CHAPTER- I

INTRODUCTION

1.1 BACKGROUND

The internship program has been designed by Tribhuvan University for the partial fulfillment of the degree of Bachelor in Business Administration (BBA) for the specialization course of Banking and Finance. According to the designed pattern of this program, students need to complete internship for the period of eight weeks. This internship session is only undertaken in the eighth semester of BBA to get the practical knowledge of the organizational procedures and work behavior. The basic purpose of an internship is to view the different procedures and requirement of all departments of the organization and also to analyze their strengths, weaknesses inherent in the working system along with the possible solutions to track down the effects of the problems. Finally, the students are required to submit report based on the work performed during those eight week in the organization. For the purpose, I performed my eight week internship program at NABIL Bank Limited, New Road Branch, and activities were focused especially to two departments of the bank: Credit Department and Customer Service Department.

Credit Department is an important department which is associated with granting credit to its potential customer. The performance of NABIL bank can be clearly viewed from its credit granting ability. Most of the customers prefer NABIL bank due to the transparency and easy accessibility of loan amount.

Likewise, Customer Service Department is also an important department focusing on catering the requirement of the customer in an efficient manner. The requests regarding balance enquiry, statements, balance certificates, cheque books, account opening and closing etc as well as their problems and grievances are handled in this department.

1.2 OBJECTIVES OF THE INTERNSHIP

The major objective of the internship program is to gain professional experiences in the real work environment during internship periods.

Moreover, it relates the theoretical knowledge with practical one so as to develop intern’s skill on problem solving, communication, decision making and build up confidence, etc. The specific objectives of the internship are as follows:

• To familiarize with day to day activities carried out at customer service department.

• To learn about the different types of customer accounts and the terms & conditions associated with them.

• To know the procedure related to debit cards, internet banking, account opening, etc. at customer service department of the bank.

• To understand the credit granting procedures at loan department of NABIL Bank Limited.

1.3 METHODOLOGY

The methodology of this internship report consist the organization selection, placement, duration of internship, and activities done during internship period. These methodologies are explained as:

1.3.1 ORGANIZATION SELECTION

Being the student of BBA with area of specialization in Banking and Finance, my first preference for conducting internship was for financial institution, and among several other financial institutions, I decided to choose a commercial bank for my internship. Therefore, I first visited the bank and submitted my curriculum-vitae with college recommendation letter at the Human Resources Department (HRD) of NABIL Bank. A few days later, I received a call informing that I had been selected as an intern in NABIL Bank.

1.3.2 PLACEMENT

The human resource department of the bank placed me at different departments: Small & Medium Enterprise (SME) & Micro-finance (MF) at credit department and Customer Service Department of the bank.

1.3.3 DURATION

In order to complete my eight week internship period, I started my internship program from 28th of March to 23rd of May 2011. I devoted six week periods at SME & MF division of credit department and two week periods at customer service department of the bank. The Table 1 presents the time period worked at different departments during internship period.

Table 1: Departments worked during the internship

|S. No. |DEPARTMENT PLACED |TIME DEVOTED |

|1 |SME & MF Division |6 weeks |

|2 |Customer Service Department |2 weeks |

1.3.4 ACTIVITIES PERFORMED IN THE ORGANIZATION

During the eight week internship period, I performed many activities at many divisions of the bank. In the credit department, my focus was to observe the credit files of the customers, preparing the sanction letter and then preparing relevant documents of the customers seeking for loans. Regarding the customer service department, I spent two week periods where the major activities were to opening and closing of accounts, issuance of ATM card form, issuance of deposit slips, dealing with the customer to disseminate the information as well as photocopying the documents.

CHAPTER II

INTRODUCTION OF BANKING INDUSTRY

2.1 BANKING INDUSTRY IN BRIEF

The word 'bank' is derived from the Italian word 'banco' meaning the portable benches or counters over which the moneychanger comes from. A bank is an institution, which deals with money and credit. It accepts deposits from the public, makes the funds available to those who need them, and helps in the remittance of money from one place to another. According to Crowther, a bank "collects money from those who have it to spare or who are saving it out of their incomes, and it lends this money to those who require it". According to Commercial Bank Act of 1974 (Nepal),

“Bank is an organization established for the purpose of exchange money deposit lending money and participation in transactions”. In general, a bank is an institution with the following features:

• It deals with money; it accepts deposits and advances loans.

• It also deals with credit; it has the ability to create credit.

• It is a commercial institution; it aims at earning profit.

2.2 Origin of Banking INDUSTRY IN Nepal

The history of banking in Nepal can be traced back to 1877 A.D. when Tejarath Adda was established by the government to provide credit facilities to general public. These unorganized institutions although quite underdeveloped could still mobilize funds from wide range of different sources. Although the Tejarath Adda was established, it was not able to facilitate the growing trades with Tibet and India. Thus a need for the establishment of a modern bank had become essential to promote the trade of the nation. In the year 1923 “Treaty of peace and Friendship” were concluded between the Government of Britain and Government of Nepal. As per the treaty, Nepal could carry on import trade free of duty via India. In other words, it meant that Nepal was going to diversify its foreign trade and for that the country needed a modern bank. But it wasn’t till 1936 A.D. that the Udyog Parishad (Industrial Development Board) was set up.

Thus, the “Udyog Parishad” helped in opening new avenues for the advent of banking, industry and commerce in Nepal and thus helped to enhance the economic status of the country. A year after its formation, the Udyog Parishad formulated the company act and the “Nepal Bank Act” in 1937 A.D. which established the Nepal Bank Ltd. with the technical cooperation of the Imperial Bank of India, as the first commercial bank of Nepal.

Before 1956 “Sadar Mulukikhana Adda” (local treasury of the government) issued currency notes and the foreign exchange reserves of Nepal were maintained by Reserve Bank of India. During that period the Indian currency along with Nepalese currency was circulating in the economy. Thus to manage the circulation of national currency and to maintain exchange rate stability, there was an urgent need for the establishment of a

Central Bank. In 1956, The Nepal Rastriya Bank Act was formulated and Nepal Rastra Bank was established as a central bank on April 26, 1956. It took over the functions of Mulukikhana Adda “Government Treasury” and started issuing currency in 1959; and also thus relieved the various Mal Addas (Revenue Offices) of their work. Thus it helped the government to perform treasury functions and stabilize the exchange rate.

The NRB focused mainly on eliminating dual currency system prevalent in Nepalese market. The NRB tried to decrease the circulation of the Indian currency, replacing it with the Nepalese currency in various transactions of trade and commerce. The initiation of the Nepalese Currency Act, 1958 and the opening of the bank’s branches in various part of the country were the major steps undertaken by the central bank in this respect. There were other government banking institutions. Rastriya Banijya Bank (National Commercial Bank), a state-owned commercial bank, was established in 1966. In the same year, The Land Reform Savings Corporation was established to deal with finances related to land reforms.

There were two other specialized financial institutions. Nepal Industrial Development Corporation (NIDC), a state-owned development finance organization headquartered in Kathmandu, was established in 1959 with United States assistance to offer financial and technical assistance to private industry. The Co-operative Bank, which became the Agricultural Development Bank in 1967, was the main source of financing for small agribusinesses and cooperatives. Almost 75 per cent of the bank was state-owned; 21 percent was owned by the Nepal Rastra Bank and 5 percent by cooperatives and private individuals.

In the mid-1980s, three foreign commercial banks opened branches in Nepal. The Nepal Arab Bank was co-owned by the Emirates Bank International Limited (Dubai), the Nepalese government, and the Nepalese public. The Nepal Indosuez Bank was jointly owned by the French Bank Indosuez, Rastriya Banijya Bank, Rastriya Beema Sansthan (National Insurance Corporation), and the Nepalese public. Nepal Grindlays Bank (now SCBNL) was co-owned by a British firm called Grindlays Bank, local financial interests, and the Nepalese public.

2.3 COMMERCIAL BANKS IN NEPAL

Commercial banks are the major component in the financial system. Commercial banks come into existence mainly with the objectives of collecting idle funds, mobilizing them into productive sector and causing the overall economic development. In general, bank that performs all kinds of banking business and generally finances trade and commerce is called commercial bank. It occupies quite an important place in the framework of every economy.

The commercial banks are those banks, which pool together the scattered savings of the community, arrange for their productive use, and generate profit. They accept deposits from the public and use the money to help the community by making loans to individuals, organizations, governments and business. Commercial banks, acquire funds from one group of surplus spending units and making these funds available to other deficit units facilitating the effective mobilization of resources, which in turn leads to sound economic growth of the country.

In the context of Nepal the first commercial bank, "Nepal Bank Limited" was established in 1937 A.D. and the second "Rastriya Banijya Bank" was established in 1966 A.D. Nepal has opened its door to foreign commercial banks in the kingdom almost a decade back. As the country followed economic liberalization, there was massive entrance of foreign banks in Nepal. Consequently, Nepal Arab Bank was established in 1985 A.D. Similarly the Nepal Indosuez Bank was established as a joint venture between Nepal and France in 1986 A.D. The legitimate entry of foreign commercial banks with full-fledged banking functions led to rapid growth of banking system. After 1990 economic liberalization policy obtained by the government, now there are 31 commercial banks operating banking activities in the country.

The list of commercial banks is shown in Annex 1

CHAPTER III

INTRODUCTION OF NABIL BANK LIMITED

3.1 INTRODUCTION OF ORGANIZATION

NABIL Bank Limited (erstwhile Nepal Arab Bank Limited) commenced on 12th July 1984 after being registered on 11th May 1984 with a paid up capital of NPR 30 million, is the first private commercial bank opened in the country. The Bank comes into existence through a joint venture with 50% share of Dubai Bank Ltd. under a Technical Service Agreement (TSA), 20% share of Nepalese Public. After a few years of commencing operations, Nabil also worked in joint venture with Emirates Bank International Limited, Dubai and National Bank Limited, Bangladesh (NBB) respectively. Currently the foreign joint venture partner of the Bank is NB International Led. Ireland.

It has been helping business communities and the government in different ways since its establishment. It has been providing modern services to customer. Its service is of international standard, which has attracted people. It has helped general people to know about the banking system and the benefits that they provided. It has been playing significant role in the development of Nepalese economy. NABIL bank is highly successful to create banking habit among the Nepalese people the bank not only holds its capital but also holds the deposits of millions of people, which make responsible to the society.

As in the case with every commercial bank, NABIL Bank’s activities are basically associated with deposit mobilization, advancement of various credits, international banking including trade financing, inward and outward remittances and funds and portfolio management. NABIL Bank is committed to provide banking services of highest possible standards that suits the customer requirements as well as the market needs.

Ownership structure is shown in Annex 2

Capital Structure is shown in Annex 3

3.2 THE CORE PHILOSOPHY OF NABIL BANK

Core philosophy can be expressed in terms of vision mission and objective of any organization. NABIL Bank has the mission to become the bank of first choice, and vision express in terms of CRISP, where C stands for customer focused, R for result oriented, I for innovative, S for synergetic, and P for professional.

3.3 MAJOR PRODUCTS AND SERVICES

The bank offers varieties of services through its various innovative products generated over the periods. This section deals about the product and services provided by the bank to its customers. The major products and services of the banks are deposits, loans, remittances, plastic card services, internet banking, infrastructure and project financing, etc.

3.4 DEPARTMENTS OF NABIL BANK LIMITED

The bank provides various services through different departments of the bank. Major departments of the bank are human resource, credit, remittance, cash, clearing, trade & finance department, etc. However, my focus of the internship was in the credit and customer service department of the bank. So, I have presented brief explanation of these two departments.

3.4.1 Credit Department

Credit department is important division of the bank that associated with granting credit to its potential customers.

3.4.1.1 Small and Medium Enterprise & Micro Financing (SME & MF)

SME and MF is one of the vital division under credit department. Nepal being a developing country, majority people residing in rural as well as urban areas are operating ‘Small and Medium Enterprises’. As these enterprise require less amount of capital in comparison to large enterprise, NABIL Bank with an intent of raising the economic standards of the people residing in rural areas and people running SME, has set up a new unit, SME & MF in order to provide banking and financial services to rural populations as well as SME operators.

3.4.2 Customer Service Department

Customer service department is the most important department in a bank. This department is also often called as information desk as customers first contact in this department for their queries. Hence, the image and status of the bank depends on the effective functioning of this department. Customer service department gives the overall impression of the concerned bank.

This department is mainly responsible in assisting customers to explore the services offered by the bank, explaining the process of receiving services and providing various customers service during and after the purchase of the financial services. This section of the bank handles inquiries of current and potential customers and provides services according to their request.

Although each department of the bank is involved in providing specific services to the customers accordingly to their nature of work, however customer service department is involved in providing customers with the surface level assistance, which is the basic function of this department.

The primary objectives of this department are to disseminate the information, listen and handle customer’s grievances, and build good customer relationship

CHAPTER -IV

ANALYSIS OF ACTIVITIES DONE/PROBLEMS SOLVED

This section presents the major activities performed at customer service and credit department of the NABIL bank over the eight week internship period.

4.1. Activities Performed at Customer Service Department

As Customer Service department is information desk of the bank that provides the information relating to products and services of the bank to its clients. In addition, it also deals with problems associated with various aspects. In this department, I performed activities such as providing various forms and vouchers, distributing application form for opening and closing as well as form for ATM card, cheque/cash deposit slip, etc. Moreover, I provided information relating to account balance, account opening and closing, and responding to phone calls.

4.1.1 Account Opening

Any types of account whether it is personal, proprietorship, partnership account or account of corporate bodies, societies, or clubs; it is opened in customer service department. The required for opening an account varies as per the type of account. The account opened and closed is registered

and filed in a daily basis. After opening of a new account, the signature and photograph of the account holder is scanned and saved in the computer system for future reference. Whereas, before closing the requested account, approval of Remittance Department, Loan Department, LC Department and Cash Department is needed to ensure that the account holder is not under bank’s debt.

NABIL Bank opens a new account to keep deposit in the bank. Customers entitled to open various accounts are supplied with a contract paper named ‘account opening form’ by the banks. This form serves both the purposes of details of the customers and contract between the bank and the customers.

Procedures of opening a new account

1. The first thing is to be done is providing the information to customers about the different account offered by the bank along with its features and prerequisites requirements.

2. Application should be completely filled by the applicant. An authorized staff does examination of the documents along with the related documents. The original copy should be tallied with the duplicate copy while opening up of accounts.

Different Types of Account Opening

1. Savings Accounts

This is an account opened by general public and non-profit organizations in bank to save the money with interest. However; there is no any restriction to open saving account by any type of customers. It consists of: Personal Account, Joint Account, and Minor Account.

This account is payable on demand, operations are comparatively lesser, cheque is issued, interest payable on certain frequency, statements of account are provided to customers, etc. The major documents required to open saving accounts are citizenship certificate, passport, passport size photo, utility bills, etc.

The various schemes under saving account is shown in Annex 4.

2. Current Account

Current account is an account on which any amount deposited can be withdrawn through a cheque. It is also known as checking account. Any individual or institution can open this account and no interest is paid on this account. It consists of: Proprietorship Account, Partnership Account, Corporate Account, and Account of Institutions or Societies.

This account is payable on demand, cheque book is issued, interest is not available. There is frequent operation as compared to saving account and there is no limit in withdrawal. The documents varies as per the different types of current account. For Proprietorship Account, required documents are registration certificate, PAN certificate, citizenship certificate/passport, and photographs. For Partnership Account, registration certificate, PAN certificate, registered partnership deed, citizenship certificate or passport of partners are the requisite documents. For Corporate Account, required documents are registration certificate, PAN certificate, memorandum and articles of association, board resolution, citizenship or passport of authorized signatories, and covering letter. For Account of Institutions/ Associations/Societies, registration certificate, board resolution to open and operate account(s), PAN certificate (if applicable), constitution and By-Laws, and citizenship/passport of authorized signatories are the requisite documents.

4.1.1.1 Account opening functions

Regarding the opening account by the customers I involved in the activities such as providing the application form, providing the information on minimum balance requirement and the interest rate, verifying the attached documents, preparing the voucher for deposit, filling the KYC (Know Your Customer) form, and handling the documents to the authorized personnel.

4.1.2 Account closing

As per the request of the customer, the department also closes the existing account in the bank. For this application in standard format is needed to be filled by the customer which is then examined by the staff and forwarded for clearing. As per the policy of the bank, certain balance is deducted from the customer account and the remaining amount is refund to the customer.

4.1.2.1 Account Closing Function

In regards to account closing, the functions performed are providing the account closing form, knowing the reason for closing of account, verifying the signature, ensuring the unused cheques, used plastics cards are returned back to bank, and finally handling the documents to the authorized personnel.

4.1.3 Account Statement

The account statements are provided to the customer on the demand basis. Statements should be collected by the account holders or person assigned by the customer. It is not dispatched by the post unless prior notice has been submitted to the bank. As per the bank rule and regulations, a flat fee is charged for printing the duplicate statements.

4.1.4 ATM card form issuance

ATM card is a plastic coated magnetic card which contains several security features along with the customer's personal details and a unique account number. It involves providing the ATM form as per the request of the customer, informing about the minimum balance requirement, verifying the signature of the form and other require identifications of applicants, and handling to the authorized personnel.

The various ATM locations throughout the country is shown in Annex 5.

4.2 SME & MF Division

The loan granting under the SME & MF division passes the long processes and the various steps in the processing of the loan from the SME division are as follows:

1. Submission of Customer’s Application Requesting Loan

People who have been operating and want to operate Small and Medium Enterprise (SME) may require some financial support. The first step of lending through SME division of NABIL Bank is, the people who are in need of the loan submit application in the bank asking for the loan. People who are in need of financial support for their SME and requires loan amount not

exceeding Rs. 2,00,00,000/- then loan application can be given in the SME division. The applicant submits the detail of the enterprise while submitting the application. The loan application also contains details about the proprietor or authorized person of the enterprise. If the loan is for individual, detail information about the person is obtained. The application should contain the loan amount and detail purpose of the requirement of the loan. This application also contains the details about the type of the loan which the applicant has requested. Along with the application other documents such as passport sized photo of the applicant, the income statement and the balance sheet of the enterprise for the last two years are to be submitted.

2. Pre-Analysis of the Customer

Pre analysis of the customer is the second step in the processing of the loan from the SME division. In this step, the customer who submitted the application for loan is analyzed by the relationship officer. Relationship officer analyzes the nature of business of the customer and analyzes the scope of the business. The relationship officer also analyzes whether the business for which the bank is providing loan is profitable or not. If the business has no scope in the current market, the loan application of the customer will not be considered. When relationship officer analyzes that the business is profitable, the loan application of the customer is considered by the bank.

After the loan application of the customer is considered detail information about the purpose of the loan is obtained. Character of the customer is also analyzed in this step. Analysis of the customer also includes of getting the information about the loan taken by the customer from any other financial institutions. Detail information on whether the customer has taken loan from any other financial institutions or not is obtained and also the honesty of the customer is analyzed. Honesty of the customer can be analyzed by looking at the past records of the customer if has had taken any loan facilities from any financial institutions. Past record gives a clear picture on whether the customer had paid the principle as well as the interest amount of the loan in time or not. If the customer has the bad past record on the payment of the principle as well as the interest amount of the loan then the loan application of the customer will not be considered.

3. Collateral Analysis

In the third step of processing the loan from the SME division, the collateral which is kept by the customer against the loan facilities provided by the bank is analyzed. The value of the collateral must exceed the loan amount. Only 70% of the total distress value of the collateral can be considered to be provided as loan. The collateral such as land and building must not be in restricted area or in the area where the government has prohibited the sale of the land and building which is kept as collateral. The collateral which is provided by the customer must be kept against the loan borrowed is visited by the relationship officer. The collateral kept must not be under any conflict. In case that the collateral is not the property of the customer, the owner of the property must agree to keep the property as the collateral and do the required documents.

4. Valuation of Collateral from Professional Valuators

Valuation of the collateral kept against the loan amount borrowed must be done. The valuation of the collateral is bound to be done by the professional valuators. The value of the collateral must be more than the loan amount borrowed. The valuator analyzes the market value as well as the distress value of the collateral. Only 70% of the total distress value of the collateral can be provided as loan by the bank. While giving the loan against some collateral, only the distress value of the collateral is considered, thus the market value of the collateral is not considered while providing the loan. After the valuation of collateral is done from the professional valuator, a valuation report is submitted to the bank. The valuation report contains details about the customer, owner of the collateral, location of the collateral. The report also contains the market value and distress value of the collateral. The map and blueprint of the collateral, if the collateral is land and building, is attached in the valuation report. Pictures of the collateral from various angle as also attached in the valuation report. After the preparation of valuation report is done and submitted to the bank, the relationship officer analyzes the report and if fulfill all the requirements for processing of the loan, the loan request application of the customer is considered by the bank.

5. Inspection of Stocks in case of Business Loan

Customer may require various types of loan in order to operate their business. In case of business loan all the stocks of the customer will be bounded by the lending policies of the bank. If the customer is unable to pay back the principle as well as the interest amount of the loan, the bank has right to cover the loan amount from the stocks of the enterprise. Inspection of stocks is done in order to make sure that the enterprise has maintained its business quite well. Through the inspection of stocks of the enterprise, the bank can analyze whether the stocks level maintained by the enterprise is enough for considering the loan request or not. If the bank feels that the stocks level is enough the request of the loan is considered and if the bank feels that the stocks level maintained is not enough the request of the loan is not considered and the customer will not be legible to obtain the loan.

6. Credit Facility Request (CFR) forward for approval

After fulfill the initial phase of lending process and the request of the customer for the loan is considered, the relationship officer prepares Credit Facility Request (CFR) of the customer. CFR explains in detail about the customer, his background, his business and purpose of loan, loan amount and expiry of the loan duration, collateral kept against the loan and various documents to be done in order to disburse the loan. CFR also contains the information about the black listing of the customer if the customer has been black listed in the past. Then, the relationship officer gets the approval of senior relationship manager and head SME for processing the loan. After getting approval he handles the detail of customer and CFR to the junior assistant who prepares various documents required to process the loan.

7. Loan Documentation

After the consideration and approval of the loan request of the customer, some of the documents are to be completed in order to continue the lending process. After doing these documents the customer will be bounded by the lending policies of the bank. No mistakes shall be done in preparing these documents otherwise the documents will be void and the customer will no longer be bounded by the lending policies of the bank.

The various types of documents that are needed to be done in order to continue the lending process are:

a. Loan Deed:

Loan Deed is the document which contains the details of the loan taking party. It also contains the type of loan taken, loan amount, interest rate of the loan and process of paying the interest rate and the loan expiry date. Details about the collateral kept against the loan are also presented in the document. This document makes an agreement with the customer that the customer has agreed to pay the principle and the interest amount of the loan. The customer also agrees that if he is unable to pay the principle as well as the interest amount, bank can recover the amount of loan from the collateral kept against it.

b. Letter of Continuity:

Letter of Continuity is the document done in which the customer agrees on the continuity of getting the loan facilities from the bank. By doing this document customer agrees that he is ready to do all the other required documents which are mandatory in order to process the loan. Letter of Continuity also makes an agreement with the customer that the customer will continue to fulfill all his liabilities of the payment of the principle as well as the interest amount of the loan.

c. Multiple Banking Declaration:

Multiple Banking Declaration contains the information about the customer if he has taken loan from any other banks. If the customer has taken loans from other bank then the name of the bank, type of the loan amount taken should be written in the multiple banking declaration. By signing this document customer agrees that the information provided in the document is correct. In case of mis-representation and/or information provided is proved to be incorrect, the customer has the full responsibility of consequences thereof and agree that the bank may prosecute the customer as per prevailing law.

d. Promissory Note:

Promissory Note contains detail information about the registration of the enterprise, authorized person of the enterprise, loan amount and interest rate of the loan. By doing this document the customer makes an agreement

with the bank on paying the principle as well as the interest amount of the loan.

e. General Letter of Hypothecation:

Through this document, customer agrees to hypothecate all the fixed and current assets of the customer’s enterprise in the name of the bank. The customer also hypothecates his book debts, outstanding values and receivables, delivery order and mercantile document in the name of the bank. The customer also agree to pay the principle as well as the interest amount of the loan. This document also makes an agreement with the customer that the bank can increase the interest rate at any time. General Letter of Hypothecation makes sure that the properties that have been kept as collateral against the loan in the bank has not been kept as collateral against the loan in any other financial institutions.

f. Supplementary Agreement:

Supplementary Agreement acts as a supplement to General Letter of Hypothecation. This document ensures that the bank has right on the properties that the customer has imported or bought. A list of properties upon which the bank has the right will be written in the document

g. Assignment of Bills and Receivables:

Assignment of Bills and Receivables as the document which makes agreement with the customer that the customer has given right to the bank for covering the loan amount if the customer fails to pay back the principle and interest of the loan from the bills and receivables of the customer. Thus, the bank can cover the loss of bad debt through the bills and receivables that are to be gained by the customer.

h. Power of Attorney:

Power of Attorney contains detail information about the customer, loan amount and the authorized person of the enterprise. Through this document the customer gives the power of attorney to the bank. Under this agreement, the bank can pick up all the receivables of the customer on his name, money received on the name of the customer can be used to fulfill the liabilities of the customer towards the bank, the bank represent the

customer in order to obtain the money. This document also ensures that that the liabilities of the customer towards the bank has not changed and there is no change in the right of the bank to obtain back the principle as well as the interest amount of the loan. By doing this document customer agrees that any activities done by the bank on the name of the customer will be regarded as the customer has done that activities.

i. Personal Guarantee:

Personal Guarantee contains the detail information about the customer, loan amount and the person providing personal guarantee. Through this document, certain person who may be the relative of the customer or business coworker provides personal guarantee that the customer will pay back the principle as well as the interest amount of the loan. This document also ensures that if the principal debtor fails to pay back the principle as well as the interest amount of the loan, the person who provided the personal guarantee will be the primary liability and the bank can recover the loan from the person. The liability of the personal guarantor will continue until the principal debtor settles the loan. This document also explains that even if the law declares that the principle debtor is incapable and is free from the liability, the personal guarantor will not be free from his liability.

j. Cross Guarantee:

This document is provides the guarantee of the sister concern of the loan taking enterprise. The loan taking customer may be running other parallel enterprise, thus through this document the bank will get the cross guarantee of the sister concern. The sister concern provides the cross guarantee that the loan taking enterprise or customer will pay back the principle as well as the interest amount of the loan. If the loan taking enterprise cannot pay back the principle or interest amount of the loan, the sister concern will be liable to settle the loan. Thus, if the loan taking enterprise could not settle the loan the bank has the right to recover the principle as well as the interest amount of the loan from the sister concern which provided the cross guarantee.

After preparing all the required documents, the customer is called in the bank to complete the process of documentation. The customer signs and

puts hand prints and enterprise’s stamp on these documents which ensures that the customer is ready to follow all the terms and conditions written in the various documents. When the customer comes for documentation a current account is opened in the name of the enterprise if it is business loan and in the name of the customer if it is individual loan. The loan amount which has been requested by the customer will be disbursed in the current account.

8. Disbursement of Loan Amount

After the completion of all the required documents, the executed documents are handed over to the Credit Administration and Support (CAS) department where the documents are checked and required records of the documents are kept in the vault as well as the credit files. Then the information about the disbursement of loan is forwarded by the CAS department. Loan disbursement in Nabil Bank is done by the loan department at Head Office. The loan amount which has been considered and approved will be disbursed in the current account which was opened in the process of documentation. After the disbursement of the loan, the customer can take the amount from the account and use it for the purpose of the business if it is business loan and use it for individual purpose if it is individual loan.

9. Regular Monitoring and Inspection

Regular monitoring of the customer is done by the bank personnel in order to make sure that the customer is paying the interest amount and other charges in time. Monitoring is also done to ensure that the customer is running his business well and he has utilized the loan amount for the same purpose for which he had requested it for. Monitoring is also done to make sure that the customer is doing well in his business and will be able to pay the principle as well as the interest amount of the loan. Inspection is done in order to check the stocks of the enterprise and to check its receivables. Inspection by Nabil Bank is done in quarterly basis to ensure that the enterprise has maintained the required stock level.

CHAPTER V

CONCLUSION AND LESSON LEARNT

5.1 CONCLUSION

In order to fulfill the partial requirement of fulfillment of Business of Bachelor Administration of Tribhuvan University, BBA Program, I did my eight week internship at NABIL Bank Limited, New Road. The main objective of this internship program is to develop the managerial behavior and skills through observation and work experience in the organization along with understanding the general banking activities, culture and policies.

Over the last few years, Nepalese-banking sector has made a significant progress in financial service transactions. The overall contribution of banking sector in national development is growing significantly. Banking institution is inevitable for the resource mobilization and all round development of the country. It is source for economic developments; it maintains economic confidence of various segments and extends credit to people.

NABIL, as a pioneer in introducing many innovative products and marketing concepts in the domestic banking sector, represents a milestone in the banking history of Nepal as it started an era of modern banking with customer satisfaction measured as a focal objective while doing business. NABIL with the slogan of “bank of the first choice” has been tying its best in providing real time, anywhere banking services. This world-class service allows its customers to operate their account from any branch in the country, as just like operating their account in their own branch.

Write in short about activities performed at CSD and SMe…………………

During the eight week internship period at NABIL Bank, I got a tremendous opportunity to know about the working environment of the bank. I dealt with many customers and provided information. I also exposed with many problem arised at this desk. Moreover, I learned about the basic lending procedures of NABIL Bank, Branch Office, located at Newroad.

5.2 LESSON LEARNT

The eight week of internship in NABIL was really worthwhile and memorable experience for me. The exposure I got from the internship was

truly precious for me. It contributed a lot to expand my knowledge on general banking; familiarized me with the working environment, organizational norms and culture, organizational structure; enhanced my interpersonal skills; and helped me understand accounting practices in private sector banks. The bank has served the people of Nepal by providing different financial services, which, I felt, has direct effect on the lifestyle and growth of the Nepalese people. Among the different services, NABIL’s credit service has found to play a vital role in the development of economic situation of the country. Some important lesson I learnt during internship period are summarized as follows:

1) I observed the different aspects of the managerial practices in real working environment at NABIL Bank.

2) I have learnt that customer is a king of the market. So necessary effort and enhancement should be made from our side to understand the customer well and fulfill their requirement.

3) I have learned that time management is the essential part