Entrustment (English: Trust) is understood as the entrusting party entrusts another organization or individual to act on his/her behalf to do a job at his/her request.
Viewing: What is entrustment in English
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Trust in English is called Trust.
Entrustment is understood as the entrusting party entrusts another organization or individual to act on his/her behalf to do a job at his/her request.
– For commercial banks, entrustment services include entrusting and receiving entrustment.
– In the case of an entrusting bank, entrustment is understood as the entrusting commercial bank to deliver capital or request its requirements related to financial services to the entrusting party through an entrustment contract to perform financial services.
– In practice, commercial banks mainly perform entrustment services.
Due to the characteristics of a bank being a currency business, operating under the control of the central bank as well as having to meet the required conditions for operational safety, commercial banks often have prestige and business opportunities with many and diversified investments, even with high efficiency.
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– Therefore, individuals and organizations will feel more secure with their entrustment to the bank.
At the same time, this is also a profitable service for banks through fee collection, especially in the current period when commercial banks are focusing on expanding this service to diversify services provided. as well as generate profits for the bank.
Some basic trust services
– Entrusted Loan (Entrusted Loan)
The entrusting party assigns capital to the entrusting party through a loan entrustment contract to directly lend to customers, the entrusting party pays a fee to the entrusting party.
– Investment trust
An entrustment bank by an individual or organization to invest in a project and the trust bank is responsible for controlling that investment for the investment trustee.
– Entrustment for collection
Collection is a payment method in which the seller, after delivering the goods or services to the buyer, entrusts the bank to collect the money for the goods or services on his behalf.
– Entrustment of money transfer – payment on behalf of
A transaction where a commercial bank receives an entrustment from a customer, using the means requested by the customer to transfer a certain amount of money to another person at a specified location at home or abroad.
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(Reference: Textbook of Monetary and Financial Theory, National Economics University Publishing House)