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TRIBHUVAN UNIVERSITY

Office of the Dean


Faculty of Management
Kirtipur, Kathmandu

An Internship Report
On

BANKING SYSTEM
In partial fulfilment of the requirement for the degree of Bachelor in Information
Management (B.I.M)

By:

DIBAS GAUDEL
T.U. Reg. No:

Roll No:

Asian School of Management & Technology (ASMT)


August, 2015
AN INTERNSHIP REPORT ON
BAINKING SYSTEM

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ACKNOWLEDGEMENT

It is a great satisfaction to prepare this internship report, which is an impartial


requirement for Bachelors Degree of Information Management. Being a BIM student
of Asian School of Management & Technology (ASMT), I have chosen Agricultural
Development Bank Limited one of the successful A grade commercial bank of
Nepal for the accomplishment of my internship.

The period of internship was very productive to me. I got an opportunity to learn the
process about the daily operations of the Bank. Further, I got familiarize to deal with
the customers, getting cooperation from the customers and the staffs, and how to work
in any institution. It has made me more responsible, sincere, cooperative, disciplined
and hard-working.

I am deeply obliged to Mr. Surya Bam for providing his valuable knowledge and
ideas to make my report more sensible, informational and on the format. Besides I am
thankful to all my teachers and friends for their precious help and support.

Lastly, I also express my gratitude towards Mr. Min Raj Pokhrel, Branch manager for
taking me as intern in the bank. I would like to thank all the department heads, staffs
of ADBL as well as interns for their kind support and guidance without which the
internship report would not have been completed. I am also thankful to my family
who gave me their valuable time and suggestion and helped in making this intern a
success.

Dibas Gaudel

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ABSTRACT

As partial fulfilment of BIM under Tribhuvan University I have chosen Agricultural


Development Bank Ltd. to do my internship. The main objective of this internship
was to know about the banking system and use my theoretical knowledge into
practical field and also to gain practical knowledge of the workplace. The internship
was for the period of 8 weeks starting from June 10 to Aug 12 2015.

I have chosen different departments for my internship through which I can get the
knowledge as well as working procedure of the departments. I have choose Customers
Service Department, Credit and Loan Department, ATM Card Department of
Agricultural Development Bank Ltd. where I got lot of opportunities to understand
several concepts related with the operation done by this department and bank. To
understand the way how banking system is done in real practice was the main
objective of my internship, which I successfully learnt during the period of 8 weeks.

After having an experience of successful 8 weeks internship, I learnt that there is


some difference between academic knowledge and the practical work experience.
However, it is also true that the theoretical knowledge we gained from the Schools
and Colleges were very useful in the real work place environment. This internship
provided to use my theoretical knowledge into practical knowledge.

Therefore, the overall experience of working in Agricultural Development Bank Ltd.


was very pleasant and I learnt how various activities are conducted in the field of
banking. This internship also helped me to implement the theoretical facts that I have
acquired in schools and colleges and gain practical knowledge in real work place
environment.

ABBREVIATIONS
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ABBS Any Branch Banking Service

ADBL Agricultural Development Bank Ltd.

ATM Automatic teller Machine

BAIFO Bank and Financial Institution Ordinance

BIM Bachelor in Information Management

BOD Board of Directors

CEO Chief Executive Officer

CSD Customers Service Department

CTI Central Training Institute

FOM Faculty of Management

KYC Know your Customer

RBB Rastriya Banijya Bank

ROs Regional Offices

RTC Regional Training Centres

SFDP Small Farmer Development Program

SMED Small and Micro Enterprise Development

TU Tribhuvan University

Table of Content

CHAPTER Page No.

Acknowledgement i

4
Abstract ii

Abbreviation iii

Table of content iv

List of Tables vii

List of Figures viii

1 INTRODUCTION 1

1.1. Background of the Study 1

1.2. Objectives of the Study 1

1.3. Methodology 2

1.3.1. Organization Selection 2

1.3.2. Placement 2

1.3.3. Duration 2

1.3.4. Nature and sources of Data 3

1.4. Limitations of the Study 4

2. INTRODUCTION TO THE BANKING INDUSTRY 5

2.1. Meaning of Banks 5

2.2. Origin of the word Bank 6

2.3. Origin and Evaluation of Bank in Nepal 6

2.4. Types of Bank 8

2.4.1. Central Bank 9

2.4.2. Commercial Bank 9

2.4.3. Industrial Bank 9

2.4.4. Agricultural Development Bank 9

2.4.5. Rural Development Bank 10

2.4.6. Saving Bank 10

2.4.7. Exchange Banks 1810

2.4.8. Universal Bank 10


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2.5. Importance of Bank 19 11

3 INTRODUCTION OF ORGANIZATION 12

3.1. Introduction of Agricultural Development Bank Ltd20 12

3.2. Vision, Mission & Objectives 13

3.3. Tier Structure of ADBL 14

3.4. Organization Chart 15

3.5. Branch Network 16

3.6. Products and Services Provided by ADBL 16

3.6.1. Deposit Products 17

3.6.2. Loans Products 18

3.6.3. Additional Services 20

4 ANALYSIS OF ACTIVITY DONE 21

4.1. Customer Service Department (CSD) 21

4.1.1. Activities done in Customer Service Department 21

4.1.2. Problems Identified in Customer Service Department 24

4.1.3. Problems Solved in Customer Service Department 24

4.1.4. Analysis of Customer Service Department 24

4.2. Remittance 25

4.3. Credit Department 25

4.4. ATM Card Distributions 26

5 CONCLUSION AND LESSON LEARNT 27

5.1. Summary 27

5.2. Conclusion 27

5.3. Lessons Learnt 29

5.4. Recommendation 29

BIBLIOGRAPHY

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LIST OF TABLES

1.1 Placement and duration..3

2.1 Financial institutions in Nepal ..8

3.1 Regional Office and Training Centre of ADBL16

3.2 Interest on Deposit..18

3.3 Interest on Loan & Advances...20

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LIST OF FIGURES

1.1 Gantt chart of placement and duration3

2.1 Classification of bank under NRB7

3.1 Tier Structure of ADBL.14

3.2 Organization Chart of ADBL.15

CHAPTER ONE
INTRODUCTION
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1.1. Background of the Study
An internship is a directed, practical learning experience, outside of the normal
classroom setting, in which students sharpen skills, gain experience, apply classroom
learning to professional settings or projects, and learn first-hand how professional
companies or organizations operate. It is a training given to the students to get
familiarize with the corporate culture. The main point with internship is that it sets us
in a situation that allows us to observe and become acquainted with industry in a more
specific way. The internship exposes the students interpersonal relationships that a
job requires. The report is the requirement for the fulfilment of the degree of bachelor
in BIM under the Faculty of Management (FOM) of Tribhuvan University.

Internship program has been designed for the partial fulfilment of the degree of
Bachelor in Information Management (BIM). BIM is a program launched by
Tribhuvan University (TU) under the Faculty of Management (FOM), with eight
semester's provision covering an international standard period of four years. It covers
class lectures, group discussions, case studies, seminar, practical exercises, project
work, term paper and internship. BIM is a broad education program to prepare the
students for much advanced middle level leadership in both private and public sector.
The purpose of the program is to develop and strengthen the students knowledge and
skills. With regard to this, FOM has combined internship with the course and make it
compulsory for the time period of two months.

This report is based on the two month internship experience and knowledge gained on
the internship time duration. It mainly focuses on the job done by the intern and
experienced gained. It also includes the things which intern has seen during the
period.

1.2. Objectives of the Study

On the basis of the three months experience in Agricultural Development Bank Ltd.
(ADBL), this report has been prepared. The general objective of this study is to fulfil
the requirements of the degree of BIM. The main objective of this study is to use
theoretical knowledge learned during the BIM program into the real life working
situation. The other specific reasons are as follows:
To know about the banking sector.
To become familiar with organizational culture and work ethics of the bank.
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To know about the institution where the internship is done.
To get the knowledge about the process of different work.
To analyse different departments of the bank.
To increase confidence by experiencing the industry first-hand with
involvement in completing assigned tasks.

1.3. Methodology

Methodology is the description of the procedure followed while collecting the


necessary data and information needed for research work and report preparation.
Different data needed for the report were collected by observation, different websites,
and annual report of Agricultural Development Bank etc.

1.3.1. Organization Selection


For the internship, intern had selected the Agricultural Development Bank, Kalanki
branch. ADBL has been one of the successful A level commercial banks in Nepal
for a long period of time. It had been a great opportunity for intern to acquire
knowledge and skills during the internship period.

1.3.2. Placement
Intern had been placed in the different departments of ADBL during the duration of
the internship. Intern had worked for the time interval of two months and spent
different time periods in different departments like customer service, remittance, and
credit.

1.3.3. Duration
The duration of internship period has been defined for 8 weeks or 6 credit hours (i.e.
96 hours of working time at any financial institution for finance specialization
students) by FOM, TU. Intern had the opportunity to work for two months starting
from April 03-June 06 2014. The intern had been placed in various departments and
the duration of time interval in those departments are shown in the following figure:

Weeks 1 2 3 4 5 6 7 8
Department
Customers service

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Remittance

Credit and Loan

ATM

Fig 1.1 Gantt chart of placement and duration

1.3.4. Nature and sources of Data


Two types of data sources are available i.e. primary data and secondary data. Both,
Primary and Secondary sources of data are used to prepare the report.
1.3.4.1. Primary Source
Personal Interview
Open ended questionnaire method is used to obtain information from the
employees of the bank. The personal interview helped to know about
commission charged by bank, difficulties of bank to convince its customers.
Informal discussion
Informal discussion with the employees of the bank gave idea about the ethics
of bank and relationship among co-staffs.
Observation
Direct observation was used to learn about consumer behavior of customers.
1.3.4.2. Secondary Source
Annual reports published by Agricultural Development Bank Ltd.
Websites (www.adbl.gov.np)

1.4. Limitations of the Study


There have been some limitations on the report despite the hard work to make it fully
approved. Some of the limitations are described below:

The analysis is only based on the Kalanki branch.


For the time limitation internee could not gather more information to justify
exact condition.
The whole department analysis and information are not included in this report.
The interpretations are made under personal judgment, which is not guided by
the experts and professionals.
Hard to get deep information from them due to their privacy policy.
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CHAPTER TWO
INTRODUCTION TO THE BANKING INDUSTRY

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2.1. Meaning of Banks

Banks are the most important financial institutions in economy. Bank constitutes an
important segment of financial infrastructure of any country. Economic development
&, fiscal development are related to each other.

The industrialization of continental Europe was mainly because of the Banks are
initiation of the venture banks. The development of Japan bank plays a vital role.

Banks are the financial institutions where the money is deposited and the needy
people come in the bank for loans to fulfil the requirements of cash. So we can say
that the main game of bank is to play the money and through it generate profit.
Actually the bank collects money from general public from attracting them with
sound interest rate in their deposit through the money they have collect from the
public they provides loans to the business house, industry, ready people and other
potential sector, with charging some interest, which is higher then the interest rate,
they provide in the deposit . Just by collecting cash from saver and providing loans to
the investor, we can say that the bank acts an agent between saver and the investor.

To know the precise and clear meaning of bank, some expert's definitions can be
given. Chamber's twentieth century Dictionary defines a bank as an "institution for
keeping, lending and exchanging etc. of money".

According to World Bank, "Banks are the financial institutions that accept funds in
the form of deposit repayable on demand or short notice."

According to Crowther "A banker is a dealer in debts. The bankers business is then to
take the debts of other to people, to offer his own in exchange and thereby to create
money.

Therefore a bank is a financial institution which collects 'deposits and in turn provides
loans by creating credit. Today banking is such a vague term, it does a lot more than
deposits and credits , like remitting of money, issue of money , guarantee, letter of
credit, controlling, payment, other agency functions, monetary activity of country etc.
are also the major functions of bank. This multiplicity of bank service and function
has led to a bank being labelled ''financial supermarket".

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2.2.Origin of the word Bank

The name bank derives from the Italian word banco "desk/bench, used during the
Renaissance by Florentine bankers, who used to make their transactions above a desk
covered by a green tablecloth. However, there are traces of banking activity even in
ancient times.

In fact, the word traces its origins back to the Ancient Roman Empire, where
moneylenders would set up their stalls in the middle of enclosed courtyards called
Marcella on a long bench called a bancus, from which the words banco and bank are
derived. As a moneychanger, the merchant at the bancus did not so much invest
money as merely convert the foreign currency into the only legal tender in Rome
that of the Imperial Mint.

2.3. Origin and Evaluation of Bank in Nepal


The history of modern banking business in Nepal is very short and is only 6 decade. If
we try to see the history of banking transaction in depth, evidence of money lending
function are found in practice before 8th century. In 780 B.S. Gunakama Dev the ruler
of Kathmandu reconstructed Kathmandu town by collecting funds from people. In
14th century 'Tanka Dhari' system had been running. In the period of Ranodip Sing in
Kathmandu established an office called 'Teja Rath Adda' From this office the
government distributed salary to their employees and it provided loans to government
employees 5% of interest against the security of gold, silver etc.

Because of the development of economic activities in Nepal, the above institution


could not fulfill the needs of people so m Kartik 30, 1994 B.S. Nepal Bank Limited
was established as one of the semi government commercial bank, which had 10
million authorized capital and 842000 paid up capital. It lias done the pioneering
functions in spreading the banking habits among the people.

Having felt a need of a central bank to control and direct the commercial bank and
help the government for making monetary policies, Nepal Rastra Bank was set up in
l4 Baishakh 2013B.S. To fulfill the growing, credit requirements of the country the
Commercial bank 'Rastriya Banijaya Bank' was established in 10 Bhadra 2022 B.S.
Rastriya Banijaya Bank is also to provide facilities for the economic welfare of the
general public. Nepal is an agriculture country to develop agriculture system and

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industry. Agriculture Development Bank and Nepal Industrial Development
Corporation were established in 2024 B.S. & 2016 B.S. respectively. The initiation of
the financial sector liberalization policy by Nepal Rastra Bank, a board of joint
venture banks entered with the view to accelerate the race of development of nation.
At present there are many joint venture banks which are running successfully in a
competitive environment. His Majesty government deliberate policy of allowing
foreign joint venture banks to operate in Nepal basically targeted to encourage local
tradition commercial bank to enhance their capacity through competitions efficiency
mechanization modernization, computerization and prompt customer services. Nepal
Arab Bank Limited was established in 2041 as a first foreign joint venture bank. Now
in our country, there are 30 commercial banks, 15 development banks, 48 Finance
companies, 34 co-operative, (Quarry finance) organization and 13 non-bank financial
institutions.

The banking industry has tremendous amount of potential growth but due to some
loopholes, the performance has not been as successful as it has to be. With increasing
number of commercial banks, the competition has undoubtedly increased. And with
that competition, the need for regulation also increased. It can be shown as:

Nepal Rastra
Bank

Commercial Development Finance Micro Credit


Banks Banks Companies Institutions
Class A Class B Class C Class D
Category Category Category Category

Fig 2.1 Classification of bank under NRB

Financial sectors in Nepal have become one of the major contributors to the Nepalese
Economy. There has been a rapid growth in the Financial Institutions in the recent
years. The present scenario of Nepalese Financial Institutions can be presented as:

Financial institutions in Nepal (Regulated by NRB)

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Type of Financial Institution Class Number

Commercial Bank A 30

Development Bank B 76

Finance Companies C 39

Micro Credit Development Banks D 19

Saving and Credit Co-operatives (Licensed by NRB) NA 16

Non Governmental Organization (Licensed by NRB) NA 45

Total 225

(Source: www.nrb.org.np)

Table 2.2: Financial institutions in Nepal

2.4.Types of Bank

Since different banks are established with different purposes. Based on their purpose,
way of functioning and meeting customers demands and choices, they are
categorized into various types. Broadly, the banks can be classified into following
types:

Central Bank
Commercial Bank
Industrial Bank
Agricultural Development Bank
Rural Development Bank
Saving Bank
Exchange Banks
Universal Bank

2.4.1. Central Bank


A central bank is the Bank of the Bank, which is established with the objective to
issue currencies, look after the overall performance of other banks and financial
institutions, and aid government in formulating various policies. In every country,
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government has full ownership on central bank. It doesnt focus on profit generation.
It acts as a regulatory body of the countrys financial market through formulation and
implementation of monetary policy, and regular inspection and supervision. All the
income and expenses of the government is carried out through this bank. Nepal Rastra
Bank was established on 2013 B.S. as the central bank of Nepal.

2.4.2. Commercial Bank


The commercial bank is the oldest type of bank, which is established with the
objective of to earn profit. It collects deposits from general public as well as from the
institutions and then disburses the collected deposits in the form of loan to agriculture,
industry and service sectors as well as to the individuals. Nepal Bank Limited is the
first commercial bank of Nepal which was established in 1994 B.S. Currently, twenty
eight commercial banks are operating in the Nepalese financial market.

2.4.3. Industrial Bank


Industrial bank is mainly established for the development and gradual improvement of
industrial sector of the country. This bank provides long term loans and industrial
consultancy for the establishment, development and modernization of industries. It
also encourages industrial investment by providing information on industrial
feasibility and by helping to raise loans from the market. Nepal Industrial
Development Corporation (2016 B.S) is the oldest industrial bank of Nepal.

2.4.4. Agricultural Development Bank


The bank established for the development and modernization of agricultural sector is
known as Agricultural Bank. It makes available the short term loans for the payment
of wages and to buy manure, seeds and small implements necessary for agriculture
and also the long term loans to purchase land, machinery and expensive equipments
necessary for cultivation. It also provides knowledge and counseling to the farmers
regarding the modern agricultural management techniques and technologies. The
other types of Agriculture Bank are Mortgage bank and Co-operative Banks. In
Nepal, the Agricultural Bank was established in 2024 B.S.

2.4.5. Rural Development Bank


The landless farmers and the very poor people in the rural areas cannot receive
institutional loans due to the need of collateral. Hence, the Rural Development Bank

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is established to provide banking services to the rural areas. The poor people of rural
areas deposit their savings in this bank both individually as well as collectively. They
receive collective loan without collateral and the personal loan on the basis of
personal collateral. In Nepal, Rural Development Bank was established in 2044 B.S.
in Eastern and Far-Western development regions.

2.4.6. Saving Bank


The Saving Bank is established to collect the scattered savings of low income people.
On one hand, it increases the capital formation by mobilizing small savings and on the
other hand, it encourages savings among low-income people. In reality, it is not a
bank at all. The customer, who deposits money in the bank, can withdraw only a
definite amount each week. In Nepal, there are more than 121 Postal Savings Banks in
operation. It is to be noted that it is not a separate bank but the district branches of
postal services department undertake this functions.

2.4.7. Exchange Banks


The bank established to deal with foreign currency is called Exchange Bank. Its
objective is to help in international trade. This bank provides loans for foreign trade
and helps in the settlement of debt between different countries. This bank provides
loan to importers on discounting bills and remits the money of the importers to their
parties. This task is undertaken either through its own branch in foreign countries or
through correspondent banks. There is no separate Exchange Bank in Nepal. The
foreign exchange is controlled by Nepal Rastra Bank. With the permission of Nepal
Rastra Bank, commercial bank also does foreign exchange transaction.

2.4.8. Universal Bank


The bank which jointly performs the function of commercial bank and investment
bank is known as Universal Bank. This is the latest concept in banking. On one hand,
it performs the function of commercial bank such as collection of deposits and
granting loans. On the other hand, it performs the function of investment banks such
as issue and underwriting of securities and purchase and sales of securities of
companies. In Nepal, Nepal Industrial Development Corporation seems to be moving
towards Universal Bank status as it has been given right to be involved in commercial
banking to some extent.

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2.5. Importance of Bank

Bank pool of the scattered deposit across the country and the channel it in
productive use.
Bank deposit is withdrawal by cheque, hence, it constitution an important part
of the total volume supply.
Sound banking system helps in flourishing healthy commercial and industrial
activities of every country.
Bank transfer fund within and outside the country without any risk.
Bank provides letter of credit and guarantee facilities which contributed in
boosting international trade to great extent.
Money lender and usurers charge heavy interest rates and cheat people, but
bank being a large entity, can be considered free from such exploitations.
Bank provides lockers for safekeeping of valuable documents and precious
articles in rent.
Bank provides various card services, which has eliminated the difficulties and
risk of caring money.

CHAPTER THREE
INTRODUCTION OF ORGANIZATION
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3.1. Introduction of Agricultural Development Bank Ltd.
With the main objective of providing institutional credit for enhancing the production
and productivity of the agricultural sector in the country, the Agricultural
Development Bank, Nepal was established in 1968 under the ADBN Act 1967, as
successor to the cooperative Bank. The Land Reform Savings Corporation was
merged with ADBN in 1973. Subsequent amendments to the Act empowered the bank
to extend credit to small farmers under group liability and expand the scope of
financing to promote cottage industries. The amendments also permitted the bank to
engage in commercial banking activities for the mobilization of domestic resources.

Agricultural Development Bank Limited (ADBL) is an autonomous organization


largely owned by Government of Nepal. The bank has been working as a premier
rural credit institution since the last three decades, contributing a more than 67 percent
of institutional credit supply in the country. Hence, rural finance is the principal
operational area of ADBL. Besides, it has also been executing Small Farmer
Development Program (SFDP), the major poverty alleviation program launched in the
country. Furthermore, the bank has also been involved in commercial banking
operations since 1984.

The enactment of Bank and Financial Institution Ordinance (BAFIO) in February


2004 abolished all Acts related to financial institutions including the ADBN Act,
1967. In line with the BAFIO, ADBL has been incorporated as a public limited
company on July 14, 2005. Thus, ADBL operates as a "A" category financial
Institution under the legal framework of BAFIO and the Company Act, 2053.

3.2. Vision, Mission & Objectives

Vision of Agricultural Development Bank Ltd. is


To be a Mass-based Complete Bank serving from Urban to Rural.
Mission of Agricultural Development Bank Ltd. is

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To deliver comprehensive banking solution strengthening its extensive
network.
Objective of Agricultural Development Bank Ltd. is
To provide quality banking services, To adopt market driven strategy, To
obtain sustained and competitive return on investment.

Corporate Conduct
In achieving its corporate objective in pursuit of its corporate mission and vision,
ADBL will:

comply with all relevant legislation, codes of conduct and standards of good
corporate citizenship in Nepal while maintaining full autonomy in the
management of its operations;
conduct its operations in an open and transparent manner;
put local resources to work for local development, serving the rural
community and its aspirations;
provide a full and balanced rage of financial products and services that
satisfies the needs of the rural population of Nepal, on a profitable and
sustainable basis;
strive consistently to provide improved products and services to its clients at
reasonable cost, using modern banking, information and communication
technology in the most appropriate form to its clients needs;
be vigorous in building reputation for professionalism, competitive pricing,
reliability and quality of service and innovation;
operate in accordance with best banking practice, acting with financial
prudence and keeping in mind the need to balance profitability with asset
preservation and liquidity and to safeguard depositor's funds;
work together with its employees to develop their capabilities to contribute to
achievement of the bank's objectives, promoting excellence, rewarding
achievement and providing them the opportunity to share in the bank's
success;
develop mutually acceptable relationship with government in the pursuit of
improvement in living standards in rural areas, while respecting best financial
practices;

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ensure that its activities contribute to the environmental stability and overall
improvement of living standards in Nepal; and
Judge the bank's success against the measures that include profitability,
portfolio quality in terms of minimal arrears and non-performing loans,
portfolio worth, total deposits, geographic outreach and public image.

3.3. Tier structure Of ADBL


The bank has three-tier organisation structure consisting of Head office, Regional
offices (ROs) and field offices. Field offices are further categorised into three levels;
main branch, branch and sub-branch depending particularly upon their volume of
business. The head office is the policy making body at the top, field offices are
implementing units at the bottom and ROs with monitoring and supervisory role are
in between.

Sub -
Branch

Regional Branch
Head Office
Office
Main
Branch

Field Offices

Fig 3.1: Three-Tier Structure of ADBL

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3.4. Organization Chart

Fig 3.2: Organization chart of Agricultural Development Bank

The Board of Directors is the apex body of the bank. It formulates policies as well as
strategies and provides guidance to the management. The Board comprises a total of
nine members; four members representing Government of Nepal and four members
representing individual shareholders. Besides, one member is nominated by the Board
as per the BAFIA. The Board is supported by Audit Committee and Governance Sub-
Committee in the area of internal control and good governance respectively.

The day to day operation of the bank is executed by the Chief Executive Officer. The
Chief Executive Officer is closely assisted by four Deputy General Managers and 18
Division Chiefs. Moreover, Chief Executive Officer is supported by Assets and
Liabilities Management Sub-Committee for various activities related to risk
management.

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3.5. Branch Network
ADBL is providing its services from its different branches in Nepal. ADBL has 235
branches including main branch and sub-branches to support and provide financial
services to its customers.
ADBL is also operating a Central Training Institute (CTI) at corporate level in Bode,
Bhaktapur under Head Office Structure and five Regional Training Centres (RTCs)
with residential facilities in five development regions. The CTI and RTCs conducts
training and seminars particularly for enhancing abilities and skills of organizational
members.

ADBL Regional Office Regional Training Center


1. Regional Office,Biratnagar 1. Eastern Region RTC Letang, Morang

2. Regional Office,Rajbiraj 2.Mid Region RTC Birendranagar,


Chitawan
3. Regional Office,Janakpur
3.Mid Western Region RTC Pipari, Banke
4. Regional Office,Birgunj
4. Far Western Region RTC Dhangadi
5. Regional Office,Kathmandu
5.Western Region RTC Mangalapur,
6. Regional Office,Pokhara
Rupandehi
7. Regional Office,Bhairahawa

8. Regional Office,Dang, Ghorai

9. Regional Office,Dhangadhi

10. Regional Office, Nepalgunj

Table 3.1: Regional Office and Training Centre of ADBL

3.6. Products and Services Provided by ADBL


ADBL is the largest bank commercial bank of Nepal. ADBL is providing full-fledged
Commercial Banking services to its clients. Besides accepting deposits in various
forms, following facilities and services are made available by the Bank:

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3.6.1. Deposit Products
ADBL offers a wide range of deposit products that caters requirement for customers.
It brings the customers a convenience of networked branches/ATMs and facility of
Any Branch Banking Services. The bank gives unlimited saving and withdrawal
facility in the deposit products. The interest rates are calculated on daily basis and
kept quarterly on the customers account. The various Deposit Schemes offered by the
bank are:
ADBL Current Account
ADBL Saving Account
ADBL Fixed Deposit
ADBL Sambridhi Saving
ADBL Ba-Ama Saving Account
ADBL Fixed Deposit Lakha Pati Account
ADBL Chetansil Nari Bachat

Interest on Deposit

S. No. Description Interest Rate %

1 Saving Deposit:
General saving 2.75

Chetansil Nari Bachat 3.50

Krishak saving 3.50


Shareholder saving 3.50
Sambridhi Saving 4.00
Ba-Ama Saving Account 4.75
2 Fixed Deposit
2.1 Corporate
Up to 6 months 3.75
1 Year 4.25

Above 1 year up to 5 years 4.75


2.2 Individual

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Up to 6 months 5.00

1 Year 5.50

Above 1 year up to 2 years 5.75

Above 1 year up to 5 years 6.00


2.3 Akshya Kosh 6.00

Table 3.2: Interest on Deposit

3.6.2. Loans Products


ADBL also offers a wide rang of loans as to fulfil the requirements of the customers.
The various Deposit Schemes offered by the bank are:
Auto Loan
Education Loan
Foreign Employment Loan
Gold Loan
Home Loan
Residential Loan
Agricultural Loan
Livestock Loan
Small & Cottage Industry Loan
Products & Input Marketing Loan
Overdraft Loan
Interest on Loan & Advances

S.No. Description Interest Rate %

Working Capital Term


Loan
1 Agricultural and Forest
1.1 Crop product and services 11.00

1.2 Tea/Coffee 10.00 10.00


1.3 Cold Store & Godown 11.00 11.00
1.4 Irrigation 10.00 10.00
1.5 Forestry related product 10.00 10.00
1.6 Other agricultural product and services 10.50 10.50

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2 Mining Related 11.00 11.00
3 Manufacturing industry
3.1 Food & seed Processing 12.00 12.00
3.2 Agricultural & food products 12.00 12.00

3.3 Handicraft, Textile Garment, Medicine 12.00 12.00


4 Construction

4.1 Residential Housing

4.1.1 5 years 10.00

4.1.2 10 years 11.00

4.1.3 15years 12.00


4.2 Non Residential 11.50

4.3 Heavy construction 11.00

4.4 Demand, Construction & contract Loan 13.00

5 Electricity, Gas and Water

5.1 Hydropower 10.00 10.00

5.2 Bio Gas & Solar 11.00 11.00

5.3 Others 11.00 11.00

6 Metal Product, Machinary & 12.00 12.00


Electronic Equipment
7 Transport, Communication and 12.00 12.00
Public Utilities
8 Finance Insurance & Investment

8.1 Small Farmer development Bank 7.00 7.00

8.2 Small Farmer Cooperative (SFCL) 10.00 10.00

8.3 Other Savings & Credit Cooperatives 10.50 11.00

9 Hotel, Restaurant, Tourism &


Entertainment
9.1 Hotel, Restaurant & Tourism Services 12.00 12.50

9.2 Entertainment, Films 13.00 13.00

10 Consumption/ Consumer Loan

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10.1 Gold/Silver Loan 14.00

10.2 Credit Cards 11.00

10.3 Hire / Purchase /Auto Loan 12.00

10.4 Household Loan 15.00

11 Other services

11.1 Education Loan 12.00

11.2 Foreign Employment Loan 13.00 13.00

12 Other Loans

12.1 Overdraft Loan (Individual) 15.00

12.2 Overdraft Loan (Institutional) 14.50

12.3 AOC (Advance on Credit) 11.00

12.4 Packing Credit 11.00

12.5 Others 15.00 15.00

Table 3.3: Interest on Loan & Advances

3.6.3. Additional Services

Interbank Transaction
Any Branch Banking Services
Extended Banking Services
National Debit Card
ATM Services
Safe Deposit Lockers
Foreign Exchange Services
Remittance

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CHAPTER FOUR

ANALYSIS OF ACTIVITIES DONE

4.1. Customer Service Department (CSD)


Customer service department (CSD) also known as the front desk helps is most
important department for every organization to develop the good impression to the
customer. Customer Service is the commitment to providing services to external and
internal customers, including providing information, technical support and quality of
services in a timely manner.

Customer satisfaction is the main wealth of every organization. The loyal customer
always uses the product and services of the bank regularly without thinking of other
alternatives. Thats why the loyal and regular customer is the main source of a
successful bank.

CSD of ADBL always welcomes to its customers for providing the best information
of bank product and services to maintain the relationship with the customers and
make them loyal to the organization.

CSD of ADBL performs various tasks in day to day operation. The basic tasks of
CSD are account opening, account closing / transfer, cheque issuing, bank statement
issue, balance certificate issue, provide information about bank product and services,
and many more.

4.1.1. Activities done in Customer Service Department


As an intern I had performs various activities in CSD and some of them are described
below:

Providing general information

Customer service department is the place where different people come to get different
information about bank. As an intern its my duty to provide information that is
required by customers. Generally the intern had to provide information about the
product and services of Agricultural Development Bank Ltd., their queries,
regulations and documents required in various cases, the exact place to consult for
their requirement, etc.
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Opening an Account
Account opening is very important for every bank. It helps to increase the number of
customer in the bank and expand its business. The more customers the organization
has, the more success it can get.

Intern had huge responsibility in the opening an account. Firstly intern had to provide
the information regarding the various accounts that ADBL have with all the benefits
and features of the accounts and tell about the necessary documents required to open
an account. If the person is satisfied with the product and have all the documents then
inter had to provide the required forms necessary to open an account.

Then intern had to check all the documents are valid or not and the data in the forms
are correctly written or not. Then intern had to place all the document copy in an
order and pass it to the office for further process.

Closing or Transfer an Account


Sometimes customers have to close their account or to transfer it to another branch.
As an intern we have to provide the necessary information and form to the customer
for closing or transfer an account. After the submission of form with the cheque slips
(if any) by the customer, the intern had to write the information on the register about
the customer and reasons to close or transfer the account. Then the intern had to put
cancellation stamp on those cheque slips and register it into different register.

The further process is done by the officer to close or transfer an account.

Preparing Cheque book


Customers needs cheque book for withdraw money from their bank account. If their
cheque slip are finished, they wants new cheque book. When the customers fill up the
form for their new cheque book requisition slip the intern had to prepare the cheque
book according to the request of the customer. The intern prints the cheque and make
sure that the account number of the customer and cheque requisition slip and the
cheque slip are same. Then, intern had to place the cheque slip in order and bind it
with the new cheque requesting slip in the middle of the cheque book and cheque
cover.

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Printing Bank Statement
Bank statement is the list of transaction of the customers during the certain period of
time. Intern had to provide the bank statement to home who wants. Firstly intern
provides a firm to the customer. When the customer fill up the form then the intern
must cheque the account no. and customer signature and print bank statement from
the date which the customer required. At the time of printing the bank statement
signature of the customer must be match with the actual signature done when opening
the bank account because the statement is only provided to the account holder.

Balance Check
Most of the customers frequently ask for their balance in account. So, intern had to
check the balance of account by entering the account number in the respective search
heading of the software. Intern can tell the amount of the account to the account
holder only. Intern doesnt have any permission to tell amount in the account to other
person who may be cheque holder except account holder.

Signature Verification
Intern had to check and verified the signature in the different forms of the bank and
also had to check the signature of the cheque on the request of the customer. Intern
had only given the permission to view signature for actual account holder when they
forgets their signature.

Handling and Making Phone Calls


Handling phone calls are also important for every organization. Through phone calls,
the customers needs to know information about the bank and also ask different
questions. Intern must handle the responsibility to handle the phone calls and solve
the query of the customers. If intern doesnt know the answer then intern had to pass
the call to the officer. If the bank require any issues like requires any information or
document about the customer document or have to give any information like about the
mature date of fixed deposit intern had to call the customer and inform them.

Form Filing
Different document and forms came at the CSD. Intern had to update the file on day
to day basis. The transaction like new account document, account closed, new cheque
book requisition slip etc. must be placed in the file for future use and reference.

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4.1.2. Problems Identified in Customer Service Department
During the internship period, intern had identified few problems in CSD and they are
described below:

Workload Problem
Workload problem occurs when the work is more than the actual work for a
employee. During the internship period, intern had seen that many customers were
unsatisfied by the services provided due to the long waiting time. Workload problem
is caused by the insufficient number of employees in the CSD.

Problem in Filling Forms


Different forms are filled everyday in the bank by different customers. Intern finds
many terms difficult to understand and confused the customers while filling the form.

4.1.3. Problems Solved in Customer Service Department


Intern had solved few problems during the period of internship in CSD and they are as
follows:

Helping the customer to fill different forms when they are confused.
Describing different accounts along with its features.
Finding the missing documents.
Informing the problem that raise during the interaction with customers to the
authorized person for the solution.

4.1.4. Analysis of Customer Service Department


There are lots of work that intern is not allowed to do during the internship period in
CSD. However, intern had analyzed the work done by employees and department
head to some extent and from that intern had learnt and realized many things. First of
all, intern had seen the difference in the work done by the experienced employee and
the inexperienced intern. Intern generally handles the entire customer with the same
magnitude and style despite the difference in the attitude of the customer; while,
employee handles the customer differently every time according to the attitude and
behaviour of the customer. Intern had analyzed that how difficult it is to do the
simplest of thing when the pressure of the workload increases. Intern had also seen
that the software layout that uses in the bank is different according to the position of

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the employee. Intern had learnt that due to the simplest of mistakes there can be huge
problem during the operation. Intern had also recognized the importance of the
hierarchy in order to work and solve the problem.

During the internship period, the intern had seen huge difference in number of
employees in the CSD and the changes that occurred due to that fluctuation in
number. The bad impact due to the crowded CSD and the lack of employees in some
period had been seen by the intern and recognized the importance the need of the best
number of employees that works efficiently.

4.2. Remittance
Remittance is the worldwide correspondent network for fund/remittance transfer. In
remittance process sender send the money from one place to another or one branch to
another using cash cheque or money order. There are different agencies to send and
receive the money.
Remittance can be of two types; inward and outward. Remitters who are abroad can
transfer money payable from ADBL through using SWIFT Code. The SWIFT Code
of bank is ADBLNPKA.
Outward remittance is the process of sending money from Nepal to other country.
ADBL can transfer the money by issuing draft which is payable either by different
world class bank on the request of the customer.
Intern had first provided the form to the customers. After filling the form by customer
intern verify the remittance ID, customers citizenship number and name, from or to
branch or country, and remittance amount. After all process are successfully done
intern had to provide or accept the money to/from customer and give the money
received or sent slip to customers and manage the form to their appropriate file for
future process.

4.3. Credit Department


Credit is the main source of the income of any bank. The credit department provide
the money for needed people. Credit is the amount available to a company or
individual from the banking system. It is the aggregate of the amount of funds
financial institutions are willing to provide to an individual or organization on
receiving of the interest.

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Credit department provides different types of products and services like different
types of loans, Bank Guarantee etc. to the customers. Under these headings, there are
different types of loan that are sub-classified like auto loan, agricultural production
loan, education loan, home loan etc. Credit department holds the key to success as it is
also the main reason for the organization to go out of the business. So, the credit
department should be handled very delicately.

Credit department performs various tasks and some of them are preparing the Credit
Approval Package (CAP), issuing credit to the customer, issuing credit card, site
visits, interest deduction, relationship management, etc.

Intern had performs various activities under credit department and some of them are
as follows:

Relationship Management with Customers


Intern had work for managing the relations of bank and customers by providing
different information of credit like bank policy for credit, interest rate, various loan
structure, document requirement etc.

Managing Customers File


Intern had to manage the customers document according to their customer ID and
customer file number. Intern also manage and placed the customers file according to
file number.

Site Visits
Intern had visit the different site i.e. customers house or land to verify the site
according to the customers document for issue credit.

Issuing Credit to the Customer


After finished all processes, intern had issue the credit for the customers as per their
requirement.

Providing green card to old customer


The customers who are loyal to the bank and paid their interest and instalment on time
from the duration of one year from loan issued can get 0.5 percent interest deduction
facility for their loan as Green Card facility. Intern had to provide green card form to
customer after customer fill the green card form intern had to deduct the interest rate
of the customers.
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Bank Guarantee
As an intern, had to issue the various bank guarantees like bid bond guarantee,
advance payment guarantee, performance bond guarantee etc. as requirement of the
customers.

4.4. ATM Card Distributions


Automatic Trailer Machine card is the key to collect money from ATM of the bank.
We can collect the money by using a ATM card from different bank which in a single
network. The intern searches the ATM card of the customer who asks for it. If the
card is found then the intern had to search the document related to the card. Then its
the duty of intern to request the customer to fill out form of acknowledgement of card
receipt. The intern had to check if there is copy of identification or not; if not, then the
intern had to ask for it and have to photocopy it to attach with the form. The intern
also had to check if the customer is taking new card or replacing old with new; if the
customer is replacing then the inter also had to ask for the old card and then punch the
hole after the process. After that, inter had to enter the data in the register and pass it
to the officer for the further process.

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CHAPTER FIVE
CONCLUSION AND LESSON LEARNT

5.1. Summary
This study generally aims to get better understanding of the operations of different
department of Agricultural Development Bank Ltd. and how it facilitates the trade
and construction. The other specific objectives are to understand the overall banking
activities.
In order to attain the above objectives, the internee selected ADBL as an organization.
The main reason for selecting ADBL is its policy to provide opportunities for the
internees to learn, its reputation, location and friendly environment of Bank and also
its different services provided to its national and international customers.
The internee spent two months (8 weeks) in internship. The internee was placed in
different department. During internship, the internee carried out different activities
relating to different department and acquired knowledge about banking system.
Similarly, the internee worked day to day activities as per the instruction and
supervision.
In this study, the internee used both primary and secondary data that have been
collected from the various sources. The main sources of primary data are the daily
observations, problems and instructions of the supervisors, queries and discussions
while the secondary sources were newsletter, annual report, internet and brochures.

5.2. Conclusion
The growth of financial sector in Nepal is much better compared to other sectors in
the country. The economic reform initiated by the government more than one and half
year decade ago have changed the landscape of several sectors of the Nepalese
economy including financial sector.
ADBL is one of the leading commercial bank serving the nation since 1968. It has
tried to target national customer especially young agriculturist by providing lone in
low interest rate. Since its establishment, ADBL has been able to successfully operate
providing efficient service to its customers. The bank has introduced various new
products and services for customers and catering the needs of the customers.
The major findings of the study during the internship program are as follows:
36
The bank is expanding its network to give mass-based complete Bank serving
from Urban to Rural.
The bank especially focused on youth and small entrepreneurs self-
employment through small and micro entrepreneurs (SME) development
program.
The banking system uses various technologies and the marketing strategies to
retain its customers at large. Thus, customers are treated with due respect, full
guidance and information because without customers no bank can survive.
The different rate of service for the account holder and non-account holder is
helping the bank to attract the customers to open an account in the bank,
which is a plus point for ADBL.

Therefore, despite the turbulence in the macroeconomic environment of the country,


ADBL has consolidated its position as one of the premier banks in Nepal and it
continues to grab the honor. The purpose of the internship is to provide the student an
opportunity to practice various management principles in the real world. In addition it
provides students with an understanding of how organization operates in real world.
The banking industry has become highly competitive and its essential to establish
good corporate governance policies with systematic transaction and operational
procedures. In that circumstance, ADBL, provide quality banking services, by adopt
market driven strategy to obtain sustained and competitive return on investment by
utilizing its huge network and revolutionized banking industry of Nepal after its
establishment. The general types of activities performed by ADBL are the accounting
activities, deposits, withdrawal, drafts, providing loans, clearing, facilitating trade,
remittance etc.
The bank has been providing various facilities like ABBS, ATM and debit cards.
Through an extensive global network that facilitates domestic and international
transaction ADBL are able to meet customers need of construction, import, export,
draft payments through offering facilities like guarantees, L/C, remittance, dollar
exchange etc.
During the internship, the internee was involved in various departments like Customer
service department (CSD), Credit Department, ATM Card Distributions, and
remittance. The internee got real life experience and exposure of working in an
37
organization by performing day to day activities, dealing with customers and
providing information regarding making operation and services. The internee got
chance to gain knowledge about issuance of Customer service department (CSD),
Credit Department, ATM Card Distributions, and remittance and essential factors
required while making its decision. . This department has helped intern to gain
knowledge about Bank Product and Services, its procedure to deal with the customer
and agent and many more. The internee believes this experience will support while
working for an organization.

5.3. Lessons Learnt


During the period of internship at Agricultural Development Bank Ltd., the interne
was cooperatively guided by all the staffs for gaining in- depth banking knowledge.
The major lessons that are learned during internship can be listed as under:

Learnt about the different functioning of the bank also learn about the KYC
Policy.
Technology is one of the major factors that minimize the operational cost and
increase the efficiency.
Learnt about the general documents requirement in the various departments.
Responding to customer queries on time help to retain the customers and also
helps to keep the customers loyal..
Keeping right things at right place.
Various type of skills i.e. communication skills, leadership skills, presentation
skills, interpersonal skills, research skills etc. are essential for a professional
career and to be a successful person in banking industry.
The real working environment and practical exposures are quite different from
the theoretical knowledge that we have learned in class room.

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5.4. Recommendation
At the end of the study following measures can be recommended for improving
performance of the bank.
Customers are not fully satisfied by the time taken to render service. So,
ADBL must focus on customers satisfaction by hiring skilled people technical
improvement.
Staffs of the bank are not regular so, proper and regular monitoring of
activities should be done to check and control the activities of staff.
Acknowledge customers and treat them with respect to earn their trust and
their business. Interact with the customer to know their needs.
The bank should focus on new technology like online banking, mobile
banking, bill payment services etc.

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BIBLIOGRAPHY

Ricky W. Griffin Management Eighth Edition

www.adbl.gov.np

www.ibpshub.com/banking-study-facts-banks-functioning

www.imnepal.com/banking-in-nepal-a-history-of-banking-system-innepal

www.nrb.gov.np

www.typeslist.com/different-types-of-banks

www.wikipedia.org/wiki/History-of-banking

www.worldbank.org/en/about/history

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