Documente Academic
Documente Profesional
Documente Cultură
Internship Report
On
Agricultural Development Bank Limited
(Customers Service Department, ECC)
Submitted By:
Laxman Sharma
Platinum Management College
Exam Roll No: 14030685
P.U. Registration No: 2013-2-03-1889
Submitted To:
Office of the Controller of Examination
Faculty of Management
Pokhara University
Signature:..
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ACKNOWLEDGEMENT
Regards,
Laxman Sharma
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Table & Fig no List of Tables and Figures Page No
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ABBREVIATIONS
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Table of Contents
Chapter 1 Introduction
1.1 Background 1
1.2 Objectives of the Study 2
1.3 Methodology 3
1.4Limitations of the Study
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Chapter 4: Analysis of Activities done and Problems Solved
4.1 Background
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4.2. Customer Service Department 33
4.3 Activities Done in Customer Service Department 33
4.4 Clearing Department 38
4.5 Other activities were done and problem solved 40
BIBLOGRAPHY
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Chapter 1
INTRODUCTION
1.1 Background
Nepal is a developing country. Its economic growth and prosperity rely on the
performance of the upcoming human resources. The quality of these human resources
depends upon the knowledge and skills they have obtained from their academic
background.
Pokhara University (PU) is the largest and oldest university in Nepal. It is the pioneer
university in providing management education in Nepal and since its establishment it
has been providing an excellent education to the students. TU has designed various
management degrees under Faculty of Management (FOM) and among them one of
the outstanding developments is in the form of Bachelors in Business Administration
(BBA). This program is a felt necessity to link between knowledge and practice to
give professionalism as the pressing requirement of HR Development to suit micro-
economic needs of the country. The whole BBA program comprises of 120 credits
hour.
Among these, the internship program is designed with the view to developing
students skill in object-oriented business management, capable of understanding and
solving real life business related problems. It provides practical exposure and help
students to understand corporate world. This course deals with the fundamental
concept of corporate worlds, which are essential for any persons conspiring to be the
active participant of this competitive world.
As per the course requirement of the BBA program every seventh semester, the
student should prepare the internship report after the completion of the two months
internship in the institution. This internship had been fruitful because it had helped me
to see the same things from the two opposite directions and find the difference in the
perception of these two completely opposite sides as a neutral observer.
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Internship Program is a feature of PU BBA Program that is compulsory to fulfill the
partial requirement for the degree of BBA, which provides the perfect platform for the
students to utilize their theoretical knowledge in real life situations. It helps them to
observe, study and explore new facts and understand how an organization actually
functions. In simple words, the internship program is designed with opportunity of
learning how to translate the theoretical knowledge into wise actions through
exposure to a real organizational environment. Summing up, internship is simply the
applied form of knowledge. It is relatively short-term in nature with the primary focus
of getting on-the-job training.
The main goal is to highlight the activities carried out in ADBL. It helps the students
to be prepared for the future through the little knowledge gained from the two months
of the job like experience. The specific objectives are jotted down in nutshell below:-
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To get the practical exposure and understand the institutional cultures and
valuesystem of the corporate world.
To gather the knowledge on the various activities performed in various
departments of the bank and be aware of the products and services.
To develop the ability to handle various kinds of customers with varying
knowledge level, problems, and requirements.
1.3 Methodology
This internship report is the study of particular subject backed by the collection,
compilation, presentation and interpretation of relevant information. It starts from the
selection of the organization for the internship, performance of different kinds of
activities and placement in different parts of the organization and last collection of
various primary and secondary data for the preparation of the report
It helped to analyze the findings in meeting the objectives of the study.
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As the selection of BBA specialization for the final semester was Business Finance,
the selection of a good organization was very important. BBA graduates see banking
career to be most lucrative, so commercial banks with diversity in products and better
working and learning environment for interns are the best choice for an intern.
Developing competencies is possible by working as a member of the bank rather
being treated as an intern.
Taking into consideration the numerous options available for the internship, various
pros and cons of each of the alternatives was thoroughly analyzed. After discussions
with various teachers and faculties, ADBL, the commercial bank of Nepal was chosen
for the unique set of advantages it offered. Most importantly ADBL rotates Internee in
various department of the bank to learn about the activities of the bank as a whole.
The bank was approached dropping recommendation letter of college and Curriculum
vitae.
1.3.3 Placement
After a week, the date for an intern was informed and a contract letter was signed
agreeing all the terms and conditions of the bank. The internship was started from 26 th
Poush, 2073.Intern was appointed at HR Department of ADBL Maitidevi,
Kathmandu. Intern was provided with an opportunity to understand all the
functionalities of the bank, especially all those performed in that branch except
handling cash. Intern had several departments to work for and learn the specific
importance and working pedagogy of each department during the short eight weeks
period. Intern was placed in various departments like Customer Service Department,
and Remittance & Clearing Department.
Internee was placed in the internal and external places of these departments. All these
departments had an internal as well as external placement area. The period for
placement was 26th Poush 2073 to 26th of Falgun 2073 from 10:00 am to 5:00 pm. The
placement was made five weeks in Customer Service Department, three weeks in
Clearing Department. The rotation of placement was changed every Sunday. In the
case of lack of staffs in some departments, internee was placed in required places.
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1.3.4 Duration of Internship
Pokhara University (P.U.), Faculty of Management, has defined the duration of
internship for 2 months of working time at the organization. So, in order to fulfill this
requirement, an internship was done for two months starting from 26 th of Poush 2073
to 26th of Falgun 2073 from 10:00 am to 5:00 pm.
The duration of interns work in each department is presented below:
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Despite lots of opportunities prevailing for the study, there were few limitations,
which restricted the study and they are:
It was difficult to have the in-depth study of all the departments due to the
time constraints.
The banks policy in keeping some matters confidential prevented from
analyzing various critical facts and issues.
Limited availability of annual reports, office records, and other published
and unpublished source of data.
Time and resources constraints are the major limitations of this report.
Despite the sincere effort and willingness to help of the bank executives,
their busy schedules could not give to interne as per the expectations.
This report does not explain the overall functioning of the bank.
Since the intern is confined to few departments, only the related data of
limited departments are available
However, ignoring all limitations, it has been best tried to gain adequate banking
knowledge and sincerely perform the task assigned.
Chapter 2
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2.1 Meaning and Definition of Bank
A Bank is a depository financial institution, which purchases money and sells money
for money. In other words, Bank is financial institution that deals with monetary
transactions in this way; a bank is a sensitive sector of the industry because it plays
with the public money. The primary operating activity of any bank is to collect fund in
the form of deposit from the surplus sector of the economy and transfer this collected
fund to the deficit unit of the economy in the form of loans. The benefit that the
surplus unit gets by depositing their access fund in the bank and the charge that the
deficit unit pays for using the fund of the bank are both expressed in percentage and
that rate is known as the interest rate. The difference between the lending interest rate
and borrowing interest rate is called interest spread and this spread is the major source
of income of any bank.
Bank is a financial intermediary, which creates the relationship with both the surplus
units and the deficit units. To create the relationship with these units, bank offers
various financial products and the person who purchase that product will knowingly
or unknowingly becomes the relative of the bank. The major financial products that
any bank offers to the public are various deposits schemes and the loan schemes. The
one who are in need of money or funds purchases the loan products as per their
requirement and the one who have excess funds purchases the deposits schemes.
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Basically, banks are those financial institutions that offer the widest
range of financial services- providing credit and encouraging
savings; and also perform the widest range of financial functions for
all type of business firm in the economy. Commercial bank is the
term used for a normal bank to distinguish it from an investment
bank. It raises fund by collecting deposits from business and
consumers. It also buys corporate bonds and government bonds. Its
primary liabilities are deposits and primary assets are loans and
bonds. The banks, which perform all kinds of banking and generally
finances trade and commerce, are called commercial banks.
Commercial bank is merely a business firm engaged in
financial inter-mediation as well as additional functions under strict
supervision and control of central bank.
In the present context, bank had become the basic need of the human, which performs
not only the basic financial activities but also performs the non-financial activities to
ease the human life.
According to 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 advice, dealing over foreign currencies, remitting
funds, etc.
According to Indian Banking Company Act 1949 Banking means the accepting for
the purpose of lending or investment of deposit of money from the public, repayable
on demand or otherwise and withdrawal by cheque draft order or otherwise.
According to C.W. CrowtherBank is an institution which collects money from
those who have it to spare and who are saving it out of their income and lends this
money out to those who require it.
So, bank may be defined as financial intermediary between depositors and the credit
seekers. Bank is among the most important financial institutions in the economy and
essential business in thousands of local towns and cities. Bank plays different kinds of
roles like intermediary, underwriter, utility payers etc.
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2.2 Origin of Banking
The concept of bank had started to evolve in the brilliant human mind immediately
after the humans were able to realize and develop money. Though money had made
the human life much easier than before but ancient humans started to realize the
complexities that evolution of money had created in their life. So, in order to
overcome these complexities and the difficulties that were attached with the benefit of
money, the concept of banking emerged in the human mind. Earlier the moneylenders
and the landlords perform the banking activities as the informal banks but later the
activities of these people are formalized and the concept of bank as an institution had
emerged.
Moving towards the word Bank, it is thought to be derived from the Italian word
Banco, Latin word Bancus and French word Banque because all meant the
bench in which the bankers would keep money and its records. The Jews of Lambardy
were thought to be the early bankers who transacted third business at the benches in
the marketplace and when they were unable to meet their liabilities, the depositors
used to break their benches and this tradition had given birth to a banking term
Bankrupt.
Banks were first introduced in Rome with its vast trade networks that extended
throughout the Europe, Asia and much of Africa. Following the footsteps of this
bank, other banks were also established. Namely: Bank of Barcelona (1401), Bank of
Genoa (1407), Bank of England (1594) and Bank of Amsterdam (1609). Likewise
India established its first bank, Bank of Hindustan in 1770. These modern banks
gradually replaced the merchants, goldsmith and moneylenders. In 1960s banking
was introduced to world because of increase in their worldwide operations and
increase in multinational companies.
Nowadays, banks are referred to as lifeblood for business houses as they offer many
facilities like travelerscheque, insurance services, pension services and other
investments. The crucial breakthrough in the modern banking history was made in
1694 A.D when the first modern bank The Bank of England was established. After
the establishment of this first English Bank, Banking sector had experienced various
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ups and downs but still they persisted and because of that persistence they are now
able to exist in this 21st century world as one of the essential element of human life.
Presently, banks are not only the deposits collecting and loan lending institutions but
also the institutions, which helps its customers from various ways as per their
convenience and ability with full security. They had been developed as the essential
service providing institutions in this rushing world. The banks had start affecting the
lifestyle of the citizens as well as the economy of the country as well. The recent
recession of 2008 is the outcome of the inefficient banking practice and the world had
to suffer much only because of the inefficiency and negligence of a single banking
sector. Hence, banking had become an important element of the world economy in the
present time.
Nepal entered the world of banking with the establishment of Nepal bank limited in
1994 B.S which was founded by Judda Samsher, as a semi-government organization
without the existence of a central bank in the country under special Banking Act 1936,
having elementary functions of a commercial bank. 51% of the paid up capital of
Nepal Bank Limited is owned by the Government and 49% owned by the public. Its
main function was to provide loans and accept deposits. Later, on Nepal Rastra Bank
was set up on 2013 B.S. as the first central bank under Nepal Rastra Bank Act 2012
B.S with an objective of supervising, protecting and directing the functions of
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commercial banking activities. The bank was completely government ownership bank
and it also started to issues notes since 2016 B.S. Another commercial bank fully
owned by the government, RastriyaBanijya Bank was established in 1996, which
made it possible for the Nepal Rastra Bank to devote more attention to the important
aspects of economic, monetary and fiscal development.
Nepalese banking sector hadnt experienced much growth till 1980s because of the
closed policies of Nepal Government. Till 1980s banking industry hadnt been opened
to the private sectors and the foreign investments. But after 1980s Nepal government
liberalized its banking policies and opened the door for the private and foreign
sectors. The privatization, tariff adjustments, liberalization of industrial licensing,
easing of terms of foreign investments, liberal trade, and foreign exchange regime
were the motivating factors for the development of Nepalese Banking Sector.
Only after 2041 B.S, Nepal government allowed joint venture banks to operate in the
country, which gave a new horizon to the financial sector. Nepal Arab Bank Limited
later renamed as Nabil Bank Limited established in B.S. 2041 as a first joint venture
bank proved to be a milestone in the history of banking which gave hope to the
sluggish financial sector. Thereafter, two foreign joint venture banks, Nepal Indosuez
Bank Ltd. (now called as Nepal Investment Bank) and Nepal Grind lays Bank Ltd
(now called as Standard Chartered Bank Nepal Ltd.) was established in 1986 and
1987 respectively. Then after, several commercial banks have been established in the
recent years.
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that banks can exploit to establish a competitive edge. Since most banks offer
comparable products and services, they should continually search for a competitive
advantage that will attract new customers and help retain existing ones. Banks are,
therefore, looking to develop innovative products and services to maintain superior
customer services levels while at the same time remaining profitable. With the number
of market players in the rise, the competition has been obviously growing in the
banking industry. The most obvious effect of the rising competition can be seen in the
interest rates offered by the banks.
According to NRB act, Commercial Banks are those depository financial institutions
which possess the below features:
Has the minimum paid up capital of 8 billion
No limit on resource mobilization
Can operate nationwide
Can do all fund based as well as non-fund based activities
The commercial banks operating in Nepal are permitted to do both the fund based and
non-fund based activities as the global commercial banks.
Functions of Commercial Banks in Nepal
The functions of commercial banks are divided into two categories:
1) Primary Functions
The primary functions of a commercial bank include:
Accepting deposit
Advancing loan
Discounting bill of exchange
Transfer of money
2) Secondary Functions
The secondary functions of a commercial bank include:
Issuing letters of credit, travelers' cheques, circular notes etc.
Undertaking safe custody of valuables, important documents, and securities by
providing safe deposit vaults or lockers.
Transferring money from one place to another and from one branch to another
branch of the bank.
Standing guarantee on behalf of its customers, for making payments for
purchase of goods, machinery, vehicles etc.
Collecting and supplying business information.
Issuing demand drafts and pay orders and
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Providing reports on the credit worthiness of customers.
Thus, the primary and secondary functions performed by bank are the essential to
meet the overall objectives of the bank.
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28 Sanima Bank Ltd 2011
Chapter 3
Introduction to Agricultural Development Bank Limited
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Official Logo of Agricultural
Development Bank Limited
With the main objective of providing institutional credit for enhancing the production
and productivity of the agricultural sector in the country, the Agricultural
Development Bank, Nepal was established in 1968 under the ADBN Act 1967, as
successor to the cooperative Bank. The Land Reform Savings Corporation was
merged with ADBN in 1973. Subsequent amendments to the Act empowered the bank
to extend credit to small farmers under group liability and expand the scope of
financing to promote cottage industries. The amendments also permitted the bank to
engage in commercial banking activities for the mobilization of domestic resources.
The enactment of Bank and Financial Institution Act (BAFIA) abolished all Acts
related to financial institutions including the ADBN Act, 1967. In line with the
BAFIA, ADBL has been incorporated as a public limited company on July 14, 2005.
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Thus, ADBL operates as an "A" category financial Institution under the legal
framework of BAFIA and the Company Act, 2053.
3.2 Vision
3.3Mission
3.4Objective
3.5Corporate Conduct
In achieving its corporate objective in pursuit of its corporate mission and vision,
ADBL will:
Comply with all relevant legislation, codes of conduct and standards of good
corporate citizenship in Nepal while maintaining full autonomy in the
management of its operations;
Put local resources to work for local development, serving the rural
community and its aspirations;
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Provide a full and balanced rage of financial products and services that
satisfies the needs of the rural population of Nepal, on a profitable and
sustainable basis;
Ensure that its activities contribute to the environmental stability and overall
improvement of living standards in Nepal; and
Judge the bank's success against the measures that include profitability,
portfolio quality in terms of minimal arrears and non-performing loans,
portfolio worth, total deposits, geographic outreach and public image.
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essence, the bank believes that success can only be achieved by being true to the core
values and principles.
Customer Focus
At ADBL, the prime focus is to perfect the customer service. Customers are their first
priority and driving forces. So, they wish to gain customer confidence and be their
trusting partner.
Quality
They believe that the quality service experience is paramount to their customer and
are strongly committed to fulfilling this ideal.
Belief in staff
At ADBL, every staff is recognized as important assets and competitive strengths and
their worth and dignity is respected for the progress of the bank.
Honesty and Integrity
At ADBL, they ensure the higher level of integrity to the customer, creating an
ongoing relationship of trust and confidence with a belief of treating each customer
with honesty, fairness and respect.
Teamwork
ADBL is a firm believer in teamwork and feels that loyal and motivated teams can
produce extraordinary results. They are driven by a performance culture when
recognition and rewards are based on individual merit and demonstrated a track
record.
Organization structure is the specified path through which the formal command of
authority and responsibility flows. The organization structure of ADBL is presented in
the following diagram.
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Fig 3.1 Organizational Structure of ADBL
Total 100%
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3.9 Network of ADBL
ADBL has the largest number of branches in Nepal with 230 banking branches.
Network
Central Region
Western Region
Mid-Western Region
Eastern Region
Far-Western Region
The Board of Directors is the apex body of the bank. It formulates policies as well as
strategies and provides guidance to the management. The Board comprises a total of
nine members; four members representing Government of Nepal and four members
representing individual shareholders. Besides, the Board as per the BAFIA nominates
one member. Audit Committee and Governance Sub- Committee in the area of
internal control and good governance support the Board respectively.
The Chief Executive Officer executes the day-to-day operation of the bank. Four
Deputy General Managers and 18 Division Chiefs closely assist the Chief Executive
Officer. Moreover, Assets support Chief Executive Officer and Liabilities
Management Sub-Committee for various activities related to risk management.
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Mr. Bishnu Prasad Nepal Member
2. Loan
ADBL offers a wide range of tailor-made funded and non-funded credit facilities to
suit funding requirements. Namely:
Corporate Loan
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Retail and Consumer Loan
3. ABBS
ADBL is proud to announce that all together 230 branches are enabled for ABBS. In
ABBS, customers having account with ADBL can access account from any online
ADBL's branch.
4. Nepal Remit
ADBL Remit - an online/internet based Remittance Service for the purpose of
facilitating to transfer the earnings of Nepalese and Nepalese Expatriates with very
minimal charge.
5. Internet Banking
ADBL introduced Internet Banking with following features:
Save time- you don't need to queue at a branch.
Bank when you want, day and night, where it suits you.
6. SMS Banking
Customers have access to banking needs without ever having to wait in queues.
Features:
Instant Balance Information and Account statement print request
Latest Exchange rate of foreign currency
7. ATM/Debit Cards
ADBL ATM allows its customer to access vast network of ATMs located in major
cities in Nepal. It allows the cardholder to withdraw cash, inquire account balances
and to pay.
3.12Analysis of ADBL
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Agriculture Development Bank has a core capital of Rs.9.86 arba. This includes
Rs.3.42 arba Common Stock and Rs.6.44 arba Preference Shares.
According to the Q4 2073 report the bank has the highest reserves among all the
commercial banks. The banks reserves stands at 4.97 billion which is more than its
paid up capital by Rs.1.55 arba.
The banks deposit collection has been increasing throughout our review period. It has
more than doubled in just the past 6 years and reached Rs.76.92 arba. Deposit
collection of the bank is increased by 20.96% in FY 2070/71 and by 16.73% in FY
71/72.
The banks mobilization of its funds has also been increasing throughout our review
period. The banks investments in the past 6 years have grown by almost 3 folds from
Rs.4.54 billion in FY 2066/67 to Rs.13.52 billion in FY 2071/72. The banks loans
and advances have also doubled during the same period. Loans and Advances grew
from Rs.33.88 billion in FY 2066/67 to Rs.66.60 billion in FY 2071/72.
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Interest income, which is the banks primary income, has increased quite rapidly from
FY 2066/67 to FY 2070/71. It increased from Rs.5.28 billion in FY 2066/67 to
Rs.8.46 billion in FY 2070/71, which is an overall increase of about 60%.
However, the bank only managed to increase its interest income by 0.14% in FY
2071/72, which might be a cause for concern. During the same period the interest
expenses decreased by 15.2% which caused the net interest income to increase by
12.88%.
The banks net interest income has been increasing since FY 2066/67 and only
decreased once in FY 2070/71 by 2.05%. The net interest income of the bank in Q4
2072 is 5.21 billion
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The banks operating profit, which was negative by Rs.1.22 billion in FY 2066/67, has
now become positive by Rs.1.71 billion. The banks operating profit becoming
positive is extremely good news for the bank and its investors. This means the bank
has finally become profitable in its core business. The banks operating profit
increased more than 200% in FY 2071/72.
The bank comes 3rd among all the commercial banks traded in NEPSE in terms of net
profit. The bank earned a net profit of Rs.1.88 billion in FY 2071/72. This is an
increase in profit of more than 23% which can be considered very good.
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The bank also has the highest staff expenses among all the commercial banks. It spent
Rs.2.96 billion in FY 2071/72 on staff expenses. Although the figure might seem
huge, this is a decrease of 10.84% compared to last year. The bank has recognized its
staff expenses issue and is taking major steps to reduce this cost. 304 employees
retired from the bank last fiscal year and approximately 300 more are expected to
retire this fiscal year. This should go a long way in reducing the companys staff
expenses.
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The bank managed to write back Rs.602 million and still has Rs.903 million in loan
loss provisions. If the bank manages to write back more of its provisions, the banks
net profit will increase even further.
The banks earning per share, which had remained above Rs.60 from FY 2066/67 to
FY 2069/70, fell to Rs.47.53 and Rs.43.52 in FY 2070/71 and FY 2071/72
respectively. This might seem alarming but this actually healthier. The current EPS
represents the earnings from the banks core business instead of earnings from the sale
of assets. The EPS is sustainable and will only grow in the future if the bank manages
to perform well.
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The banks CD ratio currently stands at 76.70% and its Capital Adequacy Ratio is at a
comfortable 12.55%. The banks liquidity ratio stands at 28.92%.
The banks Non-Performing Loan to Total Loan decreased by more than 17.03% from
5.46% in FY 2070/71 to 4.53% FY 2071/72. Although this is a good improvement it is
still dangerously high. The banks net worth per share in FY 2070/71 stands at
Rs.471.13.
ADBL with a total share capital of Rs.9.86 arba has already shown that it can manage
a large amount of capital. The bank has infrastructure already in place to mobilize
large funds which means the bank has advantage over other banks which have to set
up new infrastructure to be able to mobilize the funds they will have once their capital
reaches Rs.8 billion.
As of Q4 2072, the bank has an EPS of Rs.43.52. With a closing price of Rs.494, the
PE ratio turns out to be just 11.35. The bank would be considered undervalued even in
normal circumstances but given the current level of the market and the average PE
ratio of the banking industry (which is 28.54), the bank is highly undervalued.
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The bank distributed 31.58% cash dividend in FY 2069/70 and 7% bonus and 8.79%
cash in FY 2070/71. The dividend for this year depends on the banks capital plan.
Regardless, the banks dividends are sure to be more than what it distributed the
previous year.
3.14Capital Plan
The bank had planned to include its non-cumulative irredeemable preference shares in
its capital plan. The bank has preference shares of Rs.6.44 billion and common stocks
of Rs.3.42 billion. This would mean that it didnt need to raise its capital to reach the
Rs.8 billion-target set by NRB.
However, a recent circular issued by the NRB that instructs banks to not include
preference shares in their capital plan means the bank has to find some other way of
increasing its paid up capital to Rs.8 billion. As of now the bank is short Rs.4.58
billion which the bank can raise just by issuing bonus shares. The banks reserves and
earnings are high enough to raise its capital to Rs.8 billion just by issuing bonus
shares.
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The bank also has the option to call a rights issue and merge and acquire other smaller
institutions. But considering that the bank has large investments by the Government of
Nepal it might be hesitant to invest more in the bank, which means that a rights call
may not be very likely. Merger and acquisitions are also less likely due the same
reason.
The bank and the NRB are most likely to reach an agreement whereby the current
preference shares of the bank can be included in the capital plan thereby removing the
need for the bank to raise more capital.
The bank has extremely high potential to become one of the most profitable
institutions in Nepal. The reach granted to the bank due to its large number of
branches is unparalleled. The banks branches are also geographically diverse and
cover all the regions of Nepal.
One of the major challenges facing the company is the high number of employees it
has. The bank has one of the largest numbers of employees among all the banks in
Nepal. This has resulted in the bank having to spend a very high amount in its
employees.
Another problem the company has is the employee unions, which have made it very
difficult to run the organization efficiently.
3.16Financial Highlight
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Balance Sheet
Income Statement
Key Ratios
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Chapter 4
4.1. Background
The internship was conducted in the Customer Service Department and Marketing
department of the bank under the guidance of operation in-charge. Placement in these
departments provided the exposure and understanding of the various service and
procedures of the bank and its relationship with its customers. All the experience and
knowledge gained in the 8 weeks of the internship is explained in this chapter.
Marketing is the important part of any financial institution. ADBL has also given
utmost priority to this department. Internee got the chance to observe the activities of
the marketing department. In order to provide the practical knowledge and personal
dealing ability to the internee, ADBL had given the target of 40 new accounts to every
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internee, which I had also fulfilled successfully. Going through this target internee
could learn about dealing with the customers and got the chance to develop personal
and communication skills.
Personal account
Any individual who is capable of entering into the contract can open an account in the
bank. He/she can open the account in all convertible currencies directed by NRB. Two
or more individuals can also open a joint account in their names.
The account holder must be present in business desk in the time of opening an
account.
Fill up the prescribed application form.
Original copy of identification document i.e. citizenship or passport and
photocopy to be attached with the application form.
Two passports size photograph of the account holder.
Nominee form and citizenship of the nominee.
One introducer is required for the new customer to open an account.
Corporate account
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Any registered firms, organizations and corporations can open the corporate account
in the bank for smooth business transactions. The corporate account can be opened in
all the convertible currencies directed by NRB. The firms can open the account by
providing the prescribed documents. All the original documents should be presented
for verification. The basic requirements of opening a corporate account are:
For Proprietorship Firm
Declaration of Sole Proprietorship.
A copy of Firm Registration Certificate.
A copy of Income Tax Registration Certificate.
A copy of identification paper of promoter/ accountoperators
Two copies of the recent photograph of proprietor should also be obtained.
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The customer is requested to fill the deposit slip to deposit the minimum
balance of concerned scheme and charges the necessary charge for ATM card
and other services if applicable.
The details of the customer are entered into the bank software (i.e. FLEX) to
get customer id and account number.
The signatures and stamps are scanned and loaded in the bank software
The Operation in-charge verify and approve the account
The account opening form along with other necessary documents is kept in a
file in a serial order as per account number for future reference
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Settlement of the balance after deducting all the required charges. Ensure that
no balance is left in the customers account.
Close the account in the banking system.
The account closing form with all the documents is to be filed in the account-
closing file.
The returned ATM card should be destroyed and blocked.
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Maintain record and inform the respected cardholders about the delivery of the
card.
On the presence of cardholder, the card and account details are filled up in
card register. The card register includes information about (date, A/C number,
A/C name, card number, delivery date, the signature of the receiver, initials of
staff).
Signature is verified with the signature of card requisition provided during the
time of A/C opening.
After verifying the signature, the card is distributed along with pin code
(default pin code initially provided by account holder while filling the form)
and other details about card activation, using process.
The account holder is suggested to use the ATM card only after 24 hours of
receiving and for changing pin code for the activation of the card.
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organizations letter mentioning about providing balance statement along with
companys stamp is the must.
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Chapter 5
5.1 Conclusion
The banking system in Nepal is gearing up for another round of competition with the
second phase of financial sector reform and international standard oriented reforms
underway. Nepalese financial system, basically the banking business, has broadened
in number and diversified in the modern financial instrument. As the Nepalese
financial market witnesses the domination of banking sector, it is necessary to monitor
the banking system properly and enhance competitiveness with a strong, credible
regulatory and supervisory bank.
ADBL is one of the leading commercial banks with a vision of being the most
preferred provider of financial services in Nepal. It has the highest customer base and
is the topmost lender amongst the private sector banks in Nepal. So as to accomplish
its objective, credit department plays a pivotal role in making a loan lending decision
in the most productive sectors analyzing all the risks associated and taking steps to
monitor and recover the amount due.
Credit Department is thus one the most sensitive department as the quality of the loan;
borrower and securities determine the health of any bank as well as the banker. It
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checks and evaluates different types of loan proposals like education loan, home loan,
short-term loan etc. It is necessary for the bank because this department helps to
analyze the various types of risks occurred and mitigates the risks of the loan before
and after granting the loan. Credit Department makes the loan safe because this
department analyzes the financial condition of both individual borrower and
institutional borrower by assessing the income and expenditure. Thus, credit
department of ADBL is the major department, which performs the various activities of
controlling the credit and keeping the bank free from any future fallacy. It plays a
major function in ADBL to control each and every loan proposals before granting the
loan to the consumers and also taking necessary actions to recover the amount if the
customer turns out to be the default.
Therefore, intern concludes that Credit Department plays a major function to control
each and every document before granting the loan to the customer as well as keeping
an eye on customers actions after credit approval in order to minimize the various
types of risks. It analyzes the financial condition of the borrower and tries to make it
easy for granting the loan. Credit department is thus the most crucial department that
attempts to make the banks portfolio highly profitable and thus responsible for its
success in the competitive business environment.
The day-to-day operation of Credit Department and the process involved with
it.
Coordination of workforce and the various activities for the smooth operation
of the bank.
Importance and role of the banking industry in the in the development of the
economy.
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The friendly environment, good organizational culture, and efficient
management being the various reasons behind the success of ADBL despite
the heavy workload.
Use of theoretical knowledge into the practical working environment and also
became aware of the huge gap between theoretical knowledge and real life
situation.
The importance of time management and punctuality.
The importance of interpersonal communication skills in professional life.
Promotion of efficiency and effectiveness through sincerity and confidence.
Use and operate various machinery, equipment, and systems.
Work under pressure.
It was a great opportunity to be a part of Agricultural Development Bank Ltd and
learned the during the eight weeks internship program. This has given the intern
adequate feedback on how to face challenges in practical terms and mix up with the
organization culture giving her best for the betterment of individual as well as
organizations career.
5.3 Recommendation
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BIBLIOGRAPHY
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