You are on page 1of 37

CHAPTER I

INTRODUCTION
1.1 Background of the Study
Intern program as a new learning procedure simply can be defined as on the job training which
provides practical implement of the critical knowledge in real world experience before actually
steeping in to the real carrier. To gain practical knowledge which specific objective intern program is
there which have got its own value in the real world practice. Only gaining academic qualification is
not sufficient and productive, they need to know the real scenario where they have to work.
Cooperation of both students and the organization is essential to make intern productive. The
organization should understand what the internship is and should fully cooperate with intern to make
them understand what exactly the organization does.
Under the study of Tribhuvan University, the student of Bachelor in Business Administration (BBA)
have to do the internship for eight weeks in any organization recommended by the collage. During
this short period experience of intern an individual learn what type of task are solved, how the
problems are solved, how the decision are made by analyzing different activities/alternatives
behavioral aspect s like how to interact with other inside and outside staffs working in and out the
organization as well as with the visitors visiting in the organization. For this organization should
create an appropriate environment for intern by giving a chance to gain knowledge based on different
departments so that intern can learn the basic function or what exactly the organization does.

1.2 Objectives of the Study


Intern program is itself a new learning procedure which provide practical implement of theoretical
knowledge. The primary objective of the study is to gain practical knowledge and grasp the useful
information on various aspects of operation department of Metro Development Bank Limited for
broadening as well as enchainment of our knowledge of banking intuition through interaction,
observation and work experience.
The basic Objectives of internship Program are Highlighted a follows-To examine the different types of deposit offered by the MDBL.
To analyze the procedure of opening and closing the account
-TO assess the total deposit and total lending of MDBL.

This study is mainly conducted on the basis of the primary and secondary sources of data.
Informal queries and interview are taken with concerned authority. Personal observation was
also conducted in order to acquire various, primary information needed to prepare this report
and fulfill the objective of study. The secondary data includes volume of different types of
product/service offered by the organization that are collected from the various website of the
organization.

1.3 Methodology
This study is mainly conducted on the basis of the primary and secondary sources of data.
Informal queries and interview are taken with concerned authority. Personal observation was
also conducted in order to acquire various primary information needed to prepare this report
and fulfill the objective of study. The secondary data includes volume of different types of
product/service offered by the organization that are collected from various internal records.

1.3.1 Organization Selection


For the purpose of gaining and experiencing the theoretical knowledge in real practical field
intern choose development bank Metro Development Bank Limited (MDBL) is Perfect for it.
So the intern request my program coordinator to provide recommendation later which was
dropped in Metro Development Bank Limited (MDBL). Meanwhile due to lack of enough
space in the MDBL (Head Office), the intern got adjusted in branch office in Newroad started
from 3 Ashad to 26 Shrawan 2069.

1.3.2 Placement
The Manager of MDBL placed the intern to look over Operation department, through which
the intern can gather experience and knowledge based on this department.

1.3.3 Duration of Internship


As per the requirement of BBA of TU, a student has to work as intern in any organization for
eight weeks. Accordingly the intern moved in internship from 3 Ashad to 26 Shrawan.

1.3.4 Activities Performed in the Organization


It is well known that Operation Department is the backbone of each and every bank and
financial institution, during the eight weeks of the internship period the intern worked in this
department. During this period, the intern works in the following departments.
a) Customer Service Department
b) Operation Department
c) Credit Department
This is shown in the following work progress chart.

1.3.5 Work Progress Chart


Table 1.1
Work progress Chart
working period (weeks)

Activities
preliminary

Environment

Investigation

Analysis

Core Function Learning

Customer
Service
Department

Implementation/
Documentation

Information
collection

1.3.6 Data Collection


Data collection is basic tool for making report effectively. This study is conducted mainly on
the basis of both primary and methods. Informal queries and interview were taken with the
concerned authority of the organization. The primary data has been collected through
observation, direct personal interview and on the job training, beside the primary sources,
secondary sources were also used to collect the various information. The data relating to
different types of products/services offered by the organization were directly collected from
different brochures and the websites of the organization as well as form annual report of
MDBL and various other publication and journals. Sources of data for report writing are as
follows:
A. Method of Primary Data Collection

i. Observation
During the internship period, the intern observed the activities of personal of various
departments and their interaction with customers.

ii. Interview
During the internship period. The intern had also taken direct personal interview with
personal of various departments.

iii. On the Job Training:


During internship period, the intern had also carried on some activities of various
departments in proper guidance of the personal.

B. Sources of Secondary Data


i. Annual report of MDBL
ii. Publication and Journals
iii. Data or information from Journals

1.3.7 Significance of the Study


This study is order to see the real world practices of the banking sector. This study is also
conducted to see and analyze the various services offered by the organization. It is helpful for
the people to know and understand about the products and services of MDBL and will be
ready to use and get financial products of this organization.
Another significant point is that, it gives us to experience the real world banking sector and
also helpful for us to implement our theoretical knowledge we learn in the university
practically in the real banking sectors. Moreover, this study is very important and useful for
us to gain practical knowledge and grasp useful information in their enrichment of knowledge
and information for broadening their thinking.

1.3.8 Limitations of the Study


The major limitation of the study is time duration. The eight weeks allocated for our study
was not enough time to know and learn the real banking practices in-depth. So due to time
limitation, the study could not be made in major department. Since I have joined MDBL as an
intern there is no authority to use the system. Due to improper timing also I willingly could
not place my queries with them.

1.3.9 Organization of the report


This report is organized in to five chapters namely.
Chapter I

introduction

Chapter II

introduction of the industry

Chapter III

introduction of the organization under study

Chapter IV

Analysis of the activities done

Chapter V

Conclusion

CHAPTER II
BRIEF INTROUDUCTION OF THE BANKING INDUSTRY
Many of today's banking services were first practiced in ancient Lydia, Phoenicia, China, and
Greece, where trade and commerce flourished. The temple in Babylonia made loans from
their treasuries as early as 2000 BC. The temples of ancient Greece served as safe-deposit
vaults for the valuables of worshipers. The Greeks also coined money and developed a
system of credit. The Roman Empire had a highly developed banking system, and its bankers
accepted deposits of money, made loans, and purchased mortgages. Shortly after the fall of
Rome in AD 476, banking declined in Europe.
The increase of trade in 13th century Italy prompted the revival of banking. The
moneychangers of the Italian states developed facilities for exchanging local and foreign
currency. Soon merchants demanded other services, such as lending money, and gradually
bank services were expanded.
The first bank to offer most of the basic banking function known today was the Bank of
Barcelona in Spain. Founded by merchants in 1401, this bank held deposits. Exchanged
currency, and carried out lending operations. It also is believed to have introduced the bank
check. There other early banks, each managed by a committee of city officials, were the Bank
of Amsterdam (1609), the Bank of Venice (1587), and the Bank of Hamburg (1691). These
institutions laid the foundation for modern banks of deposit and transition.
For more than 300 years, banking on the European continent was in the hands of powerful
statesmen and wealthy private bankers, such as the Medici family in Florence and the
Fuggers in Germany. During the 19th century, members of the Rothschild family became the
most influential bankers in all Europe and probably in the world. This international banking
family was founded by German financier Mayer Amschel Rothschild (1743-1812), but it
soon spread to all the major European financial capitals.

The Bank of France was organized in 1800 by Napoleon. The bank had become the dominant
financial institution in France by the mid-1800s. In Germany, banking experienced a rapid
development about the middle of the 19th century with the establishment of several strong
stock-issuing or publicly owned banks.
Banking in the British Isles originated with the London goldsmiths of the 16th century. These
men made loans and held valuables for safekeeping. By the 17th century English goldsmiths
created the model for today's modern fractional reserve banking-that is, the practice of
keeping a fraction of depositors' money in reserve while extending the remainder to
borrowers in the form of loans. Customers deposited gold and silver with the goldsmiths for
safekeeping and were given deposit receipts verifying their ownership of the gold deposited
with the goldsmith. These receipts could be used as money because they were backed by
gold. But the goldsmiths soon discovered that they could take a chance and issue additional
receipts against the gold to other people who needed to borrow money. This worked as long
as the original depositors did not without all their gold at one time. Hence, the amount of
receipts or claims on the gold frequently exceeded the actual amount of the gold, and the idea
that bankers could create money was born.

2.1 Nature of Nepalese Banking Industry


An industry refers to group of companies of organization or institutions that provide similar
types of goods and services to its costumer. Bank safeguard money and provide loans, credit
and payment services. Bank is a financial institution which deals with money and credit.
Nepal Bank Limited (NBL) is the 1st bank to provide banking service in Nepal. It is providing
service to the customers of various departments since its establishment in 1994 B.S. as a
government bank. The second bank established in Nepal is NRB which was established in
2022 B.S. and providing services till now. Both of them are known as commercial bank at
this time.

2.2 Major Services Provided by Banking Sectors


The banks Nepal have to perform various functions. They are categorized into two parts:
i. Primary Function:
Accepting Deposits
Providing loans
Investments

ii. Secondary Function:


Issue credit instrument provided other financial services like issue of credit
instruments to encourage further transactions.
Safety of valuable goods loans are given in the safety of valuable goods
pledged as security for loan.
Dealing with foreign exchange.
Work as referee provided needed information if someone wants to take
borrowers or clients having business with the banks.
Issue of guarantee - provide guarantee a contingent liability to encourage
foreign business of import and export.

2.3 Types of Financial institutions


The main objective of the bank is to earn profit by satisfying its clients. The clients may be
various departments like credit, remittance, operation etc. Thus a single bank can't satisfy all
the customers at a time. Banks differs according to their nature. The types of bank according
to their natures are as:
Commercial Bank
Development Bank
Finance company

2.3.1 Introduction of Development Bank


Many development banks have been established in Nepal after the enactment of development
bank Act 2052 (1995). The development bank is also a kind of bank performing its function
under the Development Bank Act 2058 (2002) and Company Act 2053 (1996). These banks
are helping people as well as nation in economic development directly or indirectly. They
give long term loan and provide technical and other advices as well.

10

2.3.2 Category Of Development Bank


The prevailing Nepalese Banking Act 2063 divides Development Bank is term of authorized
capital as given below:

National Level:
A development bank is categorized into national level development bank if its authorized
capital is more than NRs.64,00,00,000.00. It can operate its function all over the country.

Ten District Level:


A development bank which can operate its function within ten district only is categorized as
ten district level development bank. Its authorized capital must not be less than NRs.
20,00,000.00.

There District Level:


This is the smallest development bank which can operate its function within three districts
only. Its minimum authorized capital in NRs. 10,00,00,000.00.

11

CHAPTER III
INTRODUCTION OF THE ORGANIZATION UNDER STUDY
3.1 Introduction of the Organization
Metro Development Bank Ltd. was dually registered on 01/09/2066 B.S with Office of
company as per Bank and Financial Ordiance-2061 B.S. It is in operation from 01/09/2066
after the license from Nepal Rastra Bank.
The company is promoted by renowned and established businessmen, industrialists, bankers
and retired civil servant etc. The company is headed by a team of professionals having
extensive banking exposure. It is 'B' grade development bank which is categorized by NRB.
MDBL is located in a business centre Newroad as Head Office and have got its branches in
Bhorletar, Ratna Chowk. MDBL going to opening their branches at Hospital Chowk Pokhara
and Myagdi at near future. It aims to provide modern service to its clients in a secure way by
the financial intermediate by providing security of customers' fund growth of their security.

3.1.1 Vision, Mission, Values and Objectives of MDBL


Vision:
To became an established and leading development bank of the country.
Mission:
To be a first choice of the customers by providing effective services, safety and satisfaction.
Values:
MDBL always operate its function on the basis of following values:

Customer services, securities and respect


Transparency in operation
Professionalism in management
Corporate governance in organization

12

Capital Structure of MDBL


The following table shows the capital structure of MDBL

Capital Structure
1. Authorized Capital: Rs.20,00,00,000
2. Issued Capital :

Rs.10,00,00,000

3. Paid Up Capital: Rs.7,00,00,000


fig:1 Capital Structure of MDBL
Source: (Brochure MDBL, 2067)

13

Objectives:
To support socio-economic development of the country by extending credit to
productive for their financial benefits.
To ensure security and effective benefits to the depositors' deposit and
investors' capital
To ensure availability of fund to establish, develop, extend and improve
productivity by accepting deposits and providing loans.
To provide trustable banking service to the Industrialist, trader, professionals,
farmers, unions, organizations and whole citizens.
To develop industrial, tourism, trade and agriculture sectors of the nation
To use the available labors and capital resources for the development of local
sector.
To work as a dutiful organizational citizen and to help in environment
conservation and social development.

Future Plan:
MDBL aims to expand its branches in order to facilitate customers. So it is going to open its
branches in different places in order to provide banking service to all those who are deprived.

14

3.2 Organization Structure


Organization of the MDBL refers to the authority, responsibility, Chain of the units or
departments or individual of the organization shown in following figure.
Board of Director

CEO

Deputy Manager

Loan/Credit Manager

Human Resource Manager

Assistants

Assistants

Operational Manager

Assistants

Fig 2 : Organization Structure of MDBL

3.3 Services Provided by MDBL


Deposit:
The customers can open Current Account with NRs. 1000/- only
FREE Counseling for the service.
As per requirements of the customer, extra facilities will be provided.

Unlimited withdrawal.
Personalized service like telephone enquiry of balances by authorized person.
Simplified Cheque Payments.
ABBS service
Remittance service

15

Call Deposit Account:


In order to make deposits of corporate bodies, productive call deposit account is introduced.
This scheme is mainly for the corporate deposits from which the money can be withdrawn at
any time. The interest rate also very negotiable.

Account can be opened with minimum NRs. 50,000/- balance.


4.5% interest on daily balance.
Unlimited withdrawal is possible.
As per requirement of the customer, extra facilities will be provided.

Fixed Deposit Account:


Account can be opened with minimum NRs. 5,000/- balance only for
minimum 1 month duration up to variable time period.
Negotiable & attractive interest rate.
Loan can be issued against the deposit receipt in case of cash required before maturity with
only extra 2% more.
Table 1.2
Interest rates
Interest Rates according to the duration on deposit
Duration
Interest Rate
1 Month
7.25%
3 Month
7.5%
6 Month
9.0%
9 Month
9.5%
1 Year
13.0%
2 Year
13.5%
3 Year and above
Negotiable

Normal Saving Account:

The customers open Saving Current Account with NRs. 1000/- only
Competitive return can be gained.
7.25% interest on monthly minimum balance.
Withdrawal of Rs. 5,00,000/- on a single day.
For withdrawal up to 10,00,000/-, 3 days prior notice is required.
Rs 10,00,000/- withdrawal within a week.

16

Account can be opened with minimum NRs.25,000/- balance only.


8.5% interest on daily balance.
An accidental insurance coverage of NRs.2,00,000/Very useful for business oriented people to carry out daily transactions as

interest gain are possible on daily balance.


Attractive souvenir as present for the Account Holders, subject to limited
stock.
The customers can open Current Account with NRs. 500/- only. 8.5% rate of
interest daily.
Free Accidental Insurance up to 1,00,000 or four times of deposited amount.
75% amount of account can be withdrawn freely.
Privileged Account Holder can be provided in the feature.
Only for the children below 16 years.

3.3.1 Loan and Advances


Corporate/Project Loan:
Metro Development Bank Limited will provide the Corporate/Project Loan
along with the counseling facilities to the renowned organization for the
fulfillment and broading the new business with proper planning.
The variable length term loans are available according to the nature of the
project.
Reasonable interest Rate with contemporary market will be applied.

Working Capital Loan:


To fulfill the economic crisis during the daily transactions due to the lack of
working capital, Metro Development Bank Limited will provide an easily
accessible Working Capital Loan with minimum Interest Rates.
The Interest Rates are decided according to the amount & duration.
Because of highly experienced management team, the need of working capital
to business community will be realized in no time and action will be
forwarded according.

17

Overdraft facility:
To fulfill economic crisis during daily transactions for business people due to
lack of working capital, Metro Development Bank Limited will provide an
Overdraft Facilities.
The money receipt daily by the business people can be deposited in their
accounts so that the Interest will decrease.
In case of term overdraft, the business people can reduce their loan amount
and can be secured for their business.

Different Types of Loan Provide by MDBL


Home Loan
Purpose: Purchase of land for construction of house/renovation of old house/construction of
house/purchase of house.
Eligibility Criteria: Those or member of joint family having proven income to service the
loan including those working abroad.
Age below 58 years.
Tenure of Loan: Up to maximum 15 years.
Interest Rate: 9% to 11% for 1 Year to 15 Years.
Service Charge: Minimum 1% upfront.
Security: Regular mortgage of the property itself under finance of decided by insurance
coverage for the building under finance.
Processing Time: Minimum 3 working days from the date of receipt of required documents.
ii. Auto Loan
Purpose: Purchase of brand new or Secondhand Car or Jeep for private use.
Quantum of Loan: Minimum-Rs. 5 lakh.
Maximum-Rs. 35 lakh.
Eligibility Criteria: Individual having proven income to service the monthly installment.
Tenure of Loan: Maximum -05 years
Minimum for upto 1 year.
Rate of Interest: Minimum 9% to 11%
Service Charge: Minimum 1% upfront.
Security: Registration of vehicle under Finance and/or as decided and insurance coverage.
Mode of Disbursement: Directly to supplier of the vehicle.
iii. Education Loan
Purpose: To pursue higher degree of B.E/B.B.S or equivalent or more for deserving student.

18

Eligibility: Those students who is enrolled for above course.


Quantum of Loan: 60% of total amount of full study or Rs. 1.00 million whichever is lower.
Tenor of Loan: Maximum -07 years after completion of study.
Rate of Interest: 12% to 13%
Service Charge: Minimum 1% upfront.
Security: Registered land or property, wroth shall be at least 150% of loan amount.
Processing Time: Minimum 03 working days from the date of receipt of entire doer.
Mode of Disbursement: Directly to applicant for payment to College/University.
iv. Foreign Employment Loan
Purpose: To meet the requirement of those seeking foreign employment.
Eligibility: Nepalese youth seeking foreign employment after obtaining VISA.
Quantum of Loan: Maximum -03 years.
Rate of Interest: 11% to 13%
Service Charge: 1% upfront.
Security:
o Mortgage of landed property.
o Personal Guarantee of 2nd party.
o Counter Guarantee of manpower Company.

19

Table 1.3
Interest rates on Loan and Advances
LOAN AND ADVANCES
Loans and Advances
Overdraft & Working
Capital
Term Loan

Business
Others

Mfg. Companies
Others
Hire Purchase (Commercial)
Consortium Loan
Consumer Loan:Home Loan
Foreign Employment

Prime per

Others Per

annum
10%
11%

annum
13%
14%

11%
13%
12%
14%
11%
14%
As per consortium decision
10%
11%

Loan
Auto Loan
10%
Education Loan
12%
Travel Loan
12%
Medical Loan
11%
Social Loan
12%
Retirement Loan
11%
Loan Against NPR Fixed Deposit of HBBL
Loan against NPR Fixed Deposit of other Banks & Financial Institutions
Loan Against Govt. Guarantee
Loan against Financial
Bank
Financial Institution
Guarantee
Contract Loan
Real Estate Loan
Himchuli Wealth Plus Loan
Deprived Sector Loan
Wholesale Lending (Deprived)
Professional OD
Share Loan
Other Loan

13%
14%
13%
14%
14%
14%
14%
14%
Plus 2%
Plus 2%
(Min.9%)
9.50%
9.50%
10%

12%
10%
11%
12%
10%

14%
14%
14%
14%
9%
13%
12%-14%
14%

20

Other Service
Bank Guarantee
Table 1.4
Commission Rates on Guarantee
TYPES OF GUARANTEE
Bid Bond
Performance Bond
Advance Payment Guarantee
Other Guarantees

COMMISSION RATE (PER ANNUM)


1.00%
1.40%
1.80%
Negotiable

Remittance Service
Share Application Collection Services

3.4 Various Departments of MDBL


MDBL is small entity has got various departments under it. All energetic and dedicated
members of MDBL are involved to make the organization stronger. Each member of various
departments is cooperative and helpful. Even though it is small organization it is able to
provide more and more services to its customers.
Mainly the function of MDBL is divided into two major departments:
Credit Department
Operation Department

3.4.1 Credit Department


The main task of the bank is not only to collect the saving. If the collected money of the bank
is invested in a right way, than only the bank can survive more. The credit department is also
known as the back bone of the bank. Credit Department is always ready to grant the loan to
those customers who want to invest the money in some responsible places. The bank should
be very careful while granting the loan because various type of risk involved in it. In order to
minimize the risk the bank keeps collateral in its favor, take guarantee of creditable institution
(CI), also taking the help of insurance company and consultancy.

21

3.4.2 Operation Department


Operation Department has its own important in all banks. It is also called as cash
maintenance department. The daily transaction of cash inflow and outflow is recorded by this
department. This is a very sensitive department in terms of cash. The teller comes under it
which involves in day to day transaction of cash.

Customer Service Department (CSD)


Customer service department is one of the most important departments of the bank. This
department plays vital role in attracting the customers. The entire customers' relate work is
done in this department, like opening account, counseling with customers about the services
provided by the bank, making statement, cheques, receiving the phone and many more other
task. Customers while enter into the bank, the first place they visit will be CSD. This
department must always be ready to help the customers and convincing them to work with
the bank. This department also helps customers to fill up the cheques, deposit slips and other
various forms. The remittance service is also provided by this department. Under remittance
service is also provided by this department. Under remittance service it looks after the codes
brought by the customers, as remittance service provides benefits to the bank.

Remittance Service
Remittance is transfer of money by foreign workers to their home country. It is the major
source of income for Nepal. It covers large percentage of its national income. Remittance
transfer can also promote access to financial and social inclusion. As remittance receiver
often have a higher prosperity to own a bank account, remittance promote access to financial
services for the sender and recipient, an essential aspect of leveraging remittance to promote
economic development. Almost all the banks are providing the remittance services. In fact,
the real truth behind the success of banking industry is only remittance. The number of
people going outside is increasing day by day in search of opportunity. Previously, people use
to send money to home by Hundi or with other's hand which was risky. There was chance of
lost of money and there were many case of lost as well. Now people are becoming aware
about remittance services provided by banking institutions and now they are using this
services which lesson the chance of lost and it increase the profit of the banking institution as
well. The function of this department is to remit and receive the fund. This department is one
of the income generating departments in the bank. MDBL is providing this service by
transferring fund via electronic media effectively and efficiently. It is servicing the customers
through the corporation of different money transferor such as IME and different others.

22

CHAPTER IV
ACTIVITIES DONE AND PROBLEM SOLVE
4.1 Introduction of Operation Department
Operation department is the heart of every banking institution. Operation Department has
vital role for financial institution to carry on daily transactions effectively and efficiently.
Operation department is also known as "Cash Maintenance Department". The basic function
of Operation Department is to keep record of cash outflows and cash inflows of everyday.
This department is also often called as information desk as customers first contacts in this
department for their queries. Operation Department is lifeblood of the financial institution
and can also be considered as main door of organization through which a costumer enters in
and known everything about the entire organization. Therefore the image and status of the
bank depends upon the effective functioning of this department.
Upon arrival at MDBL, the intern was assigned to Operation Department by branch manager.
Operation department deals with various of activities such as dealing with customers,
answering their queries, marketing to various banks products, issuing application firm for
opening new accounts, responding to telephone calls, providing information about money
transfer (remittance services), providing balance certificate, issuing bank statement, accepting
cheque book, developing and issuing cheque book, receiving mail and delivering it to
concerned department and so on.
Various information about the bank goes from the department to customers. As the first
information about the bank goes from operation department the image and reputation of the
bank depends upon the effective functioning of this department. Customer should be handled
effectively as it is said "the first impression is the last impression". This department is mainly
responsible in assisting customers to explore the services offered providing customer's
services during and after the purchase of the services and providing customer's services
during and after the purchase of the services or products. Finally, the intern can conclude that
Operation department has vital role in building good relationship with ultimate customers.

23

4.1.1 Activities carried out by the Operation Department


During the period of internship. I had performed different types of jobs in Operation
Department. They are as follows:
Providing information about the services offered by the MDBL.
Motivating customers for opening different types of account.
Fill up the for opening new account and deposit slip for cash deposit and
cheque deposit.
Providing various form and vouchers (i.e. withdrawal slips, opening new
account and closing the existing account and changing the account).
Providing account statement as requested.
Cheque printing and binding and remittance.

4.1.2 Account Opening


For the purpose of collecting funds, MDBL have got account opening service as accepting
deposit from customers. Opening an account is entering into a kind of contract with the bank.
HBBL provide various information about the service and terms and conditions before
opening the account. Only then a customer is forced to open an account.

4.1.3 Different Type of Accounts Requires Different Documents


Documents Required for Personal Account
a. Single Account:
Identification of account holders (2 copies of citizenship certificate)
b. Joint Account:
Identification of account holders
Photographs (2 copies)
c. Minor Account
Birth Certificate or school certificate or hospital or minor Identification of minor's guardian
(account operator)
Photographs of minor and account operator (2 copies of each)

24

Document Required for Company Accounts


a. Private Limited / Public Limited Company:
Company Registration
Income tax
Board resolution
Article of Association
Memorandum
Identification of account operator
Photographs (2 copies)

b. Partnership Firm:
Firm Registration
Income tax
Partnership deed
Identification of account operator (photographs of citizenship certificate)
Photograph of account operator (2 copies)

c. Joint Venture Company:


Photocopy of company Registration Certificate with pan number
Income tax
Board Resolution
Memorandum
Article of Association
Identification of account operator (photocopy of citizenship certificate)
Photographs of account operator (2 copies)
Joint Venture Agreement

4.1.4 Procedure of Opening New Account in MDBL


The first thing to be done is providing the information to customers about the different
account or deposit offered by the HBBL along with its feature and prerequisite requirements.
Second thing to be considered is that application form should be filled by the applicant or by
the help of CSD and the approved is done by authorized staff.

25

Costumer should go through following procedure for opening a new account in MDBL:

a. Application on a Prescribed Form


Each and every bank has prescribed form for opening different account. The customer or
application is required to maintain his/her name, full address, occupation, specimen signature
and photocopy and undertakes to comply with the bank's rules time to time for conducting of
the account .

b. Specimen Signature
After application on a prescribed form, next phase is specimen signature. Along with the
application on a prescribed form and proper introduction, the application must also give his
specimen signature to the bank in the prescribed form/card. Specimen signature is kept in
system of the bank scanning the specimen card including signature of the account operator.
The signature of the account holder on cheque issued by him/her is compared with his/her
specimen signature. If the signature differs the banker rejects the cheque.

c. Tendering of Deposit of Money


This is the last step for opening new account. The application or ongoing account holder
should deposit some amount in cash or cheque at the time of opening new account. After
opening an account, customer must maintain a minimum balance, for instance Rs. 5000 for
current account, Rs.1000 for normal saving account and like on.

26

4.1.5 Account Opening Function

Account Opening
Customer
Function
Receive
Application form
CSD

Cheque and compliance as per


Verify the attached document
Generate the account number by registering in registering in register book
Prepare voucher and deposit the amount to related account

Forward the document to Head of the Department

Account opening function of head of the department


Reconfirmation of account opened
Verification of document
Approve the signature scanned
Filing the document properly

Fig.1.3 Account Opening Function

27

4.1.6 Account Closing Function

Account Closing Function


Customer
Receive application from
Verify the signature and other document (cheque, citizen certificate.)
CSD

Forward the document to Head of the Department

Account Closing Function of Head of the Department


Receive closing files
Check entire documents
Specify the closing charges
Circular related department of give instruction to CSD

Fig.1.4 Account Closing Function


As per the request of the customer the account opened with the bank is closed by the bank.
There is no certainty that the accounts opened remain in the bank all the time. A situation may
arise to close the accounts operated in the bank. In fact, there is a contractual relation between
two parties, customer and bank. So if one side breaches tge contract the other party has a
right to close the account. The current and saving account have the same process of closing
the account. For account closing, the customer need to write an application in standard format
specifying the reason of closing the account and the application is forwarded for clearing (if

28

the account is company type) to head of the department. As per the remaining is refund to the
customer.

4.1.7 Procedure of Closing Fixed Deposit Account


The procedure of closing fixed deposit is quite different than that of closing other deposit
account. The fixed deposit account is opened for the fixed period of time so after the expiry
of the fixed period the relation between the bank and the customer comes to an end
automatically or the fixed deposit account end automatically. If the customer with the receipt
of the fixed deposit visit the bank after the fixed time is over, can get the total amount of the
capital with total interest of the period which then close after its due. But if customer wants to
keep it continue, he/she may renew it. the deposit will transfer to the willed person on the
death of the account holder. If the willed person too is dead or he/she had co willed any one,
the person can claim the deposited amount under section 23 of the Commercial Bank Act
2031 (1974). But without presenting the documents including the evidence of the customer's
death and other necessary documents one can't claim on the deposit.

4.1.8 Account Statement


Account statement is provided to the customer on the request of account holder. It is recorded
in the statement record book of the bank. For the corporate account holders, statement is
provided on monthly basis. Account statement is collected by the account holder or agent of
account holder in order to get inform about the interest collected and tax paid on interest and
for other different purpose. Bank charges fee in case of printing duplicate statement. This all
charges are charged in order to protect from the misuse of statement and customer's safety as
well.

29

4.1.9 Cheque Issuance


After opening an account, customer is provided cheque book according to the account type
and rules and regulation of the bank so that customer can withdraw money as they needed.

Cheque Issuing Function


Cheques are the most important and valuable thing in the bank so CSD
operator is more careful while issuing cheques.
Customer fills the cheques requisitions slip (containing number of cheque
required along with his/her signature) and provide it to CSD.
CSD operator verifies the cheque slip and print the cheque book through
system as customer requirement.
Cheque book are recorded both in system as well as cheque record file book so
that it helps in maintaining cheque inventory.
Cheque book is provided to the account holder or their agent by verifying the
proper identification.

4.2 Financial Data Analysis


The main purpose of this section is to study and analyze the given data, which are related to
deposit of different types of account and total amount of lending in different sector of HBBL.

4.2.1 Deposit Collected in Different Accounts


The following table and chart shows deposit collected in different types of account from June
2010 to August 2010. It shows the deposit collected in different types of account in previous
month and during my intern period.

30

Table 1.5
Total Deposited of MDBL in Different Months
Types of Deposit
Current Account
Normal Saving
Metro Sunaulo Bachat
Special Saving Account
Metro Khutruke Bachat
Metro Nari Bachat
Call Deposit
Fixed Deposit
Total Deposited Amount

June
Amount (Rs.)
3,50,780
2,56,532
2,88,990
3,80,976
9,876
2,90,897
4,53,712
4,65,000
24,96,763

July
Amount (Rs.)
3,46,545
3,08,688
2,67,645
3,92,840
10,880
3,03,060
4,60,480
4,80,500
25,70,638

August
Amount (Rs.)
3,40,770
3,30,200
2,62,380
4,05,765
11,767
3,18,830
4,63,105
5,05,500
26,38,317

In the above figure and table, we can see that in the month of June, the amount deposited in
Current A/C was high as compared to other months. The amount deposited in Current A/C is
lower than in other months but it is in increasing trend up to August and in June, the amount
deposited in Normal Saving A/C is lower than in other months but it is in increasing trend up
to August. The amount deposited and Fixed Deposit A/C is in increasing trend throughout the
month. Similarly, the amount deposited in Metro Sunaulo Bachat, Special A/C, Metro
Khutruke Bachat and Metro Nari Bachat is in increasing trend throughout the month.
Lastly, we can conclude that the amount deposited in Current A/C and Metro Sunaulo Bachat
seems quite unsatisfactory as because it is in decreasing trend. The amount deposited in Call
Deposit, Special Saving A/C, Fixed Deposit, Normal Saving, Metro Khutruke Bachat and
Metro Nari Bachat is gradually increasing throughout the months. The amount deposited in
Normal Saving is very high as compared with other deposits. Therefore, it seems much
satisfactory than other. Moreover, we can see that total deposited amount seems very
satisfactory because it is gradually increasing throughout the months.

4.2.2 Comparison of Total Deposit and Total Lending


The following table and graph shows total deposit and total lending of Metro Development
Bank Limited (MDBL).

31

Table 1.6
Comparison of Total Deposit and Total Lending of MDBL
S.No.
1
2

Particulars
June
July
Total Deposit
24,96,763
25,70,638
Total Lending
25,60,886
25,20,578
Comparison of Total Deposit and Total Lending

August
26,38,317
25,89,784

2700000
2650000
2600000
2550000
2500000
2450000
2400000
June

July

August

Months

Figure 1.5
Comparison of Total Deposit and Total Lending of MDBL
The above table and figure shows the total deposit and total lending of MDBL during the
period of three months. By comparing total deposit and total lending we can see that the total
deposited amount is higher than lending amount in July and August but inverse in June.
However both total deposit and total lending are in increasing trend throughout the months.
The increasing trend of total deposit seems quite satisfactory that that of total lending. But,
MDBL still should heavily focus on the deposit to maintain the increasing trend by attracting

32

more potential customers through providing attractive schemes in deposits and should make a
new competitive as well as strategic plan to maintain or increase in the increasing trend of
lending by introducing or adding other additional new scheme in the existing range of the
loan services.

33

CHAPTER V
CONCLUSION AND LESSON LEARNED
5.1 Conclusion
This study is completely focused towards the mode of operation of customer service
department of MDBL. The study aims at diagnosing the problem being faced by the bank in
CSD and to identity different types of deposit offered by MDBL, procedure of opening new
account, changing existing account and closing the account and so on. This analysis will not
only help to know the process of operation functioning in HBBL but will also be a complete
diagnosis regarding other important related function performed by particular departments.
It was unforgettable experience of doing intern at Metro Development Bank Limited
(MDBL). It was a good opportunity to build up my exposure at MDBL. During the internship
period the real life job experience was achieved which is very important for any outgoing
students. During the intern period, the theoretical knowledge which was learned in the
college was implemented practically.
The working environment of MDBL is quite satisfactory. MDBL with slogan "Simply
Trusted Banking Partner" has been trying its best to add milestone in Nepalese Banking
sectors. It has adopted many innovative plan and scheme to serve its ultimate customers.
MDBL has today become a landmark which is able to generate healthy profit. It has good
performance and image building in the customers' mind though it is in growing phase. The
reason behind its great success is that all staffs in this bank are dedicated towards the
customers' satisfaction and all staffs are very sincere and loyal with their work.

34

Some of the findings of the study are:


MDBL accept deposits with various new schemes from the pubic giving attractive
rates.
MDBL also grant loan and advances to its customers charging reasonable rates.
The customer inflow in MDBL is very high. Both cash deposit and cash withdraw is
done in continuous manner. The daily customer inflow for opening new account is 810 people. The customer inflow in MDBL is growing because of better services,
dedicated staffs, wide range of services with different scheme and evening counter
services.
The inward remittance in MDBL is very high. Moreover, the remittance comes mostly
from Malaysia, Dubai, Qatar, Iraq, UK, Saudi Arabia, Israel, USA and so on.
The amount deposited in Normal Saving Account seems quite satisfactory because it
is in increasing trend.
The total that of lending is in increasing trend but its increasing trend is quite lower
than that of total deposited amount. So, MDBL should focus on lending with new
future plan.
Overall, the study shows that the financial health of MDBL is quite satisfactory and it is able
to gain handsome return from its business by providing modern banking services. Another
significant thing is that the study shows tie importance of the internship program. It will help
the students to be full aware of the real world practices before entering into the market as
fresher and succeed in their future endeavors.

5.2 Lesson Learned


Though the bank has categorized the function of different departments, there is no
separate department for amount and remittance service. Everything about the
remittance from the CSD is impossible. This creates the both the customers and staff
and it take enough time as well which hampers the effectiveness of bank. The inward
remittance in this bank is very high so to maintain this, there should be separate
department for remittance services.
Since most of the public have great on this bank, they have to have to retain these
faiths by providing better services such as minimizing their lengthy procedures while
taking deposits and granting loans and advances. The bank should make plan about
some potential schemes to motivate and attract the potential customers.

35

The banking software (Pumori Plus) used by the MDBL is outdated. So the latest
banking software such as "Finacle" developed by Infosys, India should be introduced
so that the services can be provided in efficient and effective manner to its customers.
The bank should conduct research and development program to study and analyze
about its product and another important thing is that bank should formalize
"Situational Analysis" that will help management team in understanding the bank's
current situation (Bank's Strength and Weaknesses) or accurate picture of the bank i.e.
how the bank is doing in comparison to its competitors.
Marketing promotional tools of MDBL is not much satisfactory. Because of lot of
people are unaware of number of Deposit Scheme i.e. Metro Sunaulo Bachat Youjana
and Call Deposit and Credit Facilities i.e. Service Retirement Loan. Contract Loan
and Metro Wealth Plus provided by bank. So frequent advertising in newspapers, FM
radio and visual advertisement in Television (T.V) etc. means should be considered to
attract more customers. HBBL sometimes should conduct market research with
various new marketing programs to get customers' view about its product and its
position in the current market.
In this way timely and effectively implementation of this corrective action would lead the
bank toward continue and future program.

36

BIBLIOGRAPHY

Bhattarai, P. (2061). The Nepalese Financial System. Kathmandu: Asmita Book Publishers
and Distributors.
Bhole, L.M. (2003). Financial Institution and Market. New Delhi: Tata McGraw-Hill.
Cooper, D.R, & Schindler, S. (2003). Business Research Methods. (8th ed.). New Delhi: Tata
McGraw-Hill.
Kohn, M. (2003). Financial Institution and Market. New Delhi: Tata McGraw-Hill.
Lewis, B.R. (1987). Technology in Banking. International Journal of Bank Marketing.
Vol5.
Metro Development Bank Ltd. (2066/67). Annual Report. Pokhara: MDBL.
Metro Development Bank Ltd. (2067). Information Brochures. Pokhara: MDBL.
Metro Development Bank. [online]. Available: <http://www.metrodevbank.com.np> Sept.17
2012
Nepal Rastra Bank. Annual and Quarterly Publications. Kathmandu: NRB
Nepal Rastra Bank.[online]. Available: < http://www.nrb.org.np> Sept.17 2012

37

Board of Directors of MDBL


Table
Board of Directors of MDBL
S.No
1
2

Name
Dr. Puspa Raj Sharma
Mr. Shiva Prasad Parajuli

Designation
Chairman
Director

Group
Reader (Finance) TU
Business man and social
worker
Business man and social

Dr. Nanda Shrestha

Director

4
5
6
7

Mr. Narayan Baral


Mr. Kabiraj Poudel
Mr. Ashok Man Kapali
Mr. Surya Prasad Tiwari

Director
Director
Director
CEO

worker
Social Worker
Social Worker
Business man

Table
Staff Detail
Staff Details : MDBL-Newroad Pokhara
S.No. Name
1.
Surya Prasad Tiwari
2.
Mr. Dev Raj Poudel
3.
Mr. Sujan Parajuli
4.
Mr. Dirga Prasad Adhikari
5.
Mr. Kamal Poudel
6.
Miss Mukta Khati
7.
Mr. Kamal B.K
8.
Miss Sharadha Poudel
9.
Miss Kriti Rana Magar
10.
Miss Yog Maya Gurung

Designation
CEO
Deputy manager
Assistant manager
Assistant
Assistant
Assistant
Jr. Assistant
Jr. Assistant
Jr. Assistant
Jr. Assistant