ACTIVITIES
PERFORMED IN CSD AND BACK OFFICE DEPARTMENT OF
NEPAL
INVESTMENT BANK LIMITED
(New
Baneshwor, Kathmandu)
Submitted By:
Hari Raj Bajracharya
Shanker Dev Campus
T.U. Registration No.: 7-2-39-1442-2013
Exam Roll No.: 11794/13
An Intern Report Submitted To:
Faculty of Management
Tribhuvan University
Kirtipur, Kathmandu
In the partial
Fulfillment of the requirements for the Degree of
Bachelor of Business Administration
(BBA)
Putalisadak,
Kathmandu
September, 2017
DECLARATION
`
I hereby declare that the internship
report “Activities Performed in
CSD and Back Office Department of Nepal Investment Bank Limited”, is done under the guidance of “Associate Prof. Achyut Bhattarai”
in partial fulfillment of the requirements for the degree of Bachelor of Business Administration at
the Faculty of Management, Tribhuvan University. This is my original work and I
have not submitted it elsewhere.
Date:
11th September, 2017 Signature: _______________
Name: Hari Raj Bajracharya
ACKNOWLEDGEMENT
This Report entitled “Activities
Performed in CSD and Back Office Department of Nepal Investment Bank Limited” has been prepared in partial
fulfillment for the degree of Bachelor for Business Administration (BBA) under
the course designed by the Faculty of Management, T.U. The internship has
helped to gain real life experience regarding the Operation of
the Commercial Bank. Getting an opportunity to work in the Nepal Investment
Bank Limited, New Baneshwor Branch is a very proud achievement in itself and
the guidance and support I have received from this department makes my intern
experience even more heartwarming.
I am thankful to Mr.
Sujan Ranjit (Branch Manager of Nepal Investment Bank Limited, New Baneshwor
Branch), Mrs. Sabitri Ghimire and Mrs. Manisha Rana Mahat (Supervisors at New
Baneshwor Branch) for guiding me through the operations and how the works are
carried out. I would also like to reserve special thanks to all the staffs of
the Bank for being patient with me and teaching me through how the activities
are performed in the department during my internship period.
Similarly, I would like to pay my
sincere gratitude to my thesis supervisor Mr.
Achyut Bhattarai
of Shanker Dev Campus who guided through report providing valuable suggestions,
guidance, supports and supervision.
Finally,
I would like to offer my profound gratitude to my family members, my friends,
colleagues, and well-wishers for their encouragement and support during the
entire period of my internship. Many thanks also, to those whom I had the opportunity to
interact and for their commitment and sharing experiences that enriched this
project.
11/09/2017 Hari
Raj Bajracharya
8th
semester, BBA
TABLE OF CONTENTS
Letter
of Recommendation
Internship
Completion Letter
Declaration
Acknowledgement
Table of
Contents
List of Tables
and Figures
List of Abbreviations
TOPICS PAGE NO
Chapter I: Introduction
1.1 Background of the study 1
1.2 Objectives of the study 2
1.3 Methodology 3
1.3.1 Organization Selection 3
1.3.2 Placement 3
1.3.3 Duration 4
1.3.4 Activities 4
1.3.5 Data Collection 6
1.4 Limitations 7
Chapter II: Introduction of Banking
Industry
2.1 Introduction of Bank 8
2.2 Origin of Bank 9
2.3 History of Banking Development in
Nepal 10
2.4 Need of Banking 11
2.5 Types of Bank 12
2.6 Commercial Bank 13
2.7 Functions of Commercial Banks 15
2.8 Present Scenario of Commercial Banks
in Nepal 16
Chapter
III: Introduction of the Organization
3.1 An Introduction to
Nepal Investment Bank Limited 17
3.1.1 Vision 18
3.1.2 Mission
Statement 18
3.1.3 Strategic
Objectives of NIBL 18
3.1.4 Core Values
and Ethical Principles 18
3.1.5 Organization
Structure of NIBL 20
3.1.6 Board of Directors 20
3.1.7 Management Team 21
3.2 Ownership Structure and Share Capital of
NIBL 22
3.3 An Overview of
the Bank’s Performance 23
3.4
Products and Services of NIBL 23
Chapter
IV: Analysis of Activities and Problem Solved
4.1 Back Office 25
4.1.1 Trends in Back Office 25
4.1.2 Functions of Back Office 26
4.2 Customer Service Department 27
4.2.1 Function and
Services provided by CSD 28
4.3 Problem Identified and Solved 34
4.4 Possible Solutions to the problems 35
Chapter
V: Conclusion and Lesson Learnt
5.1 Conclusion 36
5.2 Lessons Learnt 37
Bibliography
Appendices
LIST OF TABLES
|
Table no
|
Title
|
Page no.
|
|
1.1
|
Duration of Internship
|
4
|
|
3.1
|
Board of Directors
|
20
|
|
3.2
|
Management
Team
|
21
|
|
3.3
|
Share
Ownership
|
21
|
|
3.4
|
Share Capital and Ownership
|
22
|
LIST OF FIGURES
|
Figure no.
|
Title
|
Page no.
|
|
3.1
|
Shareholder ownership
|
22
|
|
4.1
|
Flow Chart of new A/c Opening
Procedure
|
30
|
|
4.2
|
Flow Chart of A/c Closing
Procedure
|
31
|
LIST OF ABBREVIATIONS
ABBS Any
Branch Banking Services
AOA Article
of Association
ATM Automated
Teller Machine
A/C Account
BBA Bachelor
in Business Administration
CEO Chief
Executive Officer
CSD Customer
Service Department
ECC Electronic
Cheque Clearing
FOM Faculty
of Management
GM General
Manager
IMF International
Monetary Fund
ITO International
Trade Organization
KYC Know
Your Customer
NIBL Nepal
Investment Bank Limited
NPR Nepal
Rupees
SMS Short
Message Service
SWIFT Society
for Worldwide Interbank Financial Telecommunication
TT Telegraphic
Transfer
TU Tribhuvan
University
USD United
States Dollar
INTRODUCTION
The
history of the Financial Sector especially Modern Banking Industry can be
traced back to 1694 A.D in England; but as far as Nepalese Banking History is
concerned, it is only a third quarter of a century old, with the establishment
of the Nepal Bank limited in 1937
A.D(1994 B.S). Now if we closely analyze the Financial Sector, we will find
that the Financial Sector branches out to two major sub-sectors: the Banking
Sector and the Non-Banking Sector. The Banking Sector encompasses the central
bank i.e.., the NRB and the thirty-two Commercial Banks; whereas the
Non-Banking Sector comprises of Development Banks, Finance Companies,
Co-operatives, micro-finance, and other financial institutions such as
Insurance Companies, Mutual Funds, Provident Funds, Postal Saving Offices and
Nepal Stock Exchange.
BBA is a four-year graduate level program offered by the Faculty of
Management (FOM), T.U. whose mission is to “develop socially responsive,
creative, and result-oriented management professionals…in the rapidly growing
business sector in Nepal and abroad”( “BBA Program and Curriculum” TU, FOM,
2002). To do so, the FOM provides both theoretical as well as practical
knowledge to its students. As per the requirement of
Faculty of Management (FOM) of Tribhuvan University, students of Bachelors in
Business Administration (BBA) should perform the internship in any organization
for eight weeks. Simply this study is used for the partial fulfillment of BBA
course affiliated to T.U. The FoM, Tribhuvan University has its ultimate
objective of educating students for professional pursuits in business, industry
and government.
Although the course design is very much practical in all the
semesters with field work, report preparation and presentations, the internship
at the last semester aims in providing the students with real world experience
as to how the jobs in the organizations are performed, what are the issues the
business firms need to address and many others. The internship is to serve the
purpose of acquainting the students with the practice of knowledge of the discipline
of an organization and helps the student to understand corporate social
responsibility, develop the corporate attitude and venture entrepreneurship.
The BBA program has incorporated eight weeks internship program with a view to developing students’ skill in object-oriented business management, capable of understanding and solving real life business related problems. This report is prepared on the basis of careful study and the work done in the bank as an intern referred by college “Shanker Dev Campus”. The report focuses on functioning of branch bank and how the works are carried there. The major functions of this branch are deposit, withdrawal, account opening, clearance of cheques, remitting and collecting cash on behalf of its clients, opening bank draft etc. The entire major operational are performed using the software named FINACLE, which is developed by Infosys Technology Limited India. Thus, the internship has proved to be a wonderful and enlightening experience for me. Not only did I get the golden opportunity to gain practical, on-the-job experience but I also got to utilize my conceptual knowledge and enhance my managerial skills.
The primary objective of this internship
is to gain valuable insights into the business sector, more specifically the
banking industry in addition to this another major purpose is also to relate
the theoretical knowledge with the practical experience and to enable us to be
more prolific in acquiring the real life techniques of achieving results
through both individual effort and team building along with the knowledge
gained from the academic environment. The other specific objectives of the study
are:
·
To understand the applicability of
Theoretical Knowledge at the real work place.
·
To learn Account Opening, Account
Closing, ATM Handling, Printing Statements, and other enquiry procedures of
CSD.
·
To be familiar with the filling forms
for Draft, SWIFT, RTGS and keeping records in concerned files of Back Office.
1.3 Methodology
Research methodology is
a systematic investigation on a particular subject matter. It is a study of
material and source in order to establish facts and reach a new conclusion. Completion of the internship is
a combination of the different types of activities. It starts from the
selection of the organization for the internship, performance of different
kinds of activities and placement in different parts of the organization and at
last collection of various primary and secondary data for the preparation of
the report. In terms of data collection, both primary as well as the secondary
source had been used.
1.3.1 Organization Selection
Selection of
organization for internship program is always a crucial task. Being a student
who has specialized in financial courses in the Seventh and Eighth semester of
our BBA, I had to select a financial institution which could help me broaden my
spectrum of knowledge about the banking, business and financial sector. So I
decided to choose Nepal Investment Bank Limited for doing my internship. I
thought that it would give me an opportunity to realize my theoretical
knowledge into practical field.
In order to approach the bank, the
requirements were the recommendation letter from the college and curriculum
vitae. After screening my CV by the
authority of Human Resource Department (Head Office), I was duly selected as an
intern for its New Baneshwor branch. So I started working there from 5th
June 2017 to 17th July 2017.
1.3.2 Placement
During the internship,
I was placed in the Back Office and Customer Service Department at the New
Baneshwor Branch. I was required to
handle all the activities of the mentioned departments under the guidance and
supervision of Mrs. Sabitri
Neupane and Manisha Rana Mahat, the Supervisors at New Baneshwor Branch.
In addition to them, the other staffs were equally cooperative and helped me to
learn the activities of the various departments. The supportive and friendly environment in the organization helped
the intern to complete the internship period through the proper guidance of the
staffs of various departments. Through their proper guidance, the intern was
able to learn more about the organization culture, work environment, and work
procedures.
TU
has prescribed minimum six credit hours for the internship. It is equivalent to
eight weeks i.e. two months. But, as per the Rule of Nepal
Investment Bank, the interns are required to be present at the workplace for
six weeks and the remaining two weeks are provided to prepare the report. As
stated earlier, my internship period started from 6th June 2017 to 31sr July 2017. I was required to report the organization at
10 am daily. The
bank has closely monitored attendance, performance and conduct of intern at the
workplace.
Table
No 1.1: Duration of Internship
|
S.N
|
Departments
|
Weeks
|
|||||||
|
1st
|
2nd
|
3rd
|
4th
|
5th
|
6th
|
7th
|
8th
|
||
|
1
|
Back Office
|
√
|
√
|
√
|
√
|
√
|
√
|
√
|
√
|
|
2
|
Customer
Service Department
|
√
|
√
|
√
|
√
|
√
|
√
|
√
|
|
During
the internship I got the opportunity to perform different activities of the
departments. The first 2-3 days I spent gaining information from the staffs of
New Baneshwor Branch, and then after knowing that, I spent a week at the back
office providing information where I had to serve the customers with various
information and perform due activities under the guidance of the staffs. As
Back office and customer service department lied in proximity, I too had the
opportunity to spent some of my time at the Customer Service Department. I had
to help people filling up their account opening, account closing and many other
forms like demand draft, speed remit form, deposit voucher of customer, making
and handling telephone calls etc.
I
was placed in the Back Office and customer service section where following
tasks are to be performed:
i)
Back
Office
The Back office of any organization is responsible
for settlement and delivery activities. Back office also prepares the various
treasury related reports. Besides, various kinds of activities performed at the
back office of Nepal Investment Bank are:
·
Making telephone calls to the customers
and providing them with the information as well as handling their grievances.
·
Maintaining and handling the Filing systems
of various transaction activities.
·
Passing the necessary entries in the
various records books regarding the transactions.
·
Helping the clients to fill up forms of
wire transfer services such as Draft, Swift, Real time gross settlement
(R.T.G.S.) etc and providing confirmation of payment made/received in Nostro
Account.
·
Providing information to the customers
regarding the various activities that are conducted at the back office
·
Maintaining up to date records and
registering all transactions of activities conducted at the back office.
ii)
Customer
Service Department
The Customer service department at
Nepal Investment Bank believes in providing the world class services to all our
valued customers. It is a department which deals with customers and their complaints
and orders. Therefore, it focuses constantly to cater to all financial needs
and services. Various activities that are performed at the Customer Service
Department are:
- Proper
counseling to the customer with politeness.
- Informing
Customer about different types of account and other queries they have
about the operation of bank.
- Opening
all types of accounts like saving, current, and other various schemes.
- Uploading the scanned photo and signature into
the Finacle system as well.
- Timely
issuance of Cheque books to customers.
- Maintaining
proper records of cheque register, Statement Book and Debit card registers.
- Distribution
of various forms such as of e-banking, SMS banking, pay bill, etc.
Checking customer’s transaction and balance on request.
- Proper
filing of account opening and closing forms.
- Informing the customers if their cheque
has been returned.
1.3.5
Data Collection
The term refers to the way of the collection of data and
information. There are the different source of collection of data and
information. They are the primary source and secondary source. Here, both of
these sources are used to make the report authentic.
a. Primary Source:
•
Direct Verbal Communications with Managers and related staffs
Asked
many questions to the staffs of the related department and acquired lots of
information from them.
• Observation of activities
performed
Observed
the activities performed in the organization done by employees and during the
on-site visit of the customer’s property.
b. Secondary Source:
·
The
articles, publications and journals related to NIBL in different magazines and
daily newspapers.
·
Annual Reports
·
Brochures of the bank.
·
Bank's official website (nibl.com.np)
·
Nepal Rastra Bank's official Web Site (www.nrb.org.np) and Periodicals.
Despite most of the efforts undertaken to make the project more
realistic, practicable in terms of Nepalese context, there are certain
limitations of the study.
The chief limitations that I faced during the internship and during the
preparation of this report are listed as:
·
The major constraint was the Time constraint.
So learning and knowing all the banking procedure within the internship period
i.e., eight weeks is almost impossible.
·
Limited
access to and the use of the Banking Software, as I was an intern which prevented
me from learning more about the actual transactions and entries in the system.
·
Limited knowledge on my part which created
hindrance to understand the jargons and technical procedures of the banking
world.
·
This report only visualizes the activities CSD
of the New Baneshwor Branch and not of the entire organization as a whole.
·
The study is not applicable to other
organizations of similar nature and
·
Finally, the data collected may not be so
accurate as information was collected from the limited personnel and the
customer of Nepal Investment Bank Limited of New Baneshwor Branch.
CHAPTER II
INTRODUCTION OF BANKING
INDUSTRY
2.1 Introduction 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 ‘Banco’ 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.
The following are some of the main
definitions given by different scholars and institutions:
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)
Bank is an organization established for
the purpose of exchange money deposit lending money and participation in
transactions. (Commercial Bank
Act, 2031)
A bank is an establishment for the custody of money, received from or on behalf of each customer. Essential duty is to pay their draft on each profit area from its use of the money left unemployed by them. (Oxford Dictionary)
By these definitions, the bank can easily be defined as the custodian of deposits. The transactions in the financial market heavily depend upon the banking system of the country. Without the bank, it would be quite impossible for the industrialist and entrepreneurs to go directly to the general public for getting their savings or investments. So the simplest definition is that bank takes the saving of public by providing them with certain rates of interest and loan it to needy customers charging them the certain rate of interest and earns some profit. This is the broadest form of banking but in this age banking is such big term. It does a lot more than deposits and credits, remitting of money, letter of credit etc.
2.2 Origin of Bank
The word bank has been derived from Italian word banco. In the
ancient time in the French language it is called the bank; in The English
language it is called the bank. In Italian word, banco means bench. The
evolution of banking industry had started a long time back in ancient times.
There was the reference to the activity of money changers in the temple of
Jerusalem in the New Testament. In ancient Greece, the famous temples Delphi
and Olympia served as great depositories for people surplus funds and these
were the centers of money lending transactions. Indeed, the traces of
rudimentary banking were found in the Chaldean, Egyptian and Phoenician
history. The development of banking in the ancient Rome roughly followed the
Greek pattern. Banking suffered oblivion after the fall of the roman empire
after the death of emperor Justinian in 565 AD and it was not until the revival
of trade and commerce in the middle ages that the lesson of finance was learnt
a new from the beginning. Money lending in the middle ages was however largely
confined to the Jews since the Christians were forbidden by the cannon law to
indulge in the sinful act of lending money to others on interest. However as
the hold of church loosened with the development of trade and commerce about
the 13th century Christian also took to the lucrative business of money lending
thereby entering into keen competition with the Jews hither monopolized the
business.
As a public enterprise banking made its forced beginning around the middle of the 12th century in Italy and the Bank of Venice founded in 1157 was the first public banking institution. Following it were the bank of Barcelona and the Bank of Genoa in 1401 and 1407 respectively. The latter two continued to operate until the 18th century. With the expansion of commercial activities in northern Europe, there sprang up a number of private banking houses in Europe. And slowly it spread throughout the world.
Development of World Banking Sector
When the World War-2 was inching towards its end major countries
started mulling the plight of the future world. There were valued concern about
the reconstruction of devastated areas and rebuilding and developing the
war-hit economies. In 1944, they gathered at Breton woods in New Hampshire
State of the USA. They made a remarkable decision to boost international trade
and economic growth and to achieve monitor stability in the global economy. The
following organization is the outcomes of historical greater woods conference
of July 1944: IBRD (World Bank), IMF (International Monetary Fund), and ITO
(International Trade Organization).
2.3 History of Banking Development in Nepal
In the country, the development of
banking is relatively recent. The record of banking system in Nepal gives
detail account of mixture of slow and steady evolution in the financial and
global economy of Nepalese life. The history of banking in Nepal can be traced
back to 1877 A.D. when Tejarath
Adda was established by the government to provide credit facilities to
general public. These unorganized institutions although quite underdeveloped
could still mobilize funds from wide range of different sources. Although the
Tejarath Adda was established, it was not able to facilitate the growing trades
with Tibet and India. Thus a need for the establishment of a modern bank had
become essential to promote the trade of the nation. In the year 1923 “Treaty of peace and Friendship”
were concluded between the Government of Britain and Government of Nepal. As
per the treaty, Nepal could carry on import trade free of duty via India. In
other words, it meant that Nepal was going to diversify its foreign trade and
for that the country needed a modern bank. But it wasn’t till 1936 A.D. that the Udyog Parishad
(Industrial Development Board) was set up with the objectives to promote and
protect the trade, commerce, industries and manufacturers of Nepal, and to
consider and discuss questions connected with or affecting such trade,
commerce, industries and manufacturers, to register and incorporate joint stock
companies in conformity with Nepal Companies Act and also to examine and
supervise their workings and to assist and advise Government of Nepal in
economic and financial matters.
Thus, the “Udyog Parishad” helped in
opening new avenues for the advent of banking, industry and commerce in Nepal
and thus helped to enhance the economic status of the country. A year
after its formation, the Udyog Parishad formulated the company act and the
“Nepal Bank Act” in 1937 A.D.
which established the Nepal Bank Ltd. with the technical cooperation of the
Imperial Bank of India, as the first commercial bank of Nepal. Before 1956
“Sadar Mulukikhana Adda” (local treasury of the government) issued currency
notes and the foreign exchange reserves of Nepal were maintained by Reserve
Bank of India. During that period the Indian currency along with Nepalese
currency was circulating in the economy. Thus to manage the circulation of
national currency and to maintain exchange rate stability, there was an urgent
need for the establishment of a Central Bank. In 1956, The Nepal Rastriya Bank
Act was formulated and Nepal Rastra Bank was established as a central bank on April 26, 1956. It took over the functions
of Mulukikhana Adda “Government Treasury” and contributed in the growth of
financial sector.
Rastriya Banijya Bank (National
Commercial Bank), a state-owned commercial bank, was established in 1966. In
the same year, The Land Reform Savings Corporation was established to deal with
finances related to land reforms. Now there are many
banks and financial companies in the country.
2.4 Need of Banking
Banks have, today gained paramount trust in the public. The
functions of banks are not confined just to accept deposits and give loans;
they render a wide range of financial services covering different strata of
society. This gives us an impression regarding the need of a bank. Need of bank
includes but does not limit to:
·
Financial
intermediation
·
Legal
entity and freedom from exploitation
·
Boost
of trade and economic development
·
Organized
institution and capital formation
·
Fund
transfer and safety of valuables
·
Underwriting
services and agency services
·
Employment
2.5 Types of Bank
Different banks are established for different purposes. They can
be classified into the following types:
• Central Bank
The Central bank is the bank of all banks. It is the supreme body,
which controls and stabilizes the economy of the country through various direct
and indirect means. In direct means, it uses the monetary policy as a tool to
expand and contract the economic activities of the country and in indirect
means; it uses tools like issuance of treasury bills, national savings bond,
and bank rates etc. the central bank neither maintains accounts of public nor
does it give loans to the public. Nepal Rastra Bank which was established in
26th April 1956 is the central bank of Nepal and Bank of England in 1694 A.D.
was the first central bank of the world.
• Commercial Bank
Commercial banks are the largest source of finance and its
business is largely confined to business institutions. Though the commercial
banks were established with the concept of supplying short-term credit and
working capital needs of industries, they started to provide long-term loans
for up to 10 years by the provision made in commercial bank act 1974. after the
enforcement to lend in priority and deprived sector, these banks initiated to
provide credit to small and cottage industries, agriculture, and services etc.
Nepal bank Ltd was established in 15th November 1937 as the first commercial
bank in Nepal.
• Agricultural Bank
Cooperative bank, established in 1963, was converted to
Agriculture development bank in 1967 with the objective of modernizing the
country’s agriculture sector. This bank, besides providing credit to
agriculture has been availing credit to agro-industries such as livestock,
bee-keeping poultry etc. and has extended their business in hire-purchase and
other loans also.
• Development Bank
Development banks are established for the development of the
economy. Nepal industrial development corporation (NIDC) was established in
1956, with the objective of providing medium-term loans for the establishment,
development and modernization of private sector industries. Small industry
Development Corporation was established in 1960 to provide loans to small-scale
industries and it was merged to NIDC in 1971.
• Cooperative Bank
Cooperative has developed as the alternative of usury. It is an
association of voluntary members and caters the financial needs of the members
only on a mutual basis. It is a self-help type of organization, where borrowers
are member shareholders. There are 21 cooperative operating in Nepal.
• Saving Bank
The establishment of saving bank was to alleviate property through
the encouragement of thrift among the poor and marginalized community. Savings
banks offer higher interest rate than other banks and the fund is utilized by
the government. The first savings bank in Nepal is the Hulak Bachat Bank
established in 1962 A.D.
• Rural Bank
Rural banks are established with the aim of providing credit and
other facilities to the small and marginal farmers, agricultural laborers,
artisans and small entrepreneurs in rural areas. The main purpose of rural
banks is to bridge the vast credit gap in the rural sector and curtail the role
of unauthorized private moneylenders. All financial needs of the medium and
small firms are expected to be met by the rural banks.
• Merchant Bank
Merchant banking institutions offers various specialists services
such as loan syndication, financing and management consultancy, project
counseling, portfolio management, formulation of schemes for rehabilitation,
guidance on foreign trade financing and management and advisory services to
medium and small savers.
2.6 Commercial Bank
Commercial banks are the
major component in the financial system. Commercial banks come into existence
mainly with the objectives of collecting of idle funds, mobilizing them into
productive sector and causing the overall economic development. The commercial
bank is the oldest form of bank. In general, bank that performs all kinds of
banking business and generally finances trade and commerce is called commercial
bank. It occupies quite an important place in the framework of every economy.
According to Nepal
Commercial Act 2031 B.S. (1974 AD) ,”A
commercial Bank refers to such types of bank which deals in money exchange,
accepting deposits, advancing loans, and other commercial transitioning except
some special functions done by some specified bank such as Co-operative Bank,
Agricultural Bank and Industrial Banks.”
The commercial banks are
those banks, which pool together the scattered savings of the community and
arrange for their productive use and generate profit. They accept deposits from
the public and use the money to help the community by making loans to
individuals, organizations, governments and business. Commercial banks, acquire
funds from one group of surplus spending units and making these funds available
to other deficit units facilitating the effective mobilization of resources, which
in turn leads to sound economic growth of the country. The main aim of a
commercial bank is to earn profit like any other business entity. It lends a
certain percentage of the cash lying in deposits on higher interest rate than
it pays on such deposits. The difference of interest on deposits received and
loans advanced are the main source of its income. Thus commercial banks are
merely a business firm engaged in financial intermediation as well as perform
additional functions under strict supervision and control of the central bank.
In Nepal, Commercial
Banks are providing valuable services. Since they are allowed to perform all
kinds of financial functions, they are offering a wide range of services to the
people. In the Deposit side, they have widened their range from normal saving
and current accounts to market-segment specific deposits to attract specific
groups of consumers. Similarly in the Lending side too they have expanded
tremendously offering numerous business, consumer/retail, long-term, short-term
loans as well as fee-based other financial services. Finally in the Investment
side, they have ventured into multiple productive sectors (infrastructure,
hydro, hotel, tourism, deprived-sectors, agriculture etc). Therefore, the fate of the country is greatly determined by
the active role of commercial banks. Banks provides facilities to their
customers by providing loans, remitting funds, purchase and sale of bills and
other market information. These services help to run the business and other economic
activities rapidly as well as smoothly which ultimately helps in economic
development.
2.7 Functions of Commercial Banks
Commercial Banks perform an array of functions. The commercial banks are
those banks, which are established to accept deposits and grant loan to the
industries, individual and traders with a view to earn profit. Apart from
financing, they also render services like collection of bills and cheques,
safekeeping of valuables, financial advising etc. to their customer. These
functions can be systematically categorized as follows:
i) Primary Functions
·
Accepting
Deposits
·
Lending
·
Investment
ii) Secondary Functions
·
Collection
and Payment of Cheques
·
Standing
Instructions
·
Acting
as Correspondence
·
Collection
of bills-electricity, telephone, etc
·
Purchase
and Sales of stocks/share- act as a banker to issue
·
Lockers-trustee
·
Remittance
facility
·
Advisory
services
·
Other
Miscellaneous Services
2.8 Present Scenario of Commercial Banks in
Nepal
Banks are gradually starting to realize that, in today’s
competitive banking environment, exemplary customer service is one of the
distinguishing characteristics that banks can exploit to establish a
competitive edge. Since most banks offer comparable products and services, they
should continually search for a competitive advantage that will attract new
customers and help retain existing ones. Banks are therefore, looking to
develop innovative products and services to maintain superior customer services
levels while at the same time remaining profitable. With the number of market
players in the rise, the competition has been obviously growing in the banking
industry. The most obvious effect of the rising competition can be seen in the
interest rates offered by the banks.
Banks are gradually shifting towards the IT-based solution to enhance service delivery in order to address customer concerns. Most banks are embracing E-banking and provision of ATMs to reduce long queue in the banking hall. In addition, some banks have launched mobile phone banking services which facilities several account query tools, including account balances, thereby minimizing the need for customers to visit banks. This drive towards the IT-based solution will continue to gather momentum in the future as banks will find it very difficult to survive in the ever growing competition without some form of competitive advantages.
Another trend observed nowadays is large corporate houses explore
the shift towards multiple banking relationships. In order to remain
competitive, banks are seen to be increasingly encouraging business houses to
transact with them. This has led to the creation of the large volume of
unutilized limits with the bank and in order to get a large piece of the pie
banks are increasingly accepting risks, which they otherwise would not have
taken. The unyielding competition has also led the banks to accept collaterals
that are more risky and unsecured. The volume of loan against the hypothecation
of stock, receivable and other assets are on the rise. In the absence of
hypothecation in the current assets, the risk of over financing is eminent and
banks are exposed to the higher degree of risk.
A total number of commercial banks and their date of the
establishment are presented in Annex I.
CHAPTER III
INTRODUCTION OF THE ORGANIZATION
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,
Credit Agricole Indosuez would handle 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, 2010 and 2016 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.
3.1.1 Vision
“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. NIBL is
committed to do this mission while ensuring the highest levels of ethical
standards, professional integrity, corporate governance and regulatory
compliance.
3.1.3 Strategic Objectives of NIBL
§ To develop a customer oriented service culture
with special emphasis on customer care and
convenience
·
To
increase our market share by following a disciplined growth strategy
·
To
leverage our 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 attract our targeted customers
and market segments
·
To
continue to develop products and services that reduce our 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
3.1.4 Core Values and Ethical Principles
The core values let the institute, customers and communities know
what they serve, who they really are and the principles by which they pledge to
conduct business. In essence, the bank believes that success can only be achieved
by being true to the core values and principles.
• Customer Focus
At
NIBL, the prime focus is to perfect the customer service. Customers are their
first priority and driving forces. So, they wish to gain customer confidence
and be their trusting partner.
• Quality
They
believe that the quality service experience is paramount to their customer and
are strongly committed to fulfilling this ideal.
• Honesty and Integrity
At
NIBL, they ensure the higher level of integrity to the customer, creating an
ongoing relationship of trust and confidence with a belief of treating each
customer with honesty, fairness and respect.
• Belief in staff
At
NIBL, every staff is recognized as important assets and competitive strengths
and their worth and dignity is respected for the progress of the bank.
• Teamwork
NIBL
is a firm believer in teamwork and feels that loyal and motivated teams can
produce extraordinary results. They are driven by a performance culture when
recognition and rewards are based on individual merit and demonstrated a track
record.
• Good Corporate Governance
Effective
Corporate Governance procedures are essential to achieving and maintain public
trust and confidence by following best practice.
• Corporate Social Responsibility
NIBL is committed to
behaving ethically and contribute towards the improvement of the quality of
life of people, community and greatly the society.
3.1.5 Organization Structure of NIBL
Organization structure is the specified path through which the
formal command of authority and responsibility flows. The organization
structure of NIBL is presented in the Annex-II
The organization structure of NIBL consists of Chairman at the topmost
position followed by CEO who is directly accountable to the Chairman. There are
three Deputy General Managers in NIBL holding the responsibility of Corporate
Banking, Retail Banking and IT, Card, Remittance and Product Development
Department. They delegate responsibility to Assistant General Managers who are
also three in number at different branches of NIBL.AGM again delegate authority
to Department Heads and the hierarchy follows to branch manager to officers to
assistants.
3.1.6 Board of Directors
Board
of director of Nepal Investment Bank Limited consists of:
|
Table 3.1: Board of Directors
|
|
(Source: nibl.com.np)
The BOD of Nepal Investment Bank Limited Comprises of Eight
Members with one Chairman, Four Directors, Two Public Directors and One
Professional Director.
3.1.7 Management Team
The
Management team of the NIBL comprises of the following:
Table
3.2: Management Team
|
Jyoti
Prakash Pandey
|
Chief
Executive Officer
|
|
Bijendra Suwal
|
Head of Operation
|
|
Rabin Sijapati
|
Regional Branch Manager
|
|
Bikash Thapa
|
Head of Marketing
|
(Source: nibl.com.np)
A
Strong Management Team is a need for every organization. The Nepal Investment
Bank Limited is headed by Jyoti Prakash Pandey as the CEO followed by Bijendra
Suwal, Rabin Sijapati, Nikash Thapa as Head of Operation, Regional Branch
Manager and Head of Marketing respectively.
3.2
Ownership Structure and Share Capital of
NIBL
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:
Table
3.3: Share Ownership
|
Institutions
|
Percentage
of Ownership
|
|
Citizen Investment Trust
|
2.84%
|
|
Other Licensed Institutions (Insurance Companies)
|
2.53%
|
|
Mutual Funds
|
0.18%
|
|
Group of Companies
|
1.06%
|
|
Rastriya Beema Sansthan
|
1.23%
|
|
Rastriya Beema Company Ltd.
|
13.13%
|
|
Organized Institutions
|
43.58%
|
|
Others (Promoter - Individual)
|
5.45%
|
|
Public
|
30.00%
|
(Source: Annual Report 2015/16)
The
given table can be shown by the figure as follows:
Fig 3.1: Shareholder ownership
The above pie chart shows the ownership structure of NIBL. The
organized institution holds the highest percentage of shares, i.e. 43.58%
followed by the general public at 30% and so on.
The total share capital structure of NIBL comprises of Rs. 10,000,000,000 with an authorized capital of
Rs. 10,000,000,000. The following table shows it in descriptive
format:
Table 3.4: Share Capital and Ownership
|
Particulars
|
Amount in Rs.
|
|
Authorized Capital
|
10,000,000,000
|
|
Issued Capital
|
7,255,509,800
|
|
Paid Up Capital
|
7,255,509,800
|
|
Proposed Bonus Shares
|
1,451,101,960
|
|
Calls in Advance
|
-
|
|
Total Share Capital
|
8,706,611,760
|
(Source: Annual Report of NIBL
2015/16)
The Authorized Capital stood at around Ten Billion Rupees with Issued
and Paid up Capital around Seven Billion and Proposed Bonus Share around One
Billion and Four hundred million. The Total Share Capital stood around Rupees
Eight Billion and Seven Hundred Million as per the Annual Report.
3.3 An Overview of the Bank’s Performance
Tremendous Progress has been made in the Business of the Company and its
Subsidiary Company during the Previous Financial Year and Review of the
Situation Existing at the End of that Financial Year. The bank’s overall
Financial Performance has been highlighted in Annex III.
Overall, the bank has been mighty impressive on the context of the
Nepalese Banking Industry given the vast growth it has shown in various fields.
The total
deposits and lending of the Bank reached to NPR 112 billion and NPR 92 billion respectively
as of August 16, 2016 (Shrawan end 2073). On August 5, 2016 the Bank signed MoU
with Ace Development Bank Ltd. to acquire the latter. As of Now, Ace
Development runs by the Name of Nepal Investment Bank Limited. NIBL has
incorporated a merchant banking subsidiary company named “NIBL Capital Markets
Limited” with authorized capital of NPR 500 million and Issued capital of NPR
145 million. Of the total issued capital, NIBL has subscribed 70% (i.e. NPR
101.50 million) as its equity participation and the remaining 30% is set aside
for public. Dividends declared by the Bank but not claimed by shareholders till
the end of FY 2015/16 (FY 2072/73) stood at NPR 36,026,542.
3.4 Products and Services of NIBL
Broadly speaking there are two types of a
products of a normal commercial. They are deposits and credits. Under these two
categories NIBL Provides various kinds of products. They are categorized below:
DEPOSITS
·
E-Zee
Saving Account
·
Lotus
Saving Account
·
E-Zee
Student Account
·
Afnai
Bachat Khata
·
Keta
Keti Bachat Khata
·
Lotus
Saving Account
·
Surakshya
Bachat Khata
·
Fixed
Deposit
·
Call
Deposit
CREDITS
·
Home
Loan
·
Education
Loan
·
Vehicle
Loan
·
Loan
against Gold and Silver
·
NIBL
Home and solar loan
·
NIBL
EMI Scheme
·
NIBL
CAB Loan
There are other types of products too that
the bank provides. They are as follows:
·
Visa
Debit Cards
·
Credit
Cards
·
Traveler’s
Checks
SERVICES OF NIBL
·
365
Banking Days
·
E-Banking
·
SMS
Baking
·
Any
Branch Banking Services (ABBS)
·
Tele-
Banking
·
Mobile
Bills Payment
·
Remittance
·
Trade
Finance\
·
Utility
payment
·
Automated
Teller Machine (ATM)
·
Safe
Deposit Locker
CHAPTER IV
ANALYSIS OF ACTIVITIES AND PROBLEM SOLVED
During
the period of my internship at NIBL, I was given the opportunity to be placed
in Back office and Customer Service Department. The Activities that are done in
these departments are as follows:
4.1
Back Office
A Bank’s Back office is responsible for
conducting the activities that is responsible for settlement and delivery. Although the operations of a back office
are seldom prominent, they are a major contributor to a business. In banking,
the back office includes a heavyweight IT processing system that handles
position keeping, clearance, and settlement, but does
not include the Compliance Department, which would be an external. The Back
office must confirm the deals independently with the counter parties over the
phone and verifies the authenticity of the confirmation Document. Instead, the division is a
support function – operations professionals support people in the front office
to make sure everything works smoothly and the bank gets paid.
4.1.1 Trends in Back Office
The operations division may not be where banks make their
profits, but it is certainly where they can lose them. The more efficient a
bank is at conducting its business, the greater the percentage of revenues that
will feed into the bottom line. Errors in the processing of a firm’s
transactions can be particularly costly, which is why the risk management and
control functions performed by the operations team are so critical. Banks have
belatedly realized this and are now looking for a higher caliber of person to
work in operations.
The move offshore has been paralleled by increased use of
technology. Twenty years ago, clearing and settlements were labor-intensive
businesses involving a lot of form filling and large filing systems. Today,
they are mainly dominated by computerized settlements facilities that transfer
financial products electronically. But the back office has had a huge boost
from its compliance and anti-money laundering activities. Not only must these
positions stay onshore, they have also brought excitement and forensic glamour
to the back office. But the back office has had a huge boost from its
compliance and anti-money laundering activities. Not only must these positions
stay onshore, they have also brought excitement and forensic glamour to the
back office.
4.1.2 Functions of Back Office
Various kinds of activities/ functions are performed by the
back office of the bank. Some of the major functions include the following:
·
Check
the details of the deal slip.
·
Issuance
of the deal confirmation to the counter party/obtain deal confirmation from
counter parties.
·
Match
the deal confirmation received from the counterparty, if any alterations
immediately settle the differences.
·
Issuance
of the payment Instructions.
·
Passing
necessary Accounting Entries,
·
Keeping
track of payments made/received in Nostro Account.
·
Maintain
up to date records and registers of all transactions.
Besides
this, the Back Office at the Nepal Investment Bank Limited, New Baneshwor
Branch performed other functions such as:
Draft Handling
Draft
is the mechanism for sending the money from one place to another. Nepal
Investment Bank Limited is also providing good facility for the draft. Draft
can be send both inside and outside the country. At NIBL, students are the
major clients for the draft. Draft can be sending for any purpose in Nepal and
India but for abroad it is only for study purpose. Draft handling includes the
following:
·
Demand Draft
NIBL has the draft drawing arrangement with
its correspondent banks in different countries. NIBL honors bank drafts drawn
on/by various international banks denominated in major currencies like US
Dollar, Euro, and Pounds etc.
·
Telegraphic Transfer/ SWIFT
NIBL offers fast and reliable money transfer
services through SWIFT. Customer’s bank account with NIBL can be credited with
remittance from anywhere in the world. NIBL carters the need of customers to
remit fund anywhere in the worlds, denominated in major currencies, through
SWIFT.
·
Inward Transfer
NIBL offers the services of internal
transfer. Customers can transfer their fund from one account to another account
of the bank.
·
Goods For Payment
Goods for payment refers to the facility that bank
guaranteed the payment to the person who provide fund to another who have
account at NIBL.
A company's customer service department handles the concerns of
customers. The department answers customers' questions, attempts to resolve
customers' complaints and tries to sell new services to them. Most companies
have a separate customer service department; although in some cases a
receptionist may function as a customer service representative. In
addition to resolving customers' complaints and answering their questions, the
customer service department also takes suggestions from customers who have new ideas
that may improve the image of a company and attract new customers. For example,
a customer may send an email suggesting that a local supermarket increase the
amount of organic products.
The benefits of a customer service
department are that the customers' voices are heard and that it allows
businesses to get an assessment of what they're doing right as well as what
improvements need to be made. Customer service department workers operate in
different office environments depending on the company. Some workers operate in
their own separate offices, while others may work at the front desk. The
workers spend much of their time on the phone with customers and also perform
other administrative duties.
In some cases, the customer service
department alerts customers about important information on certain products.
For example, the webmaster of a company's website may place information on
products that were recalled for safety reasons.
Customer
service
is an organization's ability to supply their customers' wants and needs.
Customer service is the ability of an organization to constantly and
consistently exceed the customer's expectations. Excellent customer service is the process by which
any organization delivers its services or products in a way that allows the
customers to access them in the most efficient, fair, cost effective, and
satisfying manner possible. Customer service is a process, not a set of actions
that might include greeting the customer, smiling, etc. Customer service is
about how your organization delivers its products or services. The part that
sales people play in the customer service process is taking the customer
through the process in order for him/her to receive the product they walked in
the door to acquire. Improving customer service involves making a
commitment to learning what our customers' needs and wants are, and developing
action plans that implement customer friendly processes.
The customer service process must be
transparent. If an organization can practice full disclosure in an obvious way
in their product information and their contracts, they are on the way to create
customer loyalty. If the customer experiences your organization as one they
were never surprised and never deceived, the organization will create a
competitive edge. Good customer service is all about bringing customers back.
And about sending them away happy – happy enough to pass positive feedback
about the business along to others, who may then try the product or service the
bank offer for themselves and in their turn become repeat customers.
The
Customer Service Department of Nepal Investment Bank Limited, especially New
Baneshwor Branch, performs the following activities and provides the following
services to its customers:
4.2.1.1
Analysis of Regular/Daily Activities
a) Account Opening Procedure
Bank
Accounts can be opened by both an individual (in case of Joint A/c) as well as
a corporate firm (institution). Basically a bank account is a unique
computer-generated customer code that allows customers to deposit and withdraw
fund. The Account Opening Procedure is explained as follows:
1)
At first, on the visit of the customer
in the bank, the customer is asked to fill an Account Opening Form and
Signature Card which contains the personal details of the customers
NOTE: The customer should submit a copy of
his/her citizenship certificate, two sets of passport size photos and other
required documents according to the deposit type
2)
The CSD staff them verifies all the
documents, details and signature and feeds them into the FINACLE along with the
specific a/c type, introducer’s name (if any).
3)
The system then automatically generates
the Account Number, which is a digit code where the first 4 digits represent
the Branch code.
4)
Then the customer are requested to
deposit the minimum balance (or more) of the concerned deposit type in their
A/C. and account number is provided later on.
5)
CSD staff will create the customer id of
account holders and then forward to operation manager to verify.
6)
Once the customer id is verified,
operation manager again returned it to CSD for form scanning.
7)
After form scanning, the CSD staff will
prepare the ATM card and cheque on customer request.
The Account Opening
procedure can be shown in the form of the figure as:
Figure
No 4.1: Flow Chart of new A/c Opening Procedure
|
Start
|
|
Fill a/c opening
form
|
|
Process
|
|
Decision
|
|
Reject
application
|
|
Approve
application
|
|
Create account
|
|
Provide a/c
number
|
|
Accept minimum
deposit
|
|
Issue cheque
book
|
|
End
|
|
End
|
b) Account Closing Procedure
An
Account is closed only upon receiving a written request from the customer/a/c
holder. At first, the a/c holder fills up the “Account Closing Request” form
and submits it to CSD. The customer has to return ATM card and cheque which are
unused to the bank. The bank charges Rs. 300 for closing the account and
returned all the remaining balance to the customer. After the completion of filling
up the form, it is verified and signature by operation manager and branch
manager. Thus, finally customer account is closed.
The Procedure for closing the account
can be shown by the flow chart as:
Figure
No 4.2: Flow Chart of A/c Closing Procedure
|
Start
|
|
Fill a/c closing
form
|
|
Process
|
|
Decision
|
|
Approve
application
|
|
Collect cheque
book and ATM cards
|
|
Reject
application
|
|
End
|
|
Provide
remaining
balance
|
|
Close account
|
|
End
|
c) Cheque Issuance Procedure
Cheque
printing and issuance is the very sensitive task. It is the most regular
activity of CSD. Multiple Cheque Books are printed daily in CSD. The Cheque
Printing and Issuance Procedure are explained as follows:
1.
For new account holder, bank provide the cheque without any cost.
2.
If customer has to print the cheque for
the second time, then customer has to fill up the requisition slip that
contains the date, number of required cheque leaves, valid signature (stamp of
the company in case of current account).
3.
After that, CSD staff will issue the
cheque and operation manger verifies it and gives permission to print the
cheque.
4.
The next step after printing of cheque
is to enter the record on cheque registered which is signed by customer and the
operation manager.
d)
ATM
Card Handling Procedure
The
ATM Card at Nepal Investment Bank Limited is debit card under the Smart Card
Technology (SCT) Network. NIBL takes the charge for issuance of ATM card
depending on the type of account. The issued ATM card is valid for 5 years and
customer can withdraw Rs 100000 in one day using debit card.
A
Statement of Account is a statement that shows a detailed list of the
transactions (withdrawals and deposits/debits and credits) as well as the
closing balance of the a/c as of the one day before the statement printing. The
Statement of Account is provided on customer request and no any form has to be
filled up for statement print. But account holder must be present for statement
print. In case if account holder is not present, the agent must have the
application of statement printing request signed by the account holder.
f) Balance Enquiry Handling
During
my internship I learnt that NIBL takes special caution in disclosing the
balance in any account, which I found very impressive. Customers often come to
CSD for balance enquiry but it is only entertained after establishing the
identity of the a/c holder by checking the photo or signature in the system.
Telephonic balance enquiries are not entertained as far as possible. Only to
some highly regular customers whom the staffs know very well, are given the
privilege of Balance Enquiry via phone.
g) E-banking
E-Banking
is a free service that allows customers to avail online banking transaction
wherever and whenever required. To use this service the customer has to submit
a duly signed & filled up “Application for Internet Banking” form to CSD.
Then CSD forwards the request to operation manager desk. Then the very next
day, the bank provides the user code and password to the customer. The
customers can then full control over their accounts after collecting the user
code and password. The services available include: Balance query, Check
transactions, Send and receive messages and Bank Statement.
SMS-banking
is a system where customers are facilitated to access their account status and
retrieve general information regarding their account and other banking
transaction through their mobile phone. Customers can perform the following
tasks such as: balance enquiry, downloading transaction information, view
online statement, change PIN code etc. the only work that CSD does in case of
SMS-banking is to collect the “Application for SMS Banking” form from the
interested a/c holder, send it to the
concerned department. The SMS Banking Charge at the NIBL depends upon the type
of SMS services the clients wants.
As
a CSD staff during my internship, all my time was spent in handling the
numerous queries of various walk-in customers. I gave the information that they
wanted. Many customers were interested to learn about that product, which I
happily obliged. In addition to that, I answered queries about our other
products, services, transaction hours etc. I single-handedly handled all the
customer queries via phone as well.
4.2.1.2
Analysis of irregular/ occasional activities
The analysis of the irregular and
occasional activities is shown as below:
Balance
Certificate is a document issued by a bank stating the amount of balance/funds
maintained by an a/c holder in its bank; usually a balance certificate also
contains a statement from the bank mentioning that the a/c holder has
maintained satisfactory level of transactions with the bank, but this is only
mentioned in the case of satisfactory customers. The balance amount mentioned
in the certificate can be either in NPR or in customer preferred FCY equivalent
amount as per the FCY rate on that date.
Customers often visit the bank to issue Balance Certificate. Usually
students who are going abroad for studies come for it. In order to issue the
certificate the customer has to open an a/c with the bank. First of all the
customer fills up the “Request for Balance Certificate” form. Then the CSD
staff issues the certificate in the requested currency upon obtaining
signatures in proper register.
4.2.1.3
KYC Update
KYC is an acronym for “Know your Customer”, a term used for
customer identification process. It involves making reasonable efforts to
determine true identity and beneficial ownership of accounts, source of funds,
the nature of customer’s business, reasonableness of operations in the account
in relation to the customer’s business, etc which in turn helps the banks to
manage their risks prudently. The objective of the KYC guidelines is to prevent
banks being used, intentionally or unintentionally by criminal elements for
money laundering. KYC has two components - Identity and Address. While identity
remains the same, the address may change and hence the banks are required to
periodically update their records.
KYC
update is the recent activity that is carried out in all the commercial bank as
instructed by Nepal Rastra Bank. So as per the instruction, I distributed and
helped the customer to fill up the KYC form at Nepal Investment Bank Limited,
New Baneshwor Branch. For KYC update, we were told to
inform the customer who visit the bank and who doesn’t often visit the bank
they were informed through telephone calls.
During
my eight-week internship, I also got the opportunity to understand, identify
and solve some of the problems faced by the bank. Here are some problems and
difficulties that exist at the Back-Office and CSD of the bank:
·
The
flow of the customers is always immense at the New Baneshwor Branch. Being,
centrally located and having many businesses around increases the workload of
the staffs at the branch.
·
The
Space of the New Baneshwor is quiet low as compared to the flow of the
customers. This made the place crowded at many times.
·
The
New Baneshwor branch somehow looks understaffed. Too much responsibility lies
on the single person who faces a lot of problems during high traffic hours at
the bank.
·
There
was lack of adequate follow ups with the customer regarding matters such as
informing them to collect their ATMs, Cheque Books, etc
·
There
is a frequent technical problem in the ATM machines which has led to multiple
ATM complaints.
·
The
task of providing ATM Pins to the customers, handling storages and so on increased
workload at back office which delayed the other task that was to be performed.
4.4 Possible
Solutions to the problems
After
analyzing the problems I tried my best to solve some of them to my best of
abilities. In addition to those, here are the possible solutions to those
problems which could not be solved from my level.
·
Given
the flow of the customers, the bank needs to rent more space in order to ensure
smooth and timely services to their clients.
·
The
branch needs to recruit additional staff to handle the workload of the
department. This will make sure every work being done by the staffs in their
respective area.
·
Proper
maintenance of the ATM machines needs to be done in order to insure less
complaint from the clients.
·
Establishing
some more branch would have helped in shifting the customer to other branch but
having Acquired Ace Development Bank will surely help to increase its reach to
the customers at large.
CHAPTER V
CONCLUSION AND LESSON LEARNT
From
the above analysis, it seems that NIBL is one of most hard working commercial
bank that is dedicated in serving their valued customers with excellence.
During this internship period of 8 weeks, Intern had learnt a lot about the
banking activities and banking operation in the Nepalese market, about NIBL in
particular. This report has made intern know about the various kinds of the
customer services that NIBL has been offering. The internship has been fruitful
in many ways to intern.
Internship has broadened intern’s
knowledge, vision, ability, management skill and confidence to perform in real
working environment. It was a great chance to gain practical knowledge of
banking sector. The practical cases are
rather different from that we study in theory. Further intern has also become
versed to get socialize with the diversified people, to deal with the
senior staffs, and to deal with the intern colleague so as to make the working
environment cheerful, pleasant and friendlier. Beside this, the supervisors were extremely helpful in guiding on our
internship program.
It was the great experience working as an intern in NIBL. The operational
environment was benevolent. There was good communication, healthy competition
and healthy relationship in between the personnel of NIBL. Each and every staff
of NIBL were totally professional but still there was a family environment
making overall internal working environment delightful to work with.
Working at NIBL as an intern was a great opportunity to develop conceptual and
analytical knowledge about banking sector in Nepal. Thus, the knowledge and experience endowed with this study will surely be
constructive towards the pavement of intern’s career and professional life.
During my internship
what I also analyzed is that the bank is good in providing a good customer
service. Customers always seek quality service at their convenience. Customers
have preferred Nepal Investment Bank Limited mainly due to its brand image,
branch facilities and service quality. They expect this bank to rise even more
to become the leading bank in service quality. Mostly the customers of Nepal
Investment Bank are satisfied with what they are receiving but there are also
some issues regarding interest rate on deposits and also other factors or room
for improvement for the bank in order to excel even more and be a top banking
industry in years to come. Improvements have to be made from time to time in
order to sustain the satisfaction level of customers and push the bank to a
continuous growing path.
The statement
“more you learn more you will discover your ignorance” has seemed to be
appropriate during this internship period in NIBL. Intern has obtained insights
into career opportunities through interaction, observation and work experience
in the organization and also built another step towards success through
interpersonal, managerial, communication and entrepreneurial skills gained from
this internship period. Being exposed to professional working environment,
intern has understood the corporate social responsibility, change the attitude
and behavior towards daily life spending.
The eight
weeks of internship had paved a way for the intern to learn new and specific
things about the institute particularly in the areas of Customer Service
Department and Back Office. The learning from the internship was based on the
way work was done and observed and as per all the individual skills. The direct
and indirect learning and work getting involved in various departments at NIBL
provided the internee with fruitful experience.
The most
important lesson learned by intern has been listed as follows:
Ø Learnt the basic activities that are conducted at the Back Office.
Ø Learnt how to perform different customer related activities.
Ø Learnt to file the documents effectively and orderly.
Ø Chance to get familiar with some aspects of Finacle system installed
by NIBL.
Ø Learnt to use office equipments like photocopy machine, printer,
scanner etc.
Ø
Learnt to develop the communication skills that
were vital dealing with the customers and employees.
Ø
Learnt about the importance of Professionalism
in doing respective tasks by watching the staffs of Nepal Investment bank
Limited.
Ø
Learnt the importance of time, punctuality and
displayed emotions on the work place.
Ø
Learnt to handle the Grievances of the
customers.
Nepal
Investment Bank Limited being awarded the Prestigious “Bank of the Year”
several times has been proactive in identifying the market opportunities. The
Bank is further suggested to expand its branches to the rural areas to
penetrate the market more. The Bank shall also upgrade its technology base for
smooth handling of the operations. Investment in proper training of the staffs
shall be given a top priority.
Overall, The Internship has led the internee to grab the experiences that
are vital for the succeeding the career goals. The dedication shown by the
staffs of the Nepal Investment Bank limited has made the internee feel more
confident and responsible toward his duties.
BIBLIOGRAPHY
Hunger, J. A. (2007). Essentials of Strategic Management (Vol.
Fourth). New Delhi,India: Prentice Hall of India Private Limited.
Kolb, Robert W.
Rodriguez, Richardo J. (1996). Financial
Market & Institutions (FIM). USA: Blackwell
Publishers, Inc.
Manandhar, K.D. and
Pokhrel, S.B. (2012). Marketing
Financial Services. Kathmandu: Buddha Publication.
Nepal Investment Bank
Limited (2015/16). Annual Report.
Kathmandu: Nepal Investment Bank Limited
Saunders, A., & Cornett, M. M. (2007). Financial Market and Institution. New
Delhi: The McGraw-Hill Companies.
Sharma,N., (2009). An Internship Report on Nepal Investment Bank Limited. Kathmandu:
An Unpublished Intern Report Submitted to FOM, T.U.
Shrestha, M.K. and Bhandari, D.B.(2008). Financial Markets & Institutions.
Kathmandu: Asmita Publication.
Thapa, K., (2017)..Commercial Banking Operations. Kathmandu: Khanal Publications Pvt.
Ltd.
Wehmeier, S. (Ed.). (n.d.). Oxford Dictionary (Vol.
Seventh). Oxford University Press.
Websites
Annex I: List of
Commercial Banks in Nepal
As of mid August 2017
|
Nepal
Bank Ltd.
|
|
Rastriya
Banijya Bank Ltd.
|
|
Agriculture
Development Bank Ltd.
|
|
Nabil
Bank Ltd.
|
|
Nepal
Investment Bank Ltd.
|
|
Standard
Chartered Bank Nepal Ltd.
|
|
Himalayan
Bank Ltd.
|
|
Nepal
SBI Bank Ltd.
|
|
Nepal
Bangaladesh Bank Ltd.
|
|
Everest
Bank Ltd.
|
|
Kumari
Bank Ltd.
|
|
Laxmi
Bank Ltd.
|
|
Citizens
Bank International Ltd.
|
|
Prime
Commercial Bank Ltd.
|
|
Sunrise
Bank Ltd.
|
|
Mega
Bank Nepal Ltd.
|
|
Century
Commercial Bank Ltd.
|
|
Sanima
Bank Ltd.
|
|
Machhapuchhre
Bank Ltd.
|
|
NIC
Asia Bank Ltd.
|
|
Global
IME Bank Ltd.
|
|
NMB
Bank Ltd.
|
|
Prabhu
Bank Ltd.
|
|
Siddhartha
Bank Ltd.
|
|
Bank
of Kathmandu Ltd.
|
|
Civil
Bank Ltd.
|
|
Nepal
Credit and Commerce Bank Ltd.
|
|
Janata
Bank Nepal Ltd.
|
Annex
II: Organizational Structure of NIBL
Annex
III: Overview of NIBL’s Performance (NPR
in Million)
|
S. No.
|
Particulars
|
FY
2014-15
|
FY
2015-16
|
Growth in
|
|
Growth
|
|
|
|
(FY
2071-72)
|
(FY
2072-73)
|
NPR
|
|
in %
|
|
1.
|
Total Assets
|
104,345
|
129,782
|
25,437
|
|
24.4
|
|
|
|
|
|
|
|
|
|
2.
|
Total Deposit
|
90,631
|
108,626
|
17,995
|
|
19.9
|
|
|
|
|
|
|
|
|
|
3.
|
Total Loans and Advances (Gross)
|
67,690
|
87,009
|
19,319
|
|
28.5
|
|
|
|
|
|
|
|
|
|
4.
|
Total Investments
|
21,462
|
29,226
|
7,764
|
|
36.2
|
|
|
|
|
|
|
|
|
|
5.
|
Total
Operating Profit (before provision for possible loss)
|
3,119
|
4,136
|
1,016
|
|
32.6
|
|
|
|
|
|
|
|
|
|
6.
|
Total Net Profit
|
1,962
|
2,550
|
588
|
|
30.0
|
|
|
|
|
|
|
|
|
|
7.
|
Non-performing Assets (in %)
|
1.25
|
0.68
|
-
|
|
(0.57)
|
|
|
|
|
|
|
|
|
|
8.
|
Capital Adequacy Ratio (in %)
|
11.90
|
14.92
|
-
|
|
3.0
|
|
|
|
|
|
|
|
|
|
9.
|
CD Ratio (LCY Deposit with
equity %)
|
72.8
|
76.8
|
-
|
|
4.0
|
|
|
|
|
|
|
|
|
|
10.
|
Return on Paid-up Capital (in
%)*
|
41.1
|
40.2
|
-
|
|
(0.9)
|
|
|
|
|
|
|
|
|
|
11.
|
Return on Shareholders’ Fund (in
%)*
|
24.8
|
26.0
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
12.
|
Total Customer Base (in Nos.)
|
629,217
|
697,009
|
67,792
|
|
10.8
|
|
|
|
|
|
|
|
|
|
13.
|
Market Share in Deposit (in %)
|
6.2
|
6.1
|
-
|
|
(0.1)
|
|
|
|
|
|
|
|
|
|
14.
|
Market Share in Lending (in %)
|
6.2
|
6.2
|
-
|
|
0.0
|
|
|
|
|
|
|
|
|
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