1

Chapter I INTRODUCTION TO BANKING INDUSTRY

1.1 Introduction A bank is a financial institution licensed by a government, which deal with money and credit. Its primary activities include borrowing and lending money. Many other financial activities are key players in financial markets and offer financial services such as investment funds. Banking sector is mirror of an economy as it is linked with almost all economic sectors. Its linkage with all sectors makes it a proxy for what is happening in the economy as a whole. Banks are highly leveraged institutions that ar1e heavily depends on attracting deposits as a basis for their asset acquisition. Resources obtained from the depositors finance most part of the asset required by commercial banks. Banking plays significant role in the economic development of country. Bank is a resource for the economic development, which maintains the self confidence of various segment of society and extends credit to people. So, commercial banks are those financial institutions mainly dealing with activities of the trade, commerce, industry, and agriculture that seek regular financial and other helps from them. For growth and development, the objectives of commercial banks should be to mobilize idle resources into the most profitable sector. Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer, and ATM, etc. Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending. Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account. Banks borrow most funds from households and non-financial businesses, and lend most funds to households and non-financial businesses, but non-bank lenders provide a

2 significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings too. Bank is an financial intermediary between the deficit and surplus economic unit. It is the financial institution with an aim to accumulate the idle money of the general public and advancing to their profit sectors. In order to collect the deposits, bank offers attractive rate of return for their savings. Bank then mobilizes their deposits by providing loan facility to the general public, business house, industries, agriculture, and other needy sectors by charging some interest rate. In this way the main objective of the bank is to collect the funds, mobilize them into productive sectors and facilitate overall economic development. 1.1.1 Definitions Commercial Banks are an integral part of the national financial system that functions on a continuous basis in an open social system. The definition of a bank varies from country to country but ther are many common things in various definitions. Some of relevant definitions are as follows: "banking business" means the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act; (Banking Act (Singapore), Section 2, Interpretation). "banking business" means the business of either or both of the following: 1. receiving from the general public money on current, deposit, savings or other similar account repayable on demand or within less than [3 months] ... or with a period of call or notice of less than that period; 2. paying or collecting cheques drawn by or paid in by customers. As per U.S. law, Any institution offering deposits subject to withdrawal on demand and making loans of a commercial or business nature of a bank. According to Kent, A Bank is an organization whose principal operations are concerned with the accumulation of the temporarily idle money of general public for the purpose of advancing to other for expenditure.

3 According to R.S. Sayers, Ordinary banking business consists of charging cash for bank deposits and bank deposits for cash, transferring bank deposits from one person or corporation to another, giving bank deposits in exchange for bills of exchange, government bond, the secured or unsecured promise for businessmen to repay etc. In the word of Concise Oxford Dictionary, A bank is an establishment for custody of money which it plays out on customers order. Similarly, Nepal Commercial Bank Act 2031, defines, A commercial bank refers to such type of bank which deals in money exchange, accepting deposit, advancing loans and other commercial transaction except some specific function done by other specified banks such as co-operative, agricultural bank and industrial bank. From the above definitions, it is clear that a bank is a financial institution, which accepts deposits from the public in different accounts and grants loan to individuals and corporations against their securities. The difference in interest rate on lending and deposit interest rate spread is the major source of income for the bank. Interest on lending is higher than the interest rate on deposits. It is an agent of its client, which remits money, collects incomes and pays expenses on behalf of them. It performs a wide variety of functions, which provide utility to the individual, corporation and public.

1.1.2 Origin of word Bank The name bank derives from the Italian word Banco means desk/bench, used by bankers, who used to make their transactions above a desk covered by a green tablecloth. When a banker failed ,the people hence broke up his Banco on word Bankrupt. In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called aBanco, from which the words banco and bank are derived. However, some people do not agree with this view. They say that Germans were masters of a great part of Italy and the word Bank is derived from the German word back, meaning joint stock of fund. Also, there is another opinion from French writer, Revil Pout, that the use of Bank and Bank notes were started in Babylon in 600B.C.and the Bank of Venice of Italy was established in middle ages. The use of it in India was started in ancient age. Kautilyas

4 economy also describes the bank. The Manu Smriti too has explained the banking system of ancient age. Hence, combining all the opinions of different pioneers, we can conclude the there is unanimity among the origination of word bank. So, to denote the bank following term was used in different countries as follows: Backin German Banco in Italian Banque in French Bank in English

The evolution of the banking industry has a long time back, during ancient times. There was reference to the activities of money changers in the temple of Jerusalem in the New Testament. In ancient Greece the famous temples of Delphi and Olympia served as the great depositors for people surplus funds and these were the center of money lending transaction. Indeed the traces of rudimentary banking were found in the Chaldean, Egyptian and Phoenician history. 1.1.3 Origin of Modern Banking Modern banking was originated in medieval age in Italy, despite strong Christian prohibition against the charging of interest. According to the canon law, Florence, Genoa and Cucca became the centre of finance and trade in 12th and 13th centuries. Bank of Casa de San Giorgia in Genoa was established in 1148. Bank of Venice set up in 1157 A.D. in Venice, Italy is regarded as the first modern bank. Subsequently, Bank of Barcelona and bank of Geneva was established in 1401 A.D. and 1407A.D. respectively. During 17th century Bank of Florence and Bank of St. George were established. In 1609, the Bank of Amsterdam was established in Holland, likewise is 1607, Bank of Hamburg was established in Germany and Bank of England was established in England. 1.1.4 Banks in Nepal Nepalese modern Banking is relatively younger. But, it does not mean that she has not any traditional banking practices. Goldsmiths and the money lenders were the ancestral of Nepalese banking system. The concept of modern banking system is relatively new to Nepal.

5 However, when the history is traced, it can be found that the existence of banking practices started in the eight century. There is slow and steady evolution of banking sector in Nepalese economy. Moreover, it was recorded that the new era of Nepal known as Nepal Sambat was introduced by Shakhadhar, a sudra merchant of kantipur in 879/880 AD after having paid all the outstanding dept on the country. Towards the end of eighth century, Gunkam Dev has borrowed money to rebuild the Kathmandu valley. During the Malla regime in eleventh century, there was an evidence of professional moneylender and bankers who use to finance foreign trade with Tibet. The establishment of the Tejarath Adda during the year 1933 B.S by Prime Minister Rannoddip Singh, which was the first step towards the institutional development of banking in Nepal. The Tejarath Adda provides credit facilities to the public at very low rate of five percent especially on the collateral of gold and silver. Because this institution did not accept any deposits from the public, Adda faced financial problem making it impossible to carter its service to public. Consequently, with the incremental trade with Tibet and India, the need of modern banking institutions was realized and Nepal Bank Act was formulated in 1937 AD. In 1937, Nepal Bank Limited was inaugurated by his Majesty King Tribhuwan as the first commercial bank of Nepal. After this, on the year 1965 AD, Rastriya Banijya Bank, second commercial bank of Nepal was established. Similarly, under the Agriculture Development Bank Act 2014 B.S. Agricultural Development Bank was established on 7th Magh 2024 B.S. Later on, Government becomes more liberal and flexible. As a result, many of its Acts and Rules are amended to facilitate the banking sector advancement. Consequently, Number of joint venture banks with the foreign investments increased. Nepal Arab Bank (NABIL Bank) was first of its kind. Now in Nepal, the joint venture banks hold around 45 percentage shares, with approximately Rs. 101.1 billion in assets. The joint venture banks are from the United Kingdom, Bangladesh, Pakistan, France, India and Sri Lanka. Nepals banking sector is still in a very developing stage with only 72 years of modern banking history, and has to go a long way. In terms of number, banking sector is quite satisfactory, but in quality and diversity of services, just hope of prosperity remains of course, not backed by reality.

6 Table No.1: Joint Venture Banks in Nepal S.N. Bank 1 2 Nepal Arab Bank Ltd. Standard Chartered Bank Ltd. Foreign Bank National Bank Ltd. Bangladesh Standard Chartered Grindlays Bank Ltd. ,Sydney, Australia 3 4 5 6 7 Himalayan Bank Ltd. Nepal SBI Bank Ltd. Nepal Bangladesh Bank Ltd. Everest Bank Ltd. Habib Bank, Pakistan State Bank of India, India IFIC Bank, Bangladesh Punjab National Bank, India

Nepal Credit & Commercial Bank Bank of Ceylon, Sri Lanka Ltd.

Source: www.nrb.org Altogether there were 32 Commercial Banks as August 2012. They all have got their own rules and regulation and own vision but ultimately they are serving Nation to build huge financial resources and mobilizing it in the best possible ways. The main objectives of the banking industries will be profit maximization and wealth maximization. The banking sectors remained still for a long period time passed on many developments occurred. In this present scenario, Nepal banking system is evolving itself as a powerful instrument of planning and economy growth of all the developed and underdevelopment sectors. The scope and scale of banking too have undergone substantial change in response to the saving and credit needs of people. Although government had started the liberalization of financial sector during the decade of 80s but this process speeded up only in early 1990s. In fact private sector rushed into the banking and financial industry after the restoration of democracy. Many commercial banks like Himalayan bank, Everest bank, Bank of Kathmandu etc were established during this decade.

7 Table No. 2: Commercial Bank in Nepal SN. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Commercial bank Nepal Bank Ltd. Rastriya Banijya Bank Ltd. Nabil Bank Limited Nepal Investment Bank Ltd. Standard Chartered Bank Ltd. Himalayan Bank Ltd. Nepal SBI Bank Ltd. Nepal Bangladesh Bank Ltd. Everest Bank Ltd. Bank Of Kathmadu Ltd. KUMARI Bank Ltd. Lumbini Bank Ltd. NIC Bank Ltd. Machhapucchre Bank Ltd. Kumari Bank Ltd. Laxmi Bank Ltd. Kumari Bank Ltd. Agriculture Dev. Bank Global Bank Ltd. Citizens Bank Traineeational Prime Commercial Bank Ltd. Bank Of Asia Ltd. Sunrise Bank Ltd. Development Credit Bank Ltd. NMB Bank Ltd. KIST Bank Ltd. Janata Bank Nepal Ltd. Mega Bank Nepal Ltd. Head Office Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Chitwan Morang Pokhara Kathmandu Birgunj Kathmandu Kathmandu Birgunj Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Operation Date 1937/11/15 1966/01/23 1984/07/16 1986/02/27 1987/01/30 1993/01/18 1993/07/07 1993/06/05 1994/10/18 1995/03/12 1996/10/14 1998/07/17 1998/07/21 2000/10/03 2001/04/03 2002/04/03 2002/12/24 2006/03/16 2007/01/02 2007/06/21 2007/09/24 2007/10/12 2007/10/12 2001/01/23 1996/11/26 2003 2010/04/05 2010/07/23 2010/09/20

Commerz & Trust Bank Nepal Kathmandu Ltd.

8 30 31 32 Civil Bank Ltd. Century Commercial Bank Ltd. Sanima Bank Ltd. Kathmandu Kathmandu Kathmandu 2010/11/26 2011/03/10 2012/02/15

Source: www.nrb.org.np

1.1.5 Functions of commercial banks Wider commercial role The commercial banks are important pillars for nations economy and role of banks is not limited to banking, and includes:

Issue of banknotes(promissory note)issued by a banker and payable to bearer on demand)

Processing of payments by way of telegraphic transfer or other means Issuing bank drafts and bank cheques Accepting money on term deposit. Lending money by way of overdraft, installment loan or otherwise Providing documentary and standby LC, guarantees, performance bonds, securities underwriting commitments and other forms of off-balance sheet exposures

Safekeeping of documents and other items in safe deposit boxes Currency exchange Acting as a 'financial supermarket' for the sale, distribution or brokerage, with or without advice, of insurance, unit trusts and similar financial products

Economic functions The economic functions of banks include: Issue of money in the form of bank note and current accounts subject to cheque or payment at the customer's order. These claims on banks can act as money because they are negotiable and/or repayable on demand, and hence valued at par. They are effectively transferable by mere delivery, in the case of banknote, or by drawing a cheque that the payee may bank or cash.

9 Netting and settlement of payments Banks act as both collection and paying agents for customers, participating in interbank clearing and settlement systems to collect, present, be presented with, and pay payment instruments. This enables banks to economise on reserves held for settlement of payments, since inward and outward payments offset each other. It also enables the offsetting of payment flows between geographical areas, reducing the cost of settlement between them. Credit intermediation Banks borrow and lend back-to-back on their own account as middle men Credit quality improvement Banks lend money to ordinary commercial and personal borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes from diversification of the bank's assets and capital which provides a buffer to absorb losses without defaulting on its obligations. However, banknotes and deposits are generally unsecured; if the bank gets into difficulty and pledges assets as security, to raise the funding it needs to continue to operate, this puts the note holders and depositors in an economically subordinated position. Maturity transformation Banks borrow more on demand debt and short term debt, but provide more long term loans. In other words, they borrow short and lend long. With a stronger credit quality than most other borrowers, banks can do this by aggregating issues (e.g. accepting deposits and issuing banknotes) and redemptions (e.g. withdrawals and redemptions of banknotes), maintaining reserves of cash, investing in marketable securities that can be readily converted to cash if needed, and raising replacement funding as needed from various sources (e.g. wholesale cash markets and securities markets). Categorically, major functions of the commercial banks can be explained in following heads: Accepting Deposits: A bank accepts deposits in different types of accounts: a) Current deposits b) Saving deposits c) Fixed deposits Advancing Loans: Banks do not only collect the deposits but also perform the function of advancing loan to the needy business house, industry, agriculture and people etc. Banks generally provides the following types of loans. a) Cash credits b) Direct loan c) Overdraft

10 d) Discounting bills of exchange

Agency Service: Banks also perform function of an agent on behalf of its clients. Under agency service, it performs following functions: a) b) c) d) e) f) Payment of cheque, bills promissory notes Collection of checks Remittance of money Security brokerage service Issue of letter of credit Receipt of payment of certain dividend, interest etc.

Miscellaneous Services: They are as follows: a) b) c) Deal exchange business with the transactions of foreign Issues of travelers cheque Keeping valuable articles in the safe vault

d) Collection of a trade information, statistics, and Financial advisory services e) Credit creation

11

Chapter II INTRODUCTION TO KUMARI BANK

2.1 Introduction Kumari Bank Limited, came into existence as the fifteenth commercial bank of Nepal by starting its banking operations from Chaitra 21, 2057 B.S (April 03, 2001) with an objective of providing competitive and modern banking services in the Nepalese financial market. The bank has paid up capital of Rs. 1,603,800,000 of which 70% is contributed from promoters and remaining from public. Kumari Bank Ltd has been providing wide - range of modern banking services through 29 points of representations located in various urban and semi urban part of the country, 20 outside and 9 inside the valley. The bank is pioneer in providing some of the latest / lucrative banking services like E-Banking and SMS Banking services in Nepal. The bank always focus on building sound technology driven traineeal system to cater the changing needs of the customers that enhance high comfort and value. The adoption of modern Globus Software, developed by Temenos NV, Switzerland and arrangement of centralized data base system enables customer to make highly secured transactions in any branch regardless of having account with particular branch. Similarly the bank has been providing 365 days banking facilities, extended banking hours till 7 PM in the evening, Utility Bill Payment Services, Inward and Outward Remittance services, Online remit Services and various other banking services. Visa Electron Debit Card, which is accessible in entire VISA linked ATMs (including 33 own ATMs) and POS (Point of Sale) terminals both in Nepal and India, has also added convenience to the customers. The bank has been able to get recognition as an innovative and fast growing institution striving to enhance customer value and satisfaction by backing transparent business practice, professional management, corporate governance and total quality management as the organizational mission. The key focus of the bank is always center on serving unfulfilled needs of all classes of customers located in various parts of the country by offering modern and competitive banking products and services in their door step. The bank always prioritizes the priorities of the valued customers.

12 2.1.1 Capital Structure Authorized Capital: Rs.2,000,000,000.00 Issued & Paid-Up Capital: Rs.1,603,800,000.00 2.1.2 Vision Our vision is to be the preferred financial partner to our customers, a center of career growth to our employees, and to maximize our shareholders value, while contributing to our nations financial sector and to its economic welfare.

2.1.3 Mission Our mission is to deliver innovative products and services to our customers, use these innovative products to achieve financial inclusion, and do so by exemplifying good corporate governance, proactive risk management practices, and superior corporate social responsibility. 2.2 Board of Director Kumari Bank is managed by a team of professional Board of Directors. The Board of Directors consists of the following personalities. Table 3: Board of Directors of KUMARI Mr. Min Bahadur Gurung Mr. Naresh Dugar Mr. Noor Pratap J.B.Rana Prof. Dr. Rajan Bahadur Paudel Dr. Shova Kant Dhakal Mr. Rishi Agrawal Chairman Director Director Director Director Director Director Mr. Rashindra B. Malla

13

2.3 Management Team

Kumari Bank is managed by a professional management team. The members of the management have proven track record in the banking sector. The management team consists of the following personalities. Mr. Udaya K. Upadhyay Mr. Geha N. Dhungana Mr. Tika Ram Chapagain Mr. Suresh K. Karna Chief Process Re-engineering Officer Mr. Sanjay Poudyal Mr. Narayan P. Bhuju Mr. Ajit Bhattarai Mr. Bikas Khanal Mr. Narendra P. Chhatkuli Chief Financial Officer Head- Information Technology Head - Operations & Logistics Head - Corporate Credit Head - Legal & Compliance / Company Secretary Head - Re tail Credit Head - Human Resources Acting Chief Executive Officer Chief Credit Officer Chief Marketing Officer

Mr. Rajesh Shrestha Mr. Ashish Bhattarai Mr. Mridul Mainali Mr. Pankaj Rana Mr. Parmeshwar Pant

Head - Credit Risk Management Head - Card Head - Treasury & Correspondent Banking

Ms. Rena Rijal Head - Institutional Banking & Remittance Ms. Sipa Regmi Head - Marketing & Corporate Communication

Mr. Dinesh Nidhi Tiwari

Head - Recovery

14 Mr. Milan Kumar Maskey Mr. Niraj Rai Head - Foreign Trade Head - Traineeal Audit & Concurrent Audit Head - Finance, Planning & MIS Head - Transaction Marketing, Education Loan & Consumer Loan Head - Mobile Cash Head - Credit Administration & Compliance Head - Branch Operations

Mr. Nirmal Kumar Khatiwada Mr. Prajwal Pant

Mr. Ummeed Shrestha Mr. Vishal Rauniyar

Ms. Namita Shakya

2.4 Product and services Kumari bank offers different kind of product and services according to the customer and business need. Different products and services offered are as follows:

2.4.1 Deposit products: Saving deposits: Kumari Smart Bachat Khata Twinkle Star Saving Shuva Laxmi Bachat 50 Plus Saving Kumari Saving Kumari Salary Saving Account Shareholders Saving Account PF Deposit Scheme Kumari Big Savings Khata Fixed Deposits: GENERAL FIXED DEPOSIT 14 Days 1 Month 3 Months 6 Months 5.00 5.50 5.50 5.50 6.50 6.50 5.25 6.50 7.00

0.50 2.50 4.00 5.50

15 1 Year Above 1 Year INSTITUTIONAL FIXED DEPOSIT 1 Year Above 1 Year RECURRING DEPOSIT SCHEME STRUCTURED TIME DEPOSIT MERO LAGHU MUDDATI KHATA 6 Months 1 Year 2 Years 7.00 7.50

7.50 8.00 6.50 Upto 8.50

5.50 7.00 7.50

2.4.2 Loan products Kumari Bank provides different loans to the customer for betterment of individual life and business upliftment. Loans of the bank are in different productive sectors, business sectors, education, traineeational trade, and other social sectors also. With reasonable interest rate and other multiple facilities Kumari bank is providing following loan facilities to the customers:

1. Overdraft Corporate/ Multinational Industry/ Trading 2. Working Capital/ Short Term Loan Corporate/ Multinational Industry/ Trading 3. TR/ Importers Loan Corporate/ Multinational Industry/ Trading 4. Term Loan Corporate/ Multinational Industry/ Trading

Prime 12.50 13.00 Prime 12.00 13.00 Prime 12.00 12.50 Prime 13.00 14.00 Prime 12.50 9.50 14.00

Others 12,50 15.00 Others 12.00 15.00 Others 12.00 13.50 Others 13.00 16.00 Others 14.50 14.00 15.00

5. Export Credit 6. Deprived Sector 7. Home Loan

16 8. Educational Loan 9. Private Vehicle Loan 10. Commercial Vehicle Loan 11. Loan Against First Class Bank Guarantees 12. Loan Against Marketable Securities 13. Loan Against Deposit Of KBL* 14. Loan Against Government Bond 15. Other Loan 14.00 14.00 14.00 12.00 13.50 11.00 11.00 14.00 15.00 15.00 16.00 14.00 15.50 13.00 13.00 16.00

17

Chapter III Objectives and Research Methodology

3.1 Objectives Primarily, this program is objected towards the implementation of core theoretical knowledge into real life situation. The program incorporates the understanding of working culture, knowing the corporate environment, and learning to adapt with new circumstances. Program also develops the interpersonal, communication as well as report writing skills. Objectives of the program can be mentioned as follows: To identify the problems of customer regarding bank To identify the most important medium for advertising the banking products To know the preference of customer regarding extra services To identify the alternative features for the new products To know the customer satisfaction level and their perception regarding the bank

3.2 Research Methodology Research is one of the ways to find answers to your question. It is a systematic controlled empirical and critical investigation of propositions about the presumed relationships about various phenomena. Different systematic methodology are use to explore the mentioned objectives in this report. Report is based on various methodologies that helped to analyze the data and finding the causes and effects relationship among them.

Data Collection: Trainee used both the primary data and secondary data to collect the data for measuring the customer satisfaction towards the banking services. Trainee used both the observation and questionnaire methods for collecting primary data and used annual report, different brochure, website (www.kumaribank.com.np), other related books, newspaper, bulletin, booklets, and NRB directives for collecting secondary data. Trainee used participant observation. For this purpose trainee was involve in assigned activities with Kumari banks staff for the period of eight weeks .This traineeship report is

18 the trainees personal experience and knowledge that has been acquired through direct observation of Kumari bank, Butwal Branch.

Trainee conducted questionnaire using the following details: Sample size Sampling unit Sampling technique 50 Customers Butwal Convenient sampling method

19

Chapter IV Analysis and Interpretation

After the data collection, it was classified and tabulated manually and with the help of computer. Then the task of inferences was accomplished with the help of percentage and graphic method.

1. How long have you been associated with this bank? Responses Less than 3 months Less than 6 months Less than 1 year More than 1 year No of Respondents 18 9 13 10 % of Respondents 36 18 26 20

40 35 30 25 Less than 3 months 20 15 10 5 0 Less than 3 months Less than 6 months Less than 1 year More than 1 year Less than 6 months Less than 1 year More than 1 year

Interpretation: From the above graph it is clear that majority of the respondents are part of KUMARI BANK for less than 3 months ie 36%. Only 20% of the respondent are part of KUMARI BANK from more than 1 year.

20 2. Which of the following type of banking account do you have? Responses Saving accounts Joint accounts Current accounts Call accounts Fixed accounts No. of respondent 20 5 8 5 12 % of respondents 40% 10% 16% 10% 24%

Saving accounts Joint accounts

Current accounts
Call accounts Fixed accounts

Interpretation: From the above graph it is clear that majority of the customers have saving accounts and least of them have call accounts.

3. What are the reasons that attract you to be a customer of the bank? Respondent Interest rate Services Goodwill All of above No of Respondents 11 15 12 12 % of Respondents 22% 30% 24% 24%

21

Sales

Interest rate Services Goodwill All of above

Interpretation: From the above graph it is clear that majority of the respondents i,e. 30% are part of KUMARI BANK because of its service; 22% because of its interest rate;24% because of all the three factors goodwill of the Bank. 4. What are the problems that you are facing regarding the bank? Responses Delay in service Customer relationship Parking Location No of Respondents 18 8 10 14 %of respondents 36% 16% 20% 28%

22

Delay in service Customer relationship Parking Location

Interpretation: From the above graph it is clear that customers are facing the problem of delay in service and location of the bank.

5. Which is the most important medium you are exposed to?

Responses Newspaper T.V Door to Door Radio Hoarding Board

No of Respondents 12 10 5 13 10

%of respondents 24% 20% 10% 26% 20%

23

Sales

Newspaper T.V Door to Door Radio Hoarding Board

Interpretation: From the above graph it is clear that the product must be advertised through radio and newspapers.

6. Which of the following extra service of the bank would you like to go in for? Ranking Responses Phone banking ATM Net banking Bill Payment 1st 8 28 10 4 2nd 18 14 15 3 3rd 18 5 8 19 4th 6 3 17 24

Interpretation: From the above table we can understand that 28 customers have ranked 1 for ATM. 10 customers have ranked 1 for net banking, 8 customers have ranked 1 and only 4 customers have ranked 1 for bill payment.

24 7. Is your business handled by banking executives in a timely and efficient manner? Responses Always Once in a while Seldom Never No. of respondents 25 8 12 5 % of respondents 40% 16% 24% 10%

Always
Once in a while Seldom Never

Interpretation: From the above graph it is clear that 40% of the customers believe that their business is always handled in effective manner and 10% of them believe that the executives never handle their business. .

25 8. Rank the following features for improvement of the new product. 1st 28 2nd 14 3rd 5 4th 3

Ranking Responses Attractive interest rate Less maturity period Minimum opening balance Monthly interest Delivered

10

15

17

18

18

19

24

Interpretation: From the above table it is clear that 28 customers have ranked 1 for attractive interest rate, 10 customers have ranked 1 for less maturity period, 8 customers have ranked 1 for minimum balance and only 4 customers have ranked 1 for monthly interest delivered .

9. Would you recommend our services to anyone else? Responses No. of respondents Yes 22 No 13 May be 15

% of respondents 44% 26% 30%

Yes No May be

26

Interpretation: From the above graph it is clear 44% of the customers want to recommend the banks services and 26 % of the customer does not want to recommend

10. What is your overall satisfaction rating with our bank? Responses Very dissatisfied Somewhat dissatisfied Neither satisfied nor dissatisfied Somewhat satisfied Very satisfied No of respondents 3 5 12 10 20 % of respondents 6% 10% 24% 20% 40

40 35 30 25 20 15 10 5 0

very dissatisfied somewhat dissatisfied neither satisfied nor dissatisfied somewhat satisfied verysatisfied

Interpretation: From the above graph it is clear that 40% of respondents are very satisfied,20% somewhat satisfied, 24% are neither satisfied nor dissatisfied with the bank, 10% are somewhat dissatisfied with the bank and 6% are very much dissatisfied with the bank.

27

Chapter V Findings and Suggestions

From the above questionnaire we found out following findings: Main factor that attract customers towards the bank is its service Most of the customers use saving and fixed accounts Majority of respondents said they are facing the problem of delay in service and rest are facing the parking and location problems Majority of respondents believe radio and newspaper are the best way for positioning the banks products and services The most preferable extra service is ATM and less preferable is bill payment Most of the customers have ranked attractive interest rate as 1st feature for improvement of existing product. Most of the customers are very satisfied with the overall services of the bank

The bank must follow the following suggestions: The bank must deliver prompt and quick service to the customers while operating at cash counter. The bank can increase the cash counter and also provide the evening counter services to their customers. The bank must advertise their products and services in radio and newspapers so that they can make wide market coverage and position their products and services in customers minds. The bank must increase their ATM outlets and also encourage the card payment facilities by alliance with reputed supermarkets and departmental stores. The bank must make interest rate more attractive for improvement of the existing product.

28

Chapter VI Limitation of the study

This report is constrained by numerous factors although it is based on direct observation and personal experience of trainee. In many aspects, report depends upon the secondary sources also which reliability can be questioned. So, report is prepared in the midst of various limiting factors as explained below: This report is based on limited information due to unavailability of sufficient information from the bank. There was a time limit for traineeship program to gain full fledge knowledge desired and needed. Some required but confidential information cannot be obtained from the bank. Busy schedule of the staff in the organization. Negative attitude of staffs toward trainees. This report is only focused to a single branch of the whole organization. The staffs being in less number were busy to guide the trainee The bank did not have the policy to rotate in each department so the knowledge about other department could not be gained. The banks policy on keeping some matters confidential prevented the trainee from analyzing different activities. This study may not be applicable to other organizations of similar nature

29

CHAPTER VII CONCLUSION

Traineeship period of eight weeks has been helpful to make general know how of the KUMARI bank. Trainee makes general conclusion on the basis of analysis done in the periods of eight weeks. Financial institutions are mushrooming in Nepal in such a way that no organization can survive without outstanding performance in terms of activities, relation, product, and services. As witnessed in customer service department, KUMARI bank is trying to regain itself with different innovative products and services. Standing in the midst of cut throat competition, the bank is increasing its customers and prospective customers and hence the deposit. Different deposit services and loan products are added with more attractive interest rate and more services. The analysis done on level of customer satisfaction concluded that the customers are well satisfied by the banks services.

30

REFERENCES

Books
Shrestha, M. K., & Bhandari, D. B. (2009). Financial Markets & Institutions. Kathmandu: Asmita Publication. Thapa, K. (2009). Fundamentals of Investment. Kathmandu: Asmita Publication. Kumar, R. (2011). Research Methodology: Pearson Publication

Website
N. Rastrya Bank. (2011). Retrieved on August 14, 2012 from http://www.nrb.org.np K. Bank Limited. (2010). Retrieved on August 24, 2012 from http://www.kumaribank.com K. Bank Limited. (2011). Retrieved on August 24, 2012 from http://www.kumaribank.com/News/capital-structure.html K. Bank Limited. (2011). Retrieved on August 24, 2012 from http://www.kumaribank.com/Reports/quarterly-reports.html

31

ANNEXURE

QUESTIONNAIRE:
Name: Occupation: Address: Age: Phone no:

1. How long have you been associated with this bank? a. b. c. d. Less than 3 months Less than 6 months Less than 1 year More than 1 year

2. a. b. c. d. e.

Which of the following type of banking account do you have? Saving accounts Joint accounts Current accounts Call accounts Fixed accounts

3. a. b. c. d.

What are the reasons that attract you to be a customer of the bank? Interest rate Services Goodwill All of above

4. a. b. c. d.

What are the problems that you are facing regarding the bank? Delay in service Customer relationship Parking Location

32 5. a. b. c. d. e. Which is the most important medium you are exposed to? Newspaper T.V Door to Door Radio Hoarding Board

6. Rank the following extra service of the bank would you like to go in for? 1st Ranking Responses Phone banking ATM Net banking Bill Payment 2nd 3rd 4th

7. Is your business handled by banking executives in a timely and efficient manner? a. b. c. d. Always Once in a while Seldom Never

8. Rank the following features for improvement of the new product. 1st Ranking Responses Attractive interest rate Less maturity period Minimum opening balance Monthly interest Delivered 2nd 3rd 4th

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9. Would you recommend our services to anyone else? a. Yes b. No c. May be

10. What is your overall satisfaction rating with our bank? a. Very dissatisfied b. Somewhat dissatisfied c. Neither satisfied nor dissatisfied d. Somewhat satisfied e. Very satisfied