Prem Mba 3rd Sem Report

Sambhram Academy of Management Studies Page
1.1 Introduction to the Internship Study
Under the study course of Sambhram Academy of Management Studies, the

students of Master of Business Administration have to do the internship for
six weeks in any organization recommended by the college or by the
students itself. The primary reason behind the internship program is make
the students full aware of the real world practices and to implement the
theoretical knowledge they learn in the college in the real practical field.
Master of Business Administration, a course prescribed by Bangalore

University includes the mixture of basic theoretical foundation as well as
practical knowledge required for today's management students. Its main
target is to produce professional managers. The inclusion of various subjects
with project work, organizational study, internship, has made MBA a distinct
platform in the study of management field. It fulfills the need of today's
globalize world. The internship in the course gives students an opportunity
to gain real life experience by working in a business organization. It is like a
training where students get chance to apply their knowledge gained.
Bangalore University has its ultimate objective of educating students for

professional pursuits in business, industry, and government. It is further
dedicated to contributing for increasing the knowledge and understanding of
business and public administrator. In this pursuit, MBA Program is to develop
socially responsive, creative, and result oriented management professionals
to fill up the top level managerial positions in the rapidly growing business
sector in the world.
The specific objectives of MBA program are:

To prepare students to take up top level managerial positions in the business
sector.
To develop students skill in object-oriented business management capable of
understanding and solving practical business problems creatively.

To provide professional management education with a blend of computer and
management information system courses.
To build ethical and professional responsibility.
To build the conceptual and analytical framework for making decisions.
As prescribed by the course we got to do an internship program of six

weeks. After the basic study of one year the internship program is launched.
It is the only way to expose ourselves, give our identity to the outside world.
It is really one of the appreciable tasks that Bangalore University does. It is a
great chance for students like us to be aware of the real world. Though we
did organizational visit as well as industrial visit frequently during the course
of study from different perspective but internship program was totally a new
and remarkable experience. It was like a mind preparation before to the real
job market.
Being a student of MBA of SAMS, and to fulfill the requirements of the

course, I was assigned to work as an intern at NMB Bank which is located at
babarmahal Kathmandu Nepal. Working as an intern in NMB Bank, I have
gained some practical knowledge of the banking sector which will be plus
point for my future career.
1.2 Industry Profile
1.2.1. Definition of the Bank

Bank constitutes an important segment of the financial infrastructure of
any country. The economic history of many countries reveals that
economic development and growth of financial infrastructure go hand in
hand. There is interaction between the two. Without the growth in
financial infrastructure, there can be no development and that latter in
turn changes the shape and size of the financial infrastructure.

When we say a bank, it is related to collecting deposits, advancing loans
and other credit activities. A bank will generally collect deposits from
different individuals and institutions. The collected deposits are utilized for
giving loans to different industries and commercial enterprises. Besides
those activities, a bank performs payment and remittance and other
activities. Simply stating, a bank is a financial institution, which deals with
money by accepting various types of deposits, disbursing loans and
rendering other financial services. Since banks are rendering a wide range
of services to the people of different walks of life, they have become an
essential part of modern society.
The money a bank receives as deposits from both individuals and large
companies becomes a banks liability. The bank receives assets in the
form of the interest it charges on loans made to governments, businesses,
and private individuals. This chart depicts how this process works.
Figure 1.1: Liabilities and Assets in

According
Bankingto the Nepal Rastra Bank Act (2002), Bank is a financial
institution, which provides financial services that may be in the form of
accepting deposits, advancing loan, providing necessary technical
advices, dealing over foreign currencies, remitting funds, etc. (as cited in
B.Dahal; S.Dahal, 2002, p.7).
According to the shorter oxford English dictionary, "A bank is an

establishment for the custody of money received from or on behalf of its

customer essential duty is to pay their draft on is profit areas from its use
of the money left unemployed by them".(as cited in B.Dahal; S.Dahal,
2002, p.7).
By these definitions, bank can easily be defined as the custodian of deposit.

The transactions in the financial market heavily depend upon the banking
system of the country. Without bank it would be quite impossible for the
industrialist and entrepreneurs to go directly to the general public for
getting their saving for investments. So the simplest definition is that, bank
takes the saving of the public by providing them certain rate of interest and
earns some profit by providing these saving to the industrialist and
entrepreneurs who need it by charging some interest.
1.2.2. Origin of Banking Sector
Banking has come to the present advancement form through various

stages. Some sorts of banking activities have been carried out since the
time immemorial. Traditional forms of banking were traced during the
civilization of Greek, Rome and Mesopotamia.
In Greece , the temples of Delphi and other safer places acted as store
houses for the precious metals before the days of coinage and in later
times, they lent out money for public and private purposes at the interest
though they paid none themselves. Private money changers began with
the task of reducing many metallic currencies more or less exactly to a
common unit of value and went on to accept money on deposit at interest
and to lend it out at higher interest permitting meanwhile drafts to be
drawn on them.
In ancient times or in ancient Vedic era, there was a crude form of banking
because deposits pledges policy of loan and interest rates can be traced
out from Manusmriti. In the 15 th and 16th century Roman Empire
collapsed. As a result revival of commercial and trading activities started

in different European countries. The three ancestors of banking who
revived the commercial banking transactions are:
-Merchant traders
-The governments, and
-The moneylender
It may be said that banking in its most simple form, is as old as authentic
history. The origin of banking, in the modern sense, is traced to Italy. The
word bank is supported to have been derived from the Italian word,
Banco which refers to the place for keeping, lending and exchanging
money. The early banking was however closely associated with the
business of money changing. In connection to traceable origin and
development of banking institution in the world, The Bank of Venice of
Italy established in 1157 A.D. is supposed to be the most ancient banking
institution in the world. The Bank of Venice was the first public banking
institution. The second bank was The Bank of Barcelona of Spain
established in 1401 A.D. Subsequently The Bank of Geneva was
established in 1407 A.D. The Bank of Amsterdam set up in 1609 A. D.
was very popular. The Bank of Hindustan established in 1770 A.D. is
regarded as the first bank in India .These modern banks gradually
replaced goldsmiths and moneylenders. After the evolution of The Bank
of England in 1694, there comes a remarkable change in the process of
establishing the banking institution. The idea of commercial banks rapidly
spread all over the world only after the foundation of this bank (B. Dahal;
S. Dahal, 2000).
1.2.3. Origin of Bank in Nepal
As in other countries, goldsmiths and landlords were the ancient bankers

of Nepal. During the Prime Minister of Rannoddip Singh in 1877 A.D.
number of economic and financial reforms was introduced. In Nepal
Tejarath Adda established during the tenure of then Prime Minister

Rannoddip Singh in 1937 B.S. was the first step toward the institutional
development of banking in Nepal .The establishment of the institution was
to relief the people from the exorbitant rate of interest charged by outside
valley; including the Terai Region. Thus establishment of this institution
marked the beginning of extending credit to any moneylender. It was set
up with a sole objective to provide loans to employees and public against
bullion but it did not collect deposits from the public (B. Dahal; S. Dahal,
2000).
Banking in true sense started in Nepal with the inception of Nepal Bank
Ltd. on 30 Kartik, 1994 B.S. during the time of Juddha Shumsher. Right
from the inception, it carried out functions of a commercial bank .Nepal
Bank Ltd. had a Herculean responsibility to attract people toward banking
sector from pre- dominant Sahu Mahayanas transaction and to introduce
other banking services as well. Nepal Bank Ltd. as a first commercial bank
of Nepal was established 128 years after the establishment of first
commercial bank in India. In this way, as compared to India, Nepal lags
behind 128 years even for establishing a simple banking institution (B.
Dahal; S. Dahal, 2000).
Having felt the need of development of banking sector and to help the
government formulate monetary policies, Nepal Rastra Bank was set up in
2013 BS as the central bank of Nepal. Since then, it has been functioning
as the governments bank and had contributed to the growth of financial
sector (B. Dahal; S. Dahal, 2000).
Integrated and speedy development of the country is possible only when

competitive banking services reaches nooks and corners of the country. In
order to fulfill this objective, government set up Rastriya Banijya Bank in
2022 BS as a fully government owned commercial bank . With the coming
up Rastriya Banijya Bank, banking services spread to both the rural and
urban areas. In order to provide service to the agriculture sector,

Agriculture development Bank was established in 2024 B.S (B. Dahal; S.
Dahal, 2000).
The government of Nepal adopted liberal economic policy to accelerate

countrys growth and development. Foreign investment and participation
of private sector were encouraged. The government then enacted Joint
Venture Banking policy. Accordingly Nepal allowed establishing different
joint venture banks under the collaborations with foreign banks. As per
Shrestha & Bhandari, 2007; different joint venture banks in Nepal are as
follows:
Nepal Arab Bank Ltd. (Currently named as Nabil in 1984).
Nepal Indosuez Bank Ltd. (Currently named as Nepal Investment Bank

in 1987).
Nepal Grindlays Bank. (Currently named as Standard Chartered Bank in

1990).
Himalayan Bank Ltd. collaborated with Habib Bank of Pakistan.
Nepal State Bank of India.
Nepal Bangladesh Bank Ltd.
Everest Bank Ltd. collaborated in Punjab National Bank.
Bank of Ceylon (Currently named as Nepal Industrial and Commercial

Bank).
Bank of Kathmandu Ltd. (Previously collaborated with Bank of Thailand

and present fully locally owned).
In order to operate commercial banks in Nepal, uniformity of banking acts

are essential. So a commercial Bank Act 2031 BS was enacted and has
been amended many times in accordance with the needs (B. Dahal; S.
Dahal, 2000).

Now Bank and Financial Institutions Act (BAFIA) has come into enforced
from 2063.
1.2.4. Types of Banks
As a single bank cannot fulfil all services of customer, banks can be

categorized into various types according to their specialized functional
areas. They are as follows:
I. Central bank
Broadly speaking, central banks serve as the governments banker, as

the banker to the banking system, and as the policymaker for
monetary and financial matters. The bank of England established in
1694 A.D. is the first central bank in worlds banking history. In Nepal,
Nepal Rastra Bank established in 2013 B.S. (1956 A.D.) is the central
bank.
II. Retail Banks
1. Commercial bank
2. Development bank
3. Finance Companies
4. Micro Credit Development Bank
The figure below shows the number of financial institutions in Nepalese

financial market:
Table 1.1: No.of Financial Institutions in Nepalese Financial Market
S.No Name Number

.
1 Central Bank 1

2 Commercial Bank 31
3 Development Bank 87
4 Finance Companies 79
5 Micro Credit Development Bank 21
Chart Title
Central Bank Commercial Bank Dev elopment Bank Finance Company Cooperativ e
Figure 1.2: No. of Financial Institutions in Nepalese Financial Market
1.2.5. Commercial Banks in Nepal
There are many kinds of banks like commercial banks, saving banks,
investment banks, industrial banks, co-operative banks, central banks etc.
But when we use the term bank without any prefix or qualifications, it
refers to the commercial bank. According to BAFIA 2063, A commercial
bank means bank which deals in exchanging currency, accepting deposits,
giving loans and doing commercial transactions.
A commercial bank is a financial institution which collect saving from

many individuals and institutions provides credit or loan facilities to
different industrial and commercial business. The important distinction
that distinguishes commercial banks from all other kinds of financial
institution is that it alone can hold deposit to be drawn upon by cheque. It

has the power to create and destroy money, within limits, through the use
of loans and demand deposits. Commercial banks lend money by creating
demand deposit and retire loans by canceling demand deposits.
Commercial banks are organized on joint stock company system, primarily

for purpose of earning profit. The term commercial bank is a holdover
from an earlier when banks were predominantly short- term financiers.
Now their lending are no longer confined to short term commercial loans
only. Today those so-called commercial banks have diversified their
activities to a point where they may be referred to as departmental
stores of finance.
List of Commercial Banks of Nepal:

The history of commercial banks in Nepal starts from the establishment of
Nepal Bank Limited on 1994 BS and prior to this, there was no such
organized banking system in the country. The list of commercial banks
operating in Nepal is shown below with their year of operation, head office
and paid up capital.
Table 1.2 Lists of Commercial Banks in Nepal

S.N Name Opearation Head Office Paid up
. Date Capital
(Rs. In
Million)
1 Nepal Bank Ltd. 1937/11/1 Kathmandu 3804
5
2 Rastriya Banijya Bank 1966/01/2 Kathmandu 3853
Ltd. 3
3 Agriculture 1968/01/0 Kathmandu 94375
Development Bank Ltd. 2
4 Nabil Bank Ltd. 1984/07/1 Kathmandu 20298
6
5 Nepal Investment Bank 1986/02/2 Kathmandu 24091

Ltd. 7
6 Standard Chartered 1987/01/3 Kathmandu 16102
Bank Nepal Ltd. 0
7 Himalayan Bank Ltd. 1993/01/1 Kathmandu 20000
8
8 Nepal SBI Bank Ltd. 1993/07/0 Kathmandu 18693
7
9 Nepal Bangladesh Bank 1994/06/0 Kathmandu 20103
Ltd. 5
10 Everest Bank Ltd. 1994/10/1 Kathmandu 11196
8
11 Bank of Kathmandu Ltd. 1995/03/1 Kathmandu 13595
2
12 Nepal Credit and 1996/10/1 Siddharthana 13997
Commerce Bank Ltd. 4 gar
13 Lumbini Bank Ltd. 1998/07/1 Narayangadh 13000
7
14 Nepal Industrial & 1998/07/2 Biaratnagar 13116
Commercial Bank Ltd. 1
15 Machhapuchhre Bank 2000/10/0 Pokhara 16272
Ltd. 3
16 Kumari Bank Ltd. 2001/04/0 Kathmandu 14850
3
17 Laxmi Bank Ltd. 2002/04/0 Birgunj 16140
3
18 Siddhartha Bank Ltd. 2002/12/2 Kathmandu 15610
4
19 Global Bank Ltd. 2007/01/0 Birgunj 15000
2
20 Citizens Bank 2007/06/2 Kathmandu 19223
International Ltd. 1
21 Prime Commercial Bank 2007/09/2 Kathmandu 22457
Ltd 4
22 Sunrise Bank Ltd. 2007/10/1 Kathmandu 18554
2
23 Bank of Asia Nepal Ltd. 2007/10/1 Kathmandu 15175
2
24 DCBL Bank Ltd. 2008/05/2 Kathmandu 19209
5
25 NMB Bank Ltd. 2008/06/0 Kathmandu 16517
5
26 Kist Bank Ltd. 2009/05/0 Kathmandu 20000
7
27 Janata Bank Nepal Ltd. 2010/04/0 Kathmandu 14000
5
28 Mega Bank Nepal Ltd. 2010/07/2 Kathmandu 16310
3

29 Commerz & Trust Bank 2010/09/2 Kathmandu 14000
Nepal Ltd. 0
30 Civil Bank Litd. 2010/11/2 Kathmandu 12000
6
31 Century Commercial 2011/03/1 Kathmandu 10800
Bank Ltd. 0
1.3 Company Profile
1.3.1. Inception, History and Present Status
Established in 1996, NMB Bank is the first Commercial Bank of Nepal that
has been able to upgrade from a Finance Company to a full-fledged
Commercial Bank. Nepal Merchant Banking and Finance Ltd., the erstwhile
name of the institution, was amongst the leading financial institutions in
its category until May 2008 when the transformation process for the up
gradation was complete and changed its name to NMB Bank Limited.
NMB is the brainchild of leading Nepali entrepreneurs with dream of

framing the ultimate in Merchant Banking and Financial Services.
Harnessing from its strength on Merchant Banking the Bank has decided
to broaden its scope of services by building synergies to its current
operations. This unprecedented event has been possible by way of strong
commitment and confidence of all the stakeholders viz. customers,
promoters, shareholders, regulators, and employees.
A team of experienced bankers and professionals manages NMB. As one of

the leading banks in Nepal, they are committed to the cause of society.
The commitment has always been to behave ethically and to contribute
towards the improvement of quality of life of the people, the community
and the greater society. The Bank has done well in all its core areas.
Today, the Bank provides full range of services to corporate and retail
customers and is expanding scale of operations. The Bank believes that
building strong relationships with all stakeholders, particularly the
customers, is crucial for the growth and prosperity. The strategy is to
create a strong customer base with diversified clientele supported by an
extensive branch network. They accord the highest priority to a quality

service experience and are always looking for ways to improve their
service standard.
There has been a continuous surge in the number of financial institutions

in the country. This has heightened competition amongst these
institutions, which is not good for the economy as a whole. Instead of
quantity, NMB focuses on enhancing the quality and strength of the
existing institutions. This has significance in the context of WTO
agreement also, as per which Nepal is set to open up its banking industry
for foreign players in 2010.
1.3.2. Products and Services
NMB aims in providing a comprehensive range of flexible and innovative

product and services. The bank has been constantly making effort to
provide customer focused products with a view to meet the changing
needs and expectations of the customers. The bank strives to extend
quality and personalized service to the customers as promptly as possible.
The product and services offered by the bank are as follows:

1.3.2.1 Credit
Corporate and Institutional Banking
Project and Term Financing - Independent or Syndicated Term

Loans
Working Capital Financing for Large Corporate
Trade Finance Letters of Credit, Guarantees, Import/Export Bills

Discounting etc.
Loan Syndication
Correspondent Banking
Business and Small and Medium Enterprise (SME) Banking
Structured Product Based SME Finance Term or Working Capital

Loan
Financing of Medium Size Enterprises Indigenous Credit Facilities
Loan Against Marketable Securities
Retail Banking
Structured Consumer Loans:
Auto Loan
Auto Loan is extended to purchase New Vehicle as well used vehicle for
Private and Commercial use. The Loan is also available to refinance the
existing borrowing with other financial institution within the existing

repayment period.
Financing Amount: -
NPR 0.3 to 2 million for Commercial use
NPR 0.5 to 5 million for Private/indigenous use
Up to NPR 8million for heavy equipment or 70% of the cost of the

vehicle whichever is low
Financing Ratio:
Up to 90 percent of the cost of vehicle for Private use
Up to 70 percent of the total cost of vehicle (or valuation of

vehicle) for Commercial use & Heavy Equipment.
Tenure: Maximum period of 6 years
Repayment Method: EMI or EQI based.
Interest Rate: 14.5% p.a. interest rate to 16.5% p.a. interest rate.*
*The interest rate varies with the risk, tenure, and types of vehicle (the
rate may be changed with or without notification in this site).
Mortgage (Home) Loans
Home Loan is extended to purchase Land and/or building or flat or

renovation et cetera for residential purpose. It also finance purchase of
land and build house later on under this segment. The refinancing of
existing loan from other financial institutions is also available, but the
repayment should be within the existing repayment schedule.

Financing Ratio:
Up to 80 percent of the cost of building construction in the

already purchased land.
Up to 66% of the Fair Market Value of the land and building in

case of purchase/refinance of land and building/ apartment
Up to 60% of the Fair Market Value of the land for

purchase/refinance of land (initially and build house later on)
Tenure: Maximum period of 20 years.
Repayment Method: EMI or EQI based.
Interest Rates: 14.5% to 15.5% p.a.*
*The interest rate varies depending upon risk, tenure and types of
security for the loan (the rate may be change with or without
notification in this site).
Personal Loan
Personal Loan is structured funded facility, which is extended to

numerous personal needs except few negative list viz. speculation,
gambling, money laundering et cetera.
Financing Amount: Maximum up to NPR 4.5m.
Financing Ratio: Up to 60% of the fair market value of the

collateral.
Acceptable Security: Land, building, flat etc.,
Tenure: maximum up to 8 years

Repayment Method: EMI.
Interest Rate: 15% p.a. to 17% p.a.*
*The interest rates varies depending upon risk, types of collateral

security, and types of business for which the loan is extended (the rate
may be changed).
Education Loan
Education Loan is extended to students or sponsor of the student to

enroll for higher study abroad or within Nepal.
Financing Amount: Up to NPR 5 million or 60% of the Fair Market

Value of the collateral security as valued by the Banks approved
value whichever is lower.
Financing ratio:
o Up to 90 percent of the cost of education including

traveling cost (for abroad) and accommodation (for abroad).
o Up to 90 percent of the cost of tuition fee for study within

Nepal
Tenure: Maximum up to 8 years.
Repayment Method: EMI.
Interest Rate: 14.5% to 15.5% p.a.*
*The interest rate varies depending upon risk, and types of collateral
security (the rate may be change with or without notification in this
site).

Loan Against Fixed Deposit
Loan Against Fixed Deposit (FD) of the Bank or any other financial
institutions is extended to the clients.
Financing Amount: Up to 90 percent of the value of the deposit.
Tenure: Up to one year or up to maturity date of the FD, which

may be continued further based on the requirement of the client
and validity period of the FD.
Interest Rate: Minimum 11% p.a. or 2% p.a. above the rate of FD

of the Bank
The loan may be revolving or terminating based on the

requirement of the clients.
1.3.2.2 Deposit
Savings Account
NMB Bank Alakapuri Bachhat
Offering competitive interest rate, NMB Bank Alakapuri Bachat is ideal

for those customers who wish to deposit high amount and get high
return on it.
Features:
Minimum Balance Rs. 1,000
Interest Rate 8.25% p.a. on daily balance

ATM cum Debit Card
Payment of PSTN & Post-paid Mobile bill
Free e-Banking Subscription
Free Mobile Banking Subscription
Free cheque book
Free ABBS
Requirements:
Completely filled Personal Account Opening Form
Copy of Citizenship Certificate
One passport size photograph
NMB BANK Lavansa Bachhat
NMB Bank Lavansa Bachat is especially designed to serve the needs

of shareholders of NMB Bank and Nepal Telecom. The main purpose
of this account is to facilitate shareholders in easy and fast collection
of their dividends.
Features:
Minimum Balance- NIL
Interest rate 7.25% p.a. on daily balance
Free ATM cum Debit Card

Free cheque book
Free ABBS
Share dividend will be transferred automatically to account
Requirements:
Copy of Share certificate/Nepal Telecom identity Card
NMB BANK Investors' Saving Account
Introduced for the first time in Nepal for hassle free investment in
shares
Features:
Minimum balance NIL
Free Cheque Book

ATM cum Debit Card
No Application Forms to be filled during initial public offerings

(IPOs)
Separate Dedicated counter during IPOs
Hassle free application during issue of primary shares
Same day fund transfer to the account when refund is announced
Free ABBS
Requirements:
Completely Filled Account Opening Form
NMB Bank Samriddha Bachat
Samriddha Bachat is ideal for general people who wants to save their
hard earned money for better future
Features:
Minimum Balance: NPR. 100
Free Cheque Book
Free e-banking Subscription

Free Any Branch Banking Service (ABBS)
Payment of PSTN & Postpaid Mobile bill
ATM cum Debit Card
Free medical facilities worth NPR. 500 at Venus International

Hospital
Requirements:
NMB BANK Sahuliyat Mahila Bachhat
Targeted to women segment, Sahuliyat Mahila Bachat is introduced by

the bank in respect of all Nepalese women to save their money and
earn a high interest rate.
Features:
Minimum Balance Rs. 1000.
Interest Rate 8 % p.a. on daily balance
Free e-banking Subscription

Free Cheque Book
ATM cum Debit Card
Payment of PSTN & Post-paid Mobile bill
25% discount on lockers facility
Free discount card that can be used in hospitals, departmental

stores, restaurants, shops
Free ABBS
Requirements:
NMB Bank Sulav Muddati Bachhat
Your money, now in your control
Features:
Fixed Deposit starts from Rs. 25,000
Interest Rate up to 12% p.a.

Hassle free withdrawal facility
Saving account on zero balance at 8% Interest on daily basis
Interest on Fixed Deposit will be transferred to savings account on

a monthly basis
ATM cum Debit Card
Free Cheque Book
Requirements:
Completely filled Fixed Deposit Account Form
Interest Rate:
Tenure Interest Rate Interest Payment
6-12 Months 11.75% p.a. Monthly
12-15 Months 12.00% p.a. Monthly

NMB Bank Education Plan
Your child deserves one. Education plan that grows along with your
child.
As a parent customers responsibilities to their child are many. NMB

understand how important education is in customers priority list. NMB
Bank Education Plan is a recurring plan, designed to help customers
save for their childs financial need of the future. Make themselves a
proud parent today and tomorrow.
Features:
Plan period of 3 to 15 years
Eligible age 0 to 12 years
Interest rate 7% p.a. on daily balance
Attractive gift
Fee e-banking Subscription
Facility to transfer monthly deposit from parents to childs account
Discount on Education Loan interest and processing fee
Minimum monthly deposit Rs. 500
Fixed Rate of return on your deposit
Requirements:

Birth certificate
Parents account compulsory
Copy of citizenship certificate of parent
One passport size photograph of parent and child
NMB BANK Prudent Invest
Secured Investment. Secured Life.
Introduced for the first time in Nepalese banking industry, NMB Bank
Prudent Invest is the safest way to grow customers hard earned money
while reducing risks associated with life. It does not only secure
customers investment but also covers their life insurance (endowment
policy) for a period of ten years. Start planning for their better future as
NMB Bank guarantees to double-up their investment and provides them
an additional bonus interest during the stipulated time. With this
investment plan at their hand, customers can enjoy the benefit of being
insured both financially and emotionally. customers love your family and
always wish for their better life but what happens to them without their
support. NMB Bank Prudent Invest has become the sensible way to
show how much they care of their family. With NMB Bank Prudent Invest
customers will get the highest return and life coverage at the same
time. Besides they can also enjoy the tax benefits and dont have to
shoulder the burden of paying separate life insurance premium to
insurance company. Live wise by subscribing to NMB Bank Prudent
Invest
Features:
Life Insurance (Endowment policy) coverage through National Life

Insurance Company Ltd for 10 years

Investment plan starts at multiples of Rs. 1 Lakh
Tax Saving Benefits up to Rs. 20,000 per year
Yearly Insurance Premium paid by bank
No need of having separate life insurance
No fear of policy lapse
Guaranteed double return plus bonus interest
Overdraft facility up to 90% of investment
Free from market risk
Requirements:
Completely Filled Prudent Invest Account Opening Form
Completely filled Policy Assignment Form
Copy of passport size photograph
Table 1.3 Interest Rate

Cash Credit / Overdraft rates
ratesper
perannum
annum
NMB Investors Savings 6.75% Daily Balance

Prime 14.00 %
(Minimum Balance has been
revised to NIL)
Others 15.50%
NMB Bank Samriddha Bachat 6.75% Daily Balance

Importers Loan
(Minimum Balance NPR 100)
Prime 13.50%
NMB Bank General Savings* 6.75% Daily Balance
(Minimum Balance NPR 500)
Others 14.50%
NMB Bank Karmachari Bachat 7.00% Daily Balance

Export Finance 13.00%
(Minimum Balance NIL)
Other Working Capital Loans

NMB Bank Lavansha Bachat 7.25% Daily Balance
(Minimum Balance NIL)
Prime 14.00%
NMB Bank Jalpadevi Bachat (For 7.25% Daily Balance

Others 15.00 %
Kirne) (Minimum Balance NPR 1,000)
Term Loan
NMB Bank Sahuliyat Mahila 8.00% Daily Balance
Bachat (Minimum Balance: NPR. 1,000)
Prime 14.50 %
NMB Bank Alakapuri Bachat

Others 16.50 %
NMB Bank Lubhu Bachat (For
Lubhu)
RETAIL BANKING
NMB Bank Gaun-Thaun Bachat
(For
Auto Loan Thaiba) 14.50%-16.50%
NMB Bank Banepa Subarna 8.25% Daily Balance
Bachat (For
Personal Overdraft Banepa) 17.00%
(Minimum Balance NPR 1,000)
NMB Bank Baraha Bachat (For
Dharan)
Personal Loan 15.00%-18.00%
NMB Bank Saptakoshi Bachat (For
Biratnagar)
OTHERS
NMB Bank Bindabasini Bachat
Loan
(For Against Government) 13.00 % - 14.00 %
Pokhara
Securities
NMB Bank Siddhababa Bachat
(For Butwal)
Loan
NMB Bank Against
Mero Bachat Bank
(For 13.00 % - 14.00 %
Guarantees/SBLC
Nepalgunj)
NMB Bank Ghodaghodi Bachat
Loan
(For Against Fixed Deposits
Dhangadi) 2.0 % plus FD rate or Minimum
NMB Bank Shaileshwori Bachat 12.00%
(For Dipayal)
Loan
NMB Against Properties
Bank Gadhimai Bachat (For 15.00%-18.00%
Fig. 1.4 Operating Income and Expenses and Operating Profit
Birgunj)
Loan Against other Marketable 14.00%-18.00%
Net Profit
Securities
NMB Bank Bishesh Bachat 8.75% Daily Balance
(For Children, Senior Citizens & (Minimum Balance NPR 1,000)
Physically Disabled People)
160
140
US Dollar Savings 1.00 %
120
100Savings 2007/08
GBP 1.25 %
2008/09
80 2009/10
EUR
60Savings 1.25%
40
20
0
Net Profit
Fig. 1.5 Net Profit
Paid up Capital
1600
1400
1200
1000 2007/08
2008/09
800 2009/10
600
400
200
0
Paid up Capital

Fig. 1.6 Paid up Capital

2.1 Organizational Structure of NMB
Shareholders and Promoters
NMB is a public limited company with NPR.1 billion in paid-up capital

including 30 percent of the shares held by the public. It has a wide and
diversified ownership. Leading Nepalese economist, businesspersons,
industrialist and entrepreneurs along with major financial institutions
including EPF and Yong Lian Realty, Malaysia as a foreign joint venture
partner, has promoted the company.
Table 2.1: Shareholders and Promoters of NMB
1. Individual/Institutional 50.28 %
Promoters
2. Employee Provident Fund 11.56 %
3. Foreign Investor 13.16 %
4. Public Shareholders 25 %
As a foreign investor, Yong Lian Realty SDN BHD has 13.16 percent shares
in NMB. It is a financial institution involved in various undertakings in
Malaysia, for example, acting as loan intermediaries, venture capitalists
and so on. Besides Malaysia, they are also doing business in another Asian
country - Sri Lanka - but later, due to the civil war there, they decided to
pull out from there.
Current Board of Directors of NMB

The Board of Directors consists of eight members that manage NMB. The
details of the present board of directors and management team are given
below:
Table 2.2: Board of Directors of NMB
S.N Number of
Name of Directors
. Shares
Mr. Mahabir Prasad Goyal(Gayatri

525,700
1. Investments & management P Ltd)
2. Mr. Purushottam lal Shanghai 525,700
3. Mr. Pawan Kumar Golyan 525,700
4. Mr. AatmaRam Murarka 525,700
5. Mrs. Shanti Byahut, EPF 1,155,699
Mr. Sharad Goel, Yong Lian Realty SDN BHD,

1,316,207
6. Malaysia
Mr. Pradeep Kumar Nepal (General

500
7. Shareholder)
Mr. Harish Chandra Subedi (General

500
8. Shareholder)
The management team of NMB consists of all the managers and the
department heads. They are the one who supervise their sub- ordinates
and guide them to accomplish their work efficiently. Management of the
organization plays a major role in achieving organization goal. As the
board of directors formulates the vision, mission and objectives for the
organization, where as managers formulate action plan to achieve those
objectives.
2.2 Organization Structure

Organization structure helps in knowing the working of the organization.
Each and every organization has its own structure based on their
requirements. Some of the organization structure is complex and some
are simple. Organization structure defines how tasks are to be allocated,
who reports to whom, and the formal coordinating mechanism and
interaction patterns that will be followed. An organizational structure is a
mainly hierarchical concept of subordination of entities that collaborate
and contribute to serve one common aim. Organizations are a variant of
clustered entities. An organization can be structured in many different
ways and styles, depending on their objectives and ambience. The
structure of an organization will determine the modes in which it operates
and performs.
Organizational structure allows the expressed allocation of responsibilities

for different functions and processes to different entities such as the
branch, department, workgroup and individual. Individuals in an
organizational structure are normally hired under time-limited work
contracts or work orders, or under permanent employment contracts or
program orders.

2.2.1 Board and Directors

The Board of Directors recognizes its responsibility for leadership,
direction and control of the Bank for creating value for its customers,
shareholders and business partners; value for employees and the
communities in which IT operate. NMB Bank has a unitary board structure.
The Board comprises of a Non-executive Chairman, 4 Non-executive
Directors and an Executive Director (Managing Director).
Role of Chairman of the Board and Managing Director
Roles of Chairman of the Board and Managing Director are separate and
distinct as set out in writing and duly approved by the Board. The
Chairman of the Board is an independent non-executive director. Board
delegates day-to-day running of the Bank to a Managing Director/Chief
Executive and Senior Management.
The role of Chairman of Board includes monitoring of corporate

governance, effective communication with shareholders and providing
leadership to the Board. The role of Chief Executive, apart from being a
member of the Board of Directors, also has responsibility for the day-to-
day management of the Banks operations. Managing Director/Chief
Executive has the central role in maintaining and enhancing the culture of
the Bank and in motivating staff to act in the Banks best interests.
2.2.2 Board Committees
In accordance with the Banks and Financial Institutions Act, it have an

Audit Commiittee, Credit Committee and an Executive Committee
operating under their own specific terms of reference which are reviewed
annually by the Board. Membership of Board Committees is reviewed on a
regular basis. Board committees operate in terms of mandates that are
reviewed and approved by the Board. The mandates set out their roles,
responsibilities, scope of authority, composition and

procedures for reporting to the Board. All Board Committee mandates
have been reviewed to take into account amendments to relevant
legislations / regulatory guidelines.
Audit Committee
The Audit Committee reviews the Banks financial statements, considers

significant financial reporting issues and makes appropriate
recommendations to the Board. The Committee also monitors internal
control systems of the Bank. It controls internal audit functions, facilitates
statutory audit function and advises the management and recommends to
the Board on, major audit issues.
Credit Committee
Credit Committee, operates as per the charter authorized and duly

approved by the Board. The committee comprises of:
Managing Director Chairman
Assistant General Manager (Credit) Member
Chief Operating Officer Member
Chief Financial Officer Member
The Credit Committee is delegated certain discretionary limits and

authorities for loans and advances. The committee is involved in
reviewing and sanctioning the credit proposals under the criterion
delegated to the committee as per the Credit Policy approved by the
Board.
Executive Committee

Executive Committee even though the provision is available as under, this
committee has been temporarily dissloved due to certain practical
problems associated with implementation of certain regulatory directives
on constitution of such committee.
Executive Committee members are EPF Nominee, a Public Director,

Managing Director and any one Director nominated by NMB. The
committee is coordinated by Assistant General Manager (Credit). The EC is
delegated certain discretionary limits and authority for loans and other
credit facilities, treasury and investment activities, and capital
expenditures. The EC assists the Board

3.1 Organization Culture
NMB Bank Ltd is the building blocks on which banks performance and
productivity is based upon. It is known for stimulating environment with
levels of motivation, empowerment and recognition. They encourage an
open and informal culture that values integrity, commitment, teamwork,
excellence in customer service. They adopt a policy of strong learning and
development initiatives, which promotes day to day learning as well as
decision making. They believe that their strength is their people, so they
endeavor to surpass their expectations and give them the best possible
work environment and benefits that match the best in the industry.
NMB comprises of many departments where each department looks after

their own area of activities and with its sound and efficient capabilities
assist the bank towards the positive prospects. The major departments of
NMB Bank are:
Customer Service Department
This department deals with providing various information related to the

services offered by the bank. It responds to the queries of the customers-
giving appropriate solutions to their problems promptly. This department

performs jobs of routine and clerical nature. This department deals mainly
with Account opening, Account closing, Chequebook printing and
distribution, Account statement etc. NMB has a major focus in CSD since
its motto is Customer Care our religion
Business Retail Banking Department
NMBs Retail Banking targets medium and small sized enterprises and
resources to meet the ready requirements of the customers business with
personal touch and responsiveness. This segment of the bank provides
wide range of credit facilities to mid-sized business entities, house and
groups that includes financing to small and medium enterprises. The
ranges of facilities are L/C, Bank Guarantees, Term Loans that includes
Trust Receipt, Clean Bill & Documentary Bill Discounting, Packing Credit,
Demand Loan, Overdraft/Cash Credit etc.
Corporate and Institutional Banking
This segment of credit department comprises a seasoned and team of

Relationship Managers to meet the demanding service standards of large
and medium Corporate Houses, Multinationals, Government Organizations,
Financial institutions etc. The ranges of facilities are Working capital
finance, Pre and post shipment export financing, Import financing,
Corporate Financing, Receivable Discounting, L/C, Letter of Guarantee and
standby Letter of Credit, Loan Syndication, Project financing etc.
Information Technology Department
The bank pursues a complete IT policy as a strategic initiative to meet the

growing competition for business, achieve efficiency in internal operations
and meet customer expectations. Providers of IT not only focus only on
technology and their internal organization, they now consider the quality
of the services they provide and focus on the relationship with customers.
HR Department

The function of this department is closely related to the bank's employees
such as Recruitments, Selection, Promotions, Transfer, Performance
appraisals, Training & Developments etc. To improve the skills and
knowledge of the staff members, human resource department provides
job-related training, both in-house and external.
Internal Audit
This department is responsible for maintaining and verifying the individual
accounts of the bank on day-to-day basis like the expenses of staff salary,
expenses of staff lunch and other miscellaneous expenses.
Accounts/Budgets
This department is responsible for maintaining and preparing whole

accounts and budget of the bank. This department is responsible for
preparing final financial statement of the bank.
Trade Finance Department
This department is responsible for opening letter of credit for those people
who are involved in trading activities. This department provides services
by issuing letter of credit as an issuing bank to advising bank in case of
import and vice versa when exporting. The contents required in bill of
lading are invoice, packing list, certificate of origin, insurance and
transport document. This department looks after the foreign trade
activities of the bank such as Issuance of letter of credit (both import and
export), Issuance of Guarantee, and Telex transfer.
Legal Department

The main function of this department is to look after the legal aspects of
the bank. Formulation of laws and policies for the bank also lies in this
department. This department takes all the legal actions on behalf of the
bank as required according to the situation.
Investment Banking Department
Since NMB is an investment banker, it has setup a different department for

investment banking. This department looks after the public offering of
securities (IPO & Rights Issues). The activities of Investment Banking
department includes managing the portfolio of clients, valuation of
securities, operation of mutual funds, management of private placement of
equity and providing investment advisory services.
Card Centre
NMB Ltd. has separate department for the issue of the cards. ATM cards
are created and issued from the head office of NMB. This department deals
with issue, renewal and management of cards. NMB currently issues ATM
cards only. In future NMB plans to introduce debit cards that can be used in
POS terminals and credit cards also.
General Administration Department
The general service department of NMB performs miscellaneous works,

which are very essential for the daily functioning of the bank. It makes the
purchase order of different types of goods needed for the bank as well it
keeps the record of different goods purchased and also helps in controlling
the wastage of different goods.
Treasury Department

Treasury department is responsible for planning and executing our funding
activities and strategies at the bank. Treasury department also reviews
portfolio hedging used for managing liquidity, market and credit portfolio
risks as well as interest rate risk inherent in non-trading financial
instruments and trading risk inherent in the customer and proprietary
trading portfolio.
3.2 HUMAN RESOURCES MANAGEMENT
Effective and sound human resources programs, strategies, processes,

systems and practices are critical to attract, develop, motivate and retain
a skilled, productive and stable work force. Human resources costs are
usually the single largest expenditure of any organization. Human
Resources (HR) Department share ownership and responsibility for
managing human resources concerns and activities. It usually has
oversight responsibility for human resources policies, services and
activities. The human resources management functions of NMB Bank
includes the following sections:
A. Organization and Staffing
B. Human Resources Policies and Procedures
C. Employee Relations Management Practices
D. Compensation and Job Classification
E. Recruitment, Staffing and Hiring Activities
F. Performance Management and Staff Development
A. Organization and Staffing
The HR Department is responsible for managing the day-to-day

implementation of the human resources policies, procedures and

practices. The HR Department provides services and support to
employees who work at the bank. The key functional areas of the
department are:
compensation and benefits;

employment and employee relations;
information systems/manpower;
training;
risk management;
workers' compensation;
B. Human Resource Policies and Procedures
The NMB Bank Ltd Employee Handbook summarizes personnel policies as

well as other guidelines and regulations pertaining to non-faculty
employment. Each branch publishes and provides a copy of a faculty and
adjunct faculty handbook to staff members. The handbook contains
information on the mission and goals, organization, policies and
procedures of the bank. It also provides the handbook online.
Effective records management includes the systematic control of the

creation, receipt, maintenance, use and disposition of employee records.
Efficient records management systems increases department efficiency,
eliminates misplaced or lost documents, and reduces litigation exposure.
Records management includes the following components:
development of records retention schedules;

management of filing and information retrieval systems in any
media;
ensuring adequate protection of records that are vital, archival or
confidential according to accepted archival and records
management practices;
economical and space-effective storage of active and inactive
records;
control of the creation and distribution of forms, reports, and
correspondence and;
Maintenance of public information records in a manner to facilitate
review by the public.

C. Employee Relations Management Practices
Management of employee relations is critical to providing a workplace

environment that is free from harassment and discriminatory practices
and conducive to increased levels of employee productivity. Human
resources and employee relations management practices include
developing, recommending, implementing and interpreting human
resources policies and guidelines; providing leadership and guidance in
staff and labor relations; administering uniform discipline and
performance management practices and systems; timely intervention and
resolution of employee complaints, grievances and appeals; and other
employee and supervisor focused activities.
D. Compensation and Job Classification
The Human Resources Department has primary responsibility for

administering the non-faculty job classification and compensation plan.
The objectives of the NMB compensation system are listed as:
Allocate funds for payment of wages and salaries in as fair and

equitable a manner as possible;
Establish rates of pay and salary ranges which are justly based on
job related factors such as complexity of work, required education,
training and experience, decision making, supervision given and
received and level of responsibility; and
Give consideration to prevailing rates being paid for similar kinds of
work in the appropriate labour market as determined by periodic
salary surveys.
It has a supplemental pay practice in which it gives special pay

supplements to the base rate of pay for employees working in hazardous
duty assignments; employees who serve in an interim position that
requires additional or greater responsibilities; or employees who take on

temporary or secondary assignments outside the employee's regular
hours of employment.
E. Recruitment, Staffing and Hiring Activities
A Joint Director presently heads this Division. It deals with all the issues
pertaining to Human Resource Management i.e. Recruitment, Transfer &
Rotation, Retirement/Early Retirement, Annual/Merit Increase,
Management Information System & Litigation etc. The hiring department
informs HR of open positions by submission of a Request for Position
Announcement form for faculty and staff openings. The HR employment
specialist advertises open faculty and administrative positions upon
request in national, regional and local newspapers and other publications.
The employment manager, the HR representative and the employment
specialist partner with the hiring departments to fill vacancies. The
employment manager directs the recruitment and selection process of the
through supervision of the HR representatives and employment specialist.
Primary responsibilities of the HR representative in the hiring process
includes reviewing and screening all applications and related documents
to determine minimal qualifications of each application; verifying previous
employment and referring qualified applications to hiring departments.
The employment specialist coordinates recruitment activities and attends
local job fairs. HR Representatives occasionally attend job fairs in
conjunction with the employment specialist. HR also publishes guidelines
and provides a hardcopy Search for Talent guide to customers involved in
the hiring process to assist them in the screening and selection process.
Selection committees are required for administrator and faculty positions.

Selection committees interview and recommend candidates for hire for
administrator and faculty positions. Committee members include at least
three representatives of the open position.
F. Performance and Professional Development

NMB uses the Performance Evaluation and Development Plan (PEDP) for
administrators and the Evaluation form for staff and members.
Professional development activities enable the employees to enhance
existing skills and increase product
3.3 MARKETING DEPARTMENT
Marketing Management is a business discipline which is focused on the

practical application of marketing techniques and the management of a
firm's marketing resources and activities. Rapidly emerging forces of
globalization have compelled firms to market beyond the borders of their
home country making International marketing highly significant and an
integral part of a firm's marketing strategy.
The marketing managers of NMB are often responsible for influencing the
level, timing, and composition of customer demand accepted definition of
the term. This department works in hand to hand with other departments
in the organization to obtain the objective of integrated marketing
concept. This department mainly focuses on selling the existing products
of deposits to the prospective customers according to their needs and
wants. The intern got an opportunity to work in this department in the
second week of the internship program. The marketing department is
supervised by marketing manager of the bank who is responsible for
developing the overall product plan. The manager allocates other two
employees with various responsibilities, which may include collecting
market information, developing a database of the information, following
up the prospects, etc.
The working of marketing department in any bank is primarily based on

public relations and later the core concepts work. First it is very important
to build up a good corporate image and positioning must be accurate. The
success of the marketing plan depends on how the bank has positioned
itself, whether it has put some conflicting mission statement. Everything

has to flow and channelized as per the marketing plan of the whole bank.
This function of any bank cannot be carried out in isolation or on a
standalone basis, therefore integration of cross-functional activities are
needed to attain synergy.
The NMB Bank Ltd since its establishment has positioned itself as a
market leader in the investment banking activities and it has a clear
mission, which states, Continue our positioning as the Market Leader by
providing a comprehensive, personalized, professional and innovative
service through customer responsive staff. This clarity of mission
statement shows its clarity of marketing concept, which has focused the
customer satisfaction. It is believed that if a bank has satisfied customers
half of its marketing activities are already completed; it just has to worry
about the other half.
The marketing plan in the NMB Bank is taking its pace, due to its necessity
to compete as the youngest commercial bank. It is continuously designing
new products according to the current market needs and wants. The NMB
follows a very simple and reliable process to design new product in the
market. Being a new commercial bank most of its products are still in the
introductory phase of the product life cycle. The simple process of
developing a new product can be well understood with the help of below
given chart.
Identify the prospects needs and wants through a

market survey
Identify the market segment to be served
Design the product according to the segments needs

and wants
Test the feasibility of the product regarding cost and

other factors

Review the product paper according to the comments
made by the experts
Feedback
Launch the product and start promoting it
Fig 3.1: Basic Steps in New Product Development
Among the four Ps of marketing, the intern dealt with the Promotional
activities of the bank. The intern was designated as marketing
representative of the bank during this period of placement. Different
promotion mixes were used in this department such as advertising,
personal selling, publicity and public relations. The intern had used the
advertising and the personal selling skills in this department.
Responsibilities given and activities performed
The intern was placed in this department in order to sell the deposit
products of the bank along with some of its loan products like ODs. The
intern was supposed to go around the market and grab the customers
through the hard selling approach. The activities performed in this
department are summarized as follows:
Move around the local area in search of prospects
Open accounts
Deliver cheque books and other services to the customers who

opened accounts
Keep a record of daily account openings of different types
Develop questionnaire to collect segment information
Improve public relations through excellent communication skills

Take decision regarding the benefit to be provided to the
customers in a prescribed limit
Follow up the customers in the bank who were called from the
market
Direct the customers to the concerned areas of benefit
Develop a plan for publicity of the bank
Participate in the fairs of the banks by installing stalls
Problems solved in Marketing
Promotion of the banks product was done
Identification of new potential product- Australian dollar travellers

cheque, which the bank quickly brought into its services
Identification of need of POS facility through ATM cards
Conveying the customers desire for facility of SMS banking, e-

banking and mobile recharge through ATM cards etc to the
marketing seniors
The activities performed in this department cannot be exactly cited due to

the vagueness of the marketing concept, but the above-mentioned
activities cover most of the marketing functions.
3.4 INVESTMENT BANKING DEPARTMENT
Primary market is the market for issue of new securities. Securities are
issued in the market to raise funds to serve the specific purpose. The
government, companies, business firms and industries tap the needed
funds from the market issue of these securities. Sometimes the

responsibilities to manage the new issue is entrusted to the security
dealers and underwriter of securities under different terms and conditions
of t he issues. To issue securities in the primary market, a firm in Nepal,
must follow company act. The act has briefly specified the process of
issuing prospectus. Prospectus is a legal document containing financial
information of corporate houses and businesses helping investors to make
a rational investment decision.
NMB Bank Ltd is an investment banker and a market maker of

government securities like promissory notes, saving bonds, etc issued by
the NRB. Primarily NMB is known as an issue manager, which greatly deals
with the primary market activities and instruments.
3.5 CLEARING DEPARTMENT
Clearing refers to the he procedure by which an organization acts as an

intermediary and assumes the role of a buyer and seller for transactions in
order to reconcile orders between transacting parties. The clearing
department mainly deals with cheques, drafts or negotiable instruments
that come into the transaction of the bank. This department largely deals
with cheques that a customer deposits or withdraws from the bank.
Cheque
A cheque, also spelled check, is a negotiable instrument instructing a

financial institution to pay a specific amount of a specific currency from a
specified demand account held in the maker/depositor's name with that
institution. Both the maker and payee may be natural persons or legal
entities.
) , itself the
The English word cheque comes from the Arabic akk (
Arabicized of '( )pronounced check' in Persian, which is a written
document or letter or note of credit Muslim merchants -and everybody

else- adopted to carry out their trading. The concept of akk appeared in
European documents around 1220, mostly in areas neighbouring Muslim
Spain and North Africa, south France and Italy.1
Cheques generally contain:
1. Drawer
2. Drawee
3. Payee
4. Account number
5. Cheque number
6. Date of issue
7. Amount
8. Currency of the instrument
9. Signature of the drawer
10. Cash denomination table(at the reverse side)
A cheque is generally valid for six months after the date of issue unless
otherwise indicated; this varies depending on where the cheque is drawn.
In Australia, for example, it is fifteen months. In the United States, it is six
months. If indicated the validity may vary.
Types of cheques:
1. Open cheque
1 www.wikipedia.org

A cheque is called Open when it is possible to get cash over the counter
at the bank.
The holder of an open cheque can do the following:
Receive its payment over the counter at the bank
Deposit the cheque in his own account
Pass it to someone else by signing on the back of a cheque
2. Crossed cheque
Since open cheque is subject to risk of theft, it is dangerous to issue such

cheques. This risk can be avoided by issuing another type of cheque
called Crossed cheque. The payment of such cheque is not made over
the counter at the bank. It is only credited to the bank account of the
payee. A cheque can be crossed by drawing two transverse parallel lines
across the cheque, with or without the writing Account payee or Not
Negotiable.
When a cheque bears across its face two parallel transverse lines, the
cheque is said to be crossed. The lines are usually drawn on the left-hand
top corner of the cheque. It is the collecting bank which has to ensure that
the proceeds are credited to the account of payee only and no other. If the
collecting banker allows the proceeds of the cheque so crossed to be
credited to any other account, he may be held guilty of negligence in the
event of an action for wrongful conversion of funds being brought against
him.
3. Bearer cheque

A cheque which is payable to any person who presents it for payment at
the bank counter is called Bearer cheque. A bearer cheque can be
transferred by mere delivery and requires no endorsement.
4. Order cheque
An order cheque is one which is payable to a particular person. In such a

cheque, the word bearer may be cut out or cancelled and the word
order may be written. The payee can transfer an order cheque to
someone else by signing his or her name behind the cheque.
Some variant types of cheques:
Personal Cheque
Cashier's Cheque
Certified Cheque
Travellers Cheque
In the clearing department of a bank, all types of cheques are categorized

into two types:
Outward cheques
Inward cheques
Outward Cheques
Outward cheques are the cheques of other banks or financial institutions

that a customer presents in the bank. According to the flow of cheques, it
seems to be an inward cheque but the cheque finally goes to the
clearinghouse or the respective bank for settlement, hence it is called
outward cheque. Outward cheques bring money into the bank.

E.g.: If Bank As customer presents a cheque belonging to bank B to
deposit into bank A then that cheque is outward cheque for bank A.
Inward Cheques
Inward cheques are the home cheques of the bank that other banks or
financial institution present for settlement via clearinghouse or the banks
counter.
E.g.: If the same bank As customer presents bank As cheque in bank B,

then bank B presents the cheque to bank A for verification and settlement
which is inward cheque for bank A.

4.1 Vision Statement
To establish ourselves as a leader in banking by providing a range of

financial services suitable to the needs of the market with high priority on
customer care while simultaneously embracing the interests of all
stakeholders and value of a good corporate citizen.2
4.2 Mission Statement3
To gain supremacy in growth, profit, customer care and social response in

banking by:
Leveraging and integrating the existing strengths of the institution
Reaching out and serving wide range of customers within and

outside the country
Developing a culture of Giving Extra Care to the Customers
Being innovative in designing and delivering services
Adopting prudent investment practices for building up a sound

assets base.
Developing internal and external efficiencies by prudent use of

technology
Building operational efficiency through smarter processes and

controls
Providing exciting and challenging career prospects for the

employees
2 & 2 www.nmb.com.np
3

Placing high priority on stakeholders interest and statutory
compliance
Acting responsibly for making contributions to the society at large
4.3 Strategic Objectives
The strategic objectives of NMB are as follows:
To develop a customer oriented service culture with special

emphasis on customer care and convenience.
To increase the market share by following a disciplined growth

strategy.
To leverage the technology platform and open scalable systems to

achieve cost-effective operations, efficient MIS, improved delivery
capability and high service standards.
To develop innovative products and services that attracts targeted

customers and market segments.
To continue to develop products and services that reduces the cost

of funds.
To maintain a high quality asset portfolio to achieve strong and

sustainable returns and to continuously build shareholders value.
To explore new avenues for growth and profitability.
4.4 SWOT ANALYSIS
SWOT analysis is the study of internal as well as external environment of

the organization. To operate smoothly in the atmosphere where it
sustains, it needs to take care of it. Financial sector in Nepal is relatively
small with limited institutions and functions. A formal financial institution

includes Banking and Non Banking institutions. Under banking it comes
to Central Bank, Commercial Bank, Development Banks and Rural
Regional Development Banks. Whereas in Non Banking it comes to
Finance Company, Insurance Company, Provident Fund, Stock Exchange
Ltd etc.
The twelve years of war in Nepal has recently been settled. During the
crisis situation the country faced various emergencies but in those
situations too banking sector was doing better and still is. Due to sound
political and legal situation till now provides lots of opportunities for the
organizations. Moreover, the banking habits of customers are increasing
day by day. One or the other way they are attracted by the new banking
methodology like online banking, ATM, SMS banking, plastic money like
Credit/ Debit card, Any branch banking system etc. They are using latest
software to fulfill new demand of the customers.
At the same time there are a number of financial institutions providing

same service at different rates the competition is fierce. The banking
industry needs to be strong enough against foreign banks that will come
in Nepal after 2010.
NMB is the leading commercial bank in Nepal, offering services such as

retail banking, commercial banking, international banking and treasury
operations.
SWOT analysis is done for a company, to find out its overall Strengths,
Weaknesses, Threats and opportunities leading to gauging the
competitive potential of the company.
The SWOT Analysis enables a company to recognize its market standing

and adopt strategies accordingly. Here SWOT analysis of NMB bank is
made to understand the positioning of the bank better.
STRENGTHS

1. BRAND NAME: NMB has earned a reputation in the market for
extending quality services to the market vis--vis its competitors. It
has earned a strong Brand name in banking in a very short span of
time.
2. MARKET SHARE: NMB Bank has better market share.
3. HUGE NETWORK:NMB Bank has the many number of linked

branches in the country. The bank operates through a network of 32
branches and over 40 ATMs across Nepal, thus enabling them to
serve customer in better way.
4. DIVERSIFIED PORTFOLIO:NMB has all the products under its

belt, which help it to extend the relationship with existing customer.
It has umbrella of products to offer their customers, if once
customer has relationship with the bank.
5. Huge Customer Base

6. Diversified range of banking and non-banking financial services &
products
7. Innovations in products and services give it a major strength in
attracting customers
8. Convenience (online banking, mobile banking, large retail branch
availability)
9. Strong internet banking presence
10. A good management team
11. Quality service
12. Locational Advantage
WEAKNESS
1. Limited promotional activity

2. Regulatory Body is not proactive at times.
3. The bank has to always follow the rules and regulations laid by
the Nepal Rastra Bank (NRB).
4. Old and rigid recriutment processes.
5. Lack of motivations for the employees.
6. Minor hindrances

7. Hierarchical management
8. Increased cost of operation.
9. Retention of human resource.
OPPORTUNITIES
1. Improved political situation in Nepal.
2. Extend E- banking facility.
3. Expanding into new geographic markets.
4. Falling trade barriers in attractive foreign markets.
THREATS
1. Increasing number of the financial institutions. Mainly the

establishment of foreign banks in Nepal after 2010 A.D.
2. The well equipped competitors. They are increasing intensity of
the competition which may squeeze the profit.
3. Constant and quick innovation of changes in the banking
technology.
4. Changes in the preference of customers as well as personnel.
5. Lateral movement of staffs
6. Frauds and default
7. Worldwide economic recession.

8. Pressure on margin and profitability because of competitive
banking market.
9. Frequent closures, strikes, power shortage etc. in the nation.
10. Political Instability.

5.1 Summary
This internship program provides the opportunity to understand the

practical aspects of running the organization and dealing with the
forthcoming challenges, weakness and threats. It helps us with being
familiar with the sector, which has a huge contribution on economic
development of the nation. This internship report is the study of the
banking system of NMB Ltd. So, this report is based on the practical work
experiences, interviews and the observation in NMB Ltd. as the intern for
the period of 6 weeks. In preparing this internship report, most of the data
and facts given and used are taken from either primary source or the
secondary source. In this regard, the interview and observation method
was used as the primary source for data collection and the company's
accounting books, websites of NMB, and the other periodical are used as
the secondary source of the data collections.
The main objective of this intensive internship program was to provide

students with the opportunity to recognize their potentials regarding the
field they choose to pursue their career. This internship program aimed to
help student to acquire broader knowledge by integrating their theoretical
knowledge with practical implementations in the real life management.
As this report is prepared based on the work experiences, observations

and small part of interview it may not have covered the detailed
information. Similarly, the report is based on the study of the two branches
of NMB Limited, Babrmahal and Durbarmarg and the department in which
internee got to work; the report may not have explored all aspect as well.
The main constraint for this report was the time, i.e. the period that the
intern got to work in bank, so this report may lack some information and
may not give the true picture of banking industry as a whole.
5.2 Findings
Some major findings of the study are:

The customer inflow in NMB Bank is satisfactory. Both the cash
deposit and cash withdraw is done in continuous manner. The daily
average customer inflow for opening new account is 4 to 6.
The amount deposited in the Saving Account seems quite

satisfactory as because it is in increasing trend.
The inward remittance in the particular bank is satisfactory.

Moreover, the remittance comes mostly from India, Dubai, Qatar,
and Iraq (mostly Arabian Countries) and Malaysia and USA, Australia
etc.
Likewise, the fund transfer within the country and making Indian
drafts is also satisfactory. The bank generates income through the
commission charges for transferring funds and issuing the Indian
drafts.
The bank accepts deposits from the public giving attractive interest
rates. They categorized the deposits as current deposit, saving
deposit, call deposit, saving premium deposit and fixed deposit.
They also grant loans and advances to various sectors charging

some rates.
Overall the study shows that the financial health of the organization sound
satisfactory. Also the study shows the importance of the internship
program. It will help the students to be fully aware of the real world
practices before entering into the market as a fresher.
5.3 Conclusion
From the analysis based of the information collected, the following are the
conclusions:
The bank has positioned itself as a reliable bank in the market.

The bank has been collecting more deposits but it can still generate
more deposits by bringing new schemes to attract the potential
customer.
The different rate of service for the account holder and non-account
holder is helping the bank to attract the customer to open an
account in the bank, which is, plus point for NMB.
The bank is expanding its network to give service to the places

where there is high demand of NMB Branch.
5.4 Recommendations
On the basis of above analysis and findings of the study, the following
recommendation can be made to the NMB:
Customer should be well informed and updated with the bank rules
and regulations.
The staffs and interns should be regularly given new information so

that they could easily handle the queries customer. The staffs of
customer service are busier so either for the proper interaction with
the customer the interns should be provided with the proper
information or the staffs should be increased in the customer service
department because this department is like the front desk where the
customer gets the first impression about the Bank.
NMB need to formulate a competitive strategy in order to ensure its

survival in the face of intense competition.
Efforts should be made for the motivation of the staffs in order to

initiate them personally for the effective work and make them
responsible for the job they are in. Staffs needs to be motivated for
bringing the accounts and loyal customer to the organization.

There should be proper system of reward management and care
should be taken for the job satisfaction of all level of employee
irrespective of the position and the nature of work.
Maintaining and improving customer relationship is also important so

that they can contact in near future.
The Banks deposits trend is increasing. The loan is in increasing

trend but slope of loan trend is smaller than the slope of deposits.
Therefore, NMB needs to adapt new policies and strategies in order
to utilize its available deposits.
The Bank needs to heavily invest in the Research and Development

department to cope with the present technological advancement.
The Bank needs to rethink on its interest rates on loan to make it

comparable with the market interest rate on similar products.
The bank should provide more attention to the priority sectors, like
agriculture and small-scale industry while mobilizing its resources to
contribute to the balanced economic development of the country as
well as to be distinct service provider than its competitors should.

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Sambhram Academy of Management Studies Page

1.1 Introduction to the Internship Study

Under the study course of Sambhram Academy of Management Studies, the

Master of Business Administration, a course prescribed by Bangalore

Bangalore University has its ultimate objective of educating students for

The specific objectives of MBA program are:

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As prescribed by the course we got to do an internship program of six

Being a student of MBA of SAMS, and to fulfill the requirements of the

1.2 Industry Profile

1.2.1. Definition of the Bank

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Figure 1.1: Liabilities and Assets in

According to the shorter oxford English dictionary, "A bank is an

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By these definitions, bank can easily be defined as the custodian of deposit.

1.2.2. Origin of Banking Sector

Banking has come to the present advancement form through various

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1.2.3. Origin of Bank in Nepal

As in other countries, goldsmiths and landlords were the ancient bankers

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Integrated and speedy development of the country is possible only when

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The government of Nepal adopted liberal economic policy to accelerate

Nepal Arab Bank Ltd. (Currently named as Nabil in 1984).

Nepal Indosuez Bank Ltd. (Currently named as Nepal Investment Bank

Nepal Grindlays Bank. (Currently named as Standard Chartered Bank in

Himalayan Bank Ltd. collaborated with Habib Bank of Pakistan.

Nepal State Bank of India.

Nepal Bangladesh Bank Ltd.

Everest Bank Ltd. collaborated in Punjab National Bank.

Bank of Ceylon (Currently named as Nepal Industrial and Commercial

Bank of Kathmandu Ltd. (Previously collaborated with Bank of Thailand

In order to operate commercial banks in Nepal, uniformity of banking acts

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1.2.4. Types of Banks

As a single bank cannot fulfil all services of customer, banks can be

Broadly speaking, central banks serve as the governments banker, as

II. Retail Banks

4. Micro Credit Development Bank

The figure below shows the number of financial institutions in Nepalese

Table 1.1: No.of Financial Institutions in Nepalese Financial Market

S.No Name Number

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5 Micro Credit Development Bank 21

Figure 1.2: No. of Financial Institutions in Nepalese Financial Market

1.2.5. Commercial Banks in Nepal

A commercial bank is a financial institution which collect saving from

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Commercial banks are organized on joint stock company system, primarily

List of Commercial Banks of Nepal:

Table 1.2 Lists of Commercial Banks in Nepal

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1.3 Company Profile

1.3.1. Inception, History and Present Status

NMB is the brainchild of leading Nepali entrepreneurs with dream of

A team of experienced bankers and professionals manages NMB. As one of

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There has been a continuous surge in the number of financial institutions

1.3.2. Products and Services

NMB aims in providing a comprehensive range of flexible and innovative

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