CHAPTER
ONE
INTRODUCTION
1.1 Background
Bachelor in Business Administration (BBA)
program is the undergraduate level program of Tribhuvan University (T.U). It is
a four year course with 120 credit hours comprehensive bachelor degree program
.It is further divided into eight semester(two semester in each year).It is
mainly practical oriented which emphasizes to provide student a practical
knowledge. It aims to prepare students to become competent, confident, skilled
and socially responsive professional who can effectively support managerial, entrepreneurial
and leadership role in business and social organization. It is student oriented
course where students should be actively participated. Its syllabus has been
designed in such a way that it has tried to give student knowledge from almost
every field like psychology, sociology, business law, Information
Technology(IT) etc. It has got grade system of marking in GPA. Due to this
distinctiveness BBA program is getting popular among the students and is
becoming the first choice of every students of management field.
In the course study of BBA program
students are required to do the internship in their specialized field.
Internship is simply the applied form of knowledge. It is relatively short term in nature with the
primary focus on getting some on the job training and taking what’s learned in
the classroom and applying it to the real world. In the beginning of 7th semester
students are provided an opportunity to choose one special field for the
purpose of specialization. Finally in 8th semester they have to work
minimum 8 weeks in that specialized field which is called internship.
This
is a report on the Customer Service and Clearing Department of Everest Bank
Limited as one of the leading Commercial Bank of Nepal, as mentioned earlier,
and since I had completed my internship from the Thamel, Branch Office all the
details related to the Customer Service and Clearing function is based on that
particular branch.
1.2
Objective of the Report
The general objective of the study is to
fulfill the requirement for the degree if Bachelor in Business Administration.
The major objective is to make the BBA student relevant in the real world
situation. Besides this, the specific objectives are as follows:
·
To present the practical insights about
the banking activities.
·
To explain the knowledge about the
financial institution and its daily workings in a practical scenario.
·
To identify the various activities done under
Customer Service and Clearing Department.
·
To explain the relation between the
theoretical and practical knowledge of the bank in action.
·
To fulfill the partial requirement of BBA
program at Tribhuvan University.
1.3
Methodology
Completion
of internship is a combination of the different types of activities. It starts
from the selection of the organization for the internship, performance of
different kinds of activities and placement in different parts of the
organization and at last collection of various primary and secondary data for
the preparation of the report. In terms of data collection both primary as well
as secondary source had been used. In case of primary source, observation and
personal interview with the staffs are used and in case of secondary source,
the brochures, published reports and documents, website of the bank and other related
websites had been used.
Following methodologies
are used to study the organization:
1.3.1 Organization Selection
The most important and the initial part in
the internship program is the selection of the organization. It is the basis
from which interns get the platform to learn something and analyze the
practical implication of the theoretical aspects learnt in the academic
session.
In this competitive market it is not an
easy task to find intern in the reputed organization. Campus provided
recommendation letter which internee dropped in the Human Resource Department
(HRD) of Everest Bank Limited along with the CV.There were other numerous applicants
applying for their internship. So it was a tough job for HRD Head to select few
amongst all. There was regular follow up calls to the HRD which revealed
interest and enthusiasm to work in EBL. After a week internee was informed that
internee was selected and could start internship period. Finally, internee joined
the bank as an intern from June 13th 2012.
1.3.2 Placement
On 13th June, 2012 internee was
placed to EBL Thamel, Branch office to start her internship. There, the
internee met branch manager and was asked to meet Officer In charge and as per
her order internee was placed in customer service department for three weeks
under the supervision of CSD supervisor. After the completion of three weeks in
CSD, internee was referred to the Clearing department for rest remaining five
weeks under the supervision of clearing supervisor.
1.3.3 Duration of internship
The duration of internship period has been
defined for 8 weeks by Tribhuvan University, so as per the specified period,
intern worked in EBL Thamel branch from 13th June, 2012 to 10th August, 2012.
Internee thought those eight weeks were really fruitful and it will definitely
help in upcoming days. It was the internship program that helps to internee to
be familiar with the organization culture, work environment and working
procedure of the EBL. The placement of internship is shown in the table below:
|
Activities/Weeks
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
|
CSD
|
|
|
|
|
|
|
|
|
|
Clearing department
|
|
|
|
|
|
|
|
|
1.3.4 Sources of
Data
The
following sources have been used to collect the necessary data:
a)
Primary
source of data
The
required information was collected through the discussion and information provided
by the officials of EBL.
b)
Secondary
source of data
The
secondary data was collected from the secondary sources like: annual report,
broucher, official website and other publication.
1.3.5 Activities Performed in the
Bank
a) Customer service
department
· Account
opening (Personnel and Corporate)
· Issuance
of Debit card and cheque book
· Account
closing
· Balance inquiry and other information about
the bank service
· Providing information about products to the
customers
·
Issuing of account statements and balance
certificate
·
Solving the queries of the customers
b)
Clearing
department
·
Endorsing the cheque
·
Keeping record of clearing cheque as well as
returned cheques
·
Forward inter-bank cheques to head office
1.4 Limitation of the Study
Every field of study has some or the other
limitations and so in the case of internship report as well .There is some
limitations that are faced at the time of my report preparation and they are as
follows:
a)
The study is limited to only one financial
institution.
b)
It does not give detail view of overall
functioning of the bank.
c)
Lack of adequate time to learn, complete
and detailed works in just eight weeks.
d)
This report is prepared on the basis of
available data and the information provided by the bank and its staffs.
CHAPTER
TWO
INTRODUCTION
TO THE INDUSTRY
2.1
Background
A Bank is a depository financial
institution which purchases money and sells money for money. In this way, a
bank is a sensitive sector of the industry because it plays with the public
money. The primary operating activity of any bank is to collect fund in the
form of deposit from the surplus sector of the economy and transfer this
collected fund to the deficit unit of the economy in the form of loans. The
benefit that the surplus unit gets by depositing their access fund in the bank
and the charge that the deficit unit pays for using the fund of the bank are
both expressed in percentage and that rate is known as the interest rate. The
difference between the lending interest rate and borrowing interest rate is
called interest spread and this spread is the major source of income of any
bank.
According
to Nepal Rastra Bank Act 2002 Bank
is a financial institution, which provides financial services that may be in
the form of accepting deposits, advancing loan, providing necessary technical
advice, dealing over foreign currencies, remitting funds, etc.
According
to Indian Banking Company Act 1949 Banking
means the accepting for the purpose of lending or investment of deposit of
money from the public, repayable on demand or otherwise and withdrawal by
cheque draft order or otherwise.
In simple,
bank is an institution which deals with money and credit. A bank is a financial institution that serves as a financial
intermediary, who
bridges gap between the savers of the fund and users of the fund.
Bank exists in the economy to perform the function of the intermediary. Banks
intermediates not only the surplus and deficit units but also perform various
management activity to create a balance in the economy. It should perform the
size intermediation because in general surplus units are large in number but
they less amount of surplus funds and the opposite scenario is of the deficit side.
Similarly it should perform the maturity and information intermediation as per
the requirement.
2.2 History of Banking
The
concept of banking is not a modern concept. This concept had started to evolve
in the brilliant human mind immediately after the humans were able to realize
and develop money. Though money had made the human life much easier than before
but ancient humans started to realize the complexities that evolution of money
had created in their life. So, in order to overcome these complexities and the
difficulties that were attached with the benefit of money the concept of
banking emerged in the human mind. Earlier the moneylenders and the landlords
perform the banking activities as the informal banks but later the activities
of these people are formalized and the concept of bank as an institution had
emerged.
Moving
towards the word “Bank”, it is thought to be derived from the Italian word
“Banco”, Latin word “Bancus” and French word “Banque” because all meant the
bench in which the bankers would keep money and its records. The Jews of
Lambardy were thought to be the early bankers who transacted third business at
the benches in the marketplace and when they were unable to meet their
liabilities, the depositors used to break their benches and this tradition had
given birth to a banking term “Bankrupt”.The first ancient Bank of the world is
supposed to be the Bank of Venice which was established in 1157 A.D. Following
the footsteps of this bank, other two banks were established in 1401 and 1407
named Bank of Barcelona and Bank of Geneva, respectively. The crucial
breakthrough in the modern banking history was made in 1694 A.D when the first
modern bank “The Bank of England” was established. After the establishment of
this first English Bank, Banking sector had experienced various ups and downs
but still they persisted and because of that persistence they are now able to
exist in this 21st century world as one of the essential element of human life.
Presently,
banks are not only the deposits collecting and loan lending institutions but
also the institutions which helps its customers from various ways as per their
convenience and ability with full security. They had been developed as the
essential service providing institutions in this rushing world. Hence, banking
had become an important element of the world economy in the present time.
2.3 Evolution of Banking Industry in
Nepal
Though
the world had already leaped forward towards the modern banking practices but
till 1937 A.D, the Nepalese were completely unaware of these developments and
still using the money lenders and the rural landlords as the informal banks.
This scenario is enough to explain that the banking history of Nepal is not too
long. Only after the establishment of Nepal Bank Limited in 1937 as the first
Nepali Bank, Nepalese people came to know that there is also another way to get
loans except the goldsmiths, and the moneylenders and this can be formalized in
the form of institution named Bank.
Tejarath Adda established during the tenure
of the Prime Minister Ranoddip Singh (1993 B.S) this was the first step towards
the institutional development of banking in Nepal. It tendered a good service
to give loans to government employees and public against bullion.
Banking in modern sense started with the
inception of Nepal Bank Limited (NBL).Nepal Bank Limited was established in
1994 B.S, as a semi-government organization without existence of a central bank
in the country under special Banking Act 1936, having elementary functions of a
commercial bank. 51% of the paid up capital of Nepal Bank Limited is owned by
the Government and 49% owned by the public. Later, on Nepal Rastra Bank was set
up on 2013 B.S. as the first central bank under Nepal Rastra Bank Act 2012 B.S
with an objective of supervising, protecting and directing the functions of
commercial banking activities. Another commercial bank fully owned by the
government, “Rastriya Banijya Bank” was established in 1996,which made it
possible for the Nepal Rastra Bank to devote more attention to the important
aspects of economic, monetary and fiscal development. Industrial development
center was set up in 2013 B.S it was converted into Nepal Industrial
Development Corporation. Agricultural Development Bank established in 2024 to
finance agricultural produces.
Joint venture banks in Nepal gave a new
horizon to the financial sector of the country. Nepal Arab Bank Limited later
renamed as Nabil Bank Limited in 2041 B.S as a first joint venture bank to be a
milestone in the history of banking which gave hope to the sluggish financial
sector.
After the restoration of democracy in
Nepal there has been tremendous development in banking sector. The economic and
financial reform policies undertaken by the government have increased both
number of banks and the types of services offered. The category of banks in the
context of Nepal are shown in the table.
|
Category
|
Component
|
Minimum
paid up capital requirement
|
Number
|
|
KA
|
Commercial Banks
|
200 crore
|
32
|
|
KHA
|
Development Banks
|
64 crore
|
89
|
|
GA
|
Finance Companies
|
20 crore
|
79
|
|
GHA
|
Micro Credit institutions, Co-operatives
|
1 crore
|
21
|
Since
the interne had completed the internship in one of the commercial bank of
Nepal, the analysis is specifically focused on the “KA” category depository
institutions i.e. the Commercial Bank.
2.4
Introduction of Commercial Bank
Like
all financial intermediaries, the commercial bank acquires funds one group of
surplus spending units and makes these funds available to other deficit units.
It provides transactional, savings and money market accounts and that accepts
time deposits. Commercial banking may also be seen as distinct from retail
banking, which involves the provision of financial services direct to clients.
The powers are available to commercial banks by seeing the sources and uses of
funds available to the typical bank. An institution which accepts deposits,
makes business loans, and offers related services. Commercial banks also allow
for a variety of deposit accounts, such as checking, savings, and time deposit.
These institutions are run to make a profit and owned by a group of
individuals, yet some may be members of the Federal Reserve System. While
commercial banks offer services to individuals, they are primarily concerned
with receiving deposits and lending to businesses. Because of being the member
of the central bank, the scheduled commercial banks enjoy a strong and
financial goodwill which attracts huge amount of deposits industrialists,
traders and the public at large. Commercial Banks extend various types of
credit facilities to their constituents, to enable them carry out their
business activities. These facilities may be broadly divided into two
categories:
·
Funded and
·
Non- funded facilities
Funded
facilities are those, where Banks actually part with money. Non funded
facilities, on the other hand, are those where the Bank does not actually part
with money, but promises to do so, contingent upon the occurrence of certain
events. Which means, unless the said event occurs, the Bank will not be called
upon to part with money.
In
Nepal the financial sector is growing in slow pace that has supported its
economy to some extent. Nevertheless the partition of the financial sector can
be done on the basis of banking and non banking financial sectors. The
embanking system comprises of thirty one commercial banks, eighty eight
development banks, seventy nine finance companies and twenty one graven bikas
banks. The non-banking financial system includes many finance companies,
contractual saving institutions (employees’ provident fund and insurance
companies), cooperative financial institution, non-governmental organization
(NGO’s), postal saving offices, etc. Nepal bank limited is the first and oldest
commercial bank of Nepal that was established in 1937 A.D. However, the second
Rastriya Banijya Bank came in operation in 1966 A.D. in particular; commercial
banks can help a firm speed up the collections as well as delay its cash
disbursements. The first joint venture bank was established in 1984 A.D. The
commercial banking sector accounts for 53 percent of total financial system assets
when NRB is included - and 74 percent if NRB is excluded. Rastriya Banijya Bank
and Nepal Bank Limited dominate the commercial banking sector, holding around
about 60 to 65 percent of total commercial banking system assets.
One
of the most important operations of it is to determine the creditworthiness of
potential borrowers. The commercial banks can comfortably use so much leverage
is that they have the ability to diversify much more than most other types of
businesses. The operation activity of commercial banks includes:
·
Deposit collection
·
Liquidity management
·
Credit administration
·
Capital structure management
2.5 Functions of Commercial Banks in
Nepal
The
functions of commercial banks are divided into two categories:
1)
Primary
Functions
The
primary functions of a commercial bank include:
·
Accepting deposit
·
Advancing loan
·
Discounting bill of exchange
·
Transfer of money
2)
Secondary
Functions
The
secondary functions of a commercial bank include:
·
Issuing
letters of credit, travelers' cheques, circular notes etc.
·
Undertaking
safe custody of valuables, important documents, and securities by providing
safe deposit vaults or lockers.
·
Transferring
money from one place to another and from one branch to another branch of the
bank.
·
Standing
guarantee on behalf of its customers, for making payments for purchase of
goods, machinery, vehicles etc.
·
Collecting
and supplying business information.
·
Issuing
demand drafts and pay orders and
·
Providing
reports on the credit worthiness of customers.
Thus,
the primary and secondary functions performed by bank are the essential to meet
the overall objectives of the bank.
CHAPTER THREE
INTRODUCTION TO THE ORGANIZATION
3.1Background
Everest Bank
Limited (EBL) started its operations in 1994 with a view and objective of extending
professionalized and efficient banking services to various segments of the
society. The bank is providing customer-friendly services through its Branch
Network. All the branches of the bank are connected through Anywhere Branch
Banking System (ABBS), which enables customers for operational transactions
from any branches.
With an aim to
help Nepalese citizens working abroad, the bank has entered into arrangements
with banks and finance companies in different countries, which enable quick
remittance of funds by the Nepalese citizens in countries like UAE, Kuwait,
Bahrain, Qatar, Saudi Arabia, Malaysia, Singapore and U K. Bank has set up its
representative offices at New Delhi (India) to support Nepalese citizen
remitting money and advising banking related services.
Punjab National
Bank (PNB), the joint venture partner of Everest Bank (holding 20% equity in
the bank) is the largest nationalized bank in India. With its presence
virtually in all the important centers at India, Punjab National Bank offers a
wide variety of banking services which include corporate and personal banking,
industrial finance, agricultural finance, financing of trade and international
banking. Among the clients of the Bank are Indian conglomerates, medium and
small industrial units, exporters, non-resident Indians and multinational
companies. The large presence and vast resource base have helped the Bank to
build strong links with trade and industry.
Recognizing the
value of offering a complete range of services, EBL has pioneered in extending
various customer friendly products such as Home Loan, Education Loan, EBL Flexi
Loan, EBL Property Plus (Future Lease Rental), Home Equity Loan, Vehicle Loan,
Loan Against Share, Loan Against Life Insurance Policy and Loan for
Professionals.
EBL was one of the first banks to
introduce Any Branch Banking System (ABBS) in Nepal. EBL has introduced Mobile
Vehicle Banking system to serve the segment. EBL is one of the renowned
institutions. The capital structure which includes authorized capital is Rs2,000,000,000.
Similarly the issued capital is Rs1,281,406,500 and the paid-up capital is Rs1,279,609,490.
The vision and mission of EBL are as follows:
Vision
·
To evolve & position the bank as a
progressive, cost effective & customer friendly institution providing
comprehensive financial and related services.
·
To integrate the frontiers of technology
& serving the various segments of society.
·
To be committed to excellence in corporate
values.
·
To provide excellent professional services
& improve its position as a leader in the field of financial related
services.
·
To build & maintain a team of
motivated and committed workforce with high work ethos.
·
To use the latest technology aimed at
customer satisfaction & act as an effective catalyst for socio-economic
developments.
Every organization
has its own structure to depict its line of authority and accountability. There
are top level management, middle level management and lower level management.
Top level manager is superior to middle level manager. Lower level manager is
at the low level. Organizational structure of EBL is shown in the figure
below:
EBL Functional Chart (Source: Annual Report)
3.1.1 Awards
Since
EBL is one of the renowned institution among the various financial institution
of Nepal. The awards received are as follows:
·
The bank has been conferred with “Bank of
the Year 2006, Nepal” by the Banker, a publication of financial times, London.
·
The bank was bestowed with the “NICCI
Excellence award” by Nepal India Chamber of Commerce for its spectacular
performance under finance sector.
3.1.2 Pioneer Achievements
The
pioneer achievements of EBL are:
- EBL was one of the first banks to
introduce Any Branch Banking System (ABBS) in Nepal.
- EBL has introduced Mobile Vehicle
Banking system to serve the segment deprived of proper banking facilities
through its Birtamod Branch, which is the first of its kind.
- EBL has introduced branchless banking
system first time in
- EBL is first bank that has launched
e-ticketing system in
3.1.3 Objectives
The
objectives of EBL are listed below:
·
To become the bank of first choice.
·
To bridge the gap between saver and
borrowers efficiently and effectively.
·
To provide the higher expected rate of
return on investment.
3.2Main Business Activities of EBL
EBL’s
main business activities are to perform all the business transactions of a
typical commercial bank.
·
It accepts deposit such as current,
saving, fixed deposit etc and grant different types of loans such as education
loan, home loan, professional loan etc.
·
It transfers money from one place to
another through the means of draft, SWIFT, at its customer’s request.
·
It provides safe deposit lockers of
different sizes.
·
It purchases and sales foreign currencies
and travelers cheque.
·
It acts as guarantor on the behalf of its
customers.
·
It provides LC (letter of credit) services
to its customers.
·
It provides other services like ATM, ABBS,
e-banking etc.
3.3 Shareholding Structure
The
local Nepalese promoters hold 50 percent stake in the bank’s equity, while 20
percent of the equity is contributed by joint venture partner PNB who has also
undertaken management responsibility under a Technical Service Agreement (TSA).
The remaining 30 percent is held by the general public. This is shown in the
following table:
|
Group
|
Categories
|
% of holding
|
|
A
|
Nepalese Promoters Ownership
|
50%
|
|
B
|
General Public
|
30%
|
|
C
|
Joint Venture (
|
20%
|
|
Total
|
100%
|
|
The share ownership
discussed above of EBL is shown in the following pie-chart.
3.4 Product and Services Provided by EBL
EBL
offers a wide variety of products and services, catering to wide range of
customers from individuals, to mid market local corporate to multinationals and
large public sector companies, as well as embassies, aid agencies, airlines,
hotels and government corporations.
Everest Bank’s
policy is to extend quality services to its customer as properly as possible.
Bank’s policy is to extend quality services to its customers as properly as
possible. Personalized services are provided to all clients. To extend more
efficient services to its customer, EBL has adopted innovated and latest
banking technology. Everest Bank tailors the facilities extended to its
clients, taking into account their need and requirement, besides the normal
services, EBL has been providing the following services to their customers. In
many of these services, EBL has the pioneer.
3.4.1 Deposit
EBL offers a wide
array of deposits schemes in both local and foreign currencies to help the
customer earn competitive interest rates in order to maximize returns on
investment. Some of the deposits schemes are as follows:
·
Current account
·
Saving account
The
types of saving account are: normal saving, naari bachat khata, saving premium
account, baal bachat khata, saugat bachat khata and freedom saving account.
·
Fixed deposit account
The
types of fixed deposit account are: supreme deposit, cumulative deposit scheme,
cash certificate scheme and unfixed fixed deposit scheme.
·
Recurring deposit account
The
types of recurring deposit account are: sunaulo bavisya yogana and flexi
recurring deposit account.
·
FCY deposit account
The
types of FCY deposit account are: USD account and EBL NRN deposit account.
·
Retirement plan account
3.4.2 Loans and Advances
EBL provides
credit on competitive terms by way of term loans as well for financing working
capital needs of all kinds of productive and income generating activities. Regarding
Consumer Lending Schemes it has following major schemes:
·
Direct
Housing Loan
·
Vehicle
Loan
·
Education
Loan
·
EBL
Property Plus
·
Professional
Loan Scheme
·
Loan
Against Mortgage
·
Loan
Against Share
·
Home
Equity Loan
3.4.3 Trade Finance Activities
The bank provides
their customer with letters of credit and guarantees, etc facilities to
facilitate their business transactions.
3.4.4 Remittance Facilities
Remittance can be
made to any part of the world by way of SWIFT Transfer instantly in addition to
the conventional facilities like demand drafts, Travelers’ cheques etc. EBL has
drawing arrangements with about 130 branches all over India for remittance to
India. EBL facilitates both Inward and Outward remittance.
3.4.5 Foreign Exchange Facilities
The bank provides
facilities for financing the export and import business, exchange (sale and
purchase) of foreign currencies, forward exchange contracts, etc.
3.4.6
Cards and ATM’s Facilities
EBL debit card is
a plastic card which provides an alternative payment method to cash when making
purchases or cash withdrawal from ATM centers. It is associated with Smart
Choice Technology (SCT), it facilitates wide sharing of ATMs under SCT network
from more than 650 Locations throughout Nepal. EBL debit card holder can also
have the withdrawal facility from over 5000 PNB ATM in India.
3.4.7 E-banking Facilities
EBL offers
E-banking facilities too. Through a computer connected to the Internet,
customer can log on the Everest Net Site and do various banking transactions
from anywhere at any time.
Internet Banking
It is used for:
- Account summary/ Statements
- Balance Inquiry
- Fund Transfers
- Offline Requests (Cheque books,
remittance etc.)
- Ordering for different types of
payments
3.4.8 Any Branch Banking System
(ABBS)
EBL provides any
branch banking service where customer can conduct their business or make transaction
from any of branch of EBL, deposit of where they have opened their account.
There is no charge EBL provides any branch banking service where customer can
conduct their business or make within the branch of Kathmandu valley and in
case of outside the valley bank charge basically 150 per transaction.
3.5
Financial Indicators of EBL
The financial
indicator of EBL is shown in the table below:
|
Indicators
|
2008/09
|
2009/10
|
2010/2011
|
|
Deposit
|
33322.9
|
36932.3
|
41127.9
|
|
Loan and Advances
|
612.0
|
704.6
|
782.0
|
|
Operating Profit
|
1073.5
|
1349.1
|
1516.7
|
|
Total Income
|
2565.3
|
3500.8
|
4728.8
|
|
Total Expenses
|
1491.8
|
2151.7
|
3212.1
|
|
Earning per share
|
99.99
|
100.16
|
83.18
|
|
Market per share
|
2455
|
1630
|
1094
|
|
Price earning ratio
|
24.55
|
16.27
|
13.15
|
|
Cash reserve ratio
|
14.26
|
15.53
|
9.55
|
|
Net Profit
|
638.7
|
831.8
|
931.3
|
Thus, these financial indicators indicate the
overall status of Everest Bank Limited in the global context. These indicators help
to measure the performance and operational goals. These indicators strive to
cover the issues of financial stabilityas a systematic phenomenon and therefore
concern to financial institution and markets.
CHAPTER
FOUR
ANALYSIS OF ACTIVITIES DONE AND PROBLEMS SOLVED
4.1 Background
As
an internee, it was indeed a great opportunity to know about the banking
activities in depth. The internee was rotated through various departments of
the bank, which exposed her to the real world of the bank and observed the real
operations of the bank as the internee had only the theoretical knowledge.
During the internship, internee had performed to activities mainly in customer
service and clearing department. To generate the profit, a financial
institution needs customers and receives the amount through different names of
deposits. At EBL internee had an opportunity to study and observe in details
about the customer services, new account opening procedures, deposit procedure
and clearing procedure of EBL.
4.2
Customer Service Department (Front Desk)
Customer
service is the front desk of any organization. For any organization, it is the
important place which makes an early impression to the clients. It is the place
where customers make the first contact with the clients. The image and the
reputation of bank depend upon effective functioning of this department. It is
the first place where the customers first get the service.
It
is very important to know that a highly satisfied customer stays loyal longer,
buys more as the organization introduces new product, pays less attention to
competing brands and is less sensitive to price. A significant number of this
kind of customers is only possible through the efficient functioning of
customer service department of any organization. It would then not be inappropriate
to say that this department is the key to success of any organization.
This
department is involved in various activities from opening an account to its
closing, providing account statement as per customer demand, issuing ATM etc.
The basic functions of this department are customer counseling, account
operations and distribution activities etc.“Customer counseling is most
important functions of customer service department. A customer is the most
important visitors on the premises. He does not depend on us, we are depended
on him. He is not the interruption on our business. He is part of it. We are
not doing him a favor by serving him. He is doing us a favor by giving us an
opportunity to do so”.
Customers
are related as a god because they are the one for whom the product are design.
As Everest value the customer trust, they have implemented the policies and
procedure just to safeguard the account and the personal as well as the
financial information for their customers.
The
point detailed here is mainly associated with the customer’s personal account.
This is because they treat business account information with great cares, so
they respect the privacy off all their customers. They are:
· Provides the highest quality service
EBL CSD provides quick
response to the customers and maintains accurate, up to date account records.
· Protect customer information
CSD is only the place
from where most of the information is gathered. Thus EBL’s CSD confirms the
identity when a customer makes a constant just to safeguard against
unauthorized access other account.
·
Makes banking more convenient
The information provided
convenience for the customer to do virtually all banking when and where they
want through telephone and web banking service.
·
Make Aware of service
The banking problem being
faced by the customer is identified by CSD in a most effective way. They
clarify about the entire product as well as services provided by the bank to
their customer.
4.3
Major Activities Performed on Customer Service Department
The
major activities performed on customer service department are listed as below:
4.3.1
Account Opening
During
the internship period internee was placed in Customer Service Department
thereby, helped customers in opening accounts. Therefore, performed the
following functions:
·
Provided the account opening form
·
Provided the information on minimum
balance requirement and the interest rate in various schemes
·
Verified the attached documents
·
Prepared the voucher for deposits
·
Opened the account in Finnacle
Documents to be enclosed for Account Opening
The documents needed for the account opening varies
from one account to another account. The individual needs less document but a
corporate organization needs more documents and more formalities too. The
documents needed as per account can be shown as below:
a) Current Account
It is an account
on which any amount deposited can be withdrawn through a cheque. It is also
known as checking account. It consists of:
Ø Proprietorship
Account:
A business firm
registered in the name of a person/proprietor is known as Sole Proprietorship Firm.
The proprietor bears all the profit or loss of the business. Requirements for
opening proprietorship account:
·
Registration Certificate
·
Tax Certificate
·
Citizenship Certificated Proprietor
·
2 PP size photos
Ø Partnership
Account
A firm registered
in the name of more than one individual is known as Partnership firm. The
profit and loss from the business operation is shared by the partners.
Requirements for opening partnership account:
·
Partnership Agreement deed
·
Firm Registration Certificate
·
Tax Certificate
·
Citizenship Certificate of Partners
· 2
PP size photos of partners
Ø Limited Company Account
Limited Company Account can be maintained by both private
and public limited companies. Requirement for opening proprietorship accountare:
·
Registration Certificate
·
Memorandum & Articles of Association
·
Name, Address of directors & Office
Bearers of the Limited Company with copy Citizenship Certificate
·
Name & Signatures of the Persons
Authorized to Operate an account
·
Operation Commencement Certificate (for
Public Ltd. Co.)
·
Resolution of Board of Directors regarding
opening & conduct of an account
·
Tax Certificate
Ø Club
Society & Association Account
Various clubs, social institutions, etc can also open
accounts by fulfilling the requirements. Requirements for opening this account:
·
Registration Certificate
·
List of Office Bearers
·
Resolution Regarding Opening & Conduct
of Account.
·
Name & Signature of the persons
authorized to operate the account.
b) Saving
Account
Basic requirements for opening Personal Account
·
Citizenship Certificate or Passport.
·
2 PP size photos.
Basic requirements for
opening Joint Account
·
Documents certified from concerned Embassy.
·
All documents required for personal
account for all joint parties.
·
Special instruction must be provided to
the bank in the application form in case of any one signature among the joint
account holders.
·
ATM/Debit Card is not provided to joint
account holders.
c) Call Account
The
documents required is same as of other saving accounts. After getting the above
requirements the customer service department opens the account using the
banking software i.e. Finnacle Software. It assigns the account number which is
of fourteen digits, accepts the deposit after filling up the deposit slip
(voucher) and issues cheque book and ATM/Debit card to the account holder.
Cheque books are issued instantly. Individual and non-profit making
organization generally operate saving account in the bank to earn interest. Its
main purpose is to encourage the habit of saving among the civilian and
institution. Though saving deposit is known for saving purpose, most of the
banks allow its customer to withdraw limited or restricted amount of money. If
the account holder wants to withdraw more than restricted level, prior
information is required.
4.3.2 Account Closing
As
per the request of the customer, account closing is also performed. For this
account closing form should be filled by customer who is examined by staff and
forwarded for verification. As per the rule of bank, certain balance is
deducted as closing charge and remaining amount is refund to the customer.
Following
functions are performed for it
·
Provided the account closing form
·
Known the reason for closing the account
·
Verified the signature
·
Ensured the unused cheques, used ATM card
are returned back to bank
·
Finally handled the documents to the
authorized personnel
4.3.3 Provided Safe Deposit Locker
For
locker facility some steps to be followed:
·
The customer must maintain an account with
bank.
·
Identification documents must be submitted
with filling locker form.
·
Deposit should be maintained.
Everest
safe deposit locker ensured that your most precious, be it jewelry, passport,
share certificate are secured in our world class Safe Deposit Locker from fire
and theft. There are three sizes of locker; they are LARGE, MEDIUM, and SMALL.
The cost is 3500, 2500, 1500 accordingly.
4.3.4 Issuance
of Account Statement and Balance Certificate
The
account statement and balance certificate is provided to the customer on the
demand basis. Statements should be collected by account holders of person
assigned by the customer. Fee is not charged for statement but for balance
certificate fee is charged.
4.3.5 ATM Card Issuance
ATM
card is issued to the customer after completing the account opening process.
Maintained registered, verified and entry in Finnacle is made and then ATM is
given to customer. Basically Rs200 is charged for ATM cards.
The
individual customers having Saving Account, Current Account and Saving Premium
Account maintaining the minimum balance is eligible for the EBL Debit Card. An
EBL debit cardholders could draw cash from PNB ATMs in India with withdrawal
charge of NPR 160 per transaction and charge of NPR 24 per balance inquiry. The
maximum limit of withdrawal per transaction is NPR 16,000 and per day limit is
NPR 16,000 (In India), whereas monthly limit is NPR 160,000. Similarly, a PNB
debit cardholders could draw cash from EBL ATMs in Nepal with withdrawal charge
of INR 50 per transaction and charge of INR
per balance inquiry. In Nepal customer can withdraw Rs100000 in a day.
4.3.6
Cheque Book and ATM Delivery
The
cheque books are prepared after making the entry of account opening in computer
system. The customer can collect their cheque book only next day after giving
request for cheque book. Respective customer should be presented for taking
cheque book for first time issue and for ATM they must be compulsorily
presented.
4.3.7
Dealing and Handling Customer Grievances
The
overall functioning of this department is concerned with dealing with the
customer and handling their grievances. People with different queries and
problems come in the bank. In my stay at this bank I handle different types of
problems of the customer related to loss of cheque book, debit card, forgetting
of PIN No. and so forth.
4.3.8
Use of Office Equipment
Various
office equipment are used like photocopy machine, cheque writer, printer, fax machine,
ECC machine etc for various tasks.
4.3.9
Other Activities
Mainly
the activities related to providing effective services to the customer are
done. Besides that other activities like cash sorting, telephone handling,
filing, clearing preparation etc are done. During her stay the internee was
able to perform various task assigned by the supervisors.
Thus,
various activities are done which helped the internee to enhance the skill in
dealing with customer, answering their queries and handling their grievances.
It helped to develop the managerial attitude and behavior to carry out
managerial function in future.
4.4
Clearing Department
Clearing
is a process by which a banker exchanges cheques drawn against another bank and
deposited at their bank for collection or clearance from their customer at the
clearing house. Customers deposit cheque, drafts in their accounts, which are
drawn on various banks and bank serves their customers by helping them collect
the fund in their account through clearing function. Fund realized and credited
in customer’s account next working days.
4.4.1 Functions of Clearing Department
The functions if clearing department are as follows:
·
To accept transfer deliveries
and clearing cheques from the customer of the branch and to arrange for their collection.
·
To arrange the payment of
cheque drawn on the branch and given for collection to any other branch of EBL
or any other members, or sub-members of the local clearing house.
4.4.2
Parties Involved in Clearing Process
Basically
there are three parties involved in the clearing process. They are:
a)
Applicant Bank
b)
Nepal Rastra Bank
c)
Beneficiary Bank
·
Applicant Bank
The
applicant bank is those who receive the cheque of other bank with a deposit
voucher of itsown bank including the
stamp of the party, signatures and the account number.
·
Nepal Rastra Bank
Nepal
Rastra bank acts as the intermediary between the applicant bank and the
beneficiary bank. It carries out the settlement procedure related to the
collected cheques and drafts. It is also known as the clearing house of
Nepal.
·
Beneficiary Bank
Beneficiary
bank are those on whom the cheque is to be credited.
4.4.3
Clearing Procedure of EBL, Thamel
Clearing procedure starts with the receiving
of cheque of other bank with its deposit voucher attached to it in EBL. The
outward clearing cheques are initially listed in the clearing cheque register
book to keep the records of clearing cheque. Then, those cheque are separated
on behalf of local currency cheque and foreign currency cheque. After the separation
of the cheque, EBL stamp is given on the face as well as back side of the
cheque. After this process, the cheque is put through the ECC system that is
the Electronic Clearing Cheque system through which the cheque is passed
automatically to the clearing head office Baneshwor Branch. Then the
clearing head office Baneshwor transfer the cheque to the intermediary bank or
the clearing house that is Nepal Rastra Bank for the final settlement of
clearing the cheques. Finally, the beneficiary bank is credited and the
applicant bank is debited of its account through ECC system. Thus, the process
of clearing cheque ends here.
4.4.4
Local Currency Clearing
Local
currency clearing settlement deals with the settlement of local currency that
is NRP in the context of Nepal through the clearing house. This settlement is
carried out by each and every members of the clearing house. Except Thursday
and Saturday, clearing of local currency is done.
4.4.5
Foreign Currency Clearing
The
foreign currency cheque and drafts collected by the clearing members of the
clearing house are settled for the clearance of foreign currency. However, the
convertible foreign currencies that have been fixed by NRB are only settled.
The clearing of foreign currencies are not carried out at Thursday, Friday and
Saturday in Nepal avoiding the national holidays.
4.4.6
Reporting of Cheque Return
All
the collected home cheques re-fund cheques and return cheques from NRB should
enter in the computer system. Here at EBL bank Finnacle software was used to
keep the record track of the respective cheques. Some of the cheques may not be
sound for making the payment so here we need to make the explanation of the
return cheques. For the description process, date, client name, client code,
name of the bank, reasons for return and the account number is recorded.
Representative member should then prepare a statement of cheques returned as
per format and fax it to the clearing house. The returned cheques are returned
to the respective bank through ECC system. Bank should return the cheque to the
particular bank with the memo slip defining the reason of dishonor. The
associate of the bank receiving the cheque should confirm the receipt of the
cheque by signing at the register of the presenting bank. The original memo
slip is provided to the receiving bank and the duplicate is brought back by the
returning bank as it confirms the receipt of the cheque.
4.4.7
Flow of Clearing Cheque
Description
of the Above Figure
After
making the deposit of the cheque, documentation process is carried out looking
to the details of it. It is to check whether the cheque so presented is outward
or inward cheque. The outward cheque goes for clearing. There are two main
processes about the compliance and noncompliance of the cheque. If there occurs
compliance, the cheque is instantly settled. In case if it does not fulfill the
criteria of cheque standards, it is dishonored and finally returned bank to the
respective banks.
CHAPTER
FIVE
CONCLUSION
AND LESSON LEARNT
5.1
Conclusion
Commercial
Bank in Nepal could be viable only if they could provide maximum qualitative
services to the customer of the bank who is the main source of income for the
banks. Without the customer no bank can fulfill its objectives. To maintain the
standard of the bank it should always look for measure to adapt to changes to a
better level.
This
report has been prepared as the partial fulfillment of eighth semester of BBA
under TU. Everest bank limited proved to be a strong mainstay for building up
my professional career. The internship gave me the perfect opening to plant my
acquaintance in the appropriate field. It helped me to apply the year’s long
theoretical lessons into practical area. Further, in past 8 weeks, I learned to
work under pressure and broadened my knowledge, vision, ability and confidence
to perform in real working upbringing. It was a great chance to gain practical
knowledge of banking sector. Beside this, the supervisors were extremely
helpful in guiding on our internship program.
It
was the great experience working as an intern in Everest bank limited. The
operational environment was friendly. There was good communication and healthy
relationship in between the different levels of staffs. The author was able to
find out various services offered and facilities provided by Everest bank
limited. Working as an intern mainly provided us an opportunity to learn about
practical implication in our career building hence it is a significant platform
for our future career.
5.2 Lesson
Learnt
“Practice
makes a human practical and perfect”. The eight weeks internship period in EBL
has taught me many lessons. I have learnt different skill and obtained a
variety of knowledge during my internship period. Internship for 8 weeks really
taught us many things which have been listed below:
·
Learned to tackle the various problems of
the customer.
·
Learned to prepare and issue cheque books
and activate the debit card.
·
Learned to use the office equipment like
photocopy, faxes, cheque writer, printer etc.
·
Learned about general banking practices
and corporate culture.
·
Learned to be self confidence to contact
with the customer and make them feel comfortable in every way.
·
Learned to make effective communication
skill for quick and efficient service.
·
Learned to understand different types of
stamps that were in use. They were so called crossed stamp, bank’s stamp,
endorse stamp and paid stamp.
·
It was the great chance to be familiar
with the use of Finnacle Software that helped a lot in maintaining the proper
balance in the overall activities of the bank. In case if it failures, the
whole activities of the bank comes into halt creating the huge loss to the
bank.
Thus,
I want to conclude that throughout the internship period I learnt and develop
to use theoretical knowledge in the practical business world. Hence, internship
in EBL not only gives an insight to learn about how the bank performs interbank
transactions in Nepal, but also boosts our future prospects in the banking
sector as well.
BIBLIOGRAPHY
Kolb,
R.W. & Rodriguez, R.J. (2007). Financial Institutions and Markets. Newyork: Blackwell.
Manadhar,
K.D. &Pokhrel, S.B. (2009). Marketing Financial Services.
Kathmandu: Asmita Publication.
Shrestha,
M.K. &Bhandari, D.B. (2008). Financial markets and Institutions.Kathmandu:
Asmita Publication.
Thapa,
K. &Parajuli, B. (2010).Financial
Institutions and Markets.
Kathmandu: Januka Publication.
Shrestha,Sarada
(2011) Report on clearing department, Karhmandu: An unpublished intern report
submitted to FOM, TU.
Websites
www.nrb.org.np (4thsept,
2012)
www.everestbankltd.com (4thsept,
2012)
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