experiences and learnt that the international payment by opening Letter of Credit is the most favorable method to be transacted between Vietnamese companies and other foreign companies through Hanoi Branch of Eximbank’s services.

Being aware of the importance of international settlement in international business, I have decided to choose topic “International payment service by opening Letter of Credit at Vietnam Eximbank Hanoi Branch” for my field study report.

CONTENTS

ACKNOWLEDGEMENTS . i

LIST OF ABBREVIATION . iv

LIST OF FIGURES AND TABLES v

INTRODUCTION vi

PART 1: LITERATURE REVIEW OF IMPORT AND EXPORT L/C . 1

I. INERNATIONAL PAYMENT BY LETTER OF CREDIT 1

[*]Letter of credit 1

1.1. Definition of Letter of Credit . 1

1.2. Role of Banks in Documentary Letters of Credit 3

1.3. The Documentary Credit Cycle . 3

[*]Import LC . 5

[*]Export LC . 7

II. HISTORY AND DEVELOPMENT OF EXIMBANK 8

[*]General information . 8

[*]Development process . 8

[*]Vietnam Eximbank Services 9

3.1. Vietnam Eximbank -Hanoi Branch 9

3.2. Services of Vietnam Eximbank Hanoi Branch 9

PART II: THE CURRENT SITUATION OF LETTER OF CREDIT PAYMENT IN VIETNAM EXIMBANK – HANOI BRANCH . 11

I. THE CURRENT SITUATION OF L/C PAYMENT IN HANOI BRANCH 11

[*]Payment method by Import L/C in Vietnam Eximbank 12

1.1 L/C Issuance . 12

1.2. B/L endorsement/guarantee issuance . 12

1.3 Documents Processing and Payment 13

[*]Procedures of Export LC settlements . 14

[*]Development of L/C payment in Vietnam Eximbank . 14

3.1 Analysis on the current Import L/C payment activities at Hanoi Branch . 15

3.2 Analysis on the current Export L/C payment activities at Hanoi Branch . 18

II. ESTIMATION OF L/C PAYMENT SERVICES IN HANOI BRANCH . 19

1. Vietnam Eximbank’s strengths in L/C payment services 19

1.1 Predominant credit & Wide operation network 19

1.2 Leading technology & Advanced technology level 20

1.3 Abundant service content . 20

2. Limitations in L/C payment services . 21

2.1 Document problems 21

2.2 Ineffective marketing activities 21

2.3 Limited working conditions 22

PART III: DEVELOPMENT ORIENTATION AND PROPOSALS TO IMPROVING INTERNATIONAL PAYMENT SERVICE AT EXIMBANK HANOI BRANCH . 23

I. DEVELOPMENT ORIENTATION OF HANOI BRANCH 23

[*]Opportunities and challenges in new context of Vietnam’s economy 23

1.1 Opportunities 23

1.2 Challenges . 24

[*]Vietnam Eximbank Hanoi Branch’s development orientation to 2010 24

2.1 General orientation 25

2.2 Economic development targets . 25

II. PROPOSALS FOR IMPROVING THE QUALITY OF LC SETTLEMENT AT EXIMBANK HANOI BRANCH 27

1. Bettering the working conditions & improving the capabilities of the staff and efficiency of its transactions . 27

2. Simplifying the documents and payment process . 28

3. Upgrading IT system to develop the international payment . 29

4. Promoting Hanoi Branch’s band name, products and services 29

5. Combining Export-Import Package Service 30

CONCULSION 31

REFERENCES . 32