Internship report (nrb)

i
AN
INTERNSHIP REPORT
ON
NEPAL RASTRA BANK
PAWAN KAWAN
ROLL NUMBER:
P.U. REGISTRATION NUMBER:
INTERNSHIP REPORT SUBMITTED TO
UNIGLOBE COLLEGE
(POKHARA UNIVERSITY AFFILIATED)
SUBMITTED FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION (MBA-FINANCE)
KATHMANDU
15th April 2014

ii
INFORMATION SHEET
Name of the Company : Nepal Rastra Bank
Address of the Company : Baluwatar, Kathmandu
Phone Number of the Company : 01 4410158
Data of Internship Commencement : September 23, 2013
Date of Internship Completion : December 20, 2013
Name of the Industry Guide : Mr. Bilash Chandra Rai
Designation of the Industry Guide : Assistant Director
Student’s Name : Pawan Kawan
Student’s e-mail ID : pawankawan@gmail.com

iii
BONAFIDE CERTIFICATE
Certified that this project report An Internship Report On Nepal Rastra Bank
is the bona-fide work of Pawan Kawan Who carried out the internship work under
my supervision. This report is forwarded for examination.
Prof. Dr. Radhe Shyam Pradhan Mr. Dipkar Thapa
Academic Director MBA Program Director
Date:

iv
DECLARATION
This Internship Report entitled "Internship Report on Nepal Rastra Bank,
Baluwatar” which is submitted by me in partial fulfillment of the requirement for the
award of MBA degree of Pokhara University Comprises only my original work and
due acknowledgement have been made to materials used in the report.
____________________
Pawan Kawan
Date: 15th April, 2014

v
ACKNOWLEDGEMENT
This report is the result of continuous effort made and extended support of many
people. The preparation of this report needed a lot of effort and suggestions of many
people in order to get to its complete form. Firstly I would like to thank Pokhara
University for designing a platform where we can gain not only theoretical knowledge
but also practical knowledge.
I would like to express my intense gratitude to our Academic DirectorProf. Dr. Radhe
Shyam Pradhan for providing me his valuable guidance and suggestions throughout
the internship period. This study would not have seen light of the day without their
constructive and consistence guidance.
I would like to thank Mr. Kishor Kumar Dhakal, Deputy Director, Mr. Bilash
Chandra Rai, Assistant Director for their valuable support, inspiration and
cooperation. In the same way I would also like to thank Mr Bijaya Kumar Shrestha,
Deputy Director, Mr. Aasta Bahadur Shrestha, Assistant for their keen cooperation.
Finally, I would like to pay heartwarming thanks to my family and my dear friends for
their valuable support and assistance, without their support this report would not be
possible. I have tried my best to design a complete application that fulfill all the
requirements. Though I am not a professional or experienced in this field but I had
tried my level best to make this project according to the internship guidelines.
Sincerely,
Pawan Kawan

vi
ABBREVIATIONS
ACU : Asian Clearing Union
BFIs : Bank and Financial Intuitions
BOD : Board of Directors
FMD : Financial Management Department
LOLR : Lender of Last Resort
NRB : Nepal Rastra Bank
SLF : Standing Liquid Facility
SOA : Service Oriented Architecture
STP : Straight Through Preocessing
T-Bills : Treasury Bills
& : And
KBO : Kathmandu Banking Office
CMD : Currency Management Department
BRT : Biratnagar
JNP : Janakpur
BRG : Birgunj
PKR : Pokhara
SID : Siddharthanagar
NEP : Nepalgunj
DHN : Dhangadi

vii
Table of Contents
INFORMATION SHEET........................................................................................................i
BONAFIDE CERTIFICATE....................................................................................................iii
DECLARATION .................................................................................................................iv
ACKNOWLEDGEMENT.......................................................................................................v
ABBREVIATIONS ..............................................................................................................vi
LIST OF TABLE..................................................................................................................ix
LIST OF FIGURE.................................................................................................................x
CHAPTER I ORGANIZATIONAL PROFILE...............................................................................1
1.1 Description of Organization......................................................................................1
1.1.1 Organization’sVision, Missions, Objectives and Functions ......................................3
1.1.2 Major Markets and Customers ..............................................................................4
1.1.3 Products and Services...........................................................................................6
1.1.4 Organization Design and Structure ........................................................................9
1.1.5 Financial Structure.............................................................................................. 13
1.1.5.1 Statement of Balance Sheet.................................................................... 13
1.1.5.2 Income Statement................................................................................. 16
1.1.5.3 Statement of changes in Equity.............................................................. 18
1.1.6 Organizational Performance................................................................................ 18
CHAPTER II JOB PROFILE AND ACTIVITIES PERFORMED ..................................................... 20
2.1 Activities Performedin the Organization.................................................................20
2.2 Steps of Reconciliation........................................................................................... 28
2.3 Problem Solved.....................................................................................................32
2.4 Intern’s Key Observation........................................................................................ 33
2.5 Strength, Weakness, Opportunity and Threat (SWOT) Analysis ................................ 33
CHAPTER III LESSON LEARNT AND FEEDBACK....................................................................36
3.1 Key Skills and Attitudes Learnt ............................................................................... 36
3.2 Feedback to Organization ...................................................................................... 38
3.3 Feedback to College/University.............................................................................. 39
REFERENCES................................................................................................................... 41
ANNEX I: List of Banks and Financial Institutions............................................................... 43
ANNEX II: BALANCE SHEET AS 2066/67 ............................................................................ 53
ANNEX III: BALANCE SHEET AS 2066/67............................................................................ 54
ANNEX IV: STATEMENT OF CHANGES IN EQUITY AS 2066/67............................................. 55

viii
ANNEX V: PAY ORDER.....................................................................................................56
ANNEX VI: OLD GENERAL LEDGER.................................................................................... 57
ANNEX VII: NEW GENERAL LEDGER.................................................................................. 58
ANNEX VIII: MERGER OF BANK AND FINANCIAL INSTITUTIONS (BFIs) .................................59
ANNEX IX: OWNERSHIP STRUCTURE OF GOVERNMENT SECURITIES...................................60
ANNEX X: SOME MEMORIES AT NEPAL RASTRA BANK....................................................... 61

ix
LIST OF TABLE
Details Page No.
Table 1 List of Governors............................................................................................2
Table 2 List of Banks and Financial Institutions ......................................................5
Table 3 Board of Directors..........................................................................................9
Table 4 Management Committee .............................................................................10
Table 5 Audit Committee..........................................................................................11
Table 6 Statement of Financial Position ..................................................................14
Table 7 Statement of Income and Expenditure .......................................................16
Table 8 Statement of changes in Equity...................................................................18
Table 9 Duration of Internship.................................................................................20
Table 10 Old General Account Code .......................................................................26
Table 11 New Code for General Ledger Posting.....................................................26

x
LIST OF FIGURE
Details Page No.
Figure 1 Growth of BFIs .............................................................................................6
Figure 2 Organizational structure of Nepal Rastra Bank......................................13
Figure 3 Sections in Financial Management Department (FMD) .........................21
Figure 4 Debit Items ..................................................................................................28
Figure 5 Credit Items.................................................................................................29
Figure 6 Account Movement.....................................................................................30

1
CHAPTER I ORGANIZATIONAL PROFILE
1.1 Description of Organization
A central bank is a public institution that manages a state's currency, money supply,
and interest rates. Central banks also usually oversee the commercial banking
system of their respective countries. The primary function of a central bank is to
manage the nation's money supply, through active duties such as managing interest
rates, setting the reserve requirement, and acting as a lender of last resort to
the banking sector during times of bank insolvency or financial crisis.
NRB, the central bank of Nepal, established in 1956 under the Nepal Rastra Bank Act
1955. The preamble of Nepal Rastra Bank Act 1955 is:
“Preamble: Whereas, it is expedient to establish a Nepal Rastra Bank to function as
the Central Bank to formulate necessary monetary and foreign exchange policies, to
maintain the stability of price, to consolidate balance of payment for sustainable
development of the economy of Nepal, and to develop a secure, healthy and efficient
system of payment; to appropriately regulate, inspect and supervise in order to
maintain the stability and healthy development of banking and financial system; and
for the enhancement of public credibility towards the entire banking and financial
system of the country.”
Nepal Rastra Bank (NRB), the Central Bank of Nepal, was established to discharge
the central responsibilities including guiding the development of the embryonic
domestic financial sector. Since inception, there has a significant growth in both the
number and the activities of the domestic financial institution.
It has seven branch offices located at Biratnagar, Janakpur, Birgunj, Pokhara,
Siddharthanagar, Nepalgunj and Dhangadi. It supervises the commercial banks in
Nepal and guides monetary policy. Nepal Rastra Bank also oversees foreign exchange
rates and the country’s foreign exchange reserve. NRB has power to control and
regulate these institutions, which has been authorized by the Nepal Rastra Bank Act,
2058. Nepal Rastra Bank (NRB) is non-profit organization fully subscribed by the
Nepal Government. Nepal Government has empowered the Nepal Rastra Bank (NRB)
by law to regulate, supervise and monitor the banking sector for better economic
environment. It plays a key role in Nepalese economic system, in which no other

2
organization is likely to substitute it. The Nepal Rastra Bank (NRB) gives direction
and regulation to the commercial banks, whenever needed for proper management of
banking sectors.NRB has been a member of Asian Clearing Union (ACU), Tehran
Iran and Alliance for Financial Inclusion.
History of Banking Sector in Nepal
The banking in Nepal was started only after the establishment of Nepal Bank Limited
in 1937. Nepal Bank Ltd. is the first modern bank of Nepal. It is taken as the
milestone ofmodern banking of the country. This was established on 30th Kartik, 1994
B.S (1937 A.D) until mid-1940’s only metallic coins were used as medium of
exchange. So the Government felt need of separate institution or body to issue
national currencies and promote financial organization in the country. Hence, the
Nepal Rastra Bank act 2012 was formulated, which was approved by Government.
Accordingly, the Nepal Rastra Bank was established in 2013 B.S as the central bank
of Nepal. Similarly, Nepal Industrial Development Bank was established to accelerate
industrial development in 1st Ashad 2016 B.S, which eventually turned into
Agriculture Development Bank in 7th Magh, 2024 B.S. In 10th Magh, 2022B.S a fully
government owned second commercial Rastria Banijya Bank was established.
For more than two decades, no more banks have been established in the country. After
declaring free economy and privatization policy, Government encourage the foreign
bank for joint venture in Nepal. As a result, Nepal Arab Bank Ltd. (NABIL) was
established in 2041 B.S. This is the first modern bank with latest banking technology.
Now 31 commercial banks have been opened in the country.
Since its establishment, NRB has been lead by fifteen proficient governors, Mr.
Himalayan Shumsher J. B. Rana being the first governor of NRB. Currently, Dr. Yuba
Raj Khatiwada is the governor of the bank. Following are the lists of governors of
NRB since its inception.
Table 1 List of Governors
S.N. Name of Governor Term of office
1. Mr. Himalaya Shumsher J.B. Rana April 26, 1956 – February 7, 1961
2. Mr. Laxmi Nath Gautam February 8, l961 – June 17, l965

3
3. Mr. Pradyuma Lal Rajbhandari June l8, l965 – August 13, l966
4. Dr. Bhekh Bahadur Thapa August 14, l966 – July 26, l967
5. Dr. Yadav Prasad Pant April 24, l968 – April 28, l973
6. Mr. Kul Shekhar Sharma April 29, l973 – December 12, l978
7. Mr. Kalyana Bikram Adhikary June 13, l979 – December 8, l984
8. Mr. Ganesh Bahadur Thapa March 25, l985 – May 22, l990
9. Mr. Hari Shankar Tripathi August 10, l990 – January 17, l995
10. Mr. Satyendra Pyara Shrestha January l8, l995 – January l7, 2000
11. Dr. Tilak Bahadur Rawal January l8, 2000 - January l7, 2005
12. Mr. Deependra Purush Dhakal August 29, 2000 – April 27, 2001
13. Mr. Bijaya Nath Bhattarai January 31, 2005 –January 30, 2010
14. Mr. Deependra Bahadur Kshetry January 15, 2009 – July 26, 2009
15. Dr. Yuba Raj Khatiwada March 22, 2010 – Present
1.1.1 Organization’s Vision, Missions, Objectives and Functions
Vision
To become “A modern, dynamic, credible and effective Central Bank”
Mission
To maintain macro-economic stability through sound and effective monetary, foreign
exchange and financial sector policies.
Objectives of the Bank
According to Nepal Rastra Bank Act 1955, the objectives of the NRB are as follows:-
a) To formulate necessary monetary and foreign exchange policies in order to
maintain the stability of price and balance of payment for sustainable
development of economy, and manage it.
b) To promote stability and liquidity required in banking and financial sector.

4
c) To develop a secure, healthy and efficient system of payment.
d) To regulate, inspect, supervise and monitor the banking and financial system
e) To promote entire banking and financial system of the Nepal and to enhance
its public credibility.
Functions, Duties and Powers of the Bank
In order to achieve the objectives, the functions, duties and powers of the NRB as per
Nepal Rastra Bank Act 1955 are as follows:
a) To issue bank notes and coins.
b) To formulate necessary monetary policies in order to maintain price stability
and to implement or cause to implement them.
c) To formulate foreign exchange policies and to implement or cause to
implement them.
d) To determine the system of foreign exchange rate.
e) To manage and operate foreign exchange reserve.
f) To issue license to commercial banks and financial institutions to carry on
banking and financial business and to regulate, inspect, supervise and monitor
such transactions.
g) To act as a banker, advisor and financial agent of
h) Government of Nepal.
i) To act as the banker of commercial banks and financial institutions and to
function as the lender of the last resort.
j) To establish and promote the system of payment, clearing and settlement and
to regulate these activities.
k) To implement or cause to implement any other necessary functions which the
Bank has to carry out in order to achieve the objectives of the Bank under this
Act.
1.1.2 Major Markets and Customers
The Nepal Rastra Bank (NRB) is the central bank of Nepal. It supervises the banks
and financial institutions (licensed by the Bank) in Nepal and guides monetary policy.
Nepal Rastra Bank also oversees foreign exchange rates and the country's foreign

5
exchange reserves and regulates the foreign exchange policy. The bank is engaged in
the promotion of financial inclusion policy within the nation, and is also a member of
the Alliance for Financial Inclusion. It made a Maya Declaration Commitment in
2013 to promote financial literacy, prepare a financial sector development strategy by
the end of 2014, and improve mobile money services. It is also a member of the Asian
Clearing Union. Nepal Rastra Bank serves as regulatory body of all BFIs in Nepal. It
also serves as government's bank. It also performs the economic activities of import
and export along with the maintenance of balance of payment is its major concern.
Following are the major market and customers of Nepal Rastra Bank:
1. Government of Nepal
2. Banks and Financial Institutions
3. Corporations or the firms
4. Investors
NRB is the supreme bank of the country, thus it provide services to Government of
Nepal, Banks and Financial Institutions, Corporations or the firms and Investors.
List of Banks and Financial Institutions
Table 2 List of Banks and Financial Institutions
As of Mid October, 2013 (NRB)
S.N. Financial Institutions Numbers
1 Commercial Banks 31
2 Development Banks 87
3 Finance Companies 59
4 Micro-finance Development Banks 35
5 Saving & Credit Cooperatives Limited
Banking Activities)
15
6 NGOs (Financial Intermediaries) 31

6
All the Bank or Financial institution are governed by Banks and Financial Institutions
Act, 2063 (2006). Hence Bank means a corporate body established to conduct
financial transactions mentioned in section 47(1). And Financial Institution means a
corporate body incorporated to carry on the transactions as referred to in Sub-section
(2), (3) or (4) of Section 47, and this term also includes a development bank, finance
company or micro-finance development bank.
Growth of Bank and Financial Institutions (BFIs)
Banking Industry, normally, occupies a bigger chunk in the financial system. Same is
the case in Nepal. With the liberalized policies taken since 1980s, banking industry
has been growing in a rapid pace. Chart 1.1 below shows how the number of Bank
and Financial Institutions (BFIs), of class 'A', 'B', 'C', and 'D', increased in Nepalese
banking industry in the last two and half decades. Nepalese Banking Industry saw the
highest growth in the decade of 2000-2010. On the one hand, it increased people
awareness and banking habit as well as made them more demanding and choosy.
Figure 1 Growth of BFIs
(Source: Bank and Financial Institutions Regulation Department, NRB)
1.1.3 Products and Services
Being the Central Bank of Nepal, Nepal Rastra Bank provides various services to the
government, banks and financial institutions, and to its various customers. NRB
doesn’t perform the functions like other banks but it performs regulating and
supervising functions. Hence its products and services are related to these functions.
Central banks usually have supervisory powers, intended to prevent bank runs and to

7
reduce the risk that commercial banks and other financial institutions engage in
reckless or fraudulent behavior. Some of the basic products of Public Debt
Management Department are listed as:
1. Treasury Bills (T-Bills)
2. Repo and Reverse Repo
3. Outright Purchase/Sell
4. Bank Rate
5. Standing Liquid Facility (SLF)
6. Treasury Bonds like Development Bonds, Special Bonds, National Saving
Bonds, and Citizen Saving Bonds.
7. Loans against Treasury Securities
The functions/services provided by NRB are as follows:
1. Bank of Note Issue:
The central bank has the sole monopoly of note issue in almost every country.
The currency notes printed and issued by the central bank become unlimited legal
tender throughout the country.
2. Banker, Agent and Adviser to the Government:
The central bank functions as a banker, agent and financial adviser to the
government,
(a) As a banker to government, the central bank performs the same functions for the
government as a commercial bank performs for its customers. It maintains the
accounts of the central as well as state government; it receives deposits from
government; it makes short-term advances to the government; it collects cheques and
drafts deposited in the government account; it provides foreign exchange resources to
the government for repaying external debt or purchasing foreign goods or making
other payments,
(b) As an Agent to the government, the central bank collects taxes and other payments
on behalf of the government. It raises loans from the public and thus manages public

8
debt. It also represents the government in the international financial institutions and
conferences,
(c) As a financial adviser to the lent, the central bank gives advise to the government
on economic, monetary, financial and fiscal matters such as deficit financing,
devaluation, trade policy, foreign exchange policy, etc.
3. Bankers' Bank:
The central bank is the apex body to control the BFIs. . It maintains the account of
different government organizations along with the accounts of different financial
institutions, and market makers. The NRB gives direction and regulation to the
commercial banks, whenever needed for proper management of banking sectors. The
central bank acts as a friend, philosopher and guide to the commercial banks
4. Lender of Last Resort:
As the supreme bank of the country and the bankers' bank, the central bank acts as the
lender of the last resort. In other words, in case the commercial banks are not able to
meet their financial requirements from other sources, they can, as a last resort,
approach the central bank for financial accommodation. The central bank provides
financial accommodation to the commercial banks by rediscounting their eligible
securities and exchange bills.
5. Clearing Agent:
As the custodian of the cash reserves of the commercial banks, the central bank acts
as the clearing house for these banks. Since all banks have their accounts with the
central bank, the central bank can easily settle the claims of various banks against
each other with least use of cash.
6. Credit Control:
These days, the most important function of a central bank is to control the volume of
credit for bringing about stability in the general price level and accomplishing various
other socio-economic objectives. The significance of the function has increased so

9
much that for property understanding. The central bank has acquired the rights and
powers of controlling the entire banking.
7. Collection of Data:
Central banks in almost all the countries collects statistical data regularly relating to
economic aspects of money, credit, foreign exchange, banking, economic growth etc.
from time to time, committees and commission are appointing for studying various
aspects relating to the aforesaid problems.
1.1.4 Organization Design and Structure
As per section 14 of Nepal Rastra Bank Act, 2002, the Board of Nepal Rastra Bank
(NRB) comprises of seven members: four ex officio members - the Governor (who is
the Chairman), the Secretary, Ministry of Finance, two Deputy Governors, and three
other Directors, who are appointed from amongst the persons renowned in the field of
Economics, Monetary, Banking, Finance and Commercial Laws.
The Governor, Deputy Governors and other Directors are appointed by Government
of Nepal, Council of Ministers for term of five years. Government may, reappoint the
retiring Governor for another one term and the retiring other Directors for any term, if
it is deemed necessary.
The Board of Directors, chaired by the Governor, is the apex body of policy making
and the Governor also discharges his duty as the chief executive of the Bank. The
BOD of Nepal Rastra Bank is as follows:
Table 3 Board of Directors
S.N Members Name Position
1. Governor Dr. Yuba Raj Khatiwada Chairperson
2. Secretary, Ministry of Finance Mr. Shanta Raj Subedi Member
3. Two Deputy Governors 1. Mr. Gopal Prasad
Kaphle
2. Mr. Maha Prasad
Adhikari
Member
4. Three Directors appointed by 1. Dr. Sri Ram Poudyal Member

10
theGovernment of Nepal from
amongst the persons renowned
in the fields of Economic,
Monitory, Banking, Finance
and Commercial Law
2. Dr. Ramhari Aryal
3. Mr. Bal Krishna Man
Singh
Source: www.nrb.org.np/aboutus/bod.php, 2013
The organization structure of the bank is based on formal hierarchies and the works
are procedure-oriented like any other government institutions. The Audit committee is
directly under the BOD while the two deputy governors are assigned with two groups
each:
a) The monetary and foreign exchange policy group and banking management
group
b) Regulation and supervision group and support service group respectively.
The other departments as internal audit and the legal departments are directly under
the governor.
Board Committees
Board committees are comprises of:
Table 4 Management Committee
Governor Chairman
Deputy Governor Member
Deputy Governor Member
Senior Officer (Designated by the Governor) Member Secretary
There shall be a Management Committee, to remain under the Board to be chaired by
the Governor in order to conduct the business of the Bank in a smooth manner. The
two Deputy Governors shall be other members of the Management Committee, and
one senior officer of the Bank designated by the Governor shall act as the member

11
secretary of the committee.The functions, duties and powers of the Management
Committee formedpursuant to sub-section (1)
Government of Nepal, the Council of Ministers shall appoint Governor on the basis of
the recommendation of the Recommendation Committee formed pursuant to sub-
section (2) and Government of Nepal, the Council of Ministers shall on the
recommendation of the Governor, appoint Deputy Governor. The Senior Officer is
designated by the Governor.
Table 5 Audit Committee
One of the Board Directors Convenor
Chief of Internal Audit Department of the Bank Member
One Senior Officer of the Bank designated by the Board Member
The audit committee consists of three members which includes one of the board
directors, chief of internal audit department of the bank and one senior officer of the
bank designated by the board.The Audit Committee shall, while submitting the report
and recommendations to the Board pursuant to clause (a) of sub-section (1), furnish
the information thereof to the Governor.
Regional Offices
NRB has its head office in the capital city, Kathmandu. In order to serve the whole
country, the bank has its regional offices in 5 development regions in major cities:
a) Biratnagar
b) Janakpur
c) Birgunj
d) Pokhara
e) Siddharthanagar
f) Nepalgunj
g) Dhangadhi

12
Departments of Nepal Rastra Bank
The present internal organization of the Bank consists of its Central Office in
Kathmandu with 19 departments, in addition to the offices of the Governor and the
two Deputy Governors. The departments of Nepal Rastra Bank are:
a) Office of the Governor
b) Human Resources Management Department
c) General Services Department
d) Financial Management Department
e) Research Department
f) Foreign Exchange Management Department
g) Internal Audit Department
h) Banks and Financial Institutions Regulation Department
i) Bank Supervision Department
j) Development Bank Supervision Department
k) Finance Company Supervision Department
l) Micro-Finance Promotion and Supervision Department
m) Information Technology Department
n) Bankers Training Center
o) Legal Division
p) Public Debt Management Department
q) Corporate Planning Department
r) Banking Office, Thapathali
s) Currency Management Department
Organization Structure of NRB
An organizational structure assists in defining authority and accountability,
relationships, activities and communicating channels. It assists in deciding
organizational relationship. It helps the employee to get clear job of their job
responsibilities and avoid overlapping of works by different department. The
organization structure of NRB are as follows:

13
Figure 2 Organizational structure of Nepal Rastra Bank
Source: www.nrb.org.np, 2013
1.1.5 Financial Structure
NRB is the apex body which supervises and controls all financial institutions. NRB is
regulatory body for other banks and financial institutions and act as central bank. It
maintains the account of different government organizations along with the accounts
of different is financial institutions, and market makers. It is fully owned by the
government of Nepal.
1.1.5.1 Statement of Balance Sheet
This report analyzed the position of various form of financial assets and liabilities of
foreign currency, financial assets and liabilities of local currency, other assets and

14
liabilities and equity of Nepal Rastra Bank. Total assets, liabilities and equity of
Nepal Rastra Bank for the year ended 2066/67 are presented in ANNEX II and III.
And statement of financial position as 2068/69 are as follows:
Table 6 Statement of Financial Position
Particular Note As on 31-3-2068 As on 31-3-2069
ASSETS
Foreign Currency Financial Assets
Cash and Bank Balance
IME Related Assets: Special Drawing
Right Holding
Investment
Other Receivables
Total Foreign Currency Assets
Local Currency Financial Assets
Cash in Hand
Investment in Government Securities
GON Overdraft
Investments in Financial and Other Institutions
Other Investments
Loans&Receivable and Refinance
Other Receivables
Sub-Total
Other Assets
Gold and Silver
Other Inventories
Property, Plant & Equipment
Intangible Assets
Assets Received in Grant
Project Assets
3
3a
4
5
6
7a,b
8
9
10
11a
11b
11c
12
16,337,109,975
6,730,704,535
0
203,545,377,189
448,199,792
227,061,391,491
373,0978,127
36,509,216,412
20,764,094,278
337,892,500
10,782,610,000
14,951,607,667
3,795,691,468
90,872,090,452
309,091,119
1,636,700,152
519,867,158
2,206,358
968,058
409,480,104
21,779,942,504
7,368,831,080
0
364,600,510,228
1,360,298,093
395,109,581,905
2,088,188,303
33,656,571,458
0
337,892,500
10,390,905,000
4,586,972,914
4464752096
55,525,282,271
292,612,967
1,859,346,980
540,424,208
150,094,134
722,599
369,041,001

15
Sub-Total
Total Local Currency Assets
Total Assets
LIABILITIES
Foreign Currency Financial Liabilities
Deposit From Banks and Other Agencies
IMF Related Liabilities
Other Liabilities
Total Foreign Currency Liabilities
Local Currency Financial Liabilities
IFM Related Deposit Liabilities
Deposit and Other Balances
Bills Payable
Staff Liabilities
Other Payable
Sub- Total
Other Liabilities
Currency in Circulation
Surplus Payable to GON
Sundry Liabilities
Project Liabilities
Sub-Total
Total Local Currency Liabilities
EQUITY
Share Capital
Reserves
Total Equity
Total Liabilities and Equity
13
14
15
16
16a
17
18
19
20
21
22
2,878,312,949
93,750,403,401
320,811,794,892
523,025,693
15,955,815,523
406,992,510
16,885,833,726
5,880,083,908
73,683,216,162
586,284,224
5,695,278,571
144,199,719
85,989,062,584
167,620,000,000
3,220,000,000
1,214,711,228
409,480,104
172,464,191,332
258,453,253,916
3,000,000,000
42,472,707,250
45,472,707,250
320,811,794,892
3,212,241,889
58,737,524,160
453,847,106,065
1,000,369,226
18,261,630,791
2,373,189
19,264,373,206
5,880,083,908
132,344,464,304
7,229,902,615
8,532,806,680
232,526,765
147,719,784,272
211,250,000,000
4,227,000,000
1,462,202,396
369,041,001
207,308,243,397
355,028,027,669
3,000,000,000
76,554,705,190
79,554,705,190
453,847,106,065

16
It is clearly seen that financial assets of foreign currency is in increasing trend in the
fiscal year 2068/69 and financial assets of local currency is in decreasing trend in the
fiscal year 2068/69 and financial liabilities of foreign currency and local currency is
in the increasing trend in the fiscal year 2068/69. The equity which includes share
capital and reserve is also in increasing trend in the fiscal year 2068/69.The total
assets in the fiscal year 2068 and 2069 is 320,811,794,892 and 453,847,106,065 and
total liabilities and equity in the fiscal year 2068 and 2069 is 320,811,794,892 and
453,847,106,065.
1.1.5.2 Income Statement
This report analyzes the income from foreign currency financial assets and liabilities
and expenses on foreign currency financial assets and liabilities of Nepal Rastra Bank.
From that we get total net operating income. When we subtract general,
administration expenses & Provision from net operating income we get profit before
foreign exchange, gold & silver Revaluation and prior year adjustment. And from that
when we add gold & silver revaluation, foreign exchange and prior year adjustment
we get Net profit/(loss) for the year. The total profit or loss for the year 2068/69 is as
follows:
Table 7 Statement of Income and Expenditure
Particular Note As on 31-3-2068 As on 31-3-2069
OPERATING INCOME
Income from Foreign Currency Financial Assets
Interest Income
Commission Income
Sub-Total
Expenses for Foreign Currency Financial Liabilities
Interest Expenses
Agency and Service Charge
Sub-Total
Net Income from Foreign Currency(A)
Income from Local Currency Financial Assets
Interest Income
24
25
26
27
24
3,761,628,272
278,047,354
4,039,675,626
33,124,217
4,636,947
37,761,164
4,001,914,462
5,525,830,565
8,500,428,740
244,800,337
8,745,229,077
18,158,791
6,089,191
24,247,982
8,720,981,095
3,802,294,858

17
Commission Income
Sub-Total
Expenses on Local Currency Financial Liabilities
Interest Expenses
Agency and Service Charge
Sub-Total
Net income from Local Currency(B)
Total Net Operating Income(A+B)
General, Administration Expenses& Provision
Profit before Foreign Exchange, Gold&Silver
Revaluation Gain/(Loss) and prior year adjustment
Foreign Exchange Gain/(Loss) (Net)
Gold and Silver Revaluation Gain/(Loss) (Net)
Amount Transferred from Gold and Silver
Securities Revaluation
Other
Prior Year Adjustment
Net Profit/(Loss) for the year
25
26
27
29
31(i)
5,671,983
5,531,502,548
69,787,799
363,431,242
433,219,041
5,098,283,507
9,100,197,969
4,977,550,254
4,122,647,715
1,858,159,100
1,184,717,792
0
0
(18,579,822)
7,146,944,785
4,268,845
3,806,563,703
176,437,818
340,824,841
517,262,659
3,289,301,044
12,010,282,139
6,742,362,163
5,267,919,976
30,764,828,683
1,706,448,801
0
2,449,259
6,426,511
37,748,073,230
We can see that the net operating income is increasing trend in the fiscal year
2068/69. The profit before foreign exchange, gold & silver revaluation and prior year
adjustment is also in increasing trend in 2069. When we add foreign exchange, gold &
silver revaluation and prior year adjustment we get net profit/ (loss) for the year which
is also in increasing trend in the year 2069. The total profit for the year 2068 is
7,146,944,785 and in 2069 are 37,748,073,230.

18
1.1.5.3 Statement of changes in Equity
Table 8 Statement of changes in Equity
Particular Balance as at 31-
3-2068
Amount transferred
from/to profit
Interfund
transfer
Balance as at 31-
3-2069
Capital
General Reserve
Monetary Laibility Reserve
Exchange Equilisation Fund
Gold and Silver Equilisation
Grants Assets Reserve
Gramin Swabalam Kosh
Investment Revaluation Fund
Other Reserve Fund
Security Revaluation Fund
3,000,000,000
14,307,172,070
1,798,600,000
11,761,771,035
5,368,797,475
968,058
253,400,000
0
8,981,998,612
0
0
593,866,400
282,378,400
30,764,828,683
1,706,448,801
0
0
2,449,259
732,771,856
0
0
1591,165,306
0
0
(232,727,266)
(245,459)
0
0
(1358438040)
0
3,000,000,000
16,492,203,776
2,080,978,400
42,526,599,718
6,842,519,010
722,599
253,400,000
2,449,259
8,355,832,428
0
Total 45,472,707,250 34,082,243,399 (215,459) 79,554,705,190
The above table clearly shows that the total balance at 2068 is 45,472,707,250 and in
2069 are 79,554,705,190 which is in increasing trend because the year between 2068
and 2069 the interfund transfer amount of gold& silver equalization reserve, grant
assets reserve and other reserve fund is in negative which may get effect in balance at
2069. The statement of change in equity for 2066/67 is on ANNEX IV.
1.1.6 Organizational Performance
Nepal Rastra Bank is the central bank and the regulatory body for other banks and
financial institutions. It doesn’t have its core products and services to measure its
performance. Hence, performance of the organization can be reflected on the basis of
the other functions of this organization.
The other functions of Nepal Rastra Bank are:
a) Issuance of monitory policies
b) Issuance of notes

19
c) Controlling other financial institutions
d) Debt manager of the government
e) Economic advisory role to the government
f) Lender of the Last Resort (LOLR)
g) Foreign currency exchange
h) Enhance payment and clearing system
As envisaged by the Nepal Rastra Bank (NRB) Act, 2002, monetary policy has been
adopting the objectives of maintaining price and external sector stability, financial
stability and facilitating high and sustainable economic growth. This monetary policy
has been formulated on the basis of the analysis of currentmacroeconomic situation,
review of previous year's monetary policy, internal andexternal economic and
financial outlook and priorities of government budget for2013/14. In addition,
suggestions received from Nepal Bankers' Association,Development Bankers'
Association, Nepal Finance Company Association, MicroFinance Bankers'
Association, and industrial and commercial associations and other stakeholders are
also incorporated while formulating this monetary policy.
Nepal Rastra Bank Act, 2002 has placed NRB as an autonomous institution
empowered to regulate and supervise banks and financial institutions. As a regulator,
it has been continuously issuing various policies, guidelines and directives, to the
licensed institutions, in line with international best practices and norms. As a
supervisor, NRB supervises the activities of the BFIs based on the existing legal
framework and guiding policies. In order to strengthen the inspection and supervision
functions of the NRB, off-sitesupervision has been made more effective by timely
updating the informationreceived from BFIs. Likewise, in the process of on-site
inspection, priority has beengiven to examine the asset quality through conducting on-
site inspection of big borrowers' collateral and projects.To discharge the
responsibilities of supervisor, NRB has set four separate departments to look after the
supervision of each class of BFIs i.e. 'A', 'B', 'C' and 'D' class institutions - Bank
Supervision Department, Development Bank Supervision Department, Finance
Company Supervision Department and Micro Finance Promotion and Supervision
Department. These supervision departments basically monitor BFIs‟ compliance with
rules, regulations and directives.

20
CHAPTER II JOB PROFILE AND ACTIVITIES
PERFORMED
2.1 Activities Performed in the Organization
During the internship period, the internee was placed in the Financial Management
Department (FMD) of Nepal Rastra Bank (NRB) Central Office, Baluwatar,
Kathmandu. Internee has completed the twelve weeks of internship period and has
visited various departments and performs various activities in different Sections. In
these three months of Internship period, Internee was assigned the task of
Reconciliation Section and Pension Section of Financial Management Department
(FMD). Internee has perform the task like General Ledger, Pay order and Pension
Posting. Internee got opportunity to work in these sections for various weeks. It is
presented as follows:
Table 9 Duration of Internship
Internee got opportunity to work 9 weeks at Reconciliation Section and 3 weeks at
Pension Section. In this time durations Internee perform the General Ledger task for 3
weeks and Pay Order for 6 weeks at Reconciliation Section. The total durations of
Internship is 12 weeks at Nepal Rastra Bank.
There are various departments in NRB. One of them is FMD. There are different
sections at FMD which are presented as follows:
S.N Job Title Section weeks
1 General Ledger Reconciliation 3
2 Pay Order Reconciliation 6
3 Pension Pension 3
Total Durations 12

21
Figure 3 Sections in Financial Management Department (FMD)
1) Internal Administrative Section
This Section handles all the matters related to FMD. There are five seats for
Internship in the FMD and all of them are selected by this section.
2) Reconciliation Section
Reconciliation refers to the process of ensuring that two sets of records (usually the
balances of two accounts) are in agreement. Reconciliation is used to ensure that the
money leaving an account matches the actual money spent; this is done by making
sure the balances match at the end of a particular accounting period.
This section overlooks the reconciliation of amounts that means matching debit side
and credit side. If the debit side and credit side are equal then that is reconciled if not
Financial
Management
Department(FMD)
Internal
Administrative
Section
Reconciliation
section
Pension Section
Balance Sheet
Section
Salary Section
Retirement Fund
Section
Bill Section

22
then that is not reconciled. To ensure the reliability of the financial records,
reconciliations must, therefore, be performed for all Balance Sheet accounts on a
regular and ongoing basis. A robust reconciliation process improves the accuracy of
the financial reporting function and allows the Finance Department to publish
financial reports with confidence.
3) Pension Section
A pension is a contract for a fixed sum to be paid regularly to a person, typically
following retirement from service. This Section is created to handle all pension
related job. At present there are 2214 persons who take pension at Nepal Rastra Bank.
This section helps to provide pension to the deserved employees. At present, the retire
employees age above 70 are given 10% more pension and 20% more to aged above
80.
4) Balance Sheet Section
A balance sheet or statement of financial position is a summary of the financial
balances of organization. This section of FMD is one of the most crucial section
which has the responsibility to prepare balance sheet of NRB. This section is most
important section and Interns are not allowed to enter in this section because it covers
very serious information which should not leaked.
5) Salary Section
A salary is a form of periodic payment from an employer to an employee, which may
be specified in an employment contract. Salary is a fixed amount of money or
compensation paid to an employee by an employer in return for work performed. All
the staff in NRB takes salary and this section is responsible to record all the salary
paid and due. This section is created to handle the salary matters in NRB.
6) Retirement Fund Section
This section is specially created to manage the retirement funds at NRB. This Section
takes certain portion of salary for retirement funds.

23
7) Bill Section
There are two branches in bill section. They are Travel and Purchase. This section
keeps records of payments of travels of employees for office work. And this section
also keeps record of purchase of furniture, computers, spare parts, petrol etc.
Olympic Banking System
The Finance Department of Nepal Rastra Bank uses OLYPIC Banking Software to
carry out day to day financial activities from Baisakh 2070.The OLYMPIC Banking
System is one of the most comprehensive and modern solutions to support all aspects
of modern and sophisticated private banking. Internee also has opportunity to use the
software for reconciliation.
It is based on fully integrated, online and front to back system. It meets the
requirements of Private Banking and Wealth Management institutions across all
geographies. OLYMPIC Banking has wide application; it can be used for Retail
Banking, Corporate Banking and Central Bank.
Retail Banking
The OLYMPIC Banking System for Retail Banking is a fully integrated and modular
solution which addresses the day-to-day operational needs of retail and universal
banks, providing efficient and comprehensive support to their business requirements.
To help banks overcome challenges - such as intense competition, increasing client
expectations and lower margins – the OLYMPIC Banking System offers a unique
competitive advantage by improving profitability and extending client reach. Banks
provide their clients with the relevant information via a 360-degree single source view
into their positions, products and services: support from OLYMPIC Banking System
enables them to propose the right offerings at the right time and through the right
channel.
The OLYMPIC Banking System is a highly parameterisable solution which provides
a flexible response to an ever-changing environment. New products and processes can
be configured in a matter of minutes and implemented through multiple distribution
channels. With its service-oriented architecture (SOA) and Web services-based

24
model, it enables the easy integration of any third-party application: as a result the
bank can deliver a fully integrated business solution. Enabling Straight Through
Processing (STP) to reduce manual processes across the entire institution is one of the
critical objectives achieved by the OLYMPIC Banking System. Profitability and
client satisfaction increase while costs are reduced.
The OLYMPIC Banking System is a multi-branch, multi-entity, multi-currency,
multi-language and multi-channel system. Online e-Banking and mobile Banking are
available in various configurations in order to deliver the best possible client
experience.
Corporate Banking
The OLYMPIC Banking System for Corporate Banking is an integrated, modular
banking solution that addresses the needs of banks principally serving corporate and
commercial customers.
From commercial loans to trade finance, from cash management and payments to
syndicated lending, commercial banks need a truly global banking software platform
to respond to ever more demanding customers, in real-time and through multiple, yet
integrated and consistent distribution channels.
The OLYMPIC Banking System is a highly parameterisable solution providing a
flexible response to an ever changing business environment. New products and
processes can be configured in a matter of minutes and deployed through multiple
distribution channels. Its service-oriented architecture (SOA), and Web services-based
model enable the easy integration of third-party applications to deliver a fully
integrated response across all the relevant business processes.
OLYMPIC Banking System is able to manage the entire business work-flow - be it
for commercial loans or complex trade finance operations - from origination to
settlement. The integrated OLYMPIC modules provide increased visibility across all
business activities together with the ability to monitor and control the various risks
across multiple activities. Eliminating manual processing and enabling Straight
Through Processing (STP) across the entire organisation is one of the critical

25
objectives achieved by the OLYMPIC Banking System, to increase profitability and
customer satisfaction while reducing costs.
Central Bank
The recent financial crisis has had a major impact on practices of central banks and
other government agencies. Central banks need to be able to react quickly to
changing market conditions and regulatory frameworks. They have to face new
challenges such as handling more complex instruments and enforcing strict
compliance processes.
The OLYMPIC Banking System is a browser-based, fully integrated, online, real-
time, front-to-back and parameter-driven solution. With OLYMPIC for Central
Banks, central banks are equipped with the right information to make decisions in
real-time. The system supports the needs of a wide range of users from the front,
middle and back office with a broad range of instruments and functionality.
The OLYMPIC Banking System's high levels of flexibility and powerful
management facilities have enabled ERI to develop a specialized version for the
central bank and statutory authority market. It includes all relevant standard
OLYMPIC functionality, together with functions developed specifically to meet the
unique requirements of central banks.
ERI has made a long term commitment to central banks. The OLYMPIC Banking
System is a unique, proven industry solution that supports all asset classes, manages
risk and performance, and helps optimise returns. For central banks, it provides
business process support for reserve management, monetary policy execution, asset
management and banking services.
The OLYMPIC Banking System for Central Banks configuration has been installed
successfully in a growing number of central banks around the world.
Gateway for Olympic Banking System
The address of the system is http://192.168.160.21:9081/PROD/Olympic.do. And the
old code for the Departments is listed below:

26
Table 10 Old General Account Code
Place Old General Account code
Financial Management Department ( FMD) 1100000-038-000-524
Kathmandu Banking Office (KBO) 1200000-038-000-524
Currency Management Department (CMD) 1300000-038-000-524
Biratnagar (BRT) 1500000-038-000-524
Janakpur (JNP) 1600000-038-000-524
Birgunj (BRG) 1700000-038-000-524
Pokhara (PKR) 1800000-038-000-524
Siddharthanagar (SID) 1900000-038-000-524
Nepalgunj (NEP) 2100000-038-000-524
Dharan (DHN) 2200000-038-000-524
These codes are used to handle all the transactions from Baisakh to Ashad 2070.
These codes are used to reconcile the transaction related to branches. There are
separate codes for different branches. Internee has opportunity to reconcile the
transactions for about 3 weeks during the internship.
The New Code for General Ledger Posting is listed below:
Table 11 New Code for General Ledger Posting
Place New Code for General Ledger
Posting
Financial Management Department (FMD) 1109901-011-000-524
Kathmandu Banking Office (KBO) 1209901-011-000-524

27
Currency Management Department (CMD) 1309901-011-000-524
Biratnagar (BRT) 1509901-011-000-524
Janakpur (JNP) 1609901-011-000-524
Birgunj (BRT) 1709901-011-000-524
Pokhara (PKR) 1809901-011-000-524
Siddharthanagar (SID) 1909901-011-000-524
Nepalgunj (NEP) 2109901-011-000-524
Dharan (DHN) 2209901-011-000-524
These are the New code for General Ledger posting. From the 1st shrawan 2070 these
codes has been used. For some days Internee reconcile the transactions by using these
codes but later all transactions has been reconcile by the staff themselves who has
issue the cheque.
Pay Order
A bank pay order is a document that gives instructions to a bank to give out or pay
some specified amount of cash to a third party. Such orders are generally recognized
by the bank which guarantees that the payment will be made.
The basic task of Reconciliation Sections is reconcile the pay order. Internee has done
the task related to pay order for about 6 weeks. The code used for the reconciliation of
pay order is as follows:
The Code for Pay order is 1100000-014-000-524
Internee has learned the steps to reconcile the pay order which is listed out as follows:
1. Go to http://192.168.160.21:9081/PROD/Olympic.do
2. Click Equity
3. Click Client
4. Type pay order code: 1100000-014-000-524

28
5. Click Ok
6. Account Movements found
7. Right click on Account
8. Bank reconciliation (Status option)
9. Click unreconciled movements
10. Match debit and credit items.
Internee has used this software in Reconciliation Section to reconcile general accounts
and pay order. Internee got opportunity to use the Olympic banking system software
which is not used by any commercial banks in Nepal till now. Only NRB uses this
software in Nepal.
2.2 Steps of Reconciliation
The steps of reconciliation of pay order by taking one example are as follows:
Figure 4 Debit Items
The above picture shows the debit items but Internee try to reconcile the amount of Rs
19490 which is not reconciled yet. So Internee took its transaction date and reference
number i.e. 469507.

29
Figure 5 Credit Items
The above picture shows the credit item which is not reconciled. After taking the
transaction date and reference number of debit then same item must be searched in
credit side. Internee must match the item of debit side with item of credit side by
matching reference number. Internee matched the debit and credit item by matching
the reference number i.e. 469507. Then Internee must take the transaction date as
well.

30
Figure 6 Account Movement
The above picture shows the account movements which includes all debit and credit
items. The items can be reconciled or not reconciled. This is needed to know the
account set of certain transaction.
After finding debit and credit items with same reference number Internee must go to
account movement to take account set of respective items. In this process, Internee
takes an example of Rs19490 which need to reconcile. The account set for debit item
is 746651 and credit item has account set 744958.
After taking the account set from account movement Internee must go to debit side
and credit side to reconcile the item. Then pay order reconciliation process completed
for pay order of Rs 19490.
Activities performed by Internee in Reconciliation Section are as follows:
 Using of Olympic Banking System use by NRB for reconciliation.
 Matching debit and credit items.

31
 Whenever the debit item is not matched with existing credit item then it is
informed to Supervisor.
 Internee has visited the Bill Section and Salary Section for finding the pay
order which is not matched with debit items.
 Internee has opportunity to interact with different employees in different
sections.
 Internee got opportunity to work seating near Deputy Director Mr. Bijaya
Kumar Shrestha and interact on different matters.
 Understand the government system of attendance i.e. Internee must sign the
attendance sheet at beginning and ending of the day.
 Teach the new Intern about the reconciliation process and other problem
solving technique.
 Making the letter to different section whenever the credit item was not found
in the system.
Internee at Pension Section
A pension is a contract for a fixed sum to be paid regularly to a person who get
retirement from service. The common use of the term pension is to describe the
payments a person receives upon retirement, usually under pre-determined legal or
contractual terms. A recipient of a retirement pension is known as a pensioner or
retiree.
The pension section is one of the sections under FMD. This Section is created to
provide pension to the deserved employees. At present there are 2214 persons who
take pension at Nepal Rastra Bank. Presently, the retire employees age above 70 are
given 10% more pension and 20% more to age above 80. All the transactions related
to pension are recorded in the books manually at NRB. Transaction related to pension
is not recorded in computer till now. The head of the pension section is Mr. Kishor
Kumar Dhakal, Deputy Director. The process to calculate the pension is as follows:
Pension =
𝑑𝐿𝑎𝑠𝑡 𝑆𝑎𝑙𝑎𝑟𝑦∗𝑆𝑒𝑟𝑣𝑖𝑐𝑒 𝑝𝑒𝑟𝑖𝑜𝑑
50

32
Activities performed by Internee at Pension Section are as follows:
 Recording the increased pension of 2068 and 2070 in the pension book
manually.
 Corrected the record whenever Internee found that the past records are
incorrect.
 Sometime the total pension in the book was not matched with the present
pension sheet, then that must be corrected.
 Employees age above 70 are given 10% more pension and 20% more to age
above 80 but these amount must be separately given and should not recorded
with present pension. Thus Internee found out and corrected different such
cases where 10% and 20% pension are added to pension.
 Understand the process of providing pension at NRB.
 Incorrect transaction are recorded in separate sheet and provided to supervisor.
2.3 Problem Solved
During 12 weeks of internship period different problems has been arises related to
reconciliation and Pension and Internee was successful in solving these problems. The
problems that were solved during internship are as follows:
 During reconciliation, sometime debit item does not matched with credit item
then such transaction must be inform to supervisor.
 When debit item did not match with credit item during reconciliation then
Internee visited Bill Section and Salary Section for finding the credit item.
 If there are many items that are not matched then letter must be typed and sent
to concern section to solve the problem.
 New Intern are unaware about reconciliation and pension recording, so
Internee teaches them about the reconciliation process and pension recording.
 Record regarding increase pension are not recorded in pension book since
2068, thus Internee recorded all those records.
 Internee found out and corrected different cases regarding 10% and 20% more
pension added to net pension which should not be added.
 Incorrect and hard problem are recorded in separate sheet and provided to
concern supervisor.

33
2.4 Intern’s Key Observation
Although there are different sections, Internee got opportunity to work at
Reconciliation Section and Pension Section. Having theoretical knowledge and
practical knowledge in the field is two different parts of education system. As a whole
intern believe that the observation of real banking scenario that made during the
internship period will be helpful to understand the banking system. The key
observations during the internship period are as follows:
 The electronic equipments like computer and its peripherals were mostly out
of proper working conditions.
 There is proper coordination between the staffs.
 No proper managed infrastructure.
 Infrastructure of the bank is not sufficient and there is not CCTV as well.
 Staffs have problems with computers and its applications.
 The working system of the department is systematic and rigid.
 The concept of transfer, rotation and promotion of employees cause several
problems.
 All employees must do attendance through electronically which avoids staffs
delay in bank.
 There are four employees Unions at NRB to protect the right of employees.
 All staffs are polite and kind to the interns.
2.5 Strength, Weakness, Opportunity and Threat (SWOT) Analysis
The SWOT analysis of the organization is as follows:
a) Strengths
 NRB is the apex body to regulate all BFIs.
 The bank is a self-dependent institution with strong legal structure.
 The bank has sufficient physical resources for operation of the various
activities.
 The bank has the skilled and qualified human resources.
 The bank has global exposures as it is the central bank of Nepal.

34
 NRB has been a member of Asian Clearing Union (ACU), Tehran Iran
and Alliance for Financial Inclusion.
 A strong organizational culture has been build up to make the bank more
effective and efficient.
 The Staffs can communicate with the managers and other higher
authorities as and when required.
b) Weaknesses
 The bank has poor human resources plans and policies for career
development, reward and punishment and performance evaluation.
 The bank follows the traditional management practices.
 The old staffs feel uneasy in using computers and other equipments.
 The bank makes delay in preparation and presentation of financial
statement due to use of traditional accounting practice.
 Recording of pension are still done manually.
 Due the improper division of departmental work some departments are
overloaded while others are under loaded and office layout.
 The bank has inefficient IT infrastructure.
 There is a poor coordination between departments and corporate
governance.
c) Opportunities
 As the bank has the global exposure, there is an access to international
institutions for learning and knowledge sharing.
 The bank is using modern technology to enhance the efficiency in sectors
like accounting, human resources management, anti-money laundering.
 The bank is using Olympic banking system which is not used by any
other banks in Nepal.
 The extended financial market helps in increasing the scope and use of
monetary policy instruments.
 Being the Central bank, it is working for the financial stability in Nepal.

35
d) Threats
 Due to the fluctuation of interest and exchange rate in international
market there can be effect on foreign investment.
 There is a wrong reporting from public and private media which leads to
flow of incorrect information.
 Monetary policy implementation can be ineffective due to political
instability.
 Excess liquidity in the market at present is the headache for NRB.
 The bad performance of India also affects the economy of Nepal as
Nepali currency is pegged with Indian currency.
 The development of informal financial market and co-operatives are
affecting the task of macroeconomic management
 It is difficult to match with the international practices due rapid
development of technology in the international market.
 Decrease customer trust from Banking and Financial Institutions.
 Current unfavorable political condition.

36
CHAPTER III LESSON LEARNT AND FEEDBACK
3.1 Key Skills and Attitudes Learnt
During the 12 weeks of internship Internee has perform different jobs assigned to him
in the bank. Internee has also visited different departments and sections as well. This
Internship period is quite fruitful to Internee as he got opportunity to complete
internship at central bank.
Generally an internship is a great way to get an inside glimpse of a company, an
industry, and a particular occupation. It helps to discover the career whichever is right
or wrong. With more and more people doing internships, employers are coming to
expect to such interns listed on the resumes of potential employees. Thus, internships
often turn into job offers. All the more reason to do an internship is the first
impression you make on who may be a future employer by showing the key skills and
attitudes learnt during the internship program.
i. Communication Skills: Daily interaction with staffs of bank has increased the
communication skills. It had helped to be good listener and good speaker as well. It
has also proven that one cannot be a good speaker unless s/he is a good listener.
ii. Teamwork Skills: This internship helps the Internee to work in team. Banking
requires a great deal of teamwork and integrity within the departments. During
internship period almost all activities performed were based on teamwork which has
developed an efficient team work skills that has helped to solve assigned task properly
and in productive way working as a team member.
iii. Computer & Technical Skills: During internship, various computer software and
other devices were handled thus enhancing practical skills. This internship provide
opportunity to use Olympic Banking System.
iv. Initiative: Initiation is always important in jobs or entrepreneurship. During
internship initiatives were taken to solve the mismatched transactions during the
reconciliation and even in recording pension amounts.

37
v. Interpersonal Skills: Regular interaction with people out there in the bank Inter
has enabled to maintain good relationship with others and friendly and wholesome
ties that has further served to develop interpersonal skills.
vi Problem-Solving Skills: Many challenges and problems were faced during
internship at reconciliation section and pension section which were solved under the
guidance of the supervisor. It has helped to identify the problems, understand its
reason and its accurate mitigation or solution in right time.
vii. Analytical Skills: While different problems and issues were confronted, great
deal of time and concentration was given to analyzing those issues and problems to
pick out the roots. It has helped to develop an analytical mind that might be very
helpful in doing jobs in future.
viii. Flexibility / Adaptability: Since the professional setting teaches to adopt a
situational approach towards work, it was frequent event for me where a great deal of
adaptability was required. Getting with the environment and working accordingly
remaining within organizational culture and team has enriched the adaptability.
ix. Organizational Skills: Working in an organization bounded to work remaining
within organizational culture and behavior which helped to understand the
organization and activities to be performed. The government rules and regulation
regarding different issues were learned. So, the organizational skills were gained
during internship.
x. Leadership Skills: Observing the managers and head of department, there quality
and skills were closely watched. It has developed leadership skills and qualities
during internship. The working style of the directors and deputy directors has been
closely watched at NRB which is fruitful to the Internee.
xi. Self-Confidence: A self confident person is someone who inspires others. A self
confident person is not afraid to ask questions on topics where they feel they need
more knowledge. Self confidence is one of the most important attitudes which help us

38
develop our career. This skill of asking question with any hesitation and good
communication with different stakeholders has developed self confidence.
xii. Creativity: During internship analytical skills were developed that in turn has
fostered creativity and innovation.
xiii. Self – Motivation: Internship has helped to understands responsibility on the job
and complete it without any prodding from others. Working in a supportive work
environment and taking the initiative has provided to be self-directive and increased
self-esteem.
3.2 Feedback to Organization
It was an interesting experience to do internship in Central bank of Nepal, i.e. NRB.
The staffs were highly cooperative and due to their keen help learned big deal about
activities in NRB. This type of internship is good for the entire development of the
Internee personality. It would be a great help to intern students in selection of job or
future field of work.
Working as an intern in NRB was a great experience which led to learn different skills
and attitudes in professional working environment. It was right place where the
theories studied in college were really implemented in practical grounds. It further
helped to find out the gap between what to learn and what market needs. So, RBB was
a good choice as an intern organization due to the fact that it was very gainful and
rewarding. Some of the study and observations made during internship has led some
feedback and recommendations. Some of the suggestions for efficiency and
effectiveness in performance are:
a) Bank should optimally use the resources available and any required resources
should be assessed. Use of modern technology is impulse of today’s banking.
Thus, new and effective means of technology should be used for providing
service to the customer.
b) Re-structure and re-organize the job and responsibilities so that there is
efficiency in job completion.
c) Proper maintenance of computers and other devices should be ensured timely
in regular fashion.

39
d) Reduce the over-employed staff so as to reduce cost and bring efficiency in the
job.
e) The organization should improve its departmental overload which is now for
few staff only.
f) The operations should be systematized and in proper flow of the work.
g) The bank has inefficient IT infrastructure i.e. Server Room, Back up etc. so it
should be improved.
h) The concept of transfer, rotation and promotion of job problematic which cause
several problems. It should be improved. Also proper planning of leave of
staffs should be done.
i) Staffs should be familiar with IT and technologies.
j) Staffs should be provided adequate training on use of computers and other
devices.
k) Good corporate governance should be ensured that maintains sustainable
profitability in the system.
3.3 Feedback to College/University
Internship is defined as learning, proper supervision of the intern is essential. Ongoing
supervision of the intern student is key to the success of the internship program.
The college and university both institutions have provided us an opportunity to gain
some practical knowledge on what we are learning in our class rooms. Theory unless
made behavior have no use. Thus, this internship program offered by college and
university in fact has been proven to be the first milestone in professional career.
The internship program is to be conducted by the students as per the requirement of
the university. It is also a responsibility of the college to provide good and practical
opportunities to the students to impart the real world situations. There are some
recommendations to the college and university, which are:
a) The college/university should prepare a fixed framework of internship
activities to be carried out by students during internship.
b) Such framework should be initially conveyed to the students so that any
misunderstandings and confusions may be avoided.

40
c) Proper inspection of intern student should be made by college in proper time
and in regular manner during the tenure of internship.
d) Since it was first time much confusion were hovering around in matter of
report preparation and during selection of organization. Faculty should take
possible steps to mitigate such perplexity.
e) College should send the supervisor to the organization before, after and during
the internship program.
f) The interaction class must be provided by the college at every weekend.
g) Due to oversupply of the student it is very difficult to find the organization to
do internship. So college also searches some institution for internship.
h) College should also focus to the problem faced by intern student while doing
internship.
i) MBA students and BBA students did the same level of work during the
internship period, so college should refer to the organization to give the task to
the interns according to their qualification.
j) College should be in touch with the organization where students did their
internship so that the college can get timely feedback about the intern.
k) The internship program should be kept on the last trimester which gives
chance for better performer/s to get the job within the same organization of
internship.
l) During internship program of the students, the college should visit the
respective organizations so as to know the performance of the interns.

41
REFERENCES
Adhikary, D. K., Dhungana, B. R., & Pant, R. (2007, October). Study on Financial
Sector Reform in Nepal. Overall Impact and Public Ownership of Financial
Institutions , pp. 10-24.
Bhandari, D. R. (2003). Banking & Insurance, Principle & Practice (2nd ed.).
kathmandu, Nepal: Aayush Publication.
Bhandari, D. R. (2004). Introduction to Banking. In Banking and Insurance (3rd ed.,
pp. 2-4). kathmandu, Nepal: Aayush Publication.
Khadgi, Bibek (2012). Internship Report on Rastriya Banijya Bank Ltd. Internship
Report, Pokhara University, Department of Management
Nepal Rastra Bank (2013/14), Monetary Policy, Central Office, Baluwatar,
Kathmandu
Nepal Rastra Bank (2002), Nepal Rastra Bank Act 2002,Kathmandu
Nepal Rastra Bank (2012), Annual Financial Statement, Central Office, Baluwatar,
Kathmandu
Nepal Rastra Bank (1955), Nepal Rastra Bank Act, Kathmandu
Nepal Rastra Bank (2012), Bank Supervision Report, Bank Supervision Department,
Baluwatar, Kathmandu
Nepal Rastra Bank (2011). Unified Directives for Bank and Financial Institutions.
Kathmandu, Nepal: Bank and Financial Institutions Regulation Department.
Pyatha, Dinesh (2013). Internship Report on Nepal Rastra Bank. Internship Report,
Pokhara University, Department of Management

42
Rose, P. S. (2006). Commercial Bank Management (6th Edition ed.). New Delhi,
India: TATA McGRAW HILL.
Rose, P. S., & Hudgins, S. C. (2010). Bank Management & Financial Services (7th
Edition ed.). New Delhi, India: TATA McGraw-HILL.
Suresh, P., & Paul, J. (2010). Management of Banking And Financial Services (2nd
Edition ed.). New Delhi, India: Pearson.
Shrestha, M. K., & Bhandari, D. B. (2008). Financial Markets & Institutions (3rd
ed.). Kathmandu, Nepal: Asmita Books Publishers and Distributors.
Websites:
 www.nrb.org.np
 www.wikipedia.org

43
ANNEX I: LIST OF BANKS AND FINANCIAL INSTITUTIONS
S.No. Name
s
Operation
Date (A.D.)
Head Office
Paid up
Capital
#
1 Nepal Bank Ltd. 1937/11/15 Dharmapath,Kathmandu 3716.44
2 Rastriya Banijya Bank Ltd. 1966/01/23 Singhadurbarplaza,Kath
mandu
8588.97
3 Nabil Bank Ltd. 1984/07/12 Kantipath, Kathmandu 2436.84
4 Nepal Investment Bank Ltd. 1986/03/09 Durbarmarg, Kathmandu 3768.01
5 Standard Chartered Bank Nepal Ltd.. 1987/02/28 Nayabaneshwor,
Kathmandu
1853.90
6 Himalayan Bank Ltd. 1993/01/18 Thamel, Kathmandu 2760.00
7 Nepal SBI Bank Ltd. 1993/07/07 Hattisar, Kathmandu 2355.74
8 Nepal Bangladesh Bank Ltd. 1994/06/06 Nayananeshwor,
Kathmandu
2009.40
9 Everest Bank Ltd. 1994/10/18 Lazimpat , Kathmandu 1761.13
10 Bank of Kathmandu Ltd. 1995/03/12 Kamaldi, Kathmandu 1684.40
11 Nepal Credit and Commerce Bank
Ltd.
1996/10/14 Siddharthanagar,
Rupandehi
1470.00
12 Lumbini Bank Ltd. 1998/07/17 Narayangadh, Chitawan 1601.60
13 NIC Asia Bank Ltd. 1998/07/21 Biaratnagar, Morang 2311.55
14 Machhapuchhre Bank Ltd. 2000/10/03 Prithwichowk, Pokhara,
Kaski
2478.79
15 Kumari Bank Ltd. 2001/04/03 Durbarmarg, Kathmandu 1603.80
16 Laxmi Bank Ltd. 2002/04/03 Adarsanagar, Birgunj,
Parsa
1694.08
17 Siddhartha Bank Ltd. 2002/12/24 Kamaladi, Kathmandu 1619.24
18 Agriculture Development Bank Ltd. 1968/01/21 Ramshahpath,
Kathmandu
9636.80
19 Global IME Bank Ltd. 2007/01/02 Birgunj, Parsa 2418.14
20 Citizens Bank International Ltd. 2007/04/20 Kamaladi, Kathmandu 2101.84
21 Prime Commercial Bank Ltd 2007/09/24 Newroad, Kathmandu 2340.41
22 Sunrise Bank Ltd. 2007/10/12 Gairidhara, Kathmandu 2015.00
23 Grand Bank Nepal Ltd. 2008/05/25 Kamaladi, Kathmandu 2000.00
24 NMB Bank Ltd. 2008/06/02 Babarmahal, Kathmandu 2000.00
25 Kist Bank Ltd. 2009/05/07 Anamnagar, Kathmandu 2000.00
26 Janata Bank Nepal Ltd. 2010/04/05 Naya Baneshwor,
Kathmandu
2000.00
27 Mega Bank Nepal Ltd. 2010/07/23 Kantipath, Kathmandu 2330.00
28 Commerz & Trust Bank Nepal Ltd. 2010/09/20 Kamaladi, Kathmandu 2000.00
29 Civil Bank Ltd. 2010/11/26 Kamaladi, Kathmandu 2000.00
30 Century Commercial Bank Ltd. 2011/03/10 Putalisadak , Kathmandu 1080.00
31 Sanima Bank Ltd. 2012/02/15 Nagpokhari, Kathmandu 2016.00
Commercial Banks as of Mid October, 2013 (Licensed by NRB)
# Capital is based on Mid July 2013
(Rs in Millions)

53
ANNEX II: BALANCE SHEET AS 2066/67

54
ANNEX III: BALANCE SHEET AS 2066/67

55
ANNEX IV: STATEMENT OF CHANGES IN EQUITY AS 2066/67

57
ANNEX VI: OLD GENERAL LEDGER

58
ANNEX VII: NEW GENERAL LEDGER

59
ANNEX VIII: MERGER OF BANK AND FINANCIAL INSTITUTIONS
(BFIS)

60
ANNEX IX: OWNERSHIP STRUCTURE OF GOVERNMENT
SECURITIES
As of Ashoj 2070 (September/October 2013)
# :Including securities held by NRB and other related funds.
Others = Private non profit making org. & Business org.
Rs in Lakhs

61
ANNEX X: SOME MEMORIES AT NEPAL RASTRA BANK
Working at Reconciliation Section with other
trainee
With Deputy Director Mr. Bijaya Kumar
Shrestha
With Assistant Director Mr. Bilash
Chandra Rai
Working at Reconciliation Section Working at Reconciliation Section
Working at Pension Section Working at Pension Section

Internship report (nrb)

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Internship report (nrb)

Similar to Internship report (nrb) (20)

More from Pawan Kawan

More from Pawan Kawan (20)

Recently uploaded

Recently uploaded (20)

Internship report (nrb)