Research On Internal Funds Transfer Pricing System Based On PZ Rural Commercial Bank

Market-oriented interest rate reform process is speeding up steadily, and the competition is increasingly fierce among the domestic and foreign Banks in China. At the same time, banking supervision is more and more strict. All of these are challenges for the Banks, especially the market-based reform of interest rates, which would break the profit pattern of fixed interest rate differentials and turn into independent pricing, self-sustaining competition mode, which have very high request for the bank’s pricing power. In response to this change, many Banks have set up internal funds transfer pricing system.Internal funds transfer pricing is defined as a business management model that the funds paid transfer between the commercial banks’ internal capital center and different branches or different departments in accordance with certain rules, so as to achieve centralized management of interest rate risk, establish a fair assessment mechanism, and rationally allocate funds, etc. Because the Market-oriented interest rate reform is not complete and the interest rates of deposits and loans were not fully liberalized, when the domestic banks establish internal funds transfer pricing system, can not just copy the foreign experience, must be based on the actual situation establish internal funds transfer pricing system.In this paper, the study is conducted on the basis of PIZHPOU rural commercial bank. By combining the Internal operation data and external market data published, explore how to build internal funds transfer pricing system. We have an objective that through establishing FTP, PIZHPOU rural commercial bank can be more reasonably priced products, allocated funds, more focused on the professional management of interest rate risk, more fairly and objectively evaluate the performance. Specific implementation steps are as follows:First, choose an appropriate pricing model; second, according to China’s current interest rate situation, determine the different benchmark interest rate curves for the marketized and non-marketized financial products; third, select the reasonable pricing method for a variety of different types of financial product; fourth, adjust the benchmark interest rate curves; fifth, improve the supporting facilities.The characteristics of this paper is that the article is not about theoretical research, but is an in-depth case studies about PIZHPOU rural commercial bank. We analysis the defects of existing internal funds management model. Combining with the internal dynamics and external pressures, we put forward the necessity to establish FTP system, and we establish the FTP system successfully.