The Application Of Project Management On Group Clients Credit In The Commercial Banks

With the rapid development of China’s economy in the past decades, there hasbeen an obvious trend of collectivization of enterprises, which leads to the emergenceof large groups of enterprises with strong competitiveness, the adjustment ofeconomic structure, and improved quality and efficiency of economic growth. Thesecollectivized enterprises gradually become the focus of customer development ofcommercial banks, thus the group client credit has emerged. It has become a trend thatcredit concentrates on the group client since1990s. The report of China RegionalFinancial Stability released by People’s Bank of China on July31,2007suggested theMedium and Long Term Loans grew rapidly and gradually centered on the majorcustomers and key industries. The loan balance and new loan of the large enterprisegroups with more than100million credit lines have got a rising proportion in thewhole loans. The proportion of the major customers’ loan balance, as of March2007, is above60%in the total loans of19surveyed banks. These group customersbring scale benefit to the commercial banks, but at the same time this also increasesthe difficulty and brings a great challenge to the credit management of banks, which isdue to the complexity of group enterprises and the hidden affiliate transaction. Hugeloan loss cases involving Lantian, Nongkai, Tieben, Delong group enterprises, fullyexposed the defects of current credit management system of our banks and theloopholes of group customer credit risk control system. Therefore, it’s very importantfor the commercial bank organizations to strengthen the group customer creditmanagement, prevent and control the risk of bank credit business.In order to solve the management problems of group customer credit, ChinaBanking Regulatory Commission issued the Guide for the Group Customer CreditRisk Management and introduced some management systems. However, there are still many problems during the actual implementation process, for example, the enterprisegroup cannot be considered as a whole and the bank organizations are lack ofcooperation, which results in unfavorable credit management for group customers.The group clients refer to enterprises as commercial banks’ credit objects withfollowing characteristics. Firstly, they are controlled or control directly or indirectlyother enterprises on stock rights or operating decisions. Secondly, they are jointlycontrolled by third party. Thirdly, they are directly or indirectly controlled by themajor investor, key manager or other kinship relatives. Fourthly, enterprises thatcannot transfer capital and profits according fair value but have other relevantrelations and are regarded by commercial banks as group clients.This paper studies enterprises using methods of case study, literature researchand depth interview. Based on the analysis of problems on credit management, itcomes to the view that it has satisfied the conditions of matrix transform organizationand customer manager system that project management model is introduced intoChina commercial bank group customer credit management. And the needs of processmanagement and project administration of goal orientation will promote theapplication of project management model. Finally, the study objects are furtheranalyzed, including group customer, project types, project management process andtools, the changes of group customer management model, and the dynamicorganization of project administration between the groups with related interests.