CHAPTER ONE

INTRODUCTION

1.1

Background
1.1.1

Background of BBS Program

Bachelor in Business Administration (BBS) program is run by Tribhuwan

University from 2002* under the supervision of the Faculty of Management

(FOM). It aims to provide quality education through quality and professional
courses. BBS is two years international standard program . Thus, BBS program is
a blend of theoretical and practical knowledge on the financial sector enabling the
students in understanding business environment and solving practical business
problems. It also aims to develop creative, socially responsible, knowledged
professionals who are able to carry out the responsibility of middle level
managerial positions in the rapidly growing business sector in Nepal as well as
abroad.

1.1.2 Importance of Visit

Since theoretical knowledge is not sufficient in this competitive world.
Thus, in the BBS program, student is required to work in financial institution
where they can experience real life situations of working in the organization. It
also helps in understanding organizational environment and work culture. Visiting
institutions enables in acquiring skills and techniques by experiencing practical
work situations directly applicable to develop career on financial sectors. It may
also create the opportunities for placements in the same host organization or other
organizations.

1.2 Objectives
The internship program under the BBS is mainly targeted at giving the practical
exposure to the students who have acquired the plenty of theoretical knowledge in the
related field of the study. The students are opportune to participate into the organizations
to learn and solve the real life problems and develop the managerial skills they have
learned. Hence, the main focus of the study is to analyze the students capability to adopt
into the actual working environment. The major objectives of the study are as follows:

To acquire the knowledge about the activities performed in the customer service
department, credit department, bills and remittance department and marketing.

To learn how to handle customer grievances regarding the products and services
of the bank

To learn how to develop the customer relation with the customers.

To learn how to open account, close account, issue cheque, and issue ATM card.

To understand about deposit marketing.

To know about various products and services provided by bank.

To understand the working procedure of the credit department.

1.3 Methodology
This study is mostly descriptive in nature where the facts and findings are
prescribed in a systematic manner. The data are collected from the personal interview
with the staff of bank. The information required for the preparation of report has been
collected from observation of the activities that are performed in the bank and the
personal interview and consultation with the staffs involved in different departments of
the bank. The secondary data are used in the report. They are websites, brochures, annual
report, and books.

1.3.1 Organization Selection

Organization selection is a crucial part of internship program. It is the place where
one can gain knowledge of real world scenario. For selecting this organization, internee

had dropped curriculum vitae, citizenship and recommendation letter from college in the
various Banks. In this course, Himalayan Bank Limited, Hetauda branch has accepted my
Application for the internship and given me the opportunity to get acquainted with the
organization and its financial practices. I was lucky to get opportunity to work as intern at
HBL, Hetauda branch for which I cannot stay without expressing my heartfelt gratitude
to Mr. Sudhir Khadka, branch Manager of the bank. This bank has developed very good
intern culture which helped me to learn and gather experience about real banking
environment that would be very helpful for uplifting my career. Further, I would like to
thank the college administration in giving their full support in the organization selection.

1.3.2 Placement of Visit

Internee was placed in HBL, Hetauda branch under the supervision of the Branch
Manager (BM) Bijaya Man Nakarmi. During the internship period, the internee was
placed in customer service department, Bills and Remittance Department, Trade Finance,
Credit Management and Administration Department and Customer Relation Department.
Every staff of Hetauda Branch, HBL was supportive and friendly. The supportive and
friendly environment in the organization helped the intern to complete the period of
visiting through proper guidance of the staffs of various departments. Through their
proper guidance, the intern was able to learn more about the organization culture, work
environment and work procedures.

Table1.1 Placement during visit

Departments/ Weeks
Bills and Remittance

Customer Service
Letter of Credit
Customer Relation
Credit

management

and

administration
3

1.3.3 Duration of visit

The internship duration requirement for the BBS Program as per set by the
Tribhuwan University , which is an great opportunity for the students involved in the
program to learn and develop interpersonal, managerial, and behavioral skills in the real
organizational settings. Internee got an opportunity to work in Bills and Remittance,
Customer Service, Letter of Credit, Customer Relation and Credit management and
administration from 12.02.2014 to 29.02.2014 which really helped me to develop
managerial and interpersonal skills and at the same time boost up my confidence level.
Timing of the visiting was from 09:45-5:30 and onward. It was from Sunday to Friday
except in days of public holidays. These eight weeks has been very fruitful for internee to
get insight of the banking activities of the organization.

1.3.4 Activities performed in HBL

During internship period for two months, my placement in various departments
helped me to gain knowledge regarding various operational activities carried in the
banking institutions, built self confidence and experience organizational environment. I
accomplish the task as per the requirement of different departments. The activities
assigned to me in HBL under different departments are listed below:

A.Customer Service Department (CSD)

Customer service department is the part of bank where customers are
pleased with interaction, a phone call, self-service systems (e-banking, SMS banking)
or by other means. Hence, customer service is the process of ensuring customer
satisfaction with a product or services of the banks while performing a transaction for
the customer, such as opening an account, providing cards facilities, issuing cheques,
etc. Banks have worked hard to increase their satisfaction levels through direct
interaction with customers that form customers optimistic perceptions towards the
bank as a whole.

Activities done in CSD are:

Dealing with regular and new customers of the bank.

Advise customers about HBL's products and services and respond their

queries.
Providing different kinds of forms to customer such as Account opening form,
Account closing form, Debit card application form, Internet banking form,

SMS banking form, etc.

Collecting necessary documents and checking forms of the customers required

for account opening procedures.

Filing application forms and writing different application on behalf of

customers on the request of customers.

Keeping record of the account opened, account closed, transfer of the account,
customer taking additional facilities such as Internet banking, SMS banking,

etc.
Providing ATM cards to the cardholders.
Providing the balance statement and balance certificate to the demanding

customers after verifying the account holder signature.

Recording the ATM card holder information in the register after arrival of
ATM card and pin number and providing them to the respective customer after

checking the form filled to get card and verifying the signature.
Preparation of cheque books, recording the information and providing it to the

respective customer after verifying the signature.

Making entry of void cheques, loss cheques, issuance of cheques, etc.
Photocopies of citizenship cards, passports, license and other documents of
the customer required for recording of customer service department.

B.Bills and Remittance department

Remittance simply refers to the transfer of funds from one place to another i.e.
from one country to another or within the country through various means of fund
transfer.
Bills and remittance department of HBL perform various fund transfer operations such
as ID payment, domestic money transfer, clearing, fixed deposits and fund transfer,
international cheque collection, credit advice for advance payment, etc.
5

 ID Payment Section
ID payment is the process of providing cash to the customer that is received through
remittance after verification of receiver. It is a transfer of money by a foreign
worker to his or her family or making domestic payment. HBL has facility for both
international payment (For e.g.: Himal Remit of HBL) and domestic payment
(Domestic Money Transfer (DMT) facility by HBL).

The activities done in ID payment are:

Entry of reference no. on web based remit system to get remittance

information under various exchange houses such as Himal Remit, Western

Union Money Transfer, Money Gram, Choice Money Transfer, etc.

Verification of the information of the remitter and beneficiary.
Photocopies of customer Id
Recording of remittance information
Forwarding the verified information for cash payment.
Contacting authorized personnel if problem arise.

Bills Collections Section

It does the all tasks related to international banks cheque, traveler's cheque (TC)
i.e. making TC and bills purchase and collection, entry on Nostro and Vostro
account, sending to international bank about payment against TC, etc.
The activities done in bills collections are:

Manual entry of Traveler's Cheque,International cheques collection and

purchase in registers.
Observation of procedures for forwarding Traveler's Cheque.
Stamping Traveler's Cheque that are purchase and collected which are to
be presented to Americans Association for Traveler's Cheque.

Advance Payment of Credit Advice (APC) Section

APC does the transaction related to transferring of funds from one account to
another account but only receivable of information of credited account that is

done through SWIFT mechanism. It is basically used by customer involved in

exporting goods to receiver advance payment for making supply.
The activities done in APC are:

Informing customer about account credited.

Print account movement advice and account payment advice.
Checking statement of customer related to fund transfer.
Filing of the bank copy of APC.
Observation of account to account transfer entries by the employee.

Fixed deposit and Fund transfer Section

i. Fixed deposit
Fixed deposit is the process of depositing money that pays higher interest
than a savings account but imposes conditions on the amount, frequency,
and/or period of withdrawals. It is also called time deposits. Transaction
related to fixed deposit account of HBL were carried out by remittance
department.
ii.

Fund Transfer
It is transfer of fund from one place to another through demand draft or
telex

transfer.

Demand

draftis

written payment

order

from

one party (the drawer) to another (the drawee to pay a stated sum to a third
party (the payee) by issuing the cheque. Telex transfer is the mechanism in
which bank transfer the fund to another banks account in the request of
customer. For e.g. Fees payment of student reading abroad is done by telex.
The activities done infixed deposit and fund transfer are:

Providing different kinds of forms to customer such as demand

draft forms, telex transfer forms, fixed deposits forms, etc.

Filing application forms and writing different application on behalf

of customers on the request of customers.

Recording of fixed deposits account, demand draft transfer, and

telex transfer, etc. in the registers and filing the documents.

Writing in the cheques using Cheque Writer.

Observation of record keeping in the HBL software system (T24

software) by the employees.

Clearing Section
Clearing section is one of the counters under the bills and remittance
department where both the inward and the outward cheques are handled. An
individual might receive payments via cheques of various banks but it will be
time consuming for him to go in all the banks. NRB provides the common
platform for each and every bank to deal with the cheques of different banks.
The activities done in clearing section are:

Receiving the cheque for clearing and endorsing the cheque

Making entry in the Globus system for clearing
Informing the client in case of cheque return
Returning the rejected cheque to the respective clients and maintain proper

records
Handling queries of the customer
Returning the rejected cheque to the respective clients and maintain proper

records
Handling queries of the customer regarding their cheques sent for clearing.
Going NRB for observation of clearing procedures carried out by banks.

C.Letter of credit department

Letter of credit is defined as an undertaking issued by a bank in favor of a
beneficiary by which the bank substitutes its own creditworthiness for that of the
applicant by promising to honor (pay) if the documents specified in the letter of credit are
timely presented.
Bank Guarantee is the non fund based fee generating service which provides the
assurance that if the debtor fails to settle a debt, the bank will cover it and enables the
customer (debtor) to acquire goods, buy equipment, or draw down loans, and thereby
expands business activity.
Activities performed in LC department are:
8

The study of the LC and Bank Guarantee manual of HBL.

Chronological filing of the trade related documents.
Observation of preparation procedures of LC documents.
Preparation of Approval Sheet for import LC and Guarantee after the request

by customer for issuance of LC and guarantee.

Observation of procedures of import and export LC issuance, guarantee

issuance, etc.
Forwarding approval sheet to the Customer relation department.
Preparation of Account Movement Advice
Preparation of B. B. Ni. forms in the demand of customers
Faxing the necessary documents to different HBL branches
Photocopies of necessary documents required in trade operation center
Typing SWIFT messages under the supervision of staffs
Cancellation and amendment of letter of credit
Document checklist

D.Customer Relation Department (CRD)

Customer relation department is the division of credit department of HBL
where customer initially goes for receiving loan services. As loan are the investment
for the bank they should be secured, thus for forecasting and analyzing customers
trends and behavior and maintain highest levels of protection good quality
relationship management is preferred, so it is named as customer relation
department.
Activities performed in CRD department are:
The study of Credit Policy Guidelines (CPG) of HBL.
Dealing with the customer about nature of loan facilities they sought.
Preparation of financials.
Observation of preparation procedures of detailed Credit Analysis Package

(CAP).
Observation of CICL (Credit Information Centre Ltd.) report of the clients.
Detailed valuations of the property.
Calculation of market value of the shares for renewal of loan against shares.
Preparation of reminder letter for renewal.
Observation of financials of latest fiscal year of different corporate clients as it
was end of the fiscal year during internship period.
9

Participation in site visits for valuation of collateral and renewal of the credit

facilities.
Conduct five pillars analysis of credit facility i.e. industry environment,
financial

condition,

management

quality, technical

strength,

security

realization.

E.Credit Administration and Management Department (CMAD)

Credit administration and management department is another division of
credit department of HBL where customers are facilitated with loan facilities after
analysis is done by customer relation department. CRD forward the documents to
CMAD for further implementation of the credit granting process. CMAD take the
charge of lending to the customer after fulfilling the task of documentation and
make estimation of interest rates, reconciliation, etc.
Activities performed in CMAD are:
Preparation of offer letter to be issued to the customer
Scrutinize and verify all loan documentation
Preparation of account movement advice
Study of different cases, stock reports, collateral details, property valuation,

etc. related to credit facilities

Preparation of legal documents
Transfer the credit files to the legal department
Doing photocopies requires for documentation process
Observation of implementation of loan facilities to the customer
Observation of renewal of the loan facilities of the customer
Observation of loan settlement by the customer
Release of the documents of the customer after loan settlement under

supervision of staffs
Maintain 'safe in' and 'safe-out' registers
Proper documentation of the files of CMAD

10

1.4 Limitations
It is obvious that there arise also some kind of limitation in everything with some
productive and beneficial outcomes and as limitations are the part of progressive system,
here are some limitations of the study:

The time period that has been provided was not sufficient to learn all the activities
held in the bank

The banks staffs were occupied by their work so they had a little time to interact
with intern.

Due to the safety and privacy standards of the bank, the intern have presented
only whatever can be presented.

It does not give detail view of overall functioning of the bank since most of the
information is collected through personal experience and observation.

Since, internee joined the credit department at Ashad end which is the end of a
fiscal year in our country; internee could not gather the information regarding the
system more specifically, due to their busy schedule.

This report cannot be generalized to entire banking industry since data is only
related to HBL, Hetauda branch.

CHAPTER TWO
INTRODUCTION TO THE BANKING INDUSTRY

2.1 Introduction

11

Bank can be defined as a financial institution which provides financial services

that may be in the form of accepting deposits, accepting loan, providing technical
advices, dealing over foreign currencies, remitting funds, etc. It collects deposits from
general public, corporate bodies and private organizations by providing them certain
percent of interest, mobilizes the fund to productive sectors and distributes the
accumulated fund to others, who are in need of money by charging certain percent of
interest. Bank is therefore; known as a dealer of money that bridges the gap between the
savers of fund and users of fund.
To know the precise meaning of bank, some definition given by prominent writers,
scholars and acts of different nations are as given
"Banks are financial institutions that fund in the form of deposits repayable on demand
or in short notice."
World
Bank
"A Bank is an establishment for the custody of money received from or on behalf of its
customer essential duty is to pay their draft on is profit areas from its use of the money
left unemployed by them."
Oxford English Dictionary
Bank is an institution which collects money from those who have it to spare and who are
saving it out of their income and lends this money out to those who require it.
Crowther
From the above definitions, it is clear that the bank is a financial institution, which
accepts deposits from the public in different accounts and grants loans to individual and
corporations against their securities. In these days, it performs a wide variety of
functions. It does lot more than deposit and credit, remitting of money, letter of credit,
guarantee etc. for the service and benefit of individuals, corporations and general public.

12

It is an agent of its clients, which remits money, provides services like LC, guarantee etc.
and collects incomes, commissions and pays expenses on the behalf of them.

2.2 Origin of bank

The word bank is derived from the Italian word "banco", Latin word "bancus" and
French word "banque which means bench on which the bankers would keep money and
its records. In most simple form, banking is an old as authentic history. The early bankers,
the Jews in Lambardy, transacted third business at benches in the marketplace. When they
were unable to meet their liabilities, the depositors used to break their benches and the
term bankrupted was derived.
The bank of Venice, established in 1157 A.D is supposed to be the ancient bank.
Originally, it was not a bank in real sense being simply an office for the transfer of public
debt. Subsequently, Bank of Barcelona (1401) and Bank of Geneva (1407) were
established. The Bank of England, first English Bank was established in 1694 A.D.
Banking institutions have then changed in character and contents to further extent. They
have developed from a few simple operations involving satisfaction of a few individuals
wants to the complicated mechanism of modern banking involving the satisfaction of the
whole community by serving speedy application of capital, slowly seeking employment
and thus providing the very life blood of commerce. The history of banking is closely
related to the history of money. As a society become more civilized, the need for more
efficient methods for barter was developed organically. Most origins of money can be
traced back to the building of large structures such as temples, or large undertaking by
leaders, such as wars.
The first bank was probably the religious temples of the ancient world, and were
probably established sometime during the 3rd millennium B.C. Banks probably predated
the invention of money. Ancient Greece holds further evidence of banking. During Late
Antiquity and Middle ages, medieval trade fairs, such as the one in Hamburg, contributed
to the growth of banking in a curious way: money changers issued documents redeemable

13

at other fairs, in exchange for hard currency. In 1440, Gutenberg invents the modern
printing press although Europe already knew of the use of paper money in China.

2.3 Evolution and Growth of Banking Sectors in Nepal

The origin of banking system in Nepal started with the name of Shankerdhar, a
Sundra merchant of Kantipur who paid all the outstanding debts in the country. In
historical term, there is a story that Gunkamdev borrowed money in 723 Sambat to
reconstruct Kathmandu. In 11th century, during Malla regime, JayasthitiMalla
developed 64 different classes of caste according to their occupation. During that period,
Tankadhari which is a money lender provided debt. "TejarathAdda was established in
1877 A.D. during the tenure of Ranaddip Singh, and it was converted into government
financial institution providing credit facilities to people at low interest rate of 5 percent.
TejarathAdda distributed credit facilities to the public especially on the collateral of gold
and silver but it didnt collect deposit from the public.
After a long period, the government started trade with India and Tibet. And the various
indigenous bankers handled even the trade, because transfer of the money could be safely
made only through these bankers. This was even strongly supported by the situation
caused during 1934 A.Ds earthquake where there was a need of finance for the
reconstruction of works. Reviewing these situations, the UdyogParishad (Industrial
Development Board) was constituted in 1936 AD. A year after its formation, the
UdyogParishad formulated the company act and the Nepal Bank Act which
established the Nepal Bank Ltd. with the technical cooperation of the Imperial Bank of
India, as the first commercial bank of Nepal.

After the establishment of this bank, different services like accepting deposits, extending
credit facilities for promotion of trade, rendering customer related services and investing
in government bonds and securities were offered to general public. This bank also
performed agency functions and acted as a banker to the government. In fact it conducted
all the functions of the central bank (except issuance of paper money) till the
establishment of NRB.
14

NRB, the Central Bank of Nepal, was established in 1956, to discharge the central
banking responsibilities including guiding the development of the embryonic domestic
financial sector. Its major aims is to regulate the issue of paper money; secure
countrywide circulation of Nepalese currency and achieve stability in its exchange rate;
mobilize capital for economic development and for trade and industry growth; develop
the banking system, thereby ensuring the existence of banking facilities and maintain the
economic interest in general public. NRB also oversee foreign exchanges and foreign
exchange reserves.
Another commercial bank, Rastriya Banijya Bank (RBB), was established in 1965 A.D.
realizing NBL alone could not extend adequate services to the country in terms of
commercial banking. It had a free hand in the commercial business of the country and
this bank solely handled import-export trade. After the establishment of RBB, no new
commercial bank was established for a period of nearly 18 years. To promote healthy
competition among banks, Commercial Bank Act 1974 was amended in 1974. The new
policy allowed joint venture banks with foreign collaboration to operate in private sector
with the objective of introducing modern banking practices and widen the financial
structure. With the introduction of this policy, different commercial banks were
established.
The Nepal Arab Bank now NABIL Bank was co-owned by the Emirates Bank
International Limited Dubai, the Nepalese Government and the Nepalese public was the
first joint venture bank established in 1984. Similarly The Nepal Indosuez Bank now
Nepal Investment Bank in 1987, was jointly owned by the French Banque Indosuez
Bank, Nepal Grindlays Bank in 1990 (presently known as Standard Chartered Bank) etc
are some commercial banks in Nepal.

2.4 Financial Sector in Nepal

S.N
1

Financial Institutions
Commercial Banks

Class
A
15

Numbers
32

2
Development Banks
3
Financial Companies
4
Micro-credit Development Banks
5
Saving & Credit Co-operatives
6
Nongovernmental organization
Source: www.nrb.com.np

B
C
D
Not classified
Not classified

87
79
21
16
38

Table2.1 Financial sector in Nepal

2.5 Commercial bank

Commercial Banks are one of the major financial intermediaries whose primary
function is the transfer of monetary resources from the savers to the users. They have the
widest range of activities and they provide large amount of the money supply. They
performs several functions as various types of deposit facilities like current, saving and
fixed deposit; safety of public money, remittance of money, letter of credit, loans, locker
facility, foreign exchange, serving as an agent of its clients etc.
A commercial bank is the bank which exchanges money, accepts deposits, grant loans,
and perform banking function.
Nepal Commercial bank Act 2031
Nepal bank limited is the first commercial bank of Nepal which was established in 1994
B.S. It is a semi-government bank. The second commercial bank of Nepal is Rastriya
Banijya Bank. It was established in 2002 B.S. After reinstatement of multiparty
democracy in the country, several joint venture banks were established, such as Standard
Chartered bank, Nabil Bank, Nepal Investment Bank, Himalayan Bank, Everest Bank,
Nepal State Bank of India, Nepal Industrial and Commercial Bank, Kumari Bank,
Machhapuchhre Bank, Bank of Kathmandu and so on. With the increasing in number of
commercial banks competition among them have also become more complex.
The main function of commercial bank simply is to borrow to lend. Besides, there are
other functions which have been developed according to need of the society as

Accepting deposits
16

Providing loans

Investments

Discounting bills of exchange

Transfer of money

Capital formation

Miscellaneous functions

The commercial banks in Nepal can be listed as follows:

S.No

Operation

Date Head Office

.
1
2
3
4
5
6

(A.D.)
Nepal Bank Limited
1937/11/15
Rastriya Banijya Bank
1966/01/23
Agriculture Development Bank Ltd.
1968/01/02
NABIL Bank Limited
1984/07/16
Nepal Investment Bank Limited
1986/02/27
Standard Chartered Bank Nepal 1987/01/30

Kathmandu
Kathmandu
Kathmandu
Kathmandu
Kathmandu
Kathmandu

7
8
9
10
11
12

Limited.
Himalayan Bank Limited
Nepal SBI Bank Limited
Nepal Bangladesh Bank Limited
Everest Bank Limited
Bank of Kathmandu Limited
Nepal Credit and Commerce Bank

Kathmandu
Kathmandu
Kathmandu
Kathmandu
Kathmandu
Rupendehi

13
14

Limited
Lumbini Bank Limited
1998/07/17
Nepal Industrial & Commercial Bank 1998/07/21

Chitawan
Morang

15
16
17
18
19
20
21
22
23
24
25

Limited
Machhapuchhre Bank Limited
Kumari Bank Limited
Laxmi Bank Limited
Siddhartha Bank Limited
Global Bank Ltd.
Citizens Bank International Ltd.
Prime Commercial Bank Ltd
Sunrise Bank Ltd.
Bank of Asia Nepal Ltd.
Development Credit Bank Ltd.
NMB Bank Ltd.

Pokhara
Kathmandu
Birgunj, Parsa
Kathmandu
Birgunj, Parsa
Kathmandu
Kathmandu
Kathmandu
Kathmandu
Kamaladi
Babarmahal

1993/01/18
1993/07/07
1994/06/05
1994/10/18
1995/03/12
1996/10/14

2000/10/03
2001/04/03
2002/04/03
2002/12/24
2007/01/02
2007/06/21
2007/09/24
2007/10/12
2007/10/12
2001/01/23
1996/11/26
17

26

Kist Merchant Banking & Finance 2003/02/21

Kamalpokhari

27
28
29

Ltd.
Janata Bank Nepal Ltd.
Mega Bank Nepal Limited
Commerz& Trust Bank Nepal Ltd.

2010/04/28
2010/07/23
2010/09/20

New Baneshwor
Kantipath
Kamaladi

2010/11/26
2011/03/10
2012/02/13

Kamaladi
Putalisadak
Naxal

30
Civil Bank Ltd.
31
Century Commercial Bank Ltd.
32
Sanima Bank Ltd
Source: www.nrb.com.np
Table 2.2 List of commercial bank

2.6 Present scenario of commercial bank in Nepal

Banks are gradually starting to realize that, in todays competitive banking
environment, exemplary customer service is one of the distinguishing characteristics that
banks can exploit to establish a competitive edge. Since most banks offer comparable
products and services, they should continually search for a competitive advantage that
will attract new customers and help retain existing ones. Banks are therefore, looking to
develop innovative products and services to maintain superior customer services levels
while at same time remaining profitable. With the number of market players in the rise,
the competition has been obviously growing in the banking industry. The most obvious
effect of the rising competition can be seen in the interest rates offered by the banks.
Banks are gradually shifting towards IT based solution to enhance service delivery in
order to address customer concerns. Most banks are embracing E banking and provision
of ATMs to reduce long queue in banking hall. In addition, some banks have launched
mobile phone banking services which facilities several account query tools, including
account balances, thereby minimizing the need for customers to visit banks. This drive
towards IT based solution will continue to gather momentum in the future as banks will

18

find it very difficult to survive in the ever growing competition without some form of
competitive advantages.
Another trend observed nowadays is large corporate houses explore the shift towards
multiple banking relationships. In order to remain competitive, banks are seen to be
increasingly encouraging business houses to transact with them. This has lead to creation
of large volume of unutilized limits with the bank and in order to get a large piece of the
pie banks are increasingly accepting risks, which they otherwise would not have taken.
The unyielding competition has also led the banks to accept collaterals that are more
risky and unsecured. The volume of loan against the hypothecation of stock, receivable
and other assets are on the rise. In the absence of hypothecation in the current assets, the
risk of over financing is eminent and banks are exposed to higher degree of risk.

CHAPTER THREE
INTRODUCTION TO HIMALAYAN BANK
LIMITED
3.1 Brief profile
Himalayan Bank Limited is one of the prominent private sector commercial
banks of the country. It was established in 1993 A.D (Poush 2049 B.S) in joint venture
with Habib Bank Limited of Pakistan with an objective to become the bank of first
choice. The bank has been consistently growing over the decades and today stands as one
of the biggest banks in the country. HBL is fully committed to deliver quality service to
the customers, generating good return to shareholders, providing attractive incentives to
employees and serving the community through stronger corporate social responsibility
endeavor. It is fully dedicated towards the full satisfaction of the customers through the
wide range of services it provides. Despite the cut-throat competition in the Nepalese

19

Banking sector, Himalayan Bank has been able to maintain a lead in the primary banking
activities like Deposits and loans.
Today HBL has established itself as one of the largest private sector banks with 36
branches spread all over Nepal out of which 15 branches are located inside the
Kathmandu valley. One of the largest ATM networks of HBL with 56 ATMs within the
country out of which 34 ATMs are located inside the valley. HBL also has special tiesups with more than 1000 agencies across Nepal. The correspondent banking relationship
of the bank is widespread covering number of world renowned multinational banks. All
Branches of HBL are integrated into Globus (developed by Temenos-24), 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.

3.1.1 Vision
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 who include customers,
shareholders, society and employees.

3.1.2 Mission
The Banks mission is to become preferred provider of quality financial services
in the country by gaining substantial business growth through premium products and
services to customers, thus ensuring attractive and substantial returns to all their
stakeholders.

3.1.3Objective
To become the Bank of first choice is the main objective of the Bank.

3.2 Share composition of HBL

20

The share composition of the bank has been depicted in the chart below:

Figure3.1 Pie chart showing ownership structure of HBL

3.3 Promoters of HBL

Name

Designation

Mr. Manoj Bahadur Shrestha

Chairman

Mr. Arshaf M. Wathra

First Vice Chairman

Mr. Himalaya SJB Rana

Chief Advisor

Mr. Sushil Bikram Thapa

Directors

Mr. Bijay Bahadur Shrestha

Director

Mr. Upendra Keshari Poudyal

Professional Director

Mr. Radha Krishna Pote

Director

Mr. Prachanda Bahadur Shrestha

Director

Mr. Prem Prakash Khetan

Second Vice Chairman

Table 3.1 Promoter of HBL

21

3.4 Financial Status

(In
Million)

Parameters
Paid up capital
Total Deposit
Total Loans & Advances
Total Operating Profit
Non-Performing Loans
Capital Adequacy
Return on Assets
Return on Equity
Source: Boucher of HBL

2011

2010

2009

2,000.00
40,920.63
32,223.75
1015.00
4.22%
11.21%
1.16%
10.15%

1,600.00
37,665.52
29,123.75
776.88
3.52%
11.26%
1.26%
15.46%

1,216.21
34,681.34
24,793.15
1,159.95
2.16%
11.02%
1.91%
25.75%

Table 3.2 Three years Financial Status of HBL

3.5 Capital Structure

Capital

Amount(NPR)

Authorized Capital

3,000,000,000

Issued Capital

2,000,000,000

Paid up Capital

2,000,000,000

Source: 19th Annual report of HBL

Table 3.3 Capital Structure of HBL

22

Rs.

Amount(in Rs Million)
3500
3000
2500
2000
1500
1000
500
0

Amount(in Rs Million)

Fig 3.2: Bar Diagram view of capital structure of HBL

3.6 Products and Services

The products and services provided by customer service department of HBL are
broadly categorized into following products and services.

3.6.1 Saving Deposits

There are number of saving accounts in according with the type of customers.
Different types of saving account are targeted for different customers and of different
requirement. Different saving accounts are as follows:
1. Normal saving account:
It is a deposit scheme designed to fulfill the saving needs of individuals,
households, businessman and corporate. It is a transactional interest bearing account
where a deposit is placed with the bank for an unspecified period of time and the
depositor can withdraw or transfer the funds whenever required through different means.
23

Salient features:

Minimum balance of Rs.2500

Unlimited withdrawals/deposits

Free bank statement on demand

Free cheque book facilities and debit card valid in Nepal and India

Free AHETAUDA facilities

Free SMS and Internet banking facility

Accidental death Insurance up to Rs.500,000.00

2. Himal saving account:

It is a form of saving account which aims to cultivate savings habit amongst the
students. This product has been extremely popular among the students for the best
utilization of money for generating future saving habit.
Salient features:

Minimum Balance of Rs.0.00

Unlimited withdrawals and deposits

Free Bank Statement on demand

24 hour-7days access to cash through ATM network

Free AHETAUDA facilities

Free SMS and Internet banking facility

Accidental death Insurance up to Rs.500,000

3. Bishesh Saving Account

Bishesh Saving Account is a deposit product targeted to special section of society which
includes minors, senior citizens completing the age of 50 years, disable people and
illiterate individuals.
Salient features:

Minimum Balance of Rs.2000

Unlimited withdrawals and deposits

Free Bank Statement on demand

Free cheque book facilities

Free Debit card valid in Nepal and India

24

Accidental death insurance up to Rs.500,000.00

25% discounts on all banking fees and charges.

Free AHETAUDA facilities

Free SMS and Internet banking facility

4. Recurring saving account:

Recurring Saving Account is 3 years fixed tenure savings account targeted to individuals
who would like to save funds in installments for future use.
Salient features:

Monthly Installment deposit of RS.1000 or multiple thereof

Free Bank Statement on demand

Free cheque book facilities and Debit card

Free AHETAUDA facilities

Free SMS and Internet banking facility

Accidental Death Insurance for Maximum Rs. 0.5 million

5. Premium saving account (PSA):

PSA is a privileged savings account with a host of convenient features and banking
channels to transact through. PSA customers enjoy a separate privileged counter and an
interest rate calculated on daily balance. PSA is first Premium Deposit Product in the
Banking sector of Nepal.
Salient features:

Minimum Balance of Rs.50000

Unlimited withdrawals and deposits

Free Bank Statement on demand

Free cheque book facilities

Free Debit card valid in Nepal and India

Accidental Death Insurance for value up to Four Times the Monthly

Minimum Balance Maintained in The Account.

Free AHETAUDA facilities

Free SMS and Internet banking facility

25

25% discounts on all banking fees and charges

6. Super premium saving account:

HBL has introduced a higher return saving account considering the preference of the
customers known as SPSA.
Salient features:

Minimum Balance of Rs.100000

Unlimited withdrawals and deposits

Rebate 50% on any service charge

Free Bank Statement on demand

Free cheque book facilities

Free Debit card valid in Nepal and India

Accidental Death Insurance for value up to Four Times the Monthly

Minimum Balance Maintained in The Account with maximum ceiling of
Rs.50000

Free AHETAUDA facilities

Free SMS and Internet banking facility

50% discounts on all banking fees and charges

7. Shareholders saving account:

This type of account is specially designed for banks shareholders. This type of account
holders get waiver in issuance of Draft and Traveler Cheque etc.
Salient features:

Minimum Balance of Rs. 500

Unlimited withdrawals and deposits

Free Bank Statement on demand

Free cheque book facilities

Free Debit card valid in Nepal and India

24 hour-7days access to cash through ATM network

26

Free AHETAUDA facilities

Free SMS and Internet banking facility

8. Himal remit saving account:

This type of account is designed for the customers across the borders.
Salient features:

Minimum Balance of Rs. 1000

Unlimited withdrawals and deposits

Free Bank Statement on demand

Free cheque book facilities

Free Debit card valid in Nepal and India

Accidental death Insurance up to Rs.500,000.00

Free AHETAUDA facilities

Free SMS and Internet banking facility

3.6.2 Fixed deposits and call deposits

Fixed Deposit Account: HBL has introduced several schemes of Fixed Deposits in order
to cater the needs of valued depositors. It offers attractive rates of varied maturities
ranging from three months to five years. This type of deposits usually offers the highest
interest rate.
Current Call Account: Focusing on business aspect and loan providing aspect, HBL is
offering current call account mainly intended for business/corporate houses, this account
can be opened and operated from any HBLs branches. It offers certain rates of interest
too.
Fixed deposits

Interest

Call Deposits

3 months
6 months

rates %
3.00
4.00

Current Call Account

1.00-3.00
Non-profit Organization 2.00-3.00
Current Call Account
27

Interest rates %

1 year
2 years
5 years
Jumbo term 3 years
Jumbo term 5 years
3-year Recurring Deposit

5.25
6.00
7.50
8.00
8.50
9.50

14days
1 month

Table3.4 Interest rates on Fixed deposit and call deposit

3.6.3 Loans and advances

Credit Services
Corporate

Project Financing

Consortium Financing

Fixed Term Loan

Working Capital financing

Trade Financing

Loan against First Class Bank Guarantee

Retail Lending

Consumer Lending

Hire purchase loan

Mortgage loan

Credit Card Loan

Housing loan

Subidha loan

FD with OD facility

Retail lending
28

2.00
3.00

Card Merchant Loan

Educational institution Financing

Loan against Fixed Deposit receipt

Loan against Government Bonds/ securities

Loan against Shares

Specialized lending

Small and medium Enterprises loan

3.6.3 ATM Card services

HBL provides Debit Card which is the easiest way to carry cash. Using HBL Debit Card
one can withdraw cash as well as purchase goods from several merchants. Customers use
these cards at any ATM terminal that is under SCT network and Visa network. In the SCT
network it involves many commercial banks and development. HBL provides ATM
services to their customer, which is open 24 hours, a bay, 7 days a week, and 365 days a
year. There are altogether 33 ATM located in Kathmandu valley and 23 in outside valley.
This service provided by the bank helps the customer draw fast cash from the various
ATM machines that have been placed in various parts of the country. The bank earns
income through issue and renewals of ATM cards for its customers.
Salient Features:

Maximum of Rs.40000 can be withdrawn per day

At one Time only Rs. 10000 can be drawn

Withdraw can be done from any ATM network

Charge Rs. 30 in case of cash withdrawn from other visa network and Rs. 150 in
case of other SCT network

No charge in case of cash withdrawn from same visa and SCT network

Fast cash, Mini statement, Balance enquiry

The card services provided by HBL are

29

HBL SCT/ Visa(Chip based)/ Master Debit Card

HBL Visa Credit Card

HBL Master Credit Card

HBL Prepaid VISA Card

3.6.4 Trade Services

LC- Advising/ Confirmation/ Negotiation/ Reimbursement

Guarantee- Bid Bond/ Performance Bond/ Advance Payment/ Counter Guarantee

3.6.5 Customized Services

24/7 availability of banking services through multiple location ATMs

Funds Transfer- within and outside the country

Himal Remit- Online Remittance Channel

Fee Collection/ Payment services for Educational Institution

Service Package for Students Going Aboard for Higher Studies

3.6.6 Ancillary Services

1. Safe Deposit Locker
Looking at the varying needs and wants of the customers, HBL offers locker facilities of
various sizes as per customers preference and convenience of location. Customers
availing of this facility enjoy not only peace of mind in terms of security of their valuable
belongings but also one of the most attractive rates and ease of location.
Salient Features:
Temporary Locker Facility for client Going Abroad Period: 3 months to

less than 6 months 50 percent of annual charge

Temporary Locker Facility for client Going Abroad Period: 6 months to

less than 1 year 75 percent of annual charge

25 percent Discount on Annual Rent to PSA Holders

30

100 percent rebate on key deposit and 50 percent on annual rent to HBL
board of members, chairman, advisor to BOD, staff and their spouse.
Table 3.5 Locker Size, Annual Rent and Deposits

Locker

Size(Inches)

Key Depositing Annual Rent in

type
A
B
2A
4A
D
2D
4D

Height x Length x Depth

5.00 x 7.00 x 19.68
6.38 x10.12 x 19.68
5.00 x14.08 x 19.68
11.12 x 14.08 x 19.68
7.56 x 10.12 x 19.68
7.59 x 21.16 x 19.68
16.16 x 21.16 x 19.68

NPR
10,000.00
12,000.00
12,000.00
30,000.00
18,000.00
30,000.00
40,000.00

NPR
1,500.00
2,200.00
2,200.00
5,000.00
2,800.00
5,000.00
6,000.00

2. Internet and SMS Banking

SMS Banking allows customers to check their balance, status of cheque (encashed or
not), HBLs foreign exchange rate and contact numbers of branches. Through the
customer service department customers fill up the application form to apply for these
services. After fulfillment of the application form, the information regarding customer are
sent to the information department for further process. After that pin number issued by
the information department is provided to the customer through the customer service
department. By using E- Banking and SMS Banking customer can make inquiry for
balance and can get the mini statement by using the electronics means and mobile by
suing SMS.
3. Any Branch Banking Services(AHETAUDA)
All Himalayan branches and ATMs are inter-connected with the latest infrastructure in IT
connectivity and the renowned core-banking software T24 rather than the Pumori
software on real-time basis. This gives the customers the complete freedom of operating
their account from any of Himalayan branches and ATMs, no matter in which branch they
maintain their account. Himalayans network of branches and ATMs is the biggest among
finance company in the country.
4. 365 days Banking

31

For customers who do not find time for even small banking transactions during office
hours, Himalayan provides evening counter services and 365 days banking facilities from
all branches through which all the Himalayan customers can operate their accounts and
avail complete banking services.

3.7 Corporate Social Responsibility

Corporate Social Responsibility (CSR) holds one of the very important aspects of
HBL. Right from the time of its commencement, it has been discharging its social
responsibilities through various social and allied institutions. Being one of the active and
responsible corporate citizens of the country, HBL has always promoted social welfare
activities. The major services being rendered by HBL in this front include those related to
education, healthcare, sports, culture and social services. HBL allocates a significant
portion of its Annual Sponsorship & Donation Budget for fulfilling social
responsibilities. CSR activities recently performed by HBL are listed below:

2011: Sponsorship of ANBUG rally for social society have been undertaken by
the Bank in the drive supporting schools, cleft lip support past and they are
determined to do so in the future surgeries, etc.

2011:Blood donation program organized by the Bank at Hetauda

2010: Donation of Rs. 0.5 million to Embassy of Pakistan, Kathmandu as a

humanitarian aid for conducting rescue and relief operations in the flood affected
areas of Pakistan

2010: Sponsorship of cricket tournament organized by WATO Nepal, aimed at

raising funds for planting 2000 trees in Kathmandu city. WATO Nepal is a
member of Clean up the World. Clean Up The World in partnership with the
United Nations Environment Programme (UNEP) works for inspiring &
empowering communities to clean up & conserve environment through waste
removal, tree plantation, water & energy conservation projects.

32

2010: Active participation in the opening ceremony of Nepal Tourism Year 2011
organized by NTY 2011 Coordinating Committee in coordination with Nepal
Tourism Board.

2009-10: Financial contribution to Spinal Injury Rehabilitation Center, Kavre.

3.8 SWOT Analysis

Strengths

Joint venture with Habib Bank, Pakistan

Able to capture a considerable share of business in Nepal.

Highly competent, trained and motivated employees

Top 5 bank of the country

Specialized Products and Services

High customer satisfaction

Strong culture that makes the employees believes in hard work, building good
relation, proper communication and perfection in their respective department.

Full fledge research and development department

Weakness

Low interest rate in deposit

Lack of good advertisement strategies

Inadequacies in customer service

Less variety of product

Regular system deficiency

Opportunities

33

Uncaptured rural market

Emergence of new investment sectors( hydro, remittance, etc.,)

Increasing per capita income of Nepalese citizens

Threats

Unstable political and economic conditions

Mushrooming of new banks in the market

Frequent change in NRB directives and regulatory policies

Instable government policies and internal security crisis

CHAPTER FOUR
ANALYSIS OF ACTIVITIES DONE AND PROBLEM
SOLVED
As an organization has several departments, HBL has also got various departments where
activities are carried out according to their nature and function. During the internship
internee got an opportunity to work on two different departments and go for marketing as
well. But since her maximum hour of internship was on customer service department this
report basically focuses on CUSTOMER SERVICE DEPARTMENT of Himalayan Bank
Limited, Hetauda Branch. So the detailed analysis of what internee learnt on the
internship is described below

4.1 Analysis of activities done on CSD

34

CSD is the major department which is located at the frontline of the bank. When
the customers enter the bank, they encounter with the staffs of this department. If the
employees of this department are rude to the customers then they feel that the bank is not
good to the customers. A satisfied customer not only tend to buy again but also like to
talk positively about the business to others whereas unsatisfied customers are shared with
around ten other people who are likely to tell another ten. This directly affects in
achievement of basic objectives of the bank. Hence, the success and the failure of the
bank depend upon the functions of this department. This department always focuses on
maintaining the good relationship with its clients and novel customers and keeping happy
over time.
In Hetauda branch of HBL, this department basically deals with account opening,
issue of cheque book, account statement, customers queries, account closing, account
transfer etc. The major function carried out at CSD of HBL can be mentioned as below:

Opening of the new accounts

Transferring the accounts from one branch to another

Closing the accounts

Answering to customers queries regarding

New Account

Existing as well as new product and services provided by bank

Facilities provided by bank

Telephone handling

Producing account statement

Issuing Cheque Book as per the demand of the customers

Producing balance certificate

Maintaining customer records both in files and in system

Distributing ATM cards with secret pin code

Providing locker facilities by issuing locker ID and keys to the holders of locker

4.2 Account Opening

35

Account opening is the initial step in deposit. It is the most frequent activities
done in this department. Accounts can be open under various schemes provided by the
bank. Customers open account for depositing money in the bank for their safety by taking
some percent as interest rate.
While opening of an account, the customers are required to fill up the account opening
form. The account opening form contains the name of accountholder, permanent and
temporary address, occupation, contact number, family details, citizenship number and
signature of account holder and the type of account preferred to open (Single saving a/c,
joint saving a/c and Current a/c). Along with an account opening form he/she should
present two passport size recent photo of own, one copy of citizenship certificate or
passport or driving license, documents evidencing the permanent address (whichever
applicable) that may include utility bill of electricity/water, land ownership certificate,
voters ID. They should be verified with original documents. The customers should also
include the name and details of beneficiary along with one copy of beneficiarys
citizenship certificate. After proper checkup of forms and necessary documents, the name
entry is registered and account number is provided to the customer.
Customers are required to fulfill various basic requirements before they open their
account on HBL. Those requirements are as follows:
For opening personal account

A properly filled application form

Identification documents (citizenship certificate or Passport)

Two recent size photographs

Documents evidencing the permanent address(whichever applicable)

Voters Id

Utility bills of electricity/ water

Land ownership certificate

Certification of local authority

Driving license
36

Employee identification card( for payroll a/c)

Identification of Nominee

Specimen of signature

For opening joint account

A properly filled application form with signature in the specified places of the
parties

All documents required for personal account are required for all joint parties

Special Instruction must be provided in case of signature of the concerned parties

Nominee Details

For opening current account

It is an account specially designed for business transactions. No interest is paid on current
account. Current account is of three types.
For Proprietorship Firm

Declaration of Sole Proprietorship

Copy of renewed Firm Registration Certificate

Copy of renewed Income Tax Registration Certificate

Copy of identification paper of promoter/ account operators

Two copies of recent photograph of proprietor

For Partnership Firm

Letter of Partnership duly signed by all partners.

Copy of Partnership Deed duly attested.

Certified copy of Partnership Registration.

Identification papers of all partners and account operators

Income Tax registration/ renewal certificate

For Corporate Bodies (company a/c)

Memorandum and Articles of Association of the company.

37

List of existing directors.

Resolution of Board of Directors to open and operate the account.

Company registration and Income Tax registration/renewed certificate.

Identification papers of directors and account operators.

Notification of appointment of office bearers as authorized account operators

in case of Corporations.

For opening Fixed Deposit Account

A properly filled term application form

Saving/ current account with the bank

All documents required for personal account/current account are required for
fixed deposit account

4.2.1 Procedure for account opening in HBL

After the form is filled properly and all required documents are fulfilled, the hard
copy information is being converted into softcopy by entering all the information
in the banking software T-24.

Scan signature and photograph of the account holder.

KYC requirement must be fulfilled.

Accounts opened are verified by operation in charge.

14 digits account number is provided to the account holder as per register

sequence.

Customer are then provided with the cash/ cheque deposit slip for depositing cash
in their newly opened account to maintain minimum balance( if any) set by the
bank.

Hold minimum balance(if any) of the customer

The new account opened is being entered in the account opening register with full
detail of account holder.

The account opening form along with other necessary documents is kept in a file
in a serial order as per account number for future reference.

38

4.3 Issuance of Cheques book

Cheques are just like paper cash. It can be taken from one place to another easily. Cheque
is issued to the customer after account holder opened their account in Bank as per his/her
request. The number of cheques is issued to the customer according to the customers
requirement but normally 10-12 slips of cheques are provided to the new account holder.
If customer requested for new cheque book for second time s/he should fill the requisition
form with authorized signature which is placed at end of cheque book. Then account
holder signature is verified by T-24 system and when signature matches, s/he gets new
cheque book. The account holder should be present while receiving cheque book. Before
receiving the cheque book account holder should sign in cheque register maintained by
the bank. In case the account holder is not present, the agent who has come to receive the
cheque should bring the requisition slip with signature of authorized account holder. The
name of the agent and number of cheque required should be mentioned. In this case agent
should present his/her copy of citizenship certificate or identification certificate. In case if
requisition slip is lost account holder should pay the extra charge of Rs 200 and if whole
cheque book is lost, he/she should pay Rs. 500 to get new cheque book and charge is
debited from customer account.

4.4 Issuance of ATM card

HBL ATM card today works as digital wallet for the customer. It is a secure
means of money because no one can use it until and unless they know the given pin
number to the account holder .HBL has SCT as well as chip based visa debit card. Since
Himalayan Bank has initiated chip based ATM card (EMV card) which is more secure
than magnetic stripe card, for the first time in Nepal, customer are attracted more toward
it. In order to get HBL, ATM card accountholder has to fill the form with one photograph
and one copy of citizenship certificate. Once form is filled, customer is informed to take
ATM card after 3-5 days. The account holder should present at the time of collecting the
card. To collect card customer should sign in self declaration form and in ATM register
and their signature is verified and finally card is handover with four digits secret pin
number to related account holder only. Every time when withdrawing money from ATM

39

machines the 4 digit pin code should be entered. Debit card of HBL has got 4 years of
validity and charge annual fee Rs. 200 for ATM card. For zero balance account, account
holder should deposit Rs.200 to get the card for the first time.
Using these cards, the customer can buy different goods and services and also withdraw
money from ATM. If the cards are used from other banks ATM, then certain amount will
be charged by the respective bank. In CSD, the customer can also renew the cards by
filling the application form for renewal of their card.

4.5 Printing Balance Statement

Balance statement shows complete transaction of customer of deposits, withdrawal and
final balance. All the debit and credit balances, tax charges, interest are shown in the
balance statement. On the demand of the customers, the balance statement for required
period of time is provided. These are confidential information so statements are provided
to the account holders only, in case of any organization letter mentioning about providing
balance statement along with the companys stamp are must. Customers can produce their
balance statements from their own branches only.

4.5.1 Procedure for issuing bank statement in HBL

Customer should fill up a request form to receive balance statement.

The name of the account holder, account number, time period and signature
should be mentioned.

In case of any organization, authorized signature with companys stamp is

compulsory.

At last the statement is provided with the stamp of the bank.

4.6 Handling Telephone Calls

CSD department is one of the busiest departments of the bank. Telephone calls never stop
ringing, as, the responsible staff those calls has to be received and dealt accordingly to its
40

necessity. Important calls are to be passed to other department personals and rest should
be handled self by answering those calls and providing them the solution. Most of
customers queries deals with the products and services provided by the bank, branches
network, remittance related queries and so on. Most importantly, information about the
balance regarding the customers of the bank is not entertained in the telephone. Most of
customers queries deals with the products and services provided by the bank, branches
network, remittance related queries and so on.

4.7 Account Closing

It is another task performed under account operation of the bank. Opening of the account
can be taken as the contract between bank and the customers whereas closing of the
account is the termination of the contract. Customers close their accounts due to various
reasons like banks low interest rate in deposit, migration, inconvenience, in case of
lunacy or death of the account holder and rise in the numerous competitors in that locality
and so on. All the requests for closure of accounts must be made in writing and duly
signed by the customer. The charge of account closing in HBL is Rs 500 which is debited
from the customer account.

4.7.1 Procedure for Account Closing in HBL

Account holders must visit the bank in order to close the account.

Account holders have to fill up a separate account closing form with necessary
details such as account number, signature and his/her name.

Unused cheques and ATM card must be returned to the bank.

Then the unused cheques are made void and ATM card are blocked by the bank.

Reason for closing the account must be mentioned.

This form is taken by CSD for the no objection in different department like
card, locker, cash, Bills and remittance, loan recovery Department, CMAD
(Credit Management and administration Department).

Remaining amount in the account is provided to the account holder after cutoff of
the charge of Rs. 500.
41

At last account close is verified by operation in charge.

CHAPTER FIVE
CONCLUSION, SUMMARYAND LESSON LEARNT
5.1 Conclusion/Summary
During whole period of internship and the preparation of this report internee learnt a
lot about the banking sector and banking operation, about Himalayan Bank Limited in
particular. The internship has been fruitful in many ways. Internee knew only little bit
about the banking earlier, but internship has helped to know about the banks and its
operation. This report in particular has made internee knew about the various technique
and tools for conducting research.
The internee learnt the general trend of deposits in the bank. Internee came to know
about the importance of deposit schemes for the banks to increase their deposit volume
and customer base. Deposit policy is the most essential policy to credit creation for
commercial banks. The growth of bank depends primarily upon the growth of its
deposits. It helps to raise the capital. The next important part of the banking business is
credit because bank earns interest on it. The deposit gathered is accumulated and provide
loan to borrowers. Hence, a proper and clear structure with a proper credit process should
be developed in the bank. Most of all, there must be proper coordination and cooperation
42

among these departments as in one or another way these departments are interlinked to
each other.
Internee learnt other aspects other than the banking as to socialize with the people, to deal
with the senior staffs, and to deal with the intern colleagues so as to make the working
environment cozier and friendlier. Internee also learnt that the behavioral issues are most
important inside the organization. Customer feel satisfied when they are behaved
properly. Their queries are needed to be answered in a friendly way so as to retain them
in the organization.

5.2 Lessons learnt

The most important lesson internee learnt during internship period was the working
procedures of the departments. The eight weeks internship period was not sufficient
enough to understand the banking system as a whole. However, the eight weeks
internship period has proved very valuable in understanding the practical implications
and knowledge exposures. The internship program helped to learn the dynamics of work
culture, professionalism and systems in the business world.
The eight weeks internship at HBL taught internee the importance of interpersonal
relationship, time management, effective communication, public relation, leadership traits
and other managerial skills which are basic requirement to groom overall personality of
student. This period was helpful to bridge theoretical knowledge learned during academic
session with practical exposure and to learn the real world working environment.
Some of the prominent facts and understanding acquired by the internee during the
internship period has been summarized below:

Internee experienced that the real working environment and managerial practices
are different from theories learned.

43

Internee learnt the general banking transaction procedure of Credit Department

and customer service department.

With the regular interaction with the staff members and customers in the bank had
helped internee a lot to develop her communication skills.

Gained basic knowledge on operating temenos software (T-24) of HBL like

opening account, cheque printing, statement printing, scan signature and
photograph, hold data and so on.

Internee learnt that the behavioral issues are most important inside the
organization. Customers feel satisfied when they are behaved properly. The
misbehavior and the delay in providing service adversely affect the organizational
image.

Learnt to deal with customer other than walking customer through marketing

Internee learnt that the important aspects for effective customer service include
knowing customers need, identifying key service activities, and delivering
superior service and follow up.

Internee learnt about different kind of services provided by the bank.

Internee learnt to use supportive devices like photocopy machine, printer, scanner,
fax tactfully.

Learnt to satisfy the inquiry of the customers regarding the product and services.

5.3 Findings
Among the various tools, SWOT analysis can be used to find out the internal and
external change in the environment. SWOT analysis is conducted to find out the
strength and weak point as well as the opportunities and threats of Himalayan Bank
on the basis of information and data collected through primary and secondary
services.
Strengths

Joint venture with Habib Bank, Pakistan

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Able to capture a considerable share of business in Nepal.

Highly competent, trained and motivated employees

Top 5 bank of the country

Specialized Products and Services

High customer satisfaction

Strong culture that makes the employees believes in hard work, building good
relation, proper communication and perfection in their respective department.

Full fledge research and development department

Weakness

Low interest rate in deposit

Lack of good advertisement strategies

Inadequacies in customer service

Less variety of product

Regular system deficiency

Opportunities

Uncaptured rural market

Emergence of new investment sectors( hydro, remittance, etc.,)

Increasing per capita income of Nepalese citizens

Introduction of Master Card.

Increasing Urbanization

Threats

Unstable political and economic conditions

Mushrooming of new banks in the market

Frequent change in NRB directives and regulatory policies

Instable government policies and internal security crisis

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5.4

Suggestions and Recommendation

HIMALAYAN BANK LIMITED is the most popular bank among the people of

Kathmandu. HIMALAYAN Banks performance has indicated that in the few years time
it may be one of the leading banks in the Nepalese banking sector. So it needs to spread
its branches in remote area of the country. A strategy needs to be directed for better
performance to ensure long term survival and sustainability. Some of the important
suggestions for strengthening the bank are provided below:

a.

Encouraging and supporting productive industrial sector

The bank should shift their investment and credit strategy to the productive
industrial sectors of the economy so as to have adequate capital formation for overall
national development. This is called production consumption linking model of credit and
investment.

b.

Ensure long term sustainability and growth

It is not wise policy to follow "Quick growth, quick delay" policy. The Bank has

to discipline itself by learning from experience of operations regarding what is good to do

and what not to do so as to develop key milestones for future improvement and further
success.

c.

Providing Venture Capital

The Bank has to start providing venture capital on a phase-wise basis by

encouraging man of talent and innovation to start new ventures if there exists bitter
prospect and chance of success in such nature.
d.

Appropriate Risk-Return trade off

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In the years to come, the survival of the bank is to be related by maintaining and
appropriate risk-return trade off between credit outflows by way of loans and investment
and strict monitoring and controlling of repayment schedules.
e.

Deposit Insurance
The deposit insurance schedule is to be encouraged by NRB. As a matter of

principal all deposits should be insured to gain recognition of depositors on the Bank.
f.

Fulfil expectation impacts

The expectation impact of both depositors and client would be fulfilled. The

depositors must be provided with higher return and clients must be easily provided with
funds without having many necessary operational details and procedural formalities of
loan which they have experience many other banks.
g.

Shift in lending priorities

The bank was to channelize funds by gradually shifting priorities from hire

purchases and trading to industry to help in the capital formation within the country. The
over all growth of the national economy is to be basically linked to the nature and extent
of capital formation in the country.

h.

Avoid imperfect practices

All imperfect practices inherent from the past mistakes should be avoided to re-

orient the bank to new discuss of change and further improvement.

i.

Conducting trading, workshop and seminars

It is important to have frequent sharing of experience by conducting a seminar or

workshop at least once or twice a year.

The most important function of each bank is to mobilize and utilize the funds
collected from the public and help to promote the economy of the nation. HBL has
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been established by its own position in Nepalese economy. Although the bank is able
to collect the deposit, it doesnt mobilize its funds in the non profit making sectors as
like cottage industries, agriculture industries etc. Proper attention should be given to
unfelt profitability condition to increase the net profit. The operating cost should be
reduced. Branches existing in some limited areas are not able to boost up their
campaign of deposit mobilization. So the HBL should open its new branches outside
the Katmandu valley as well, where there is still huge demand.

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Fig.Cash/cheque Deposit Slip

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Fig. Account Statement Request Form

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