Kumari Bank Internship Report 406y52

AN INTERNSHIP REPORT ON KUMARI BANK LIMITED

SUBMITTED BY: Gautam Bhatta Symbol No: 14030623 P.U. Registration Number: 2013-2-03-1781 Kailash Budhair Symbol No: 1403029 P.U. Registration Number: 2013-2-03-1787

A Internship Report Submitted To National Academy Of Science and Technology

Submitted for degree of Bachelor of Business istration (B.B.A) Dhangadhi, Kailali June, 2017

ACKNOWLEDGEMENT An internship report entitle "AN INTERNSHIP REPORT ON KUMARI BANK LIMITED" has been as a prerequisite for the Bachelor Degree in Business istration of Dhangadhi University. This report has highly helped me to expand my knowledge on banking sectors and other activities related to banking system of Nepal. I am indebted to my college National Academy of Science And Technology for the great opportunity to experience this type of practical and necessary work which is very beneficial in my future career. I would like to express my deep gratitude to all those who assisted with their valuable suggestions and numerous ideas with valuable time while preparing the project. We would like to extend our gratitude to Mr. Khagendra Saud Branch manager of Kumari Bank Limited. We are also grateful to all staffs-Mrs. Sunita Bhatta, Mr. Dharmanand Bhatt, Mr. Govind Paneru and Mr. Sher Bahadur Saud for their valuable cooperation, guidance, direction, and continuous throughout the internship period. I would like to express my sincere thanks to HOD of management faculty Mr. Prem Raj Joshi and Mr. Megh Raj Upadhyay lecturer of National Academy of Science And Technology and the entire faculty who have come across me from the initial stage of my project work to the complete execution of my project work. Date: 2017/06/13 Kailash Budhair Gautam Bhatta

National Academy Of Science and Technology

TABLE OF CONTENTS Chapter

Page No.

Chapter I Organization Profile 1.1. Introduction

1

1.2. Background of the organization

1

1.3. Organization’s mission and objectives

2

1.4. Major markets and customers

4

1.5. Product and Services

4

1.5.1. Products of Kumari Bank Ltd

4

1.5.2. Services of Kumari Bank Ltd

8

1.6. Organizational design and structure 1.7. Financial structure 1.7.1. Ownership structure 1.8. Organizational performance

11 12 13 14

Chapter II Job Profile and Activities Performed 2.1. 2.2. 2.3.

Activities performed in the organization Problem solved Intern’s key observation

16 19 19

Chapter III Lesson learnt and 3.1. 3.2. 3.3.

Key skills and attitude learnt to the Organization to the College/University

21 21 22

REFERENCES

23

Declaration

This internship project report entitled "An Internship Report On Everest Bank Limited" which is submitted by us in partial fulfillment of the requirement for the award of BBA degree of Pokhara University comprises only our original work and due acknowledgement have been made to materials used in the report. Signature………….. . Gautam Bhatta

Signature................... Kailash Budhair June, 2017

BONAFIDE CERTIFICATE It is certified that this internship project report entitled “An Internship Report On Kumari Bank Limited” is the Bonafide work of Gautam Bhatta & Kailash Budhair who carried out the project under my supervision. This report is forwarded for examination.

……………………….. Mr. Megh Raj Upadhyay Supervisor

............................... HOD: Prem Raj Joshi Head of Department, BBA

LIST OF TABLES Tables

Page No.

Table 1: Branches of KBL Table 2: Products of KBL Table 3: Saving deposit of KBL Table 4: Loan of KBL Table 5: Board of Directors Table 6: Management committee Table 7: Core Capital and its components Table 8: Supplementary Capital and its components Table 9: Total Qualifying Capital Table 10: NRB policy of Kumari bank (8 Arab) Table 11: Ownership Structure of Kumari Bank Limited Table 12: Financial Achievements of Kumari Bank Limited

LIST OF FIGURES Figures

Page No.

Fig 1: Organizational Structure of Kumari Bank Ltd Fig 2: Shareholding composition

ABBREVIATION

ABBS

: Any Branch Banking Service

ASBA

: Applications ed by Blocked Amount

ATM

: Automatic Teller Machine

BOD

: Board of Directors

CSD

: Customer Service Department

ECC

: Electronic Cheque Clearing

KBL

: Kumari Bank Limited

KYC

: Know Your Customer

NRB

: Nepal Rastra Bank

NTC

: Nepal Telecom

PUK

: Personal Unlocking Key

POS

: Point of Sale

SCT

: Smart Choice Technology

SMS

: Short Message Service

SWIFT

: Society for Worldwide Interbank Financial Telecommunication

CHAPTER I ORGANIZATION PROFILE 1.1

About Kumari Bank Limited

Kumari Bank Limited, came into existence as the fifteenth commercial bank of Nepal by starting its banking operations from Chaitra 21, 2057 B.S (April 03, 2001) with an objective of providing competitive and modern banking services in the Nepalese financial market. The bank has paid up capital of Rs. 2,699,166,532 of which 51% is contributed from promoters and remaining from public. Kumari Bank Ltd has been providing wide - range of modern banking services through 37 points of representations located in various urban and semi urban part of the country, 25 outside and 12 inside the valley. The bank is pioneer in providing some of the latest / lucrative banking services like E-Banking and SMS Banking services in Nepal. The bank always focus on building sound technology driven trainee system to cater the changing needs of the customers that enhance high comfort and value. The adoption of modern Globus Software, developed by Temenos NV, Switzerland and arrangement of centralized data base system enables customer to make highly secured transactions in any branch regardless of having with particular branch. Similarly the bank has been providing 365 days banking facilities, extended banking hours till 7 PM in the evening, Utility Bill Payment Services, Inward and Outward Remittance services, Online remit Services and various other banking services. Visa Electron Debit Card, which is accessible in entire VISA linked ATMs (including 47 own ATMs) and POS (Point of Sale) terminals both in Nepal and India, has also added convenience to the customers. The bank has been able to get recognition as an innovative and fast growing institution striving to enhance customer value and satisfaction by backing transparent business practice, professional management, corporate governance and total quality management as the organizational mission.

1.2

Organization`s Missions, Visions and Objectives

Visions

Kumari Bank vision is to be the preferred financial partner to our customers, a center of career growth to our employees, and to maximize our shareholders’ value, while contributing to our nation’s financial sector and to its economic welfare. Missions Kumari Bank mission is to deliver innovative products and services to our customers, use these innovative products to achieve financial inclusion, and do so by exemplifying good corporate governance, proactive risk management practices, and superior corporate social responsibility.

Objectives The core values or the objectives of the organization mainly are to meet customer satisfaction through easy and quality service and others are mentioned below:  Bringing innovations and customization to meet customer need and to     

hold quality of service. Provide secured future for its internal employees. Attractive return to its investors. Lower rates for loan clients. Upholding honesty and sincerity Engaged in various social activities fulfilling corporate social responsibilities.

 Strengthen the market shares.

1.3

Major markets and customers

KUMARI Bank Limited (KBL) with a slogan of “SABAI KA LAGI SADHAI KA LAGI” expands its services in Dhangadhi. It has been operating its business in many places of Nepal since sixteen years. Its major market is viewed to be every nook and corner of the country so it is extending further more branches in the various cities in

the near future. The various branches recently in operation by the branch managers are: provides customer-friendly services through its Branch Network and all it's the branches are connected through Anywhere Branch Banking System (ABBS), which enables customers for operational transactions from any branches. Table 1.3.1: Number of customer different a\c in the bank

S. No. 1 2 3 4 5

Name of s

Total no. of customers

Saving Current Others ATM cards holder Credit cards holder

3000 600 400 1556 0

Source: CSD, KBL, Dhangadhi Branch

1.4

Products and Services

As a pioneer in introducing many innovative products and marketing concepts in the domestic banking sector it represents a milestone in the banking history of Nepal with customer satisfaction considered as focus objective while doing business.

1.4.1 Products of KBL

Kumari Big Savings Khata Kumari Big Savings Khata as the name suggests, provides higher rate of interest amongst the saving category product & additional banking benefits. It is the saving which provides higher rate of return and value added banking services to the saving holders. Opening:  Minimum balance of NPR. 10,000 Key benefits :  Privileged service 

Statement - FREE



Cheque book- FREE (upon request)



VISA Debit Card valid in Nepal and India



Mobile Banking facility/ SMS alert notification



Internet Banking facility



NTC and NCELL postpaid, ADSL, PSTN bill payment service from KBL Counters, Kumari Mobile Banking and Internet Banking

 365 Days banking and extended banking hours

 Home loan/ Auto loan/ Education loan processing fees at a concessional rate.

Kumari Smart Bachat Khata Kumari Smart Bachat Khata offers opening facility at zero balance. We believe in providing banking access to all hence, this is a very suitable for everyone. Besides the facility to open in zero balance, the holders are offered various banking facilities Opening:  Minimum balance of ZERO. Features:  Unlimited Withdrawal  Statement - Free  Cheque book - FREE but upon request  VISA Debit Card valid in Nepal and India  Mobile Banking facility  Internet Banking facility  NTC and NCELL postpaid, ADSL, PSTN bill pyament service from KBL Counters, Kumari Mobile Banking and Internet Banking  Locker Facility  Evening Counter, 365 Days Banking  Telephone/ Mobile Bill Payment service  Home loan/ Auto loan/ Education loan processing fees at a concessional rate.

Kumari Savings Kumari Savings is a special saving that beholds the corporate name after “Living Goddess Kumari”. The customers can avail various value added banking services in this . A/C Opening:  Minimum balance of Rs. 5,000.00 or above Features:  Internet Banking  Special consideration in Consumer Loan processing fee  Monthly Statements  VISA Debit Card valid in Nepal and India. 50 Plus Savings As the name suggests, this saving is targeted to all the individuals of 50 years and above. Interest rate is calculated on daily balance and provided on quarterly basis. There are attractive features associated with this like 25% discount on locker, ATM debit card, Internet/ Mobile banking facilities, etc. Opening:  Minimum balance of 1,000.0 Features :  Quarterly Interest Payable  Internet/ Mobile Banking Facility

 25% discount on Locker Charge  No restrictions on deposit or withdrawal  VISA Debit Card valid in Nepal and India & Conditions :  Individuals above the age of 50 will only be eligible  Interest will be payable on daily balance  Locker facility is provided as per availability on "First Come - First Serve" basis

Subha Laxmi Saving This saving is especially designed for the women of 16 years and above. Attractive interest rate on daily balance is provided to encourage saving habit. Besides, other features like 50% discount in locker, ATM debit card, accidental death insurance and internet/ mobile banking facilities are also offered to the customers. A/C Opening:  Minimum balance of Rs. 1,000.00 Features:  Quarterly Interest Payable  VISA Debit Card valid in Nepal and India  50% discount on Locker  Free Accidental death insurance up to NPR. 100,000.00 per year  Internet / Mobile Banking facility and Conditions:  Interest will be paid on daily balance  The locker facility will be provided as per availability on "First Come - First Serve" basis  A minimum balance of NPR. 100,000.00 must be maintained to be eligible for the accidental death insurance, locker and consumer loan facilities  The accidental death insurance will be applicable as per the insurance policy guideline

Twinkle Star Saving Twinkle Star Savings is a saving targeted to the children 16 years and below. This is an ideal for children to instill saving habit from a very young age. holders are offered interest on daily balance. Children receive special gifts at the time of opening with Kumari Bank and are eligible for special discounts on education loan as per the bank’s rule. A/C Opening:  Minimum balance of Rs.1,000.00 Features:  Quarterly Interest Payable  Cheque book and Statement - Free  VISA Debit Card valid in Nepal and India  Mobile Banking facility  Internet Banking facility  Evening Counter, 365 Days Banking  NTC and NCELL postpaid, ADSL, PSTN bill payment service from KBL Counters, Kumari Mobile Banking and Internet Banking  Special consideration in Education Loan processing fees after the age of 18  No restrictions on deposit and withdrawal & Conditions:  Interest will be accrued on daily balance

 Children under the age of 16 are only eligible  holder will be qualified for special Education Loan only after the age of 18

Kumari Remit Bachat Khata Kumari Remit Bachat Khata is a saving deposit product targeted to the migrant workers and their relatives. It is a service via which the holders can send their hard earned money in a safe and secured way in their and also send payment request to the bank for the payment of fund to the beneficiary (his/ her relative) against ID details. A/c Opening:  Minimum balance of Zero. Features:  Statement - No Charge  No Ledger Fees  VISA Debit Card valid in Nepal and India  Internet Banking service fee as per STC  Mobile Banking service fee as per STC  Anywhere Branch Banking Service: Free  Evening Counter - Available at Main Branch, New Road, Gongabu and Butwal branches  365 Days Banking  Balance Certificate - Eligible for 25% discount on standard bank charges  Home loan/ Education loan/ Auto loan/ Personal loan - 50% Discount on Processing fee or as decided by the management from time to time.

Kumari Flexi-Fix Scheme This deposit is not available on Dhangadhi branch .Kumari Flexi-Fix Scheme is specially designed based on hybrid concept of flexi-fix mechanism to attract retail deposits. The customer will be able to receive facilities of a saving deposit type and earn interest similar to that of fixed deposit type. The scheme is based on “standing order” whereby a condition is applied for those applying for the scheme. The product carries special features such as: Key Benefits:  Facility of saving and interest rate of Fixed Deposit and Conditions:  Rate of Interest and Minimum balance in Saving : At par with respective Savings .  Rate of Interest in Fixed Deposit will be published by the bank on floating basis.  A sum of stipulated amount needs to be available at all times in saving as well as Fixed Deposit .  If the available balance falls short of required amount in saving , fund will sweep from Fixed Deposit but only in excess of the stipulated fixed amount in the fixed deposit.  Similarly, any excess fund from saving above the available balance will sweep to fixed deposit at a higher rate.  The amount in saving can be withdrawn through cheque or ATM however, if the amount goes below the stipulated balance in saving then ATM service may not be available.  Upon FD maturity, the balance will get transferred in saving which can be renewed upon request from the customer.  The scheme is time bounded and can be renewed upon customer’s request.  The interest capitalized in FD to be credited in saving .  closing charge in saving to be at par with Standard Tariff and Charges as published by the bank and Fixed Deposit (Flexi-Fix Scheme) closing charge to be as per bank’s rules.

 Rate of Interest is market driven and hence subject to change. Kumari Swastha Jeevan Bachat Khata Kumari Swastha Jeevan Bachat Khata (KSJBK) is a saving deposit product being introduced to promote ‘saving habit’ and ‘good health’ amongst the people. This product is being introduced with value addition of medical benefits along with modern banking services for a differentiation.

A/c Opening:  Minimum Balance of NPR 5,000.00 only. Key Benefits:  Privileged co-branded card  Medical Insurance coverage up to NPR 10,000.00 to Swastha Jeevan holders only  Cheque book – Free  statement – Free  Free Internet Banking service  50% discount in KBL Mobile banking and SMS alert facility  Anywhere Branch Banking Service – Free  Balance Certificate – Free for 1 time  50% discount in Locker margin  25% discount in Locker annual charge  No closure charges  Evening Counter/ Holiday banking  365 Days Banking  General services of the Bank  Concessional rate of interest in consumer loans (Personal/ Home/ Auto) as decided by the authority at the time of loan application  Discounted rate on consumer loan istrative fees (Personal/ Home/ Auto) as decided by the authority at the time of loan application. Medanta Shall:

 Offer flat discount of 5% on the actual sum spent on medical services made available to KBL customers in the case where payment is made by co-branded ATM card on POS machines. The discount is not available on cash payment. 15% waiver on to Nepalese Patients. Tie-up with Local Hospitals: Recently, the Bank has tie-up with different local hospitals, namely:  Norvic International Hospital Pvt.Ltd.  Vayodha Hospital Pvt. Ltd.  Grande International Hospital Pvt. Ltd.  Chirayu National Hospital & Medical Institute Pvt. Ltd.  Alka Hospital Pvt. Ltd.  K - Lab (Krown Laboratory & Referral Center)  Vivanta Dental Pvt. Ltd. Kumari Salary Saving Kumari Salary Saving (KSSA) is a saving product specially designed for individuals with regular income (salaried people). The product focuses on making the product hassle free, easy, affordable and yet benefiting individual KSS holder NPR High interest rate and attractive banking service package are the key benefits provided in this product. Opening:  Minimum balance of NPR. 1,000.00 (in case of Check book) Features:  s can be opened with ZERO balance. However, to avail check books the KSS holders shall agree to maintain minimum balance of NPR. 1,000 (for checking facilities).  Cheque book - FREE  statement - FREE  FREE Internet Banking service  50% discount in KBL Mobile banking and SMS alert facility  Anywhere Branch Banking Service – FREE  Balance Certificate – FREE for 1 time  50% discount in Locker margin  25% discount in Locker annual charge

 No closure charges  Evening Counter/ Holiday banking  365 Days Banking  Concessional rate of interest in consumer loans (Personal/ Home/ Auto) as decided by the authority at the time of loan application  Discounted rate on consumer loan istrative fees (Personal/ Home/ Auto) as decided by the authority at the time of loan

Table 1.4.2 Saving Deposit of KBL Saving Deposit (% per annum) FCY Saving Kumari Smart Bachat Khata Kumari Swastha Jevan Bachat Khata Kumari Savings Kumari Salary Saving Kumari Big Saving Khata Kumara Remit Bachat Khata

Interest Rates (%) Up To 1.5 6.10 7.00 6.10 6.10 6.50 6.10

Subha Laxmi Bachat Shareholders Saving Twinkle Star Saving 50 Plus Saving

6.10 6.10 6.10 6.10

Source:www.kumaribank.com

Loans The need for financing various short term and long term venture of both corporate and retail clients has been best fulfilled by the bank with its large loan product portfolio. The various kinds of loans provided by the bank are:

Short Term Loan KBL finance capital expenditures of Small / Medium / Large-scale companies in the form of Term Loan for periods less than 1 year. Hire Purchase Loan Purchase of office equipment, vehicles, machinery etc is possible through our Hire Purchase Schemes.  Vehicle Loan: KBL finance up to 80% of the cost of the vehicle that is new or will be less than 7 years old at the time of final maturity of the loan. KBL need is proof of income and/or reference/guarantee from customer employer/individual acceptable to us. Depending on customer income and the car customer choose to buy, a loan of NPR 300,000.00 to NPR 5,000,000.00 can be availed of at a very competitive rate of interest. Repayments are calculated on an Equal Monthly Installment (EMI) basis that goes easy on customer monthly budget. And the tenor is kept flexible to suit customer need: customer can take a minimum of 12 months or a maximum of 60 months to repay. Customer also has an option of prepaying loan and all customers will be charged is a low 1% on the outstanding amount. So, if customer are 25 years (or more) of age or have been in business for at

least 2 years, can go to nearest office and get an auto loan approved for a nominal processing fee. KBL guarantee a decision on customer application within 48 hours of receipt of customer completed application.KBL credit & marketing officers will be pleased to provide further information

& Conditions Registration of the vehicle will be in the Bank's name Bank reserves the right to call for additional ed Mortgage over land and / or building. First Repayment Date is from the subsequent month of initial drawdown Repayment is to be made in Equal Monthly Installments (Interest + Borrowings) which will not exceed 50% of the borrowers monthly earnings.

 Home Loan: KBL finance up to 60% of the cost of the purchase/construction/renovation of land/house within municipal boundaries. All KBL need is proof of customer income and/or reference/guarantee from customer employer/individual acceptable to KBL. Depending on customer income and customer need, a loan of NPR 500,000.00 to NPR 4,000,000.00 can be availed of at a very competitive rate of interest. Repayments are calculated on an Equal Monthly Installment (EMI) basis that goes easy on customer monthly budget. And the tenor is kept flexible to suit customer need: customer can take a minimum of 12 months or a maximum of 120 months to repay. customer also have an option of prepaying customer loan and all you will be charged is a low 1% on the outstanding amount. KBL guarantee a decision on customer application within 48 hours of receipt of customer completed application.KBL credit & marketing officers will be pleased to provide further information.

& Conditions  Property being mortgaged should be located within municipal boundaries of Kathmandu Valley and in other residential / commercial sector of developing areas within 40 KMs from the heart of Kathmandu (Hanuman Dhoka) like Godavari, Nagarkot, Bhaktapur, Dhulikhel, Kakani etc and must have motorable access.  As security, the Bank shall have the First Legal Mortgage on freehold property (land + building) valued by Bank's approved value with extended value (Distress value as valued by the Bank's value) not less than the 100% of financed amount.  Bank reserves the right to call for additional ed Mortgage over land and / or building.  First drawdown is allowed only after injection of investment portion of the Borrowers is confirmed and subsequent drawdown is in phase-wise manner upon receipt of application from the Borrowers with details of estimated costs and confirmation of the Bank's value of utilization of previously drawn amount.  First Repayment Date is from the subsequent month of initial drawdown in case of ready built houses / refinance of owned houses while a moratorium period of six months will be provided in case of construction / renovation or expansion.  Repayment is to be made in Equal Monthly Installments (Interest + Borrowings) which will not exceed 50% of the borrowers’ net monthly earnings. Monthly net savings in case of Self-employed individuals must be 5 times of EMI.  Property being mortgaged should be insured against fire, earthquake, flood etc with a banker's clause.

 Consumer Product Financing: KBL help finance a range of consumer durables and household equipments like televisions, furniture, personal computers, music systems, air conditioner, microwave ovens, refrigerator, washing machines, etc. KBL finance up to 70% of the cost of a range of consumer products. KBL need is proof of consumer income and/or reference/guarantee from customer employer/individual acceptable to KBL. And the tenor is kept flexible to suit customer need: customer can take 12 to 24 months to repay. Customer also has an option of prepaying customer loan and all customers will be charged is a low 1% on the outstanding amount.KBL credit & marketing officers will be pleased to provide further information.

& Conditions  Monthly net savings in case of self-employed individuals must be 5 times of EMI.  Repayment period not to exceed Borrower’s balance / tenor of service up to retirement in case of Employees / Salaried Employees  As security, Hypothecation of assets financed in bank's name is needed and personal guarantee of employer in case of salaried individuals.  Assets being hypothecated should be insured against theft, fire, earthquake, flood etc with a banker's clause.  Repayment is to be made in Equal Monthly Installments (interest + principal) not to exceed 75% of borrowers’ net income in case Salaried / Self Employed Individuals.  A processing fee of 1% will be charged on the Financed Amount.

 Education Loan: KBL finance up to 60% of the cost of tuition and ission. All KBL need is proof of customer income and/or reference/guarantee from customer employer/individual acceptable to KBL.

Depending on customer income and customer need, a loan of NPR 150,000.00 to NPR 800,000.00 can be availed of at a very competitive rate of interest. Repayments are calculated on an Equal Monthly Installment (EMI) basis that goes easy on customer monthly budget. And the tenor is kept flexible to suit customer need: customer can take a minimum of 12 months or a maximum of 60 months to repay. customer also have an option of prepaying customer loan and all you will be charged is a low 1% on the outstanding amount.KBL credit & marketing officers will be pleased to provide further information. & Conditions  ed Mortgage over land and building within municipal boundaries.  Property being mortgaged should be located within municipal boundaries and must have a motor able access.  Monthly net savings in case of self-employed individuals must be 5 times of EMI.  Repayment period not to exceed Borrower’s balance / tenor of service upto retirement in case of Employees / Salaried Employees  Repayment is to be made in Equal Monthly Installments (interest + principal) not to exceed 75% of borrowers’ net income in case Salaried / Self Employed Individuals.  A processing fee of 1% will be charged on the Financed Amount. Travel Loan: This service of Kumari bank is not available in Dhangadhi Branch.KBL finance up to 70% of the cost of ticket and tour expenses. All KBL need is proof of customer income and/or reference/guarantee from customer employer/individual acceptable to us. Depending on customer income and customer need, a loan of NPR 50,000.00 to NPR 300,000.00 can be availed of at a very competitive rate of interest. Repayments are calculated on an Equal Monthly Installment (EMI) basis that goes easy on customer monthly budget. Customers can repay the loan over a period of 12 months. Customers also have an option of prepaying customer loan and all Customers will be charged is a low 1% on the outstanding amount. So, if Customers are 25 years (or more) of age or have been in business for at least 2 years and are looking for options for traveling, walk in to

KBL nearest office and get a travel loan approved for a nominal processing fee. KBL guarantee a decision on customer application within 48 hours of receipt of customer completed application.KBL credit & marketing officers will be pleased to provide further information. & Conditions  Corporate Guarantee of business houses in case of business executives.  Monthly net savings in case of self-employed individuals must be 5 times of EMI.  Repayment period not to exceed borrower’s balance / tenor of service up to retirement in case of Employees / Salaried Employees  Repayment is to be made in Equal Monthly Installments (interest + principal) not to exceed 75% of borrowers’ net income in case Salaried / Self Employed Individuals.  A processing fee of 1% will be charged on the Financed Amount

Loan Syndication This service is not available in Dhangadhi branch. If customer credit need is a large one, KBL arrange Loan Syndication by involving other banks with which KBL have working relationships. Table 1.4.3: Loan provision of KBL LENDING (% Per annum)

Interest Rates LENDING (% Per annu

Term Loan

Corporate/Multinational

10.00-13.00

Industry/Trading 9.00-11.00 Corporate/Multinational

11.00-14.00

Export Credit Overdraft Deprived Sector

Industry/ Trading Wholesale Lending Direct Lending

9.00-12.00 10.00-14.00 3.00-11.00 10.00-14.00

Education Loan Auto Loan Loan Against Deposit of KBL

1.4.4

11.00-14.00 10.00-14.00 FD Rate + 2% Minimum 12% Source: www.kumaribank.com

Services of KBL

“Need centered products are the KBL product” is basic business philosophy. The bank has been continuously identifying customer changing needs and preferences, deg and offering need centered augmented product and services that has met or even exceeded customer’s expectation. The innovative products of the bank has not only added extra value and provided high level of satisfaction to the customers but also produced desire on customer to be associated with the bank’s future innovation. The bank perceives product differentiation and service excellence as an opportunity to prove superior to competitors, and has been successful in the past and is the source of inspiration to go ahead.

 Cash Withdrawal  Mini Transaction Report  Mini Statement Prints

 Balance Enquiry  Payment for purchase of goods/ services at the merchant locations (through POS)  Personal Identification Number (PIN) change Kumari Internet Banking The first ever commercial bank in the country to provide 'Internet Banking service" to its customers. This service has allowed the bank to streamline the services it offers to customers. It allows customers the flexibility to take control of banking activities via the internet. Further it has enabled core customers to transact with us from any corner of the world and made their job simpler.  Access Customers s, 24 hours a day, 7 days a week  Transfer funds within a group  Make payment of Nepal Telecom bills  Online shopping

Kumari SMS Banking Kumari bank is the first bank in the history of Nepal to start a mobile banking service. The bank has facilitated this service to customers with the sole objective of being an additional channel with a crucial role of responding to their inquiries and transactional information via SMS messaging. Annual service charge for Kumari Mobile Banking: Rs. 250.00 per year per / mobile number. The service will be renewed automatically every year.  Balance Enquiry  Transaction notification  Foreign Exchange Rate Enquiry  Statement Request Inward Remittance

Remittance is one of the major incomes generating service of banks. Remittance service of the bank is beneficial both to the business and personal customers as it make the transfer of money easier. It covers large percentage of its national income. It facilitates the sending and receiving funds to/from various places. It can also promote access to financial services for the sender and beneficiary increasing financial and social inclusion. Kumari Bank offers number of remittance products to furnish the customer need for transferring their money in and out of the country through:  Kumari Remit  Prabhu Money Transfer  Himal Remit  Prithivi Remit  City Express Money Transfer  Reliable Development Remit  IME Remit  Money Gram

Any Branch Banking Services (ABBS) Kumari Bank has Any Branch Banking System to facilitate its customers to have easy transaction. As KBL, for the solutions of endless long procedure, rush hour traffic, long queues, risk of carrying huge sums of money to the bank, wanted to take out money from Customers but to make the service more reliable bank introduced the convenient service. The customers can withdraw or deposit cash, receive information about the balance of their or obtain a statements of s is convenient from any branch. The network is online and one can have access to his/her from any of the branches of the bank.

Source: www.kumaribank.com Foreign Currency Transaction Kumari has been providing following Foreign Currency Transaction  Foreign Currency Deposits  Current  Saving  Fixed Deposit  Cash Sale/ Purchase  SWIFT / Telegraphic Transfer  Cross Currency Transaction

Kumari Utility Payment  NTC Post-Paid Payment  NTC PSTN Payment  ADSL Payment Customer can make a payment to Nepal Telecom for NTC Post-paid payment and can make a payment by filling a deposit receipt form and deposit the amount in any of the branch counters. This service is charged only with Rs.250 per year. ATM/Debit Cards

KBL Debit Card allows holders to withdraw cash, inquire balances and make payments through a wide network ATMs and merchant outlets of VISA in Nepal and India. Types of ATM Debit Visa Electron Card Credit Card

Number OF Cards 2500 0

Source: www.kumaribank.com

1.5 Organizational Design and Structure This is organizational structure of Kumari Bank Limited, Dhangadhi Branch. Branch manager is head of the organization. He supervises the employees and takes major decision. Credit head deals with the loan customers and do documentation. The ready file is signed by credit officer & branch manager and send to the head office for the approval. Operation department includes CSD and Teller department. CSD department deals with the customers perform task of cheque clearing, remittance etc. Teller department helps customer to deposit and withdraw cash from bank. Operation head control and supervise CSD and Teller staffs of the organization. Since it is branch office, all the staffs work with cooperation helping each other.

Figure 1.5.1 : Organizational Structure of KBL (Dhangadhi Branch)

Table 1.5.2: Board of Directors

1

Board of Directors

Designation

Mr. Santosh Kumar Lam

Chairman (Promoter Group)

Dr. Shobha Kant Dhakal

Director (Promoter Group)

Mr. Naresh Dugar

Director (Promoter Group)

Mr. Binod Dabadi

Director (Promoter Group)

Mr. Uttam Prasad Bhattarai

Director (Promoter Group)

Mr. Puna Ram Bhandari

Director (Public Group)

. 2 . 3 . 4 . 5 . 6 . Source: www.kumaribank.com

Table 1.5.3: Management committee Management committee

Designation

1

Mr. Rajib Giri

Chief executive officer

2

Mr. Angir Man Singh

Chief Risk Officer

3

Mr. Rameshwar Sharma Aryal

Chief Operating Officer

4

Mr. Rajesh Shrestha

Chief Marketing Officer Source: www.kumaribank.com

Table 1.5.4 Employees in Kumari Bank of Ltd Dhangadhi Branch S.N.

Name of Employees

Designation

1.

Mr. Khagendra Kumar Saud

Acting Branch Manager ( Officer)

2.

Mrs. Sunita Bhatta

Operation In charge (Supervisor)

3.

Mr. Dharmananda Bhatta

Assistant Relationship Manager (Assistant)

4.

Mr. Govinda Paneru

Teller (Assistant)

5.

Mr. Sher Bdr Saud

Messenger

6.

Mr.Somal Kumar Chaudhary

Driver (Outsourced) Source:-KBL Dhangadhi Branch

1.6 Financial Structure Financial Structure refers to the way the firm’s assets are financed with. It refers to the entire liabilities side of the balance sheet. So financial structure is the amount of total current liabilities, long term debt, preferred stock, and the common equity used to finance a firm. Bank’s activities are KBLighted in of risk and return in light of capital requirement. Bank has established a culture whereby return on capital needs to be justified in light of risk involved in each investing and operating activities. In order to access the adequacy of capital, all major risks like credit, liquidity etc. are identified, measured and reported on periodic basis. These are monitored by the bank’s board and senior management periodically in addition to the monthly review of annual audit of the bank.

Table 1.6.1: Core Capital and its components Particulars Paid up Capital Statutory General Reserves Retained Earnings Profit/Loss Core Capital

Current Year NPR Previous Year NPR 2,699,166,532 2,699,166,532 546,371,157 467,413,482 13,394 26,270 394,788,376 341,654,966 3,214,663 2,926,215 Source: www.kumaribank.com

Table 1.6.2: Supplementary Capital and its components Particulars General Loan Loss Provision Exchange Equalization Reserves Investment Adjustment Reserve Supplementary Capital

Current Year NPR Previous Year NPR 267,055 218,902 267,055 218,902 11,000,000 311,027 259,293 Source: www.kumaribank.com

Table 1.6.3: Total Qualifying Capital Particulars Core Capital Supplementary Capital Total Qualifying Capital

Current Year NPR Previous Year NPR 3,214,663 2,926,215 311,027 259,293 3525690 3185508 Source:www.kumaribank.com

Therefore, the total capital fund along with profit and retained earnings has been increased in the current year as compared to the previous year. The institute has increased its position in the market. 1.7 Ownership structure

Ownership structure refers to the composition of the owner’s capital in the share capital. It generally comprises of contribution from the promoter shareholders, general public, institutional ownership and sometimes contribution from the government as KBL. The ownership contribution of the KBL comprises contribution from the promoter shareholders and the general public. Promoter shareholders hold 51% of the paid up capital and the rest 49%is from the general public. The authorized capital of the KBL is Rs. 5 billion

Table 1.7.1: Ownership Structure of Kumari Bank Limited Details Current Year NPR Issued and Paid Up 2,699,166,532 Capital Promoters (51%) 1376574931.32 General Public (49%) 1322591600.68 Source: www.kumaribank.com As shown in table 1.7.1 the ownership of the KBL is hold by the promoters and the general public. Out of the total issues and paid up capital, 51% of capital is contributed from the promoter shareholders and the rest 49% is held by the general public. The shareholder composition of the KBL for the fiscal year 2014\15 is presented in figure1.7.2 below.

Figure 1.7.2: Shareholding Pattern

Shareholders compostion

Source: Kumari Bank Ltd., Annual Report 2014/15

The figure 17.2 shows the shareholding pattern of Kumari bank that states 51 percent promoters and 49 percent public. It means that the promoter have high authority and right then public. KBL can say that the promoter have the control over the management, they have right to declare the B.O.D and other decision.

1.8

Organization Performance

KBL has been successful to capture major market and customer in its sixteen year of journey since its establishment. The issued capital of the bank is around NPR 2,699,166,532 out of which NPR 1376574931.32 has already been paid by the promoters and NPR1322591600.68 is issued to the general public. KBL is ‘A’ grade bank that has been recently upgraded. It is governed by the experienced bankers and professionals. It main focuses in providing customer satisfaction by offering various products and services including saving, fixed, call deposits, consumer and business loans, investment banking, etc. KBL comprises highly motivated staffs who are customer centered. This has been successful for being 16th in position conducted on survey by Central Bank.

The brief highlights of the financial position of the bank as per the audit report 2014/2015 is:

Table 1.8.1: Financial Achievements of Kumari Bank Limited

Source: www.kumaribank.com.

CHAPTER II

JOB PROFILE AND ACTIVITIES PERFORMED 2.1 Activities performed in the organization In KBL I worked in two different departments i.e. CSD and remittances. As a service oriented company the major responsibilities KBLre to give better services to the clients promptly on their demand. I was mainly given the responsibility of service related issues under the supervision of the respective officers. In the period of my internship I helped the organization by sharing the workload of the respective officers. The working environment was very comfortable to work in with friendly staffs which made the work easier. The major responsibilities given to me are as follows:  Opening an  Closing an  Issuance of cheque book and ATM  Remittance department  ECC department  Others

Opening an The first thing I had to know was about the criteria of opening the of a new customer. The responsibility of the customer service starts with opening of new of the new customer informing them about the facilities available in the organization. I learnt about the documents required to open a new . By opening an bank bridge its customers to avail the facilities provided by the bank.

Closing of an I also had the responsibility to close the of the customers who wants to close his/her in the bank following the procedure strictly. The procedure for it was: 

Need of the written application by the holder



Return of the cheque book and the ATM provided to the customer



Calculate the required charges according to the type of the opened



Return of the rest amount to the respective customer



Finally it is updated in the system and the form is filed in closed file.

Issuance of cheque book and ATM The cheque book and ATM had its own respective which was required to be mentioned along with the signature of the customer in the . Before printing the cheque book, requisition should be completed containing title of type, a/c number, number of leaves to be printed and signature of the a/c holder. Signature of the holder is verified on the requisition. In case of holder’s inability to collect cheque book than he can give authority to the third person to collect the cheque book on his behalf only by g on the requisition but it is not same in the case of ATM. The a/c holder must be present to collect it. The cheque book and ATM are ed in the long book or mentioning all the essential information along with the stamp and signature of the authorized person.

Remittance department The work that I was assigned in this department was that of paying out the customer’s money that may be from local or international and also to send the local remit from Dhangadhi to other places. There are many remits such as Himal, IME, City, and many more but main remit used is Kumari Remit for receiving or sending out the money. For paying out the remittance the number brought by the customer is entered in the respective page of the remit and the names are verified through the original government id and the print is taken out. The stamp of the bank and the authorized signature is made and finally the customer receives the money from teller.

ECC department I feel lucky that I could have the idea of newly emerged technology of Electronic Cheque Clearing (ECC). It is the new process of clearing the cheque of the other banks brought by the clients of KBL. Before ECC the particular staff was required to go to the clearing house i.e. NRB for clearance of cheque but ECC has avoided it and made work of employees more flexible. The supervisor made me capable to handle the cheques for clearing. I was assigned to do ECC in the absence of the respective officer. For clearing cheque at first the appropriate stamps are required with authorized signature and it is scanned through cheque scanner.

Maintenance of reconciliation Reconciliation is the settlement of the things that may be cheques, ATM cards or PIN on the daily basis. I also learnt to make the reconciliation at the day end. It consist of opening balance, no. of cheque printed and delivered, no. of ATM card received and delivered, no. of PIN received and delivered and finally closing balance. The print is taken out and is signed by two authorized officers for approval.

Other activities performed 

Helping customers to fill up the forms or vouchers



Receiving phone calls



Cheque/statement printing and scanning



Answering to the customers queries



Checking balance or a/c number of the clients



Filing documents



Updating KYC



Preparing of petty cash

2.2 Problem Identification Problems and organization are non-detachable . In performing day to day activities of the organization, one needs to tackle with various problems and challenges. While dealing with such problems, appropriate managerial skills need to be used to solve the problem in the effective and efficient way. During the internship period, the following problems were identified.  Problems related to the misunderstanding of the customers:  Problem-related to the change of rules and regulations:  Problems related to the service provided and mistakes done by the other

employees:  Problems related to the mistakes due to the error in the system:  Problems related to the nonfunctioning of various services:  Problems related to the non-clarity of information

2.3 Problems solved

The internship period I did was short which was not enough for learning everything we need to. Though it was short but I tried my best to take the optimum advantage of this period to know the things to its surface in every department. The staffs were not able to guide sometimes as they used to get busy with their work and at those times I could not get the answers of my queries that I had. Being the part of bank as intern I cannot open up everything I know about the bank due to the oath of secrecy and confidentiality. I was given the chance to work in CSD and load department of the bank. I tried to solve the basic problems of the customers and others as well when other staffs were busy: Addressing the customer’s queries.  Giving details of the available services to the customer’s for their flexibility.  Filling up the opening forms, vouchers or forms for remittance.  Solving problems related to ATM or PIN.  Problems related to reconciliation.  Handling the problems faced by customers.

2.4 Intern’s Key Observation Kumari bank is operating in the society to make the people easily access to the banking world. It has widened the area of its operation by opening the branches aiming to reach every people in the country. The investments made by banks are also in safe hands and the profits have been increasing year by year. It was a great experience to be a part of KBL and work as an intern. The seniors of the institution were very helpful and were always ready to impart their knowledge and solve the queries at their easy time. It is also introducing new products to attract more customers. The major thing that the customers appreciate is about the service of ATM which does not charge customers for withdrawing money from any terminals of any bank.

The things that I was able to observe in this bank are as mentioned below:  Laborious, helpful and cooperative .  Most of the customers are satisfied with the services provided.  Good return to the shareholders.  On time disbursement of loans.  Involved in social activities  Quick remittance from any remit.

2.4.1. Know Your Customers (KYC): Nepal Rastra Bank (NRB) has advised banks to follow a 'KYC guidelines', wherein certain personal information of the -opening prospect or the customer is obtained. The objective of obtaining KYC information is to enable the Bank to have true identification of its customers. This is also in the interest of customers to safeguard their hard earned money. The identification of a customer is a very critical process with a view to protect the customer interests by preventing from fraudsters who may use the name, address and forge signature to undertake illegal business activities, encashment of stolen drafts, cheques, dividend warrants, etc. This also helps to safeguard banks from being unsuspectingly used for the transfer of deposit of funds derived from criminal activity or for financing terrorism. Identification of customers will also help to control financial frauds, identify money laundering and suspicious activities, and for scrutiny / monitoring of large value cash transactions. Money Laundering refers to conversion of money illegally obtained to make it appear as if it was earned from a legitimate source. Money laundering is being employed by launderers worldwide to conceal criminal activity associated with it such as drugs / arms trafficking, human trafficking, terrorism and extortion. All crimes that produce a financial benefit give rise to money laundering.

2.4.2. Information Technology (IT): IT has helped the banking industry to deal with the challenges the new economy poses. More than most other industries, financial

institutions

rely

on

gathering,

processing,

analysing,

and

providing information in order to meet the needs of customers. Given the importance of information in banking, it is not surprising that banks were among the earliest adopters of automated information processing technology. Technology has opened up new markets, new products, new services and efficient delivery channels for the banking industry. Online electronics banking, mobile banking and internet banking are just a few examples. The adoption of modern Globus Software, developed by Temenos NV, Switzerland and arrangement of centralized data base system enables customer to make highly secured transactions in any branch regardless of having with particular branch.

2.4.3. Tools of Current Monetary Policy: Monetary policy impacts the economy and the price level through various channels. The process by which monetary policy decisions are transmitted to the real economy is called the monetary policy transmission mechanism. This (long) chain of cause and effect linking monetary policy decisions with the price level starts with a change in the official interest rates set by a central bank on its own monetary policy operations. By changing its key interest rates, a central bank exercises major influence on the money market and may steer the prevailing money market rates. Changes in these rates, in turn, impact on other (longer-term) interest rates. 

Reserve requirement are the portions of deposits that banks must hold in cash, either in their vaults or on deposit at a central bank. A decrease in reserve requirement is expansionary because it increases the funds available in the banking system to lend to consumers & businesses. An increase in reserve requirements is contractionary because it reduces the funds available in the banking

system

to

lend

to

consumers

&

businesses.



Source:www.nrb.org.np

The discount rate is the interest rate central bank charge commercial banks for short-term loans. Lowering discount rate is expansionary because the discount rate influences other interest rates. Lower interest rates encourage lending &spending by consumers & businesses. Likewise the raising the discount rate influences other interest rates. Higher rates discourage lending & spending by consumers & businesses.



The open market operation refers to the purchase or sale of short & long term market securities by the central bank. Under inflationary situation, the central Bank sells the securities. On the other hand, it buys securities to address the deflationary situation.



Credit rationing, under this the central bank fixes credit amount to be lent by banks. Credit is rationed by limiting the amount available for each bank or fixing the upper limit of credit. According to NRB the CCD ratio is 80% and 20% mandatory lending for the commercial banks to the productive sector among them the minimum 12% of the productive sector lending on agriculture and energy sector to 15%. - BFIS will have to allocate at least 1% of their profit for corporate social -

responsibility(CSR) BFIS will have to allocate at least 3% of staff expenses for training and

-

capacity development. BIFS not required to get permit from the NRB to open branch in area except inside metropolitan, sub-metropolitan & municipality.

2.4.4 Capital Plan

Table 2.4.4: NRB policy of Kumari bank (8 Arab)

Source: www.kumaribank.com As per Monetary Policy 2072/73, Commercial Banks need to increase their capital to Rs 8 Arab by the end of Ashad of the Fiscal Year 2074. If the current merger process goes as planned, the paid-up capital of the merged entity will reach Rs 8.21 Arab.

CHAPTER III LESSONS LEARNT AND 3.1 Key skills and attitudes learnt The internship period was very fruitful which shows the face of real life job experience. I felt it to be quite effective to enter in the world of banking institutions. The internship period has taught me how KBL can implement the theoretical knowledge in our practical life. I too felt on- the-job training that KBL faced more profitable and practical rather than off-the-job training only which is monotonous and forgetful. KBL learnt interpersonal skill, communicational skill and technical skill that helped me to build my knowledge in a broad way. The interpersonal skills helped us to interact with the various types of customers and their various problems. The negotiation skills also got increased developing the softness and being more formal while communicating with the people or clients. The positive attitude also got developed while dealing with different nature of customers. The importance of a

friendly environment that makes working place even better and enjoyable giving all the an opportunity to know each other and share the ideas they might have despite a hierarchy. Learnt about general activities that are performed in customer service department like opening of , closing of , issuing of statements to the customer, filing, recording, etc. Able to handle problems and queries related to walk-in and existing customers. Learnt how to deal with customers, senior staff and co-internees KBL also learnt the technical skills to operate computer system, ATM machine, photocopy machine, fax machine, scanner, printer, ECC scanner and many more. There must be a two way effective communication with the customers so as to satisfy them with the services. Therefore all these skills are gained through internship which motivated for the better performance with developed personality. Interns were told timely to manage resources as much as they can because the more the resource saved the more efficient the organization becomes. The birth of professional is directly proportional to saving of resources and energy which was yet another topic that was learnt during the time duration of internship. Saving resources not only means saving of physical properties but also saving of time. Communication with the related officer and customers was the major target but within limited time but giving out the best information with positivity. Communication is the major tool that makes target come closer with more benefits during the journey. Not only communication skills were learnt but the best communication means were used to flow information within the organization be it printing in a network or simple flow of information within organization using telephones. From opening s of customers in different schemes to providing information about different schemes and analytically determining which scheme best matches their requirement, various skills were developed along with feel of social responsibility were developed.

3.2 s to the organization

The organization is well enough but there are some drawbacks as nothing can be perfect. So here is swot analysis of Kumari Bank recover the limited drawbacks and to make it better and accessible:

3.2.1 SWOT Analysis A SWOT Analysis provides a comprehensive insight into the company. SWOT Analysis is a useful technique for understanding company Strengths and Weaknesses, and for identifying both the Opportunities open to company and the Threats company face.

 Strenght  Innovation  Loyal customers  Reduced labor cost  Existing distribution and sales networks  High profitability and revenue

 Weakness  Future Profitability  Competitive Market  Changing Strategy Of Stakeholder  No ment on media

 Threat  Government regulations  Tax Changes  Increasing Costs  External Business Risks  Increase In Micro Finance

 Opportunity  New Acquisition  Growing Economy  New Markets  Venture capital  Global Market  Growing Demand

By analyzing the swot analysis here is my some towards the organization

 Increase the advertising media and change the hording board making it noticeable and attractive.  To extend its branches to the remote areas to mobilize the resources.

 Increasing investment towards the new emerging business as per the present scenario of the state.  Enhancing the ergonomics for the staffs and providing them better working environment reducing the pressures.  Increasing effective trainings to the staffs for professionals’ development so than they can enhance their efficiency towards the customers and their works.  Various programs to be conducted so as to attract more people towards the banking services and its facilities.

3.3 to the College  The university can incorporate the internship program with a longer time period so that it would help to boost the skills of student and may provide them with more learning opportunities.  The university can be suggested to focus more on on-the-job training then theory classes.  The college can be suggested to design the courses which will make the student more updated with the latest technology.  College should try to promote the strength of the student and the course they are providing to the students so that the internee are assigned intern as per their capability and strength.

REFERENCE American Psychological Association (APA) Style . Joshi, s. (2010). Principle of Economics .Kathmandu: Buddha publishers. Simon, J.L., &Burstein, P. (1985) .Introduction of International Business. .Sellitiz, C. jain ,A .& Cook ,S .W . 1976) .Research methods in Social relations. New Yourk :McGraw-Hill . www.kumaribank.com www.google.com

www.nrb.org.np Annual report of KBL Kumari Bank Limited. (2015). Internal Report of Kumari Bank Limited 2014/15. Brouchers of KBL.