GENERAL BANKING SYSTEM OF NEPAL BANK LIMITED CITY

OFFICE, BIRGUNJ

Submitted by:

Manish Kumar Sarraf

Submitted to:

Nepal bank Limited

City Office, Birgunj

1
 ACKNOWLEDGEMENT

It had been a great experience working as internee in Nepal Bank Limited, City Office
Birgunj and making a project under the heading of CSD of NBL. This internship report is
dedicated to all the people who have helped directly to complete this project.

Firstly, I would like to thank Thakur Ram Multiple Campus for providing me with an
opportunity to use theoretical knowledge in the practical field during my internship program.
I am very grateful to all the seniors and teachers, especially to Baidyanath Prasad Yadav and
Sanjay Shrestha

I am also grateful to the Branch Manager of Nepal Bank Ltd. Of Birta Branch, Mrs. Sangita
Pokhrel for her kind cooperation and valuable suggestion. I would also like to thank Suraj
Raj Bhandari, Rama Shankar Sahani, Pooja Shah, Tripti Shrestha, Sangita Verma and other
members of NBL for their dynamic guidance, support, and supervision throughout my
internship period.

Manish Kumar Sarraf

2
 CERTIFICATION

This is to certify that Mr. Manish Kumar Sarraf, student of Thakur Ram Multiple
Campus, Birgunj Parsa, Nepal has successfully completed his internship from our
organization from 2081/02/31 to 2081/04/31 (60 DAYS). He performed his activities in the
Customer Service Department, Clearing Department and Remittance Department. During
the period of his internship, we found her punctual, hardworking, dedicated and devoted to
his assigned responsibilities. We wish his success in his life and career.

Sangita Pokharel
Branch Manager
Nepal Bank Limited
City Office, Birgunj

3
Table Of Contents

GENERAL BANKING SYSTEM OF NEPAL BANK LIMITED CITY OFFICE, BIRGUNJ ............................. 1
ACKNOWLEDGEMENT .................................................................................................................... 2
CERTIFICATION ............................................................................................................................... 3
Table Of Contents .......................................................................................................................... 4
CHAPTER I....................................................................................................................................... 6
INTRODUCTION .............................................................................................................................. 6
1.1 Background ............................................................................................................................ 6
1.2 Objectives of the Study .......................................................................................................... 7
1.3 Methodology .......................................................................................................................... 8
Organization Selection ............................................................................................................... 8
Placement .................................................................................................................................. 9
Duration of Internship................................................................................................................ 9
Activities ................................................................................................................................... 10
CHAPTER II.................................................................................................................................... 12
INTRODUCTION OF THE INDUSTRY .............................................................................................. 12
2.1 Meaning of Bank .................................................................................................................... 12
2.2 Origin of Bank......................................................................................................................... 12
2.3 Modern Banking ..................................................................................................................... 13
2.4 Evolution of Banking Sectors in Nepal ................................................................................... 14
2.5 Types of Banks........................................................................................................................ 15
CHAPTER III................................................................................................................................... 17
INTRODUCTION TO THE ORGANIZATION ..................................................................................... 17
3.1 Background ............................................................................................................................ 17
3.2 Vision, Mission, Objective and Value Statement ................................................................... 18
3.3 Shareholders composition of NBL .......................................................................................... 19
3.4 Branches of Nepal Bank Limited ............................................................................................ 20
3.5 Organizational Structure of Nepal Bank Limited ................................................................... 21
3.6 Introduction of Major Departments in Organization ............................................................. 22
3.7 Products of Nepal Bank Limited ............................................................................................. 23
3.8 SWOT Analysis of NBL ............................................................................................................ 26
4
CHAPTER IV .................................................................................................................................. 28
ANALYSIS OF ACTIVITIES DONE AND PROBLEMS SOLVED ........................................................... 28
4.1 Task Performed ...................................................................................................................... 28
4.1.1 Account Opening ............................................................................................................. 28
4.1.2 Account Closing Process at NBL ...................................................................................... 29
4.1.3 KYC Update Process at NBL ............................................................................................ 29
4.1.4 Recording, Filing and Documentation ............................................................................. 30
4.1.5 Issuance of Bank Statement ............................................................................................ 30
4.1.6 Balance Enquiry ............................................................................................................... 31
4.1.7 Issuance of Cheque ......................................................................................................... 31
4.1.8 Remittance ...................................................................................................................... 31
4.1.9 Locker Access .................................................................................................................. 31
4.1.10 Balance Certificate Issuance ......................................................................................... 32
4.1.11 Clearing and Settlement ............................................................................................... 32
4.1.12 Cheque Clearing Process at NBL ................................................................................... 32
4.2 Observed Problems ................................................................................................................ 33
4.3 Problem Solved ...................................................................................................................... 34
CHAPTER V ................................................................................................................................... 35
CONCLUSION AND LESSONS LEARNT ........................................................................................... 35
5.1 Conclusion .............................................................................................................................. 35
5.2 Lessons Learnt ........................................................................................................................ 35

5
 CHAPTER I

INTRODUCTION

1.1 Background

Tribhuvan University is the largest and oldest university of Nepal. Tribhuvan University,
under the Faculty of Management (FOM), has its ultimate objective of educating students
for professional pursuits in business, industry and government. FOM aims to develop
networking with management institutes in the country and abroad to exchange new
knowledge, technology and methods of achieving higher level efficiency in management of
business and public entities. Tribhuvan University has designed various management
degrees under Faculty of Management (FOM) and among them one of the outstanding
developments is in the form of Bachelors of Business Administration (BBA), which had
been established in 2002. The mission of FOM's Bachelor in Business Administration (BBA)
program is to develop socially responsive, creative and result oriented management
professionals to fill up the middle level managerial positions in the rapidly growing business
sector in Nepal and abroad. This program is introduced in a way so as to reduce the gap
between theoretical and practical knowledge provided to the students. It is a four year
program designed with eight semesters as a complete package of BBA eligibility and tries
to cover the operations and transactions of the practical business world with particular focus
on Nepalese context. The whole BBA program comprises of 120 credits hour in total
including management and allied subjects as 78 credits hours, specialization area subjects as
24 credits, computer related subjects as 12 credits hour, summer project 3 credit hours and
an internship as 3 credit hours. The entire above mentioned and other course matters helps
the educational institutions to produce the skillful, confident, knowledgeable and dynamic
middle level managers for this country.

As mentioned earlier, internship is one of the important components of the four years BBA
Program. It is designed with view to develop student’s skill in object-oriented business
management, capable of understanding and solving real life business related problems. It
6
provides practical knowledge and work experience and helps students understand corporate
world.

As per the course requirement of the BBA program every eighth semester student should
prepare the internship report after the completion of the two months internship in the
institution. Since I completed the internship in Nepal Bank Limited, this report is the
outcome of the valuable real-life experiences I obtained during the internship in that
organization. As an intern I got the chance to work in three departments- Customer Service
Department (CSD), Clearing Department (CD) and Remittance Department. This internship
has been fruitful because an intern got the chance to confront the real job-place experience
and chance to apply theoretical knowledge learnt during the BBA. This internship report
mainly focused on Customer Service Department (CSD) of Nepal Bank Limited, Birta
Branch, Birgunj.

1.2 Objectives of the Study

The main goal of this report is to highlight the activities carried out during the internship for
two months in Nepal Bank Limited. And the main objective of internship is to explore the
applicability of theoretical knowledge in the practical workplace and prepare intern to take
up entry level management position to start a professional career in business and
management. The specific objectives are as follows:

To develop the interpersonal and communication skills to tackle the real life
situations.
To develop the ability to handle various kinds of customers with varying knowledge
level, problems and requirements.
To know about various financial products and services provided by the bank.
To obtain practical knowledge or work experience in the bank and understanding of
the institutional working environment.
To gather the knowledge on the various activities performed in various departments
such as CSD, CD and Remittance of the bank.

7
1.3 Methodology

Methodology is the description of the procedure followed while collecting the necessary data
and information needed for research work and report preparation. The internship report is
the study of particular subject backed by the collection, compilation, presentation and
interpretation of the relevant information. This study is mostly descriptive in nature where
the facts and findings are prescribed in a systematic manner. Completion of internship is a
combination of the different types of activities. It starts from the selection of the organization
for the internship, placement in different parts of the organization, performance of different
kinds of activities 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 secondary source had been used. For the
primary data collection, different activities and working environment of the bank are
observed, personal interview are taken, informal discussion, interaction and inquiries with
the staffs are made for the relevant information. And for secondary data collection,
information from the official website of the bank ([Link]), the brochures
of the different types of the accounts, Official website of Nepal Rastra Bank
([Link]) and other related websites had been used for the qualitative data.

Organization Selection

Selection of the organization tends to be the most crucial part of the internship because
success in the fulfillment of the objectives of the internship completely depends on the type
of the organization that had been selected. Since the selection of BBA specialization for the
final semester was banking and finance and BBA graduates see banking career to be most
lucrative, commercial banks with diversity in products, better working and learning
environment for interns are the best choice for an intern. Developing competencies is
possible by working as a member of the bank rather being treated as an intern.

Nepal Bank Limited was chosen as it is the first bank in Nepal in Nepalese banking history
and it offers intern to work in various departments of the bank to learn about the activities
of the bank as a whole. For the internship in Nepal Bank Limited the recommendation letter
of the college, curriculum vitae, copy of citizenship and other necessary documents are

8
dropped. After that bank accepted intern application and gave intern an opportunity to get
familiar with the bank.

Placement

After submitting the documents, intern was informed for the date of internship and placed
in Nepal Bank Limited, Bagar Branch. During the internship period, the intern was placed
in Customer Service Department (CSD), Clearing Department (CD) and Remittance. The
supportive and friendly environment in the organization helped the intern to complete the
internship period through the proper guidance of the staff of those departments. Throughout
the internship period, intern got an opportunity to deal with sort of banking issue prevailing
in Customer Service Department (CSD), Clearing Department (CD) and Remmitance

Duration of Internship

The duration of internship has been defined for two months of working time at the
organization by Tribhuvan University (T.U.), Faculty of Management (FOM). So, in order
to fulfill this requirement internship was done for two months. It was the enough duration
for a Bachelors’ level student to understand the future workplace environment. The intern
worked on the different departments and performed activities. All the factors such as
discipline, attendance, regularity, performance, interest towards the work, sincerity,
behavior, contribution to solve problems and the efforts that intern made to understand the
banking function were closely monitored.

The internship was started from 31st Jestha [Link] stint of the internship was from 31st
Jestha to 31st Shrawan i.e. nine weeks. Intern was provided with an opportunity to understand
all the functionalities of the bank, especially all those performed in that branch except
handling cash and loan department. The placement and duration of Intern’s work in each
department is presented below:

Table 1.1 Placements and Duration of Performance

Activities/weeks 1st 2nd 3rd 4th 5th 6th 7th 8th 9th

Customer Service Department

Clearing Department

Remittance Department

9
Activities

During the entire internship period, the intern had a time to visit the three different
departments like Customer Service Department (CSD), Management Service Department
(MSD) and Cash Department. Intern got opportunity to know about banking software
(Pumori Plus IV). In the course of the internship, Intern got chance to perform different
function and got the opportunity to learn and practice various activities in three departments
except loan department. The activities performed on these departments are given below in
table.

Table 1.2 Activities Performed in Bank

Department Activities Performed

Customer Enquiry about account number, account balance and other

Service details about customer of same and other branches
Department Printing and issuing cheque book
Printing transaction statement
Scanning, updating and verification of signature card
Filling the debit voucher for payment of social security
allowance
Pension Allowance Payment and Social Security Allowance
Payment
Helping customer to fill cash/ cheque deposit slip and to fill
necessary information in cheque for cheque payment
Forwarding customer to respective department as per the
requirement of customers
Renewal of social security allowance and pension account.

Opening accounts (saving, current, fixed, Pension, social

security a/c, personal and corporate account etc.)
Handling telephones and solving the queries of customers
Assisting customer in filling the various forms like account
opening form related to personal account, joint account,
corporate account, KYC forms, ATM application forms,

10
 account closing form, mobile banking forms etc. as per the
requirement
Transfer of fixed deposit interest into saving account
Reporting Operational Units
Mobile banking
Electronic Cheque Clearance (ECC)
Payment of money come from Remittance
ATM card distribution and mailing to the card department for
the request of card activation
Issuance of balance certificate
Posting of Salary of staffs of Various organizations
Debit and credit posting and reimbursement or reverse in case
of double posting.
Account closing

Clearing
Receiving the cheque for clearing.
Department
Endorsing the cheque.
Making entry in the ECC system for clearing.
Informing the client in case of cheque return.
Returning the rejected cheque to the respective clients
and maintain proper records.
Handling queries of the customer.
Returning the rejected cheque to the respective clients
and maintain proper records.
Handling queries of the customer regarding their cheques
sent for clearing.

11
 CHAPTER II

INTRODUCTION OF THE INDUSTRY

2.1 Meaning of Bank

A bank is a type of financial institutions that are established under a certain act to perform
monetary and credit transaction. Bank provides financial services that may be in the form of
accepting deposits, accepting the loan, providing technical advice, dealing over foreign
currencies, remitting funds etc. The bank accepts the deposits in the form of capital and
collateral, formulates, and implements monetary and foreign exchange policy to maintain
price and balance payment stability for a sustainable development of the country. It provides
necessary liquidity for promoting the stability of the financial sectors. It raises funds by
collecting deposits from general public, corporate bodies and private organization by
providing them the certain percent of interest. It mobilizes the fund to productive sectors and
distributes the accumulated fund to others, who are in need of money by charging the certain
percent of interest. It gives facilities to business like giving loans to business, housing, saving
deposited money, buying and selling of bonds etc. Bank is therefore known as a dealer of
money that bridges the gap between the savers of fund and users of the fund.

It also helps to develop a safe, sound, and efficient payment system. Bank helps in making
regulations, inspection, supervision, and maintaining the sound development of the banking
system.

As per Nepal Rastra Bank Act 2002, “Bank is a financial institution which provides financial
services that may be in the form of accepting deposits, advancing loan, providing necessary
technical advises, dealing over foreign currencies, remitting funds etc.”

Bank is defined as financial intermediary accepting deposit and granting loan, offers the
widest menu of services of any financial institutions (Manandhar and Pokhrel, 2007).

2.2 Origin of Bank

Actually, the word “Bank” has been originated from the Latin word “Bancus”; Italian word
“Banca” and a French word “Banque”; which all refers to the BENCH on which the bankers
would keep money and its records. Jews, the early bankers, in Lombardy, used to transact
12
their business at benches in the market place. When Jews were unable to meet their liabilities,
the depositors used to break their benches and the term bankrupted was derived. In the
history of origin of banking in the world, “The Bank of Venice”, was the first, which was
originated in Venice of Italy in the year 1157 A.D. Originally it was not a bank in the real
sense being simply an office for the transfer of public debt. In addition, the first central bank
which was established in 1694 A.D. was “The Bank of England”.

Banking institutions have then changed in character and contents to the further extent. They
have developed from few simple operations involving satisfaction of a few individual’s
wants to the complicated mechanism of modern banking involving the satisfaction of the
whole community by serving speedy application of capital, slowly seeking employment and
thus providing the very life hood of commerce. Bank is a financial intermediary accepting
deposits and granting loans and also offers the variety of services like conversion foreign
currency into domestic currency and vice versa, lending money, saving deposits etc. Even if
we look at the past, banking concept is found. In the ancient period, this concept existed,
when goldsmiths and the rich people used to give money to the common people against the
promise of safekeeping their valuable items on the presentation of the receipt, the depositors
would get back their gold and valuables of the paying a small amount for safekeeping and
saving.

2.3 Modern Banking

Merchants, Goldsmiths, moneylenders are known as the ancient bankers. Development of

modern banking in the 15th, 16th, 17th centuries gradually shifted the Centre of the world
commerce from the Mediterranean region towards Europe and the British isles, where
banking became a leading industry. During third initial phase of modern banking
development industrial revolution was developed, which demanded a well-developed
financial system. Modern banking was developed to provide new methods of making
payments and credit available, which were required as economy of various countries adopted
mass production.

At previous times, banks functions were limited. They only accepted deposits of money or
valuables for safekeeping and verifying coinage or exchanging one jurisdiction’s coins for
another’s. Various banks were developed as modern banks such as Medici Bank of Italy and
Hochstetler Bank in Germany.

13
Now bank has become a known place for every people and it also offers wide variety of
services than before.

2.4 Evolution of Banking Sectors in Nepal

The origin of the banking system in Nepal started with the name of Shankardhar, a Sudra
merchant of Kantipur who paid all the outstanding debts in the Kantipur who paid all the
outstanding debts in the country. In historical term, there is a story that Gunakamdev
borrowed money in723 sambat to reconstruct Kathmandu. In the 11th century, during Malla
regime, Jayasthiti Malla developed 64 different classes of caste according to their
occupation. During that period, Tankadhari which is a money lender provided debt.
“Tejarath Adda” can be regarded as the initial steps in the direction of start of banking
development in Nepal. The established of ‘Tejarath Adda’ during the Tenure of prime
Minister Ranoddip Singh in 1876 A.D. (1933 B.S.) was the 1st step towards the institutional
development of banking in Nepal. It was converted into government financial institution
providing credit facilities to people at low interest rate of 5 percent. Tejarath Adda
distributed credit facilities to the public especially on the collateral of gold and silver, but it
didn’t collect the deposit from the public. During the time of Chandra Shamsher (1901 –
1929), credit facilities of ‘Tejarath’ were extended by opening its branches. Later, it was
replaced by the first commercial bank in Nepal Bank limited established on 30th Kartik 1994
B.S. is the first commercial bank in Nepal with authorized capital of 10 million rupees.

Nepal Rastra Bank was established on 2013/01/14 B.S. as the central bank under the Nepal
Rastra Bank Act-2012 B.S. Its function was to supervise commercial banks and to guide the
basic monetary policy of the nation.

After a long period, the government started to trade with India and Tibet. And the various
indigenous bankers handled even the trade because the transfer of the money could be safely
made only through these bankers. In 2013 B.S. Industrial Development Center was
established and later it was converted into Nepal Industrial Development Corporation
(NIDC) in 2016 B.S.

As the monetary got more and more complicated on 2022/10/10, Rastriya Banijya Bank was
established as a fully government owned commercial bank. Agricultural Development bank
was established on 2024/10/07 to help the agricultural side of the country.

14
To operate all commercial banks uniformly under single act ‘commercial bank act 2031’
was enacted. In 2041 B.S. Nepal Government established 5 rural development banks under
the control and supervision of Nepal Rastra Bank (NRB). The establishment of these banks
helped in rural areas but banking service to the customer satisfaction was still far. After the
re- establishment of democracy, the government has taken liberal policy in banking sector
so different private banks are getting permission to establish with the joint venture of other
countries. The Nepal Arab Bank now Nabil Bank was the first joint venture bank co-owned
by the Emirates Bank International Limited Dubai.

2.5 Types of Banks

Banks are classified into various categories based on the function they perform. In Nepal,
banks are generally used as synonyms for commercial banks only. However, there is various
banking business in the country. The types of banks of Nepal are as given below:

1. Central Bank: Central bank is the lender of last resort in the event of crisis for other
banking businesses. It controls the policy. Nepal Rastra Bank is the central bank of
Nepal established in 1956 under the Nepal Rastra Bank Act, 1955 which is replaced
by Nepal Rastra Bank Act, 2002. It is the monetary, regulatory and supervisory
authority of Bank and Financial Intermediaries.
2. Commercial Banks: Commercial banks are the major component in the financial
system. A commercial bank is a business organization, which deals in money by
lending and borrowing money, in which it makes profit. They perform intermediary
role by accepting deposits from saving units under various accounts and lending money
to needy deficit units. They have the widest range of activities and they provide a large
amount of the money supply. They performs several functions as various types of
deposit facilities like the current, saving and fixed deposit, safety of public money,
remittance of money, letter of credit, loans locker facilities, foreign exchange etc.
There are 28 commercial banks in Nepal. They also known as banks.
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 etc.
15
3. Development Banks: They are established to provide capital and technological
assistance for the development of infrastructure of the country. There are 40
development banks in Nepal.
4. Finance Companies: They provide loans to the risky customers whom commercial
banks find too risky to provide loan. They convert risk into potential business
opportunities. There are 32 finance companies.
5. Micro Finance Companies: They are sources of financial services for entrepreneurs
and small businesses lacking access to banking and related services. The two main
mechanisms for the delivery of financial services to such clients are: (1) relationship-
based banking for individual entrepreneurs and small businesses, and (2) group-based
models, where several entrepreneurs come together to apply for loans and other
services as a group.

16
 CHAPTER III

INTRODUCTION TO THE ORGANIZATION

3.1 Background

Nepal Bank Limited is the first commercial bank of Nepal. It was established in 1937
November 15 (Kartik 30, 1994) which marked the beginning of an era of formal banking in
Nepal. Before the establishment of Nepal Bank Limited, none other financial institution had
come into operation. All monetary transactions were carried out by private dealers and
trading centers due to which Nepalese economy suffered various economic and banking
problems which were settled after the establishment of Nepal Bank Limited. Headquarter of
Nepal Bank Limited is in Dharma path, Kathmandu, Nepal. Debit and credit cards, consumer
banking, corporate Banking, financial services, Investment banking, mortgage loans and
private banking are the some products of Nepal Bank Limited. Official website of Nepal
bank is [Link] .

On November 15, 1937 (Kartik 30, 1994), the King Tribhuvan inaugurated Nepal Bank
Limited. This marked the beginning of an era of formal banking in Nepal. Until then all
monetary transactions were carried out by private dealers and trading center.

In that era, very few understood or had confidence in this new concept of formal banking.
Rising equity shares were not easy and mobilization of deposits even more difficult. From
the very conception and its creation, Nepal bank Limited was as joint venture between the
government and the private sector. Out of 2500 equity shares of NPR 100 face value, 60%
was subscribed by the government and the balanced 40% was offered for the sale to private
sector. There were 10 shareholders when the bank first started.

When NBL was established, it was formed under the principle of Joint venture (Joint venture
between Government and general public). Its authorized capital was NPR 10 million and
issued capital NPR 2.5 million of which paid up capital was NPR 842,000 with 10
shareholders. The bank has been providing banking through its branch offices in the different
geographical locations of the country.

Nepal Bank Limited is providing services to its customers from its 132 branches. It provides
deposits facility, various loan facilities, advanced ABBS services from 132 branches,

17
internet banking along with the ATM facilities all over the country. Currently there are 2356
staffs in Nepal Bank Limited in total.

3.2 Vision, Mission, Objective and Value Statement

Vision, missions, and objectives are the most important aspects for a substantial growth and
survival for a bank. Nepal Bank Limited vision, missions, objectives and value statements
are as follows:

1. Corporate Vision

Corporate vision of Nepal Bank Limited is “Pioneer Bank with complete banking solution”.

2. Mission

Mission statement of Nepal Bank Limited is NEW which means networking for inclusion,
enhancing the value and world class banking services.

Networking for Inclusion: Use bank’s network to increase its reach all over the
country from urban areas to rural areas and help in improving the lifestyle of rural
population and in turn become the bank of choice of corporate, medium businesses
and rural market
Enhancing the value: to employees, shareholders, government and customers.
World class banking services: Provide world class banking services by achieving
excellence in customer service and adopting high level technology standards.
3. Objectives

Nepal bank limited has the following objectives:

Focus on building the positive net worth and meeting minimum capital requirement
over the coming five years.
Focus on increasing the customer base and market share.
Maximize the potential/ efficiency of bank’s staff.
Focus on minimizing the risk associated wi9th the business.
Focus on providing the world class business solutions.
Focus on increasing the sustainable profit.

4. Value Statement
18
Value statement of Nepal bank Limited is SPIRIT which means

Segmented business approach: for risk management and enhancement of efficiency

Partnership: with all stakeholders including the Government, employees,
shareholders and customer
Innovation: of business areas and processes for providing advanced banking services
and enhance competitiveness
Responsiveness: responding to the changing need of the market/ society/ business on
timely basis
Integrity: uphold trustworthiness and business ethics in the business process
Total banking solutions: to cater the need of all sections of society

3.3 Shareholders composition of NBL

The ownership composition of NBL can be described by the following table.

Table 3.1: Shareholder Composition of NBL

S.N. Ownership Percent

1. Government of Nepal 62.21%

2. General Public 37.79%

Total 100%

Source: [Link]

19
 Figure 3.1 Shareholders Composition of NBL

Government of Nepal
General Public

3.4 Branches of Nepal Bank Limited

Nepal Bank Limited has 132 branches in total including five regions. Nepal Bank Limited’s
head office is located in Dharma path, Kathmandu. The numbers of branches of Nepal Bank
Limited based on regions are shown in below table:

Table 3.2: Region Wise Branches of Nepal Bank Limited

Region Wise Branch Number of Branches

Kathmandu 29

Biratnagar 33

Birgunj 27

Pokhara 24

Nepalgunj 19

Total 132

Source: [Link]

20
3.5 Organizational Structure of Nepal Bank Limited

The bank is under the control of Nepal Rastra Bank. Nepal Rastra Bank has appointed a five
members management committee. This management committee performs as the Board of
Directors of the bank. Chief Executive Officer (CEO) is under the Board of Director (BOD)
followed by General Manager (GM), Deputy General Manager (DGM) and then other
departments.

The BODs of Nepal Bank Limited is chaired by Mr. Janardhan Sharma Acharya,
representative from MOF, 3 members are appointed by MOF, 1 member is professional
director appointed by MOF and 2 members are elected from the public shareholders.
Organizational structure of Nepal Bank Limited has shown in the figure 3.2.

Figure 3.2: Organizational Structure of NBL

Source: [Link]
21
3.6 Introduction of Major Departments in Organization

Major departments in Nepal bank limited are CSD, MSD, Cash department and loan
department. These departments are explained in the following sub headings.

1. Customer Service Department (CSD)

Customer service is the front desk of any organization, where customers make the first
contact with the bank. The image and reputation of the bank depend upon the effective
functioning of this department.

The staff deployed in CSD should have a fair knowledge of banking so that they may be able
to answer any questions raised by the customers. All the activities of CSD are directed
towards customer satisfaction.

CSD is the face of the bank. CSD is about how the organization delivers its product or
services. It is a link between customers and other departments of the bank. It bridges between
bank and customer. CSD is responsible to provide detailed information about the product
and services of the bank to meet customer need and to make banking more convenient. The
staff in the CSD must be capable enough to cope with every environment and at the same
time needs to have good communication and interpersonal skills to build a good public
relation.

2. Management Service Department (MSD)

This department is responsible for internal expenses management, fixed assets management,
and for customer services that are not provided by CSD. This department also directly takes
a part to provide services to their customer.

3. Cash Department (CD)

This department is responsible for cash management and ATM management. The various
functions performed under it are as follows:

Cash deposit and withdrawal

Disbursement of Gold Loan and documentation of information of customers

22
4. Loan Department

This department is responsible for loan management. Under this department various
functions like loan disbursement and documentation, renewal of loan, varificaton of
collateral etc.

3.7 Products of Nepal Bank Limited

Nepal Bank Limited like all other commercial banks generates its revenue mainly from its
credit creation ability and finances its credit creation from deposits. Thus, mainly the
products can be categorized into two major heading deposits and loans. However, there are
other various products /services of NBL that has enabled it to retain its customer. NBL is
not just business, it’s the facility for the citizen belonging to every corner of the country and
in even in the entire globe. Nepal Bank Limited is continually coming up with innovative
products and services to meet the ever changing requirements of the customers and to attract
potential customer. Remittance, utility payment service, SMS banking, internet banking,
ABBS banking are the customer oriented services provided by NBL.

NBL products are briefly described below:

1. Deposit:

NBL offers a wide range of deposit products that caters the requirement. They are saving,
current and fixed deposits. Karmachari sahuliyat saving account, Karmachari nirbritabharan
(employee retirement) saving account, NBL bishes bachat khata and nepa laxmi bishes
bachat khata are the example of saving deposits.

In the following Table 3.3, interest rates in different deposit accounts are shown. These rates
are effective from Baishakh 1, 2074 (April 14, 2017).

23
 Table 3.3: Interest Rates in Different Accounts

S.N. Deposit Types Rates Previous Rates

1. Normal Saving (rate calculated in daily basis) 1.25% 1.50%

Special Saving Deposit
1. Pension Payment Saving 2.50% 1.25%
2. Salary Saving Accounts (Non NBL Staff) 3.25% 2.50%
3. NBL Diamond Saving 2.25% 2.50%
4. Women Special Saving 2.25% 2.50%
5. Yuba Bachat Khata 2.25% 2.50%
6. Senior Citizens Special Saving 2.50% 2.75%
7. NBL Special Saving 3.00% 2.75%
8. NBL Staff Pension Saving 2.50% 2.75%
9. NBL Staff Salary Saving 3.25% 2.50%
10. Santati Saving Accounts 2.50%
11. Remittance Saving Accounts 2.50%
12. Investor’s Saving Accounts 2.50%
13. Professional’s Saving 2.50% 2.75%
14. Social Security Saving Accounts 2.50%
Fixed Deposits
1. 3 Month 5.00% 3.00%
2. 6 Months (Individual) 6.50% 8.50%
3. 6 Month (Institutional) 6.00%
4. 1 Year (Individual) 8.00% 9.50%
5. 1 Year (Institutional) 7.50%
6. Nepalaxmi Fixed Deposit (Above 1 year up to 7.00%
5 years)
7. Employee Welfare Account 4.00%
Normal Call Deposits 1.25% 1.00%
Source: [Link]

24
2. Loan:

NBL offers a wide range of tailor made funded and non-funded credit facilities to suit
funding requirements. They are corporate loan and consumer loans. Gold loan is the type of
consumer loan provided by NBL.

3. ABBS:

NBL is proud to announce that all together 132 branches are enabled for ABBS. In ABBS,
customers having account with NBL can access account from any online NBL’s branch.

4. Nepal Remit:

NBL remit is an online based remittance service for the purpose of facilitating to transfer the
earning of Nepalese and Nepalese expatriates with very minimal charge.

Along with inward remittance from foreign countries, NBL- remit is powered by domestic
money transfer facility through all of the bank’s branches throughout the country with very
minimal charge.

5. Internet Banking:

NBL has introduced internet banking. Thus, customer does not need to queue at a branch.

6. SMS Banking:

Customers have access to banking needs without ever having to wait in queues. Customers
can make instant balance information and account statement print request. Customer can
know latest exchange rate of foreign currency.

7. ATM/Debit Cards:

NBL ATM allows its customer to access vast network of ATMs located in major cities in
Nepal. It allows the cardholder to withdraw cash, inquire account balances and to pay.

8. Safe Deposit vaults:

It helps to store items like important papers like insurance policies, family records, birth
certificates, deed, titles, leases, contracts, bonds and certificates of deposits, jewels etc.

25
9. Others:

Nepal Bank Limited makes payment of social security allowances and pension allowances
under the direction of government of Nepal.

3.8 SWOT Analysis of NBL

SWOT Analysis is used to evaluate the Strengths, Weaknesses, Opportunities and Threats
involved in a project or in a business venture. It involves specifying the objective of the
business venture or project and identifying the internal and external factors that are favorable
and unfavorable to achieve those objectives. SWOT analysis of NBL reveals various
strengths, weakness it needs to work on and the opportunities and threats present in the
environment that it has to focus on.

Strength Analysis

1. Eminent management team

2. Component and highly skilled employees
3. Loyal and valued customers
4. Friendly environment to work
5. Introduction of Electronic delivery channels( ATM, internet banking, and mobile
banking) and 24/7 service availability
6. Wide geographical coverage with maximum branches all over the nation.

Weakness Analysis

1. No equal participation of men and women in top level management

2. Lack of adequate number of staffs that causes overload in the existing staffs

Opportunity Analysis

1. Expansion of branch network across the country

2. Technology innovations like E-banking, SMS banking
3. Change in political scenario
4. Banking deregulation and liberalization

Threats Analysis

1. Political instability in the country

2. Global issues of money laundering and terrorist financing

26
3. Emerging cyber fraud, privacy issues and other risks arising out of implementation
of information system and internet
4. Intense competition with the established commercial banks like Nabil, Standard
Chartered Bank etc.
5. Decrease of share price in the market

27
 CHAPTER IV

ANALYSIS OF ACTIVITIES DONE AND PROBLEMS SOLVED

During the internship at Nepal Bank Limited, involvement was diversified in many
departments. However, the main focus was given to the Management Service Department.
Thus this chapter mainly focuses on the department that was given a prime focus during the
internship period and the activities performed as an intern.

4.1 Task Performed

During the internship program in Nepal Bank, different responsibilities were given. Various
activities were carried out to fulfill the responsibilities. Most of the activities are undertaken
jointly by MSD and CSD. Some of the activities performed during the internship period
under different departments are analyzed as follows:

4.1.1 Account Opening

NBL offers different types of accounts such as saving account, call account, current account
and fixed deposit etc. Activities undertaken while opening account are:
• Issuing the forms as per customers’ demand and assist them in filling up the forms.
• Obtaining required information as per KYC circular issued by NRB. The account
opening form should contain account name, account holder number, nominee name
and signature. For account opening customer authenticated record like passport,
citizenship, nominee citizenship, utility bills or identity card, three passport size
photos are essentials. Signature specimen card should be duly completed and sign by
the customer.
• Filling up the KYC form.
• Account number is given as per registered sequence following computer system rule
to open the account in computer. The account number is of 20 digits, first three
indicate branch code.
• Then the customer is asked to deposit the amount in the assigned account number
and told to show the deposit slip duly received by teller.
• Then the customer is requested to collect the cheque next day and customer is
released.
28
 • Documents are checked as per details given in account opening rules according to
the nature of the accounts.
• Account opening forms are submitted from MSD to the Branch Manager (BM) for
the scrutiny.
• The documents are returned to CSD after the authorization.
• If there is any discrepancy of document found by the manager then the customer is
informed about that and is asked to clear the discrepancy.
• Signature is scanned for the computer access. All other information related to the
customer is written in the account opening section of Pumori for the future reference.
• The account opening form and KYC along with other necessary documents are kept
in a serial order as per account number for future reference.

4.1.2 Account Closing Process at NBL

Closing an account is just opposite of opening an account. Opening of an account can be

taken as the contract between bank and the customers whereas closing of the account is the
termination of contract. The main challenge of MSD staffs is to convince the customers not
to close their account. Activities involved are:

• Receiving the application for the closure of account: customer has to fill the account
closing form with the necessary details as account number, signature, name, reason
for closing the account.
• Asking the customer to return their ATM and check: customer has to return the
remaining cheque leaves and debit card to the bank. It is checked from the database
at Pumori. Before closing any account bank staff verifies the signature, check all the
liabilities of the customer in the bank as LC, guarantee, loan, locker etc.
• After checking the balance and clearance from various department like trade and
credit operations, finance and credit department, account closure is approved by BM.

4.1.3 KYC Update Process at NBL

Know Your Customer (KYC) form is the mandatory form every customer of the bank needs
to fill as directed by NBL. NBL has almost old accounts which need to be upgrade. NBL
made it mandatory for the customer to fill KYC form while opening new account and old
account holder cannot enjoy the banking service unless the account was updated. The KYC
update process in NBL is as follows:
29
 • The customer is requested to fill the KYC form with signature specimen card which
includes details like account number, account name, permanent address, temporary
address, name of the organization where the customer work, phone number and
location map of the customer with signature of customer at the end. The customer
need to submit the documents like Passport, Citizenship, ID Card and two recent
passport size photo.
• The customer need to first verify their documents with the assistant manager or
branch manager. Then, they need to submit the KYC form verified by manager with
necessary documents to MSD.
• After checking the documents the CSD official updates the signature specimen and
recent photo with necessary details in the system.
• Then, the CSD official sign the KYC form by writing updated in the top of the form
and submit to MSD for filing it in the separate file for future reference.

4.1.4 Recording, Filing and Documentation

Filing and documentation are very important task that the MSD staffs do. The entire paper
work has to be done simultaneously to the computer work. There are different files for filing
different documents. The account opening form, signature specimen cards, cheque
requisition slip, ATM request form, mobile banking form, KYC, and customer complain
form etc. are filed in separate files. Void cheque is also filed. The cheque issuance and ATM
card issuance is recorded in different book with signature of account holder. The authorized
letter received is also filed.

4.1.5 Issuance of Bank Statement

It involves providing bank statements to the customers on their request. Only customer who
owns the account can get the statement. The individual customer may also send other person
to collect the statement on his/her behalf only by giving his/her written consent to the bank.
In case of institutional customer, statement is given to the person who has been authorized
by the institution. Activities undertaken are:

• Asking the customers to write application letter for the statement request.
• Make sure that the necessary information is included like account name, number and
starting date from which the statement is required.

30
 • Verifying the authorized signature in case of individual customers and stamps for
institutional customers.
• Generating the statement after entering the required data in PUMORI and issuing to
the customer after registering in the file and taking signature and stamps for
institutional customers.
• If other person comes to collect the statements on behalf of the customer, the
statement is issued against their proof of identity (citizenship, ID card, driving
license).

4.1.6 Balance Enquiry

It involves enquiring the balance amount by the customers. Only authorized customers have
the privilege to enquire about the details of their account. Activities undertaken are:

• Making sure the customer enquiring the details owns the account.
• Correctly entering the account number in the PUMORI.
• Informing the details of the account (balance) to the customer.

4.1.7 Issuance of Cheque

The MICR cheque is printed on demand of customer in branch office. Cheque cover are
placed over the cheque and then binding is done with the help of stapler, the cheques were
provided to the customers the very next day of the cheque request is placed. The cheque is
strictly provided to account holder only. The number of cheque given to the customer
depends on the type of the account the customer hold.

4.1.8 Remittance

Both domestic and international remittance service is provided in NBL. Under the domestic
remittance different remittance companies has their account in NBL. As per the request of
the remittance companies we debited the account of those companies and credited the
account of those customers whose account number is listed in the list provided by the
remittance companies. Likewise under the domestic remit people from different part of the
country can send the money in the citizenship or license number to the person whom they
want. But the sender must have saving account in NBL. Similarly, under the international
remit people can send money directly to NBL through NBL remit.

4.1.9 Locker Access

31
NBL provides the locker facilities to its customers. Activities involved in the assessment of
locker are:
• Asking the customer to fill up the locker access form which is verified by CSD staff.
• Getting access register signed by customer.
• Taking the customers to the locker and wait till they are done.
• At the end of the day closing the main gate of locker and keep the key on the vault.

4.1.10 Balance Certificate Issuance

Balance certificate is issued to the customers upon request. Charge of Rs. 250 is debited
from customer’s balance on every issue. The balance certificate is approved by Assistant
Manager further approved by Branch Manager. Activities undertaken are:
• Receiving the request application from the customer.
• Taking the certificate to the BM’s for his approval, after being approved by head-
MSD.
• Receive the duplicate copy of the balance certificate from the customer and file it in
Issued Balance Certificate register.

4.1.11 Clearing and Settlement

Electronic Cheque Clearing (ECC) is an image based, cost effective, MICR cheque
processing and settlement solution where an original paper cheque is converted into an
image for electronic processing of the financial transactions between participating member
Banks and FIs. The physical movement of the cheque are truncated or stopped at the level
of the presenting bank in the ECC system. The cheque physically doesn’t travel to the
clearing house or to the paying branch as it used to do in manual clearing process, resulting
in a faster and easier processing of the cheque transaction.

4.1.12 Cheque Clearing Process at NBL

1. First the cheque is collected from the customer. The staffs of the department check
following thing before receiving the cheque.
a. The date of the cheque. The presented cheque should not exceed 6 month period
from the date cheque was written.
b. The cheque must be account payee cheque.
c. The cheque should be properly endorsed in the back of the cheque. The customer
should clearly write the account number and phone number.
32
 d. The cheque should be properly signed.
e. The cheque must be MICR cheque.
2. After collecting the cheque are inputted in the system through the ECC scanner. After
that the staff should fill the remaining details of the cheque like BDF account, pay
bank, pay bank account no. if the details. The details filled should be saved and
uploaded in the system.
3. The uploaded cheque details is shown in the quality and assurance option, the official
once should check the details of the cheque and mark it and chlick to approve for the
final approval of the system.
4. Then the report is generated in the system like total cheque presented, honored and
rejected. And the staffs check and compare every report. If everything is all right
the amount of the cheque are deposited in the respective account.
5. Customers are called for the returned cheque with reason for rejection from thee
clearing bank and the charge is deducted from the customer account.

4.2 Observed Problems

1. There is a frequent network problem in the branch because of which customer service
is delayed.
2. Delay in customer response: Customers have to wait for longer period of time to get
service because of the large queue of the customer and single staff in the customer
service department.
3. The cheque book and ATM cards are provided from the respective branch in which
the customers have account only. Because of this customer face problem of time
delay, compulsion to visit the branch even they are outside the city if they need the
cheque book and ATM.
4. Frequent ATM related problems because of frequent problem in ATM machine and
delayed maintenance of the machine.
5. Problem in mobile banking service.
6. Customers have to wait for more than one month for getting ATM card from the date
of request.

33
4.3 Problem Solved

1. The network of the branch should be checked regularly. The permanent solution of
the problem should be searched. There should be alternative network in the branch.
2. The number of staff should increase in the CSD and MSD considering the volume of
customer movement in the department.
3. Bank must arrange a facility to bring cheques and cards of branches out of the valley
to the respective branch where the customer wants.
4. Regular maintenance of ATM machine.
5. Rather than providing ATM cards one month after the customer request, it is better
to make a system to check how frequently ATMs have been used before expiry date
and make cards ready as soon as the card gets expired.

34
 CHAPTER V

CONCLUSION AND LESSONS LEARNT

5.1 Conclusion

An internship is first step of learning experience at work environment after the studying of
theoretical knowledge in college. After the completion of this internship of two months, the
real meaning of the work life and the actual pressure of the job had been felt. Intern at Nepal
Bank Limited was involved in various departments and gather practical experience about the
functioning of those departments.

Intern observed the various activities done that aid in the development of intern’s
interpersonal and communication skills. Placement at various departments assist to be
familiarized with overall activities, risk associated with the activities and the matter that
needed a close monitoring in those departments.

Nepal bank limited begins the history of formal banking in the country. Nepal Bank Limited
does not only provides financial product and services but even aims at total customer
satisfaction by rendering efficient and diversified financial services through improved
technology. As a result Nepal Bank Limited is known not only as the oldest bank but also as
one of the leading commercial bank of Nepal providing the full range of commercial banking
services through its 132 branches across Nepal.

While concluding this report, the intern is intensely satisfied with the internship and its
outcome.

5.2 Lessons Learnt

The most important lesson that intern learnt during the internship period is how to perform
various tasks in an organization, to cope up with the real working environment. Besides this,
it provided intern a great opportunity to work with the staff of the Nepal Bank Limited of
Bagar branch who helped intern to increase practical learning experience and provided a
platform to show the ability to perform the job, the importance of the time management and
the need of good communication skills. In internship period, intern was assigned in
Customer Service Department, Management Service Department and cash Department of
35
Nepal Bank Limited where lots of real life working experiences were learnt which can be
briefed as:
Intern developed interpersonal and communication skills to tackle the real life
situation.
Intern was able to handle various kinds of customers with varying knowledge level,
problems and requirements.
Intern got knowledge about various financial products and services provided by the
bank.
Intern got practical knowledge or work experience in the bank and understanding of
the institutional working environment.
Intern was able to learn about the general banking transaction and its operation in
various departments such as CSD, MSD and CD of the bank.
Some other skills and knowledge obtained through internship are more specifically
presented below.
Got an idea of using office machines as photocopy, printer, scanner etc.
Learnt to check and verify documents manually and technically by using banking
software (Pumori Plus IV)
Procedures of account opening, account closing and account transfer for individuals,
firms and institutions and about the documents required for each.
Issuing cheque books, account statements printing and distributions and dealing with
customers at CSD.
Got the knowledge of various remittance products like web remit, draft, scheduling
etc.
Learnt the process of debit and credit posting, reimbursement in case of double
posting etc.
Learnt various qualities required for being a crucial part of an office team such as
sincerity, punctuality and confidentiality and working under pressure.
After the preparation of this report and experience gathered during the internship, intern has
been able to understand the banking operation to some extent. Lessons learnt during the
internship will be of great help while the intern starts her career in the financial sectors of
the economy. The internship program is successful in bringing the change in the student
closed in the boundary of the classroom by exposing them in the real and very difficult and
challenging external job place.
36