ACKNOWLEDGEMENT

Foremost, we would like to express our deep and sincere gratitude to Nepal Bank L i m i t e d a n d t h e e n t i r e N e p a l B a n k f a m i l y f o r p r o v i d i n g u s t h e e x c i t i n g opportunity to be one of them and giving us thorough guidance and opportunities to move ahead with our internship objectives. We would like to extend our gratitude to Mr. Dharmendra Lal Shrestha, Branch Manager,Sripur branch and Mr. Vijay Nakarmi, Deputy Branch Manager, Sripur, branch for trusting us and providing access to confidential documents when and where requiredin the scope of the project. Our indebt gratitude also goes to Mr. Pawan Agrawal of Credit Control Department and the entire Customer Relations Department of the bank f o r providing us guidance and motivation for the project and also by s h a r i n g t h e i r knowledge with us.We would also like to thank Mr. Bishnu Raj Adhikari, Principal, KCM and Mr. VinayS h a r m a , D i r e c t o r , K C M f o r g u i d i n g a n d h e l p i n g u s i n e a c h a n d e v e r y s t a g e o f t h e MBA course and the Internship Study. We are deeply indebted to KCMs internship coordinator, Mr. Lhakpa Gelu Sherpa whose help, stimulating sug g e s t i o n s a n d encouragement helped us in writing of this internship report. We would like to further thank KUSOM for providing students with such opportunity to experience the organization culture and experience and for their structuring of this course for the benefits of the students. W e a r e g r a t e f u l t o Mr.sohanlalKhatri,Director,Mr.Rajendra Bahadur S h r e s t h a , C r e d i t D e p a r t m e n t , N B L a n d M r . A m i t B a j r a c h a r y a , R e l a t i o n s h i p Manager, Prime Commercial Bank for all their help, support, interest and valuable hints for the preparation of this report. Thank you all!

PREFACE

Government banking is a concept which is new and fast emerging in the world of banking where changes have become a necessity in order for banks to survive in this competitive environment vis-a-vis not only from the public and private sector banks but also from the foreign banks. The objective of the research is to explore the various products, which a private banker deals into and the systematic process involved to match client requirements with the right kind of product. Through this research one of the main objectives is to explore the reason why most of the banks are injecting goverment banking as business profile to their set of service offerings. Though goverment banking evolved in late 80s in Asia, in Nepal its not more than 5 years old. INBL started it in kartik 30,1994 and since then it has been a remarkable success. Today there are enormous solutions to cater client needs but what suits best to a client is where private banking fits in. Every client will have different needs, liking and preferences. So a customized portfolio for every client is the need of the day. This research will highlight more on the product portfolio of NBL goverment Banking, how they have changed or innovatively structured to be attractive and competitive

INTRODUCTION

1.1 FINANCIAL MANAGEMENT

Financial management is defined as the management of flow of funds in a firm and it deals with financial decision making of the firm. Financial management includes any decision made by an investor that affects his finances. In financial management the emphasis is laid on optimum utilization of funds. Financial management is important to all levels of human existence as every entity has to look after its finances. Financial management is also referred as planning, organizing and controlling the monetary resources of an organization. Financial management helps in improving the allocations of working capital within business operations. It reviews the financial health of the company by using tools like ratio analysis.

Goals / Objectives of Financial Management

A goal of the firm is the target against which a firms operating performance is measured. The goals serve as the point of reference to a decision maker. The objectives or goals of financial management are: 1. Profit Maximization. 2. Wealth Maximization. 3. Return Maximization. 1. Profit Maximization: The objective of financial management is to earn maximum profits. Various important decisions are taken to maximize the profit of the firm. Profit maximization as an objective of financial management results in efficient allocation of resources. Companies collect their finance by issuing shares to the public. Investors also purchase shares in hope of getting good returns from the company in the form of dividend. If the company does not earn good profits and fails to distribute higher dividends, the people would not invest in such a company and people who have already invested will sell their stock. 2. Wealth Maximization: The objective of wealth maximization of shareholders considers all future cash flows, dividends, earning per share, risk of a decision, etc. This goal directly affects the policy decision of the firm about what to invest in and how to finance these investments. Shareholders are always interested in maximization of wealth which depends upon the market price of the shares. Increase in market price lead to appreciation in shareholders wealth and vice versa. So the major goal of financial management is to maximize the market price of the equity shares of the company. 3. Return Maximization: The third objective of financial management says to safeguard the economic interest of all the persons who are directly or indirectly connected with the company whether they are shareholders, creditors or employees. All these parties must also get maximum return on the investment and this can be possible only when the company earns higher profits to discharge its obligations to them.

Loan Process Introduction In this tutorial, you design a process that takes a loan application document from a client and returns a selected and approved loan offer. When you run this process, it retrieves a social security number that you enter into an HTML user interface and contacts the Credit Rating service to request a credit rating for the client. If a credit rating is supplied, the process sends the completed loan application to two loan providers (Star Loan and United Loan). Each provider can take some time before returning loan offers. The flow waits for both loan offers to be received before selecting the offer with the lowest interest rate to send to the client. The process can also be designed to handle negative credit exceptions. These exceptions are made known by the credit rating service if a negative credit event is identified for the client (for example, a bankruptcy). Figure 3-1 provides an overview of this communication:

Figure 3-1 Loan Process Tutorial Overview

Description of "Figure 3-1 Loan Process Tutorial Overview" 3.2 Using the Loan Process Tutorial

VARIOUS TYPE OF LOAN PROVIDED BY NEPAL BANK LIMITED AND ITS PROCESS
Consumer Loans Bank provides, at most competitive terms, various loan facilities such as loan against fixed deposits/government bonds, loan against gold and silver, loan against stable future income etc that help to manage personal needs of the customers.

NBL Personal Loans

Provided to fulfil the personal needs of an individual Provided against the land and building

Types

Personal Term Loan Personal Overdraft Loan

Contact: Any branches of NBL. Eligibility:

Borrower must have regular and stable source of income Borrower must be Nepalese citizen The collateral must be accessible by at least eight feet wide road Borrower must have experience of at least 3 years Borrower must be 21 years of age and should not exceed 60 at the time of maturity of loan. The retirement age must be more than the tenure of the loan.

Parameters

Criteria

Parameter

NBL Personal Term Loan Loan amount Loan portion Tenure First payment date Prepayment charge Minimum: Rs. 500,000 Maximum: Rs. 5,000,000 Up to 60% of value estimated by valuator acceptable to the bank Minimum: 2 years Maximum: 15 years From the end of the subsequent month of initial drawn down.

No prepayment fee will be charged if paid after maturity of 1/3 of the loan period. 2% prepayment charge will be levied if prepayment is made within 1/3 of loan period.

NBL Personal Overdraft Loan Loan amount Loan portion Tenure Minimum: Rs. 500,000 Maximum: Rs. 5,000,000 Up to 50% of value estimated by valuator acceptable to the bank 1 year; can be renewed subject to periodic review

Min. utilization Rs. 500,000 limit

Processing fee 1% of the financed amount at the time of submission of loan application. The fee shall be refunded if the loan is not approved.

NBL Auto Loans This loan is provided for: Purchase of new vehicles Purchase of old / used vehicles (For Private use only)

Contact: Any branches of NBL.

Eligibility: The criterion for taking auto-loans is as follows.

The loan is provided to Nepalese Citizens only. This loan shall be provided other than insider. The loan is provided to any salaried and self-employed individuals and companies having regular and stable source of income. The company / firm should be registered to the government authority. All borrowers and guarantors should not be enlisted in Black List of NRB. In case of individuals, the borrower must be at least 21years and should not exceed 60 years at the time of maturity. The retirement age must be more than the tenure of the loan. 3 years work experience is needed for salaried individuals. The company / firm should be in operation since last three years. The person taking loan for the company / firm is to be authorized by the company / firm as appropriate.

Parameters:

Maximum Loan Amount Minimum Loan Amount

Rs. 25,00,000

Rs. 2,00,000 Private (Personal Use) Private (Business Use) Private (Used)

Loan portion

Up to 80% of quotation price

Up to 80% of quotation price

Up to 70% of valuation price

Tenure

Minimum 2 Years - Maximum 7 Years

Processing Fee: 1% of the financed amount shall be charged upfront at the time of submission of loan application with necessary documents. The fee shall be refunded if the loan is not approved.

Prepayment Fee: 2% prepayment charge on the prepaid amount if prepayment is made within 1/3 of loan period. However, no prepayment fee will be charged if paid after maturity of 1/3 of the loan period.

Documents required: Y = Required; N = Not Required; O = Optional Documents Identification 2 Passport size photo of applicant Photocopy of Citizenship Certificate/ Passport (Applicant & guarantor) Y Y Y Y Y Y Self Salaried Company/Firm Employed

Photocopy of valid Driving License Photocopy of Registration Certificate Photocopy of Operating Approval Photocopy of Tax/PAN/VAT certificate Proof of Income Original Salary Certificate not more than 10 days old Photocopy of Contract agreement Photocopy of Rent Contract Original Bank Statement (Past 3 months) Photocopy of Financial Statements (Past 3 years) Others Original Quotation of vehicle and from the body builder if body needs to be built up. Fax copy of quotation mentioning applicants name received from dealer is also acceptable.

O N O N

O N O N

O Y O Y

N N Y O Y

Y O Y O N

N O N O Y

Photocopy of Land ownership certificate (Lalpurja) Y Photocopy of Memorandum and Articles of Association For used vehicles only Original Invoice of Used car showroom / certified copy Valuation report of vehicles from valuators Y Y O

Y N

N Y

Y Y

Y Y

Notes:

All companies are required to submit their board resolution authorizing to execute loan/security documents with the bank to avail credit facility. Corporate guarantee should be supported by resolution of Board of Directors. Original certificates should be presented for verification while submitting this form. Salary certificate must be in the office's letterhead having seal and must contain net salary, your designation, years of service, date of retirement or expiry of contract and type of employment (permanent or contract). It should be signed along with the name and designation of the signatory. The bank can demand any additional documents at its own discretion. Payment shall be made through account payee cheque in the name of dealer. Used vehicle can be valued from these following company: Tej & Karan Enterprises Sipradi Trading Pvt. Ltd Arun Intercontinental Traders

NBL Education Loans

Provided to fulfill the needs of financing for higher education. Provided against the land and building

Contact: Any branches of NBL. Eligibility:

Loan shall be provided as joint borrower to the student and the collateral owner. Student shall complete +2, obtaining atleast 50% marks. Borrower(Guardians) must have regular and stable source of income.

Student/Borrower must be Nepalese citizen. The collateral must be accessible by at least eight feet wide road. Borrower (Guardians) must have experience of at least 3 years. Student/Borrower must be 18 years of age and should not exceed 60 at the time of maturity of loan. The retirement age must be more than the tenure of the loan.

Bijeshwori International Cube International Pvt. Ltd. Continental Trading Enterprises Valuation expenses shall be borne by borrower self.

Parameters Criteria Parameter

NBL Education Loan Loan amount Loan portion Minimum: Rs. 5,00,000 Maximum: Rs. 25,00,000 Up to 60% of value estimated by valuator acceptable to the bank Maximum up to 80% of total expenditure in foreign or 100% of tution fee, admission fee and plane ticket. Minimum: 2 years Maximum: 10 years

Tenure

First payment date

From the end of the subsequent month of initial drawn down.

Prepayment charge

No prepayment fee will be charged if paid after maturity of 1/3 of the loan period. 2% prepayment charge will be levied if prepayment is made within 1/3 of loan period.

Processing fee 1% of the financed amount at the time of submission of loan application. The fee shall be refunded if the loan is not approved.

Documents

Documents

Salaried

Self employed

Identification documents 2 Passport size photo of each applicant and one passport size photo of guarantor Photocopy of citizenship certificate of applicant and guarantor Required Required

Required

Required Required

Photocopy of all academic record above SLC level (transcript and Required character certificate) Photocopy of passport with visa Required

Required Required

Admission confirmation letter incorporating admission fee, tution Required fee, accomodation and other

Photocopy of Tax/PAN/VAT certificate and registration certificate

Not required

Required

Proof of Income related documents Original Salary Certificate not more than 10 days old Required Not required Required

Photocopy of contract agreement between applicant and his/her employer Photocopy of Rent Contract, if any Original/photocopy of Bank Statement (Past 6 months)

Required

Required Optional

Required Optional Required

Photocopy of audited/management prepared financial statements for Not past 3 years required Land and/or building related documents Original letter stating coparcener from local authority (Ward) Original Blue Print of the land Required Required

Required Required

Original copy of restraint letter from Land Revenue Office

Required

Required Required

Original construction completion certificate from Municipality/VDC Required in case of purchasing already built house Original/photocopy of detailed break down of cost estimation from the applicants consultant Original land ownership certificate Original latest land revenue receipt Required

Required

Required Required

Required Required

Photocopy of blue print of building approved from Municipality/VDC Photocopy of land Transfer Deed Original four Boundary Disclosure from ward office/municipality Legal/Other documents Debit authority note Photocopy of Memorandum and Articles of Association/partnership deed Credit information of borrowers and guarantors from CIC and branch Cash deposit voucher of processing fee Current account of the borrower Credit Facility letter accepted by the borrower Promissory Note Original copy of loan deed Insurance of the building Original copy of mortgage deed

Required

Required

Required Required

Required Required

Required Not required Required

Required Optional

Required

Required Required Required Required Required Required Required

Required Required Required Required Required Required Required

NBL Margin Lending This loan is provided against the shares of the companies, which are listed in Nepal Stock Exchange (NEPSE) and acceptable to the bank. The companies whose shares are eligible for NBL Margin Lending are:

Commercial Banks Nabil Bank Ltd. Nepal Investment Bank Ltd. Standard Chartered Bank Ltd Himalayan Bank Ltd. Everest Bank Ltd. Bank of Kathmandu Nepal SBI Bank Ltd. NIC Bank Ltd. DCBL Bank Ltd.

Manufacturing and Processing Bottlers Nepal Ltd. (Balaju) Bottlers Nepal (Terai) Ltd. Unilever Nepal Ltd.

Hotels Soaltee Hotel Ltd. Hydropower Chilime Hydropower Company Ltd. Butwal Power Company Ltd. Trading Bishal Bazaar Co. Ltd.

Finance Companies Narayani National Finance Co. Ltd. Annapurna Finance Co. Ltd.

Yeti Finance Company Ltd. Nepal Housing and Merchant Finance Company Ltd. Mahalaxmi Finance Ltd. Laitpur Finance Ltd. Pokhara Finance Ltd. Nepal Merchant Bank & Finance Company Ltd.

Development Bank Ace Development Bank Ltd.

Eligibility: Any individual, companies, and firms can take this loan. But, all the borrowers should be Nepalese citizen. This loan can be taken against the shares owned by any person or company. Contact: Any branches of NBL.

Parameters: Maximum Loan Amount Minimum Loan Amount Up to single obligor limit

NRs. 5,00,000

Draw Down

The draw down is restricted to stipulated as mentioned by bank on time to time. Pledge over the shares and lien of right shares, dividends and bonus shares

Security

Management fee: 0.50% of the loan amount or Rs 3000 whichever is higher upon approval of the loan.

Documents Required: For individual Copy of citizenship certificate of the borrower and other owners of the shares. Personal Gurantee of coheirs of the borrower.

For All Loan application form duly filled and signed. Original share certificates.

Letter of consent issued by the borrower addressed to the concerned companies for the pledge of shares with NBL. Letter of consent from Borrower to the concerned company for the lien over shares in favor of NBL and accretion (Dividend, Bonus shares, Right shares).

For firm / partnership / company Firm Registration Certificate. PAN Certificate. Partnership deed (in case of partnership firm only). Memorandum of Association and Articles of Association (in case of company).

By-laws and articles (in case of association/trust). Resolution of Board/Executive Committee for obtaining the loan (in case of company/association/trust). Power of attorney for signing the loan application and security documents (in case of company/association). Personal guarantee of shareholders holding 10% of total shares or more (in case of company). NBL Home Loans

This loan is provided for Purchase a plot of Land/Building. Construction, renovation, modification, extension of existing building,

Contact: Any branches of NBL. Eligibility: The criterion for taking home-loans is as follows. The loan is provided to any individuals who have regular and stable source of income. This loan can be given to any salaried and self-employed individuals. The loan will be provided to Nepalese Citizens only. Any house/land, which does not lie in municipal area, will not be financed. However, urban VDC can also be considered with proper justificantion. The land and/or house to be constructed / purchased / renovated / extended / modified should have motorable road (8 feet wide in minimum) access. Such road should be clearly seen in the blue print or be verified by concerned authority (for e.g. ward office). All borrowers and guarantor should not be enlisted in Black List of Nepal Rastra Bank. 3 years work experience is needed for salaried and self-employed individuals. In case of business income, financial statement of the company should be audited. The borrower must be at least 21years and should not exceed 60 years at the time of maturity. The retirement age must be more than the tenure of the loan

. Parameters:

Maximum Loan Amount

Rs. 50,00,000

Purchase of Land / Building Minimum Loan Amount Loan portion

Renovation, Construction of building modification, on already extension of Building owned/Purchased land

Rs. 4,00,000

Rs. 2,00,000

Rs. 4,00,000

Up to 60% of Transfer deed (Rajinama) price or value estimated by valuator approved by the bank whichever is lower For land: Up to 60% of transfer deed (Rajinama) price or value estimated by valuator approved by the bank whichever is lower.

Up to 70% of cost of construction estimated by valuator approved by the bank

Up to 70% of cost of construction estimated by valuator approved by the bank

Tenure

Minimum 2 years - Maximum 20 years

Processing Fee: 1% of the financed amount shall be charged upfront at the time of submission of loan application with necessary documents. The fee shall be refunded if the loan is not approved.

Prepayment Fee:

2% prepayment charge on the prepaid amount if prepayment is made within 1/3 of loan period. However, no prepayment fee will be charged if paid after maturity of 1/3 of the loan period.

Documents required: Y = Required; N = Not Required; O = Optional Self Employed

Documents Identification 2 Passport size photo of applicant / co-applicant Photocopy of Citizenship Certificate / Passport (Applicant & guarantor) Photocopy of Tax/PAN/VAT certificate along with registration certificate Proof of Income Original Salary Certificate

Salaried

Y Y

Y Y

Photocopy of Tax/PAN/VAT certificate Proof of Income Original Salary Certificate not more than 10 days old Photocopy of Contract agreement Photocopy of Rent Contract Original Bank Statement (Past 3 months) Photocopy of Financial Statements (Past 3 years) Others Original Quotation of vehicle and from the body builder if body needs to be built up. Fax copy of quotation mentioning applicants name received from dealer is also acceptable. Photocopy of Pension book/ ID stating name of the pensioner, amount and validity period Photocopy of Contract agreement between applicant and his/her employer Photocopy of Rent Contract if any Original Bank Statement (Past 6 months) Photocopy of Audited Financial Statements (Past 3 years) Others

N N O O Y

Y O O O N

N Y Y N

O Y Y N

Original letter stating coheir (Anshiyar) of seller from local authority Y (ward) Original quotation of housing company Photocopy of Blue Print of the land (Napi Naksha) Y Y

Y Y Y

Photocopy of Certificate of construction from Municipality/VDC in case of purchasing already built house (Nirman Sampanna Pramanpatra) Original Private Sale Agreement in case of Private Sales Photocopy of Memorandum and Articles of Association Photocopy of Detailed break down of cost estimation from the applicants consultant Photocopy of Land ownership certificate (Lalpurja) Photocopy of Latest land revenue receipt (Malpot Receipt) Photocopy of Blue Print of building approved from Municipality/VDC (Naksha Pass) Photocopy of Land Transfer Deed (Rajinama) Original Four Boundary Disclosure (Char Killa Pramanit) Approval letter of municipality for construction of house (Ghar Nirman Izazat Patra) Approval letter of municipality for extension and renovation/modification (if needed) of house

Y Y Y Y Y Y Y Y Y

Y N Y Y Y Y Y Y Y

Notes: Corporate guarantee should be supported by resolution of Board of Directors. Oiginal certificates should be presented for verification while submitting this form. Salary certificate must be in the offices letterhead having seal and must contain net salary, yourdesignation, years of service, date of retirement or expiry of contract and type of employment (permanent or contract). It should be signed along with the name and designation of the signatory. The bank can demand any additional documents on its own discretion.

NBL Apartments Loan

Eligibility: Nepali Citizens above 18 years and below 65 years (till maturity of Loan) Company/Finance Company/Partnership/INGO (duly registered with the concerned government authority) proposing to use the apartments for residential use. Applicability : Apartments project where in RBB is involved in project financing Stupa Housing, Sinamangal Prestige Developers, Chandol Kohinoor Hill Housing, Balkumari Limit for the Loan : a. Up to 70% of actual net purchase price of the apartment (as verified from invoice raised by the developer) b. Disbursement shall be on construction linked plan wherein each disbursement is linked to progress of construction. Payment : Payment should be on monthly installment basis and for 5-15 years. Service Charge: 1% of total loan amount

Security: Apartment being purchased.

Gold Loan You do not have to sell your gold/silver just pledge it with us and get gold/silver loan facility instantly. This loan is easy to get and completely hassle free.

Eligibility: The bank advances loan against the yellow metal GOLD and raw silver. Jewellery shopkeepers, salaried and self employed Nepalese citizens with reliable source of income.

Valuation 70% on the value of ornaments derived by bank 80% on the value of raw gold derived by bank 80% on the value of raw silver derived by bank

Tenure For the period of maximum of one year. Partial or full prepayment allowed without any charges.

Charges Interest Rate: 16% -18% p.a. Insurance Charge: 1% on full value of gold.

Equipment Loan

This is a simple facility to cater the financing needs of doctors and contractors in order to setting up business. It is easy, simple and hassle free with quick turnaround time.

Eligibility The bank extends the equipment loan for the purchase of equipment/ machinery. Professionals doctors and contractors bearing a Nepalese citizenship with reliable source of income.

Security Related equipment/machinery itself. Mortgage of fixed asset equivalent to the value of equipment/ machinery. Financing up to 70% of the cost of equipment/machinery.

Nature of Facility Repayment on EMI/EQI basis for the period of maximum of five years.

Charges Processing Fee/ Prepayment Charges: 1% of loan amount. Interest Rate: 14%P.A.

Documents Required Identification document like Citizenship, Passport Photographs Documents certifying current salary (for employee) Certified Income Statement Paper of Agreements/contracts (for Fixed Income Groups)

Deprived Sector Loan

A) Deprived Sector Loan - Institutional

Eligibility Institutions/ Microfinance Companies working for the deprived sectors duly licensed by NRB are eligible for the loan.

Nature of Facility Non-revolving Interest payable on quarterly basis.

Charges Interest Rate: 10% - 11% p.a.

B) Deprived Sector Loan - Personal

Prime Kaligadh Karja

With an aim to promote Handicraft business and support individual indigenous craftsmen involved in metal crafts, wood crafts, stone crafts and similar business , bank has developed product named Prime Kaligadh Karja to extend credit facility to finance their working capital requirement.

Eligibility Skilled Nepalese craftsmen doing Handicraft business since last one year (metal, stone paving, wood paving, jewelries and similar business).

Security Personal guarantee of borrower/ family members;

 Hypothecation of handicrafts with PCBL

Repayment Repayment period: 3 months to 6 months; Interest amount to be deposited due at the end of each month and principle amount at the time of maturity of the credit facility;

Interest Rates 15% per annum, with rebate of 1% interest on timely repayment;

Service Charge 2 % of total loan amount;

Small and Medium Enterprises Loan Purpose Financing of working capital requirement of the business Financing for capital expenditure (in the form of Fixed Term Loan) Financing of various Funded Facilities and Non-funded facilities (LC & Bank Guarantee)

Features Very low and competitive interest rate. Quick processing and prompt approval. Better Suggestion from Relationship Managers for business expansion and operation. Loan processing fee: 1.00% of the loan amount Prepayment charge: 1% of the prepaid amount (In case of Term Loan)

Eligibility Small and medium scale industries ; Trading sector (wholesaler & retailers/distributors, importer and exporters), service sector (cargo/ freight forwarders, travel/ tour/ ticketing agencies, hospital/ polyclinics, educational consultancies etc.) and any other sector Firm/ company owned by Nepalese individual registered in concerning government authorities / municipality / VDC. Minimum 2 years of business operation or if the business in new the client should have 2 years of experience in the similar field.

Security Primary security: Hypothecation of stocks, assignment of debtors and receivables of the unit Secondary Security: Acceptable Fixed Assets Collateral.

Interest Rate Applicable Rate: 14%

Documents Required

f applicant, guarantor.

and guarantor

Registration

resolution (In case of Company)

e years either audited or management prepared

Sampanna Pramanpatra).

1.2 OBJECTIVES OF THE STUDY

PRUMARY OBJECTIVES
How does right loan process helps in creating overall efficiency to attract customer on the bank.

Developing loan policy in consonance with broader corporate horizon and long range vision of the organization.

SECONDARY OBJECTIVES

To collect the finding,information & analyze to draw conclusion of loan process.

To explain the documentation used at the various type of loan process.

To involve customer in creating an environment of openness,trust,fun & pride.

To highlight the area where loan process needs improvement.

Is the currentloan process in line with the customers future carrer planning and his potential?

1.3 METHODS EMPLOYED

Research Design: The research design indicates the type of research methodology under taken to collect the information for the study.

METHODOLOGY OF THE STUDY

DATA COLLECTION

Data collection is one of the important tasks of the research, which is based on

PRIMARY and SECONDARY DATA

The main objective of using descriptive research is to describe the state of affairs as it exits at present. It mainly involves survey and fact finding enquiries of different kinds. The researcher used descriptive research to discover the characteristics of customers.

Descriptive research also includes demography characteristic of customers who use the service. The researcher also used analytical research design to analyze the existing facts from the data collected.

Sample Size

This Study involves 50 respondents.

Sampling Technique:

The sample size has been taken by non-random convenience sampling

technique.

Data collection: Data has been collected both from primary as well as secondary sources as described below:

Primary Sources Primary data was obtained through questionnaires filled by people and through direct communication with respondent in form of Interview.

Secondary Sources The secondary sources of data were taken from the various websites,books,journals reports,articles etc. This mainly provided information about the customer of NBL in Nepal.

A careful design of the descriptive study is necessary to ensure complete description of the situation,minimum bias in the collection of data, and costs kept to the minimum. Cross-sectional research involves data collection from any given sample of population only once. This type of research makes use of sample selected specifically and solely for one time data collection.

The response for questions were taken on a 5 point Likert scale as follows: Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satishfied

1.4 SIGNIFICANCE OF THE PROJECT:-

The important reason for studying the Loan Process is to know the loan policy undertaken by the bank. Loan process involves lot of thing in getting positive profils .

But loan providers are many so bank should be adopt one of the best loan policy ,like minimize the interest rate and provide some extra facilities .Than bank obtain maximum efficiency and to maximize profit

Important factor is discipline because there was not good discipline of employee .they dont maintain good relationship with customers . There are most important to maintain discipline.

For the point of view of bank loan process helps a bank achieve their targets and accomplish their goals.

Good loan process important for the bank to minimize the bad debts.

Loan policy Interest rate

It is not about loan process.It is about managing all service.This helps a bank manage well. Bank focus on managing the work environment to make better use of the available resources.

2.1 INDUSTRY PROFILE

BANKING INDUSTRY
In the banking industry, office and administrative support workers constitute 2 out of 3 jobs; tellers account for about 3 out of 10 jobs. Many job opportunities are expected for tellers and other office and administrative support workers, because these occupations are large and have high turnover. Many management positions are filled by promoting experienced, technically skilled professional personnel.

Banks safeguard money and valuables and provide loans, credit, and payment services, such as checking accounts, money orders, and cashiers checks.

Banks also may offer investment and insurance products, which they were once prohibited from selling.

Banks also may offer investment and insurance products, which they were once prohibited from selling. As a variety of models for cooperation and integration among finance industries have emerged, some of the traditional distinctions between banks, insurance companies, and securities firms have diminished. In spite of these changes, banks continue to maintain and perform their primary roleaccepting deposits and lending funds from these deposits. Banking is comprised of two parts: Monetary AuthoritiesCentral Bank, and Credit Intermediation and Related Activities. The former includes the bank establishments of the U.S. Federal Reserve System that manage the Nations money supply and international reserves, hold reserve deposits of other domestic banks and the central banks of other countries, and issue the currency we use. The establishments in the credit intermediation and related services industry provide banking services to the general public. They securely save the money of depositors, provide checking services, and lend the funds raised from depositors to consumers and businesses for mortgages, investment loans, and lines of credit. There are several types of banks, which differ in the number of services they provide and the clientele they serve. Although some of the differences between these types of banks have lessened as they have begun to expand the range of products and services they offer, there are still key distinguishing traits. Commercial banks, which dominate this industry, offer a full range of services for individuals, businesses, and governments. These banks come in a wide range of sizes, from large global banks to regional and community banks. Global banks are involved in international lending and foreign currency trading, in addition to the more typical banking services. Regional banks have numerous branches and automated teller machine (ATM) locations throughout a multi-state area that provide banking services to individuals. Banks have become more oriented toward marketing and sales. As a result, employees need to know about all types of products and services offered by banks. Community banks are based locally and offer more personal attention, which many individuals and small businesses prefer. In recent years, online bankswhich provide all services entirely over the Internet have entered the market, with some success. However, many traditional banks have also expanded to offer online banking, and some formerly Internet-only banks are opting to open branches.

Savings banks and savings and loan associations, sometimes called thrift institutions, are the second largest group of depository institutions. They were first established as communitybased institutions to finance mortgages for people to buy homes and still cater mostly to the savings and lending needs of individuals. Credit unions are another kind of depository institution. Most credit unions are formed by people with a common bond, such as those who work for the same company or belong to the same labor union or church. Members pool their savings and, when they need money, they may borrow from the credit union, often at a lower interest rate than that demanded by other financial institutions.

Evolution of Banking Sector in Nepal

Banking service is the oldest service industry in Nepal. It has gone through the various stages of evolution and development since the Vedic times (200 to 1400 B.C.) Though the modern banking institution has a very recent origin in Nepal, some crude bank operations were in practice even in the ancient time In the Nepalese Chronicle, it was recorded that the new era known as Nepal Sambat was introduced by Shankhadhar, a sudra merchant of Kantipur in 879 or 880 A.D; after having paid all the outstanding debts in the country. This shows the basis of money lending practice in ancient Nepal. Towards the end of 8th century, Gunkam Dev had borrowed money to rebuild the Kathmandu Valley. In 11th century, during Malla regime there was an evidence of professional moneylenders and bankers. It is further believed that money-lending business, particularly for financing the foreign trade with Tibet, became quite popular during regime of Mallas. However, in the absence of any regulatory measures, the unscrupulous moneylenders were known to have charged exorbitant rates of interest and other extra dues on loans advanced. These inconveniences led the Prime Minister Ranodeep (1877-1885) to establish Tejarath Addaha in Kathmandu, which was a government financial institution supplying credit to the people at 5% rate of interest against security of gold, silver and ornaments. The government servants were also entitled to take loans from Tejarath, repayable from their salary at the source. During the time of Chandra Shamsher (1901-1929), credit facilities of Tejarath were extended to some other parts of the country by opening its branches. It is believed that the socalled well-to-do persons used to take loans from private money lenders even at a higher rate of interest than those from the government institution, for they were not prepared to disclose in public anything that was likely to affect their prestige. When they were approached by this type of clients, the professional money lenders used to raise loans in their own names from Tejarath at 5% rate of interest against gold and ornaments, which were not their own but brought to them by their clients as security for the loans to be financed from the funds raised from Tejarath itself. Thus, without any resources of their own and without any risks on their own part, the money lenders could manage very well to exploit their special type of clients just playing the role of middleman between their clients and the government institution. To control spurious rates of interest and also to curb unfair practice on the part of the unscrupulous moneylenders, legislative measures were also taken.

Later, with the growing necessity of the commercial banks in the world, Nepal Bank Limited, the first commercial bank of Nepal, came into being in 1937 A.D. replacing the older system of banking. In the present scenario different types of banks are being practiced in Nepal, but among them commercial banks play a vital role in the economic development of the country. As mentioned above, with the motive to develop the trade and industry in the country commercial bank called Nepal Bank Limited was established in 1937 A.D. It was established under the Nepal Bank Act of 1936 A.D. and the late King Tribhuvan Bir Bikram Shah Dev inaugurated this bank. At that time the authorized capital of Nepal Bank Limited (NBL) was Rs. 10 millions, divided into 1,00,000 shares of Rs. 100.00 each. Nepal Bank Limited had a responsibility of attracting people towards banking sector from predominant sahu-mahajan's transaction and introducing other banking services as well. Being a commercial bank, it was natural that Nepal Bank Limited paid more attention to profit generating business. But it is the duty of the government to look into the neglected sectors. Therefore Nepal Bank Limited was established with 51% ownership of His Majesty Government (HMG) (Now Nepal Government) and 49% of the equity participation from private sector. With the development of banking sector and to help the government, formulate monetary policies, Nepal Rastra Bank was set up in 1956 A.D. (14th Baisakh 2013 B.S), the central bank of the country. Since then it has contributed to the growth of financial sector. The growth and development of the country is possible only when competitive banking services reach each and every corner of the country. However, as the central bank, Nepal Rastra Bank had its own limitations and as a commercial bank it was not logical for Nepal Bank Limited to go to unprofitable sectors. So, to catch up with these problems, the government established Rastriya Banijaya Bank is 2022 B.S. (1965 A.D), under Banijya Bank Act 1965 A.D. as a fully state owned commercial bank (Dahal, 2002:11). Then the establishment of Nepal Industrial Development Corporation, Employee Provided Fund, Agriculture Development Bank etc, followed the formation of financial institutions. With the aim to provide quality-banking service, enhance the efficiency and healthy competition, foreign investment and new technology in banking sector was introduced. Nepal Arab Bank, the first joint venture bank of Nepal was established in 1984 A.D. (2041 B.S). The bank was the outcome of joint venture with Dubai Bank Limited of United Arab Emirates. The footstep of this bank was followed by Nepal Indosuez Bank a joint venture bank with a Bank of Paris in 1986 A.D. (2041 B.S) and later other joint venture banks are established in Nepal.

Meaning and General Concept

Corporate governance is a combination of corporate policies and best practices adopted by the corporate bodies to achieve its objectives in relation to their stakeholders. It is also the field of economics, which studies the many issues arising from the separation from ownership and control. The fundamental objective of corporate governance reforms is to enhance transparency and transparency enhances accountability. It is widely recognized that transparency enhances trust among the major players within the governance framework. Various definitions and principles have been introduced to stabilize the corporate governance among corporate entities. The definition presented by some institution is presented below.

Corporate governance is the system by which companies are directed and controlled (Cadbury Report-1992)

Set of relationships between a companys management, its boards, its shareholders and other stake holders (OECD Principles)

In brief, corporate governance is a set of process a entity's culture, policies, laws and institutional value that affect the way a corporation is directed, administrated or controlled. It is a combination of corporate policies and best practices adopted by corporate bodies in achieving its objectives in relation to their stakeholders. It aims to protect shareholders rights, to enhance disclosure and transparency, to facilitate effective functioning of the board and to provide an efficient legal and regulatory enforcement framework. It addresses the principal/agency problem through a mix of company law, stock exchange rules and sub regulatory codes. It arises from high profile corporate scandals, globalization and increased investor activism.

Corporate Governance: Need & Significance in Nepalese Banking System

Significance of Corporate Governance in Banking Sector

Corporate governance is equally significance to all types of corporate institution. Furthermore it is very crucial and essential element for the banking system because bank and financial institutions depends on the Other Peoples Money (OPM). There may be a gap among major stakeholder like owners, depositors and management. Very limited people have a right to access in resources and decision. Due to the lack of transparency and adequate control mechanism, there may be the chance of vested interest and moral hazard problems. It is a universal fact that the higher degree of transparency contributes towards the maximizing shareholders value and ensuring the fairness to rest of the shareholders. Corporate governance also enhances performance of the corporation by motivating manager to maximize returns on investment, raising operational efficiencies and ensuring long- term productive growth. Following key points help to emphasis the significance of corporate governance especially in the banking sector. Banking system stability is important for economic growth, Good corporate governance (CG) is required in banks to achieve good CG in other firms. Banks have wider stakeholders-government, regulators and most importantly depositors. capital, and fosters Promotes market confidence, helps to attract additional market discipline through good disclosure and transparency.

Helps ensure that company takes into account the interest of not only of a group of people but also of the communities within which they operate. Those actions in turn help to ensure that FIs are operating for the benefit of society as a whole. Good corporate governance practices can strongly contribute to financial market development and financial stability. 7. Nepal implemented the Basel II from 2008 July in banking sector and good corporate governance forms important part of Basel II. Therefore for complying the provision under Basel II is very essential for banking sector. Basel Committee has introduced principles on Enhancing Corporate Governance for Banking Organizations (2006 revised version of the principles introduced in 1999)

Principles of Corporate Governance In Banking Sector

BIS (Bank for International Settlement) OECD (Organization of Economic Cooperation and Development) and other different financial institutions has developed and presented the various guidelines on enhancing corporate governance in banking sector but they do not diverge from each other, OECD focus on the following critical elements of desirable corporate Governance for the banks.

Board members should be qualified for their positions, have a clear understanding of their role in corporate governance and be able to exercise sound judgment about the affairs of the bank. The board of directors should approve and oversee the banks strategic objectives and corporate values that are communicated throughout the banking organization. The board of directors should set and enforce clear lines of responsibility throughout the organization. The board should ensure that there is appropriate oversight by senior management consistent with board policy The board and senior management should effectively utilize the work conducted by the internal audit function, external auditors, and internal control functions. The board should ensure that compensation policies and practices are consistent with the banks corporate culture, long-term objectives and strategy, and control environment The bank should be governed in a transparent manner.

The board and senior management should understand the banks operational structure, including where the bank operates in jurisdictions, or through structures, that impede transparency (know-your structure)

Existing Laws and Regulation

Banking system of Nepal is gearing up for different business and economic environment. Nepal Government and central bank are working to develop transparent, competitive and strong financial sector. Till date, there have been several efforts towards building regulatory mechanism for corporate governance. Among those several efforts following are the acts and regulations, which provide necessary guidelines to maintain corporate governance in the bank and financial institutions.

1. 2. 3.

Banks and Financial Institutions Act 2063 Directive 6 issued by the NRB Companies Act 2063

Banks and Financial Institutions Act 2063 (BAFIA 2063)

(i) Conflict of Interest and Transparency Section 48-Restriction to give loans to promoter, director, executive officer etc Restriction on dealing with shares by the directors, Officers of the Bank(s.11) Disclosure requirement for directors regarding conflict in appointment of auditors, shareholding by family members, transactions between bank and family members (s.22) Directors not to take personal benefit (s.24) Disqualification of auditors and duty of the auditors (s.61 and s.63) Remuneration of directors to be as provided in the articles of association (s.21) (ii) Competent Key Personnel Qualification of directors and chief executive officers (s.18,s.26) Requirement to appoint professional director(s.13)

NRB Directive 6

Code of Conduct for Directors Directors should not interfere in day-to-day operation of the financial institution. If there is a conflict, director needs to inform the board before assuming office. Directors should not involve in any activity which is against the interest of the company (conflict of interest) Chief executive should work fulltime. Directors of one deposit taking institution cannot act as director of other FI. Director Can not act as custodian or trustee of any of the customer Director shall not misuse its position and should deal fairly Director should keep up to date and accurate record of accounts and reports Director should not use or misuse information received from clients for person benefit Outlines the duties and responsibilities of the directors Provides additional disqualification for the appointment of chief executive directors Provides for code of conduct to be followed by the chief executive and other employees.

Audit Committee

Headed non executive director Outlines responsibilities of the audit committee Restriction on granting of loan to directors, shareholders, employees and firm related to such persons. (Conflict of interest)

Companies Act 2063

(i) Conflict of Interest and Transparency Requirement to give beneficial interest on the shares(s.47) Information required to be given on becoming substantial shareholder (s.50) Shareholders having conflict are not qualified to vote in general meetings(s.70) Director required to give information about transaction between company and him/her or close relatives (s. 92) Approval of general meeting required to enter transaction between company and director/its close relatives (s.93) Restriction on power of board to enter certain transaction (s. 105) Restriction to give loans to directors and officers (s.101) Financial disclosures to the shareholders (s.109)

(ii) Directors Directors are made personally liable for any breach of the Act Directors have fiduciary duty to act in the best interest of the company (s.99) Directors are specific duty not to exceed their powers (s.103) Requirement to appoint independent directors by public companies (s. 86) Directors who breach reporting requirement under the Act are disqualified to become director (s.89) (iii) Audit Listed companies having paid up capital of more than Rs. 3 crores need to have audit committee

An auditor is disqualified to be appointed for three consecutive years.(111) A person working full time, or his/her partners are disqualified to be appointed as auditor (112) (iv) Shareholders Protection. Shareholder have right to inspect books of the company Shareholders can sue on behalf of the company.(s.140) Shareholders can request to appoint investigation officer (s.121) Can prevent directors from exceeding their powers.(s.138)

Challenges
Before discussing the corporate governance of the Nepalese Banking system, it is necessary to consider the adverse political situation of past two decades. Adverse conflict system of the past hindered to develop transparency and system efficiency in government as well as private sectors. Frequently changed government and different political unrest keep different anomalies (problem) in governance issues. But, now, the Nepalese economy is rapidly integrated with global economy with its outward oriented policies followed by membership of WTO, SAFTA and BIMSTEC. Besides this banking system of Nepal is gearing up for different business and economic environment with second phase of financial sector reform program. Nepal Government and central bank are working to develop a transparent, competitive and strong financial sector. On the other hand, last few years data gives contradictory result about industry return of different sector of economy. The real sector of Nepalese economy is paralyze instead of this profit of financial sector is unbelievably increased day per day. In this context following challenges are seen in the banking sector.

Issues related to Regulators Lack of institutional capacity for enforcement of laws, regulations Enforcement authorities themselves lack good governance. Lack of accountability of employees of regulating bodies (need to have internal rules) Lack of resources within regulator Transparent and scientific licensing policy Lack of political and leadership will Court have frequently intervened in regulatory enforcement

Issues related to BOD Board members are interested to use public deposits as their own assets which is against the BAFIA 2063, article 48 Generally, Board members (non executive) are liking to use power like executive or, executive director and executive chairman in the area of loan sanction, employee selection and daily office activities which is again the against the BAFIA, 2063 article 24. Board members are prohibited take loan from own company however, it is general practice to take loan directly or, indirectly, Similarly, Board members are restricted to provide collateral for loan purpose for own or, for others however, they try to do directly or indirectly Board members are inclined to authenticate the minutes after finishing the vested interest The company enjoying the practice of CEO and Chairperson by the same gentle man are ahead in noncompliance activities Big houses running many same nature business are manipulating public deposits and transferring the fund within the group in their own interest Bank, FIs running by non professional are in severe noncompliance practices*

Conclusion
In conclusion corporate Governance is very crucial for each and every organization. Corporate Governance framework should ensure the strategic guidance of the company, the effective monitoring of management by the board and the board's accountability to the company and the shareholders. Good corporate Governance should provide proper incentives for the board and management to pursue objectives in the interest of the company and shareholders and should facilitate effective monitoring. The responsibility for good governance lies within the banks and FIs senior management. Regulators can only facilitate but not ensure improved governance. Last but not least, I would like to say SELF REGULATION IS BEST REGULATION.

BANKS SLASH SHORT-TERM LENDING RATES

Commercial banks have announced a cut in short-term lending rates by half to 2 percentage points in a bid to stimulate borrowing, which has slumped over the last three months due to slowdown seen in manufacturing and real estate sectors. Citizens Bank International, for instance, said it is now offering short-term lending rates at 12 percent, down from 14 percent. Laxmi Bank has also done the same. It recently extended loans to Nepal Electricity Authority for six months at 10 percent interest, which is far too low than the prevailing rates. Commerz and Trust Bank too provided loans to the state-owned utility company at 11 percent. Overall, interest rates on short-term loans which include demand loans, overdrafts and export bills, among others have now come down to an average of 12 percent from around 14 percent earlier. We had to cut the rates due to suppression of credit demand whereas liquidity surplus continued to soar, Rajan Singh Bhandari, CEO of Citizens Bank International, told Republica. Nepal Rastra Bank said deposit collections of 31 commercial banks in the first two months of the current fiscal year jumped by Rs 14 billion to Rs 701.85 billion whereas their credit flow dropped to Rs 522.25 billion in mid-September from Rs 522.85 billion in mid-July. Bankers said this trend continued in the third month (mid-October) as well. Commercial banks, which suffered from liquidity crunch for almost two years, witnessed a sudden rise in deposits over the last three months after depositors started shifting money from development banks and financial companies to big banks due to erosion in trustworthiness of development banks and finance companies. But these commercial banks currently flush with excess liquidity of around Rs 27 billion have not been able to find substantial borrowers.

Bankers attributed the sudden drop in credit demand to slump in real estate business which has trapped investments of many businessmen and gloomy industrial climate, among others. As a result, banks had invested on short-term Treasury Bills at rates that hardly fetched them interest return of 1 percent. The latest reduction in interest rates will bring some relief to traders and short-term borrowers, but will make situation no different for industries and general consumers that rely on long-term borrowing. They (long-term borrowers) might have to wait for a couple of months to enjoy similar cuts, indicated Radhesh Pant, CEO of Kumari Bank. The banks are currently not in a position to reduce long-term lending rates because they need to bring down credit-deposit (CD) ratio to 80 percent by mid-January 2012, he told Republica. Since many commercial banks are struggling to bring the CD ratio to the level set by the regulator, they are not eager to lend rapidly and hence are not interested in slashing long-term lending rates now. But if the credit market remains the same after mid-January, banks may finally revisit their strategies and make long-term credit cheaper, Pant stated. Source: Republica

The Impacts of Implementing a Data Warehouse in the Banking Industry

The impacts of implementing a data warehouse in the banking industry

Data warehousing in the financial sector Introduction In the modern banking and financial sector, there is keener and stronger competition and many enterprises are much more eager to get immediate and accurate information to make better and faster decisions. Furthermore, with many banks fighting to capture new customers and the rapidly growing need for larger amounts and more specific information, traditional databases are incapable of effectively handling the demands of increasing online information retrieval, access, update, and maintenance (Hsin-Ginn Hwang et al). This inability greatly impacts businesses in a way that the management level cannot utilise internal data efficiently and effectively to assist reliable decision-making in a timely manner. As a result, it is such a critical issue for every business to seek for ways and/or means to access, store, maintain, and utilise the massive data efficiently.

The method that best fulfils the needs of the business is a data warehouse. A data warehouse is a subject-oriented, integrated, time-variant and non-volatile collection of data in support of management's decision making process (Inmon). It also acts as a specially prepared repository of data created to support decision making. Data is extracted from source systems, cleaned, scrubbed, transformed, and placed in data stores (Gray and Watson 1998). Data warehousing is near the top, if not at the top, of most companies strategic IT initiatives. These repositories of data have great potential for providing insight into client behaviour in client-to-business e-commerce, implementing customer relationship management strategies, and supporting comprehensive performance measurement systems. Within the financial and banking industry, it is becoming evident that corporations are realising the importance of a customer-orientated strategy that places the customers at the centre of all...

Impact of Technology on Banking Industry

The developments in information collection, storage, processing and transmission and distribution technology have influenced all aspects of banking activity. And was regard as the main driving forces for the changes in banking industry. In my opinion, the technology influences the banking industry, mainly in the following six aspects: 1. Technology is influencing competition and the degree of contestability in banking. Due to the development of technology, banks superiority in information is deteriorated. Entry barrier have been declining, new competitor have emerged. Some financial products and services have become more transparent and commodities, customer show willing to unbundled the demand for financial products and services, all these lead to a more competitive market environment. Due to lowered entry and exist and deconstruction, for some sub-financial markets, contestability in banking is also raised. 2. Technology influence Economy of scale: Competitive pressure force banks to lower their cost. Bank seeks to get economy of scale in bank procession instead of being a big bank. Bank seeks to secure the optimal business structure, and secure the competitive imperative of economy of scale. There are other options to get economy of scale, including joint venture and confederation of financial firms. Small firms also can get economy of scale by outsourcing, i.e. buy in economy of scale. 3. Technology influence the economics of delivery Technology has a major impact on the way banking and financial services are delivered. A wide range of alternative delivery mechanism becomes available, Internet, ATM these Reduces the dependence on the branch network as a core delivery mechanism. With the development of technology, The financial systems are substantially over-supplied with delivery system through a duplication of net work,

Swot Analysis of Banking Industry

EXECUTIVE SUMMARY The rise of retail lending in emerging economies like India has been of recent origin. Asia Pacifics vast population, combined with high savings rates, explosive economic growth, and underdeveloped retail banking services, provide the most significant growth opportunities for banks. Banks will have to serve the retail banking segment effectively in order to utilize the growth opportunity. Banking strategies are presently undergoing various transformations, as the overall scenario has changed over the last couple of years. Till the recent past, most of the banks had adopted fierce costcutting measures to sustain their competitiveness. This strategy however has become obsolete in the new light of immense growth opportunities for banking industry. Most bankers are now confident about their high performance in terms of organic growth and in realising high returns. Nowadays, the growth strategies of banks revolve around customer satisfaction. Improved customer relationship. management can only lead to fulfilment of long-term, as well as, short-term objectives of the bankers. This requires, efficient and accurate customer database management and development of well-trained sales force to develop and sustain long-term profitable customer relationship. The banking system in India is significantly different from that of the other Asian nations, because of the countrys unique geographic, social, and economic characteristics. Though the sector opened up quite late in India compared to other developed nations, like the US and the UK, the profitability of Indian banking sector is at par with that of the developed countries and at times even better on some parameters. For instance, return on equity and assets of the Indian banks are on par with Asian banks, and higher when compared to that of the US and the UK. Banks in India are mainly classified into Scheduled Banks and Non-Scheduled Banks. Scheduled Banks are the ones, which are included in the...

3.1 COMPANY PROFILE

NEPAL BANK LIMITED

History His Majesty King Tribhuvan inaugurated Nepal Bank Limited on Kartik 30,1994 Bikram Sambat. This maarked the beginning of an era of formal banking in Nepal. Until then all monetary tractions were carried out by private dealers and trading center. Then Prime Minister Maharaja Juddha Shumsher J.B.R. speaking on the occasion with the kind permission of His Majesty the King stated this work which is being done in the larger interest of the nation is a great moment for me. Until today a bank could not be opened in Nepal. Therefore this bank, which is being established under the name of Nepal Bank Limited to fill that, need and to be inaugurated by His Majesty the King, is a moment of great joy and happiness. The Bank's objectives to render service to the people whether rich or poor and to contribute to the nation's development will also need the support and best wishes of all, which I am confident will be forthcoming. In that era, very few understood or had confidence in this new concept of formal banking. Rising equity shares were not easy and mobilization of deposits even more difficult. This was evident when the bank floated equity shares worth NRs. 2,500,000, but was successful only in raising NRs. 842,000. "In the absence of any bank in Nepal the economic progress of the country was being

hampered and causing inconvenience to the people and therefore with the objective of fulfilling that need by providing service to the people and for the betterment of the country, this law in hereby promulgated for the establishment of the Bank and its operation" The total deposits for the first year was NRs. 17,02,025 where current deposits was about NRs. 12,98,898 fixed was about NRs. 3,88,964 and saving was NRs. 14,163. Loan disbursed and outstanding at the end of the first year was NRs. 1,985,000. From the very conception and its creation, Nepal Bank Ltd, was as joint venture between the government and the private sector. Out of 2500 equity shares of NRs. 100 face value, 40% was subscribed by the government and the balanced i.e. 60% was offered for the sale to private sector. There were only 10 shareholders when the bank first started.

Introduction Nepal Bank Limited, The first bank of Nepal was established in November 15, 1937 A.D (Kartik, 30, 1994). It was formed under the principle of Joint venture (Joint venture between govt. & general public). NBL's authorized capital was Rs. 10 million & issued capital Rs. 2.5 million of which paid-up capital was Rs. 842 thousand with 10 shareholders. The bank has been providing banking through its branch offices in the different geographical locations of the country.

Mission Statement: Nepal Bank Limited seeks to provide an environment within which the bank can bring unique financial value and services to all customers. It will be a sound institution where depositors continue to have faith in the security of their funds and receive reasonable returns; borrowers are assured of appropriate credit facilities at reasonable prices; other service- seekers receive prompt and attentive service at reasonable cost; employees are paid adequate compensation with professional career growth opportunities and stockholders receive satisfactory return for their investment.

Values Statement: At Nepal Bank Limited, we believe that our banking should be based on:

Respect, service and safety for the customers we serve Respect, reward and opportunity for the people with whom we work Respect, cooperation and support for the economic community of Nepal

Objectives: Nepal Bank Limited has the following objectives

Continue to maintain leading share of banking sector with a significant presence in all major geographical areas in the country. Provide competitive and customer oriented banking services to all customers through competent and professional staff. Reclaim leadership within the national financial community.

OTHER SERVICES Safe Deposit Vaults "The Best Protection For your most Important Valuables" Your valuables are safely stored in another location other than your home or business...the SAFEST PROTECTION from fire and theft. Nepal Bank Limited offer you safe deposit vault to store items that would cause you to say "if I lose this, I'm in deep trouble." This means important papers like insurance policies, family records such as birth certificates, deeds, titles, mortgages, leases, contracts, bonds,

certificates of deposit. Other items include jewels, medals, rare stamps and negatives for important photos in case of fire or theft.

Safe Deposit Vault Rates Type A B C D E F G H I High 115 m.m 148 m.m 115 m.m 178 m.m 145 m.m 266 m.m 178 m.m 314 m.m 394 m.m Wide 150 m.m 184 m.m 330 m.m 238 m.m 401 m.m 330 m.m 506 m.m 401 m.m 506 m.m Deep 517 m.m 517 m.m 517 m.m 517 m.m 517 m.m 517 m.m 517 m.m 517 m.m 517 m.m Rent (Per Year) 1800/2100/2400/2800/2800/4000/4500/5400/6200/-

Branches with Locker Facility

Kathmandu Banking Office Biratnagar City Office Kantipath Branch Adarsha Nagar, Birgunj Nepalgunj City Office City Office Birgunj City Office Pokhara Prithivichowk Branch, Pokhara

SMS BANKING SERVICES Nepal Bank Limited presents SMS (Short Message Service) Banking service to it's valuable Customers. We are providing the service from our branches (selected). In SMS Banking service, you can get your Account information easily by sending SMS to 1994. NBL SMS banking service having the following features.

Secure transaction with PIN code Instant Balance Information Last three transactions with current Balance PIN code changing facility Latest Exchange rate of Foreign curreny

Account Stop Facility Cheque Book print request Account statement print request NBL SMS banking service also provides the extra services to it's valuable customer's such as New Product information of bank, Loan alert messages and cash withdrawal notification on customer's request. To get the SMS banking facility , please contact your nearest Branch of NBL for details.

Normal ABBS

Special ABB Enabled Branches Beni Besisahar Birendra Nagar Bhojpur Chandanigapur Chandrauta Chapagaun Charikot Chautara Duhabi Dumre Barahathawa Chame Manang Gaur Panchkal Surunga Therathum Gaighat Dhulabari Urlabari Bhadrhe Dolpa Gaurigunj Jajarkot Khandbari

Kathmandu Banking Office City Office Pokhara City Office Birgunj City Office Janakpur City Office Narayanghat City Office Nepalgunj City Office Biratnagar Khasauli (Butwal) Bhedasing Dillibazar

Kalimati Balaju Industrial Estate (BIE) Lazimpat Chhetrapati Chabahil Sundhara (Nepal Army Camp) Kantipath Patan Industrial Estate (PIE) Kopundole Jawalakhel Bhaktapur Banepa Kirtipur Lalitpur (Gabahal) Itahari Prithvichowk Baglung Damak Damauli Bhairahawa Dharan Hetauda City Office Birtamod Trishuli

Gauradah Gulariya Golbazar Ilam Ja Chu Ka (Janakpur) Jeetpur Jhumka Kalaiya Kanchanpur Krishnanagar Kushma Mahendranagar Malangawa Manigram Melamchi Mills Area, Biratnagar Palpa Panauti Parsa Panchkhal Pyuthan Rajapur Rajbiraj Rangeli Ratnanagar

Dhangadi Lahan Dang Dhamboji Kakadvitta Adarsanagar Hetauda Industrial Estate Sripur Shyangja Bagar Bazaradda

Rolpa Rukum, Musikot Salyan Sankhu Siraha Thankot Thimi, Bhaktapur Tikapur Waling

Extra Features of NBL Normal ABBS

ABB service is available even in evening counter and extended banking. This facility enables the customers to withdraw and deposit in their account of closed branch from the branch having evening counter and extended banking facility. ABB service is also available in government accounts. Service is available around the country. Limitless cash transfer

E-BANKING General Information Now NBL is just a click away. Wherever you go, you can access your account in Nepal Bank Limited on your desktop. We are very happy to announce NBL Internet Banking with wide coverage of services in order to facilitate our valuable customers. Balance check, cheque stop, cheque issue, statement print etc our some of the facilities under this service. Procedures to create NBL Internet Banking Account:

Download NBL Internet Form : Click Here

Fill up the form completely Submit the form into your account holding NBL branch. ( If you are NBL customer residing out of the country, please click here to read the instruction )

When we receive the form, your account will be created and Internet Banking User ID and Password will be mailed to the provided E-mail address with appropriate guidelines.

NBL WEB REMIT Introduction NBL Remit - an online/internet based Remittance Service for the purpose of facilitating to transfer the earnings of Nepalese and Nepalese Expatriates in foreign countries with the help of available NBL agents. Alongwith inward remittance from foreign countries, NBL-remit is powered by domestic money transfer facility through all of the bank's branches throughout the country with very minimal charge. NBL Remit service is based on online data transfer system and it is instant enough, efficient and very much secure. For the authentication purpose, SECRET KEY is generated on the system, which is required by the customer while being paid. Remittance facility is available both for instant cash payment and credit to the beneficiary personal account. Now the account transfer facility can be availed within

NBL branches. NBL Remit Service is also operated by agents of Nepal Bank who exist in different locations of National and International Topography. At this time, NBL has started this service from Arabian and Parsian Gulf mainly from QATAR where NBL has an established drawing

arrangement with two major exchange houses, which are:

Eastern Exchange Est. Doha, Qatar Arabain Exchange Co. W.L.L.

Remitter may contact the aforesaid exchange house for more information about NBL Remit service. Procedures How to receive money? Contact Address Foreign Agents NBL Branches in Foreign Remittance NBL Branches for Domestic Remittance List of countries and contact offices

NBL REMITTANCE PRODUCTS Remittance Product of Nepal Bank Limited The oldest, biggest and most trusted bank in Nepal, Nepal Bank Limited has largest network of branches in the country and very big network of correspondent and agency relationship all over the world. The business of remittance fund transfer into Nepal, from Nepal and within Nepal through this bank is most reliable, timely at the minimum of charges. A) Inward Remittance (receiving of money in Nepal)

SWIFT: Through this system the remitter anywhere in the world can remit or transfer the fund in Nepal very easily, securely and quickly. The remitter can transfer the money in Nepal through Nepal Bank Limited just by mentioning this bank's SWIFT identity, that is, NEBLNPKA and beneficiary details. The widest network of branches of this bank can take care of your need very efficiently and at the minimum of cost

TT and Mail transfer: we have arrangement made with major banks in financial centers as well as with banks in neighboring counties to receive funds through tested telegraphically transferred funds. We also honor the mail transfer from major banks. Drafts: We have system of honoring drafts drawn on us by many banks denominated in major currencies such as USD, Euro, GBP. Remittance from Gulf Countries: We have maintained special relationship with banks, financial institution and exchange houses in Gulf countries where majority of Nepali workers are working so that their hard earned money can be received by family members in Nepal. Western Union Money Transfer Service: Due to the arrangement made by our bank with this fund transferring institution through Hulas Remittance, the beneficiary in Nepal can receive money very quickly and the beneficiary does not need any account to receive the fund. Remittance from India: We have arrangement made with many banks in India by which remitter in India can remit the fund through SWIFT, TT, Mail Transfer, Drafts etc. All remittance into Nepal through Nepal Bank Limited is quick, dependable and cheap because the beneficiary anywhere in the Nepal can receive the money without needing services of other banks because Nepal Bank Ltd has largest network of branches in Nepal in important places.

B) Outward Remittance:

SWIFT: Through this System we can cater the need of customer to remit the fund anywhere in the world, denominated in major currencies. Draft: We have draft drawing arrangement made with our correspondent banks in many countries of the world where Nepalese individual and institution need to transfer fund due to any reason. TT and Mail Transfer: Because of our international banking relationship we can handle the outward remittance business though this method.

Remittance to India: We can cater the need of business community and individuals to transfer the fund denominated in Indian Rupee In India very efficiently and at the minimum of commission compared to any bank in the Nepal. Facilities We offer you good remittance facilities to send money to Nepal for your loved ones. Depending on your location and the speed with which you want the money transferred you can take our service. You can do Telegraphic Transfer for remittance of money through our correspondent Banks. Now, we offer you very fast and reliable money transfer facilities through SWIFT. Essential details for SWIFT remittance to Nepal (from any country / bank)

Nepal Bank's SWIFT Code for remittance to Nepal Account with Institutions:

NEBLNPKA Please give full detail of Bank, Branch and its complete postal address, where the beneficiary is maintaining account Please give account number, name, address and phone / fax number (if available) of the beneficiary

Beneficiary Customer

NBL DEBIT CARD

Nepal Bank has introduced its ever waited NBL Debit Card by joining the hands with Smart Choice Technologies (SCT), the first company in Nepal to provide networked ATMs. NBL Debit Card of Nepal Bank allows its customers to access a vast network of ATMs located in various points in Kathmandu and other major cities within Nepal displaying the SCT logo on it. NBL Debit Card is also accepted in INDIA via ATM's of Punjab National Bank. (Click here to view ATM network in INDIA). The NBL Debit Card allows the cardholder to withdraw cash, inquire account balances and to pay for purchases through POS transactions. NBL ATM outlets support cards from the banks associated with SCT as well as Visa and Master Cards. Now for the first time in Nepal NBL Debit card supports e-commerce facility. Enjoy shopping online with NBL Debit card from www.muncha.com and www.netfornepal.com how to use e-commerce manual

Apply for the NBL Debit Card at your nearest NBL Branch Download the Application Form (Editable PDF) : Click here Download E-Commerce Application Form (PDF) : Click here Fill up the form, Print it Submit to your accounting holding branch Card Delivery - within approximately 14 days

Functions offered by NBL Debit Card Cash withdrawal Balance Inquiry POS (Point of Sale) transaction (most of the shopping malls in major cities of Nepal) E-commerce Facility (www.muncha.com, www.netfornepal.com) PIN Change

NBL ATM Outlets New Road (Dharmapath) New Baneshwor Kantipath Lazimpat Narayanghat Biratnagar Kalimati Jawalakhel Kupondol Trisuli Balaju Kritipur Janakpur Chabahil Bhaktapur Prithvichowk Kakadvitta Dang Member Bank's outlets Click on the below link to find out the SCT outlets http://www.sct.com.np/location.php

Butwal (Khasyauli) Bhairahwa (Siddarthanagar) Gabahal Birgunj City Office Adarsanagar Hetauda City Office Pokhara City Office Dhamboji Birtamod

Baglung

How to use NBL Debit Cards Insert the Card Type your PIN number Go through "Fast Cash" or "Account Withdrawal Option" and follow the instructions When your request is processed, ATM ejects your Card. Don't forget to take the card at first. Then it prints out your balance information. At last, it ejects the requested Cash. Take the cash. Your ATM transaction is finished. Security Tips: Do not delay to take your card back. Otherwise ATM will retract your card. Do not delay to take your money. It will retract the money after certain interval. Do not tell your PIN number to others and do not write it into your CARD. If you feel, your PIN is stolen, change it immediately through ATM.

Fees and Charges

Cash withdrawal from NBL ATM outlets anywhere in country Cash withdrawal from the banks associated with SCT in Nepal POS Transaction New Card issue Re-newal of Expired card Account Maintenance Charge Additional Card issue Card Lost - additional card New PIN generation Account closure

Free of cost

NRs. 25 Free of cost Free of cost NRs. 200 NRs. 150 per year till card validity date NRs. 150 per card NRs. 200 per card NRs. 100 NRs. 100 additional for card holder

Cash withdrawal from Punjab National Banks NRs. 100 ATM outlets in INDIA

lding bFor further information, please contact NBL Card Center NBL Card Center Head Office, New Road Kathmandu. Email: card@nbl.com.np Phone: 01-4247341
For the assistance, please contact your account horanch

DEPOSIT

Current Account Nepal Bank's current account saves you the hassle of carrying around cash every month. The account is non-interest bearing and it comes with a cheque-book - you just need to write a cheque whenever and wherever it's convenient.

Statement of Transactions A six monthly statement will be sent so that you can see your transaction movements. You can also request that the Bank provides you with a statement every day, every week, every 15 days or every month. Your Account and Cheque Book A current account can be opened with a minimum amount decided by the specific branch. Deposit at your home branch. Once your account is opened you will receive your chequebook containing 10 personalized cheques. To replace your cheque book once you run out of cheques just present the replacement form at the back of your current cheque book at your home branch and we will arrange a new one for you. Our Officers will be happy to help you so that you can start to maximize the benefits of a Nepal Bank current account immediately. Account Opening You will need to bring:

Personal Account: Personal Identification (Citizenship Certificate and 2 Copies of Photograph) Nominee Declaration Proprietorship Account:

Declaration of sole proprietorship Copy of Registration Certificate Partnership Account Letter of Partnership duly signed by all partners Copy of the Partnership Agreement Certified copy of Partnership Registration Account of corporate bodies, copy of: Memorandum and Article of Association of the Company Resolution of Board of Directors to open and operate an account List of directors duly signed by respective directors with home address and phone numbers Certificate of commence of commencement of business

Accounts of clubs, societies and associates (all documents to be duly certified by the charity): List of Office Bearers Copy of by-laws Copy of Resolution to pen and operate the account Name and signature of persons authorized to operate the account Copy of the registration certificate

Saving Account With Nepal Bank's saving account your interest is calculated on daily balance and credited to your account quarterly. It is your passport to other Nepal Bank's products and services designed to manage your daily life easier and more convenient. Initial deposit depends upon

nature of saving account. Any balance below minimum amount will be liable to incidental charges as fixed by the bank from time to time. Transaction Record For Thumb Print Account When you open your account you will get a passbook to keep track of your savings and transactions. You have to update your passbook by our bank staff at our branch.

Types of Saving Account

Karmachari Sahuliyat Saving Account: Can be operated on Zero Balance

2% interest on daily balance Free Services like: ATM, ABB, SMS, Internet Banking Automatic conversion to Karmachari Nibritabharan (Employee Retirement) Account once the employee is retired from service. Account transfer facility if the employee is transfered to another location and no account closing charge. Karmachari Nibritabharan (Employee Retirement) Saving Account: Requirement of Pension Passport to open account. Can be operated on Zero Balance. 5% interest on daily balance. Cash or Transfere facility to pension amount. Free Services like: ATM, ABB, SMS, Internet Banking. Account transfer facility. NBL Bishes Bachat Khata: Minimum balance is 50,000 only. 5% interest on daily balance. Free Services like: ATM, ABB, SMS, Internet Banking.

Nepa Laxmi Bishes Bachat Khata: Minimum balance is 100,000 only. 7% interest on daily balance. Free Services like: ATM, ABB, SMS, Internet Banking. Insurance facility up to 100,000. Account Opening You will need to bring:

Personal Account: Personal Identification (Citizenship Certificate and 2 Copies of Photograph) Nominee Declaration Proprietorship Account: Declaration of sole proprietorship Copy of Registration Certificate

Partnership Account Letter of Partnership duly signed by all partners Copy of the Partnership Agreement Certified copy of Partnership Registration

Fixed Account Features Fixed Deposit can be opened with a minimum balance of NRs. Payable upon maturity Penal interest is levied on withdrawal of FD prior to maturity. Interest is payable Quarterly.

Tax is deducted at source from the interest on saving deposit as per the Income Tax Act, 2058(2001). Nomination facility is available. Strict confidentiality is assured.

Tenure of FD 3 months 6 months 9 months 1 year 2 years Above 2 years

Prevailing Interest Rate (Per Annum): 6 months 3 months 6 months 9 months 1 year 2 year Above 2 year * It is subject to change as per the market condition.

Eligibility: Individuals. Minors. Trusts. Associations. Clubs. Societies.

Documents : The copy of the following certified documents has to be submitted while requesting for opening of Account

Personal Account :

Identification Card in the form of Citizenship Certificate/Passport/Other ID/PAN Card

Minors: Guardianship to be verified with related documents Nominees form: Photograph of the nominee Signature of the nominee

Clubs/Societies and Association:

Copy of Registration Certificate Copy of Bye-Laws Copy of Resolution to Open and Operate the account List of members

Corporate body: Certificate of Incorporation Memorandum and Article of Association of the Company Resolution of Board of Directors to Open and Operate the account Sample of Company Seal Name of the Directors of the Board

Partnership Account: Certificate of Partnership Registration Copy of Partnership deed, if any

Proprietorship Account: Registration Certificate Identification of Proprietors

SAHULIYAT BACHAT KHATA Sahuliyat Bachat Khata is a new deposit product for working employees of any Nepalese organization. Under this saving product, employees can open saving account with minimum balance of Rs. 500. To open the account, employee needs to submit reference letter from working organization alongwith other documents that need to open general saving account. For more information, please contact your nearest NBL branch.

EXTENDED BANKING Branches with Evening Counter Kathmandu Banking Office Kantipath Jawalakhel Chabahil Lalitpur Banepa CO Biratnagar CO Birgunj CO Khasauli CO Nepalgunj Prithvichowk Baglung Balaju Industrial Estate (BIE) CO Hetauds

Branches Opened on Saturday All the above branches running evening counter Biratnagar Bazaradda Branch Birgunj Adarshanagar Branch

Branches having holidays on odd days Biratnagar Bazaradda Branch - Tuesday Birgunj Adarshanagar Branch - Sunday

Extra Banking Hours Days Sunday to Thrusday Friday Saturday Kartik 16 to Magh 15 Magh 16 to Kartik 15 4:00 pm - 6:00 pm 1:30 pm - 3:30 pm 11:00 pm - 1:30 pm 5:00 pm - 7:00 pm 1:30 pm - 4:00 pm 11:00 pm - 1:30 pm 11:00 pm - 1:30 pm

Public Holiday (from KBO) 11:00 pm - 1:30 pm

SERVICE CHARGES* ABB charges (charges and transaction routes)

No commission will be charged for mutual ABB transaction of the braches within valley (Kathmandu, Lalitpur, Bhaktapur district) No commission will be charged for mutual ABB transaction of the branches within same district Minimum ABB charge - Rs. 150 or 0.05% whichever is higher on the balance after providing discount for 2 lakhs.

SMS Banking Charges

Registration Fee: Rs. 100 Renewal fee: Rs. 100

Internet Banking

Registration Fee: Rs. 100 Renewal fee: Rs. 100

ATM (NBL Debit) Card

Free Issuance for first time Renewal fee: Rs. 200 Re-Issue fee: Rs. 200 Pin Re-generation : Rs. 100

Web Remittance Commission

Minimum Rs. 150 or 0.05% whichever is higher on the balance after providing discount for 2 lakhs (For individual). For Corporate customers minimum Rs. 150 or 0.15% whichever is higher on any balance. No commission will be charged for remit transaction of the braches within valley (Kathmandu, Lalitpur, Bhaktapur district).

Draft and Fax charge (In NRs.)**

Account holder customer Commission rate

Bank and Financial institutions 0.15%

Other customers not having A/c with bank 0.15%

0.10%

Minimum

100

500

200

For fax transfer, additional Rs. 50 will be charged per transfer.

Draft and Fax charge (In Indian and Exchangeable other foreign currency)**

Draft Currency A/C holder customer Other customer

TT/SWIFT A/c holder customer Other customer

I.C.

0.10% or 0.15% or 0.20% or min. 0.20% or minimum Rs. minimum Rs. Rs. 200 + Swift min. Rs. 300 150 300 charge Rs. 1000 + Swift / Telex charge Rs. 1000 0.20% or minimum 0.30% or minimum 0.20% or min. USD 5.00 + 0.20% or min. USD

F.C.

USD 5.00

USD 8.00

Swift/Telex 8.00 + Swift / charge Rs. 1000 Telex charge Rs. 1000

Additional Swift confirmation charge Rs. 500 will be charged for the issuance of draft in:

Indian Rs. 500,000 or above USD 2000 or above

4.1 FINANCIAL ANALYSIS OF THE COMPANY

Shareholding Composition

S.N Ownership 1 2 Government of Nepal 'A' Class Financial Institutions

Percent 40.49 4.92

NRB Licensed Financial Institutions

3.42

4 5

Other Institutions General Public

0.52 49.94

Others Total

0.71 100

Shareholding Composition (Pie-Chart View)

NBL Network Overview

Region wise branches Kathmandu Region Biratnagar Region Birgunj Region Pokhara Region Nepalgunj Region Total no of Branches*

No of Branches 28 28 19 21 16 112

No. of Staff: 2815 (As of Nov 14, 2011)

Financial position of the Bank

No. of computerized branches: 112 Branches under single computer network: 95

Composition of Board Of Directors The bank is under the control of Central Bank of Nepal, Nepal Rastra Bank (NRB). NRB has appointed a five members management committee. This management committee performs as the board of director of the bank.

Management Team The bank is running under the leadership of Nepal Rastra Bank (NRB) appointed three management team under the leadership of NRB director, Mr. Maheshwor Lal Shrestha.

Present Capital Structure of NBL

Rs. '000'

Table of Financial Indicators:

Particulars Paid up Capital Core Capital Capital Fund Total Loan & Advances Total Investment

060/61 380,383 -9,252,399 -8,901,430 17,937,658 11,004,820

061/62 380,383 -7,522,269 -7,127,284 16,866,546 14,199,216

62/63 380,383 -6,374,479 -5,853,918 12,441,554 14,490,247

NPL Total Deposit Saving Current Fixed Foreign Currency Other Net worth Per Share Earning Per Share (Rs) Loan Loss Provision Return to Assets (%) Return to Equity Net Profit/Loss

9,640,082 35,735,044 22,198,772 5,357,137 7,809,759 191,630 177,746 (2) 187 113,096 2

8,372,108 35,934,164 23,482,868 5,649,052 6,185,066 203,980 413,197 (2) 455 381,437 5

2,262,183 35,829,765 24,113,875 5,880,370 5,216,038 172,379 447,103 (2) 317 483,683 3

710,391

1,730,130

1,207,265

5.1 Analysis of Data

a) Statistical Analysis

Calculation of the mean, standard deviation, coefficient of variation and Karls Pearson correlation coefficient between

Cash and Bank Balance and Total Deposit

Year (n)

Cash & Total Bank Deposit balance (y) (x) 4174.8 7922.8

__ X=x-X X2

__ Y=y-Y Y2 XY

2058/2059 338.90 2059/2060 926.60

(894.78) 800631.24 (307.08) 94298.12 (6.78) 45.96 11410.51

(7185.98) 51638308.56 6429871.18 (3437.98) 11819706.48 1055734.89 163.92 2893.79 26869.77 8374020.56 (1111.37) 309114.64

2060/2061 1226.90 11524.7

2061/2062 1340.50 14254.57 106.82 2062/2063 2335.53 18927 x = y = 1101.85

1214073.42 7566.22 X2= 2120459.25

57247685.09 8336839.50 Y2= XY=

6168.43 56803.87

129106590.5 16130448.86

Source: Annual report of Nepal Bank Limited (2058/2059-2062/2063)

Mean

Mean is the sum of all the observation divided by the number of value. Mean is the arithmetic average of total or value.

Average C.B.B(X) = X

= 6168.43

= 1233.68

__

Average T.D. (Y) = Y

= 56803.87

= 11360.78

Therefore the average of Cash and Bank Balance of Nepal Bank Ltd for the last five years is Nrs.1233.68 million and the average of Total Deposit of Nepal Bank Ltd is Nrs.11360.78 million.

Standard Deviation

Standard Deviation is used t measure the risk of the company

________

Standard Deviation of C.B.B. ( x ) = (x-X)2

__________

2120459.25

= 651.22

Standard Deviation of T.D. (y ) = (y-Y)2

___________

129106590.5

= 5081.46

Therefore the Standard Deviation based on Cash and bank Balance of Nepal Bank Ltd for the last five year is Rs 651.22 million and Standard Deviation of Total Deposit of Nepal Bank Ltd is Rs. 5018.46

Coefficient of Variation (C.V.)

The coefficient of variation of dispersion based on standard deviation multiplied by 100 is known as C.V., it is independent unit.

Therefore, C.V. of C.B.B. = C.B.B x 100%

__

= 651.22 x100%

1233.68

= 52.78 %

Therefore, C.V. of T.D.

= T.D. x 100%

__

= 5081.46 x100%

11360.78

= 44.72 %

The Coefficient of variation measures the consistency (variability) of the observation with references to above calculation, there is uniformity in the changes of cash and bank balance as compared to the total deposit because coefficient of variation of cash and bank balance (52.78 %) is greater than the coefficient of variation of total deposit (44.7 %).

Karl Pearsons correlation between cash and bank balance and total deposit

One of the widely used mathematical method of calculating the correlation between two and more than two variables is Karl Pearsons correlation coefficient. It is also known as Pearsons correlation. It is denoted by . Values always lies between -1 and +1. +1 denotes the perfect correlation between the two variables and -1 denotes negative correlation between the two variables.

XY

X2 x Y2

= 16130448.86

2120459.25 x 129106590.5

= 16130448.86

16545853.38

= + .97

The value of correlation shows the degree of relationship between the two or more than two variables. The .97 shows the positive relation. Hence there is high degree positive correlation cast between Cash and Bank Balance and Total Deposit of Nepal Bank Limited.

SWOT Analysis for Nepal Bank Limited

Strength

1. Nepal Bank limited has vast network system in the nation thus helping customer to transact through bank from place to place. It has 105 branches nation wide to help the customers.

2. Nepal Bank Limited is well known for providing highly personalized service like ATM, ebanking, credit card, safe deposit locker etc. It has also introduced a number of new product and services.

3. Human resources of Nepal Bank Limited are well trained and are dedicated toward its bank. It is providing high remuneration and other benefit to its staff

4. Nepal Bank Limited is equipped with latest technology, computer does most of the banking services. Thus the services of the bank are prompt and accurate.

Weakness

1. The increase of the branches increases the operation cost, administration expenses, salary etc.

2.

The political instability is another weakness that the bank is suffering.

3.

Too much dependency in computer is not considered to be reliable.

4. Staffs are unwilling to give even required information. They dont want to cooperate with the ones who are not its real customer.

Opportunity

1. Many people deposit their funds in this bank due to its skill in attracting people by adapting and attracting policies like interest rate, prompt services, ATM, credit card services etc.

2. Staff can perform their work more efficiently with the computers. The environment of the bank is sound which enhance its better performance.

3. People get employment opportunities since it has the highest number of branches in the country.

4. The policies of HMG & NRB rules & regulation always give confidence to the banking sectors to uplift the economy of the nation.

Threats

1.

Competitors are increasing.

2.

The economic condition of the country is very poor.

3. Excess government pressure may create irregular banking transaction, which leads to bad reputation of the bank.

4. The bank should be discouraged to open account for the individuals or firm having bad name as well as illegal names which effects to society. It may be threat, which can ruin the bank.

6.1 Findings and Implications

The findings and implications of the study are presented below

xii) Earning per Share (EPS) of this year is 59.35 which has increased compared to last year (i.e. 39.50) and the average EPS of last five year is 44.74

xiii) Return on Asset (ROA) of this year is 1.61 which has increased compared to last year (i.e. 1.40) and the average EPS of last five year is 1.312

xiv) Price Earning Ratio (PE ratio) of this year is 21.23 which has increased compared to last year (i.e. 20.25)

xv) Ratio of Net Profit to Gross Income of this year is 23.99 which has increased compared to last year (i.e. 20.26)

xvi) Exchange Gain to Total Income Ratio of this year is 8.60 which has decreased compared to last year (i.e. 8.95)

xvii) Net profit to Loan and Advances Ratio of this year is 2.66 which has increased compared to last year (i.e. 2.22)

xviii) Cash and Bank balance to current deposit ratio of Nepal bank Limited is 136.92 this year.

xix) Cash and Bank balance to Total deposit Ratio (CRR) Cash Reserve Ratio of Nepal bank Limited is 12.33 this year.

xx)

Saving Deposit to Total Deposit Ratio of Nepal bank Limited is 42.70 this year

xxi)

Fixed Deposit to Total Deposit Ratio of Nepal bank Limited is 28.60 this year.

xxii)

NRB balance to the Total Deposit Ratio of Nepal Limited bank is 12.33 this year.

3. The mean of Cash & Bank Balance and Total Deposit of Nepal Bank Limited

is 1233.68 and 11360.78 respectively.

Standard Deviation of Cash & Bank Balance and Total Deposit of Nepal Bank limited is 651.22 and 5081.46 respectively. Coefficient of variation of Cash & Bank Balance and Total Deposit of Nepal Bank Limited is 52.78% and 44.72% respectively. Karl Pearsons correlation between cash and bank balance and total deposit is +.97. This shows the high degree positive correlation between Cash & Bank Balance and Total Deposit. This shows there is positive relationship between Cash & Bank Balance and Total Deposit.

CONCLUSIONS AND SUGGESTION

Conclusion
After analyzing and interning in NBC, conclusions can be made on various ground commercial banks are the pillars for the development of any country. In Nepal the

first stone of the pillar was put when NBC was stablished on November 13,1937.How ever due to its old management practices and internal in efficiency the bank was declared technically the bank was declared technically bank rupt on 2000. Then NRB took over the control of the bank and was handed over to Bank of Scotland (Ireland) ICC consulting group on july ,2002 and remained unity jully 2007. The new management changed the face NBC Once declard bankerupt ,NBC earned a net profit of 239214010 during the year 2007-08 the management change the overall structure of the bank downsized it form 214 branches to 108 branched. Computerised the bank hired efficient staff and laid of the inefficient under different schemes. Currently 17 employees around 2200 people. During the period the most considerable thing foreign management did was the recovery of NPA of NBC. It was because of the aggressive NPA recovery that NBC was able to take it self in to profit. The NPA lable declined from 56.3% in 2002 to just 14.8% in 2007. It is just around 11% in april 2009. NPA of NBC is handled by RMB consisting of four divisior vi 2, Cash recovery and priority sector legal and administrative and consortium corporate restrucring these division RMD handled different NPA as for the directive of NRV while RMV dandles thr NPA whole credit the department and different branches are equally working on preventing loan from becoming NPA by flowing a well defined crediy procedure and the requirement as for NRV direction. Similarly, NBL has recently increased its interest rate on various deposit schemes it has also come up with various promotional and advertisement strategic, lounch of ATM card, web remit, branches in every district of Nepal is also its strength point. Every department consists of both young and old aged people among which dissatishfaction is still exists the weekness of banking performance is the existence of various political ground that only side their own welfare in spite of bank future protect. On the other side ,NBL is providing various motivational skims to its employee both young and old aged like distribution of bonuses bringing volintery skill (VRS)and so no.

8.1 SUGGESTION
NBC is a good success story in the Nepalies banking history being first Bank and also being able to revive it self once again into profitability from the state of bank ruptcy how ever, NBL have a long way to go after my study and stay in the bank for 8 weeks as an Summer internship training. I have found that NBC can considered following things for future improvement. Similar size of bank like in Nepal Banijya Bank employs only 2000 no of people and able to performe well. So 2200 is still a huge number for NBL an it is over staffed.

NBC is logging being in training its manpower. Many employee due to the lack of proper training are not able to perform their job efficiently especially the old staffs. Political unions in the forms of the unionization must be discouraged by management this hamper the working of bank and decreases of employees but still in NBC their exist about five political unions. NBC is recovering its NPA at a faster pace but in order to reduce the number of NPA in future proper recording and recommendation of each and every loan a/c must be done. It has been seen that important documents related to many NPAs are missing so,proper documptation must be done. NBC must look into busting up the moral of its employees as in few cases employees too are responsible for an asset to turn into NPA.SO NBC must focus on motivational techniques as well. NBC must be efficient enough to identify early since of non performance of asset and must be able to take quick decision. In such type of old organization due to the organizational structure it self is a common problem. So decision making must be fast that deligation of certain authority can be also be done with modification of hierarchical structure. As every department is very crucial department for the organization .Same special facilities (monitory and non-monitory) must be provided to the staffs of the department. Small size of lone are seen to occupy the largest percentage share of NPA. So proper care must be taken care regarding sub asset waiber facility could be given to facilitate payment. The soft wave and equipment us edi in SBD and very older is not compatible with other changes that may arise in future. So they must be checked properly and should be maintained in good condition. Efficient and effective IT management is also lack in SBO it has become intergral part in peration of activity thus, IT department must focus on such looks and holes.

9.1 Limitation of the study

Numerous limitations have been faced while preparing this fieldwork report. Some of them which can be pointed out as:

Lack of time

Focus on only ratios of Nepal Investment bank.

It cannot be compared with the ratios of other banks.

Only Nepal Investment bank is taken

Past 5 years trend is taken.

It is bound by the limitation of rules and regulation of Nepal Rastra bank

APPENDICES

10.1COPY OF QUESTIONNAIRE

Dear SIR/MADAM, I am conducting survey on NBL. I shall be very thankful to give yourfew minutes to me for answering my few questions below. Name: _____________________________________ Add: ________________________________________ Contact no: ____________________________________ Gender Male FemaleE-mail Id : _______________________________________________________ Age Group: 1825 2535 35 45 455555+ Occupation: JournalistStudentProfessionalRetired PersonTechnical expert Other, please specify:

Income: 1 laces 13 laces 35 laces 57 laces 710

1:-WHICH OF THE FOLLOWING ATTRIBUTES COMPELLED YOU MOST TO OPENBANK?

(a) ATM cum DEBIT Cards (b) Cheque Book (c) Internet Banking/ Phone Banking (d) Working Hours (e) Value Added Services

2:-Which TYPE OF SERVICE PREFERS THE MOST by you?

(a) ATM SERVICE (b) INTERNET BANKING (c) MOBILE BANKING (d) CORE BANKING (e) Retail Banking

3:-Which of following banks do you Provide loan in easy way?

(a) NBL Bank (b) SBI Nepal Bank (c) Everest BANK (d) Citizen Bank (e) Other Pls specify __________________

4:-WHAT TYPE OF LOAN DO YOU HAVE IN BANK?

(a) Home loan (b) Gold loan (c) corporate loan (d) Education Loan (e) Others Pls specify ________________________________________

5:-How many services offered by your banks?

(a) D-Mat A/C (b) Mutual Funds (c) e-Instructions

(d) LI & GI (e) Digitally Signed Statement

6:-How would you know about these services?

(a) Advertisements (b) Friends and Relatives (c) Direct Selling Agents (d) Others Pls specify _______________

7:-What the people think about the Banks?

(a) Necessity for protection security b) Imposition of a burden of expenses (c) A compulsory tool for SAVING (d) Others Pls specify ________________

8:-What a respondent see in taking loan from Banks?

(a) Standing and goodwill of the company (b) Rate of interest (c) Advertisement being released by the company (d) Services being given by the company

9:-Is NBL Bank Provide better facilities than SBI & Everest Bank?

(a) Yes (b) No (c)Can`t Say

10:-Do you know what type of value added services provide by Nepal Bank Limited?

(a)-Young star (b)-Senior citizen (c)-Pre paid card (d)-Recurring deposits (e)-other

11:-How would you rate product offered NBL Bank than other?

Low 1 2 3 4 5 High

12:-How would you rate product service / product vs. cost by NBL Bank?

Low 1- 2 -3 -4 -5 High

13:-How would you divide 100 points on the basis of service provide by NBL Bank?

(a)-Less formality (b)-Flexibility

(c)-Less documentation (d)-others

10.2 SAMPLE INFORMATION

Sample Size This Study involves 50 respondents .

Sampling Technique
The sample size has been taken by non-random convenience sampling technique.

10.3 ORGANIZATIONAL STRUCTER

An organizational structure assists in defining authority and accountability, relationships, activities and communicating channels. It assists in deciding organizational relationships. It helps the employee to get clear job of their job responsibilities and avoid overlapping of works by different department.

The policy making decision made by the board of Directors are put into operation by the concerned department through Chief Executive Directors, Chief Executive Directors is appointed for a specific period of time to perform the daily transaction of NIBL. In NIBL, under Chairman and Chief Executive Directors there is a General Manager, Internal Audit Department, Research & Development Department and under General Manager there are two Deputy General Manager: One is Operation Deputy General Manager and another is Credit/Retail Deputy General Manager, Credit/Retail Deputy General Manager has the

authority to control the activities of Retail Bank Department, Corporate Bank Department, Legal Department while Operation Deputy General Manager has the authority to control the activities of Treasury Department, Human Resource Department, General Services Department, Department of Information and Technology and Department of Accounts/Budgets, Share and Company Affairs Department. So in this way all the departments and staffs are devoted towards their jobs to get the specific objectives of NIBL.

Permanent Staff S.No. Level Post Male Female Total % of Female

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 11 10 9 8 7 6 5 4 3

Chief Executive Officer General Manager Deputy General Manager Chief Manager Senior Manager Manager Deputy Manager Assistant Manager Senior Assistant Assistant Junior Assistant Driver Peon Secuirty Guard Sweeper Total 2 5 9 17 51 127 308 851 190 6 10 181 37 38 1832 0 0 1 0 6 13 79 326 65 0 0 30 0 26 546

0 2 5 10 10 57 140 387 1177 255 6 10 211 37 64 2378 10 0 11 9 20 28 25 0 0 14 0 41 23

Contract - Based Staff S.No. 1 2 Level Post DW Security Guard Male 45 356 Female 34 2 Total 79 358 % of Female 43.04 0.56

Other (Contract) Total

36 437

12 48

48 485

25.00 9.90

11.1 BIBLIOGRAPHY:

BOOKS:
Chandra Bose- Advance Accounting,Volume Kuppa Pally- Accounting for Managers Krishnamurti & Viswanath- Advanced Corporate Finance Kaplan & Atkinson- Advanced Management Accounting Book
Miranda & Fackler- Applied Computational Economics and Finance

Websites:
www.nepalbank.com.np www.finca.org/ www.cholomandalam.com/
www.manappuram.com/ www.mahindrafinance.com/