ANALYSIS ON REMITANCE SERVISES OF HIMALAYAN BANK LIMITED

An Internship Report

Submitted by:

Submitted to: Office of the Dean Faculty of Management Submitted in Partial fulfillment of the course requirement for the degree of Bachelors in Business Administration (BBA)

Campus Chief Name: Signature: _________ Date:

Acknowledgement

This report has been prepared as a Partial fulfillment of the course requirement for the degree of Bachelors in Business Administration (BBA).The primary objective of this case study is to analyze the Remittance service of Himalayan Bank Limited situated at Thamel, Kathmandu Nepal. I would not be able to justify my work without acknowledging the staffs who have contributed significantly for the completion of this report.

First of all I would like to thank Mr.Ishwor Karki (HR manager) for providing me the opportunity to work in their prestigious organization as an intern. I would like to extend my sincere thanks to all the staff of remittance promotion department especially Ms. Supridi, Mr. Manish Raj Pant, for there help and support. I would also like to thank Mr. Manoj D Shrestha, for providing me the information. At last, I thank once again to the entire member and the organization that have supported me for the completion of my intern.

TABLE OF CONTENT
ABSTRACT ABBREVIATION CHAPTER I. INTRODUCTION 1.1 1.2 1.3 Placement Duration of internship Activities performed Background Objectives Methodology

Organization selection

1.4

Limitation

CHAPTER II. 2.1 Introductions to Banking Sector 2.2 Development of Banking Industry in Nepal 2.3 Introduction to Commercial Banks 2.4 Functions of Commercial Banks 2.5 Introduction of the organization. 2.6 Capital structure 2.7 Equity participation

CHAPTER III

ABSTRACT
This internship report, which is about the Remittance service of Himalayan Bank Limited, has been prepared for the partial fulfillment of the degree of Bachelor in business administration (BBA) for the finance and banking, which is one of the specialization course in BBA of Tribhuvan University. This report is divided into five chapters; the first chapter of the report contains the information regarding the study, I.e. its background, objective, methodology, and limitation.

ABBREVIATION

1. 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 course of Finance and Banking. According to the designed pattern of this program, students need to complete internship for the period of 8TH weeks and prepare the report for the fulfillment of degree. This report has been prepared as per the internship requirement of Tribhuvan University, School of management in the partial fulfillment of BBA degree. As a part of the University curriculum, the internship course carries six credit hours.

1.2

Objective of the study

The main objective of the study/internship program is to relate the theoretical knowledge with practical one. The study also helps to gain professional experience in the real work environment. Beside this, the other part of the objectives is to develop internees skill on communication, decision making, confidence buildup, etc

The main objectives of the study are as follow: To relate our theoretical understandings of management acquired till the period with the real work environment. To study and analyze working system of the various departments of the bank and come up with the list of strengths and weaknesses. To understand the major functions along with products and services of commercial banks. To understand the general banking activities, practices and policies.

1.3

Methodology

According to the designed patterned of this program, students need to complete internship for the period of 8th weeks and prepare the report. The report is prepared by using the information that is obtained from different sources i.e. interview, bulletin, newspapers, booklet, websites, and annual report of HBL. 1.3.1 1.3.2 1.3.3 1.3.4 Organization SelectionPlacement Duration Activities performed

Organization selection
Before selecting the organization, I dropped my Curriculum-Vitae at different banks. I had to choose the best alternatives. Considering the suggestion and recommendation from my friends and family, I choose Himalayan Bank Limited to work as an intern. My college also provided me the recommendation letter, which helped me to get a chance to work as an internee in one of the best banks in the country.

Placement
Regarding the placement, I was first placed at the customer service department. During my stay I learned to familiarize myself to the environment and learn the activities performed by the card center. Later I was placed in the remittance promotion department, and LC department. I stayed at the remittance promotion department for comparatively longer period, so I could collect and study all the possible details about the remittance transfer. Due to lack of the time, I stayed at the Trade Finance department for 2 days only. So I could only study about general procedures of issuance of Letter of Credit.

Duration
The duration of internship period has been defined for eight weeks by Tribhuvan University. I have completed my internship program which lasted for two months at Himalayan Bank Limited at Thamel Branch. During this period I was placed at administration department, customer service, remittance, Letter of credit department. I was allowed to work for eight weeks starting from July 2nd to September 1st.

Activities Performed in the organization

Himalayan Bank Limited is one of the major financial intermediaries whose primary function is the transfer of monetary resources from the savers to the users. This section includes the study based on the internship period and the various tasks performed during the stay in bank. The

followings are general function of HBL, which I was allowed to learn during my internship period. But these functions are performed by different departments. HBL provides different customer services like opening and closing of accounts, issuing cheque book, account statements, balance certificates, debit and credit cards and access to ebanking. The other functions are Issue of guarantee, Letter of Credit, fund transfer, Bills/Remittance, safety of valuable goods, etc. Promotion of remittance for those who are in abroad for different purposes, Besides above functions, I was also allowed to learn other activities that are performed in different departments like how to open the different accounts, what the general procedures to open these accounts, how to verify the original data, and how to solve the customer queries as well as complaints, how to make bank statements, etc. In the remittance department, I learnt the procedure of collecting remittance, how to identify the actual remittance receiver, sending remittances, etc.

1.4 Limitations of the Study

During the preparation of this report, there were many limitations, which are as follows: 1. The study is mainly based on the data provided in the annual report. 2. Therefore, the accuracy of results and conclusions are totally depended on data published in annual report. 3. The study is about HBL only. 4. The study only covers the transaction of remittance. 5. The report is prepared for an academic purpose only. 6. Only eight weeks data are taken into consideration due to data unavailability. 7. The deep analysis and study couldnt be done due to time and data limitation.

CHAPTER II

INTRODUCTIO TO THE INDUSTRY

Banking Sector
Banking sector plays an important role in the economic development of the country. Commercial banks are one of the vital aspects of this sector, which deals in the process of channelising the available resources in the needed sector. It therefore acts as an intermediary between the deficit and surplus group of the financial resources. Financial system contains two components viz. depository and non-depository financial institutions. Commercial banks and finance companies are the examples of the depository 10

institutions where as Employee Provident Fund, Development Banks, Insurance Companies, etc. are the examples of non-depository financial institutions. The study in this report is concerned with the depository financial institutions i.e. Himalayan Bank Ltd. Financial institutions play an important role in the proper functioning of the economy. These institutions act as an intermediary between the individuals who lend and borrow financial instruments. These institutions make the flow of investment easier.

Development of Banking Industry in Nepal

Like other countries goldsmiths, merchants and moneylenders were the ancient bankers of Nepal. Tejarath Adda established during the tenure of the then Prime Minister Ranoddip Singh (1933 B.S) was the first step towards the institutional development of banking in Nepal. Tejarath Adda did not collect deposits from the public but gave loans to employees and public against the bullion. Banking in modern sense started with the inception of Nepal bank limited (NBL) on 1994/7/30 B.S. Nepal bank limited had a Herculean responsibility of attracting people toward banking sector from pre-dominant moneylenders net and of expanding banking services. Being a commercial bank, it was natural that NBL paid more attention to profit generating business and preferred opening branches at urban centers. Government however had onus of stretching banking services to the nook and corner of the country and also managing financial system in a proper way. Thus, Nepal Rastra Bank (NRB) was set up on B.S. 2013.01.14 as a central bank under Nepal Rastra Bank act 2012 B.S. Since then, it has been functioning as the government's bank and has contributed to the growth of financial sector. The major challenge before NRB today is to ensure the robust health of financial institutions. Accordingly, NRB has been trying to change them and has introduced a host of prudential measures to safeguard the interest of the public. NRB is yet to do a lot to prove themselves efficient supervisors. NRB really requires strengthening their policymaking, supervision and inspection mechanism. Integrated and speedy development of the country is possible only when competitive banking service reaches nooks and corners of the country. Keeping this in mind, government set up Rastriya Banijya Bank (RBB) in B.S.2022/10/10 as a fully government owned commercial bank.

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As the name suggests, commercial banks are to carry out commercial transaction only. But commercial banks had to carry out the functions of all types of financial institutions. Hence, industrial development center (IDC) was set up in 2013 B.S. for industrial development. In 2016 B.S. IDC was converted to Nepal industrial development corporation (NIDC). Similarly, agricultural development bank (ADB) was established in 2024/10/07 B.S. to provide finance for agricultural produces so that agricultural productivity could be enhanced by introducing modern agricultural techniques. Moreover, security exchange center was renamed Nepal stock exchange in 1990.NEPSE opened its trading floor on 13 January 1994. With the establishment of RBB and ADB, banking service spread to both the urban and rural areas. NRB also gave incentive to NBL to expand their branches to rural areas. This helped the common people reduce their burden of paying higher rate of interest to moneylenders and absolved them from kowtowing before moneylenders. It is natural expectations of customers which keep on increasing. Once they got banking services, they were expecting improvement and efficiency. However, excess political and bureaucratic interference and absence of modern managerial concept in these institutions was hurdle in this regard. Banking service to the satisfaction of customers was a far cry. The inception of Nepal Arab Bank Ltd. (renamed as Nabil Bank Ltd. on January 1, 2002 A.D.) on 2041/03/29 B.S. (July12, 1984 A.D.) as the first joint venture bank to be a milestone in the history of banking. Nabil Bank gave a new ray of hope to the sluggish financial sector. The very marketing concept of Nabil Bank forced the other bank in operation to be more customers oriented and led the influx of commercial banks. Having observed the success of Nabil Bank based on marketing concept and also because of liberal economic policy adopted by the successive governments, following commercial banks came into being. Because of higher return on investment and lower capital requirement, entrepreneurs were interested in setting up new banks including branches of foreign banks. However, current political and economic scenario of the country coupled with new prudential norms of Nepal Rastra Bank and stiff competition may make the entrepreneurs give a second thought to the idea of establishing banks.

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Commercial Banks
Commercial banks are the major components in the financial system. They work as the intermediary between depositors and lenders and facilitate in overall development of the economy, with major thrust in industrial development. In modern time, commercial banks, which are facilitated, regulated and supervised by the central bank, confine them and concentrate in their activities of fulfilling needs of their customers. Modern commercial banks can be identified by different name such as business banks, retail banks, clearing banks, joint venture banks, they all perform the same basic function i.e. they provide a link between lenders, those who have surplus of money and do not wish to spend immediately with borrowers, those who do not have surplus money but wish to borrow for investment in productive purpose. Basically, by charging a rate of interest to borrowers slightly higher than they pay to lenders, the banks make their profit. This is known as financial intermediation. .

Importance of Commercial Banks

1. Channelise the idle resources towards the economic activities. 2. Provide financial services in order to systemize the customer's financial activities. 3. Help build the efficient financial sector of the economy. 4. Assists for rapid economic growth of the country by providing parties with deficit of fund, required and reasonable financial assistance.

Functions of Commercial Banks

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Though the primary function of commercial banks is to act as a 'go- between' the savers and users of funds and channelise idle and scattered resources prevalent, it assists financial system by undertaking following other functions: Core functions: The core functions of commercial banks is to ease the business or any other economic activity by either providing funds to parties with deficit of it accepting deposit from those with surplus of it, or providing any other non fund based services like issuing letter of credit, issuing guarantee, remittance and safe deposit lockers Support functions: The bank, in order to support its core function of lending and borrowing fund, has to perform support functions like personnel, administrative, operations and management information system. Personnel: All the functions related to the management of human resources are included in this category. Some of the functions related to human resource may be stated as: 1. Hiring and firing. 2. Job design and evaluation. 3. Motivational functions. 4. Performance evaluation. 5. Coordination and 6. Maintaining cordial relationship and favorable environment.

Administrative: Under administrative functions of banking, procurement and supplies, administration of contracts, fulfilling contractual obligations and management of the logistics are included.

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These functions are related with the external affairs and procurement and distribution of materials required for day-to-day operations. Operations: The activities related with operation procedure, system and technology and inter-branch tractions are included in operation function. These functions hold reasonable importance as these are related with how the primary functions (lending and borrowing) are to be performed and management of system and technology involved in such functions.

List of Licensed Commercial Banks of Nepal

Table No.: 1

List of Licensed Commercial Banks of Nepal

Companies
1. NMB Bank Limited 2. Development Credit Bank Ltd. 3. Nepal Industrial & Co.Bank 4. Laxmi Bank Limited 5. Kumari Bank Ltd 6. Lumbini Bank Ltd. 7. Nepal Credit & Com. Bank 8. Siddhartha Bank Limited 9. Lumbini Bank Limited Promotor Share 10. Kumari Bank Ltd. (PROMOTOR SHARE) 11. Nabil Bank Limited Promoter Share 12. Peoples Finance Co. Ltd Promoter Share 13. Everest Bank Ltd(Preference Shares Convertible) 14. Machhachapuchhre Bank Ltd.(Promotor Share)

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15. Bank of Kathmandu(Promoter Share) 16. Laxmi Bank Limited Promotor Share 17. Nabil Bank Ltd. 18. Nepal Investment Bank Ltd. 19. Standard Chartered Bank Ltd. 20. Himalayan Bank Ltd. 21. Nepal SBI Bank Limited 22. Nepal Bangladesh Bank Ltd. 23. Everest Bank Ltd 24. Bank of Kathmandu 25. Machhapuchchhre Bank Ltd.

(Source: www.nepalsharemarket.com)

A Profile of Himalayan Bank Limited

Himalayan Bank was established in 1993 in joint venture with Habib Bank Limited of Pakistan. Despite the cut-throat competition in the Nepalese Banking sector, Himalayan Bank has been able to maintain a lead in the primary banking activities- Loans and Deposits. Legacy of Himalayan Bank lives on in an institution that's known throughout Nepal for its innovative approaches to merchandising and customer service. Products such as Premium Savings Account, and HBL Proprietary Card besides services such as ATMs and Tele-banking

16

were first introduced by HBL. Other financial institutions in the country have been following the lead by introducing similar products and services. Therefore, HBL stand for the innovations that they bring about in this country to help their Customers besides modernizing the banking sector. With the highest deposit base and loan portfolio amongst private sector banks and extending guarantees to correspondent banks covering exposure of other local banks under their credit standing with foreign correspondent banks, they believe they obviously lead the banking sector of Nepal. The most recent rating of HBL by Bankers Almanac as countrys number 1 Bank easily confirms their claim. All Branches of HBL are integrated into Globus (developed by Temenos), the single Banking software where the Bank has made substantial investments. This has helped the Bank provide services like Any Branch Banking Facility, Internet Banking and SMS Banking. Living up to the expectations and aspirations of the Customers and other stakeholders of being innovative, HBL very recently introduced several new products and services. Small Business Enterprises Loan, Pre-paid Visa Card, International Travel Quota Credit Card, Consumer Finance through Credit Card and online TOEFL, SAT, IELTS, etc. fee payment facility are some of the products and services. HBL also has a dedicated offsite Disaster Recovery Management System. Looking at the number of Nepalese workers abroad and their need for formal money transfer channel; HBL has developed exclusive and proprietary online money transfer software- HimalRemit TM. By deputing our own staff with technical tie-ups with local exchange houses and banks, in the Middle East and Gulf region, HBL is the biggest inward remittance-handling Bank in Nepal. All this only reflects that HBL has an outside-in rather than inside-out approach where Customers needs and wants stand first. HBL is not only a Bank, It is committed Corporate Citizen Corporate Social Responsibility (CSR) holds one of the very important aspects of HBL. Being one of the corporate citizens of the country, HBL has always promoted social activities. Many activities that do a common good to the society have been undertaken by HBL in the past and this happens as HBL on an ongoing basis. Significant portion of the sponsorship budget of the Bank is committed towards activities that assist the society as large.

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The Banks Vision:

Himalayan Bank Limited holds of a vision to become a Leading Bank of the country by providing premium products and services to the customers, thus ensuring attractive and substantial returns to the stakeholders of the Bank.

The Banks Mission:

The Banks mission is to become preferred provider of quality financial services in the country. There are two components in the mission of the Bank; Preferred Provider and Quality Financial Services; therefore people at HBL believe that the mission will be accomplished only by satisfying these two important components with the Customer at focus. The Bank always strives positioning itself in the hearts and minds of the customers. Himalayan Bank is committed to be a Bank which has "The Power to Lead."

The Banks Objective:

To become the Bank of first choice is the main objective of the Bank. 1. To become a leading bank in the country by providing premium products and services and then ensuring attractive and substantial return to shareholders. 2. To emerge as a quality provider of the quality financial services of the country. 3. To become the bank of first choice. 4. To ensure handsome and steady return on investment. 5. To provide banking services with difference. To respond to all banking needs courteously and co efficiently. 6. To promote productivity through sustainable benefits, 7. To become a responsible national institution. 8. To bridge the gap between savers and borrowers efficiently and effectively.

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Himalayan Bank has access to the worldwide correspondent network of Habib Bank for fund transfer, letter of credit or any banking business anywhere in the world. Habib Bank is the largest and oldest bank in Pakistan having over 1700 domestic and 65 overseas branches covering all continents and over 1800 correspondents worldwide. Besides, Himalayan Bank has correspondent arrangement with 178 internationally renowned banks like American Express Bank, Citibank, ABN Amro etc. The head office of Himalayan Bank Limited is situated at Karmachari Sanchaya Kosh Building,Tridevi Marg, Thamel. The bank has fifteen branches over the country. Among the total, five are located inside the capital including the head office and the rest is dispersed throughout the country. The various branches of HBL operating throughout the country are as under: Table No: 2 S.N 1 2 3 4 5 6 7 8 9 10 11 Name of branches Pokhara Branch Maharajgung Branch New Road Branch Butwal Branch Patan Branch Tandi Branch Birgunj Branch Dharan Branch Hetauda Branch Banepa Branch Siddartha Nagar Branch Branch Address New Road, Phokhara Kaski Teaching Maharajgung, Kathmandu Bishal Bazar Kathmandu Traffic Chowk Pulchok, Lalitpur Ratnanagar ,Tadi, Chitwan Mahabir Road, Birgung, Parsa Putali Line, Dharan, Sunsari Main Road Hetauda Main Road Benepa, Kavre Police Colony , Bhairahawa

19

12 13 14 15

Biratnagar Branch Credit Card Branch Bhaktapur Branch Narayangadh Branch

Shanihat Main Road Biratnagar Pulchock ,LalitPur Katunje ,Bhakatpur Pulchock , Chitwan (Source: Annual report of HBL)

Equity participation:
Table no: Ownership Local-Employee Provident Fund -Nepalese Promoters -General public Foreign(Habib BankLimited, Pakistan) Total 14 51 15 20 100 %

20

Share Ownership of HBL

20

14 Employee Provident Fund Nepalese Promoters General public Foreign (Habib Bank) 51

15

(Source: Annual report of HBL)

Awards And Recognitions

Awards and Recognitions received by Himalayan Bank Limited in the last five years

Number 1 Bank of Nepal- 2006 awarded by The Bankers Almanac, Britain Number 1 Bank of Nepal- 2003 awarded by The Bankers Almanac, Britain National Excellence Award- 2003 awarded by Federation of Nepal Chambers of Commerce and Industry

The Bankers' Almanac 21

The Bankers' Almanac

World Ranking 2006

World Ranking 2003

FNCCI - National Excellence Award 2003

Products and Services offered

Though the Bank is fairly young in terms of tenure of operations, it has been the innovator of tenure of its operations; it has been the innovator in introducing many new products in Nepalese financial market. To illustrate it, the following products have been implemented till now: Credit card: Himalayan bank has been a pioneer in introduction in introducing a Nepalese domestic credit card; the bank has introduced "Himalayan Bank Gold Card". Himalayan Bank is also the member of VISA and MASTERCARD international. The bank issues all ranges of VISA card and is developing framework for MASTERCARD issuance.

Tele-Branch Banking: To provide more prompt and efficient services to customers, Himalayan Bank has been pioneering in instituting telebanking services. Dialing a pre-specified telephone number client can have information on: Make balance and statement inquiries. Order statement and chequebook

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Get information on foreign exchange, interest rates etc.

Any-Branch Banking: The bank has any branch-banking facility in New Road, Thamel, and Patan branches and is looking forward to extending it to other branches as soon as possible. Adoption of world wide accepted GLOBUS software enhances the convenience of operating this service and security of the operation as well. This product, integrated with the core banking system will enable to make certain operations like withdrawal and deposit of cash and cheques from any of the bank's branches can walk into any of the bank's branches possible. Customers maintaining an account with any of the branches can walk into any of the branches convenient to them for operation of the account, which means they are not restricted to particular branch for operating that account. ATM (Automatic Teller Machine): Automatic teller machine (ATM) placed in the premises of Thamel branch, New Road branch, Maharajgunj branch and Patan branch enables the bank to extend the bank facilities to 24 hours. Customers can utilize ATMs and make withdrawal at any time, be it 5 a.m. in the morning or the 12 p.m. at midnight. To use this facility, one must request for the ATM card from any of the four branches providing service. It's the beauty of ATM service that enables one to withdraw cash from account in any of the branch providing this service Home loan and Hire purchase loan: The bank has recently introduced home loan as its new product under which employed or selfemployed persons or pensioners within the age bracket of 25 to 65 years with regular and stable source of income and adequate saving are qualified. In case of home loan, it requires the proposed site to be accessible with at least 9 feet motorable road and should fall under the bank's criteria for collateral mortgage. The primary focuses of this product are the professionals like doctors, engineers, lawyers, and chartered accountants as well as self employed businessman. The bank provides Home loan for three basic purposes, viz. Purchase Construction Extension 23

The bank provides loan for almost every vehicles, especially for personal use, and vehicles brand but the bank has special scheme for Hyundai and Perouda cars under which thy provide loan to the customer in a comparatively lower interest rate. The bank finances maximum up to 70 and 80 percentage of the total cost in home and hire purchase loan respectively. Himal Remit: Himal Remit is one of its latest products, which facilitates transfer of fund from almost all over the world, especially from all the parts of the Middle East, in most of the major currencies. The funds can be transferred through the correspondent bank arrangement with various financial institutions in Middle East to facilitate efficient fund transfer. Furthermore, funds can also be transferred within the country to the following cities in Nepal directly, and the bank provides service of transferring funds to other cities on Nepal, via its total correspondents or branches. Apart from these services there are some other innovative measures too: accidental death insurance is one example of it. It covers individual account holders. The insurance benefit payable to the nominee of the account holder is a lump sum equivalent to four- time ht minimum balance in the account during the month of the event, subject to a maximum of 500,000 Rupees. PSA scheme (Premium Saving Account Scheme) provides incentives for all account holders with balance of more than 50,000. PSA holders are served through a special counter in all branches. The participants of this scheme can receive Himalayan Bank Gold Card, ATM card along with tele-banking facility, free of charge. The customers under this scheme are given preference in providing self-deposit lockers. They also enjoy 20% wavier in rental on the small size lockers. Interest on all accounts as such is calculated on daily basis. PSA holders maintaining average balance of over 100,000 are eligible to take part in lucky draw under a premium prize and several other prizes are given every month. The bank currently offers following types of deposits schemes to the customers: Current account Saving account Short term deposit account. (7 days to 90 days) Fixed term deposit. (Above 90 days)

The bank accepts and maintains these types of deposit accounts in the following currencies. 24

Nepali Rupees US Dollars Pound Sterling Deutsche Mark Japanese Yen Swiss Franc

Any customer complying with the general rule for account opening and fulfilling the document requirement can open an account

Current Status of the Organization

The Himalayan Bank Limited is one of the best banks in the country. The Bank holds a vision to become a Leading Bank of the country by providing premium products and services to the customers, thus ensuring attractive and substantial returns to the stakeholders of the Bank. Legacy of Himalayan Bank lives on in an institution that's known throughout Nepal for its innovative approaches to merchandising and customer service. Products such as Premium Savings Account, HBL Proprietary Card and Millionaire Deposit Scheme besides services such as ATMs and Tele-banking were first introduced by HBL. Other financial institutions in the country have been following the lead by introducing similar products and services. Therefore, HBL stand for the innovations that they bring about in this country to help their Customers besides modernizing the banking sector. With the highest deposit base and loan portfolio amongst private sector banks and extending guarantees to correspondent banks covering exposure of other local banks under their credit standing with foreign correspondent banks, they believe they obviously lead the banking sector of Nepal. The most recent rating of HBL by Bankers Almanac as countrys number 1 Bank easily confirms their claim.

The Bank believes in

1. Providing quality services to the customers 2. Building healthy future for Bank Employees 25

3. Providing attractive return to stakeholders 4. Upholding honesty and sincerity 5. Embracing extra-curricular activities for refreshments and fun at work 6. Developing a fruitful bond with the Society through continuous socially responsible activities.

Remittances
Remittance in simple words is the transfer of the funds- a portion of migrants earnings from the migration destination to the place of origin. Remittance transfers may be domestic or international. The term remittance is normally limited to denote monetary and other cash transfers transmitted by migrant workers to their families and communities. Domestic remittances occur, for example, when there is migration from rural to urban areas within a country. Similarly international remittances are defined as cross-border person-to-person payments typically recurrent in nature (e.g. who send money to their families in their home country every month). The emphasis is on person-to-person payments rather than payments to purchase goods and services or business-to-business payments. These person-to-person payments are typically relatively low-value compared to, for example, wholesale bank-to-bank transfers. (# Average size of remittance to Nepal amounts USD 200 to 400). Often the flows are between relatively low-income individuals and the senders, as migrants, may not always be well integrated into all aspects of the host-country's society and economy. In addition, although remittance transfers are typically recurrent, in practice they are usually made as a series of individual instructions rather than by standing order.

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REMITTANCE IN NEPAL: Remittance received from abroad has been one of the major factors for Nepalese Economy. It has continued to be the major source that injects much-needed cash into the economy (# currently remittance contributes to more than 14% of the total GDP of the country). Apart from contributing significantly to the foreign exchange reserves of the country, this enhances the import potential of the country which will eventually drive the growth of the economy as a whole. For the underdeveloped country like Nepal, the flow of funds from migrant workers back to their families in their home country is an important source of income. Approximately USD 1 billion per year enters the country in the name of remittance achieving at least 8% growth each year. The clearer picture of the growth of remittance in Nepal can be assessed through following data: Table no: Situation of Remittance in Nepal Year Amount NPR (Billion) USD (Million) Annual Growth Rate (%) 30.06 24.9 47.6 22.8 25.6 31.7 158.7 8.1 11.9 63.1
107

95/96 4 58 96/97 6 76 97/98 7 94 98/99 10 139 99/00 13 171 00/01 16 215 01/02 21 283 02/03 54 732 03/04 59 792 04/05 66 886 REMITTANCE INFLOW TO NEPAL 05/06 107 1445
120 RS. IN BILLION 100 80 60 40 20 0 4 6 7 10 13 54 16 21

The
66 59

above figures clearly show

.9 5/ 96 .9 6/ 97 .9 7/ 98 .9 8/ 99 .9 9/ 00 .0 0/ 01 .0 1/ 02 .0 2/ 03 .0 3/ 04 .0 4/ 05 .0 5/ 06

27

YEAR

that the remittance inflow to Nepal has been increasing in a very steady way. The major growth can be seen in 2003/04 and 2005/06 registering the growth of 54% and 158.7% and 63.1% respectively. However one of the important factor to be considered here is that still at least 35% of the total remittance have been coming through the unofficial channels such as hundi and personal delivery which may affect the contribution of the remittance in the total economic growth of the country and to the remittance industry as a whole if it is not controlled which is operating at much lower cost than that of remitting companys increasing their attractiveness.

Activities done regarding promotion of Himal Remit

HimalRemit, a premium online customer focused and technology oriented Money Transfer product is brought to you by Himalayan Bank Limited, the leading joint venture bank of Nepal. Himalayan Bank is a pioneer in the field of retail money transfer business with over 11 years of customized service delivery experience in the field. Himalayan Bank has the largest network covering all major cities, towns and villages of the country and is capable of paying at more than 200 locations across Nepal. HimalRemit is a state of art web-based money transfer system. It is easily accessible through our main web domain http://www.himalayanbank.com/. It can be directly accessed by all our branches thus ensuring prompt execution of the remittance. The product is monitored and

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serviced 24/7 by our Remittance Service Department dedicated to deliver fast and reliable services to the Customers. The remitting agency can transfer funds either to the beneficiary against the identification document or can credit the Customers Account maintained either with Himalayan Bank Limited or other local banks of Nepal. The money transferred through this product will be on real time basis. The system will automatically generate RAD number. The RAD number is number generated by the system for each transaction and is unique and this becomes the main basis for payment at the receivers end. The RAD number consists of ten digits. 1. The remitter will make request for fund transfer to pre-agreed location against cash deposit and he/ she is required to fill all details i.e. Name, ID number, Currency & Amount etc. 2. Based on the information provided by remitter, remitting agent shall transfer the data to the system and upon approval of transfer, RAD number will be generated by the System, which will be provided to the remitter. 3. The remitter will have to pass details of RAD number, Amount and nearest location from where money is to be collected to the beneficiary. The beneficiary will go to the prearranged payment location and claim the amount. The payment location will be either Himalayan Bank Branch or HBL agent. 4. For the payment to be paid from the HBL branch, the branch, upon confirmation of RAD number and identification of beneficiary, will make the payment. 5. For the payment to be paid from other authorized agent, agent shall make payment upon confirmation of RAD number, Identification and after receiving authorization from Himalayan Bank Limited. 6. For the payment to be credited to the account with HBL and/ or other banks in Nepal, payment details i.e. beneficiarys name, account number, bank/ branch name and amount etc., will be provided in HimalRemit. Based on the information in the System, HBL will arrange to make deposit to the beneficiarys account. HBL will arrange to make deposit to beneficiarys branch through its branch where HBL has branch or through its agent, where HBL does not have its Branch. 29

7. Account credit confirmation will be provided to Remittance Promotion Department by HBL branch/ paying agent that will be passed on to the Remitting agent. 8. Paying agent, after making the payment, will send the confirmation of payment to Himalayan Bank, which will be sent to the remitting agent as confirmation of payment. 9. The system facilitates remitting agent(s) to browse the status of particular payment on the basis of RAD unique numbers. Special Features of Himal Remit- the Online Remittance Software:

Web based technology, direct access from our main web site http://www.himalayanbank.com/ Provide instant updates on remittance request at the receiving end for prompt processing. Manage agents and officers through central administration at Himalayan Bank. Provide a secure and reliable means of remittance information. Provide instant updated information to the HBL agents.

For the promotion of Himal remit, during the internship, I visit the various place for this purpose where I had to open the account for those who are going abroad for the purpose of earning like Korea, Dubai, Qatar, UAE, Saudi Arabia and so on Account open for them is saving account of zero balance those who are going Korea and Rs.100 for those who are going other countries. One family member of them could also enjoy the facilities provided by the bank.
Savings Account

Savings Deposit Account can be opened in any of our Branch Offices. The minimum deposit to be maintained by the Customer varies according to the Branch. Customers are provided with free personal accidental death insurance. Customers opening this account get a free Cheque Book. The Bank offers Any Branch Banking Facility. Feature: 1. Interest will be calculated and credited to depositor's Savings Accounts on minimum monthly balances in every Six Months.

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2. The minimum deposit ranges from NRS 2,500.00 to NRS 15,000.00 to open a Savings Account in Local Currency depending upon the Branch. Minimum deposit to open foreign currency A/C is USD 50.00 or equivalent in foreign currency A/C. No interest will be provided for balance less than specified above.

Document Requirements for opening account Following documents are required to open a Current/Savings/Premium Savings Account with the Bank depending upon the type of Account: a. Personal Identification: Citizenship Certificate or Passport and 3 copies of Photograph; b. Nominee Declaration

For the promotion of himal remit I went to Banshipati where people selected by government for working Visa in Korea are trained. For this I went there four times. Visit times 1 2 3 4 Total Number of people who open the account 65 16 28 36 145 People open this account because of following facilities : It can be directly accessed by all our branches thus ensuring prompt execution of the remittance The product is monitored and serviced 24/7 by our Remittance Service Department dedicated to deliver fast and reliable services to the Customers.

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Can credit the Customers Account maintained either with Himalayan Bank Limited or other local banks of Nepal. Customers are provided cheque book along with Visa debit card which can be used in Nepal and India. When account is opened by customers there will be accidental death insurance up to Rs.5 lakhs. By these features people are attracted towards the himal remit. Other activities done in the Himalayan Bank: Account open for other customer who want to open account in bank Printing of Cheque and preparing cheque book. Printing of statements and balance certificates. Assist in card services The other functions are Issue of guarantee, Letter of Credit, fund transfer, Bills/Remittance.

Chapter III Lesson learnt, Conclusion and Recommendation

Lesson learnt
Working as an intern in Himalayan bank limited for two months, I was able to use myself in the world of business where I could apply my theoretical knowledge in practice. This internship also provided me with greatest opportunity to acquaint myself with the banking industry. Further, it provided me the practical exposure and helped me to understand corporate social responsibility and develop corporate attitude. I have learned to be in time while working with the bank.

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I have learned to get permission before doing any thing and providing any service to the customer. I have understood the banking procedure through the banks perspective. I got chance to be familiar with several types of product and services provided by the bank I have learned process of account opening in the bank under different saving sachem.. I have find out the existing as well as the possible problems associated with Customer Service Department, card section, remittance promotion department and trade operation. I have learned about the change in customers preference regarding the various product launched by the bank I have learnt a lot of other aspects other than the banking as to socialize with the people, to deal with the senior staffs, and to deal with the intern colleague so as to make the working environment cozier and friendlier. I have also learnt that the behavioral issues are most important inside the organization. Customer feel satisfied when they are behaved properly. Their queries are needed to be answered in a friendly way so as to retain them in the organization. Lastly, working in Himalayan bank, I was able to develop some qualities in me which will be helpful for me throughout my life. Internship in such bank not only gives us an insight to learn about how the bank perform the inter bank transaction in Nepal , but also boosts our future prospects in the banking sectors. I would like to thanks Himalayan bank once again for giving me an opportunity to grow up practically in its comprehensive banking environment.

Conclusions By and large, a proper marketing plan, a better strategy and a smooth implementation are the basic ingredients of any successful business. So to operate any profitable business, lots of homework should be done. Since the future program of HBL, are quite good so delay should not be made. 33

The study is primarily aimed at assessing financial aspects of the bank. It has been found that the bank has widespread branches around the major cities and has a pleasant goodwill that it has created in the market through its operations. The findings of analysis can be concluded as below: The bank has unsatisfactory cash reserve ratio over the review period. However, we cannot conclude it as a setback due to statutory requirement of maintaining average cash reserve ratio on a weekly basis of immediately preceding fourth week. The bank, though able to collect sufficient deposit does not have satisfactory loans and advances. Analysis of other ratios shows that the bank neither has been able to perform outstandingly, at least when we conclude on the basis of annual report, nor has to lament for what it couldn't achieve. However, it has been noticed that the banks performance, from the profit to return in assets, has been slackening and that it needs improvement in its due course of operations. But we cannot overlook the macro-economic conditions and instability of the current affairs. The dividend payout ratio of the bank has not remained in the satisfactory level. The net profit level of the bank has gone up considerably over the last few years of operation, which, if not tackled prudently, would obviously hamper its profitability. Had it been able to administer and follow up the loan that it had dispersed and evaluate the proposals and its creditability thoroughly, it would not have to face problems like these. There is high prospective and growing market for card business especially acquiring business. Nowadays, people are being aware about card facilities and the advantages of holding a card, which is gradually progressing in industrialization process and increasing income level among the higher and middle class society. So the possibility of other banks and/or financial institutions entering this field should not be ignored

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Conclusively, the bank has been able to produce satisfactory results over the review period despite environmental adversities. While we relate the present economic condition with its performance, we won't have any other option in hand apart from praising it for whatever it has been able to realize.

Recommendation
Recommendations to organization.

Nepal too needs to develop the banking habit of its people. We just cannot make any more unsubstantial and detrimentally indigenous excuses. Bank should try to focus on customer satisfaction and relation Bank should search for new opportunities and greater coverage in remittance service.

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Bank should try to change the employee behavior by introducing the concept of teamwork and delegate them adequate authority to carry out their work.

Bank should try to satisfy its customer by providing them prompt service. To improve the skill of banks employee regular skill development programs

should be initiated and periodic skill test for the employees can be applied Since so many risks are attached with the credit card business, HBL should develop innovative and effective risk management programs and services for its members, which helps to maintain credit card operation at a high standard and prevent the fraudulent act. For this purpose, HBL should give knowledge about credit card fraud to its customer and should prevent them from fraud by using latest technology. But HBL should also balance technological cost and its respective benefits. Thus Public awareness of credit card fraud should be generated to capture more market for credit card To encourage frequent usage of cards, HBL can introduce the concept of reward points. For e.g., for cardholders, every 100 rupees worth of purchases made through the card, the cardholder gains one point. These points could be redeemed for gifts, select product purchases and even for paying the annual fees. So every point would be equivalent to one rupee. This would encourage more use of HBLs credit card. Bank should build the effective feedback channel so that the bank can know and make correction from the valuable suggestions and comment and, feedback of the marketing activity given by the consumer.

Recommendation to Internship programme.

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This internship program is fruitful to the student of BBA as they get chance to gain practical knowledge about the Banks, which they have been studying in their course. As internship program is must in BBA course, students must get clear guidance regarding the work at Banks. Many Banks have misconception about the intern students as they keep them for filling purpose, doing photocopies, fax etc. Thus internship of BBA program should clearly specified along with the work that interns are ought to do. It should specify that work of any interns should be related with banking activities as they enter a bank to gain a practical knowledge about a Banks. Internship is very rewarding to every student of this program. It would work more effectively and gives positive result if it becomes more specific. It has become difficult to bank as well as interns regarding the activities they are supposed to perform in an organization. So if it becomes more specific and defines the criteria within which interns are ought to do work or the works Bank could give to the interns then this internship program surely would help every intern to gain maximum practical knowledge about Banks.

Recommendation to Faculty of Management

First of all I like to thank to the faculty of Management by providing the chance to read the BBA course under the T.U, renowned university in the world by sitting in the country. They provide us the facilities to do internship in the financial sector of the country for the practical knowledge of the course and make us easily sellable in the market after finishing the course. According to the course of BBA we need to fulfill the internship but the faculty doesnt specify how to do and what we have to do in the internship period. So not having the knowledge of this we student faces many problem in the starting phase of the internship period. But we are 37

successful to make them convinced about our requirement and fulfill the two months internship period. I would like to thanks to all the people who help faculty of management to bring this fruitful course in the university and run under different colleges of the country. At last but not the least I would like to thank to faculty of KIST College of Management helping me to get the internship in Himalayan Bank limited.

Annex 1
Boards of Directors

Mr. Manoj B. Shrestha Chairman

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Mr. Ashraf M. Wathra First Vice Chairman

Mr. Prem P.Khetan Second Vice Chairman

Mr. Prachanda B. Shrestha Director

Mr. Bijay B. Shrestha Director

Dr. Ramesh K. Bhattarai Director

Mr. Amar S. Rana Director

Mr. Upendra Keshari Poudyal Professional Director

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Mr. Himalaya S. Rana Chief Advisor to the Board

Mrs. Ranjana Shrestha Alternative Director

Mr. Surendra Silwal Alternative Director

Ms. Menuka Shrestha Alternative Director

Mr. Gyem Raj Adhikari Company Secretary

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Management Team Executive Committee (E.C.) Name Designation

Mr. Prachanda Bahadur Shrestha Chairman

Director

Mr. Bijaya Bahadur Shrestha Member

Director

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Mr. Upendra K. Poudyal Member

Director

Mr. Ashoke SJB Rana Member

Chief Executive Officer

Mr. Masood Ul Hasan Member Secretary

Senior General Manager

Annex 2 Management Team Name Present Dept./Branch

Mr. Ashoke SJB Rana Chief Executive Officer

Head Office

Mr. Masood Ul Hasan Senior General Manager

Head Office

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Mr. Sushiel Joshi General Manager

Head Office

Mr. Pradeep N. Rayamajhi Executive Administrative Officer

General Administration Department, HO

Mr. Ujjal R. Rajbhandary Executive Marketing Officer

Corporate Marketing Dept, HO

Mr. Anup Maskey Executive Credit Officer

Credit Control Dept, HO

Mr. Banshidhar Sharma Manager

IT & SWIFT Dept, HO

Mr. Maheshwor P. Joshi Manager

Legal and Shares Dept, HO

Kanchan Basnyat Manager

IT Dept, HO

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Sulap Raj Aryal Manager

Maharajgunj Branch, Branch Manager

Sunita Shrestha Manager

Reconciliation Dept, HO

Bina Pandey Manager

Credit Management & Administration Dept, HO

Rabindra Narayan Pradhan Manager

Thamel Branch, Branch Manager

Ishwar Kumar Karki Executive Human Resouces Officer

Human Resources Dept, HO

Vinay Kumar Joshi Manager

Bhairahawa Branch, Branch Manager

Sisam Pradhanang Joshi Manager

CCD, Head Office

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Mrigendra Pradhan Manager

Patan Branch, Branch Manager

Bijaya Man Nakarmi Manager

Thamel Branch, Dy. Branch Manager

Robin Kumar Nepal Manager

Birgunj Branch, Branch Manager

Gaurav Bikram Shah Manager

TOC, Head Office

Lokesh JB Rana Manager

CCD, Head Office

Sunil Prasad Gorkhali Manager

Branch Manager, New Road Branch

Gyem Raj Adhikari Manager

Executive Operating Officer

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Ananta Rajbhandary Manager

Remittance Promotion / Correspondent Banking Dept., Head Office

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