Professional Documents
Culture Documents
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:
1
ACKNOWLEDGEMENT
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
2
ABSTRACT
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.
ABBREVIATIONS
3
ABBS Any Branch Banking Service
TU Tribhuvan University
Table of Content
Acknowledgement i
4
Abstract ii
Abbreviation iii
Table of content iv
1 INTRODUCTION 1
1.3. Methodology 2
1.3.2. Placement 2
1.3.3. Duration 2
3 INTRODUCTION OF ORGANIZATION 12
4.2. Remittance 25
5.1. Summary 27
5.2. Conclusion 27
5.4. Recommendation 29
BIBLIOGRAPHY
6
LIST OF TABLES
7
LIST OF FIGURES
CHAPTER ONE
INTRODUCTION
8
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.
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.
9
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
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
10
Remittance
ATM
12
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".
13
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.
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
14
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
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:
15
Type of Financial Institution Class Number
Commercial Bank A 30
Development Bank B 76
Finance Companies C 39
Total 225
(Source: www.nrb.org.np)
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
17
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.
18
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
19
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.
20
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;
21
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.
Sub -
Branch
Regional Branch
Head Office
Office
Main
Branch
Field Offices
22
3.4. Organization Chart
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.
23
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.
9. Regional Office,Dhangadhi
24
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
1 Saving Deposit:
General saving 2.75
25
Up to 6 months 5.00
1 Year 5.50
26
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
27
10.1 Gold/Silver Loan 14.00
11 Other services
12 Other Loans
Interbank Transaction
Any Branch Banking Services
Extended Banking Services
National Debit Card
ATM Services
Safe Deposit Lockers
Foreign Exchange Services
Remittance
28
CHAPTER FOUR
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.
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.
29
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.
30
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.
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.
31
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.
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.
32
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.
33
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:
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.
35
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.
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.
38
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.
39
BIBLIOGRAPHY
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
40