Idea Transcript
Check Out This Special Offer!
Try Now!
Internship Report on Bank of Kathmandu, Nepal
CHAPTER ONE INTRODUCTION
1.1 Background Tribhuvan University has designed various management degrees under Faculty of Management (FOM). Among them, one of the outstanding developments is in the form of Bachelors of Business Administration (BBA), which had been established in 2002. This program is introduced in a way so as to reduce the gap between theoretical and practical knowledge provided to the students. The BBA program aims to overcome the drawbacks of other existing management degrees of TU and hence focuses on the development of the students through field visits, report preparation, presentation and of course, internship program. The entire above mentioned and other course matters help the educational institutions to produce the skillful, confident, knowledgeable and dynamic human resource for this country. The internship program is one of the important components of the 4 year BBA program. It provides the platform for the BBA products to do the self-evaluation of them in the practical business world and moreover, act as a feedback forum for the policy makers of the Tribhuvan University to revise the course as per the requirement Internship provides students hands-on work experience in a particular organization and field. An internship is an extensive program through which an internee can learn the practical aspects of what is taught between 4 walls of a classroom. It provides golden opportunity to generate quality education because it enables us to learn, observe and understand the real corporate world. Most importantly, the internship could be regarded as the first step of career development. For the partial fulfillment of the requirements for the degree of Bachelor in Business Administration (BBA), every eighth-semester student should prepare an internship report. This internship report is mainly focused on Customer Service Department of customer service department of Bank of Kathmandu, Newroad branch. 1.2 Objectives of the Study The internship program is undertaken for the partial fulfillment of the requirements for the degree of Bachelors in Business Administration. The general objective of this program is to make students familiar with the working environment and gain the practical experience in the related field. This further helps the students to expose themselves to the real world of the external environment about different aspects of management where they can apply their theoretical knowledge. The main task of the internship program is to make a study on the banking operations process, understand the services provided to its customers, and have complete knowledge and functioning of the related departments. The specific objectives are: 1. To learn how to handle customer grievances regarding the various products and services provided by the bank 2. To examine various front office and back office activities being performed in Customer Service Department. 3. To know about various financial products and services provided by the bank. 1.3 Methodology This study for making this report is mostly descriptive in nature where the facts and findings are prescribed in a systematic manner. The information required for the preparation of report has been collected from observation of the activities that are performed in the bank and the personal interview and consultation with the staffs involved in different departments of the bank. The secondary data are used in the report are obtained from websites, brochures, annual report, and books. 1.3.1 Organization Selection The beginning phase of an internship program begins with a selection of suitable organization by the internee as per the requirement. The knowledge of real world scenario is obtained from the organization. For selecting this organization curriculum vitae, citizenship and recommendation letter from college are dropped in the various Banks. In this process Bank of Kathmandu, Newroad branch has accepted internee Application for the internship and given me the opportunity to get familiar with the bank. Internee was lucky to get the opportunity to work as the internee at BOK, Newroad branch. This bank provided the great opportunity to learn and gather experience about real banking environment that would be very helpful for enhancing the knowledge about real world banking scenario. 1.3.2 Placement Internee was placed in BOK, Newroad branch. During the internship period, the internee was placed in customer service department. The supportive and friendly environment in the organization helped the internee to complete the internship period through the proper guidance of the staffs of customer service department. Throughout the internship period, internee got an opportunity to deal with sort of banking issues prevailing in customer service department. 1.3.3 Duration of internship The internship duration requirement for the BBA Program as per set by the Tribhuvan University, which is a great opportunity for the students involved in the program to learn and develop interpersonal, managerial, and behavioral skills in the real organizational settings. Internee got an opportunity to work in customer service department from and the Timing of the internship was from 10.00-5:30 and onward. It was from Sunday to Friday except in days of public holidays. This internship program has been very fruitful for the internee to get real life experiences of the banking activities of the organization. 1.3.4 Activities performed in the Organization During the internship period, internee was placed in the customer service department of Bank of Kathmandu, New road branch. Different activities that were performed in customer service department of the organization in this internship duration were as follow: • Opening Personal and Corporate Account • Balance checking and signature verification • Solving the various problems related to ATM cards. • Helping the customers in filling up the various forms like account opening form related to personal account , joint account, corporate account, ATM application form, renewable of debit card application form, fixed deposit form, account closing form, SMS banking form, internet banking form, application for safe deposit locker, cash/cheque deposit slip, counter cheque. • Issuing of cheque books, ATM cards, account statements and balance certificate. • Telephone handling and solving the queries of the customers. • Performing the other task like the photocopy, filing, scanning, stamping, KYC form fill up, register maintaining of account opening, cheque registration, card issuance, SMS and internet banking, account closed, remittance record, clearing cheque record. • Doing various back office work like cheque binding, filing of documents, register entry. • Dealing with customer grievances and trying to solve their queries. 1.4 Limitations It is obvious that there arise some kind of limitation in everything with some productive and beneficial outcomes and as limitations are the part of progressive system, here are some limitations of the study: • The time duration that has been provided was not sufficient to learn all the activities held in the bank • The banks staffs were preoccupied with their work so they had a little time to interact with internee. • It does not give detail view of the overall functioning of the bank since most of the information is collected through personal experience and observation. • This report cannot be generalized to entire banking industry since data is only related to BOK, Newroad branch.
CHAPTER TWO INTRODUCTION TO THE BANKING INDUSTRY
2.1 Introduction Bank can be defined as a financial institution which provides financial services that may be in the form of accepting deposits, accepting the loan, providing technical advice, dealing over foreign currencies, remitting funds, etc. It collects deposits from the general public, corporate bodies and private organizations by providing them the certain percent of interest, mobilizes the fund to productive sectors and distributes the accumulated fund to others, who are in need of money by charging the certain percent of interest. Bank is, therefore; known as a dealer of money that bridges the gap between the savers of fund and users of the fund. To know the precise meaning of bank, some definition given by prominent writers, scholars, and acts of different nations are as given: "A Bank is an establishment for the custody of money received from or on behalf of its customer essential duty is to pay their draft on is profit areas from its use of the money left unemployed by them." Oxford English Dictionary From the above definitions, it is clear that the bank is a financial institution, which accepts deposits from the public in different amounts and grants loans to individual and corporations against their securities. In these days, it performs a wide variety of functions. It does lot more than deposit and credit, remitting of money, letter of credit, guarantee etc. for the service and benefit of individuals, corporations, and the general public. It is an agent of its clients, which remits money, provides services like LC, guarantee etc. and collects incomes, commissions and pays expenses on the behalf of them.
2.2 Origin of bank The word “bank” is derived from the Italian word "banco", Latin word "bancus" and the French word "banquet” which means bench on which the bankers would keep money and its records. In most simple form, banking is an old as authentic history. The early bankers, the Jews in Lombardy, transacted third business at benches in the marketplace. When they were unable to meet their liabilities, the depositors used to break their benches and the term bankrupted was derived. The bank of Venice, established in 1157 A.D is supposed to be the ancient bank. Originally, it was not a bank in the real sense being simply an office for the transfer of public debt. Subsequently, Bank of Barcelona (1401) and Bank of Geneva (1407) were established. The ‘Bank of England’, first English Bank was established in 1694 A.D. Banking institutions have then changed in character and contents to the further extent. They have developed from a few simple operations involving satisfaction of a few individual’s wants to the complicated mechanism of modern banking involving the satisfaction of the whole community by serving speedy application of capital, slowly seeking employment and thus providing the very lifeblood of commerce. The history of banking is closely related to the history of money. As a society become more civilized, the need for more efficient methods for barter was developed organically. Most origins of money can be traced back to the building of large structures such as temples, or large undertaking by leaders, such as wars. The first bank was probably the religious temples of the ancient world and were probably established sometime during the 3rd millennium B.C. Banks probably predated the invention of money. Ancient Greece holds further evidence of banking. During Late Antiquity and Middle ages, medieval trade fairs, such as the one in Hamburg, contributed to the growth of banking in a curious way: money changers issued documents redeemable at other fairs, in exchange for hard currency. In 1440, Gutenberg invents the modern printing press although Europe already knew of the use of paper money in China.
2.3 Evolution and Growth of Banking Sectors in Nepal The origin of the banking system in Nepal started with the name of Shankerdhar, a Sundra merchant of Kantipur who paid all the outstanding debts in the country. In historical term, there is a story that Gunkamdev borrowed money in 723 Sambat to reconstruct Kathmandu. In the 11th century, during Malla regime, Jayasthiti Malla developed 64 different classes of caste according to their occupation. During that period, Tankadhari which is a money lender provided debt. "Tejarath Adda” was established in 1877 A.D. during the tenure of Ranaddip Singh, and it was converted into government financial institution providing credit facilities to people at low-interest rate of 5 percent. Tejarath Adda distributed credit facilities to the public especially on the collateral of gold and silver, but it didn’t collect the deposit from the public. After a long period, the government started to trade with India and Tibet. And the various indigenous bankers handled even the trade because the transfer of the money could be safely made only through these bankers. This was even strongly supported by the situation caused during 1934 A.Ds earthquake where there was a need of finance for the reconstruction of works. Reviewing these situations, the Udyog Parishad (Industrial Development Board) was constituted in 1936 AD. A year after its formation, the Udyog Parishad formulated the “company act” and the “Nepal Bank Act” which established the Nepal Bank Ltd. with the technical cooperation of the Imperial Bank of India, as the first commercial bank of Nepal. After the establishment of this bank, different services like accepting deposits, extending credit facilities for promotion of trade, rendering customer related services and investing in government bonds and securities were offered to general public. This bank also performed agency functions and acted as a banker to the government. In fact, it conducted all the functions of the central bank (except issuance of paper money) till the establishment of NRB. NRB, the Central Bank of Nepal, was established in 1956, to discharge the central banking responsibilities including guiding the development of the embryonic domestic financial sector. Its major aims are to regulate the issue of paper money; secure countrywide circulation of Nepalese currency and achieve stability in its exchange rate; mobilize capital for economic development and for trade and industry growth; develop the banking system, thereby ensuring the existence of banking facilities and maintain the economic interest in the general public. NRB also oversee foreign exchanges and foreign exchange reserves. Another commercial bank, Rastriya Banijya Bank (RBB), was established in 1965 A.D. realizing NBL alone could not extend adequate services to the country in terms of commercial banking. It had a free hand in the commercial business of the country and this bank solely handled importexport trade. After the establishment of RBB, no new commercial bank was established for a period of nearly 18 years. To promote healthy competition among banks, Commercial Bank Act 1974 was amended in 1974. The new policy allowed joint venture banks with foreign collaboration to operate in the private sector with the objective of introducing modern banking practices and widen the financial structure. With the introduction of this policy, different commercial banks were established. The Nepal Arab Bank now NABIL Bank was co-owned by the Emirates Bank International Limited Dubai, the Nepalese Government and the Nepalese public was the first joint venture bank established in 1984. Similarly, The Nepal Indosuez Bank now Nepal Investment Bank in 1987 was jointly owned by the French Banque Indosuez Bank, Nepal Grindlays Bank in 1990 (presently known as Standard Chartered Bank) etc are some commercial banks in Nepal. 2.4 Classification of Financial Sector in Nepal Table2.4.1: Classification of Financial sector in Nepal
S.N
Financial Institutions
Class
Numbers
1
Commercial Banks
A
32
2
Development Banks
B
88
3
Financial Companies
C
78
4
Micro-credit Development Banks
D
21
Source: www.nrb.com.np In this way, there are altogether 32 commercial banks,88 development banks, 78 financial companies and 21 micro-credit development bank in Nepal which are classified as A, B, C and D class respectively. 2.5 Commercial bank Commercial Banks are one of the major financial intermediaries whose primary function is the transfer of monetary resources from the savers to the users. They have the widest range of activities and they provide a large amount of the money supply. They perform several functions as various types of deposit facilities like the current, saving and fixed deposit; safety of public money, remittance of money, letter of credit, loans, locker facility, foreign exchange, serving as an agent of its clients etc. Nepal bank limited is the first commercial bank of Nepal which was established in 1994 B.S. It is a semi-government bank. The second commercial bank of Nepal is Rastriya banijya Bank. It was established in 2002 B.S. After reinstatement of multiparty democracy in the country, several joint venture banks were established, such as Standard Chartered bank, Nabil Bank, Nepal Investment Bank, Himalayan Bank, Everest Bank, Nepal State Bank of India, Nepal Industrial and Commercial Bank, Kumari Bank, Machhapuchhre Bank, Bank of Kathmandu and so on. With the increasing in a number of commercial banks competition among them have also become more complex. The main function of the commercial bank simply is ‘to borrow to lend’. Besides, there are other functions which have been developed according to need of the society as• Accepting deposits • Providing loans • Investments • Discounting bills of exchange • Transfer of money • Capital formation • Miscellaneous functions The commercial banks in Nepal can be listed as follows: Table 2.5.2: List of commercial bank
S.No.
Operation Date (A.D.)
Head Office
1
Nepal Bank Limited
1937/11/15
Kathmandu
2
Rastriya Banijya Bank
1966/01/23
Kathmandu
3
Agriculture Development Bank Ltd.
1968/01/02
Kathmandu
4
NABIL Bank Limited
1984/07/16
Kathmandu
5
Nepal Investment Bank Limited
1986/02/27
Kathmandu
6
Standard Chartered Bank Nepal Ltd
1987/01/30
Kathmandu
7
Himalayan Bank Limited
1993/01/18
Kathmandu
8
Nepal SBI Bank Limited
1993/07/07
Kathmandu
9
Nepal Bangladesh Bank Limited
05/06/1994
Kathmandu
10
Everest Bank Limited
1994/10/18
Kathmandu
11
Bank of Kathmandu Limited
1995/03/12
Kathmandu
12
Nepal Credit and Commerce Bank Ltd
1996/10/14
Rupendehi
13
Lumbini Bank Limited
1998/07/17
Chitawan
14
Nepal Industrial & Commercial Bank Limited
1998/07/21
Morang
15
Machhapuchhre Bank Limited
2000/10/03
Pokhara
16
Kumari Bank Limited
2001/04/03
Kathmandu
17
Laxmi Bank Limited
2002/04/03
Birgunj, Parsa
18
Siddhartha Bank Limited
2002/12/24
Kathmandu
19
Global Bank Ltd.
2007/01/02
Birgunj, Parsa
20
Citizens Bank Interneeational Ltd.
2007/6/21
Kathmandu
21
Prime Commercial Bank Ltd
2007/9/24
Kathmandu
22
Sunrise Bank Ltd.
2007/10/12
Kathmandu
23
Bank of Asia Nepal Ltd.
2007/10/12
Kathmandu
24
Development Credit Bank Ltd.
2001/01/23
Kamaladi
25
NMB Bank Ltd.
1996/11/26
Babarmahal
26
Kist Merchant Banking & Finance Ltd.
2003/02/21
Kamalpokhari
27
Janata Bank Nepal Ltd.
2010/04/28
New Baneshwor
28
Mega Bank Nepal Limited
2010
Kantipath
29
Commerz & Trust Bank Nepal Ltd.
2010/09/20
Kamaladi
30
Civil Bank Ltd.
2010/11/26
Kamaladi
31
Century Commercial Bank Ltd.
2011/03/10
Putalisadak
32
Sanima Bank
2012
Naxal
Source: www.nrb.com.np There are altogether 32 commercial banks in Nepal. The functions of commercial banks are broader in scope, size and magnitudes. Some of the major functions of commercial banks are: • Accepting deposits • Providing loans • Investment • Liquidity management • Cash management • Capital structure management 2.6 Present scenario of commercial bank in Nepal Banks are gradually starting to realize that, in today’s competitive banking environment, exemplary customer service is one of the distinguishing characteristics that banks can exploit to establish a competitive edge. Since most banks offer comparable products and services, they should continually search for a competitive advantage that will attract new customers and help retain existing ones. Banks are, therefore, looking to develop innovative products and services to maintain superior customer services levels while at the same time remaining profitable. With the number of market players in the rise, the competition has been obviously growing in the banking industry. The most obvious effect of the rising competition can be seen in the interest rates offered by the banks. Banks are gradually shifting towards the IT-based solution to enhance service delivery in order to address customer concerns. Most banks are embracing E-banking and provision of ATMs to reduce long queue in the banking hall. In addition, some banks have launched mobile phone banking services which facilities several account query tools, including account balances, thereby minimizing the need for customers to visit banks. This drive towards the IT-based solution will continue to gather momentum in the future as banks will find it very difficult to survive in the ever growing competition without some form of competitive advantages. Another trend observed nowadays is large corporate houses explore the shift towards multiple banking relationships. In order to remain competitive, banks are seen to be increasingly encouraging business houses to transact with them. This has lead to a creation of the large volume of unutilized limits with the bank and in order to get a large piece of the pie banks are increasingly accepting risks, which they otherwise would not have taken. The unyielding competition has also led the banks to accept collaterals that are more risky and unsecured. The volume of loan against the hypothecation of stock, receivable and other assets are on the rise. In the absence of hypothecation in the current assets, the risk of over financing is eminent and banks are exposed to a higher degree of risk.
CHAPTER THREE INTRODUCTION OF THE ORGANIZATION
3.1 Profile of Bank Of Kathmandu Bank of Kathmandu Limited (Bank of the year 2011) is registered under the “Banks and Financial Institutions Act” of Nepal as an “A” grade commercial bank which was incorporated in March 1995. It is the 11th commercial bank of Nepal which has been established by prominent and highly experienced business personnel and professional from diversified areas with a slogan ‘We make your life easier’ in the country, where still a large number of the population are deprived of Banking Services. The bank of Kathmandu assures the customer that it is solely giving priority to customer service by easing the life of the customer. Bank of Kathmandu is committed to opening its door of opportunities to all its stakeholders through quality products and services to customers, satisfactory return to shareholders, attractive incentives to employees and service to the community. Bank of Kathmandu Limited (BOK) has today become a landmark in the Nepalese banking sector by being among the few commercial banks which is entirely managed by Nepalese professionals and owned by the general public. Its objective to stimulate the Nepalese economy and take it to newer heights. The major concern of BOK is to facilitate the national economy by making the customers life easier by providing various banking services. BOK also aims to facilitate the nation's economy and to become more competitive globally. The policies of Nepal Government and Nepal Rastra Bank rule and regulation preside over Bank of Kathmandu (BOK).Bank of Kathmandu is able to record a net profit of NRs. 608 million during the FY 2011/12. In view of satisfactory profit earned by the Bank its Board of Directors, during their meeting held on 29th August 2012 has decided to propose for 5 % bonus share and 21.32 %cash dividend post approvals of Nepal Rastra Bank and Annual General Meeting of the Bank. During the financial year, the Bank's total deposit and loans and advances have reached NRs. 24.99 billion and NRs. 18.81 billion respectively. During the same year, the Bank has opened four new branches in Birtamod, Khandbaari, Maharajgunj & Battisputali and also installed two ATMs in new locations. With these, the Bank's total number of branches and ATM has reached 45 and 54 respectively. The share ownership structure of BOK is presented below as per year 2010/2011. Table 3.1.1: Share Ownership Structure Particulars
Percentage (%)
Amount (Rs.)
Promoters
42%
570,981,894
Public Share Holder
58%
788,498,806
Total
100%
1,359,480,700
The above figure shows the share ownership patterns of promoters and public shareholders. The net profit of BOK from year 2005/06 to 2010/11 can be shown below: Figure 3.1.1: net profit in millions of BOK
The above figure shows that the net profit of BOK is significantly increasing from FY 05/06 to 10/11 and now it is 608 million. The balance sheet of bok is shown as below
Figure 3.1.2: balance sheet of BOK of fiscal year 2011/12
The balance sheet of BOK of fiscal year 2011/2012 shows the total assets and total liabilities equal to RS 23,396,191,791. Objectives of BOK The major objectives of the bank are listed as follows 1. Promoting economic growth and becoming a caring corporate citizen 2. Providing excellent customer services by offering personalized quality services and products 3. Including modern technologies of banking, that add value to customer services 4. Following strict risk-control mechanisms 5. Enhancing shareholders value 6. Providing challenging career and learning opportunities for our employees
Vision To become a significant contributor to the economic development of Nepal by distinguishing the Bank as an efficient, competitive, safe and topquality financial institution. Mission Statement To offer financial services and become the "Bank of Choice" by dedicating the progress and growth of the institution to the community, customers, employees, and stockholders by: o Promoting economic growth and becoming a caring corporate citizen o Providing excellent customer services by offering personalized quality services and products o Including modern technologies of banking, that add value to customer services o Following strict risk-control mechanisms o Enhancing shareholders value · Providing challenging career and learning opportunities for our employees Core Values The Bank has defined following core values for achieving the vision and mission: o Embrace a commitment to excellence o Develop knowledgeable, competent and professional employees o Deliver quality services o Provide value to the stockholders o Be accountable for delivering what we promise o Demonstrate honesty and integrity in all actions o Be balanced in customer orientation and risk consciousness · Be efficient and technology oriented 3.2 Management Team The management team of BOK can be shown in the table: Table 3.5.1: Management team of bok
S.No
Name
Post
1)
Mr. Ajay Shrestha
Chief Executive Office
2)
Mr. Prabin Prakash Chhetri
Chief Operating Officer
3)
Head- Central Operations Mr. Chetan Bar Singh Thapa
4)
Mr. Pushparaj Bhandari
Executive Manager – Business
5)
Mr. Mahesh Mishra
Head - Finance & Treasury
6)
Mr. Kiran Bohara
Head- Business Bank
7)
Mr. Manish Singh
Company Secretary and Head Integrated Risk Management & Compliance
8)
Mr. Ram Pratap Yadav
Head- Transaction Banking
9)
Mr. Anand Pandey
Head- Institutional Banking
10)
Mr. Dibya Chandra Shrestha
Head- Interneeal Audit
11)
Mr. Sudeep Paudel
Head- Legal
12)
Ms. Himani Pant
Head - Credit Operations
13)
Mr. Amit Chand
Head - Interneeational Trade
14)
Ms. Anupa Rajbhandari
Head - Reconciliation & Treasury Back Office
15)
Mr. Anil Ratna Tuladhar
Head - Treasury Front & Planning
16)
Mr. Ganesh Lamsal
Head -Marketing & Corporate Communication
17)
Mr. Bigyan Ghimire/ Niranjan Nakarmi
Senior Relationship Managers (Corporate Bank)
18)
Ms. Shailee Joshi
Head - Policies, Compliance & Operations Risk
19)
Mr. Pratick Shrestha
Head- Retail Credit
20)
Mr. Umesh Raj Aryal
Head - Central Logistics
21)
Ms. Anju Nakarmi
Human Resource Development Officer
22)
Ms. Snigdha Morbaita
Head - Accounts & Budgeting
23)
Mr. Bhushan Ratna Bajracharya
Head- System & Technology
24)
Mr. Bikram Shrestha
Head- Card
3.3 Services provided by BOK A. Deposits The different types of deposit in BOK are: Sajilo Bachat Khata Normal Savings Account targeted to customers from various sectors. Convenient and efficient saving structure with various service features. Griha Laxmi Bachat Khata Easy Savings Account for all women customers with service features catering to the needs of all. Ladder Savings Savings account enhancing the saving habits for all customers Laghu Bachat Khata Saving accounts encouraging small depositors where the Bank offers cash incentives for the customers. My Choice Women's Savings Encouraging women savers and giving them the choice of making their own decision. Gramin Mahila Bachat Khata This account can be opened by women customers only in the branches that fall under Village Development Committee (VDC) and Municipality (Nagarpalika). The whole purpose behind this account is to get women involved in self-development activities. BOK Pokhara Bachat Khata This is a regional account which can be opened only in the branches that fall under Gandaki and Dhaulagiri zone.The product ensures local heritage development as Social Contribution to Bindyabasini Temple of Pokhara is made after each account is opened. (Contribution of NRs. 100.00 in the account of Bindyabasini Dharmik Kshetra Bikas Samiti for every "BOK Pokhara Bachat that" opened at BOK branches as a part of CSR activity.) Baidesik Rojgar Khata This product is targeted for people going abroad for foreign employment and their family members residing in and outside Kathmandu valley. For every inward remittance transactions that are deposited in customers account, NRs. 25.00 (net of tax) will be deposited in customers account from bank’s side. Nava Kopila Bachat Khata Saving Account for the minors ensuring a better future for them. The Bank also Offers cash incentive at the time of account opening and also at the time of Birthday of each account holder. Premium Savings Scheme This product has been developed in line with BOK Deposit Policy 2006. It is intended for high valued individual depositors. To mobilize relatively higher sized savings of people with higher yield availing most of the banking services for free. BOK Chetanshil Yuva Bachat Yojana Bank of Kathmandu Ltd. has entered an agreement with Save the Children International to inculcate saving habits amongst low-income youth (12 – 22 years of age) under Youth Save Project. Under the project, the bank is providing financial education in partnership with Save the Children and its partner NGOs and is also providing easy saving services via tailored saving product accessible at neutral venues besides bank’s branches. The interest rate and minimum balance for opening an account in BOK can be shown in the table Table 3.6.1 list of interest rate and minimum balance for A/C opening
Savings Deposit Sajilo Bachat
Interest Rate
Minimum Balance
3.00
100
-
10000
4.5
1000
Nava Kopila Bachat khata
5.00
100
BOK chetansil Yuwa BachatYojana
5.00
100
4.5
1000
Ladder Saving Laghu Bacha Khata
My choice
Fixed Deposits: BOK provides Laghu Muddati for the period up to 5 yrs in which interest will be paid as agreed at the time of deposit. The interest of the deposit can be credited to saving the account. Fixed can be opened with the minimum amount of NPR 50,000. Normal Fixed Deposit Tenure ranging from seven days to over three years, Fixed Deposit at Bank of Kathmandu allows you to diversify your portfolio to best suite your investment plan. Laghu Muddati Khata is a fixed deposit account targeted for a small amount from general individuals. The interest earned by the customers will be given at the time of account opening. BOK Muddati Plus Fixed Deposit product targeted for individual customers and institutions to diversify the customer base of fixed deposit portfolio in terms of a number of customers, the size of deposits and geographical coverage. Facility of longer tenure and higher interest rate even on smaller deposits. Earn yourself additional benefit for longer periods along with secured growth. BOK Premium Fixed Deposit This is a fixed deposit product targeted for high-value individuals and institutions The interest rate for fixed deposit can be shown as below: Table 3.6.2: list of fixed interest rate provided by BOK
1. Fixed Interest Rate
% P.A.
A. General 1 Month
5.00
3 Months
5.50
6 Months
6.00
1 Year
6.50
B. Prime Customer 1 Year and above
6.50
C. Laghu Muddati Khata 1 Month
5.00
3 Months
5.50
6 Months
6.00
9 Months
6.50
1 year
7.00
D. BOK Premium Fixed Deposit 1 year
6.50
E. BOK Muddati Plus 2 Years to 5 Years
6.50
B. Loans The various types of loan can be discussed as below Corporate Credit a) Project Finance (Term Loan) Based on the viability of the project/proposal, Term Loan to finance the long-term financing need of a firm/company may be made available. This loan is normally provided up to 65% of the financing requirement with a maximum tenure of 60 months. Terms could vary depending upon the need of the project. • Working Capital Finance Based on the nature of a business/transaction, various types of working capital facilities/loans may also be availed. Some of the commonly offered products under this category are as follows: • Overdraft this revolving/open term facility enables a firm/company to manage their varying daily cash requirement. • Demand / Short-term loan (Trade Finance) These facilities are normally provided to support one-off or any particular short-term transactions. • Trust Receipt/Importers Loan (Trade Finance) The majority of the businesses in Nepal depend on imported items. Short-Term Trust Receipt Loans are the most common/popular product available to finance such requirement. • Export Loan Export loan facilitates to the exporters to process/collect stocks for exports. b) Consortium Lending Bank of Kathmandu has developed skills in syndicating large project loans and has successfully applied them in tying up a number of large deals. c) Housing Loan Housing Loan is to offer financial support to provide accommodation facilities to individuals. Under the loan product, the loan is offered to purchase of land and construction of the house; purchase of land and readymade house; construction of the house; etc. d) Vehicle Loan The vehicle loans are: i) Car 4U Loan: Car4U Loan is to offer finances for purchase new passenger car / vehicle for private use. ii) Car 4U Refinancing Loan: Car4U Refinancing Loan is to offer finances for purchase used passenger car / vehicle for private use. iii) LCV Loan: LCV Loan that denotes Light Commercial Vehicle is to offer finances for purchase vehicles to be operated on the commercial basis. iv) HCV Loan: HCV Loan that denotes Heavy Commercial Vehicle is to offer finances for purchase vehicles to be operated on the commercial basis. e) Education Loan Under Education Loan, students who aspire to pursue higher education (including technical and professional) are offered financial support for meeting educational expenses throughout. Personal Loan Personal Loan is for financing individuals to meet expenses on social obligations and other personal obligations. The other services are: Locker Services For the persons having valuables like gold, silver, documents etc, BOK provides locker facilities with special code number keys for the safety with ample parking space, strategic location and choice of sizes. Card Services SCT/ VISA/ATM / Debit Cards Remittance The fund can be transferred from one place to another, both domestic and international. This facility is used for import/export trade. The payment and receipt in Nepalese and foreign currency can be performed.
Bills Purchase When exporter receives cheques from the importer, which is to be paid only after the certain time duration, then importer in need of money requests the bank to accept the cheques like security and give him the money. The bank after completion of the time period receives the amount from the importer through cheques. Clearing/Collection BOK provides the services of the inter-banking transaction. Cheques of various other banks are accepted and cleared, as BOK is also the member of the clearinghouse. Trade Finance This department is responsible for opening letter of credit for those people who are involved in trading activities by issuing the letter of credit as an issuing bank to advising bank in case of import and vice-versa for export. The contents required request letter, proforma invoice, packing list, and certificate of origin, insurance, and transport document. Bank Guarantees It is a non-funded facility provided by the bank for its valued clients. There are bank guarantees such as bid bonds, performance bond, advance payment guarantee, custom guarantee, back-to-back letter of credit and credit guarantee. Export Credit This service is provided to the exporter who needs to export goods both at national and international level. Any Branch Banking Service (ABBS) This facility enables customers of BOK to deposit or withdraw money and acquire any information from any branch of BOK. Locker Facility For the persons having valuables like gold, silver, documents etc, BOK provides locker facilities with special code number keys for the safety with ample parking space, strategic location and choice of size. ATM Services The ATM services provided by the bank are cash withdrawal, fast cash, statement or balance inquiry, and pin code change for the customers.
BOK Debit Card A debit card is the most convenient way of making payment of goods, safe and easy to carry, withdraw cash from ATM’s, used within Nepal and India, get the replacement if lost or stolen. It is the card of an international brand. NTC Mobile Bill Payment This facility provided by the bank will be started shortly. It enables Nepal Telecommunication Corporation (NTC) mobile phone owners to make payment through the bank in the following modes. - Full or partial payment by cash. - Full or partial payment by account transfer. E-banking Services This facility provides customers of BOK to view and check their statement of account from any part of the country or the world, request cheque pad. They need not personally approach to the bank. They can also change the password for the means of safety. SMS Banking This facility provides customers of BOK to check their balance of account through their cellular phones. They also get alert messages if any changes occur in their account. BOK Click BOK Click is one of the finest facilities provided by BOK itself. Features of BOK Click: • Can get Pre-Paid Mobile Re-Charge Pin through Bok Click • Transfer of Funds to Anyone Who Can Get Cash Based On Secret Code BOK Click helps through: • Viewing your Account Balance and the status of the account. • Viewing the last 6-month history of your transactions. • Transfer of funds between your own accounts. • Transfer funds from your account to selected beneficiaries • Transfer funds to any account maintained with BOK if you know the account number of your beneficiary. • Pay the bill of your landline telephone or post-paid mobile phones of NT. • Send money to anyone for whom you will be given a secret code that you need to pass on to your beneficiary who then has to go to the nearest branch or the Agent of BOK with the ID for getting cash. • Get the recharge PIN for your pre-paid mobile phones of Nepal Telecom.
CHAPTER FOUR ANALYSIS OF ACTIVITIES DONE AND PROBLEMS SOLVED 4.1 INVOLVEMENT During the internship in Bank of Kathmandu, the internee was assigned in Customer Service Department which helped internee to gain knowledge of that department. “Excellent customer service is the process by which organization delivers its services or products in a way that allows the customer to access them in the most efficient, fair, cost effective, and humanly satisfying and pleasurable manner possible”. Here is the first point to remember: Customer service is a process, not a set of actions that might include greeting the customer, smiling, asking if you can help, etc. Customer service is about how your organization delivers its product or service. The part that salespeople play in the customer service process is taking the customer through the process in order for him or her to receive the product they walked in the door to acquire. . In simple terms, CSD is thought to be the inquiry section of any organization but this thinking is not complete. Of course, CSD performs the inquiry service but it is only a part of its total function. It performs various functions for various customers, which will later be discussed in the next part of this section. CSD is the department which is directly related to image creation and destruction of the organization. Customers perceive any bank as good or bad depending upon the CSD of that bank. So the officer of CSD is the liaison between the bank and the customers of that bank. Efficient functioning of CSD also enhances the efficiency of the other operations of the bank because the management of customers is a very difficult task and if they are managed properly then the other officers can do their work properly without any problems and disturbances. Furthermore, Customer service (also known as Client Service) is the provision of service to customers before, during and after a purchase. Customer service may be provided by a person (e.g., sales and service representative), or by automated means called self-service. Customer service is normally an integral part of a company’s customer value proposition. The customer service process must be transparent. If an organization can practice full disclosure in an obvious way in their product information and their contracts, they are on the way to creating customer loyalty. If the customer experiences your organization as one where they were never surprised and never felt deceived, the organization will create a competitive edge in a world where there is precious little confidence in the customer service process. It is very important to know that a highly satisfied customer stays loyal longer, buys more as the organization introduces a new product, pays less attention to competing brands and is less sensitive to price. Having 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 the success of any organization. 4.2 MAJOR FUNCTIONS CARRIED UNDER CSD Generally we all think that the only function of the customer service department is counseling the customers and fulfilling their queries. But the scope of CSD is not only limited to the customer counseling and fulfilling their queries. It includes various major functions which can be discussed below: • Customer counseling • Account operations • Distribution activities 4.2.1 Customer Counseling Customer counseling is most important functions of customer service department. The efficiency of the customer service department or an organization is the outcome of the quality of the customer counseling that it provides. As shown in the above chart that this department is concerned with counseling the new as well as the existing clients regarding the products and the services provided in this branch. There are various kinds of products and services available in this organization. This department is also responsible for providing detail information regarding these different products and services. Staffs in CSD should have information about the various products of the bank and should have good communicating skills as to answer the queries of the customers correctly, precisely and politely. 4.2.2 Account operation Accounts can be opened in two ways: 1. INDIVIDUAL ACCOUNT Any individual capable of entering into a contract can open accounts with the bank. Lunatics, insolvents, drunkards cannot enter into the contracts. Naturally, they cannot be the account holders. Illiterate person, blind, trustee can open accounts, but special attention should be paid to such accounts. Likewise, bank open accounts in the name of minors but they have to be operated by guardians till “minors turn into “majors”. There are various types of individual accounts such as: • Personal NPR Account, Personal USD Account and can open account in all convertible currencies directed by NRB (For Nepalese and Foreign Citizen) • Joint NPR Account (For Nepalese Citizen) The basic requirements for opening Personal Account: • Fill in the application form • Agree with the terms and conditions of the bank • Sign the specimen cards • Certified True Copy of Identification Document i.e. Citizenship or Passport • Two photographs of account Holder • Introduction by existing account holders In case of Foreign National: • Certified true copy of Passport • Documents should be certified from concerned Embassy • Certified True copy of valid Visa • All documents of personal account for all the joint parties In case of Joint account: • The party who has not filled the regular account opening form must fill up the addendum • No objection for anyone signature form must be filled After ascertaining completion of above said documents, the bank assigns an account number, accepts the deposit in the deposit slip (voucher) and issues a checkbook and card to individual(s). In the case of the illiterate, thumb impression is obtained in the specimen card. Moreover, s/he is required to furnish photograph as well. No checkbook is issued and the account holder is required to visit the bank in person for withdrawal. Terms and conditions should be explained. 2. CORPORATE ACCOUNT There are 4 types of corporate account and documents required for these accounts are as follows: Proprietorship Account: A business firm registered in the name of a person/proprietor is known as the sole proprietorship firm. The proprietor enjoys all the profit and bears all the loss from the operation of the business. • Registration Certificate • PAN Certificate • Citizenship Certificate/Passport Partnership Account: A business firm registered in the name of more than one individual is known as a partnership firm. The proportion of the share of benefit and loss among the partners is mentioned in the partnership deed. • Registration Certificate • Citizenship Certificate/Passport (of partners) • PAN Certificate • Registered Partnership Deed Corporate Account: Companies can be both private limited and public limited. They are called limited because their members are limited to the number of shares they hold in the company. • Registration Certificate • Citizenship Certificate/Passport of Authorized Signatories • PAN Certificate • Memorandum and Articles of Association • Board Resolution Account of Institutions/Association/Societies: Various clubs, social institutions, NGOs, INGOs, projects, different bodies of governments also open accounts with the banks. • Registration Certificate • Citizenship Certificate/Passport (of partners) • PAN Certificate (if applicable) • Constitution and By-Laws • Citizenship/Passport of Authorized Signatories Points to follow while opening Corporate account: • Legal status of the account holder should be examined to open accounts. • Original documents should be checked and a certified copy should be retained. • Any blank space in the “instruction” and “specimen card” column should be crossed. • An account number is to be assigned. • Deposit to be accepted in the deposit slip (voucher) and a copy to be returned to the account holder. For fixed deposit account, just an application form is to be filled out as the account holder must normally have any account maintained with the bank. Bank issues a Fixed Deposit Receipt as a proof of having accepted fixed deposit. Account Closing Procedure: Opening an account is a contract between the bank and the account holder while closing the account is termination of the contract. The account can be closed with mutual consent, with a notice by the account holder with or without assigning any reason, with prior notice by the bank with valid reason and at the instruction of legal authority. Different ways of closing the account have been explained below: 1. at a request of the Customer: If the customer requests for the closure of the account, the bank closes the account after setting off any due to/from the customer. It is the normal practice to receive unused check leaves and cards and other facilities from the account holders. 2. At the initiative of bank: The bank can close the account with a prior notice to the account holder assigning a valid reason. Bank blocks the operation in the account under following circumstances: o In the case of a valid notice of lunacy or death of the account holder. o In the event of insolvency/liquidation, the credit balance should be transferred to the official assignee. o In the case of receipt of assignment, the letter issued to the third party by the account holder. o In case of the letter received from judicial authority or NRB A fixed deposit account is automatically closed once the deposit matures. Interest is transferred to nominee accounts directly while the principal is transferred on submission of original fixed deposit receipt. Points to ensure while closing the account: • Account closure request has been signed by the authorized signatory (ies). • Any due to/from the customer has been set off. • Cards (Credit, Debit, Smart, etc) and unused check leaves are received from the customers and shredded. • The reason for account closing is received. • To the extent possible, authorized signatory (ies) should be asked to visit the bank in person. 4.2.3 Distribution Activities Statement Print: One of the major works done in CSD is to print the statement for customers. Customers are required to fill the inquiry form which contains the Name, Account number, date and authorized signature of the customer in order to get the bank balance statement. Bank balance statement shows the amount deposited and withdrawn by the customers. Bank normally provides the statement paper free of cost for six months.. Customers usually wish to take the monthly statement. Benefits of Statement: • To help customer know about the use of the fund in a chronological manner. • To act as an evidence if any discrepancy occurs in the transaction. • To assist customers in knowing a different kind of charges charged by the bank. Provided Balance Certificate Balance certificate is also issued through CSD. Balance certificate is issued by the bank to the customers in order to certify the balance maintained in the account of customers. Balance certificate act as a proof that the concerned customers have the mentioned balance in his/her account. Balance certificate is specially issued by the individual customer’s in order to present as evidence to the Embassy if they are trying to go abroad.BOK provides the balance certificate along with six months statement at a charge of Rs.500. Issuance of Check Book Today cheque works as closely as paper money. It can be taken from one place to another easily. Most of the commercial banks, development banks, financial institutions and the co-operative accept cheque of each other easily. The cheque is issued to the customer after he/she opened the account in the bank as per his/her request. The number of cheques issued to the customer according to the customers’ requirement. If the customer requested for new cheque book for the second time s/he should fill the requisition form which is placed at the end of the checkbook. Before receiving the checkbook, the account holder should sign in cheque register and requisition slip. Then account holder’s signature is verified by FINACLE system and when signature matches s/he gets the new cheque book. In case if requisition slip is loosed, the account holder should pay the extra charge of Rs 300 to get the new cheque book and the charge is debited from the customer account. If the customer does not have either cheque or ATM card for withdrawing money in the time of need, the bank provides withdrawal slip and the extra charge of RS 25 is charged to the customer. 4.3 FELT OBSERVED GAP: Knowledge gained from the academic courses seemed to be totally different in practice. Although there is the huge gap between theory and practice, the concept of the theory is essential in the workplace. Literature is the base to perform any task in the working environment. SocioCultural factors, the interpersonal relationship seems to be simple in theory but in the practice maintaining the interpersonal relationship and mixing with society is a crucial task. Dealing with various kinds of customers effectively can be sharpening through the practice. Depth knowledge from the book about customer relationship cannot be as effective as that in practice. Whenever internee learn something through the help of books, get a mental picture as to what should be, but after the completion of the internship the internee found out that the textbooks and the real world situation are two completely different matters because what was learnt in the textbooks are not updated from time to time whereas in the real world one has to be updated in order to compete and get success. 4.4 PROBLEMS SOLVED: CSD and problems are not- detachable terms. One of the main functions of CSD is to solve the problems. During the internship period, the following problems were solved. • Problems related to the wrong information and incomplete information: Most of the customers had to face the problems due to the wrong information provided by other customers or due to the incomplete information. So, the major responsibility of the CSD officer is to handle those customers and solve their problem by either providing the factual information or by providing the complete information as per their peculiarity of the case. • Problems related to the malfunctioning of the ATM Machines: Another problem that the CSD officer should face daily is to manage the angry customer who had to face problems due to malfunctioning of the ATM machine. The CSD officer clarifies the actual scenario and apologizes if it is due to the fault of the machine otherwise pointed out the fault of the customer. • Problems related to the non-clarity of information: Sometimes, the customers misunderstood the unclear information and the CSD officer is responsible to clarify the information to the customer. • Problem-related to the change of rules and regulations: The rules related to the operation of the banks, the interest rates, the charges are revised time to time to cope with the dynamic environment but the customers don’t easily accept the change. Hence the CSD officer should inform the customer about the change, its need and relevance to the organization which is really a hard and tedious job to perform. • Problems related to the service provided and mistakes done by the other employees: “To err is human”, so, sometimes the other employees commit mistakes and make the customer dissatisfied. In that situation, the CSD officer handles the grievances of the customers. • Problems related to the mistakes due to the error in the system: Sometimes due to various reasons, the customer’s account would be debited twice for the same charge or something similar to this occurs. Also, sometimes the ATM Machine doesn’t provide the cash but the account is debited. This and other these kinds of system errors makes the customer dissatisfied and hence the dissatisfied customer arrives at the CSD and this kind of problems are to be handled by the CSD officer. • Problems related to the nonfunctioning of various services: Particularly in BOK, the CSD officer should face difficult situation due to the malfunctioning of the SMS services as well as the E- Banking Services. • Problems related to the misunderstanding of the customers: Sometimes the customers aren’t fully aware of the services and products and their features and they misinterpret the bank. The expectation of customer sometimes makes the customer unhappy and the customer starts perceiving the bank in a negative way so the CSD officer should solve that kind of situation and prevent the bank from losing its customers.
CHAPTER FIVE CONCLUSION AND LESSON LEARNT 5.1 Conclusion BOK does not only provides product and services but even aims at total customer satisfaction by rendering efficient and diversified financial services through improved technology As a result, BOK today is found to be one of the leading commercial bank of Nepal providing the full range of commercial banking services through its establish 45 branches across Nepal and numerous of ATM terminals and even with branchless banking facilities in remote areas which lacks its branches and ATM terminals. The reason behind its success can also be predicted as a result of new technologies and userfriendly banking software (finacle software) is being used by the bank. As a conclusion, it can be said that BOK is marching on the path of success by running in profits as well as providing different services and features to its clients and even seems successful in creating a goodwill and image in the minds of its customers through the services provided. Internee wants to conclude that Bok is excellent in terms of their services despite with some pros and cons with the issue related to customer satisfaction. It can perform better in future by updating its working style and strategy and also by regulating its drawbacks, overcoming their weakness and doing their best to retain quality services. 5.2 Experiences and Lesson Learnt The most important lesson that the internee learnt during the internship period is how to perform various tasks in an organization, to cope up with the real working environment. Besides this, it provided internee a great opportunity to work with the staff of the Bank OF Kathmandu who helped internee to increase practical learning experience and provided a platform to show the ability to perform the job, the importance of the time management and the need of good communication skills. In internship durations internee was assigned in customer service department of BOK where lot of real life working experience were learnt which can be briefed as: Internee was able to learn about general banking transaction and its operation. Learnt various qualities required for being a crucial part of an office team such as sincerity, punctuality, and confidentiality and working under pressure. The importance of a friendly environment that makes working place even better and enjoyable giving all the members an opportunity to know each other and share the ideas they might have despite a hierarchy. Learned about the behavioral skills while dealing with customers as well as middle and lower level managers. And various process and procedures learned during real working hours can be outlined as: Got an idea of using office machines as photocopy, printer, fax, scanner etc. Learnt to check and verify documents manually and technically by using finale banking software. Procedures of a/c opening, a/c closing and a/c transfer for individuals, firms, and institutions and about the documents required for each. Handling with cheque books and a/c statements printing and distributions. The internship program at BOK really provided internee an opportunity to know and observe the working system, network layout, functions of various departments and a lot which were possible only due to friendly working environments and associated employees.
web search