AN INTERNSHIP REPORT ON

HIMALAYAN BANK LIMITED (HBL)

Submitted By:

Submitted To:Office of the Dean

Faculty of Management

Tribhuwan University

in partial fulfilment of the requirement for degree of

Bachelor of Business Administration (BBA)

Old Baneshwor, Kathmandu

August, 2013

RECOMMENDATION

This is to certify that the fieldwork assignment report

SUBMITTED BY:

RAVI SHRESTHA

Exam Roll No: 6770-09

T.U. Registration No: 7-2-388-81-2009

Entitled:

An Internship Report on

Himalayan Bank Limited

has been approved by the Kantipur College of Management & Information Technology.

This field work assignment report is forwarded for examination/evaluation.

_____________________ MR. Sharad Sigdel

Internship Report Supervisor

DECLARATION

I hereby declare that the Internship report entitled ‘An Internship report on

Himalayan Bank Limited’ submitted to Office of the Dean, Faculty of

Management, Tribhuvan University is my original work, done in the partial fulfilment

of the requirement of Bachelor in Business Administration (BBA)

__________________

RAVI SHRESTHA

BBA 2009-2013

Roll No.: 6770/09

TU Reg. No.: 7-2-388-81-2009

ACKNOWLEDGEMENT

First of all, I would like to express my deep gratitude to Tribhuvan University for

including such a wonderful program as part of the curriculum for Bachelor in Business

Administration. This opportunity helps to extend my theoretical knowledge to the real

world.

I also would like to thank management of Kantipur College of Management and

Information Technology for the guidance in the preparation of this report.

My Appreciation also goes to the Himalayan Bank Limited for providing me with the

opportunity of doing internship in their renowned organization. The whole family of

Himalayan Bank has supported me in coping with the surroundings and helped me to

learn various things during the duration of Internship.

I would like to offer my heartfelt appreciation to my report supervisors Mr. Sharad

Sigdel and Mr. Aman K.C. for their entire guidance, valuable suggestions,

encouragements and support throughout this report.

My Appreciation also goes to the Himalayan Bank Limited for providing me with the

opportunity of doing internship in their renowned organization. The whole family of

Himalayan Bank has supported me in coping with the surroundings and helped me to

learn various things during the duration of Internship.

Lastly, I would like to give gratitude to my family members and friends for their moral

support throughout the report. Without their support, I never would have completed

my report so effectively.

Ravi Shrestha

TABLE OF CONTENTS

Title Page No.

Cover Page

Recommendation Letter

Internship Completion Letter

Declaration

Acknowledgement

List of Tables

List of Figures

Abbreviations

Chapter One: Introduction 1-3

1.1 Background of the Study 11.2 Objectives of the Study 11.3 Methodology 2

1.3.1 Organization Selection 21.3.2 Placement 21.3.3 Duration 21.3.4 Nature & Source of Data 3

1.4 Limitations of the Study 3

Chapter Two: Introduction of Banking Industry 4-8

2.1 Introduction of Banking Industry 42.2 Evolution of Banking Industry 42.3 Evolution of Banking Industry in Nepal 52.4 Overview of Nepalese Financial Market 62.5 Types of Bank 7

2.5.1 Commercial Bank 8

Chapter Three: Introduction of Organization 9-15

3.1 Introduction of Himalayan Bank Limited 93.2 Vision, Mission & Objectives 103.3 Capital Structure 103.4 Organization Structure of HBL (New Road Branch) 113.5 Products & Services Offered 11

3.5.1 Products 12

3.5.2 Services 133.6 Financial Analysis of HBL 143.7 SWOT Analysis 15

Chapter 4: Analysis of Activities Done 16-34

4.1 Customer Service Department (CSD) 164.1.1 Activities done in Customer Service Department 164.1.2 Problems Identified in Customer Service Department 204.1.3 Problems Solved in Customer Service Department 214.1.4 Analysis of Customer Service Department 21

4.2 International Banking Department 224.2.1 Activities Done in the International Banking Department 224.2.2 Problem Identified in International Banking Department 254.2.3 Problems Solved in International Banking Department 264.2.4 Analysis of International Banking Department 26

4.3 Credit Department 274.3.1 Activities Done in the Credit Department 274.3.2 Problem Identified in Credit Department 294.3.3 Problems Solved in Credit Department 304.3.4 Analysis of Credit Department 30

4.4 Remittance / Bills Department 314.3.1 Activities Done in the Remittance / Bills Department 314.3.2 Problem Identified in Remittance / Bills Department 334.3.3 Problems Solved in Remittance / Bills Department 344.3.4 Analysis of Remittance / Bills Department 34

Chapter Five: Conclusion and Lessons Learnt 35-36

5.1 Conclusion 355.2 Lesson Learnt 36Bibliography

Annex

LIST OF TABLES

Table Title Page No.

2.1 Growth of Financial Institution 7

3.1 Share Ownership 11

4.1 Number of Data Entry Done by Intern in International Banking 24

LIST OF FIGURES

Figure Title Page No.

1.1 Gantt Chart of Duration of Internship 2

3.1 Deposit Products of HBL 12

3.2 Loan Products of HBL 13

3.3 Services of HBL 13

ABBREVIATION

A.D. Anno Domini

ATM Automated Teller Machine

BBA Bachelor in Business Administration

Bi. Bi. Ni. Bideshi Binimaye Niyemawali

B.S. Bikram Sambat

CAP Credit Approval Package

CEO Chief Executive Officer

CIB Credit Information Bureau

CLR Credit Liability Report

CSD Customer Service Department

DAP Document Against Payment

Dept. Department

ECC Electronic Cheque Clearing

etc. Etcetera

FOM Faculty of Management

GDP Gross Domestic Product

HBL Himalayan Bank Limited

HMG/N His Majesty’s Government of Nepal

Int’l International

i.e. That is

KYC Know Your Customer

LC Letter of Credit

NGO Non Government Organization

NRB Nepal Rastra Bank

ROA Return on Assets

ROE Return on Equity

RM Relation Managers

SMS Short Message Service

SWIFT Society of Worldwide International Financial Telecommunication

TU Tribhuvan University

CHAPTER ONE

INTRODUCTION

1.5 Background of the Study Internship program has been designed for the partial fulfilment of the degree of

Bachelor in Business Administration (BBA). BBA is a program launched by

Tribhuvan University (TU) under the Faculty of Management (FOM), with eight

semester's provision covering an international standard period of four years. It covers

class lectures, group discussions, case studies, seminar, practical exercises, project

work, term paper and internship. BBA is a broad education program to prepare the

students for much advanced middle level leadership in both private and public sector.

The purpose of the program is to develop and strengthen the students’ knowledge and

skills. With regard to this, FOM has combined internship with the course and make it

compulsory for the time period of two months.

An internship is a directed, practical learning experience, outside of the normal

classroom setting, in which students sharpen skills, gain experience through work on

advanced productions, apply classroom learning to professional settings or projects,

and learn firsthand how professional companies or organizations operate. The

internship exposes the students’ interpersonal relationships that a job requires.

This report is based on the two month internship experience and knowledge gained on

the internship time duration. It mainly focuses on the job done by the intern and

experienced gained. It also includes the things which intern has seen during the period.

1.6 Objectives of the StudyThe general objective of this study is to fulfil the requirements of the degree of BBA.

The main objective of this study is to explain the experience of the intern during the

internship period. The other specific reasons are as follows:

To know about the banking sector.

To know about the institution where the internship is done.

To get the knowledge about the process of different work.

To know the activities done by the intern.

To analyze different departments of the bank.

1.7 Methodology Methodology is the description of the procedure followed while collecting the

necessary data and information needed for research work and report preparation.

Various data were collected by observation, different websites, annual report of

Himalayan Bank Limited (HBL), etc.

1.3.1 Organization SelectionFor the internship, intern had selected the Himalayan Bank Limited, New Road

branch. HBL has been one of the successful commercial banks in Nepal for al long

period of time. It had been a great opportunity for intern to acquire knowledge and

skills during the internship period. The selection of the organization has been possible

through the personal references and with few other documents. After the few follow-

up, HBL provided the internship during the interval of 15th May to 14th June 2013.

1.3.2 PlacementIntern had been placed in the different departments during the duration of the

internship as per the culture of Himalayan Bank Limited. Intern had worked for the

time interval of two months and spent different time periods in different departments

like customer service, remittance, international banking and credit. Intern had worked

with full enthusiasm and confidence in the entire department.

1.3.3 Duration The duration of internship period has been defined for 8 weeks or 6 credit hours (i.e.

96 hours of working time at any financial institution for finance specialization

students) by FOM, TU. Intern had the opportunity to work for two months starting

from 15th of May to 14th of July. The intern had been placed in various departments

and the duration of time interval in those departments are shown in the following

figure:

Figure 1.1: Gantt Chart of Duration of Internship

Department < ----------------------- 15th May to 14th July -------------------------- >

Customer Service 15th May- 1st June

Int’l Banking 2nd June – 20th June

Credit 21st June – 7th July

Remittance 8th July – 14th July

1.3.4 Nature & Source of DataPrimary and secondary data has been used during the preparation of the report, and

below is the brief description about the nature and sources of data:

Primary Data

The primary data were collected from day to day activities, discussion and information

provided by the different officials of various departments.

Secondary Data

The secondary data were collected from the various sources like annual report,

broachers, official websites and other publications.

1.8 Limitations of the StudyThere have been some limitations on the report despite the hard work to make it fully

approved. Some of the limitations are described below:

The analysis is only based on the New Road branch.

The whole department analysis and information are not included in this report.

The information collected is not sufficient due to the short period of time

interval.

The interpretations are made under personal judgment, which is not guided by

the experts and professionals.

The study may not be applicable to other organizations of similar nature.

CHAPTER TWO

INTRODUCTION OF BANKING INDUSTRY

2.1 Introduction of Banking IndustryA bank is a financial institution which deals with deposits and advances and other

related services. It receives money from those who want to save in the form of

deposits and it lends money to those who need it. In other words, the bank is the

institution that makes money in terms of receipt of income and payment of

expenditures and deposits. So, the bank creates credit by providing loans to individual,

traders and businessman. The bank also receipt deposits from the customer to

safeguard it and promise to repay at the time of their need. Interest is provided for the

money deposited and taken on the loan provided by the bank.

The function of the bank is changing day by day. The development of new services by

the banks around the world is changing the definition along with it. Initially, the banks

are considered as the institution that only takes deposit and lends money to the needed

persons. But, the services have been innovated to the whole new level. Now-a-days,

the bank provides an easy way to pay bills through the maintained account. Not only

that, they provide many services such as accepting various deposits, making different

kinds of loans, providing means of payment, electronic banking, and other services

such as traveller’s cheques and money orders.

“An establishment authorized by a government to accept deposits, pay interest,

clear checks, make loans, act as an intermediary in financial transactions, and

provide other financial services to its customers.” – Business Dictionary

So, the bank can be described as the financial institution whose major function is to

provide the loan and to deposit the money from the people along with providing the

various financial services to their customers.

2.2 Evolution of Banking IndustryHistory of Banking begins with the first prototype banks of merchants in the ancient

world, which made grain loans to farmers and traders who carried goods between

cities. This began around 2000 BC in Assyria and Babylonia. Later, in ancient Greece

and during the Roman Empire, lenders based in temples made loans and added two

important innovations: they accepted deposits and changed money.

Banking, in the modern sense of the word, can be traced to medieval and early

Renaissance Italy, to the rich cities in the north such as Florence, Venice and Genoa.

The Bardi and Peruzzi families dominated banking in 14th century Florence,

establishing branches in many other parts of Europe. The oldest bank still in existence

is Monte dei Paschi di Siena, headquartered in Siena, Italy, which has been operating

continuously since 1472.

The development of banking spread from northern Italy through Europe and a number

of important innovations took place in Amsterdam during the Dutch Republic in the

17th century and in London in the 18th century. During the late 18th century, J.P.

Morgan and Company emerged at the head of the merchant banks and nearly created

the monopoly in the market. Later, the panic in the collapse of the share end that era.

Then, the struggle continues until the World War II as it saved the banking industry

from complete destruction. It lifted the downward spiral of the banking sector as the

billions of dollar is needed for the war. Later the 2007-08 financial crisis caused many

bank failures, including some of the world's largest banks, and provoked much debate

about bank regulation.

Although history has altered the fine points of the business model with the modern

telecommunications and computing mechanism, the banks will never stop to perform

this primary function.

2.3 Evolution of Banking Industry in NepalThe history of banking in Nepal is believed to be started from the time of Prime

Minister Ranoddip Singh in 1877 A.D. he introduced many financial and economic

reforms. The “Tejaratha Adda” was established at that time and its basic purpose was

to provide credit facilities to the general public at a very concessional interest rate. The

Tejarath Adda disbursed credit to the people on the basis of collateral of gold and

silver. All employees of government were also eligible for this type of loan, which

was settled by deducting from their salary. Tejaratha Adda extended credit only; it did

not accept deposits from the public.

In 1937 A.D. “Nepal Bank Act” was formulated which established the Nepal Bank

Limited; the first commercial bank in Nepal which was founded by Judda Samsher.

Later, the country’s central bank, Nepal Rastra Bank (NRB) was established in 1956

by “Nepal Rastriya Bank Act” of 1955, after two decades of Nepal Bank Limited

having been in existence. The need of the central bank emerges due to the “Sadar

Mulukikhana Adda” (local treasury of the government) which issued currency notes.

At that time, the foreign exchange reserves of Nepal were maintained by Reserve

Bank of India who circulated the Nepalese currency as well as Indian currency in the

Nepalese economy.

A decade after the establishment of NRB, Rastriya Banijya Bank (RBB), a commercial

bank under the ownership of His Majesty’s Government of Nepal (HMG/N) was

established. Thereafter, HMG/N adopted open and liberalized policies in the mid

1980s reflected by the structural adjustment process, which included privatization,

tariff adjustments, liberalization of industrial licensing, easing of terms of foreign

investment and more liberal trade and foreign exchange regime was initiated. With the

adoption of liberalization policy, there has been rapid development of the domestic

financial system both in terms of number of financial institutions and as ratio of

financial assets to the GDP.

2.4 Overview of Nepalese Financial MarketAs the statistics of NRB, by the end of mid – July 2012, altogether 265 banks and non-

bank financial institutions licensed by NRB are in operation. Out of them, 32 are “A”

class commercial banks, 88 “B” class development banks, 69 “C” class finance

companies, 24 “D” class micro-credit development banks, 16 saving and credit co-

operatives and 36 NGOs. In mid- July 2011, the commercial banks branches reached

to 1425 with the population of nineteen thousand per branch. Present development of

financial institutions in Nepal is reflected in table below:

In the Nepalese financial market, the total capital fund in the 2012 A.D. is Rs

117,979.6 million among which commercial banks covers 65.4% of it. During the

year, the total borrowing reaches to Rs 34,392.3 million along with the deposits of Rs

1,076,629.3 million. In 2012, the other liabilities and liquid fund of the institutions

reaches to Rs 126,163.1 million and Rs 241,900.3 million respectively. Besides these,

the total investment equals to Rs 209,934.4 million; loan and advances reaches to Rs

807,579.3 million and other assets is only Rs 94,913.2 million.

Table 2.1: Growth of Financial Institution

Types of Financial

Institutions

Mid – July 2011

1985 1990 1995 2000 2005 2010 2011 2012

Commercial Banks 3 5 10 13 17 27 31 32

Development Banks 2 2 3 7 26 79 87 88

Finance Companies 21 45 60 79 79 69

Micro-credit Development

Banks

4 7 11 18 21 24

Saving & credit co-

operatives

6 19 20 15 16 16

NGOs (Financial

Intermediary)

7 47 45 38 36

Total 5 7 44 98 181 263 272 265

(Source: Bank and Financial Institutions Regulation Department, NRB)

2.5 Types of Bank Different types of bank still exist in the world and they are differentiated by their

nature of function. Generally, people perceive the commercial bank as the general

bank but their perception is wrong as there are many other types of bank. Some of

them are as follows:

Central Bank

Commercial Bank

Development Bank

Exchange Bank

Saving Bank

EXIM Bank (Export & Import Bank)

Co-Operative Bank

Other

o Labour Bank

o Regional Bank

2.5.1 Commercial Bank

Commercial Bank is a financial institution that provides services, such as accepting

deposits, giving business loans and auto loans, mortgage lending, and basic investment

products like savings accounts and certificates of deposit. The traditional commercial

bank is a brick and mortar institution with tellers, safe deposit boxes, vaults and

ATMs. For the development of the commercial sector it provides different facilities

like capital, information supply, etc.

“Commercial bank means a bank which operates currency exchange transactions,

accepts deposits, provide loan; performs, dealing, relating to commerce except the

banks which have been specified for the co-operative, agricultural, industry of

similar other specific objective.” – Section 2 (a) of Commercial Bank Act 2013

B.S.

There are some functions of commercial bank and they are:

Accepting various types of deposits

Lending money to needed sectors

Letter of credit i.e. credit creation

Issue of guarantee

Agency function

General utility function

Money remittance

Bills acceptance and others

There are currently 31 commercial banks licensed by NRB in Nepal. The detail of

their establishment date and paid up capital are given in Annex I.

CHAPTER THREE

INTRODUCTION OF ORGANIZATION

3.1 Introduction of Himalayan Bank LimitedHimalayan Bank Limited (HBL) is one of the largest and reputed private sector banks

of Nepal. The Bank was incorporated in 1992 by a few eminent individuals of Nepal

in partnership with the Employees Provident Fund and Habib Bank Limited of

Pakistan. The bank commenced its operations in January 1993. Himalayan Bank is

also the first commercial bank of Nepal with most of its shares held by the private

sector of Nepal. Besides commercial banking services, the bank also offers industrial

and merchant banking service. Despite the cut-throat competition in the Nepalese

Banking sector, HBL has been able to maintain a lead in the primary banking

activities- Loans and Deposits.

Legacy of Himalayan lives on in an institution that's known throughout Nepal for its

innovative approaches to merchandising and customer service. Products such as

Premium Savings Account, HBL Proprietary Card and Millionaire Deposit Scheme

besides services such as ATMs and Tele-banking were first introduced by HBL. Other

financial institutions in the country have been following HBL lead by introducing

similar products and services. Therefore, HBL stand for the innovations that it brings

about in this country to help its Customers besides modernizing the banking sector.

With the highest deposit base and loan portfolio amongst private sector banks and

extending guarantees to correspondent banks covering exposure of other local banks

under credit standing with foreign correspondent banks.

All Branches of HBL are integrated into Globus (developed by Temenos), the single

Banking software where the Bank has made substantial investments. This has helped

the Bank provide services like ‘Any Branch Banking Facility’, Internet Banking and

SMS Banking. Living up to the expectations and aspirations of the Customers and

other stakeholders of being innovative, HBL very recently introduced several new

products and services. Millionaire Deposit Scheme, Small Business Enterprises Loan,

Pre-paid Visa Card, International Travel Quota Credit Card and Consumer Finance

through Credit Card are some of the products and services. HBL also has a dedicated

offsite ‘Disaster Recovery Management System’.

Looking at the number of Nepalese workers abroad and their need for formal money

transfer channel; HBL has developed exclusive and proprietary online money transfer

software- HimalRemitTM. By deputing HBL staff with technical tie-ups with local

exchange houses and banks, in the Middle East and Gulf region, HBL is the biggest

inward remittance handling Bank in Nepal. It shows that HBL has an outside-in rather

than inside-out approach where Customers’ needs and wants stand first.

HBL has established a strong network over the country by using its branches. HBL is

aiming for increasing its perimeter by covering area as much as possible. Every year,

HBL is increasing its branches and moving towards its aim. Currently there are 41

branches altogether in and outside the valley. The detail list of branches is shown in

Annex III.

3.2 Vision, Mission & Objectives

Himalayan Bank Limited holds of a vision to become a Leading Bank of the country

by providing premium products and services to the customers, thus ensuring attractive

and substantial returns to the stakeholders of the Bank.

The Bank’s mission is to become preferred provider of quality financial services in the

country. There are two components in the mission of the Bank; Preferred Provider and

Quality Financial Services; therefore HBL believe that the mission will be

accomplished only by satisfying these two important components with the Customer at

focus. The Bank always strives positioning itself in the hearts and minds of the

customers.

To become the Bank of first choice is the main objective of the Bank.

3.3 Capital StructureThe total authorized share capital of HBL is Rs. 3 billion among which Rs. 2.4 billion

shares have been issued. Last year, HBL distributed the bonus share of Rs. 400 million

and this year HBL is planning to distribute 360 million rupee worth of shares in bonus

to its shareholders. The share ownership of the HBL is shown in the following table:

Table 3.1: Share Ownership

Particulars As on July, 2012% Share Capital

1. Domestic Ownership 80.00 1,920,000,0001.1 Nepal Government - -1.2 "A" Class Licensed Institutions - -1.3 Other Licensed Institutions - -1.4 Other Entities 65.00 1 ,560,000,0001.5 General Public 15.00 3 60,000,0001.6 Others - -2. Foreign Ownership 20.00 480,000,000Total 100.00 2,400,000,000

(Source: 20th Annual Report, HBL)

3.4 Organization Structure of HBL (New Road Branch) Himalayan bank limited has proper structure from top to bottom. The corporate office

controls all the branches, and the corporate office is governed by CEO of the bank

under the supervision of Board of Directors (details of BOD is given in Annex IV).

New Road branch is handled by the branch manager and a structural hierarchy follows

through the top. The detail of organization structure of HBL, New Road Branch is

shown in Annex II.

3.5 Products & Services OfferedHimalayan bank offers various kinds of products and services to its customers to fulfil

their demand. The bank is providing its services through a wide network of 41

branches throughout the nation; 17 of them located inside the Kathmandu valley and

other 24 are located around the country. All the branches of the bank are connected

through ‘Anywhere Branch Banking System (ABBS)’, a facility which enables a

customer to do banking transactions from any of the branches irrespective of having

account in any branch.

Products such as Premium Savings Account, Super Premium Saving Account, Himal

Saving Account (Zero Balance Account), HBL Proprietary Card and Millionaire

Deposit Scheme are being provided by HBL. Besides these, ATM’s services, Internet

banking and SMS banking are some of its services along with HimalRemit services are

being provided to its customers. Small Business Enterprises Loan, Pre-paid Visa Card,

International Travel Quota Credit Card and Consumer Finance through Credit Card are

some of the other products and services.

3.5.1 Products

Figure 3.1: Deposit Products of HBL

Deposit Products

Term DepositsCall Deposit AccountFixed Deposit AccountStructured Term Deposit Account3 Year Recurring Deposit Account

Saving DepositNormal Saving AccountBishes Saving AccountHimal Saving AccountPremiun Saving AccountSuper Premium Saving AccountHimal Remit Saving AccountShareholders Saving Account

Current Account

Figure 3.2: Loan Products of HBL

3.5.2 Services

Figure 3.3: Services of HBL

Loan ProductsCorporate LoanFundedProject / Consortium LoanNon Revolving Cash CreditWorking Capital FinancingOverdraft FacilityDemand Loan Revolving Demand Loan Short Term Demand Loan Revolving Cash CreditImport Credit for Telex Transfer and Demand Draft PaymentTrust Receipt Loan Export Credit FacilitiesPledge LoanClean Bills purchased and discountedDocumentary Bills Purchased and Discounted

Non-FundedLetter of CreditBank Gurantee

Retail/Consumer LoansHire Purchase LoanHousing LoanSubidha LoanCredit Card LoanLoan against Fixed Deposit Receipt Loan against Government

Bonds & Bonds of Bank

Loan against First Class Bank Guarantees

Loan against Shares

Small and Medium

Enterprises (SME) Loan

LockerInternet BankingSMS BankingCredit CardDebit CardATM ServiceRemittance ServiceInternational BankingTravel Cheque

Services

3.6 Financial Analysis of HBL

Financial situation of Himalayan bank is currently very good. According to its fiscal

year statement as on July, 2012 the bank has maintained its capital adequacy ratio

above the required limit. The tier I capital ratio of the bank is 9.60% while the total

capital ratio is being maintained at 11.02%. HBL earned the net profit of about Rs.

958.6 billion in the same fiscal year; which was more by 7.33% from the last year’s

net profit. The accumulated profit was Rs. 72.9 million during the last year.

The Himalayan bank has been planning for the any contingencies that might come its

way; so the bank has been keeping reserves and funds which now has reached to the

amount of Rs. 1.87 billion. During the same fiscal year, HBL accepted the total

deposits of Rs. 47.73 billion in interest bearing account and about Rs. 5.56 billion in

non-interest bearing account. The bank held the total cash balance of Rs. 951.3 billion

at the end of same fiscal year including both local and foreign currency. The bank also

believed that it has the balance of Rs. 3.98 billion in the NRB while the NRB

statement shows the amount of Rs. 4.05 billion.

The Himalayan bank has the net loan total of Rs. 34.97 billion at the end of the fiscal

year. The net loan of HBL was increased by 10.77% from the last year. From the loan,

HBL has earned the interest total to Rs. 4.72 billion. The bank has invested in other

securities up about Rs. 1.26 billion among the total of Rs. 10.03 billion in fiscal year

2011/12.

3.7 SWOT Analysis

Strength Qualified employees

Good organization culture

Proper internal communication

Computerized system using latest

technology

Branch Coverage

Innovation

Remittance service

Weakness Policy making

ATM service

Extra Charges

Less use of marketing strategy

Opportunity Favourable law for the banking

sector

Increasing remittance market

Increasing knowledge of banking

sector to general public

Threats Political instability

Domestic conflict

Limited resources

Threats of new entrance

Threat of substitute

Rivalry among existing firm

CHAPTER FOUR

ANALYSIS OF ACTIVITIES DONE

4.1 Customer Service Department (CSD)Customer service department is most important department to develop the good

impression to the customer. CSD also known as the front desk helps the customer to

solve their query. Customer Service is the commitment to providing services to

external and internal customers, including providing information, technical support

and quality of services in a timely manner.

Customers are the main wealth of the organization. A loyal customer always uses the

product and services of the bank without looking into the other alternatives. That’s

why loyal customers are the main source of success of the organization. It’s the duty

of the CSD to maintain the relationship with the customers and make them loyal to the

organization.

CSD performs various tasks in day to day operation. The basic tasks of CSD are

account opening, account closing / transfer, ATM card issue, cheque issuing, bank

statement issue, balance certificate issue, and many more.

4.1.1 Activities done in Customer Service DepartmentIntern had to perform various activities in CSD and some of them are described below:

Providing general information

Customer service department is the place where many people come to get information

regularly. It is the duty of an intern to provide information that is required by them.

Generally the intern had to provide information about the product and services of

HBL, their queries, regulations and documents required in various cases, the exact

place to consult for their requirement, etc.

Opening an Account

Account opening is very important thing in the organization. It not only helps to

increase the number of customer in the bank, it also helps to expand its business. The

more customers the organization has, the more success it can get. Intern had huge

responsibility in the opening an account. Firstly intern had to provide the information

regarding the various accounts that HBL have with all the benefits and features of the

accounts. Then intern had to tell about the necessary documents that are required to

open an account. If the person is satisfied with the product and have all the documents

then inter had to provide the required forms necessary to open an account.

The next thing intern had to do is to check all the documents are valid or not and the

data in the forms are correctly written or not. Then intern had to place all the document

copy in an order and pass it to the office for further process. After the process, inter

had to bring the document to CSD department head and operation in charge to get sign

and officially open an account.

Making New Account File

Intern had to make the file for the new account opening. According to the nature of the

account, the file is selected. Intern had to specify the name and the customer

identification number in front of the file clearly. Intern also had to put the letter of

opening in the file and in the box containing all the letter of opening.

Closing or Transfer an Account

Customers sometimes have to close their account or to transfer it to another branch.

It’s the duty of an intern to provide the necessary form to the customer and tell them

about the procedure and charge of Rs. 500 for closing an account. After the

submission of form along with the cheque slips (if any) by the customer, the intern had

to write the information on the register about the customer and reasons to close or

transfer the account. These reasons help the bank to improve their services in future.

Then the intern had to put cancellation stamp on those cheque slips and register it into

different register.

The further process is done by the officer to close or transfer an account and then inter

had to visit different departments (cash, remittance, letter of credit, credit and locker)

to make sure everything is clear to close or transfer that account.

Preparing Cheque book

Intern had to prepare the cheque book according to the request of the customer. The

responsibility of the intern is to fill up the new cheque requisition slip and tear the

cheque slips from the printer. Then intern had to make sure that the number in the

cheque requisition slip and the cheque slip are same. After that, intern had to place the

cheque slip in order and bind it with the cheque cover. During the process, the new

requisition slip must be placed carefully between the cheque slips and intern had to

remember the total number of cheque slips and had to calculate where to put that

requisition slip. Intern also had to search the cheque book from the box at the time of

issuing the cheque book.

ATM Card Distribution

ATM card distribution is one of the day to day activities that an intern had to do in

CSD. The intern searches the ATM card of the customer who asks for it. If the card is

found then the intern had to search the document related to the card. Then it’s the duty

of inter to request the customer to fill out form of acknowledgement of card receipt.

The intern had to check if there is copy of identification or not; if not, then the intern

had to ask for it and have to photocopy it to attach with the form. The intern also had

to check if the customer is taking new card or replacing old with new; if the customer

is replacing then the inter also had to ask for the old card and then punch the hole after

the process. After that, inter had to enter the data in the register and pass it to the

officer for the further process.

ATM Pin Distribution

Due to the system change, HBL had updated the pin number of all the ATM card

holders who had the expiry date above June 2016. Below that date, the customers have

to replace the card. So due to this reason, the customer regularly comes in the HBL

New Road branch to ask for their pin number. And it is the intern who had to provide

them the pin number after searching the pin in the pin collection box. The intern

requests the customer to fill out the form of acknowledgement of pin receipt and asks

for their identification to attach along with the form after the copy. Then, the intern

had to register the data in the pin register and pass it to the officer to issue it.

Printing Bank Statement

Bank statement is the list of transaction that has been occurred during the certain

period of time. Intern had to request the customers who are interested in printing out

their bank statement to write their account number, date from which the statement is

required and their signature. Intern first had to check their account number and their

signature because the statement is only provided to the account holder. Then, intern

should the print the statement from the date they have asked for using the T24

software.

Balance Check

Many customers frequently ask for the balance in their account and the amount in the

cheques they are holding. So, intern had to check the balance by entering the account

number in the respective search heading of the software. Intern can tell the amount to

the account holder. Intern can’t tell the amount of the account to the person holding

the cheque but can tell if there is sufficient amount in the account or not to withdraw

the cheque.

Signature Verification

Sometimes intern had to check the signature in the different forms. Intern also had to

check the signature of the cheque on the request of the customer and sometime when

the customer forgets their signature.

Handling Phone Calls

Handling phone calls are as important as handling the customers face to face. Through

phone calls, the customers ask many different questions and require different

information. Intern had the responsibility to handle the phone calls and solve the query

of the customers. If intern doesn’t know the answer then intern had to pass the call to

the officer.

Making Phone Calls to Customers

Intern had to call the customer and inform them about their ATM cards which have

arrived in the bank. Intern also had to contact the customer regarding different issues

like asking for the different document, to fill out the Know Your Customer (KYC)

form, etc.

Filing

Intern had to update the file of different customers on day to day basis. The transaction

that occurred in the CSD must be placed in the file for the future reference. The

transaction includes issuing of ATM card or pin number, change of signature, request

of the customer on various matters, change in nominee, etc. Intern had to put the

documents by checking the customer identification number which is provided at the

time of opening an account.

Photocopy

Photocopy is done in the CSD on a regular basis. Important documents are needed for

future reference if in case any misunderstanding happens. So, it’s the duty of intern to

photocopy the document and place where it belongs.

4.1.2 Problems Identified in Customer Service DepartmentDuring the internship period, intern had identified few problems in CSD and they are

mentioned below:

Workload Problem

Workload problem arises when the employees are unable to meet the need of the

customers. During the internship period, intern had seen that many customers were

unsatisfied by the services provided due to the long waiting time. Workload problem is

caused by the insufficient number of employees in the CSD.

Problem in Grievance Handling

Intern had identified that the method of handling the grievances are improper.

Grievance handling problem is occurred due to the lack of defined procedure and

inflexible rules towards small issues.

Problem in Filling Forms

Different forms are filled everyday in the CSD and many people finds many terms

difficult to understand while filling the form. The intern had identified that some of the

forms contain the technical words and terms which causes confusion in customers

mind.

ATM Problem

During the internship period, intern had identified that large number of customer

complained about the ATM service. The customers’ main complaint is about the ATM

card process during the transaction. The other problems related to ATM are time

duration to get new card, lack of information on card receiving and time period to

collect the card.

Lack of Brochure

Many customers want the brochure during their visit in the CSD to know about the

different accounts, there features and the interest rates provided in them. But, due to

the regular change in the bank’s interest policy, intern had identified that there is lack

of proper updated brochure in the department.

4.1.3 Problems Solved in Customer Service DepartmentIntern had solved few problems during the period of internship in CSD and they are

described below:

Helping the customer to fill out the different forms and describing the

complicated terminologies.

Describing different accounts along with its features and interest due to the

lack of brochure.

Dealing different customers who have different attitude accordingly.

Finding the missing documents.

Informing the problem that raise during the interaction with customers to the

authorized person for the solution.

4.1.4 Analysis of Customer Service DepartmentThere are lots of work that intern is not allowed to do during the internship period in

CSD. However, intern had analyzed the work done by employees and department head

to some extent and from that intern had learnt and realized many things. First of all,

intern had seen the difference in the work done by the experienced employee and the

inexperienced intern. Intern generally handles the entire customer with the same

magnitude and style despite the difference in the attitude of the customer; while,

employee handles the customer differently every time according to the attitude and

behaviour of the customer. Intern had analyzed that how difficult it is to do the

simplest of thing when the pressure of the workload increases. Intern had also seen

that the software layout that uses in the bank is different according to the position of

the employee. Intern had learnt that due to the simplest of mistakes there can be huge

problem during the operation. Intern had also recognized the importance of the

hierarchy in order to work and solve the problem.

During the internship period, the intern had seen huge difference in number of

employees in the CSD and the changes that occurred due to that fluctuation in number.

The bad impact due to the crowded CSD and the lack of employees in some period

had been seen by the intern and recognized the importance the need of the best number

of employees that works efficiently.

4.4 International Banking DepartmentThe international banking department of a bank is primarily responsible for financing

foreign customers or domestic clients involved in foreign dealings. It’s the place where

the bank provides the services to the international level. It’s the important part of the

bank as it helps to gain the reputation outside the country.

The services provided in the international banking department are generally non-

funded. Non-funded facilities are those facilities where the cash transfer in not done to

the customer by the bank. Since, cash are not used by the bank; these services can

prove the good profitable services to the bank. It’s basically triggers the off-balance

sheet risk to the organization.

International banking department includes the services of import letter of credit (LC),

export letter of credit, bank guarantee and money transfer services like draft and

SWIFT. The general activities that are performed in the international banking

department are opening of LC, fund transfer, issuing bank guarantee, LC amendments,

and so on.

4.4.1 Activities Done in the International Banking DepartmentIntern had to perform various activities in international banking dept. and some of

them are described below:

Opening Letter of Credit

Letter of credit it an important function of the bank as it links with the international

banks. A small mistake can cause huge loss for the bank financially and image wise

also, so the task performed in the LC is handled by competent official. Opening LC is

the huge job because the every corner of the information has to be analyzed carefully.

It is the duty of an intern to provide the necessary forms to the applicant. Intern had to

check the forms and document that are submitted by the applicant. Intern had to make

sure the forms like LC opening form and Bi. Bi. Ni. form no. 3 are submitted along

with the Performa invoice.

Intern also had to check the required information (i.e. product list, price, quantity,

harmonic code, terms and condition, beneficiary’s bank, etc) are present in the

Performa invoice or not. Then intern had to check if the forms are correctly filled or

not. If everything is alright then the forms and documents are submitted to the official

for further process.

Checking Approval Sheet

After scrutiny of the application form and verification of applicant’s signature and

completing checklist, the approval sheet for opening of LC is completed. Basically

details of the applicant or customer’s outstanding liabilities towards the bank are

mentioned in the approval sheet. The details of the customer’s credit line (for funded

and non-funded) and customer’s current liability are obtained from the Credit Liability

Report (CLR) by the competent employee. Intern then had to check the approval using

the same CLR and if everything is alright then intern submits the approval sheet to the

other employee for further checking and process.

Preparing New LC File

After LC is approved by all the necessary departments and personnel, the head office

sends the original copy of LC and LC opening advice in the branch. Then intern had to

do photocopy the documents. After that, intern had to prepare new LC file. While

preparing the LC intern had to identify the information like corresponding bank,

beneficiary name, applicant name, currency, amount, merchandise, date of shipment,

LC number and type of LC (i.e. sight LC or usance LC). Intern then also had to record

the data on the register.

Providing LC to Applicant

After the arrival of original copy of LC, it’s the duty of intern to provide the duplicate

copy of LC and the original LC opening advice. First, intern had to check the terms

and condition of the LC to know if insurance copy is necessary or not from the

applicant. If yes, then intern had to ask for the insurance copy and check the

information with the LC. If everything is correct or insurance is not needed, then the

documents are provided to the customer under the supervision of the officer in charge

of document of LC.

Filing

Intern had to do the filing job on a day-to-day basis. Intern had to store and retrieve

different type of files according to the requirement of the employees. The files are

stored on the basis of LC numbers which are provided according to the nature of

transaction and the currency used for transaction.

Data Entry

Intern had to enter the different types of data on the different register. While opening

the LC intern had to enter the record of new LC opening in the register according to its

country of business and currency. Intern also had to enter the data of the documents

arrived in the department. The information of the LC is written in the two different

registers specifying its main points. The documents that are known as document

against payment (DAP) and DAP are also registered in the same register but after

registering the document the new file is created for those transactions. During the time

of internship, the number of data entered by the intern in different register is given

below:

Table 4.1: Number of Data Entry Done by Intern in International Banking

Register for NumberDocument Received 90

LC Opening for Nepal 3

LC Opening for India with Indian Currency 14

LC Opening for India with USD 8

LC Opening for 3rd Country (Except Nepal & India) 33

Total 148

(Source: HBL)

Photocopying

Intern had to do photocopy of different types of document. The documents like

original copy of LC, LC opening advice, Bi. Bi. Ni. Form number 4, and few other

have to be photocopied during the internship period of intern.

Handling Phone Calls & Fax

This dept. is the first place where all the calls of the bank arrive and then the calls are

transferred to their specific places. Intern had the responsibility of handling the phone

calls in the absence of the employee or if employee is busy doing their task. Intern first

had to ask about the nature of the call and then transfer it the necessary place. Intern

also had to handle the fax machine. Inter had to handle every incoming fax and

transfer it the necessary problem.

Scanning

Intern also had to scan the documents and then had to send it to the necessary person

through the mail.

4.2.2 Problem Identified in International Banking DepartmentDuring the internship period, intern had identified few problems in international

banking department and they are mentioned below:

Problem in Communicating with Beneficiary’s Bank

Intern had identified that due to the international boundary it is quite hard to

communicate with the beneficiary’s bank. And the more trouble occurs when the

beneficiary’s bank is not the corresponding bank. Intern had found that the difference

in the rules and regulation between the banks causes the communication problem.

Workload Problem

Intern had identified that in certain time the workload had been high. Due to this, the

employees were not able to work properly and the possibility of the quality of work

was low.

Improper Filing System

Intern had found that the filing system by the employee had been a serious problem as

the required document takes a lot of time to discover. Intern had realized that this

problem arises due to the low space for the filing system.

Problems in Electronic Instrument

Intern had identified that there had been regular problem in the electronic instruments

that are placed in the international banking department. The main problem occurred in

the photocopy machine and the printer.

4.2.3 Problems Solved in International Banking DepartmentIntern had solved few problems during the period of internship in international

banking department and they are described below:

Finding the missing files.

Helping employees during the time of workload.

Placing files in proper order.

Informing the administration dept. about the problems in the electronic

instrument.

Informing about the lack of new files in the dept. to the concerned person.

4.2.4 Analysis of International Banking DepartmentDuring the internship period, the intern had the opportunity of observing many things

in the international banking department. There are only few things that intern can learn

by doing the regular work, but the intern can really enlarge the knowledge by

analyzing the environment around the department. Intern had found that the LC is

very complicated thing and the process of it can be very lengthy. Intern had realized

that the LC can enhance the reputation of the bank in international level. During the

internship, the intern had the chance of knowing all the code of the LC and the

materials that should be included in it.

Intern had also got the opportunity of analyzing the different types of bank guarantee

and the process of issuing the guarantee. Intern had realized that the bank takes high

charges and the commission in these types of facilities. Intern had also analyzed about

the draft and SWIFT functioning for the international countries. Intern had realized the

difference between the draft and SWIFT. Intern had analyzed about the different rates

that are charged by the NRB in transacting the LC.

Intern had also got the opportunity to analyze the forward rates. Inter found that the

bank doesn’t calculate any rates before issuing the forward rates and there is the

difference between the book knowledge and the real world functioning in doing the

forward rates.

4.5Credit DepartmentCredit department is the main source of the income of any bank. The main objective of

the bank is to provide the credit facility to the people who need the money. Credit is

the amount available to a company or individual from the banking system. It is the

aggregate of the amount of funds financial institutions are willing to provide to an

individual or organization on receiving of the interest.

Credit department provides different types of products and services to the customers.

Some of the products and services are credit card, corporate loan, small and medium

enterprise (SME) loan, and retail / consumer loan. Under these headings, there are

different types of loan that are sub-classified. Credit department holds the key to

success as it is also the main reason for the organization to go out of the business. So,

the credit department should be handled very delicately.

Credit department performs various tasks and some of them are preparing the Credit

Approval Package (CAP), issuing credit to the customer, issuing credit card, site visits,

interest deduction, relationship management, etc.

4.5.1 Activities Done in Credit DepartmentIntern had to perform various activities in credit dept. and some of them are described

below:

Filling Credit Information Bureau (CIB) Form

Credit Information Bureau is the agency that collects the information of all the credit

information of the different financial institution and stores in its database. The main

function of CIB is to provide the liability report of a person or a firm to the financial

institution if any of them wants the credit facility. For that purpose the financial

institution has to fill up the form provided by CIB to update their database on a

quarterly basis. Intern had been provided with the responsibility of filling up the CIB

form. While filling up the form intern had to search the whole file to extract the

information. The general information that it asks is about the personal information

(like 3 generation info, citizenship number, etc.) of loan holder in case of personal loan

and in case of a firm the information like Pan Number, Registration Number,

shareholder’s information, etc. Intern had to search the Credit Approval Package

(CAP), the offer letter and the valuation report to know about the loan and the security

provided by the loan holder.

Preparing Advice

Advice is the bill drawn under the name of the account holder to specify them about

the charges and fees that are charged by the bank against them. Intern had to prepare

the advice under the name of different account holder according to the charge taken by

the bank. Generally, interests charged are specified in the advice. Intern had to specify

the account holder name, account number, amount charged, reason, etc.

Preparing Balance Sheet and Income Statement

Balance sheet and income statement are important in the credit department because it

shows how the firms are operating and are competent to repay the loan amount with

interest or not. Intern had to enter the data on the software according to the

information provided by the customer. Inter faces some problem due to the

terminologies used by the customer. After entering all the data, the software provides

the total of balance sheet and shows if the assets and liability and equity are equal or

not. If everything is correct then the software automatically prepares the financial

highlights that include the different ratios, Altman Z model, ROE, ROA and few

others.

Updating Insurance Data

Banks asks insurance for all those things that are security of the loan and have

possibility of risk of any damage. Insurance ensures the bank in case the security is

damaged or stolen or so on. Intern had to update the time interval of the insurance after

loan holder provides the new insurance with new maturity period. Intern had to use the

software of the bank to perform this task. Intern also had to check how much time is

remaining until the expiry of insurance of different loan holder.

Update Values of Shares

Values of shares are important for the bank when the bank provides the loan against

shares. That’s means customer deposits the share as collateral in the bank to receive

the loan. The bank only provides the 50% of the value of total stock. The duty of the

intern is to check the average stock prices of past 180 days and the closing price of last

day and then calculate the total value of the stock that are provided by the customer.

Intern had to remember that during calculation the average stock price of past 180

days or closing price whichever is lower had to be used.

Filing

Filing is the tough job to do in the credit department; not because of the volume of

work but because of the size of file of loan. Intern had to do filing job on a regular

basis as many documents are updated time and again.

Photocopying

Intern had to know the photocopy machine’s function very well to complete the task of

photocopy in the credit department. Many documents that have to be photocopied are

in huge size, so the functions like ratios have to be known by the intern. Intern had to

photocopy many documents on a regular basis in the credit department.

4.3.2 Problem Identified in Credit DepartmentDuring the internship period, intern had identified few problems in credit dept. and

they are mentioned below:

Mistakes in Documents

During the internship period, intern had found many mistakes in the document of the

loan file. Intern had found that the problems in the document can lead to the serious

problem. Intern had informed the officer about the mistakes.

Lack of Insurance Update

Insurance are necessary to safeguard the position of the bank during any solvency of

the customer. Intern had identified that the insurance are not up to date and the amount

of the insurance are not same as identified in the offer letter.

Improper Filing

Intern had identified that the documents in the loan file are not properly placed i.e. the

documents are in not their column as they should be. Intern had faced problem in

finding the information due to this problem.

Last Minute Job Done

Intern had also identified that the employees had completed their job by rushing in the

last moment. For e.g. the interest rate that has to be taken at the end of the Ashad

month by debiting the account of customer were not deposited by the customer. On the

last day, employee contacted many of the customers for the deposit of the interest rate.

4.3.3 Problem Solved in Credit DepartmentIntern had solved few problems during the period of internship in credit dept. and they

are described below:

Informed about the mistakes in the document to the employee.

Rectification of the mistakes in the document.

Properly placing the document in the file.

Informed about the insurance that have been expired and not updated.

Helping the employee in problem solving.

4.3.4 Analysis of Credit DepartmentDuring the internship period in the credit dept. intern had analyzed the work done by

the officers, relation managers (RM) and the dept. head. Intern got the opportunity to

analyze the process of doing the work in the real field. During the time, intern had

analyzed the how the loans are provided to the firms and individuals. Intern had the

chance of studying the different manuals of the credit department. Intern had

compared the steps in the manual and the real process done by the employees; intern

found that there is not much of a difference in them. Intern also had the opportunity of

analyzing the process of making CAP and the way of interpreting the financial

highlights of firms by the employee in the CAP. CAP is an important document of the

loan process as the authorities approves the loan on analyzing the CAP.

Intern had also realized how challenging job it is in the credit department because of

regular monitoring of all the loans and documents time and again. Intern had observed

the process of providing the credit cards to the customer and had realized the

importance of the process in the delicate matter. Intern had analyzed the work of the

RM and observed how to maintain a good relationship with the customer. Intern had

analyzed that the credit department holds the high ratio of profitability of the bank and

is critical role for the success of the bank. Intern had observed that there is quite

regular and close monitoring from the branch manager in the credit dept. than other

departments.

4.4 Remittance / Bills Department

Remittance department is the place where the bank performs the transfer of funds.

Remittance dept. is important in running the bank successfully as it directly handles

the monetary transactions. Remittance dept. provides various products and services to

the customers of the bank. Some of the functions are Electronic Cheque Clearing

(ECC), HimalRemit, Moneygram, telex / SWIFT transfer and draft and term deposits.

Remittance department is another department from where the bank can gain the

revenue. The bank generally earns from the fees and commissions on providing

various product and services. The transfer of funds from the Middle East Asia is

successful service operated by HBL.

Remittance department performs different tasks during the day to day transaction and

some of them are entering data for ECC, providing money, performing telex / SWIFT

transfer and draft, cheque receipt, account to account transfer, cheque booking, etc.

4.4.1 Activities Done in Remittance / Bills DepartmentIntern had to perform various activities in remittance / bills dept. and some of them are

described below:

Putting Stamps

The flow of cheques in the remittance / bills dept. is huge as the function of Electronic

Cheque Clearing (ECC) is done in this department. To perform this task, intern had to

collect the cheques and cheques deposit voucher. Then intern had to put the stamp of

date received and signature on the copy voucher before returning it to the customer.

After that, intern had to put the stamp of endorsement and date on the back side of the

cheque. Before the change in the policy by NRB, intern had to put the stamp of bank

name in the front side of the cheque.

Account to Account Transfer & Cheque Booking

The cheques that the customer deposits should be record in the system for the process

of transferring the amount in the customer account from corresponding bank. The

cheques that are presented before 11 a.m. are cleared on the same day (except Friday);

that means the amount is credited on the same date in the customer’s account. The

cheques that are presented after 11 a.m. are cleared on the next day. Intern had to enter

some specific data (like corresponding bank short form, cheque number, amount, etc.)

into the system for account to account transfer i.e. to clear on the same date. Intern had

to enter some specific data (like code of the corresponding bank, cheque number,

amount, etc,) into the system for cheque booking i.e. to clear the cheque on the next

day.

Checking and Calculating the Amount

Intern had to check the document of Performa invoice and match the information with

the form for Draft or SWIFT transaction. Then intern had to calculate the amount of

the entire document including the fees and commission. Intern also had to remember

that the commission are charged according to the bank’s pre-defined rate.

Providing Information

Intern had to provide the information regarding the different functions done in the

remittance / bills dept. Intern had to provide information about the different rates on

the term deposits. Intern also had to tell the customer about the different vouchers

according to their need. Intern also had to inform about the change in regulation in the

process of ECC by NRB. Intern specifically had to clarify the customer about not

putting any stamp on the front side of the cheque as it would not be processed further.

Performing Moneygram Transaction

Intern had to perform the transaction of Moneygram (money transfer service). Intern

had to enter the data which are provided on the voucher. The system shows the

balance with respect to that data and if there is the positive balance then intern had to

further enter the information related to the person who provided the voucher. After

that, intern had to print the document and submitted it to the officer for further process.

Printing Document

Intern had to print the document of those cheques that are not cleared which are

processed on that day before 11 a.m. and the day before that. The document includes

the cheque information and the reason for not clearing the cheque. Then intern had do

attach those documents with the original cheque.

Making Phone Calls to Customer

Intern had to call the customer to make them inform about the cheques that has not

been cleared and its reason.

Filling Forms

Intern had to fill the different forms in this department. Intern had to fill the forms like

cheque deposit vouchers, term deposit form, HimalRemit voucher, Bi. Bi. Ni. form

number 4 ka and few others.

Photocopying

Intern had to photocopy the different documents on a regular basis. Intern also had to

photocopy the customer identity cards which are used in different transactions.

4.4.2 Problem Identified in Remittance / Bills DepartmentDuring the internship period, intern had identified few problems in remittance bills

dept. and they are mentioned below:

Workload Problem

Intern had found that in the remittance / bills dept. the workload is very high during

the opening and closing time; especially due to the ECC. Intern had identified that the

workload problem rose due to the customer trying to clear their cheques on the same

date.

System Problem

Intern had identified that the system of the remittance / bills dept. has problem. Intern

had found that the system crashed many times during the internship period.

Problem in Filling Forms

Intern had found that the customer had problem in filling the forms in the remittance /

bills department. Due to the different terminologies, the customer had problem in

filling the form. Intern had to help the customer on that.

Lack of Broachers

Intern had found that in the remittance / bills dept. the number of broachers for the

term deposit is very low and those broachers are even out of date. The customer had

problem in finding the term deposit rates due to this problem. The intern had to tell the

customer about the current interest rates in the term deposit.

4.4.3 Problem Solved in Remittance / Bills DepartmentIntern had solved few problems during the internship period in remittance / bills dept.

and some of them are described below:

Helping the customer to fill out the different forms and describing the

complicated terminologies.

Finding the missing documents.

Informing the problem that raise during the interaction with customers to the

authorized person for the solution.

Describing different interest rates of term deposit due to the lack of broachers.

4.4.4 Analysis of Remittance / Bills DepartmentIntern had been placed in the remittance / bills department for short period of time on

comparison to other department. However, intern had analyzed some of the works

done by the employee and the environment of the department. Intern had analyzed that

the job of ECC is critical as every failure of cheque clearance cost Rs. 250 to the bank.

So, intern had observed that the employee had to conscious for any mistakes in

cheques during the process of ECC and employee also had to be quick due to the

pressure of large volume of cheque. Intern had analyzed that the process of providing

the remittance money to the customer. Intern had also analyzed that the interest rates

can be managed to increase in case of large deposits. Intern had also analyzed the draft

and SWIFT differences and the process of doing it. Intern had observed the problems

occurred in remittance / bills dept. and how the employee solved that problem.

CHAPTER FIVE

CONCLUSION AND LESSON LEARNT

5.1 ConclusionFinancial institution in Nepal is in emerging stage. The commercial banks are

dominating through their products and services; however, the other financial

institutions are on the verge of the huge competition. The rules and regulation are

matching the international standard while the foreign investments are in the right track

for the financial institutions.

The internship is done for the two month period in Himalayan Bank Limited. HBL is

one of the successful banks in the Nepalese banking industry for quite a long time.

HBL is known for their innovations in the financial sector. It has been quite a journey

in the field of finance for the intern. Intern had the opportunity to learn so many things

during the internship period. Internship had transformed the mindset towards the

banking industry. Intern had learnt various skills regarding the different departments

along with the knowledge of functioning of the bank.

Though the time period of the internship is short to acquire any depth knowledge,

intern had understood the mechanism of the different departments. Intern realized that

the success of the any institution lies in its customer and the loyalty from the customer

is more valuable than the number of customer. Intern had found that doing the same

thing with same person is simple, but doing the same thing with different person is

difficult. Intern had learnt how to use the theoretical knowledge in the practical field

but also found that every time the theoretical knowledge is impossible to apply. Intern

had learnt to cope with the different situation and learnt to bond with the new

surroundings.

The study has its vital significance to the intern and overall the intern found the

internship training at HBL, New Road Branch to be a very rewarding experience.

5.2 Lesson LearntIntern had learnt various things during the internship period. Some of the lessons

learnt from different departments are as follows:

Intern learnt about the different functioning of the bank.

Intern learnt how to use the theoretical knowledge and about some differences

between theoretical knowledge and real world practice.

Intern got the opportunity to learn about the KYC Policy.

Learnt general background of different departments like customer service,

international banking, credit and remittance.

Learnt how to keep the customers loyal.

Learnt about the general documents requirement in the various departments.

The importance of good working environment and the relation between the

employees.

Bibliography

BooksShrestha, M.k. &. Bhandari. D.B. (2008). Financial Markets & Institutions, Asmita

Books Publishers and Distrbutors., Kathmandu.

Saunders, A & Cornett, M.M. (2010) Financial Markets And Institutions, Tata

McGraw Hill Company Ltd., India.

Gautam R., Gurung, R., Pokharel, J., Kadel,R. & Sigdel, S. (2011) Foundation of

Financial Instiutions and Markets. (2nded.) Ayam Publication Pvt. Ltd ,Kathmandu.

Brigham, E.F. & Houston, J.F. (2004). Fundamentals of Financial Management,

Thompson Asia Pvt. Ltd., Singapore.

Websiteshttp://www.himalayanbank.com/

http://en.wikipedia.org/wiki/Bank

http://www.duhaime.org/LegalDictionary/B/Bank.aspx

http://www.businessdictionary.com/definition/bank.html

http://www.investopedia.com/terms/c/commercialbank.asp

http://www.investopedia.com/university/banking/

http://finmanep.blogspot.com/2010/07/financial-market-general-background.html

http://nepalibankingsector.blogspot.com/2011/04/history-of-banking-in-nepal.html

http://en.wikipedia.org/wiki/History_of_banking

http://econkancha.blogspot.com/2007/07/history-of-financial-market-in-nepal.html

http://anju.page.tl/Commercial-Banking.htm

http://imnepal.com/banking-in-nepal-a-history-of-banking-system-in-nepal/

http://www.investopedia.com/articles/07/banking.asp

http://www.bfr.nrb.org.np/statistics/bank_fina_statistics/

Banking_and_Financial_Statistics--No_58%20July%202012.pdf

http://www.businessdictionary.com/definition/bank.html

ANNEX I

List of Commercial Banks in Nepal

(Amount in Millions)

S.N. Name of Banks Operation

Date (A.D.)

Paid up

Capital

1 Nepal Bank Ltd. 1937/11/15 1772.832 Rastriya Banijya Bank Ltd. 1966/01/23 1172.303 Nabil Bank Ltd. 1984/07/12 2435.724 Nepal Investment Bank Ltd. 1986/03/09 3012.925 Standard Chartered Bank Nepal Ltd. 1987/02/28 1610.176 Himalayan Bank Ltd. 1993/01/18 2400.007 Nepal SBI Bank Ltd. 1993/07/07 2093.998 Nepal Bangladesh Bank Ltd. 1994/06/06 2009.409 Everest Bank Ltd. 1994/10/18 1391.6410 Bank of Kathmandu Ltd. 1995/03/12 1604.1911 Nepal Credit and Commerce Bank Ltd. 1996/10/14 1400.0012 Lumbini Bank Ltd. 1998/07/17 1430.0013 Nepal Industrial & Commercial Bank Ltd. 1998/07/21 1311.5514 Machhapuchhre Bank Ltd. 2000/10/03 2478.7915 Kumari Bank Ltd. 2001/04/03 1603.8016 Laxmi Bank Ltd. 2002/04/03 1694.0817 Siddhartha Bank Ltd. 2002/12/24 1619.2418 Agriculture Development Bank Ltd. 1968/01/21 9474.3019 Global IME Bank Ltd. 2007/01/02 2184.8620 Citizens Bank International Ltd. 2007/04/20 2101.8421 Prime Commercial Bank Ltd 2007/09/24 2245.7522 Sunrise Bank Ltd. 2007/10/12 2015.0023 Grand Bank Nepal Ltd. 2008/05/25 2000.0024 NMB Bank Ltd. 2008/06/02 2000.0025 Kist Bank Ltd. 2009/05/07 2000.0026 Janata Bank Nepal Ltd. 2010/04/05 2000.0027 Mega Bank Nepal Ltd. 2010/07/23 1631.0028 Commerz & Trust Bank Nepal Ltd. 2010/09/20 1400.0029 Civil Bank Ltd. 2010/11/26 1200.0030 Century Commercial Bank Ltd. 2011/03/10 1080.0031 Sanima Bank Ltd. 2012/02/15 2016.00

(Source: NRB)

ANNEX II

Organizational Structure of HBL (New Road Branch)

Branch Manager

Deputy Branch

Manager

Credit Dept. Head

Sub-Ordinates

International Banking

Dept. Head

Sub-Ordinates

Operation Incharge

Cash Dept. Head

Sub-Ordinates

Customer Service

Dept. Head

Sub-Ordinates

Remittance Head

Sub-Ordinates

Administration Head

ANNEX III

List of Branches of Himalayan Bank Limited

Inside Valley Branches Outside Valley Branches

1. Battisputali Branch

2. Bhaktapur Branch

3. Card Center

4. Chabahil Branch

5. Corporate Office

6. Dilli Bazar Branch

7. Kalanki Branch

8. Kaushaltar Branch

9. Maharajgunj Branch

10. New Baneshwor Branch

11. New Road Branch

12. Patan Branch

13. Satdobato Branch

14. Sorahkhutte Branch

15. Swoyambhu Branch

16. Teku Branch

17. Thamel Branch

1. Baglung Branch

2. Banepa Branch

3. Barahabise Branch

4. Bhairahawa Branch

5. Bharatpur Branch

6. Biratnagar Branch

7. Birgunj Branch

8. Butwal Branch

9. Damak Branch

10. Dhading Branch

11. Dhangadi Branch

12. Dharan Branch

13. Ghorahi Branch

14. Gorkha Branch

15. Hetauda Branch

16. Itahari Branch

17. Kawasoti Branch

18. Nepalgunj Branch

19. Palpa Branch

20. Parsa Branch

21. Pokhara Branch

22. Ram Bazaar Branch

23. Tandi Branch

24. Trishuli Branch

ANNEX IV

Members of Boards of Directors

Name Designation

Mr. Manoj B. Shrestha Chairman

Mr. Salim Amlani First Vice Chairman

Mr. Prem P.Khetan Second Vice Chairman

Mr. Prachanda B. Shrestha Director

Mr. Bijay B. Shrestha Director

Mr. Radha Krishna Pote Director

Mr. Sushil Bikram Thapa Director

Mr. Upendra Keshari Poudyal Professional Director

Mrs. Ranjana Shrestha Alternate Director

Mr. Surendra Silwal Alternate Director

Ms. Menuka Shrestha Alternate Director

Mr. Sunil Bahadur Thapa Alternate Director

Mr. Himalaya Prasad Siwakoti Alternate Director

Mr. Himalaya S. Rana Chief Advisor to the Board