Tribhuvan University, Faculty of Management (FOM) commenced Bachelors of Business Administration (BBA) program as a distinct approach of attaining both theoretical knowledge and practical exposure. This university is the oldest university in Nepal and since its establishment it has been providing excellent education to the students. It provides a wide range of streams in the educational sector among which management education holds a major position. It introduced the Bachelor in Business Administration (BBA) program in the year 2001/02 with an objective of producing middle level managerial professionals. It has designed the BBA course in such a way that the students are facilitated to know the real business situations in the global context.
An internship program under the BBA is mainly targeted at giving the practical exposure to the student who has acquired plenty of theoretical knowledge in the related field of the study. The student gets the opportunity to participate into the organizations to learn and solve the real life problem and develop the managerial skills they have learned. Hence, the main focus of the study is to analyze the student’s capability to adjust and adopt into the overall working environment. Moreover internship program offers platform to compare differences in theoretical and practical knowledge and its real implication.
BBA program of Tribhuvan University has kept the minimum requirement of eight weeks internship period. The reason behind including internship in the final semester is to provide the practical exposure, to train and prepare understanding of corporate cultures, to give an opportunity to analyze business setting by identifying the problems in the real life situation, to uplift the interpersonal and communication skills. In addition, students can use the knowledge acquired in the previous semesters and perform efficiently in completion of the assigned task in the workplace.
The internship report has been prepared on the basis of the experience and knowledge of eight weeks internship in NMB Bank. It has been prepared for the partial fulfillment of the requirement of the BBA, Tribhuvan University. This report gives the information regarding the working experience in Telemarketing department along with customer service departments.
The main objective of this study is to report the activities performed/learned in Customer Service Department and Clearing Department of the NMB Bank Limited, Babarmahal. The major objectives of the study had been stated as follows: To acquire the knowledge of activities performed in customer service department. To know the procedure of clearing of cheques.
To develop skill in dealing with potential and existing customer and maintaining their satisfaction level. To develop the confidence level and interpersonal as well as communication skill.
All the information has been gathered through a systematic procedure for the preparation of report. Most of the information has been collected through the brochures, websites of the bank, document and articles published in the newspaper and through the interviews as well. The relevant data of the bank have been obtained through the official site and credible source so the deviation might not occur. However, the major portion of facts included in the report has been obtained through the personal experience of intern throughout the internship.
1.3.1 Organization selection
For the specialization in the field of finance, I had certain options to choose the organization that offers the most of the information. So I chose NMB as it has the best offerings to the students. A letter from the college along with Curriculum Vitae, and photos were presented at the head office of the NMB, Babarmahal. I approached the bank and after few days I was called to join the bank from 1st April 2012.
For conducting the internship the internee was placed in head office. The intern was first familiar with the bank and banking environment. During the eight weeks of internship periods, internee was placed in two different departments. They are as follows: Customer Service Department
1.3.3 Duration of Internship
In order to attain the objectives of the BBA program, the university has placed it in the final semester i.e. the 8th semester. At this point of time the students of BBA program are completely ready for converting their theoretical knowledge with some practical implications. As per the requirement by the Management Dean’s Office, the internship program has a mandatory duration of 8 weeks. With its duration and the needed exposure, the program has been designed to attain 6 credit hours. Accordingly, this internship program was successfully accomplished from 8th April 2012 to 3rd June 2012 in the head office of NMB Bank Ltd. There were different activities performed by the intern during this 8 weeks time which will be dealt in detail in Chapter 4.
Table1.1: Duration of internship in different departments
Time Period ( in weeks)
1. Customer Service Department
2. Clearing Department
While doing the internship in the bank there are certain limitation by which we can’t able to get what our course want. The limitations are as follows:
Due to the time constrain, it was not enough to completely experience the activities, processes, functions and transaction undertaken in bank. Thus in-depth analysis of other departments couldn’t be done. The bank did not have the policy to rotate in each department so the knowledge about other department could not be gained. The bank’s policy on keeping some matters confidential prevented the intern from analyzing different activities. This study may not be applicable to other organizations of similar nature.
INTRODUCTION OF THE INDUSTRY
2.1 Introduction of Bank Industry
Banking sector definitely plays a pivotal role in the overall development of an economy. Banks are one of the vital aspects of the economy, which deals in the process of canalizing the available resources in he needed sectors. It is the intermediary between deficit and surplus of financial resources. It is the financial institution with an aim to accumulate the idle money of the general public and lend those who are intending to use it for productive purpose. Bank offer attractive product plans and schemes to attract the deposits and then mobilizes their deposits in providing loan facility to the general public, business house, industries, agriculture, and other needy sector by charging some interest rates.
From this return they provide return to depositors and make their profits. In this way, banks collect idle fund, mobilize them into productive sector and hence supports the overall development of the economy. Thus the bankers have responsibility of safeguarding the interest of the depositors, the shareholders and the society they are serving. According to NRB Act 2002, “Banking means accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdraw by cheque draft order or otherwise” According to World Bank, “Banks are financial institutions that accept fund in the form of deposits repayable on demand or in short notice.”
According to Nepal Commercial Bank Act 2031, “A commercial bank is a bank, which deals in exchanging currency, accepting deposits, advancing loans and doing other commercial transactions except some specific function done by other specified banks such as co-operative agricultural bank and industrial bank.” Commercial banks are the integral part of the national financial system that functions on continuous basis on society. The basic objective of commercial bank is to collect idle money, mobilize them into productive sector and causing overall economic development so that the national economy can grow and increase the standard of living. 2.2 History of Bank
The term ‘bank’ was derived from the Latin root “Bancus” which refers to the bench on which the money mediator would keep his money and his records. Again the term ‘Bank’ is derived from the French word “”Banque” and the Italian word “Banca” which mean a bench for keeping, lending and exchanging of money or coins in the marketplace by money lenders and the money changers. It was also derived from the German word “Bank” which means Joint Stock Company. In Global Context:
Banking has come to the present advance form through the various stages. Traditional forms of banking were traced during the civilization of Greek, Rome and Mesopotamia. “Bank of Venice” was set up in 1157 AD in Venice. Originally, it was not a bank in real sense being simply an office for the transfer of the public debt and storing precious metals and coins. Subsequently, “Bank of Barcelona” (1401) and “Bank of Geneva” (1407) were established. “Bank of England” (1694) was incorporated as a joint stock bank and later on, it became the first Central Bank of the world (1844). Then, people migrated to England and the other parts of Europe from Italy for the development and expansion of the modern banking. Commercial banking in India began in 1770AD with the establishment of the joint stock bank, named the “Bank of Hindustan” bay an English Agency in Calcutta. In Nepal:
At the early stage, zamindars were known as banks. The focus was more on lending money against securities like land and ornaments, which could be redeemed if the loan wad defaulted. The establishment of ‘Kausi Tosha Khana’ during the regime of Great Prithivi Narayan Shah and ‘Tejarath Adda’, during the Prime Ministership of Ranoddip Singh around 1820-1876AD, were taken as the initial step for the development of institutional banking system. The history of modern banking industry dates back to1937AD in which Nepal Bank Limited was incorporated, the government owned 51 percent of the shares in the bank and controlled its operation to a large extent. It is headquartered in Kathmandu and had branches in other parts of the country as well.
In order to regulate the economy and the unregulated use of money Nepal Rastra Bank was created in 1956 as the central bank. Its function was to supervise commercial banks and to guide the basic monetary policy of the nation. Its major aims were to regulate the issue of paper money, secure countrywide circulation of Nepalese currency and achieve stability in its exchange rates; mobilize capital for economic development and for trade and industry growth; develop the banking system in the country; thereby ensuring the existence of banking facilities; and maintain the economic interests of the general public. Nepal Rastra Bank also was to oversee foreign exchange rates and foreign exchange reserves. After almost 30 years another state owned commercial bank Rastriya Banijya Bank was established in 1966.
The Land Reform Savings Corporation was also established in the same year to deal with finance related to land reforms. During 19867 AD the Agricultural Development Bank was also established. Almost 75 percent of the bank was state-owned; 21 percent was owned by the Nepal Rastra Bank and 5 percent by cooperatives and private individuals. Hence it is clear that since the 1960s, both commercial and specialized banks have expanded. More businesses and households had better access to the credit market although the credit market had not expanded. Government formulated liberal economic policy to accelerate countries growth and development. Government encouraged foreign investment and participation of private sector in the banking sector.
The government then applied the policy of “Joint Venture Banking”. This was a great significant event. Healthy competition prevailed and people were offered valuable services and national as a whole begun to take benefit. However, the decade of 1980s can be considered as the landmark in the modern banking history of the Nepal. It was only in this decade government allowed the excess to foreign joint venture banks to be the part of the Nepalese banking business. During this period, three foreign commercial banks opened branches in Nepal. The first was Nepal Arab Bank established in 19884 AD. It was co-owned by the Emirates Bank International Limited (Dubai), the Nepalese government and Nepalese public. After that in 1984 came Nepal Indosuez Bank (currently Nepal Investment Bank Limited) which was jointly owned by the Credit Agricole Indosuez, Rastriya Banijya Bank, Rastriya Beema Sansthan ( National Insurance corporation), and the Nepalese public.
Then Nepal Grindlays Bank was the third foreign joint venture to be established in Nepal which was co-owned by a British firm called Grindlays Bank, local financial interests and the Nepalese public. Although government had started the liberalization of financial sector during the decade of 80’s but this process speeded up only in early 1990’s. In fact private sector rushed into the banking and financial industry after the restoration of democracy in 1990. Nepalese financial market scenario at present is shown in the chart below: Table 2.1: List of financial institutions
2.3 Commercial Banks in Nepal
Commercial banks are the one of the major financial intermediaries whose primary function is the transfer lf monetary resources from the savers to the users. They are the almost largest of all the financial intermediaries. They have the wide range of activities. Commercial banks collect fund through depository schemes and lend as a loan to the different parties. Commercial banks do wholesale as well as retail banking to business corporations and individual entities. In Nepal, there are 32 commercial banks at present (see in ANNEX 1).
Commercial banks now are not limited to deposit and loan services only but they also provide variety of other services such as remittance, guarantee, letter of credit, foreign exchange etc. Nowadays commercial banks have come up with different ideas to improve its performance and to lower its operating cost by adopting various technologies like automated teller machine (ATM), Internet banking, telephone banking (tele-banking), point of sales (POS), mobile banking, etc. 2.4. Importance of Commercial Banks
The major roles of banks are as follows:
1. Lending and Deposit
A bank’s role as an “intermediary” is clearest in the credit and deposit business. Clients “bring” to the bank their savings, i.e. the money they have chosen not to spend. The bank transfers this money to its credit clients in the form of loans.
2. Payment mechanism
Banks, in behalf of their customers, carryout payments for goods and services. This includes issuing and clearing cheques, conducting electronic payments through plastic cards, payment of bills in customer request etc.
3. Securities issuing
In a securities issue, a bank or group of banks generally agrees to underwrite the entire amount of the issue. The securities acquired in this
way are then offered for public subscription for the account and at the risk of the bank or banks involved. The risk that not all the securities will be placed with the clients is carried by the bank. The issuer, for its part, has immediately available to it the entire proceeds from the transaction, regardless of how successful the offering has been. For a bank to be successful with an offering, it has to be able to gauge market conditions correctly at the time of the issue.
4. Asset management
Asset management covers a range of banking activities: portfolio management, investment advisory, securities trading and lending business (collateral loans, securities lending and borrowing). With a discretionary portfolio management agreement, clients authorize a bank to undertake, for their account and at their risk, all the actions it deems appropriate within the framework of the normal asset management activities of a bank. Clients expect their assets to be managed professionally and it their best interests.
5. Foreign exchange trading
Foreign exchange is the system or process of converting one national currency into another and of transferring the ownership of money from one country to another country. Due to the massive amounts traded in the foreign exchange markets, various foreign exchange trading is flourishing within banks with the aim to exploit even the slightest differences between exchange rates (arbitrage).
6. Safeguarding of valuables
Banks also take care of valuables of the customers. It also apprises and certifies the true market value of their valuables.
INTRODUCTION TO THE NMB BANK LIMITED
NMB bank Ltd , the first commercial bank of Nepal that has been able to upgrade from a finance company to full-fledge commercial bank, was
financially institutionalized in the year 1996 A.D. in Durbarmarg, Kathmandu. Nepal Merchant Banking and Finance Ltd, the erstwhile name of the institution was among the leading financial institutions in its category until May 2008 when the transformation process for the up gradation was complete and changed its name to NMB Bank Limited.
NMB is the brain child of leading Nepali Entrepreneurs with the dream of framing the ultimate in merchant Banking and Financial services. Harnessing from its strength on Merchant Banking the Bank has decided to broaden its scope of services by building synergies to its current operation. This unprecedented event has been possible by the way of strong commitment and confidence of all the stakeholders’ viz. customers, promoters, stockholders, regulators, and employees.
NMB strives to provide its professional financial services know-how to proper in today’s competitive environment. To achieve its goal, NMB has assembled a team of young and dynamic professionals to look after the day operation of the institution. The professionalism and the experience gained in various sector of finance over the years will enable NMB to serve its customers in a more reliable and flexible manner. The company is striving to become a leader in the market for financial and merchant banking activities. In short span of its existence, NMB has been recognized as a premier Merchant Bank in Nepal.
Since NMB is managed by the experienced bankers and professionals, it is considered as the leading bank in Nepal that is committed to the society. The commitment has always been to behave ethically and to contribute towards the improvement of quality of life of the people, the community, and the greater society. The bank has done well in its core area. Today, the bank provides full range of services to corporate and retail customer and is expanding its scale of operations. The bank believes in building strong relationships with all the stakeholders, particularly the customers, is crucial for the growth and prosperity. The strategy is to create strong customer base with the diversified client supported by an extensive branch network. They accord the highest priority to a quality service experience
and are always looking for ways to improve their service standard.
There has been a continuous surge in the number of the financial institutions in the country. This has heightened competition among these institutions which is not good for the economy as a whole. Instead of quantity, NMB focuses on enhancing the quality and strength of the existing institutions. This has significance in the context of WTO agreement also, as per which Nepal has opened up its banking industry for foreign players in 2010.
Currently it is promoted by members of leading business conglomerates in association with young Lian Reality, Malaysia and Employee Provident Fund of Nepal. It is one of the leading Merchant (investment) Bankers at present in Nepal. It also enjoys number one status among the existing finance companies in terms of profitability, market capitalization, deposits, risk Assets and Net Worth.
NMB is a public limited company with NPR 2 billion in paid up capital. It has altogether 21 branches (Annex -2)
“To establish ourselves as a leader in banking by providing a range of financial services suitable to the needs of the market with high priority on customer care while simultaneously embracing the interests of all stakeholders and value of a good corporate citizen.”
To gain supremacy in growth, profit, customer care and social response in banking by way of: Reaching out and serving wide range of customers within and outside the country Leveraging and integrating the existing strengths of the institution Developing a culture of “Giving Extra Care to the Customers” Being innovative in designing and delivering services
Adopting prudent investment practices for building up a sound assets base. Developing internal and external efficiencies by prudent use of technology Building operational efficiency through smarter processes and controls
Providing exciting and challenging career prospects for the employees Placing high priority on stakeholders’ interest and statutory compliance Acting responsibly for making contributions to the society at larg
The objectives of NMB are as follows:
To develop a customer oriented service culture with special emphasis on customer care and service. To increase the market share by following disciplined growth strategy. To leverage the technology platform and open scalable systems to achieve cost effective operations, efficient MIS, improved delivery capability and high service standards. To develop innovative products and services that attracts targeted customers and market segments. To continue to develop products and services that reduces the cost of funds. To maintain a high quality asset portfolio to achieve strong and sustainable returns and to continuously build shareholders’ value. To explore new avenues for growth and profitability.
3.1.4 Capital Structure
Shareholders and Promoters
NMB is a public limited company with NPR 2 billion, in paid up capital including 25 percent of the shares held by the public. It has wide and diversified ownership leading Nepalese economist, business persons, industrialist and entrepreneurs along with major financial institution. Malaysia as a foreign joint venture partner, has promoted the company.
Table 3.1: Shareholders and promoters of NMB Bank
Employee Provident Fund
Fig: 3.1 participation in NMBs’ share
Current Board of Directors of NMB
The Board of Directors consists of seven members that manage NMB. The details of the present board of directors and management teams are given below:
Table 3.2 Board of Directors of NMB Bank
Mr. Pawan Kumar Golyan
Mr. Aatma Ram Murarka
Mr. Purushottam Lal Shanghai
Ms. Shanti Byahut
Director-Representative Employees Provident Fund
Ms. Rita Pant
Mr. Harischandra Subedi
Dr. Hari Prasad Shrestha
Mr. Deepak Narsingh Shrestha
Source: Annual Report 2010/11
The management team of NMB consists of all the managers and the department heads. They are the one who supervise their subordinates and guide them to accomplish their work efficiently. Management of the organization plays a major role in achieving organization goal. As the board of directors formulates the vision, mission, and objectives for the organization, where
as managers formulate action plan to achieve those objectives. The members of management team are shown below:-
Table 3.3 Management Team of NMB
Chief Executive Officer
Head -Human Resource
Chief operating Officer
Head Business Banking
Source: Annual Report 2010/11
3.1.5 Future plans
NMB bank believes in safe and sustainable growth as the major driving factor behind all its future plans. Some of the important goals that the bank would be looking to achieve in the medium term are as follows: 1. Continue to reinforce NMB as a franchise in order to supplement its business and reputation in the market. 2. Raise the size of the balance sheet to generate the advantage of scale. However the expansion will be based upon judicious selection of business both in terms of deposit and loans.
3. Focus on high yield lending opportunities i.e small and medium scale borrowers with appropriate risk controls. 4. Extend credit lines to basic and infrastructure related projects viz. power, cement, agricultural products, educational and health related institutions etc. that have lower external vulnerabilities. 5. Increase customer base to over 100,000 within five years span. Achievement of this can provide opportunities in selling transactions banking product and services. 6. Promote a subsidiary company mainly for investment banking purpose. This is also a regulatory requirement now. Establishing a separate entity for the reason can add value in terms of
raising efficiencies as well as having focused approach to the business.
“Customer care our Religion” has always been the motto including in case of technological enhancement at NMB bank limited. The IT initiatives have played a major role in transforming the bank into a highly responsive organization to meet challenges of a globalised economy. The bank is pursuing a complete IT policy as strategic initiatives to meet customer expectation. With this end in view, the reach of IT initiatives was expanded to automate more banking touch points and overall business. NMB bank have essentially used the IT service Management in the bank for managing IT systems, philosophically centered on the customer’s perspective of IT’s contribution to the business.
3.2 Departments at NMB Bank
NMB Bank comprises of many departments where each department looks after their own area of activities and with its sound and efficient capabilities assists the bank towards the positive prospects. The major departments of NMB are discussed below. A. Customer Service Department
Customer service department directly deals with the customer by providing information related to various bank. Service offered by bank. It responds to the queries of the customers giving appropriate solution to their problems promptly. This department performs jobs of routine and clerical in nature. Specifically, customer service department deals mainly with account opening, account closing, renewing of fixed deposit account, Cheque printing and issuing, account statement, etc.
B. Business Retail Banking Department
NMB Retail banking targets medium and small sized enterprises and resources to meet the ready requirements of the customers business with personal touch and responsiveness. This segment of bank provides the wide range of credit facilities to mid sized business entities, house and groups that include financing to small and medium enterprises.
C. Corporate and institutional Banking
This segment of credit department comprises a seasoned and team of Relationship Managers to meet the demanding service standard of large and medium corporate houses, multinationals, government organizations, Financial Institutions, etc. The range of facilities are Working capital finance, Pre and post shipment export financing, import financing, corporate financing, receivable discounting, L/C, project financing, etc.
D. Information Technology Department
The bank pursues a complete IT policy as a strategic initiative to meet the growing competition for business, achieve efficiently in international operation and meet customer expectations. Providers of IT not only focus on technology and their internal organization, they now consider the quality of the services they provide on the relationship with customers.
E. HR Department
Human resource department is closely related to bank’s employees such as recruitment, selection, promotions, transfer, performance appraisals, training and development, etc. For the purpose of improving the skills, abilities and knowledge of the staff members, human resource department of NMB bank provides various job related trainings.
F. Internal Audit Department
This department is responsible for maintaining and verifying the individual accounts of the day to day basis like the expenses of staff salary, expenses of staff lunch and other miscellaneous expenses.
G. Accounts/Budget Department
This department is responsible for maintaining and preparing whole accounts and budget of the bank. This department also prepares final financial statement of bank.
H. Trade finance Department
This department is responsible for opening letter of credit for those people who are involved in trading activities. This department provides services by issuing letter of credit as an issuing bank to advice bank in case of import and vice versa when exporting. The contents required in bill of lading are invoice, packing list, certificate of origin, insurance and transport document. This department looks after the foreign trade activities of the bank such as Issuance of letter of credit (both import and export), Issuance of Guarantee, and Telex transfer.
I. Legal Department
The main function of this department is to look after the legal aspects of the bank. Formulation of laws and policies for the bank also lies in this department. This department takes all the legal actions of the behalf of the bank as required according to the situation.
J. Investment Banking Department
Since NMB is an investment banker, it has setup a different for investment banking. This department looks after the public offering of securities (IPO and Rights Issues). The activities of Investment Banking department includes managing the portfolio of clients, valuation of securities, operation of mutual funds, management of private placement of equity and providing investment advisory services.
K. Card Center
NMB Ltd has separate department for the issue of the cards.ATM cards are created and issued from the head office of NMB. This department deals with the issue, renewal and management of cards, NMB currently issues ATM cards only. In future, NMB plans to introduce debit cards that can be used in POS terminals and credit cards also .
L. General Administration Department
The general service department of NMB performs miscellaneous works, which are very essential for the daily functioning of the bank. It makes purchase order of different types of goods needed for the bank as well as it keeps the record of different goods purchased and also helps in purchasing the wastage of different goods.
M. Treasury Department
This department is responsible for planning and executing our funding activities and strategies at the bank. Treasury department also reviews portfolio hedging used for managing liquidity, market and credit portfolio risk as well as interest rate risk inherent in non-trading financial instruments and trading risk inherent in the customer and proprietary trading portfolio.
3.3 Major Products and Services
A) Corporate and Institutional Banking
Project and term financing- independent or syndicated term loans Working capital financing for large corporate
Trade finance – letter of credit, guarantees, import/ export bills Loan syndication
B) Business and small medium enterprise loan
Structured product based finance for small and medium enterprises- Term financing. Working capital financing for small and medium enterprises for their short term needs- Overdraft, Demand Loan, Trust Receipt Loan. Trade finance – Letter of Credit, Bank Guarantees, Import Export Bill discounting etc. C) Retail Banking
Structured consumer loans:
3.3.2 Deposits and other interest rates
1. NMB Bank Alkapuri Bachat
Minimum Balance Rs. 1,000
Interest Rate 6.50% p.a. on daily balance
ATM cum Debit Card
Payment of PSTN & Post-paid Mobile bill
Free Mobile Banking Subscription
Free cheque book
Completely filled Personal Account Opening Form
Copy of Citizenship Certificate
One passport size photograph
2. NMB Bank Sulav Muddati Bachhat
Fixed Deposit starts from Rs. 100,000
Hassle free withdrawal facility
Saving account on zero balance at 6.00% Interest on daily basis Interest on Fixed Deposit will be transferred to savings account on a monthly basis ATM cum Debit Card
Free Cheque Book
Free Mobile Banking Subscription
Completely filled Personal Account Opening Form
Completely filled Fixed Deposit Account Form
Copy of Citizenship Certificate and one passport size photo
3. NMB Bank Investors’ Saving Account
Introduced for the first time in Nepal for hassle free investment in shares Features:
Interest Rate 5.0% p.a. on daily balance
Minimum balance –NIL
Free Mobile Banking Subscription
Free Cheque Book
ATM cum Debit Card
e-Banking Subscription facility
No Application Forms to be filled during initial public offerings (IPOs) Separate Dedicated counter during IPOs
Hassle free application during issue of primary shares
Same day fund transfer to the account when refund is announced Free ABBS
Completely Filled Account Opening Form
Copy of Citizenship Certificate
One passport size photograph
4. Current Account
Organization can open a current account in its name in order to carry out day-to-day banking transactions. It is a non-interest bearing account with no limit on withdrawal facility. Features:
Minimum Balance ranging from NPR. 10,000 to NPR. 100,000 depending upon organization’s size No limit on withdrawal facility
Free Cheque facility
Facility to transfer certain amount to call deposit on predetermined rate. Requirements:
Completely Filled Corporate Account Opening Form
5. Individual Fixed Deposit
Individuals who wish to secure their returns can apply for NMB Bank Fixed Deposit guaranteeing the interest rate not to change for the nominated term. Individuals can open fixed deposit with a minimum amount of NPR. 10,000. Customers can choose the interest rate for the tenure of 3 months to 2 years. Interest Rate: 9.75 % for the first year,
Completely filled Fixed Deposit Form
Interest amount transferred to savings account on a quarterly basis Credit facility up to 80% of fixed deposit
ANALYSIS OF ACTIVITIES DONE
AND PROBLEM SOLVED
During internship period, internee worked in specially two different departments. Inside the block of the bank, internee got chance to work in customer service department. An internee was given a brief overview about the work of the particular department and allowed to do general works related to the departments. However, internee learned by asking questions to the staff of departments and also by observing their daily works. The different types of activities performed in different department are: 4.1 Customer Service Department
Customer service department is the most crucial link between a bank and the customer how this department handles the customer makes all the difference whether or not the customer wants today business with the bank. In today’s highly competitive business environment, customer should be treated with the utmost respect, dedication and nothing less. It is generally the reception desk that a client first approaches and it is the duty of this department to help the customer with sincerity. A good delivery of service at this point often establishes a good link of the bank with the client. 4.1.1 Activities Performed in Customer Service Department
Different activities that the internee had carried out during the placement in CSD are as follows: Account Opening In CSD, the new customers visit mainly to open an account. It is the most frequent activity done in this department. Customers entitled to open various accounts are supplied with contract paper named account opening form by the banks. This form serves both the purposes of details of customers and contract between customer and the bank. While opening a new account presence of an account holder is necessary.
Process of opening an account:
Provide the details of account and upon customers request provide new account opening form to the customer who is willing to open an account in the bank. After the form has been filled up, verify whether the form has been duly
filled up or not. After the form has been verified staff at CSD assigns an account number to the account holder. Then, the form is approved by the supervisor.
Finally, the client deposits money in his account and becomes the member of the bank. 1. Individual Account:
Obtain citizenship or passport
Obtain photos of customers
In case of minority of account holder copy of birth certificate and citizenship of the parent. 2. Proprietorship Account:
Declaration of sole proprietorship
Copy of renewed registration certificate
Identification paper of A/c operator
Income tax registration /renewal certificate/PAN certificates 3. Partnership Account:
Letter of partnership duly signed by all partners
Copy of partnership agreement/deed
Certificate of partnership, registration and renewal
Identification paper A/c operator
Income tax registration/renewal certificate
4. Account of Corporate Bodies
Memorandum and article of the company
Resolution of the board of directors to open and operate the account List of director’s duty signed by respective directors with home address and phone number Company registration certificate
Identification paper of A/c operator
Income tax renewal/registration certificate.
5. Accounts of Clubs, Societies and Association (All Documents to be duly Certified by Charity) List of office bearers and address
Copy of By-Law/constitution
Copy of resolution to open and operate account
Name and signature of person authorized to open account
Certificate of registration and renewal.
It is another important but task done under account operation. People close their accounts because of many reasons but their major reason for closing of account was the inefficiency and the late service of the bank and the increased number of competitors in the area. Process to close an account is given below:
Customer willing to close the account must fill up the form specifying the reason. After submission of the form to CSD it is confirmed form the various department that the customer is not enjoying any sort of facility from the bank at present. The client I then asked to return all his account related belongings like ATM card and check box. Then finally, the account of applicant is closed with certain charge.
Printing and Providing Cheque Books
For a new customer, chequebook is provided on the next day of opening an account. However for the existing customers, cheque requisition from needs to be filled up. The cheque books are prepared demanding upon the demander number of leaves in the cheque book. While providing the cheque book, the customer signature should be verified properly and necessary records need to be maintained.
Distribution of debit cards
The ATM cards become ready to collect after 10-15 days of account opening. Debit cards were distributed only after the verification of the customer signatures. The customers were given the debit card along with the pin number. However, the cards get activated only on the next day. The records of collected debit cards were manually entered in register with customer signature.
Interaction with customers
The internee has to deal with various natures of customers on CSD. The internee has to answer the question raised by the customers regarding the various areas such as interest rate of various schemes, requirements for account opening, information about different products of bank, etc.
4.2 Clearing Department
Customers deposit cheques, drafts in their accounts, which are drawn on various banks and bank serves their customers by helping them collect the fund in their account through clearing function. The department is responsible for the clearing of all checks that the bank receives daily. 4.2.1 Activities Performed in Clearing Department
Different activities that the internee had carried out during the placement in clearing are as follows: Manual clearing:
It is the process whereby the personnel from clearing department should present in Nepal Rastra Bank for the clearance of cheques at 11:45 a.m. They come there with the summary sheet prepared and claim on the desk of clearance. The summary sheet shows the claim on different banks. The cheques are attached on other bank cheque sheet (OBC-Sheet). The cheques attached on OBC sheet are distributed to the respective banks/FIs. The activities assigned to the internee as follows: Collecting cheques and attaching on OBC sheet:
The cheques are collected from different branches of a bank. After making confirmation of entries the OBC sheet is printed. The cheques are attached by matching the cheques amount, cheque number and name of the bank with the OBC sheet. Preparation of Summary Sheet:
It is a process where every representative member should prepare the summarized statement report of total presenting cheques (Summary Sheet) as per the format thus provided from Nepal Clearing House Limited. In the summary Sheet there includes name of the bank, no of cheques to be presented, and the calculated amount of all the cheques. Checking Different Stamps:
The cheques presented to other banks most contain different stamps like endorsement, bank’s stamp, cross stamp. Collecting Cheques from NRB:
The prepared summary sheet is presented the desk of clearance and the cheques attached on OBC sheet are distributed to the respective banks/ financial institutions. The other banks also drop the respective cheques on the desk of NMB. The collected cheques are divided as home cheques and refund cheques. Entry of Refund Cheques:
The refund cheques are entered in middle ware and matching with the settlement of clearing transaction provided by clearing house and if any deviation occurs that must be informed to the respective banks in the form of less claim or over claim. Electronic Cheque Clearance (ECC):
Electronic cheques clearing (ECC) NCHL-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/ FIs. The physical movement of cheques are truncated or stopped at the level of presenting bank in the ECC system. The cheque does not physically travel to the clearing house or the paying branch as it currently does, resulting in a faster and easier processing of the cheque transaction. ECC currently supports cheques clearing of four currencies NPR, USD, GBP and EUR with presentment cut off time at 14:00, paying bank response cut off time at 15:00 and final settlement at 15:30 for standard (MICR) cheques. And for a non-standard (existing non- MICR) cheques presentment cut off time at 12:00, paying bank response cut off time at 15:00 and final settlement at 15:30. Express ECC:
Express ECC is a special session of short duration for cheque presentment, response from paying bank and NRB settlement. It has two hours o window for presentment to final settlement. Thus allowing the banks /FIs and their customers to present and realized their cheque faster. Currently there is only one express cheques clearing for four currencies NPR, USD, GBP and EUR with presentment cut off time at 11:00, paying bank response cut off time at 11:30 and final settlement at 12:00. The activities assigned to the internee as follows:
Identifying the cheques for ECC:
There are some development banks and Finance companies that are not the
member of ECC so, the cheques are divided as presentment through ECC and manual clearing. Checking Necessary Stamps :
Different stamps are required while presenting the cheques to respective banks like endorsement stamps with signature, cheque presentment stamps, bank’s stamp, cross stamp and other necessary stamps. Forwarding Cheques for Scanning:
After checking necessary stamps the cheques with OBC sheet are forwarded for scanning and presenting the cheque to the respective banks which includes account number, amount, date, type of cheque/ draft, etc.
Reporting of Return Cheques:
The recording of inward and outward return must be kept in computer. There are various reasons for returning cheques. For example, refer to drawer is a reason due to insufficient balance and in this case bank charges Rs. 100 for inward and Rs, 250 for the outward cheque. Preparation of Transaction Batch:
After settlement of transaction the batch is prepared. It includes OBC sheet, Outward cheque, home cheque, refund cheque, etc. It is prepared on daily basis and forwarded to the concerned department for further processing.
4.3 Felt/Observed Gap
The student were selected as internee in different bank so that they can present themselves as skillful person on related field on which they have been appointed. The bank gives the environment for internee to fulfill certain responsibilities. Regarding this internee can show their capability and intelligence. While working in the bank internee observe and evaluate the theoretical knowledge he has gained from course books and what actually happened in the real scenario of bank. Theoretical knowledge helps a lot in understanding the actual working environment, but not exactly cent percent.
The novel type of problem/situation generates the novel type of solution that the internee might not have studied in classroom. While working in the NMB Bank an internee has felt/observed following gaps: The intern was only allowed for clerical tasks but not for managerial task though BBA aims to develop Middle Level Managers. In the theoretical knowledge it was studied that the banks follow each and every regulations imposed by NRB but the company does not seem to follow those rules as prescribed. The good example is KYC form should be filled in front of the customer but it will be filled in the same format after opening the account.
Team work is essential in this modern business era, which must be enhanced. All the manager and staffs have to feel as the member of team rather than as a boss and employee. The internee observed that different type of theoretical knowledge can’t be applied solely rather they are applied in combination in real world. The good example of it is use of more than one motivational theory, while motivating the employees of the company. It has been taught that there must be knowledge in the staff about the related field and must be experienced but the staffs generally lack effective learning skill and lack deep knowledge in their field. Higher importance is given to customer satisfaction but there is no any culture of taking customer advice and learning from it.
CONCLUSION AND LESSON LEARNT
The objectives set and the outcome of the intern program was converging and even the achievement was more than it was expected. The intern was benefited from the exposures and knowledge of the real business situations, the college and the TU benefited in developing a good and prospect manpower for the banking sector. The bank was benefited to get their work done in relatively lower costs which otherwise have been incurred and had a record of prospect bank employees for Human Resources. In this way the whole program was successfully accomplished.
Banking industry is one of the booming and most profitable sectors of the economy. There has been massive growth and demand of banking products and services. Thus, the result is increase in number of banks with their specialized products like consumer loans, investment banking, and foreign trading and so on. Internship in this industry helps the students to build working framework of banks and apply theoretical knowledge practically. NMB bank is ‘A’ grade bank that has been recently upgraded. It is governed by the experienced bankers and professionals. It main focuses in providing customer satisfaction by offering various products and services including saving, fixed, call deposits, consumer and business loans, investment banking, etc.
NMB bank comprises highly motivated staffs who are customer centered. Under the guidance of the supervisor and the staff members the internee was able to experience various activities that are conducted in customer service departments and clearing department. The intern got vital support by the effective working environment and highly cooperative and supportive staff members in learning and experiencing process. The internee was able to know about the basic functioning of bank like opening and closing of bank account, issuing of cheques and statements, and clearing of cheques. This has enhanced the practical knowledge and developed interpersonal skills, professional qualities, communication skills, and team work; know the ways to deal with the bank staffs and customers. 5.2 Lesson Learnt
The internship program helps to learn the dynamics of work culture, professionalism and system in the business world. Most of the things learnt during this period are related to the practical implications and knowledge exposures. Some of the valuable lessons the internee learned are as follows: 1. Able to relate the theoretical aspects into practical implications in the banking industry. 2. Learnt about general activities that are performed in customer service department like opening of account, closing of account, issuing of statements to the customer, filing, recording, etc.
3. The internee known about the role of NRB in clearing of cheques through manually and ECC. 4. The internee was able to handle problems and queries related to walk-in and existing customers. 5. The internee learnt how to deal with customers, senior staff members and co-internees. 6. The internee known about the corporate culture of the organization. 7. Wearing formal dress, greeting, being polite, having patient and being sincere in the bank. 8. The internee develop the skill about how to operate banking software like PUMORI and to use the technologies like photocopy, fax, print, etc.
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NMB Bank Limited.(2010/11). Annual Report. Kathmandu: NMB.