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

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 Application form for different type of account opening

 Browsers of the different types of account

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

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1.4.3 Duration

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

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more time duration I was placed at CSD. So the activities I had performed in CSD
during my internship are as follows:
1. Interacting with customers and try to solve their queries.
2. Counseling the customers and answering their queries.
3. Opening different accounts after verifying all the required documents.
4. Providing the bank statement as per the requirement of customer.
5. Informing customer about their arrival of ATM cards
6. Receiving cheque book requests and delivering the cheque book.
7. Arranging the cheque and cards on the basis of ascending order.
8. Helping customers fill up the different types of forms.
9. Activating inactive or dormant accounts.
10. 11. Close the accounts of customers as per request.

1.5.2 Activities performed at Marketing 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:

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1. Remittance data entry
2. G-9 form fill up for fixed deposit
3. ATM Pin code release

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.

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CHAPTER TWO

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.

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2.2 Origin of Bank
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

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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
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

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The modern banking in Nepal has started with the establishment of Nepal
Bank Ltd. in 1994 B.S

Having felt the need of development of banking sector and to help the
government formulate monetary policies, Nepal Rastra Bank was set up in
2013 B. S. as the central bank of Nepal.

In B.S. 2022, Government set up Rastriya Banijya Bank as a fully
government owned commercial bank.

The agricultural development bank was established in B.S. 2024. This bank
was established with the objective of increasing the life standard of the
people who are involved in agriculture.

3) The third phase of Banking Development

The process of development of banking system in Nepal was not satisfactory.
Nepal was observing the events that were taking places in the world also. The
country can‟t change its status by using only its own capital in the country
without importing the new technology from Foreign country and accordingly,
law and policy have been enacted by the state to encourage the foreign
investment on banking sector. From this, the real form to the development of the
banking system started in Nepal. In order to get established and develop other
Joint venture commercial banks and other financial institution, Nepal adopted
liberal free economic policy. Accordingly, Nepal is allowed to establish
different joint venture banks under the collaboration with foreign banks.

4) The fourth phase of Banking 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

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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
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 Institutions
As of Mid-July 2011 (Licensed by NRB)

S.N Organization Number
1 Commercial Bank 31
2 Development Bank 87
3 Finance Companies 79
4 Micro credit development Bank 21
5 Saving and Credit Co-operatives(Licensed by NRB) 16
6 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

2.5 Commercial 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.

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Commercial Bank Act 2031 states- “A commercial bank is the bank which exchanges
money, accepts deposits, grant loans, and perform banking function.”

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

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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,
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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Shareholding structure

20% Organized Institutions

15% 50% Rastriya Banijya Bank
15% Rastriya Beema Sansthan
General 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
Rastriya Beema Sansthan -
Mr. Omkar Nidhi Tiwari Director
Group C
Mr. Surendra Bahadur Singh Public Director Group D
Professional
Mr. Mohan Madan Budhathoki
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

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Ezee Savings 5.00
Saving Bonanza 6.50

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

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 Special health package at National Reference Laboratory (NRL)
 Privilege Lounge
 Unlimited deposits and Withdrawals
 Free eBanking
 Free issuance of VISA Electron Debit Card valid in Nepal and India
 Free Any Branch Banking Service (ABBS)
 Accidental Insurance
 Cheque book facility

 Afnai Bachat 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

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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
 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:

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 Minimum opening balance Rs 2500/-
 Maturity period, Maximum of 3 years
 Minimum monthly deposit Rs 500/-
 Minors receive cakes on their birthday
 Parents/guardian is to have an account with NIBL and from their account the
money will be transferred to this account through Standing Instruction.
 Personnel Accidental Insurance upto RS 50000/-
 Free ABBS
 eBanking service
 Free Standing Instruction service

Fixed Deposit A/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

22

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.

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
Any Branch Banking Service (ABBS)
Tele Banking Services
Statement request
Cheque pad request
23

Remittance
Trade finance
Utility payment
Lockers
Automated Teller Machine (ATM)

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

24

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

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:

25

Table : Department in Seepadole Branch

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

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,

27

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.

4.2 Responsibilities of CSD of NIBL

Customer reception and attending to their needs.
Disseminating information related to various banking products and services
that are available to satisfy needs of customers.
Manage the various forms and vouchers such as different new account
opening forms, closing forms, scheme change forms etc.
Telephone Handling
Maintaining the record of total number of the cheque requisition issued by the
customers and preparing the cheque book.
Making the photocopy of all necessary identification, documents as per the
type of the account being open and verify with the original one.
Providing the bank statement to the customers to see their transactions being
taken place.

4.3 Major functions to be performed in CSD:
As described, the CSD is responsible to provide detailed information about the
product and services of the bank to meet customer need and to make banking
more convenient. The staff in the CSD must be capable enough to cope with every

28

environment and at the same time needs to have good communication and
interpersonal skills to build a good public relation. The major activities performed
in the CSD are shown below:

Deposit
Product
Counseling
Customer
Credit
Counseling
Services
Counseling

Account
Opening
Account
Major Operations
Functions Account
Closing

Account
Statement

Cheque
Distribution
Book
Activities
Distribution

ATM
Distribution

Fig 2: Chart showing major function of 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.

29

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
Afnai bachat khata
Keta keti bachat khata
Saving bonanza
2. Fixed account
3. Current account
4. Call deposit
B) Credits
A contractual agreement which a borrower receives something of value now
and agrees to repay the lenders at some later date. When consumers purchase
something using a credit card, they are buying on credit(receiving the item at
that time, and paying back the credit card company month by month). Any
time when an individual finances something with a loan (such as an
automobile or a house), they are using credit in that situation as well. Also
credit refers to the borrowing capacity of an individual of company. The
various loan provided by the seepadole branch are:

30

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
Any Branch Banking Service (ABBS)
Tele Banking Services
Statement request
Cheque pad request
Remittance
Trade finance
Utility payment
Lockers
Automated Teller Machine (ATM)
College and school payment
Evening 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

31

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.

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 Fill Application Form

Provides
to

Staffs of CSD
Reject department

Makes

No

Head of CSD Verified System (Finacle)
department by

Yes

Accept

Open a new account

33

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)

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)

34

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.
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.

35

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.
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.

36

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.
2. If the customer willing to close the account must fill up the account
closing form specifying the reason.
3. After submission of the form to CSD it is confirmed from various
department that the customer is not enjoying any sort of facility from
the bank at present.
4. The client is then asked to return all his account related belonging like
ATM card and the cheque book.
5. Then finally the account of the applicant is closed with certain charges.

Points to ensure while closing the account:

Account closing request has been signed by the authorized signatory.
Any due to/from the customer has been set off.
Unused cheque leaves and ATM card are received from the customers and
shredded.
Reason for account closing is received.

37

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:

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

38

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

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

39

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.

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:

40

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.

41

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
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.

42

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.
Activities related in issuing cheque, issuing ATM cards, phone handling e.t.c.
was learnt
Readiness to work and showing and „never say no‟ attitude are the keys
towards success.
One should not only know to attract a customer but also should be able to
retain them.
Gained basic knowledge on operating Finacle software of NIBL.

43

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