Nepal investment bank

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Nepal investment bank

  1. 1. CHAPTER ONE INTRODUCTION1.1 Background:Nowadays, people are becoming more aware about the importance of education. Dueto this reason, many schools and colleges are emerging every day. Among the variousuniversities governing the colleges, Tribhuvan University (T.U.) is the largest andoldest university of Nepal. With the increasing demand of the Management studies,T.U. has gradually prepared an innovative course in order to originate the competentprofessionals with the changing demands of corporate world since 2002 A.D. Amongdifferent management courses of T.U., Bachelor in Business Administration (BBA) isone of the best management courses.Bachelor in Business Administration (BBA) is the semester wise academic programfor management students designed to provide comprehensive and practical education.The charm of BBA is increasing because it is accepted world wide as it covers theInternational standard of four years (one hundred and twenty credit hours).As per the requirement of Faculty of Management (FOM) of Tribhuvan University,students of BBA should perform internship in any organization for eight weeks, as apartial fulfillment of program. The FOM, Tribhuvan University has its ultimateobjective of educating students for professional pursuits in business, industry andgovernment. It is further dedicated to contributing for increasing the knowledge andunderstanding of business and public administration. Accordingly, FOM has beendeveloping networks with management institutes in the country and abroad toexchange new knowledge, technology and methods for achieving higher level ofefficiency in management education. For a developing country like Nepal, it is moremeaningful to have commercial banks as lending financial institution to guide theeconomy in a desired level.With the view to achieve same objective, FOM has introduced BBA program. Thespecific objectives of the BBA program are to: 1
  2. 2. Prepare students to take-up middle level managerial positions in the business sector. Develop students‟ skill in object-oriented business management capable of understanding and solving practical business problems creatively. Provide professional management education with a blend of computer and management information system courses. Prepare students to proceed on to postgraduate level study in business administration.The teaching methodology of the program has focused on preparing us to face thechallenges emerging out of the changing business environment. In order to achievethe aforementioned objectives, the teaching pedagogy of the program consisted casestudies, practical exercises, lab works, project works, field visits, etc. throughout theprogram period and an internship for the period of eight weeks in an organization atthe end of final semester. An internship is an extensive program through which anintern can learn the practical aspects of what is taught between the four walls of aclassroom. The BBA program has incorporated eight weeks internship program with aview to develop students‟ skill in object-oriented business management, capable ofunderstanding and solving real life business related problems. It provides practicalexposure and helps the student to understand corporate social responsibility, developcorporate attitude and venture entrepreneurship.1.2 Objectives of the ReportThe BBA program sharpens business and management concepts and developstechnical capabilities, which will enable us to analyze and implement businessconcepts in real world scenarios. So, one of the objectives of this study is to provideus with an opportunity for learning as well as implementing the managementconcepts learnt in classrooms in a real organization. One of the most essential criteriafor successfully completing the BBA program is to undergo an internship in anorganization for a minimum 8 weeks, study the relevant areas in the organization, andprepare a report in the same. The fundamentals objectives of the internship report areas follows: To gain in-depth knowledge about operation activities performed in the bank. To study and analyze the working system of various departments of the bank. 2
  3. 3. To know whether various theoretical tools and techniques learnt in college can be applied in the work place. To know about the customers responses towards the services provided by the bank. To learn through observation and work experience in the organization to enhance and develop managerial behavior and skills. Mould the classroom theoretical discussions with practical experience to develop the skills demanded by the financial market1.3 Research Methodology:This internship report is the in depth study of particular subject or topic backed by thecollection, compilation, presentation and interpretation of relevant data. In this report,both primary and secondary sources of information are used. It helped to analyze thefindings in meeting the objectives of the study.Sources of data:The report would not be completed without the collection of data. For the report thedata are collected from primary source and secondary source. They are as follows: Primary Data  Observation of working environment of bank.  Visited banks in order to associate with different aspects of the banks.  Met with the banking people and had direct contact with them for relevant information.  Informal discussion and interaction with the staff of the bank. Secondary Data  Annual report of Nepal Investment Bank Ltd.  Information from the official website of NIBL- www.nibl.com.np  Publications & Journals 3
  4. 4.  Application form for different type of account opening  Browsers of the different types of account  Official website of Nepal Rastra Bank (NRB)- www.nrb.org.np1.4 Organization Selection, Placement, Duration:1.4.1 Organization SelectionSelection of organization for internship program is always a crucial task. At thepresent scenario, among different fields related with the financial sector one of themajor field is the banking sector. Being the student of BBA, most of the internee hasselected the banking sector as their destination, because banks are the key players inthe financial market.For the completion of the BBA program I had to select an organization that wouldperfectly match the requirement as well as help me learn about real business workingenvironment. As a result, I selected NIBL, among other financial institutionsoperating in Nepal with the help and suggestion of my teachers as well as wellwishers. I was placed at the Seepadole Branch of the bank for my internship.1.4.2 PlacementDuring my internship period, I was placed as an intern in Seepadole Branch of NIBL. Thesum of period of internship was 8 weeks. During the period, placement was made at thecustomer service department, marketing department and at back office. I was placed at CSDfor the period of 5 weeks, at marketing department for the period of 2 weeks and at backoffice 1 week. The following table shows the department of placement and respectivesupervisor of the department: Table 1: Placements DEPARTMENT SUPERVISORS CUSTOMER SERVICE Mandira Malla MARKETING Sachin Baidya BACK OFFICE Sushila Basel 4
  5. 5. 1.4.3 DurationAs per the course study of the Tribhuvan University, Faculty of Management forBBA, the student of BBA 8th semester must do the internship of 8 weeks of workingat an organization. I got an opportunity to work in CSD, marketing department andback office, from May 30, 2011 to July 25, 2011 which really helped me to developmanagerial and interpersonal skills and at the same time boost up my confidencelevel. These eight weeks has been very fruitful for me to get insight of the bankingactivities of the organization. The duration of my internship has been split into variousdepartments. They are figured below: Table 2: Duration of Internship WEEKS 1 2 3 4 5 6 7 8 CSD MARKETINGBACK OFFICE1.5 Activities performed in the organizationDuring this internship period of eight weeks I have done various jobs in eachdepartment personally. I was engaged in the jobs starting from account opening toaccount closing in CSD including cheque book issue, ATM issue and others.1.5.1 Activities performed at CSDBasically I was placed in Customer Service Department (CSD) throughout myinternship period; I carried out all the functions of CSD. However I was also assigneddifferent activities of marketing departments and work in back office as well. For 5
  6. 6. more time duration I was placed at CSD. So the activities I had performed in CSDduring my internship are as follows: 1. Interacting with customers and try to solve their queries. 2. Counseling the customers and answering their queries. 3. Opening different accounts after verifying all the required documents. 4. Providing the bank statement as per the requirement of customer. 5. Informing customer about their arrival of ATM cards 6. Receiving cheque book requests and delivering the cheque book. 7. Arranging the cheque and cards on the basis of ascending order. 8. Helping customers fill up the different types of forms. 9. Activating inactive or dormant accounts. 10. 11. Close the accounts of customers as per request.1.5.2 Activities performed at Marketing DepartmentCustomer satisfaction is the key success factor for all commercial banks. Speed,convenience and competitive price are the driving forces, which demand existingbanks to be much more innovative and equipped with sophisticated technology andchanged mind-sets to recognize customer as the king. Hence this department mainlyholds the responsibility of finding ways to improve its products and services in orderto attract new customers as well as retain the existing ones. The activities that I haveperformed in this department are as follows: 1. Approaching to different prospects, individuals and corporate houses to inform about different product of bank. 2. Persuading them to use different product of the bank. 3. Informing about new product of the bank. 4. Providing information about new changes and schemes of the bank. 5. Collecting feedbacks from existing and unsatisfied customer.1.5.3 Activities performed at Back OfficeWork done in back office are advance payment, forex, remittance, dealing clearingcheques, making TC, draft, MC cheque , cheque deposit, etc. It also deals with thepurchase and sale of INR. And other activities performed are: 6
  7. 7. 1. Remittance data entry 2. G-9 form fill up for fixed deposit 3. ATM Pin code release1.6 Limitation of the ReportIt is obvious that in everything there is some kind of limitations and this internshipreport is also not an exception. So, it also has common limitations. The following arethe major limitations of my report: The research study was conducted in a limited sphere of time. The report on NIBL is mainly focused on the work that I have performed in NIBL. It does not give detail view of overall functioning of the bank. The study might not be able to fulfill the desire to know the details of the prescribed department and its transactions due to confidentiality reasons and policies of the bank. The study is only confirmed to one financial institution, which is NIBL.Finally, this report is prepared on the basis of available data, practical day to dayoperations and information provided by the bank and its staffs. 7
  8. 8. CHAPTER TWO AN INTRODUCTION TO BANKING INDUSTRY2.1 Meaning of BankBanking sector plays an important role in the economic development of the country.The word „Bank‟ has been derived from the Italian word „Banca‟ which means a placefor keeping, lending and exchanging money. The bank is a financial institution, whichdeals with money. It accepts deposits from individuals and organizations and grantsloans to them. It allows interest on the deposits made and charges interest on the loansgranted. Since, it accepts deposits and grants loans, it is regarded as the trader ofmoney. Further, it creates credit and supports for the formation of capital and hence itis regarded as manufacturer of money.The following are some of the main definitions given by different economists:“Bank is an organization established for the purpose of exchange money depositlending money and participation in transactions”-Commercial Bank Act of 2031 (Nepal)“Bank is an institution which collects money from those who have it to spare and whoare saving it out of their income and lends this money out to those who require it.”– CrowtherBy the above definition we can be clear that bank is the financial institution, whichaccepts deposits from the public in different accounts and grants loans to individualsand corporations against their securities. The major source of income for the bank isthe difference in interest rate on lending and deposit, interest rate spread, the lendinginterest is higher than the deposit interest. So we can consider the financial institutionis the agent of the clients, which remits money, collects incomes and pays expenseson behalf of them. It provides the wide variety of function on the behalf of thecustomer. 8
  9. 9. 2.2 Origin of BankThe banking is as old as authentic history. The word bank is derived from the Latinword bancus which means bench. In the ancient time the Italian goldsmiths used tosit on benches when they are in work of exchanging of money; trading of gold andsilver. The words of bench means „Banck‟ in German, „Banca‟ in Italian and„Banquee‟ in French, from which it used as „bank‟ in English language.The banking functions were in use even in the second millennium in Babylonia butthe deposits were not of money but of cattle, grain or crops and eventually preciousmetals. Nevertheless, some of the basic concepts underlying in today‟s bankingsystem were present in the ancient arrangements. Deposits were accepted, loans weremade and borrowers paid interest to the lenders.Similar type of banking arrangements could be found in ancient Egypt. Thesearrangements stemmed from the requirement that grain harvests be stored incentralized state warehouse, and the depositors could use written orders for the use ofcertain quantity of grains as means of payment. Bankers and moneylenders operatedin India during the Vedic period. Those were the earliest form of banking. Bankingwas organized as it passed through several developmental stages.The history of modern banks starts from the establishment of the bank of Venice,established in Venice, Italy in 1157 AD. Subsequently, Bank of Barcelona (1401) andBank of Geneva (1407), Bank of Amsterdam (1607) and bank of Hamburg (1619)were established. The „Bank of England‟, first English bank, was established in 1964A.D. The bank of Hindustan established in 1770 A.D. is regarded as the first bank inIndia. But these banks were not established according to the law. In 1833 A.D.,Banking Act-1833 was introduced in United Kingdom which allowed opening Jointstock company banks. With the expansion of the commercial activities in the northernEurope, there sprang a number of private banking houses in Europe and slowly spreadthroughout the world.In 1838 A.D., New York adopted the Free banking Act, which allowed anyone toengage in banking business as long as they met certain legal specifications. As free 9
  10. 10. banking quickly spread to other states, problem associated with the system soonbecame apparent. The bank incorporated under these laws had right to issue their ownbank notes. This led multiplicity of notes many of which proved to be worthless in theevent of bank failure. Then the Federally Chartered system of banks came inlegislation which allowed national banks to issue notes and placed a tax on stateissued notes. The national bank came into Federal guarantee, which protected the noteholder if the bank failed. The new legislation also brought all the banks under federalsupervision. In essence, it laid the foundation of present day system.By this time, all the countries have their own banks and the system of operating them.2.3 History of Banking Sector in NepalBanking concept existed even in the ancient period when the goldsmiths and the richpeople used to issue the receipts to the common people against the promise of safe-keeping of their valuable items. On the presentation of the receipts, the depositorswould get back their gold and valuable securities or collateral after paying a smallamount for safe-keeping and saving. The goldsmiths and the moneylenders becamebankers of those days who started performing two functions of modern banking-accepting deposits and advancing loans.However, stage wise development of banking can be narrated as follows:1) The first phase of Banking Development Eight century, king “Gunkamdev” renovated the Kathmandu city by taking loan. At the end of same century merchant named “Shankhardhar” has started the „New year‟ Nepal sambhat after freeing all people of Kathmandu from the debt. In the 11th century, during Malla reigns, there was an evidence of professional money lender and buyer. Tejarath Adda was established in 1877 A.D which provided loan at very low rate of 5%.2) The second phase of Banking Development 10
  11. 11. The modern banking in Nepal has started with the establishment of Nepal Bank Ltd. in 1994 B.S Having felt the need of development of banking sector and to help the government formulate monetary policies, Nepal Rastra Bank was set up in 2013 B. S. as the central bank of Nepal. In B.S. 2022, Government set up Rastriya Banijya Bank as a fully government owned commercial bank. The agricultural development bank was established in B.S. 2024. This bank was established with the objective of increasing the life standard of the people who are involved in agriculture.3) The third phase of Banking Development The process of development of banking system in Nepal was not satisfactory. Nepal was observing the events that were taking places in the world also. The country can‟t change its status by using only its own capital in the country without importing the new technology from Foreign country and accordingly, law and policy have been enacted by the state to encourage the foreign investment on banking sector. From this, the real form to the development of the banking system started in Nepal. In order to get established and develop other Joint venture commercial banks and other financial institution, Nepal adopted liberal free economic policy. Accordingly, Nepal is allowed to establish different joint venture banks under the collaboration with foreign banks.4) The fourth phase of Banking DevelopmentFrom 2041 B.S, His Majesty‟s Government of Nepal established 5 rural developmentbanks. They are as follows: Eastern Rural Development Bank Central Rural Development Bank Western Rural Development Bank Mid-western Rural Development Bank Far-western Rural Development Bank 11
  12. 12. In order to establish and develop other joint ventures, commercial banks and otherfinancial institution, Nepal adopted liberal free economic policy. After 2041 B.S., thegovernment gradually liberalized and opened up the financial sector, resulting in therapid entry of the Foreign Banks. Later, in 2041 B.S., with the grand opening ofNABIL Bank Ltd., other commercial banks started emerging in the private sectors. Asa result, now there are altogether 31 commercial banks operating at different parts ofthe country. At present, the banking sector is more liberalized and there are varioustypes of bank working in modern banking system. This includes central, developmentand commercial banks. Evolution of the information technology has revolutionizedthe banking sector is saving lots of time and money by implementing IT. Technologyhas changed the traditional method of the services of bank. Invention of differentsoftware and hardware, which are very essential and available for functioning banksuch as Banking software, ATM, E-banking, Mobile Banking and card like Debitcard, Credit card, Prepaid card etc which helps the customer as well as banks tooperate and conduct their activities more efficiently and effectively. This helps bankto generate more customers, goodwill and profit.In the present day all the financial institutions are guided by NRB. The list of Banksand Non-bank Financial Institutions licensed by NRB are presented in the followingtable: Table :List of Banks and Non-bank Financial Institutions As of Mid-July 2011 (Licensed by NRB)S.N Organization Number1 Commercial Bank 312 Development Bank 873 Finance Companies 794 Micro credit development Bank 215 Saving and Credit Co-operatives(Licensed by NRB) 166 Non Government Organization(NGO) (Licensed by NRB) 38 12
  13. 13. 2.4 Classification of BanksWhen a single bank performs multiple tasks, the efficiency and effectiveness of thework becomes weak. Hence different banks are established for different purposes.Basically, the banks have been categorized in various types in accordance with thebanks ultimate purpose, customers demands and choices, and overall economicdevelopment of nation. Broadly, the banks can be classified into following types: Central Bank Commercial Bank Industrial Bank Agricultural Development Bank Rural Development Bank Saving Bank Exchange Bank Universal Bank2.5 Commercial Banks in NepalCommercial banks are the major component in the financial system. A commercialbank is a business organisation, which deals in money by lending and borrowingmoney, in which it makes profit. It raises its resources through borrowing from thepublic in the form of deposit and lends this to business firm. Its lending rate ofinterest is greater than its deposit rate. This difference in lending and borrowing ratesenables it to make profit. Basic source of funds for commercial banks are capital andreserved retained profit. It performs several functions as various types of depositfacilities like current, saving and fixed deposit; safety of public money, remittance ofmoney, letter of credit, loans, locker facility, foreign exchange, serving as an agent ofits clients etc. 13
  14. 14. Commercial Bank Act 2031 states- “A commercial bank is the bank which exchangesmoney, accepts deposits, grant loans, and perform banking function.”2.5.1Functions of commercial bankThe main function of commercial bank simply is „to borrow to lend‟. Besides, thereare other functions which have been developed according to need of the society as- Accepting deposits Advancing loans Discounting bills of exchange Transfer of money Miscellaneous functionsList of commercial banks of Nepal: See Annex I CHAPTER THREE INTRODUCTION OF AN ORGANIZATION3.1 AN OVERVIEW OF NIBLNepal Investment Bank Limited (NIBL), previously Nepal Indosuez Bank Ltd. Wasestablished in 1986 as a joint venture between Nepalese and French partners. TheFrench partner (holding 50%of the capital of NIBL) was credit Agricole Indosuez. Asubsidiary of one of the largest banking groups in the world. The bank started itsbanking services from Magh 6, 2042 after registration in the company act, 2021 and 14
  15. 15. Nepal Banijya bank act 2031 on 6th Magh 2042 B.S. With the collaboration of foreigntechnology and investment the bank is established to provide the banking service indifferent parts of the country. There was a contract made between Rastriya BanijyaBank, Rastriya Bema Sansthan and foreign investor credit Agricole Indosuez fromFrance. In the contract it was stated that for the 10 years from the starting of the bank,Credit Agricole Indosuez would handle by the management. With the decision ofCredit Agricole Indosuez to divest a group of companies of bankers, professionals,industrialists and businessmen, on April 2002 acquired the 50% shareholding ofCredit Agricole Indosuez in Nepal Indosuez Bank Ltd.The name of the bank subsequently changed to Nepal Investment Bank Ltd. uponapproval of bank‟s annual general meeting. NIBL, is managed by the team ofexperienced bankers and professional having proven track record. So, it can offercustomers what they are looking for. The choice of the bank will be guided amongothers by its reliability and professionalism. The fact of professionalism is reflectedby the fact that the Banker of London-based Financial Times Group has awardedNIBL with “THE BANK OF THE YEAR 2003”. Besides, NIBL won the same awardin the year 2005,2008 and 2010 as well. NIBL was selected for this honor amongstthe Nepali banks for meeting the benchmark criteria set by The Banker. The award isbased on growth and performance of capital, assets, and return on equity andmanagement quality. The prestigious award is the first occasion that a 100% Nepalimanaged bank has won. The reliability of the bank is reflected by its operation in thefield. It is established to provide the banking service in different parts of the country.Customer satisfaction is the paramount driver at NIBL.NIBL provides 365 daysbanking services.NIBL, at present is a Company listed on the Nepal Stock Exchange. But its shares areheld by different parties. The shareholdings of the bank at present are as follows: A group of companies holding 50% of the Capital. Rastriya Banijya Bank holding 15% of the Capital. Rastriya Beema Sansthan holding 15% of the Capital. The general public holding 20% of the Capital. Fig 1: NIBL‟s shareholding structure 15
  16. 16. Shareholding structure 20% Organized Institutions 15% 50% Rastriya Banijya Bank 15% Rastriya Beema Sansthan General Public3.1.1 Vision“Our Vision is to be the most preferred provider of Financial Services in Nepal”3.1.2 Mission statement“To be the leading Nepali bank, delivering world class service through the blending ofstate-of-the-art technology and visionary management in partnership with competentand committed staff,to achieve sound financial health with sustainable value additionto all our stakeholders.”3.2 Strategic objectives of NIBL To develop a customer oriented service culture with special emphasis on customer care and convenience To capture the more market share in the competitive environment through innovative products. To maximize the shareholder‟s wealth by taking optimum investment, financing and dividend decision. To increase market share by following a disciplined growth strategy 16
  17. 17. To leverage technology platform and pen scalable systems to achieve cost- effective operations, efficient MIS, improved delivery capability and high service standards To develop innovative products and services that attracts targeted customers and market segments To continue to develop products and services that reduce cost of funds To maintain a high quality assets portfolio to achieve strong and sustainable returns and to continuously build shareholders‟ value To explore new avenues for growth and profitability3.3 Board of DirectorsThe board of directors of NIBL consist of 7 directors.The name of the board membersand their designation are listed in the following table:Table 3: board of directorsMr. Prithivi Bahadur Pande Chairman & CED Group AMr. Prajanaya Rajbhandari Director Group AMr. Deepak Man Sherchan Director Group AMr. Janardan Dev Pant Director Group A Rastriya Beema Sansthan -Mr. Omkar Nidhi Tiwari Director Group CMr. Surendra Bahadur Singh Public Director Group D ProfessionalMr. Mohan Madan Budhathoki Director 17
  18. 18. 3.4 Organization Structure of the BankOrganization structure is the specified path through which the formal command ofauthority and responsibility flows.Organization structure: See Annex II3.5 Products and Services offered by NIBLNIBL has been able to maintain its image of being the technology leader in thebanking sector by adopting new technologies from the very beginning of its operation.NIBL is never back in providing the best products and services to meet therequirement of its customers be that the existing ones or potential customers.Moreover, it has always been the innovator in introducing many of the products andservices. Customer‟s satisfaction is the paramount driver at NIBL.3.5.1 Products of NIBLBroadly speaking there are two types of products of a normal commercial banks. Theyare deposits and credit. Under these two categories NIBL provides various kinds ofproducts. They are categorized below:Deposits: Saving A/C There are different types of saving a/c offered by NIBL. The interest rate of different a/c varies which is presented in the following table: Deposit Interest Rates Saving Accounts % per annum Savings 4.50 - 6.00 18
  19. 19. Ezee Savings 5.00 Saving Bonanza 6.50Different saving a/c offered by NIBL are as described below:  Normal Saving AccountSaving Account is thie type of a/c which encourages the customer in saving. Thecustomers generally open this account for earning. In case of NIBL Seepadole branchthe A/C needs to have the minimum balance of Rs. 2500. The interest rate in thisaccount is 4.5 % per annum calculated each 3 month. The features of this a/c are asfollows:  Unlimited deposits and withdrawls  Free eBanking  VISA Electron Debit Card valid in Nepal and India  Any Branch Banking Service (ABBS)  Cheque book facility  Social Deposit AccountThe Social Deposit Account is NIBL‟s contribution to help achieve a better Nepal.The Social Deposit Account permits any INGO/NGO account holder to claim a sharein the profits of the account. NIBL invite all such organization to join hands with bankin this noble cause. Eligibility for opening this a/c are:  All INGO/NGO who is registered with Social Welfare Council (SWC)  INGO/NGO engaged in non-profitable social work or charitable activities.  Maintain an annual average balance of USD 10,000 or NPR equivalent.  E Zee Saving Account This is the type of saving account which provides 5% interest on daily balance. The minimum balance of this account is NPR 50,000.The feature of this account are:  Waiver of key deposit fee for lockers 19
  20. 20.  Special health package at National Reference Laboratory (NRL) Privilege Lounge Unlimited deposits and Withdrawals Free eBanking Free issuance of VISA Electron Debit Card valid in Nepal and India Free Any Branch Banking Service (ABBS) Accidental Insurance Cheque book facility Afnai Bachat KhataThis is a type of personal a/c which can be open with minimum balance of Rs1.This a/c has 4.5% interest on daily balance. The feature of this a/c are follows: Visa electron debit card @ NPR 250.00 per annum, valid in Nepal and India Free eBanking facility Free ABBS within Kathmandu valley No maintenance charge Keta Keti Bachat KhataThis is a a/c specially designed for the children. This a/c offer 4.5% inerest p.a. ondaily balance. This a/c doesnot required any minimum balance. The feature of thisa/c are as follows: Visa electron debit card @ NPR 250.00 per annum, valid in Nepal and India Discount Privilege card Free eBanking facility-pay school fees online ABBS facility No maintenance charge Free birthday cake for the account holder (minor) NPR 100 contribution from the bank as soon as the account is opened. Saving Bonanza 20
  21. 21. This is a saving a/c which require minimum balance of NPR 100,000 to open .Thisa/c offer interest of 6.5% p.a. on daily balance. The feature of this a/c are asfollows: Privilege Lounge Waiver of key deposit for lockers Free ABBS/ eBanking/ Visa Debit Card Unlimited deposits / withdrawals Free Utility Payment for Nepal Telecom Pre-Paid Recharge, Post Paid/PSTN Bills, Schools. ISPs, Cable networks, Insurance & Yeti Air eTicket Accidental Insurance Lotus Saving Minimum balance of NPR 1, 000/- Visa electron debit card @ NPR 250.00 per annum, valid in Nepal and India Free eBanking facility ABBS facility No maintenance charge EZee Student AccountThis is the a/c specially initiated for the student level clients. The a/c should havethe minimum balance of Rs. 2,000. This a/c has the interest rate of 4.5% perannum. The feature of this a/c are: Visa electron debit card @ NPR 250.00 per annum valid in Nepal and India Free eBanking facility ABBS facility 50% waiver on TC issuance 50% waiver on Draft Parivar Bachat KhataThis is a a/c designed for family. It require minimum balance of NPR 2500. Thefeature of this a/c are as follows: 21
  22. 22.  Minimum opening balance Rs 2500/-  Maturity period, Maximum of 3 years  Minimum monthly deposit Rs 500/-  Minors receive cakes on their birthday  Parents/guardian is to have an account with NIBL and from their account the money will be transferred to this account through Standing Instruction.  Personnel Accidental Insurance upto RS 50000/-  Free ABBS  eBanking service  Free Standing Instruction service Fixed Deposit A/CFixed Deposit A/C is also termed as Term Deposit. In fixed deposit account, thecustomers keep their amount for some fixed period of time. This A/C is maintainedby the customers who have cash in hand and is not interested in investing in anyother field. The interest in this A/C is 6.5-11% in general. However, it varies with thetime duration. Table 2: Interest Rate according to Maturity period Fixed Deposit Prime (%) Others (%) 1 month 6.00 5.50 3 months 6.50 6.00 6 months 7.00 6.50 1 year 7.50 7.00 2 years 8.00 7.50 Above 2 years 8.50 8.00 Special Deposit Account 10.00 9.00 NIBL Special Fixed Deposit 11.00 10.50 Special Bulk Fixed Deposit Account 11.50 11.00 Current A/C 22
  23. 23. Current A/C also termed as the Demand Deposit is maintained by the customers whorequires the money frequently. The balance in this A/C is non productive for the banksince, it cannot be utilized. So, the bank does not provide interest in this A/C. currenta/c in NIBL is mostly maintained by business enterprises. The minimum balance to bemaintained in this a/c is Rs.5, 000. This kind of a/c is maintained for the easiness inbusiness day to day transactions. The bank should pay the customers as per thedemand in this A/C till it has balanced in it.Credits:Corporate Loan Home Loan Vehicle Loan Education Loan Loan against gold and silver Bank overdraftThere are other types of products too which the bank provides. They are as follows: Visa debit cards Credit cards Traveler‟s checks3.5.2 Services of NIBLLike every other commercial bank NIBL do provide services keeping the customer‟sneeds and wants in mind. These are the existing services provided by NIBL: 365 Days Banking E-banking Any Branch Banking Service (ABBS) Tele Banking Services Statement request Cheque pad request 23
  24. 24. Remittance Trade finance Utility payment Lockers Automated Teller Machine (ATM)3.6 Branches of NIBLNIBL is never back in providing the best products and services to meet therequirement of its customers be that the existing ones or potential customers.Knowing the need of the market and the convenience of the customers it has openedseveral branches all across the country. The bank extended its operation to Seepadole,Birgunj, Banepa, Pulchowk and Jeetpur during the period of French partnership. Restsof the branches were established after the management was totally handed over toNepalese partners.NIBL branch address: See Annex III3.7 ATM of NIBLAt present the bank has sixty seven automated teller machine (ATM) locationsproviding services to its customers in different parts of the country. The customers ofNIBL can withdrawal minimum of Rs.100 in a transaction as well. In the same waycustomers can withdrawal maximum of Rs. 100000 per day. Services provided byNIBL through ATM are: Open 24 hours a day, 7 days a week, 365 days a year. Cash withdrawal Fast Cash Statement request Cheque pad request Mini Statement 24
  25. 25. Balance Inquiry Utility payment Pin Change Fund transferNIBL has 67 ATM in different part of the country which accepts VISA and VISAELECTRON cards.ATM location of NIBL: See Annex-IV3.8 Branch Profile3.8.1 Introduction to NIBL, SeepadoleNepal Investment Bank Ltd. extended its transaction by establishing its first branch atThimi in the year 1992. The bank extended its operation to Birgunj, Banepa,Pulchowk and Jeetpur during the period of French partnership. The other branches ofbank were established only after the total management of bank was handed over toNepalese partners. NIBL, Thimi continued its operation till the year 2002. But since itis not performing to its full capacity and felt very low market there, its was shifted toSeepadole, Bhaktapur in the year 2003 after the management was handed over to theNepalese team. So, NIBL, Seepadole was established in the year 2003.At present, it is performing to its maximum covering the total area of Bhaktapur.NIBL, Seepadole also follows all the norms of Nepal Investment Bank Ltd. NIBL,Seepadole is providing all the services to the people of the area. It provides the morefacility than other banks and it has extended its office hours. It operates from 9:30A.M. to 7:00 P.M. on Sunday to Thursday. On Friday it will be opened till 3:30 P.M.and on Saturday and other public holidays it is open from 10:00 A.M. to 1:00 P.M.The departments of Seepadole branch are as follows: 25
  26. 26. Table : Department in Seepadole BranchS.N Department Head1 Operation Department Bidur Thapa2 Cash Department Nina Dhaubanjar3 Retail Marketing Dept. Sachin Baidya4 Credit Dept. Sulav Dhoj Khand Thakuri5 Back Office Sushila Basel6 Customer Service Dept. Mandira Malla3.8.2 Target of NIBL, Seepadole To facilitate the business people of Bhaktapur by providing each possible banking facility. To provide continuous banking facility with 365 days service. To be the Best and the Number One Bank in Bhaktapur. To provide banking education to people of Bhaktapur and encourage saving. To update Bhaktapur with the banking technologies; ATM; Lockers etc. 26
  27. 27. CHAPTER FOURANALYSIS OF ACTIVITIES DONE AND PROBLEM SOLVEDAs an organization has several departments, NIBL has also various departments andthe activities are performed respectively according to their nature and function.During internship period internee got an opportunity to work on various department ofNIBL, but this report basically focuses on the Customer Service Department of NIBL.4.1 Customer Service DepartmentCustomer service is the front desk of any organization. It is the place where customersmake first contact with the bank. The image and reputation of the bank depend uponthe effective functioning of this department. Customer service is the process by whichan organization delivers its products and services to the customers. The staff deployedin CSD should have fair knowledge of banking so that they may be able to answer anyquestions raised by the customers. Attracting the potential customers and retainingthe existing customers are intended by CSD. Hence, all the activities of CSD aredirected towards customer satisfactionSuperior customer service is the service that exceeds the expectation of the customerand will make the business stand out from competitors. To be effective and efficient, 27
  28. 28. customer service must be consistently good in every part of the organization. In orderto build superior customer service into your business, you need to develop a businessvision that reflects your commitment to good customer service and let your customerknow about it by incorporating customer service strategies into your business andmarketing plan.One thing that is to be kept in mind is the finding new customer is much moreexpensive than retaining existing one. Customer service is more than just keepingcustomer happy. But it is about revenue, because a lost customer means loss ofrevenue and incurred expenses in making new customer and unhappy customer candamage the image and reputation of the business as a whole.4.2 Responsibilities of CSD of NIBL Customer reception and attending to their needs. Disseminating information related to various banking products and services that are available to satisfy needs of customers. Manage the various forms and vouchers such as different new account opening forms, closing forms, scheme change forms etc. Telephone Handling Maintaining the record of total number of the cheque requisition issued by the customers and preparing the cheque book. Making the photocopy of all necessary identification, documents as per the type of the account being open and verify with the original one. Providing the bank statement to the customers to see their transactions being taken place. 4.3 Major functions to be performed in CSD: As described, the CSD is responsible to provide detailed information about the product and services of the bank to meet customer need and to make banking more convenient. The staff in the CSD must be capable enough to cope with every 28
  29. 29. environment and at the same time needs to have good communication and interpersonal skills to build a good public relation. The major activities performed in the CSD are shown below: Deposit Product Counseling Customer Credit Counseling Services Counseling Account Opening Account Major Operations Functions Account Closing Account Statement Cheque Distribution Book Activities Distribution ATM Distribution Fig 2: Chart showing major function of CSD4.3.1 Customer counseling and handlingThis is one of the most important functions of customer service department. Theefficiency of the customer of any organization is the outcome of the quality of thecustomer handling and counseling that it delivers. This department is concerned withcounseling with the customers that can be both new or regular clients concerning theirqueries and confusions about the product or services provided by the banks to thecustomers. 29
  30. 30. 4.3.1.a Product counselingThis department is responsible for providing the detailed information to its customersregarding the prevailing products as well as inform the products going to be launchedin a days come. The products that are provided in the Seepadole branch are dividedinto two main headings. They are: A) Deposits Providing information regarding deposits is one of the ways of counseling the customers. Moreover, handling the customers with care is also equally important. There are various kinds of product provided by Seepadole branch. Various kinds of deposit facility available at Seepadole branch are as follows: 1. Saving account E-zee saving E-zee students Pariwar bachat Normal savings Lotus savings Afnai bachat khata Keta keti bachat khata Saving bonanza 2. Fixed account 3. Current account 4. Call deposit B) Credits A contractual agreement which a borrower receives something of value now and agrees to repay the lenders at some later date. When consumers purchase something using a credit card, they are buying on credit(receiving the item at that time, and paying back the credit card company month by month). Any time when an individual finances something with a loan (such as an automobile or a house), they are using credit in that situation as well. Also credit refers to the borrowing capacity of an individual of company. The various loan provided by the seepadole branch are: 30
  31. 31. Home Loan Vehicle Loan Bank overdraft4.3.1.b Service counselingThe Seepadole branch provides various kinds of services. So giving information to thecustomer about the services is from the customer service department only.Various forms of services provided by the Seepadole branch are listed below: 365 Days Banking E-banking Any Branch Banking Service (ABBS) Tele Banking Services Statement request Cheque pad request Remittance Trade finance Utility payment Lockers Automated Teller Machine (ATM) College and school payment Evening counter4.3.2 Accounts operationThe second function of CSD as mentioned in the figure above is accounts operation.In the accounts operation mainly two major functions are done. They are:4.3.2.a Accounts opening 31
  32. 32. Accounts opening simply refer to open account by any individual, or by anycompany. There are 15 to 20 accounts opening per day in Seepadole branch. Therange may be increased as per duration of schemes provided.Process of opening new accountThe process followed by Seepadole branch to open an account is listed below: 1. The customer is provided an account opening form to fill up. 2. The customer must bring the copy of their citizenship, photos and should have an introducer. 3. After the form is filled, given to the CSD department. 4. The staffs of CSD make the entry of the account holder in the system used i.e. Finacle. 5. After the entering it is verified by the head of CSD department, the account is assign to the account holder. 6. Then the account holder is asked to deposit the money as per the type of account he/she has opened. 7. At last after he/she deposit the money in their account the holder is then the member of the bank.Only by the mentioning the steps may not be understandable to every customer orothers. So by the following figure the process of account opening can be more clearlyunderstood to everyone.The diagrammatic presentation of the account opening process is figured below: 32
  33. 33. New Customer Fill Application Form Provides to Staffs of CSD Reject department Makes No Head of CSD Verified System (Finacle) department by Yes AcceptOpen a new account 33
  34. 34. Fig 3: Diagrammatic presentation of account opening process at NIBL (Seepadole Branch)Document required while opening an accountAs we know there are different types of account provided to customer by NIBL. So asper the types of account the document is needed. The document required to opendifferent types of account is mentioned below: A. Individual A/C 1. Personal NPR Account (For Nepalese Citizen) Certified True copy of Identification Document viz Citizenship, Passport, Driving License, NG/N Official IDs Two Photographs of Account Holder. Discharge relating to instruction by fax. Introduction by existing account holder. 2. Joint NPR Account (For Nepalese Citizen) Certified True copy of Identification Document viz Citizenship, Passport, Driving License, NG/N Official IDs Two Photographs of Account Holder. Discharge relating to instruction by fax. Introduction by existing account holder. 3. Personal NPR Account (For Indian Citizen) Certified True copy of Identification Document viz Citizenship, Passport or Registration Certificate from Indian Embassy. Two Photographs of Account Holder. Discharge relating to instruction by fax. Introduction by existing account holder. 4. Personal NPR and FC Account (For Foreign National) 34
  35. 35. Certified True copy of Passport Certified True copy of Valid Visa other than Tourist Visa and Entry Stamp. Two Photographs of Account Holder. Discharge relating to instruction by fax. Introduction by existing account holder.5. Joint NPR Account (For Foreign National) Certified True copy of Passport Certified True copy of Valid Visa other than Tourist Visa and Entry Stamp Two Photographs of Account Holder. Discharge relating to instruction by fax. Introduction by existing account holder.B. Business A/C1. NPR Account of Company (Registered in Nepal) Certified true copy of renewed Company Registration Certificate. Certified true copy of renewed Income Tax or VAT Registration Certificate. Certified true copy of Memorandum and Articles. Certified true copy of board resolution for opening and operation of account. Certified list of present Board of Directors. Copy of Certificate of Commencement of Business, in case of Public Ltd. Company. Request Letter to open the A/C. Discharge relating to instruction by fax. Certified True copy of Identification Document viz Citizenship, Passport, Driving License, NG/N Official IDs of Account Operators. Two Photographs each, of Account Operators. Introduction by existing account holder.2. Account of Clubs, Societies and Associations (NPR) Certified true copy of Registration Certificate. Certified true copy of by-laws. 35
  36. 36. Copy of resolutions to open and operate the account. Request Letter to open the A/C. List of office bearers. Affiliation Certificate with the social welfare council or other council concerned. Discharge relating to instruction by fax. Certified True copy of Identification Document viz Citizenship, Passport, Driving License, NG/N Official IDs of Account Operators. Two Photographs each, of Account Operators. Introduction by existing account holder.3. Proprietorship Account (NPR) Certified true copy of renewed Registration Certificate. Certified true copy of renewed Income Tax or VAT Registration Certificate. Request Letter to open the A/C. Discharge relating to instruction by fax. Certified True copy of Identification Document viz Citizenship, Passport, Driving License, NG/N Official ID of Proprietor. Two Photographs of Account holder. Power of Attorney, If Yes Power of Attorney form duly filled up and signed. Certified True copy of Identification Document viz Citizenship, Passport, Driving License, NG/N Official ID of Power of Attorney Holder Two Photographs of Power of Attorney Holder Introduction by existing account holder.4. Account of Partnership (NPR) Certified true copy of renewed Registration Certificate. Certified true copy of renewed Income Tax or VAT Registration Certificate. Certified true copy of Partnership deed (agreement). Request Letter to open the A/C signed by all partners mentioning opening and operation of account. Discharge relating to instruction by fax. 36
  37. 37. Certified True copy of Identification Document viz Citizenship, Passport, Driving License, NG/N Official ID of Account Operators. Two Photographs each, of Account Operators. Introduction by existing account holder.4.3.2.b Account Closing:Account closing is the important task to be done under account operation. As theaccount is opened, it is being closed also due to various reasons. But the maximumreason customer close their account was going outside of the country for longduration. The charge for account closing within the six months opening is Rs. 1000whereas Rs. 500 is charged after six months.Procedure to close the account: 1. The customer is ask the reasons for closing the account and tries to convince not to close by explaining the benefits of the account and the charges taken for closing the account. 2. If the customer willing to close the account must fill up the account closing form specifying the reason. 3. After submission of the form to CSD it is confirmed from various department that the customer is not enjoying any sort of facility from the bank at present. 4. The client is then asked to return all his account related belonging like ATM card and the cheque book. 5. Then finally the account of the applicant is closed with certain charges.Points to ensure while closing the account: Account closing request has been signed by the authorized signatory. Any due to/from the customer has been set off. Unused cheque leaves and ATM card are received from the customers and shredded. Reason for account closing is received. 37
  38. 38. To the extent possible, authorized signatory should be asked to visit the bank in personal.Instead of closing the account, a customer can also shift his/her account. NIBL hasprovision of shifting between different types of saving account. The customers canchange the scheme from lower minimum balance to higher minimum balance accountbut if they want to change the scheme from higher minimum balance to lowerminimum balance then certain charge should be given to bank. The charge of schemechange from higher minimum balance to lower minimum balance is lower than that ofclosing the account i.e. Rs 300.4.3.3 Distribution activities:Most over there is staffs over the bank to distribute the cards or any other to thecustomers. But if there is intern then the interns do the work. Intern distributes thevarious requested documents and services to the clients. It reflects the genuineoperational efficiency of the customer service department. Various documents thatcan get from this department on request are:4.3.3.a Account statementAccount statement refers to checking the status of customers account. Everydayaround numerous customers come for the request for account statement to know theirstatus of the account. The bank provides the statement only to the account holder afterthey fill up the form and submitted to CSD. The care and the secrecy of the customeris always kept in mind while giving the account statement. After the statement isprovided the record is kept in the statement issuing book in CSD.4.3.3.b Cheque book distributionClients, holding the minimum balance of Rs. 2500 can only issue the cheque book inthe Seepadole branch. Everyday customers requesting for the cheque book visits thebank. The client has to fill up the cheque request slip available in CSD if he/ she isrequesting for the first time otherwise the cheque request slip attached in the previouscheque book should be fill up. If cheque request slip is lost then client has to pay Rs.300 charge for taking cheque book. The collection period of the cheque book from 38
  39. 39. CSD is 90 days. If client do not collect the cheque book within 90 days then Rs. 250charges is taken by the bank. Every day the concerned information regarding thedistribution of cheque book is recorded in the cheque issuing book maintained in theCSD.4.3.3.b ATM cardsExcept for the fixed and call deposit the customer holding other account is providedwith an ATM card. They can use this card in various ATM counters all over thecountry to withdraw cash and even for other activities like balance inquiry, pinchange, NTC prepaid recharge etc. While issuing ATM card the concerned personmust come to receive it and his/her signature is verified by the CSD staff. Afterissuing card the record must be maintained in ATM issue book.4.4 Other activities done in CSD of NIBL Seepadole branch4.4.1 Handling Telephone CallsCSD department is one of the busy departments of the bank. Telephone calls neverstop ringing, as the responsible staff those calls has to be received and dealt accordingto its necessity. Important calls are to be passed to other department personals and restshould be handled by self by answering those calls and providing them solution.4.4.2 Producing balance statementBalance statement shows complete transaction of a customer of deposits, withdrawalsand final balance. These are confidential information so statements are provided to theaccount holders only, in case of any organizations letter mentioning about providingbalance statement along with company‟s stamp are must. Customers can produce theirbalance statements from any branches of NIBL.4.4.3 Recording Cheqe book issue, debit card issue 39
  40. 40. In bank there are various books maintained which may be related to cheque bookissue, debit card issue, for birthday cake etc. These books are filled up by intern forfuture reference of the activities.4.4.4 Handling Photocopy machineTo open different a/c photocopy of citizenship are required and sometime to issuecheque book also id‟s photocopy may be needed. So, for that intern are send to dophotocopy of necessary document.4.4.5 Preparation of ChequesCheques are just like paper cash. Customer who has finished cheque books can askfor another by filling up the slip which is inside the cheque book. Those are providedwithin few time period.4.4.6 Providing Information to the CustomersCSD aims to help the customer in every possible way, by listening to their grievances,providing information on Account Balances, issuing ATM cards, helping customerprepare demand draft, etc. Thus in a sense, Customer Service, is an information deskprovided to the customers.4.4.7 Fill up the cash/cheque deposit voucherIt is not necessary that all customer of bank are educated. Many uneducated peopleare also the customer of bank who doesn‟t know to fill up the cash/cheque voucher.So to fill up that voucher they search for intern service.4.4.8 Issue of Debit cardFor getting new debit card customer has to fill up a form and has to pay Rs 250. Afterariving the debit card from card department of NIBL, CSD issue it to the concerncustomer after verifying properly.4.4.8.1 Responsibilities Assigned and Discharged in Card Processing: 40
  41. 41. Creating a card and making it available to customers consisted of a stepwise process.The internee got an opportunity to observe each step thoroughly and take activeparticipation in those steps. The different responsibilities that the intern hadundertaken during the internship at the card department are as follows: i) Receiving, Recording and filing Application forms of debit cardThe account holders who want to have the debit card fill up the application form inCSD. For the recording of these forms Finacle is used by the staff. After that the datainput to Finacle are verified by concern authority. These forms are send to cardcenter. ii) ScanningScanning is the only job which is not done by the staffs but done by interns. Scanningof the photographs and signature in the form is necessary since these are to beembossed in the Debit card. While providing the card, verification is done by lookingat the photo and the signature in the card. iii) Providing cards and pin code to customersThe renewed cards are distributed from the card center. The intern search the card inthe boxes as ordered by senior as per the name of the customer‟s name and provide itto them with pin code and activating card. 41
  42. 42. CHAPTER FIVE CONCLUSION AND LESSON LEARNT5.1 ConclusionEven though Nepal is one of the least developed countries in the world, bankingbusiness is rapidly developing. Banking sector plays an important role incommencement and development of industry. Therefore there is growing need for thedevelopment of the financial institutions in the country which may be fulfilled bybanks. Nepalese financial system, basically banking business, has broadened innumber and diversified in modern financial instrumentNIBL has customized its services according to the needs and wants of the customers.Majority of the customers are satisfied with the services provided by NIBL. Themajor reason behind it was cooperative and responsive staff.From above analysis it is clear that NIBL is one of the well established and leadingcommercial bank of Nepal which aims to serve its valued customers through qualityand advancement of its services throughout the nation. The bank is widely providingits financial services through largely extended network. During internship period, Igot an opportunity to gain an in depth knowledge of the banking sector and scrutinizeits various aspects. Internship favored me to get the practical acquaintance of the bankand its overall operation system. I observed the functional activities of CSD andunderstood the corporate culture. Prior to internship, my knowledge was limitedwithin the books. At NIBL I was fully guided by all the staff in acquiring the practicalknowledge. It not only provided me the experience of functional activities but also tolet me know about the informal organizational relationships. The internship addedsense of responsibility to me while performing any task. The experience of internshipwas incredible which boosted my confidence level and enhanced my inter-personalcommunication skills. It developed interaction skills and shaped up my personalitytoo. 42
  43. 43. Therefore, I am very much pleased to conclude that NIBL is one of the best bankswith friendly environment and excellent customer service.5.2 LESSONS LEARNTThe duration of my internship lasted for around two months and during the course ofthe internship there were various lessons that I was able to learn. This internship was agreat opportunity for me to face real-life work scenarios after four years in theclassroom; and it must be said that it was a great learning experience for me. Some ofthe Lessons I learnt during my time as an intern at Nepal Investment Bank Limitedcould be summarized as follows: Basic activities and operations of CSD and its role in overall functioning of a commercial bank Using various office equipments like photo copy machine, scanner, stapler, printer, cheque writer etc. The various procedures involved in the opening and closing of the different accounts. Developing inter-personal communication skills Procedures of filing and indexing of different document. Authority and responsibility relationship among the various managerial and subordinate level in the hierarchy of the commercial banks. Importance of the time management and the need of the communication skills are very much needed. Activities related in issuing cheque, issuing ATM cards, phone handling e.t.c. was learnt Readiness to work and showing and „never say no‟ attitude are the keys towards success. One should not only know to attract a customer but also should be able to retain them. Gained basic knowledge on operating Finacle software of NIBL. 43

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