nepal bank ltd final banking

7/25/2019 Nepal Bank Ltd Final Banking

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CHAPTER -1

INTRODUCTION

1.1 Historical Background of t! "tud#

This fieldwork helped me a lot to figure out the similarities and

differences between which we have learnt during our university course

and practical work in organization. The decisionmaking procedure, flow

of responsibility, accountability and authority are in the same way, which

we have taught in class. These basic things helped me to understand what

organization is, how it is functioning and how the organization decides.

This program is really fruitful to me in understanding the organization

during fieldwork period.

1.1.1 Historical $ackground of Banking%

Banking in the form of today has came through various stages, some sort

of banking activities used to be carried out since the time, before history

could trace. But traditional form of banking could be traced during the

early civilization of Greece, Rome and esopotamia.

!n the earlier times, the safe storage of valuables and money used to be

done in some safe places like temples. "lowly, these storage institutions

began to lend money to the people who needed them, this money used to

be returned with interest in stated time. This type of activities of deposit

and borrowing emerged and advanced stage by stage and finally took the

form of modern banking.

# bank of modern form was setup in $$%& #' in (enice for the first time

named, )Bank of (enice*. But, )Bank of #msterdam* which was setup in$+- #' became very popular.

$


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The growth of bank accelerated throughout the globe after the

introduction of )Banking #ct$//0*, in the 1nited 2ingdom as it allowed

opening 3ointstock company banks.

1.1.& Origin and E'(ansion of $anking in N!(al%

The origins of banking in 4epal also were the ancient moneylenders and

merchants. The banking in 4epal crossed many stages since then to come

to the modern form. But, Rana 5rimeinister Ranoddeep "ingh in $-00

B.". started the banking activities in the modern concept by establishing

the )Te3arath #dda*. The establishment of )Te3arath #dda* was the first

step towards the institutional development of banking in 4epal. Te3arath

#dda did not collect deposits from public, but it only used to e6tend

loans to employees and public against the bullion.

But the commercial banking in 4epal in the true sense started with the

establishment of 4epal Bank 7imited in $-0& #', 4epal Rastra Bank

was established in 8$0 B."., which has been functioning as the

Government9s Bank till today. Thereafter, the banking in 4epal e6panded

slowly to reach the form of today. Till the date there are $+ commercial

banks in 4epal. The name and the year of establishment of the

commercial banks operating in 4epal are as following:

Na)! of t! Bank *!ar of Esta$lis)!nt +AD,

$. 4epal Bank 7td. $-0&

8. Rastriya Bani3ya Bank 7td. $-+%

0. 4abil Bank 7td. $-/;

;. 4epal !nvestment Bank 7td. $-/%

%. "tandard


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&. 4epal "B! Bank 7td. $--0

/. 4epal Bangladesh Bank 7td. $--;

-. >verest Bank 7td. $--;

$. Bank of 2athmandu 7td. $--%

$$. 4epal


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8. To develop industry and commerce: # bank can provide lone for the

industry and commerce in need as it collects large scale of money on

deposit. The industry and commerce can be developed only from large

amount of capital. #part from lending money a bank can provide

technological and administrative services. 'eveloped industry means the

boosted trade and commerce.

0. "afety of valuable assets

;. >mployment creation

%. Transfer of fund: 5hysical transfer of cash involves many risks and

costs but transfer of fund from one place to another is the necessity of the

day is it for common people. "o bank is a mean of transferring funds to

any corner of the world through their vast mechanism and network by

various e6peditious modes.

+. inancial intermediate: # bank acts as a financial intermediate by

mobilizing the saving of society as deposit and then providing money to

those who are in need of it by granting loan.

1.1. T#(!s of Bank

There are different types of bank in modern economy. # single bank

cannot fulfill all the services demanded by the customers and cannot

cover all the sector of economy. "o, different types of banks specializing

in different functional area are listed below.

$A


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!n addition to these, there are other types of banks viz. student bank,

labor bank, saving bank, cooperative bank, merchant bank etc. are in

practice in the world.

1.& Introduction to N!(al $ank /i)it!d.

4epal Bank 7td. !s an initiator Bank in 4epal. !t is the first established

public institution and first modern bank. There wasnCt any bank before its

establishment in the county. !t was the first encouraged effort removing

program. !t was established on 8th. 2artik $--; B.". 1nder the C4epal

Bank #ct $--;C. 4ow itCs operating under the C


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"ar! o5n!rsi( carts

Dwner Drdinary

"hares

Bonus

shares

Total shares 5ercentage

4epal

Government

@inance

inistry

-+;,%% %/+,-0& $,%%$,;;8 ;.;-

4 < < Bank $$&,$-/ $,$&,$-/ ;.-8

General 5ublic $,0,0&/ /0;,// 8,$0%,$/+ %;.%-

Total "hares 8,0/8,/$ $,;8$,&;% 0,/0,/8+ $.

There was Rs. Dne


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the bank, #fter the


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letter for credit is the most acceptable instrument for arranging payments

in international business transactions as it provides the greatest protection

to the concerned parties. "o it used as a basis of settlement for payment is

widely accepted by both e6porter and importer. ! is guarantee to the

e6porter that he well receive payment for the goods he is e6porting that.

!t is also convincing and comfortable instrument to the importer to import

goods from foreign country. The importer could also get it issued from

the bank with which he has a close relationship without having to commit

funds in advance.

!n 7E


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however named or described whereby a bank @issuing bank Aacting at the

reuest and on itCs own behalfI

!A to make a payment to or to the order of a third party @The

beneficiaryA, or is to accept and pay bills of e6change

@'raftsA, or drawn by the beneficiary, or

!!A #uthorize another bank to effect such payment, or to accept and

pay such bills of e6change @'rafts A or,

!!!A #uthorize another bank to negotiate, against stipulated

documentsA, provided that the terms and conditions of the

credit are complied with.

=ere, the branches of a bank in different countries are considered as

another bank.

1


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&. Issuing Bank%

The applicant is the customer of the issuing bank, and it is the issuing

bank, which gives the written undertaking in the form of a letter of credit

in favor of the beneficiary.

. Ad0ising Bank%

This is a bank usually domiciled in the beneficiaryCs country, which is

reuested by the issuing bank to advise the beneficiary of the terms and

conditions of the credit. There is no liability in the part of advising bank

to honor the 7E


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The payment by the issuing bank to provide payment to the negotiating

bank for negotiation effected under 7E


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1.&.7 T#(!s of cr!dits and t!r)s of /3C

'ifferent types of credit available for opening 7E< is e6port and import

business transaction are as follows:

$. Revocable and !rrevocable credit

8. Transferable credit

0. 'eferred payment credit

;. "ight payment

%. 1sance credit

+. Back to Back credit

&. Jith recourse and without recourse credit

/. #dvised credit

-.


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should be fulfilled in 7E< procedures. The terms and conditions can be

e6plained using sample of irrevocable 7E< form of 4epal Bank 7td. !n

the form the customer has to clearly mention the following term:

$. A((licants na)! and addr!ss%

The applicant has to write hisEher full name and permanent address in this

section #pplication means the party who opens the 7E< and imports the

goods.

8. B!n!ficiar#=s na)! and addr!ss%

!n this section, applicant has to write the name and address of the

beneficiary party. Beneficiary means e6porter or seller who is entitled to

receive payment under the credit presentation of specified documents.

or goods shipped. "ome foreign companies are black listed and the

applicant canCt open the 7E< on the name of such Black listed parties.

4otes:

The name and address of the applicant beneficiary must match with their

name and address mentioned in the perform invoice.

. Cr!dit a0aila$l! $#%

!n this section, an applicant has to fill about when the payment will bemade generallyI there are four types of payment systems.

!. "igt (a#)!nt% !f the credit provide for sight bank has to pay

when party presents the document.

!!. Acc!(tanc!%!f the credit provide for acceptance bank has to at

maturity of drafts drawn by the beneficiary. !f the

beneficiary has drawn drafts before its maturity, the bank

has discounted certain amount from the drafts.

$;


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!!!.D!fin!d (a#)!nt%!f the credit provides for deferred payment

to pay on maturity, the bank has discounted certain amount

form the drafts. 'eterminable in accordance with the

stipulation of the credit.

!(.N!gotiation% !f the credit provides for negotiation to pay

without recourse to drawers and Eor bona fide holders. 'rafts

drawn by beneficiary andEor documents presented under the

credit. # credit should not be issued available by drafts on

the applicant. !f the credit nevertheless calls for drafts on the

applicant, bank will consider such drafts an additional

document.

. A)ount of /3C%

Total amount of 7E< in foreign currency as well as in local currency is

given in this section. The amount mentioned here must be matched with

the value of perform invoice.

7. Part si()!nt%

The applicant has to define whether goods can be shipped in part or all

the goods have to be shipped at once in this section.

2. Transsi()!nt%

The applicant has to mention whether the transshipment of the goods isallowed or not. !n this section, transshipment of goods means transferring

goods from one shop to another.


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8. All carg!s outsid! N!(al 6or%

!n this section, the applicant has to mention whether all charges which

occurs outside 4epal has to be born by the applicant himself or the

beneficiary

9. "i()!nt 0alidit#%

"he, the applicant defines the period in which the goods should be

shipped if the beneficiary fails to ship the goods within this perfidy the

applicant has no legal obligation to pay.

1.Cr!dit !'(iring%

'ocuments presentation for negotiation within a day from shipment date.

11.>od! of cr!dit%

I 6r!! On Board +6OB,%

Then an e6porter delivers goods HDBH , he pays all charges involved in

getting them actually on to the ship his responsibilities include putting

the goods in a condition for shipping taking them it the ship loading them

and providing a clean of board receipt. =e also has to provide e6pert

license. 5ay e6port ta6es and loading costs if not included in the freight

charge his responsibilities and when the goods are on board. #nd the

buyer or e6porters duties are seemed from the board site as he pays thefreight. 5ay discharge costs and loading costs if included in he freight

charges, pay insurance 5remium.

II. Cast and fr!igt +C6R A:

!f the mode of credit is


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obtain e6pert license and pay e6pert ta6es, loading cost and unloading

cost if the freight charges. !n this case, the buyer must accept the delivery

of goods on shipment after documents are tendered to himI pay unloading

costs if not included in the freight charges and pay insurance 5remium.

III. Cost insuranc! fr!igt +CI6,%

!t is same as in case of Hcost of freightH mentioned above, here the seller

must also contract for the insurance of goods, pay the 5remium and

provide the buyer with the policy or certificate. The seller must provide

the buyer with the documents necessary to take delivery of the goods an

arrival. These documents are normally a bill of landing, and insurance

policy and an invoice here the buyer must accept delivery of goods on

shipment after documents are tendered to him whether or not,

#. The goods actually arrive.

B. They have been lost in route.


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?. Cast and fr!igt +C6R,%

!f the mode of credit is


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?II. 4epal Rastra Bank @4RBA has instructed all the commercial Banks

to open 7E


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cargo, air cargo, post parcel, including bond but final destination is

2athmandu.

Ot!r docu)!nts%

These are ma3or terms, which is clearly fulfilled by and applicant when

opening 7Eanag!r

D!(art)!ntal

H!ads


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4B7.The general manager is a chief e6ecutive of the bank who will be

appointed by the board in the meeting. The function of the manager is to

look after the management and banking transaction of the bank. =e

authorized to take decision without taking any consideration to the board.

But he is responsible to the board. There are other responsible e6ecutives

of the bank like deputy general manager and departmental heads. They

hold their own decision and can take decision without consulting to the

board and G.

There are also general managers who area the real representatives of the

head office, authorized to perform certain specific function. They are

given more responsibilities and authorized by the head office. They

should work like true administrators of the decentralized unit of bank

management.

Therefore, the board has complete control over the banking activities and

it supervise the performance of the staffs and it fives instruction for

regulating the banking activities to run smoothly.

1. "tat!)!nts of Pro$l!)s

#s we know that the main ob3ective of any business organization e.g.

Bank, is profit ma6imization. 'eposit mobilization. 'eposit mobilizationis the key factor to attain this ob3ection therefore if the Bank fails to

employ its funds suitably it is not possible to ma6imize profit. # Bank

has to make decisions within a framework of statutory reuirements of

credit regulation by central Bank, as well as the national ob3ectives that

are determined in the matter of the provision of credit from time to time.

The commercial Bank should maintain adeuate credit deposit ratio but

sometimes Bank credit may e6pand out of proportion to the reuirement.

8;


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!n this situation Bank has to collect sufficient fund from deposits and

must make some permanent changes in its banking policies, otherwise

there will be a uestion in the survival of that particular Bank in this

highly competitive commercial sector.

!n order to attract sufficient number of deposit i.e. from the viewpoint of

uantity and uality, the Bank should analyses their position in collection

cash and trend of deposit in term of small cash balance is not the

representation of Bank policy for cash collection.

1. O$!cti0!s of "tud#

$. To gain practical knowledge about the 7E< department of

4B7.

8. To identify the trend.

0. To gain work e6perience of the field visit.

;. To access the


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$$. To keep eagle eyeview on related chapter and pick up some

certain statically tools like tabulation, bardiagram etc.

1.7 "ignificanc! of t! "tud#

or the practical fulfillment of the course on the Bachelor on Business

"tudies, provided by aculty of management, Tribhuwan 1niversity, this

field report was prepared on field writing in 4epal Bank 7td. 4ew Road,

Banking Dffice, 2athmandu. #s my sector selection area is banking and

!nsurance, 7etter of


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! wish to remind the reader of the following constraints ! had to face

during the research pro3ectI

! this fieldwork is limited into 4epal Bank 7imited, Banking office, new

Road, 2athmandu. ! prefer on 7E< transaction of 4B7I date of Baisakh

8+$ to !todolog#

1.


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There are two methods of collecting the source of data:

Pri)ar# Data @

"!condar# Data

ortunately, ! applied both methods in this study.

Pri)ar# Data% -

Those types of data, which is collected by own intellectual power,

sense and field observation, interviews, uestioning etc. attach interview

? uestioning section in this report as primary data.

"!condar# Data% -

That data which is collected by the help of other people, professors,

students, library, books, dissertation, thesis, articles, report, 3ournal etc.

that types of data is colleted from the staff of 4B7. 4epal Bank 5atrika,

#nnual Report of 4B7 studying a lot of dissertation, thesis, 3ournals,

books from T.1. library etc.

1.


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Navin: Ha0! #ou g!t an# d!sir!; 5ic 5as not fulfill!d during

#our ti)!

Mr. Pandey: ! used to eager to apply computerized system nationalize

but it could not do it properly at that situation. ! realized privatization is

necessary at that time which was gradually used on these days. #t that

movement, staff strikes breakout time to time due to political changes. !n

short, we should develop 4B7 as 3oint venture banks.

Na0in% At last; 5ould #ou lik! to gi0! an# solid sugg!stion to )ak!

$ank )or! !ffici!nc# and (rogr!ssi0!

Mr. Pradhan:! see following steps will make bank more efficiency and

effectivelyI

'oor to door service to branch banking should be service

plus profit oriented.

5lacement of efficient and skilled manpower instead of point

of no return off

"upervision and control on banking activities.

otivate to staff leading them as teamwork.

To standardize 4B7I market professional development is

necessary. !f it is urgent invite e6pert or specialist from

foreign countries.

Navin:Did #ou find an# diff!r!nt on $anking acti0iti!s in #our ti)!

tan tis ti)!

8-


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Mr. Raj Bhandari: #t that time, there were not so competitions. 4epal

commercial Bank could not stand properly as perfect competitor. 4epal


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CHAPTER G &

DATA PRE"ENTATION AND ANA/*"I"

&.1 Data Pr!s!ntation @ Anal#sis

Ta$l! No-1

E'(orting A)ount of /3C

$ear No. %mount &NC'

()*+/()*, - 0120(012(()*,/()* ( 0),020),-

()*/()2) -( 0()0+0,+)

()2)/()2 11 (02,0,*0,

()2/()2( -* 0-)0+)02))

"ourc!% N!(al Bank /i)it!d

rom the above table, it is clear that in the year 8+E8+$, the ma6imum

>6porting amount took place.

Ta$l! No-&

I)(orting a)ount of /3C

$ear No. %mount &NC'

()*+/()*, , *10()0*

()*,/()* 2)0*0)*+

()*/()2) - 2202+0,1

()2)/()2 ) 2)0*0())

()2/()2( -) ,,0)01**


rom the above the table, it is clear that in the year 8+$E+8, the

ma6imum importing amount took place.

rom the above table the e6port and import of 7E6portA has been classified as $.;+ cores in 8%&E%/ and $.0 cores in

0$


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%/E%-, $.8 cores in %-E+, and ;.+/ cores in +E+$, $.0 cores in

+$E+8.and$.+crores in +8E+0.

#nd the total 7E6porting amount took place.

Ta$l! No.

I)(orting a)ount of /3C

08


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rom the above table, it is clear that in the year 8+E8+$, the ma6imum

>6porting amount took place.

Cart -1

I)(ort and E'(ort of /3C in NB/

"ourc!% N!(al Bank /i)it!d Annual R!(ort

rom the above chart importing and of 7E< in 4B7 in year 8%& to 8+

is in increasing trend but in year 8+$ this trend is decreased. #s like in

e6porting of 7E< in 8%/ it is in increasing trend but in 8%- it is

$ear 3C. 4C

()*+/()*, (-0,)02(, 010((*

()*,/()* 0,-0,*+ 0*0,2*

()*/()2) ()0,,0(+ )0*2,0+-

()2)/()2 -10,)01* 0(),0)1*

()2/()2( -0()01)1 +0)1*0,(2

00


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decreased in the year 8+ it is slightly increase but also in 8+$ it is

decreased.

rom the above table the e6port and import of 7E6portA has been classified as $.;+ cores in 8%&E%/ and $.0 cores in

%/E%-, $.8 cores in %-E+, and ;.+/ cores in +E+$ and $.0 cores

in +$E+8.

#nd the total 7E


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CHAPTER -

"U>>AR*; CONC/U"ION @ RECO>>ENDATION

.1 "u))ar#

!n the beginning. 4B7 has as authorized capital of Rs. Dne core and

divided to $, , sharing of Rs. $ each of which 8%, shares were

allowed to be issued. 4ow it has reached up to $ core authorized

capital and paid up capital has been raised up to Rs 0/.0/ corer from /

lakhs ;8 thousand.

This study limited only the 7E6portA has been classified as $.;+ cores in 8%&E%/ and $.0

cores in %/E%-, $.8 cores in %-E+, and ;.+/ cores in +E+$ and

$.0 cores in +$E+8.

#nd the total 7E


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4umber of negotiation contributed for this growing number of

4egotiation of the bank. Dne of the important factors that lead to grow

the negotiation number of bank is the lack of investment policy, second

important factor is political instability and important factor is different

problems to be faced in opening 7E


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customer and able to convince the people that bank is for

their benefit rather than the profit.

8. There should be sound coordination between 4RB, 4B7

and other commercial banks. "o as to deliver credit and

other supporting services smoothly. "o hat 3oint effort can be

carried out in making any decision like change in the interest

rate, lending policy etc.

0. Bank should give view on mobilizing deposits..

;. !t should focus on development of modern technology and

scientifically try to solve the problems and obstacles of

customersI it should care to solve the problems by the

management and personals.

%. !t is more necessary to supervise and control the banking

transaction.

+. !t may provide better banking services than the other

commercial bank to their customers.

&. ! suggest giving preference on loan repayment instead of

pressure loan for hat purpose it manage effectively and

skilled management.

/. ! suggest making effective repayment f loan program by

giving discounts and doortodoor facilities.

-. !n over all, it can be said that the bank needs, so manyimprovement9s by it9s own part but also the help of

government is most essential.

$. ! suggest making effective repayment f loan program by

giving discounts and doortodoor facilities.

nepal bank ltd final banking

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