FACULTY OF

FINANCE AND COMMERCE

Commercial Bank
Management
Lam Dang Xuan Hoa
 Chapter 02

Debt Assets’
Management -
Capital Mobilization
Contents

I. General issues of capital mobilization

II. Forms of capital mobilization
III. Solution to improve efficiency
 Your family has some idle money and needs
to seek a bank to save it. Please choose a bank
and explain why you choose it.
Capital mobilization is the process of
receiving temporary idle capital from
organizations and individuals in many
different forms to create a bank's operating
capital.
I. General issues of capital mobilization

Demand deposit

Customers Saving deposit The Commercial

Banks
Valuable papers
I. General issues of capital mobilization
1. The role of capital mobilization:

Creating a leading capital circulation

channel for the economy.
The
Economy Contribute to controlling inflation.

Supply goods for the financial market

I. General issues of capital mobilization
1. The role of capital mobilization:

Creating the main source of capital for

Banks business

Improve reputation, promote the brand

I. General issues of capital mobilization
1. The role of capital mobilization:

Customers

Banking service Safe investment

Saving the cash

I. General issues of capital mobilization

2. Principles of capital mobilization:

Return Security
I. General issues of capital mobilization

CIF (Customer Information File)

Open account
The process of opening account
 II. Forms of Capital Mobilization

1. Demand deposit (Tiền gửi không kỳ hạn)

Demand deposit is a type of deposits, when depositing into the

bank, customers are allowed to use this deposit at any time to
serve the customer's payment needs.

Features:
- No specific withdrawal date agreed.

- Unlimited number of deposit times, number of withdrawals.

 II. Forms of Capital Mobilization

1. Demand deposit (Tiền gửi không kỳ hạn)

Subject:
- Enterprise.
- Individual

Utilities:
- Pay
- Safe - Profitable
Monitor and Manage Account

For deposit transactions

For withdrawals
II. Forms of Capital Mobilization
1. Demand deposit:
a. Transaction documents:
II. Forms of Capital Mobilization
1. Demand deposit:
a. Transaction documents:
II. Forms of Capital Mobilization
1. Demand deposit:
a. Transaction documents:
II. Forms of Capital Mobilization
1. Demand deposit:
a. Transaction documents:
II. Forms of Capital Mobilization
1. Demand deposit:
a. Transaction documents:
 II. Forms of Capital Mobilization
1. Demand deposit:
a. Interest calculation and payment:

- Pay interest per month, on a specific date.

- The interest is paid into the customer’s demand deposit account.

- Interest is calculated according to the actual balance on the

customer's deposit account at the end of the day, by the method of
accumulation.
II. Forms of Capital Mobilization
1. Demand deposit:
a. Interest calculation and payment:

I  Di *Ni *r
i1

Di: Actual balance on account.

Ni: Number of days to maintain the
balance.
r: Interest rate on demand deposits
- Opening balance: 100,000,000 VND
- In the month, there were transactions as follows:
Date Content Amount
05/10 Take out 25,000,000
15/10 Deposit 30,000,000
20/10 Take out 5,000,000

Request:
Calculate deposit interest for customers, knowing that:
- Interest rate for demand deposit is 0.1%/year.
- The bank charges interest on the 25th of each month.
Information about a client's demand deposit account in October,
follows:
- Opening balance: 10,300,000
- In the month, there were transactions as follows:
Date Content Amount
07/10 Deposit cash into account 1,500,000
09/10 Electricity bill payment 300,000
19/10 Collecting money from Sales 4,000,000

Request:
Calculate deposit interest for customers in October, knowing that:
- Interest rate for demand deposit is 0.1%/year.
- The bank charges interest on the 25th of each month.
 II. Forms of Capital Mobilization

2. Time deposit (Tiền gửi có kỳ hạn)

A type of deposit that customers can only withdraw after a
specified period.

Features:
- Customer has a specific agreement to withdraw money.
- Customers can only withdraw money after the term as agreed.
- When customers need to withdraw before maturity, customers
must notify the bank with the agreement of the bank.
II. Forms of Capital Mobilization

2. Time deposit:
- At the end of the period, if customers do not withdraw
money, the bank will re-grant a new term for the deposit.

- Each deposit must sign a time deposit contract.

- Customers, mainly firms, organizations,… have idle

money for the company's backup and safety of capital.
II. Forms of Capital Mobilization

2. Time deposit:

Subject:
- Enterprise.
- Individual.

Utilities:
- Profitable
- Safe
- Pledge
II. Forms of Capital Mobilization

2. Time deposit:

Payment:
- Initial deposit amount: The bank pays once when the
customer needs to withdraw money.

- Interest: The bank pays interest once with the principal at

the time the customer withdraws or pays interest per month
according to the kind of deposit.
 II. Forms of Capital Mobilization
Payment: Deposit amount * Number of days * rate
Example: A customer's deposit at the bank follows:
- Deposit amount: 150,000,000 VND.
- Rate: 7.5%/year, the last period
- Opening date: 05/03/2019. Due date: 05/06/2019.
I = 150 x (7.5% /4) x 1
How much money will the customer receive when closing the time
deposit? I = 150 x (7.5% /12) x 3 months

FV = PV (1 + n. r ) = PV + PV.n.r = 152,812,500 VND

FV 2 = PV1 ( 1 + n.r) = 152.812.500 x ( 1 + 7.5%/12 x3) = 155,665,000 VND

FV 3 = PV2 (1+ n.r) – 156,677,000 x ( 1 + 7.5% /12 x 3) = 158,584,000 VND

FV = PV (1 + r) n = 150 (1 + 7.5%/12x3)^3 = 158,584,000 VND

 II. Forms of Capital Mobilization

Suppose that until June 5, 2019 the customer does not

withdraw money.
On September 5, 2019 the customer
I = 150comes tox 1withdraw
x (7.5% /4)

money.
How much money can customer withdraw?
FV = PV (1 + n. r ) = PV + PV.n.r = 152,812,500 VND
(assuming interest rate is remained)
FV 2 = PV1 ( 1 + n.r) = 152.812.500 x ( 1 + 7.5%/12 x3) = 155,665,000 VND
FV 3 = PV2 (1+ n.r) – 156,677,000 x ( 1 + 7.5% /12 x 3) = 158,584,000 VND

FV = PV (1 + r) n = 150 (1 + 7.5%/12x3)^3 = 158,584,000 VND

Interest

Amount of money can be earned after a certain period of

the original money that invested in a certain method,
such as a loan.

I = PV x r

I: Interest
PV: present value
r: Rate
 The future value of single money

b. Simple interest
Calculate on the original money only
FV: Future Value
FV = PV (1 + n . r ) PV: Present value
n: Period
c. Compound interest r: rate (for year)

Calculate on the original money, then, adding interest which

incurred in the previous periods.

FV: Future Value

PV: Present value
FV = PV (1 + r) n n: Period
r: rate (year)
 Case Study
Mr. Hoang is depositing in the bank with 05
billion VND. The period is 06 months, rate is
7%/year.
Now, just finished 04 months, he wants to take out
the deposit to pay for new house.
If you are financial officer in the bank, how you
advise him?

If taking out before the period, all amount will be calculated

with demand interest rate: 0.1%/year.
If getting loan, the loan rate will be applied: 8%/year
II. Forms of Capital Mobilization

3. Saving deposit (Tiền gửi tiết kiệm)

Saving deposit is a form of mobilization of an

individual's idle money deposited in a bank for the
purpose of earning profit and securing assets.
II. Forms of Capital Mobilization

3. Saving deposit:
a. Non-term saving deposit:
Non-term saving deposit is a form of saving deposit
that depositor can withdraw at any time.

b. Term saving deposit:

Term savings deposit is a form of saving deposit that
the depositor can only withdraw after a certain term
Form: Pass-book saving (sổ tiết kiệm), certificate of
deposit (chứng chỉ tiền gửi)
II. Forms of Capital Mobilization

Where to receive and pay savings deposit?

Interest rate:
- Interest is calculated on a daily basis
- For term saving deposits, what if the payment due date
coincides with a holiday?
 II. Forms of Capital Mobilization

On March 10th, 2022, Mr.A went to XYZ Bank to deposit a 6-

month term saving deposit with an amount of 216 million VND,
receiving interest at the end of the period, and the applicable
interest rate is 7%/year.
Request:
1. Calculate the amount received at maturity.
2. If on May 23rd, 2022, Mr.A goes to the bank to request the
settlement of the passbook saving before maturity.
Determine the amount the customer receives.
Know that the interest rate on demand deposits applied by
banks is 0.1%/year.
II. Forms of Capital Mobilization

4. Issuing the valuable papers:

Issuing valuable papers is a form of capital

mobilization by a bank through the debt certificates.
II. Forms of Capital Mobilization

4. Issuing the valuable papers:

Characteristics:
- Owners of valuable papers can be transferred to
others, pledged, or discounted at commercial banks
- If due, the owner does not come to withdraw, and
the bank automatically convered interest into the
principal. What interest rate applies?
II. Forms of Capital Mobilization

Classification of valuable papers:

Based on the deadline:
- Short-term valuable papers are valuable papers with a
term of less than 1 year: promissory notes, short-term
deposit certificates ... etc.
- Long-term valuable papers are valuable papers with a term
of 1 year or more: bonds, certificates of long-term deposit ...
etc.
II. Forms of Capital Mobilization

Based on form of issue:

- Anonymous valuable paper: is a valuable paper that
does not specify the name of the owner.
- Registration valuable paper: is a valuable paper that
specifically states the name of the owner.
II. Forms of Capital Mobilization

Par Value Period

Bonds

Interest rate
II. Forms of Capital Mobilization
II. Forms of Capital Mobilization
A customer owns 100 bank-issued bonds with a par value of
VND 1,000,000/bond, the term is 5 years, the interest rate is
12%/year, receive interest at the end of the period, issued on
10/01/2010.
Request:
1. Calculate the amount received by the customer on the
bond maturity date?
2. Calculating the amount interest received by the customer
in case the bond pays interest on an annual basis?
SOLUTIONS FOR IMPROVING
CAPITAL MOBILIZATION
 SOLUTIONS FOR IMPROVING CAPITAL
MOBILIZATION

- Improve service quality, develop new convenient

services for customers
- Enhance the bank's reputation and brand
- Expanding the bank's network to facilitate transactions
- Having a reasonable deposit interest rate policy
- Research and develop many capital mobilization
products to meet the diverse needs of customers.
- ….
Stakeholders
 Governance

Revenue
Profit
Capital
Cost
mobilization

Sustainable
Economy Society Environment
Development
Thank You