Nepal investment bank

CHAPTER ONE

INTRODUCTION

1.1 Background:

Nowadays, people are becoming more aware about the importance of education. Due

to this reason, many schools and colleges are emerging every day. Among the various

universities governing the colleges, Tribhuvan University (T.U.) is the largest and

oldest university of Nepal. With the increasing demand of the Management studies,

T.U. has gradually prepared an innovative course in order to originate the competent

professionals with the changing demands of corporate world since 2002 A.D. Among

different management courses of T.U., Bachelor in Business Administration (BBA) is

one of the best management courses.

Bachelor in Business Administration (BBA) is the semester wise academic program

for management students designed to provide comprehensive and practical education.

The charm of BBA is increasing because it is accepted world wide as it covers the

International 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 a

partial fulfillment of program. The FOM, Tribhuvan University has its ultimate

objective of educating students for professional pursuits in business, industry and

government. It is further dedicated to contributing for increasing the knowledge and

understanding of business and public administration. Accordingly, FOM has been

developing networks with management institutes in the country and abroad to

exchange new knowledge, technology and methods for achieving higher level of

efficiency in management education. For a developing country like Nepal, it is more

meaningful to have commercial banks as lending financial institution to guide the

economy in a desired level.

With the view to achieve same objective, FOM has introduced BBA program. The

specific objectives of the BBA program are to:

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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 the

challenges emerging out of the changing business environment. In order to achieve

the aforementioned objectives, the teaching pedagogy of the program consisted case

studies, practical exercises, lab works, project works, field visits, etc. throughout the

program period and an internship for the period of eight weeks in an organization at

the end of final semester. An internship is an extensive program through which an

intern can learn the practical aspects of what is taught between the four walls of a

classroom. The BBA program has incorporated eight weeks internship program with a

view to develop students’ skill in object-oriented business management, capable of

understanding and solving real life business related problems. It provides practical

exposure and helps the student to understand corporate social responsibility, develop

corporate attitude and venture entrepreneurship.

1.2 Objectives of the Report

The BBA program sharpens business and management concepts and develops

technical capabilities, which will enable us to analyze and implement business

concepts in real world scenarios. So, one of the objectives of this study is to provide

us with an opportunity for learning as well as implementing the management

concepts learnt in classrooms in a real organization. One of the most essential criteria

for successfully completing the BBA program is to undergo an internship in an

organization for a minimum 8 weeks, study the relevant areas in the organization, and

prepare a report in the same. The fundamentals objectives of the internship report are

as 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.

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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 market

1.3 Research Methodology:

This internship report is the in depth study of particular subject or topic backed by the

collection, compilation, presentation and interpretation of relevant data. In this report,

both primary and secondary sources of information are used. It helped to analyze the

findings in meeting the objectives of the study.

Sources of data:

The report would not be completed without the collection of data. For the report the

data 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

Application form for different type of account opening

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http://www.nibl.com.np/

Browsers of the different types of account

Official website of Nepal Rastra Bank (NRB)- www.nrb.org.np

1.4 Organization Selection, Placement, Duration:

1.4.1 Organization Selection

Selection of organization for internship program is always a crucial task. At the

present scenario, among different fields related with the financial sector one of the

major field is the banking sector. Being the student of BBA, most of the internee has

selected the banking sector as their destination, because banks are the key players in

the financial market.

For the completion of the BBA program I had to select an organization that would

perfectly match the requirement as well as help me learn about real business working

environment. As a result, I selected NIBL, among other financial institutions

operating in Nepal with the help and suggestion of my teachers as well as well

wishers. I was placed at the Seepadole Branch of the bank for my internship.

1.4.2 Placement

During my internship period, I was placed as an intern in Seepadole Branch of NIBL. The

sum of period of internship was 8 weeks. During the period, placement was made at the

customer service department, marketing department and at back office. I was placed at CSD

for the period of 5 weeks, at marketing department for the period of 2 weeks and at back

office 1 week. The following table shows the department of placement and respective

supervisor of the department:

Table 1: Placements

DEPARTMENT SUPERVISORS

CUSTOMER SERVICE Mandira Malla

MARKETING Sachin Baidya

BACK OFFICE Sushila Basel

1.4.3 Duration

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http://www.nrb.org.np/

As per the course study of the Tribhuvan University, Faculty of Management for

BBA, the student of BBA 8th semester must do the internship of 8 weeks of working

at an organization. I got an opportunity to work in CSD, marketing department and

back office, from May 30, 2011 to July 25, 2011 which really helped me to develop

managerial and interpersonal skills and at the same time boost up my confidence

level. These eight weeks has been very fruitful for me to get insight of the banking

activities of the organization. The duration of my internship has been split into various

departments. They are figured below:

Table 2: Duration of Internship

WEEKS 1 2 3 4 5 6 7 8

CSD

MARKETING

BACK OFFICE

1.5 Activities performed in the organization

During this internship period of eight weeks I have done various jobs in each

department personally. I was engaged in the jobs starting from account opening to

account closing in CSD including cheque book issue, ATM issue and others.

1.5.1 Activities performed at CSD

Basically I was placed in Customer Service Department (CSD) throughout my

internship period; I carried out all the functions of CSD. However I was also assigned

different activities of marketing departments and work in back office as well. For

more time duration I was placed at CSD. So the activities I had performed in CSD

during my internship are as follows:

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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 Department

Customer satisfaction is the key success factor for all commercial banks. Speed,

convenience and competitive price are the driving forces, which demand existing

banks to be much more innovative and equipped with sophisticated technology and

changed mind-sets to recognize customer as the king. Hence this department mainly

holds the responsibility of finding ways to improve its products and services in order

to attract new customers as well as retain the existing ones. The activities that I have

performed 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 Office

Work done in back office are advance payment, forex, remittance, dealing clearing

cheques, making TC, draft, MC cheque , cheque deposit, etc. It also deals with the

purchase and sale of INR. And other activities performed are:

1. Remittance data entry

2. G-9 form fill up for fixed deposit

3. ATM Pin code release

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1.6 Limitation of the Report

It is obvious that in everything there is some kind of limitations and this internship

report is also not an exception. So, it also has common limitations. The following are

the 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 day

operations and information provided by the bank and its staffs.

CHAPTER TWO

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AN INTRODUCTION TO BANKING INDUSTRY

2.1 Meaning of Bank

Banking 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 place

for keeping, lending and exchanging money. The bank is a financial institution, which

deals with money. It accepts deposits from individuals and organizations and grants

loans to them. It allows interest on the deposits made and charges interest on the loans

granted. Since, it accepts deposits and grants loans, it is regarded as the trader of

money. Further, it creates credit and supports for the formation of capital and hence it

is 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 deposit

lending 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 who

are saving it out of their income and lends this money out to those who require it.”

– Crowther

By the above definition we can be clear that bank is the financial institution, which

accepts deposits from the public in different accounts and grants loans to individuals

and corporations against their securities. The major source of income for the bank is

the difference in interest rate on lending and deposit, interest rate spread, the lending

interest is higher than the deposit interest. So we can consider the financial institution

is the agent of the clients, which remits money, collects incomes and pays expenses

on behalf of them. It provides the wide variety of function on the behalf of the

customer.

2.2 Origin of Bank

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The banking is as old as authentic history. The word 'bank' is derived from the Latin

word 'bancus' which means bench. In the ancient time the Italian goldsmiths used to

sit on benches when they are in work of exchanging of money; trading of gold and

silver. 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 but

the deposits were not of money but of cattle, grain or crops and eventually precious

metals. Nevertheless, some of the basic concepts underlying in today’s banking

system were present in the ancient arrangements. Deposits were accepted, loans were

made and borrowers paid interest to the lenders.

Similar type of banking arrangements could be found in ancient Egypt. These

arrangements stemmed from the requirement that grain harvests be stored in

centralized state warehouse, and the depositors could use written orders for the use of

certain quantity of grains as means of payment. Bankers and moneylenders operated

in India during the Vedic period. Those were the earliest form of banking. Banking

was 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) and

Bank of Geneva (1407), Bank of Amsterdam (1607) and bank of Hamburg (1619)

were established. The ‘Bank of England’, first English bank, was established in 1964

A.D. The bank of Hindustan established in 1770 A.D. is regarded as the first bank in

India. 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 Joint

stock company banks. With the expansion of the commercial activities in the northern

Europe, there sprang a number of private banking houses in Europe and slowly spread

throughout the world.

In 1838 A.D., New York adopted the Free banking Act, which allowed anyone to

engage in banking business as long as they met certain legal specifications. As free

banking quickly spread to other states, problem associated with the system soon

became apparent. The bank incorporated under these laws had right to issue their own

bank notes. This led multiplicity of notes many of which proved to be worthless in the

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event of bank failure. Then the Federally Chartered system of banks came in

legislation which allowed national banks to issue notes and placed a tax on state

issued notes. The national bank came into Federal guarantee, which protected the note

holder if the bank failed. The new legislation also brought all the banks under federal

supervision. 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 Nepal

Banking concept existed even in the ancient period when the goldsmiths and the rich

people 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 depositors

would get back their gold and valuable securities or collateral after paying a small

amount for safe-keeping and saving. The goldsmiths and the moneylenders became

bankers 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

The modern banking in Nepal has started with the establishment of Nepal

Bank Ltd. in 1994 B.S

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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 Development

From 2041 B.S, His Majesty’s Government of Nepal established 5 rural development

banks. 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

In order to establish and develop other joint ventures, commercial banks and other

financial institution, Nepal adopted liberal free economic policy. After 2041 B.S., the

government gradually liberalized and opened up the financial sector, resulting in the

rapid entry of the Foreign Banks. Later, in 2041 B.S., with the grand opening of

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NABIL Bank Ltd., other commercial banks started emerging in the private sectors. As

a result, now there are altogether 31 commercial banks operating at different parts of

the country. At present, the banking sector is more liberalized and there are various

types of bank working in modern banking system. This includes central, development

and commercial banks. Evolution of the information technology has revolutionized

the banking sector is saving lots of time and money by implementing IT. Technology

has changed the traditional method of the services of bank. Invention of different

software and hardware, which are very essential and available for functioning bank

such as Banking software, ATM, E-banking, Mobile Banking and card like Debit

card, Credit card, Prepaid card etc which helps the customer as well as banks to

operate and conduct their activities more efficiently and effectively. This helps bank

to generate more customers, goodwill and profit.

In the present day all the financial institutions are guided by NRB. The list of Banks

and Non-bank Financial Institutions licensed by NRB are presented in the following

table:

Table :List of Banks and Non-bank Financial InstitutionsAs 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

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2.4 Classification of Banks

When a single bank performs multiple tasks, the efficiency and effectiveness of the

work becomes weak. Hence different banks are established for different purposes.

Basically, the banks have been categorized in various types in accordance with the

bank's ultimate purpose, customer's demands and choices, and overall economic

development 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 Bank

2.5Commercial Banks in Nepal

Commercial banks are the major component in the financial system. A commercial

bank is a business organisation, which deals in money by lending and borrowing

money, in which it makes profit. It raises its resources through borrowing from the

public in the form of deposit and lends this to business firm. Its lending rate of

interest is greater than its deposit rate. This difference in lending and borrowing rates

enables it to make profit. Basic source of funds for commercial banks are capital and

reserved retained profit. It performs several functions as various types of deposit

facilities like current, saving and fixed deposit; safety of public money, remittance of

money, letter of credit, loans, locker facility, foreign exchange, serving as an agent of

its clients etc.

Commercial Bank Act 2031 states- “A commercial bank is the bank which exchanges

money, accepts deposits, grant loans, and perform banking function.”

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2.5.1Functions of commercial bank

The main function of commercial bank simply is ‘to borrow to lend’. Besides, there

are 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 functions

List of commercial banks of Nepal: See Annex I

CHAPTER THREE

INTRODUCTION OF AN ORGANIZATION

3.1 AN OVERVIEW OF NIBL

Nepal Investment Bank Limited (NIBL), previously Nepal Indosuez Bank Ltd. Was

established in 1986 as a joint venture between Nepalese and French partners. The

French partner (holding 50%of the capital of NIBL) was credit Agricole Indosuez. A

subsidiary of one of the largest banking groups in the world. The bank started its

banking services from Magh 6, 2042 after registration in the company act, 2021 and

Nepal Banijya bank act 2031 on 6th Magh 2042 B.S. With the collaboration of foreign

technology and investment the bank is established to provide the banking service in

different parts of the country. There was a contract made between Rastriya Banijya

Bank, Rastriya Bema Sansthan and foreign investor credit Agricole Indosuez from

France. In the contract it was stated that for the 10 years from the starting of the bank,

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Credit Agricole Indosuez would handle by the management. With the decision of

Credit Agricole Indosuez to divest a group of companies of bankers, professionals,

industrialists and businessmen, on April 2002 acquired the 50% shareholding of

Credit Agricole Indosuez in Nepal Indosuez Bank Ltd.

The name of the bank subsequently changed to Nepal Investment Bank Ltd. upon

approval of bank’s annual general meeting. NIBL, is managed by the team of

experienced bankers and professional having proven track record. So, it can offer

customers what they are looking for. The choice of the bank will be guided among

others by its reliability and professionalism. The fact of professionalism is reflected

by the fact that the Banker of London-based Financial Times Group has awarded

NIBL with “THE BANK OF THE YEAR 2003”. Besides, NIBL won the same award

in the year 2005,2008 and 2010 as well. NIBL was selected for this honor amongst

the Nepali banks for meeting the benchmark criteria set by The Banker. The award is

based on growth and performance of capital, assets, and return on equity and

management quality. The prestigious award is the first occasion that a 100% Nepali

managed bank has won. The reliability of the bank is reflected by its operation in the

field. 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 days

banking services.

NIBL, at present is a Company listed on the Nepal Stock Exchange. But its shares are

held 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

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50%

15%

15%

20%

Shareholding structure

Organized InstitutionsRastriya Banijya BankRastriya Beema SansthanGeneral Public

3.1.1 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 of

state-of-the-art technology and visionary management in partnership with competent

and committed staff,to achieve sound financial health with sustainable value addition

to 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

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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 profitability

3.3 Board of Directors

The board of directors of NIBL consist of 7 directors.The name of the board members

and their designation are listed in the following table:Table 3: board of directors

Mr. Prithivi Bahadur Pande Chairman & CED Group A

Mr. Prajanaya Rajbhandari Director Group A

Mr. Deepak Man Sherchan Director Group A

Mr. Janardan Dev Pant Director Group A

Mr. Omkar Nidhi Tiwari DirectorRastriya Beema Sansthan - Group C

Mr. Surendra Bahadur Singh Public Director Group D

Mr. Mohan Madan BudhathokiProfessional Director

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3.4 Organization Structure of the Bank

Organization structure is the specified path through which the formal command of

authority and responsibility flows.

Organization structure: See Annex II

3.5 Products and Services offered by NIBL

NIBL has been able to maintain its image of being the technology leader in the

banking 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 the

requirement of its customers be that the existing ones or potential customers.

Moreover, it has always been the innovator in introducing many of the products and

services. Customer’s satisfaction is the paramount driver at NIBL.

3.5.1 Products of NIBL

Broadly speaking there are two types of products of a normal commercial banks. They

are deposits and credit. Under these two categories NIBL provides various kinds of

products. 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

Ezee Savings 5.00

Saving Bonanza 6.50

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Different saving a/c offered by NIBL are as described below:

Normal Saving Account

Saving Account is thie type of a/c which encourages the customer in saving. The

customers generally open this account for earning. In case of NIBL Seepadole branch

the A/C needs to have the minimum balance of Rs. 2500. The interest rate in this

account is 4.5 % per annum calculated each 3 month. The features of this a/c are as

follows:

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 Account

The 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 share

in the profits of the account. NIBL invite all such organization to join hands with bank

in 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

Special health package at National Reference Laboratory (NRL)

Privilege Lounge

Unlimited deposits and Withdrawals

Free eBanking

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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 Khata

This is a type of personal a/c which can be open with minimum balance of Rs

1.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 Khata

This is a a/c specially designed for the children. This a/c offer 4.5% inerest p.a. on

daily balance. This a/c doesnot required any minimum balance. The feature of this

a/c are as follows:


Discount Privilege card

Free eBanking facility-pay school fees online

ABBS facility


Free birthday cake for the account holder (minor)

NPR 100 contribution from the bank as soon as the account is opened.

Saving Bonanza

This is a saving a/c which require minimum balance of NPR 100,000 to open .This

a/c offer interest of 6.5% p.a. on daily balance. The feature of this a/c are as

follows:

Privilege Lounge

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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/-



ABBS facility


EZee Student Account

This is the a/c specially initiated for the student level clients. The a/c should have

the minimum balance of Rs. 2,000. This a/c has the interest rate of 4.5% per

annum. The feature of this a/c are:

Visa electron debit card @ NPR 250.00 per annum valid in Nepal and India


ABBS facility

50% waiver on TC issuance

50% waiver on Draft

Parivar Bachat Khata

This is a a/c designed for family. It require minimum balance of NPR 2500. The

feature of this a/c are as follows:

Minimum opening balance Rs 2500/-

Maturity period, Maximum of 3 years

Minimum monthly deposit Rs 500/-

Minors receive cakes on their birthday

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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/C

Fixed Deposit A/C is also termed as Term Deposit. In fixed deposit account, the

customers keep their amount for some fixed period of time. This A/C is maintained

by the customers who have cash in hand and is not interested in investing in any

other field. The interest in this A/C is 6.5-11% in general. However, it varies with the

time 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

Current A/C also termed as the Demand Deposit is maintained by the customers who

requires the money frequently. The balance in this A/C is non productive for the bank

since, it cannot be utilized. So, the bank does not provide interest in this A/C. current

a/c in NIBL is mostly maintained by business enterprises. The minimum balance to be

maintained in this a/c is Rs.5, 000. This kind of a/c is maintained for the easiness in

business day to day transactions. The bank should pay the customers as per the

demand in this A/C till it has balanced in it.

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Credits:

Corporate Loan

Home Loan

Vehicle Loan

Education Loan

Loan against gold and silver

Bank overdraft

There are other types of products too which the bank provides. They are as follows:

Visa debit cards

Credit cards

Traveler’s checks

3.5.2 Services of NIBL

Like every other commercial bank NIBL do provide services keeping the customer’s

needs and wants in mind. These are the existing services provided by NIBL:

365 Days Banking

E-banking


Tele Banking Services

Statement request

Cheque pad request

Remittance

Trade finance

Utility payment

Lockers

Automated Teller Machine (ATM)

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3.6 Branches of NIBL

NIBL is never back in providing the best products and services to meet the

requirement 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 opened

several branches all across the country. The bank extended its operation to Seepadole,

Birgunj, Banepa, Pulchowk and Jeetpur during the period of French partnership. Rests

of the branches were established after the management was totally handed over to

Nepalese partners.

NIBL branch address: See Annex III

3.7 ATM of NIBL

At present the bank has sixty seven automated teller machine (ATM) locations

providing services to its customers in different parts of the country. The customers of

NIBL can withdrawal minimum of Rs.100 in a transaction as well. In the same way

customers can withdrawal maximum of Rs. 100000 per day. Services provided by

NIBL 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

Balance Inquiry

Utility payment

Pin Change

Fund transfer

NIBL has 67 ATM in different part of the country which accepts VISA and VISA

ELECTRON cards.

ATM location of NIBL: See Annex-IV

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3.8 Branch Profile

3.8.1 Introduction to NIBL, Seepadole

Nepal Investment Bank Ltd. extended its transaction by establishing its first branch at

Thimi in the year 1992. The bank extended its operation to Birgunj, Banepa,

Pulchowk and Jeetpur during the period of French partnership. The other branches of

bank were established only after the total management of bank was handed over to

Nepalese partners. NIBL, Thimi continued its operation till the year 2002. But since it

is not performing to its full capacity and felt very low market there, its was shifted to

Seepadole, Bhaktapur in the year 2003 after the management was handed over to the

Nepalese 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 more

facility than other banks and it has extended its office hours. It operates from 9:30

A.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:

S.N Department Head

1 Operation Department Bidur Thapa

2 Cash Department Nina Dhaubanjar

3 Retail Marketing Dept. Sachin Baidya

4 Credit Dept. Sulav Dhoj Khand Thakuri

5 Back Office Sushila Basel

6 Customer Service Dept. Mandira Malla

Table : Department in Seepadole Branch

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3.8.2 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

CHAPTER FOUR

ANALYSIS OF ACTIVITIES DONE AND PROBLEM SOLVED

As an organization has several departments, NIBL has also various departments and

the activities are performed respectively according to their nature and function.

During internship period internee got an opportunity to work on various department of

NIBL, but this report basically focuses on the Customer Service Department of NIBL.

4.1 Customer Service Department

Customer service is the front desk of any organization. It is the place where customers

make first contact with the bank. The image and reputation of the bank depend upon

the effective functioning of this department. Customer service is the process by which

an organization delivers its products and services to the customers. The staff deployed

in CSD should have fair knowledge of banking so that they may be able to answer any

questions raised by the customers. Attracting the potential customers and retaining

the existing customers are intended by CSD. Hence, all the activities of CSD are

directed towards customer satisfaction

Superior customer service is the service that exceeds the expectation of the customer

and will make the business stand out from competitors. To be effective and efficient,

customer service must be consistently good in every part of the organization. In order

to build superior customer service into your business, you need to develop a business

vision that reflects your commitment to good customer service and let your customer

know about it by incorporating customer service strategies into your business and

marketing plan.

One thing that is to be kept in mind is the finding new customer is much more

expensive than retaining existing one. Customer service is more than just keeping

customer happy. But it is about revenue, because a lost customer means loss of

revenue and incurred expenses in making new customer and unhappy customer can

damage the image and reputation of the business as a whole.

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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

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:

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Major FunctionsCustomer CounselingProduct Counseling

Deposit

Credit

Services Counseling

Account OperationsAccount Opening

Account Closing

Distribution ActivitiesAccount Statement

Cheque Book Distribution

ATM Distribution

Fig 2: Chart showing major function of CSD

4.3.1 Customer counseling and handling

This is one of the most important functions of customer service department. The

efficiency of the customer of any organization is the outcome of the quality of the

customer handling and counseling that it delivers. This department is concerned with

counseling with the customers that can be both new or regular clients concerning their

queries and confusions about the product or services provided by the banks to the

customers.

4.3.1.a Product counseling

This department is responsible for providing the detailed information to its customers

regarding the prevailing products as well as inform the products going to be launched

in a days come. The products that are provided in the Seepadole branch are divided

into 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

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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:

Home Loan

Vehicle Loan

Bank overdraft

4.3.1.b Service counseling

The Seepadole branch provides various kinds of services. So giving information to the

customer 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


Tele Banking Services

Statement request

Cheque pad request

Remittance

Trade finance

30

Utility payment

Lockers

Automated Teller Machine (ATM)

College and school payment

Evening counter

4.3.2 Accounts operation

The 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

Accounts opening simply refer to open account by any individual, or by any

company. There are 15 to 20 accounts opening per day in Seepadole branch. The

range may be increased as per duration of schemes provided.

Process of opening new account

The 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.

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Only by the mentioning the steps may not be understandable to every customer or

others. So by the following figure the process of account opening can be more clearly

understood to everyone.

The diagrammatic presentation of the account opening process is figured below:

32

New Customer Application Form

Staffs of CSD department

Fill

Provides to

Makes

Reject

Fig 3: Diagrammatic presentation of account opening process at NIBL (Seepadole Branch)

Document required while opening an account

As we know there are different types of account provided to customer by NIBL. So as

per the types of account the document is needed. The document required to open

different 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)

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System (Finacle)Head of CSD department

Verified by

Accept

Open a new account

Yes

No


Driving License, NG/N Official IDs




3. Personal NPR Account (For Indian Citizen)

Certified True copy of Identification Document viz Citizenship, Passport or

Registration Certificate from Indian Embassy.




4. Personal NPR and FC Account (For Foreign National)

Certified True copy of Passport

Certified True copy of Valid Visa other than Tourist Visa and Entry Stamp.




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




B. Business A/C

1. 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.

34

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.



Driving License, NG/N Official IDs of Account Operators.

Two Photographs each, of Account Operators.


2. Account of Clubs, Societies and Associations (NPR)

Certified true copy of Registration Certificate.

Certified true copy of by-laws.

Copy of resolutions to open and operate the account.


List of office bearers.

Affiliation Certificate with the social welfare council or other council

concerned.



Driving License, NG/N Official IDs of Account Operators.



3. Proprietorship Account (NPR)

Certified true copy of renewed Registration Certificate.





Driving License, NG/N Official ID of Proprietor.

Two Photographs of Account holder.

35

Power of Attorney, If Yes

Power of Attorney form duly filled up and signed.


Driving License, NG/N Official ID of Power of Attorney Holder

Two Photographs of Power of Attorney Holder


4. Account of Partnership (NPR)

Certified true copy of renewed 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.



Driving License, NG/N Official ID of Account Operators.



4.3.2.b Account Closing:

Account closing is the important task to be done under account operation. As the

account is opened, it is being closed also due to various reasons. But the maximum

reason customer close their account was going outside of the country for long

duration. The charge for account closing within the six months opening is Rs. 1000

whereas 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.

36

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.

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 has

provision of shifting between different types of saving account. The customers can

change the scheme from lower minimum balance to higher minimum balance account

but if they want to change the scheme from higher minimum balance to lower

minimum balance then certain charge should be given to bank. The charge of scheme

change from higher minimum balance to lower minimum balance is lower than that of

closing 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 the

customers. But if there is intern then the interns do the work. Intern distributes the

various requested documents and services to the clients. It reflects the genuine

operational efficiency of the customer service department. Various documents that

can get from this department on request are:

37

4.3.3.a Account statement

Account statement refers to checking the status of customers account. Everyday

around numerous customers come for the request for account statement to know their

status of the account. The bank provides the statement only to the account holder after

they fill up the form and submitted to CSD. The care and the secrecy of the customer

is always kept in mind while giving the account statement. After the statement is

provided the record is kept in the statement issuing book in CSD.

4.3.3.b Cheque book distribution

Clients, holding the minimum balance of Rs. 2500 can only issue the cheque book in

the Seepadole branch. Everyday customers requesting for the cheque book visits the

bank. The client has to fill up the cheque request slip available in CSD if he/ she is

requesting for the first time otherwise the cheque request slip attached in the previous

cheque 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

CSD is 90 days. If client do not collect the cheque book within 90 days then Rs. 250

charges is taken by the bank. Every day the concerned information regarding the

distribution of cheque book is recorded in the cheque issuing book maintained in the

CSD.

4.3.3.b ATM cards

Except for the fixed and call deposit the customer holding other account is provided

with an ATM card. They can use this card in various ATM counters all over the

country to withdraw cash and even for other activities like balance inquiry, pin

change, NTC prepaid recharge etc. While issuing ATM card the concerned person

must come to receive it and his/her signature is verified by the CSD staff. After

issuing card the record must be maintained in ATM issue book.

4.4 Other activities done in CSD of NIBL Seepadole branch

4.4.1 Handling Telephone Calls

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CSD department is one of the busy departments of the bank. Telephone calls never

stop ringing, as the responsible staff those calls has to be received and dealt according

to its necessity. Important calls are to be passed to other department personals and rest

should be handled by self by answering those calls and providing them solution.

4.4.2 Producing balance statement

Balance statement shows complete transaction of a customer of deposits, withdrawals

and final balance. These are confidential information so statements are provided to the

account holders only, in case of any organizations letter mentioning about providing

balance statement along with company’s stamp are must. Customers can produce their

balance statements from any branches of NIBL.

4.4.3 Recording Cheqe book issue, debit card issue

In bank there are various books maintained which may be related to cheque book

issue, debit card issue, for birthday cake etc. These books are filled up by intern for

future reference of the activities.

4.4.4 Handling Photocopy machine

To open different a/c photocopy of citizenship are required and sometime to issue

cheque book also id’s photocopy may be needed. So, for that intern are send to do

photocopy of necessary document.

4.4.5 Preparation of Cheques

Cheques are just like paper cash. Customer who has finished cheque books can ask

for another by filling up the slip which is inside the cheque book. Those are provided

within few time period.

4.4.6 Providing Information to the Customers

CSD aims to help the customer in every possible way, by listening to their grievances,

providing information on Account Balances, issuing ATM cards, helping customer

prepare demand draft, etc. Thus in a sense, Customer Service, is an information desk

provided to the customers.

39

4.4.7 Fill up the cash/cheque deposit voucher

It is not necessary that all customer of bank are educated. Many uneducated people

are 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 card

For getting new debit card customer has to fill up a form and has to pay Rs 250. After

ariving the debit card from card department of NIBL, CSD issue it to the concern

customer after verifying properly.

4.4.8.1 Responsibilities Assigned and Discharged in Card Processing:

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 active

participation in those steps. The different responsibilities that the intern had

undertaken during the internship at the card department are as follows:

i) Receiving, Recording and filing Application forms of debit card

The account holders who want to have the debit card fill up the application form in

CSD. For the recording of these forms Finacle is used by the staff. After that the data

input to Finacle are verified by concern authority. These forms are send to card

center.

ii) Scanning

Scanning is the only job which is not done by the staffs but done by interns. Scanning

of the photographs and signature in the form is necessary since these are to be

embossed in the Debit card. While providing the card, verification is done by looking

at the photo and the signature in the card.

iii) Providing cards and pin code to customers

The renewed cards are distributed from the card center. The intern search the card in

the boxes as ordered by senior as per the name of the customer’s name and provide it

to them with pin code and activating card.

40

CHAPTER FIVE

CONCLUSION AND LESSON LEARNT

5.1 Conclusion

Even though Nepal is one of the least developed countries in the world, banking

business is rapidly developing. Banking sector plays an important role in

commencement and development of industry. Therefore there is growing need for the

development of the financial institutions in the country which may be fulfilled by

banks. Nepalese financial system, basically banking business, has broadened in

number and diversified in modern financial instrument

NIBL 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. The

major reason behind it was cooperative and responsive staff.

From above analysis it is clear that NIBL is one of the well established and leading

commercial bank of Nepal which aims to serve its valued customers through quality

and advancement of its services throughout the nation. The bank is widely providing

its financial services through largely extended network. During internship period, I

got an opportunity to gain an in depth knowledge of the banking sector and scrutinize

its various aspects. Internship favored me to get the practical acquaintance of the bank

41

and its overall operation system. I observed the functional activities of CSD and

understood the corporate culture. Prior to internship, my knowledge was limited

within the books. At NIBL I was fully guided by all the staff in acquiring the practical

knowledge. It not only provided me the experience of functional activities but also to

let me know about the informal organizational relationships. The internship added

sense of responsibility to me while performing any task. The experience of internship

was incredible which boosted my confidence level and enhanced my inter-personal

communication skills. It developed interaction skills and shaped up my personality

too.

Therefore, I am very much pleased to conclude that NIBL is one of the best banks

with friendly environment and excellent customer service.

5.2 LESSONS LEARNT

The duration of my internship lasted for around two months and during the course of

the internship there were various lessons that I was able to learn. This internship was a

great opportunity for me to face real-life work scenarios after four years in the

classroom; and it must be said that it was a great learning experience for me. Some of

the Lessons I learnt during my time as an intern at Nepal Investment Bank Limited

could 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.

42

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