INTERNSHIP REPORT

AN INTERNSHIP REPORT ON
HIMALAYAN BANK LIMITED

Submitted by:
Sanjeela Joshi
Roll Number:
P.U. Registration Number: 2015-2-45-0108

Submitted to:
Ace Institute of Management
Pokhara University

In partial fulfillment of the requirements for the degree of

Bachelors in Business Administration- Banking and Insurance (BBA-BI)

Kathmandu
September
2018

I
INTERNSHIP REPORT

DECLARATION

I hereby, declare that this report entitled “AN INTERNSHIP REPORT ON HIMALAYAN
BANK LIMITED” has been carried out under the guidance of Mrs. Sharmila Maharjan,
coordinator of Ace Institute of Management, which is submitted in the partial fulfillment of the
requirement for the award of BBA-BI degree of Pokhara University comprises only my original
work and due acknowledgement have been made to the materials used in report.

I further declare that this project report is result of my own efforts and that it has not been
submitted in the part of in part or in full any other universities or in institutions for the award of
of any degree.

Sanjeela Joshi

BBA-BI 6th Semester

RN: 16450226

Ace Institute of Management

II
INTERNSHIP REPORT

BONAFIDE CERTIFICATE

Certified that this internship report on

Himalayan Bank Ltd
is the bonafide work of
Sanjeela Joshi
Who carried out the summer project proposal work under my supervision. This report is
forwarded for examination.

………………………………                                  …………………………...

Signature                                                                 Signature
Sharmila Maharjan                                                  Ramesh Chauhan
Supervisor                                                                Program Director

III
INTERNSHIP REPORT

Acknowledgement

In the today rapid changing world, the financial sector plays an important role in the economic
development of the country, more in the context of developing nation. Hence, I’m thankful to
Pokhara University for providing us the opportunity to allow us to perform a practical field work.

It’s my great pleasure to perform the practical activities in such esteemed organization,
Himalayan Bank completion of the internship and the report has been only because of the
appreciated support of many people. I benefited immeasurably from their knowledge suggestion
and feedback. I express my sincere gratitude to Mrs. Sabina Shrestha, intern supervisor, for
supervising me throughout the training period.

I’m grateful to all the staffs of Himalayan Bank, Thamel who gave me their valuable time in
guiding me throughout the training period and helped me in preparing the final report.

Finally, I would like to thank all the concerned people, my supervisors, family members and
colleagues for their precious time, valuable suggestion during my internship period. I perceive
this opportunity as a big milestone in my career development. I will strive to use my skills and
knowledge in the best possible way which I gained by working in this bank.

IV
INTERNSHIP REPORT

List of figures:

Figure 1:………………………………………………………….……… Deposit products

Figure 2:………………………………………………… Classification of corporate loans

Figure 3:………..……………………Organizational structure of Himalayan bank limited

Figure 4:……………………………………………………………..Balance sheet of HBL

Figure 5:…………………………………………………...Profit and loss account of HBL

Figure 6:…………………………………………………………..Equity structure of HBL

Figure 7:………………………………………………………….Share ownership of HBL

Figure 8:…………………………………………………………….Duration of internship

Figure 9:…………………………………………………………...Process of fund transfer

V
INTERNSHIP REPORT

Table of contents
DECLARATION…………………………………………………………………………………II

BONAFIDE CERTIFICATE ………………………………………………………………..…..III

Acknowledgement …………………………………………………………………………….…
IV

List of figures…………………………………………………………………………………,,…V

CHAPTER 1………………………………………………………………………………...…….1

ORGANIZATION PROFILE…………………………………………………………………..…1

1.1 INTRODUCTION OF BANK …………………………………………………………….1

1.2 Organization’s missions and objective ……………………………………………………1

1.3 Major market and customer………………………………………………………………..3

1.4 product and services ……………………………………………………………………….3

1.5 organization design and structure …………………………………………………………7

1.6 organization performance …………………………………………………………………8

CHAPTER II………………………………………………………………………………….….12

Job profile and activities performed …………………………………………………………….12

2.1 activities performed in organization ……………………………………………………..12

2.2 problem solved …………………………………………………………………………...22

2.3 Intern’s key observation…………………………………………………………………..22

CHAPTER III……………………………………………………………………………………23

3.1 Key skills and attitude learned …………………………………………………………...23

3.2 feedback to the organization……………………………………………………………...25

3.3 Feedback to college/university …………………………………………………………..25

VI
INTERNSHIP REPORT

References………………………………………………………………………………………..27

Annex……………………………………………………………………………………………28

VII
INTERNSHIP REPORT

List of acronyms:

AIM        = Ace institute of management

LC = Letter of credit

HBL = Himalayan Bank Limited

CSR = Corporate social responsilbility

ABBS     = Any Branch Banking System

NPR        = Nepalese Rupees

USD        = United State Dollar

BOD       = Board of Directors

CEO        = Chief Executive Officer

DPS         = Dividend per Share

ATM        = Automated Teller Machine

KYC        = Know Your Customer

CSD         = Customer Service Department

SMS         = Short Message Service

VIII
INTERNSHIP REPORT

Chapter I
Organization profile

1.1 Introduction to bank

Himalayan Bank was established in 1993 in joint venture with Habib Bank Limited of Pakistan.
Despite the cut-throat competition in the Nepalese Banking sector, Himalayan Bank has been
able to maintain a lead in the primary banking activities- Loans and Deposits. It goes with a
punch line “The Power to Lead”.

Legacy of Himalayan lives on in an institution that's known throughout Nepal for its innovative
approaches to merchandising and customer service. Products such as Premium Savings Account,
HBL Proprietary Card and Millionaire Deposit Scheme besides services such as ATMs and Tele-
banking were first introduced by HBL. Other financial institutions in the country have been
following our lead by introducing similar products and services. Therefore, HBL stand for the
innovations that bring about in this country to help customers besides modernizing the banking
sector. With the highest deposit base and loan portfolio amongst private sector banks and
extending guarantees to correspondent banks covering exposure of other local banks under the 
credit standing with foreign correspondent banks, HBL believe it as lead the banking sector of
Nepal. The last year rating of HBL by Bankers’ Almanac as country’s number 1 Bank easily
confirms our claim. Other awards and recognitions received by the bank in the past 6 years also
ranks the bank in high positions with awards like:

  Best Presented Account Award- 2008 awarded by The Institute of Chartered Accountants of
Nepal.

   Number 1 bank of Nepal-2006 awarded by the Bankers’ Almanac, Britain

   Number 1 bank of Nepal-2003 awarded by the Bankers’ Almanac, Britain

     National Excellence Award- 2003 awarded by federation of Nepal chambers of Commerce

and Industry.

1
INTERNSHIP REPORT

All Branches of HBL are integrated into T-24, the single Banking software where the Bank has
made substantial investments. This has helped the Bank provide services like ‘Any Branch
Banking Facility’, Internet Banking and SMS Banking. Living up to the expectations and
aspirations of the customers and other stakeholders of being innovative, HBL very recently
introduced several new products and services. Millionaire Deposit Scheme, Small Business
Enterprises Loan, Pre-paid Visa Card, International Travel Quota Credit Card, Consumer
Finance through Credit Card and online TOEFL, SAT, IELTS, etc. fee payment facility are some
of the products and services. HBL also has a dedicated offsite ‘Disaster Recovery Management
System’. Looking at the number of Nepalese workers abroad and their need for formal money
transfer channel; HBL has developed exclusive and proprietary online money transfer software-
Himal RemitTM. By deputing our own staff with technical tie-ups with local exchange houses
and banks, in the Middle East and Gulf region, HBL is the biggest inward remittance handling
bank in Nepal. All this only reflects that HBL has an outside-in rather than inside-out approach
where customers’ needs and wants stand first.

1.2 Organization mission and objective:

HBL's VISION

To become a "Leading Bank of the country" by providing premium products and services to
the customers, thus ensuring attractive and substantial returns to the stakeholders of the bank.

HBL's MISSION

To become preferred provider of quality financial services in the country. There are two
components in the mission of the Bank; Preferred Provider and Quality Financial Services;
therefore HBL believe that the mission will be accomplished only by satisfying these two
important components with the customer at focus. The bank always strives positioning itself in
the hearts and minds of the customers.

HBL’s Objective:
"To become the Bank of first choice" is the main objective of the Bank.

2
INTERNSHIP REPORT

1.3 Major markets and customer

Customers are one of the important players in any businesses whether be it a bank or any other
organizations. They are the one who demand the services and consume the products created and
produced by the firms or the organizations. The major customers of the bank include general
public, different corporate houses, business firms, import export agencies, etc. Himalayan Bank
are today one of the best managed banks in the country and a top 10 bank in terms of market
share, size of operations and quality of profits.

1.4 Products and services:

A.                Deposit product: figure 1

Fixed deposit Call account

Current account Premium saving account

Normal saving account Super premium saving

Bishesh saving account account

Recurring saving account Shareholder’s saving account

Himal saving account Jumbo term deposit

Himal remit saving account

B.   Loans

Loan facilities provided by HBL are:

1.      Corporate Loan

Corporate loan of HBL is classified in two categories. They are:

Figure 2

3
INTERNSHIP REPORT

Funded facilities Non-funded facilities

Project/consortium Loan Bank guarantee
Non-revolving cash credit Letter of credit
Working capital financing
Overdraft facility
Demand loan
Revolving cash credit
Import credit for telex transfer and
demand draft payment
Trust receipt loan
Export credit facilities
Pledge loan
Clean bills purchased and discounted
Documentary bills purchased and
discounted

2. Retail/consumer Loan 3. Small and medium enterprises loan

Hire Purchase Loan Funded/Non-Funded Facility in range of Rs.
Housing Loan 0.5 M to Rs. 40.0 M
Subidha Loan
Credit Card Loan
Loan against Fixed Deposit Receipt 
Loan against Government Bonds &
Bonds of Bank
Loan against First Class Bank
Guarantees
Loan against Shares

4
INTERNSHIP REPORT

C.             International Banking (LC)

To assist its trading customers, HBL offers Letter of Credit (LC) facilities. Customers can place
their LC application in any of HBL branches. The fees/ charges are one of the lowest amongst
the commercial banks of Nepal. The customers enjoy wide correspondent network of HBL in
addition to attractive rates.

D.             HIMAL Remit

Himalayan Bank Ltd. is a pioneer in the field of retail money transfer business with over a
decade long customized service delivery experience in the field. HimalRemit is a state-of-the-art
web-based online money transfer system. It is easily accessible through website of HBL. It can
be directly accessed by all branches and network thus ensuring prompt execution of the
remittance. The product is monitored and serviced 24/7 by Remittance Promotion Department of
HBL dedicated to deliver fast and reliable services to the customers. Himal Remit has the largest
payment network covering all cities, towns and villages of the country and is capable of paying
at more than thousand locations across Nepal which is in ever growing trend as per the demand
of local customers and service providers.

E.              Safe Deposit Lockers

Looking at the varying needs and wants of the customers, HBL offers locker facilities of various
sizes as per customer’s preference and convenience of location. Customers availing of this
facility enjoy not only peace of mind in terms of security of their valuable belongings but also
one of the most attractive rates and ease of location.

Salient Features:

   Temporary Locker Facility for client Going Abroad Period: 3 months to less than 6 months
50 percent of annual charge

   Temporary Locker Facility for client Going Abroad Period: 6 months to less than 1 year 75
percent of annual charge

      25 percent Discount on Annual Rent to PSA Holders

5
INTERNSHIP REPORT

   100 percent rebate on key deposit and 50 percent on annual rent to HBL board of members,
chairman, advisor to BODs, staffs and their spouse.

F.              Cards Services

HBL provides various card facilities to the customers can withdraw cash as well as purchase
goods from several merchants. Customers use these cards at any ATM terminal of HBL
networks as well as SCT network also. HBL provides ATM services to their customer, which is
open 24 hours, a bay, 7 days a week, and 365 days a year. The cards facilities by HBL are:

         ATMs Card

         Credit Card (VISA/Master card)

         Prepaid Card

         VISA Debit Card

         Master card

G.             SMS Banking and E-Banking

SMS Banking allows customers to check their balance, status of cheque (encashed or not),
HBL’s foreign exchange rate and contact numbers of branches. Through the customer service
department customers fill up the application form to apply for these services. After fulfillment of
the application form, the information regarding customer are sent to the information department
for further process. After that pin number issued by the information department is provided to the
customer through the customer service department. By using E- Banking and SMS Banking
customer can make inquiry for balance and can get the mini statement by using the electronics
means and mobile by suing SMS.

3.8 HBL Branches and Networks

HBL have totaled 41 Branch networks including branches inside and outside the valley which
does operational activities of the banks. Corporate office located at Kamaladi, Kathmandu does
all the management activities only. There are 40 ATM locations inside Kathmandu valley and 26
outside Kathmandu Valley.

6
INTERNSHIP REPORT

1.5 Organization design and structure

Himalayan Bank Limited has a very typical organization structure where the top level
management includes the CEO, Senior GM and GM. Under them are the various departments of
the bank with one person heading each department. The major decisions are taken by chief
Executive Committee.

The organizational structure of Himalayan bank is shown below:

Fig: 3 Organizational Structure of HBL

Board of Directors in HBL

Himalayan bank is managed by a team of professional Board of Directors. The Board of

Directors consists of the brilliant personalities assigned with various designations. The name list
of BODs along with their designations is placed in annex 2.

7
INTERNSHIP REPORT

1.6 Organizational performance:S

Current year Previous year

Total capital and 99,863,008,080 Total capital and 82,801,550,614
liabilities liabilities

Current year Previous year

Total assets 99,863,008,080 Total assets 82,801,550,614

Profit and Loss account:

Current year Previous year

Net profit 1,935,907,634s 1,112,285,716s

8
INTERNSHIP REPORT

 Equity Structure of HBL

9
INTERNSHIP REPORT

The Equity structure of Himalayan Bank has been briefly summarized in the table below:

Equity structure of HBL : Figure 6

Equity Amount
Authorized capital 2,400,000,000
Issued capital 1,600,000,000
Paid-up capital 1,600,000,000
Source: HBL Annual Report 2009/10

 Share composition of HBL         

The table below shows the share ownership of HBL.

Share ownership of HBL: Figure 7

Local partners 51%

Foreign partners (HABIB) 20%
Employee provident fund 14%
General public 15%

 Corporate Social Responsibilities by HBL

HBL is not only a bank; it is a committed corporate citizen. Corporate Social Responsibility
(CSR) holds one of the very important aspects of HBL. Being one of the corporate citizens of the
country, right from the time of its commencement, it has been discharging its social
responsibilities through various social and allied institutions. Being one of the active and
responsible corporate citizens of the country, HBL has always promoted social welfare activities.
Many activities that do a common

good to the society have been undertaken by HBL in the past. HBL is enthusiastically interested
in enrolling itself in such activities on an ongoing basis. The major services being rendered by
HBL in this front include those related to education, healthcare, sports, culture and social

10
INTERNSHIP REPORT

services. HBL allocates a significant portion of its ‘Annual Sponsorship & Donation Budget’ for
fulfilling social responsibilities. 

HBL CSR Activities:

 CSR to Orphan and Helpless Children Development Association in Nepal

(OHCDAN):

Himalayan Bank Ltd. has provided 5 units of double storied beds worth Rs. 75,000/- to an
orphanage, “Orphan and Helpless Children Development Association in Nepal (OHCDAN)”
located at KMC-6, Budhanilkantha. On the occasion of the 25th Anniversary and under the CSR
initiatives, the Bank has provided the beds to the orphanage. The beds will be useful to children
sheltering in the orphanage since the existing ones have become old and deteriorating. The
orphanage has been providing shelter to children of various ages. Mr. Sushiel Joshi, General
Manager of the bank has handed over the beds to Mr. Prakash Kumar Nepali, the Chairperson of
the orphanage.

 Contribution to restore Patan Durbar Square:

On the occasion of 25th Anniversary of Himalayan Bank Ltd., the Bank has contributed Rs. 10
Million under its CSR initiative towards Restoration of Patan Durbar Square in association with
Kathmandu Valley Preservation Trust (KVPT). The Chairman of the Bank Mr. Manoj Bahadur
Shrestha handed over a letter of contribution to Mr. Rohit K. Ranjitkar, Country Director, KVPT
amidst 25th anniversary function at Hyatt Regency on January 21, 2018.

 CSR to Helping Hands Children's Home:

On the occasion of Bank's upcoming 25th Anniversary and under the Corporate Social
Responsibility activity, General Manager Mr. Sushiel Joshi handed over Cloths (Track suit),
Food stuffs (Rice, Dal, Beaten Rice, Cooking Oil, Beans, Salt etc) to the children of Helping
Hands Children's Home, Aadeshwor, Sitapaila, Kathmandu

11
INTERNSHIP REPORT

Chapter II
Job profile and activities performed

2.1 Activities performed in the organization:

Placement

As concern to my placement in HBL, throughout my internship period I was placed in Thamel

branch. There I got an opportunity to work in different department such as bills and remittance
department, customer service department, trade finance, customer relation department, credit
management and administration department. The task was assigned as per the requirement of the
different department under the supervision of respective department head. I was fortunate
enough to gain knowledge on various departments under proper supervision of department heads
and staffs during the internship period. I presented myself with full confidence and well-
disciplined in this institution and created mutual trust among the staffs and got the opportunity to
learn functioning of different departments.

Duration of Internship

The duration of internship period has been declared for minimum 8 weeks by FOM, Pokhara
University. During eighth semester, student should complete internship acquire six credit hours.
As per the requirement, the internship was carried out from May 22, 2018   to July, 2018 in
HBL, Thamel branch from 10:00 am and to 5:00 pm in different departments. In this period, I
was placed in various departments so that I could develop knowledge about various activities
performed in each department making me able to achieve practical; disclosure to functioning
process.

12
INTERNSHIP REPORT

Duration of Internship: Figure 8

Departments / 1 2 3 4 5 6 7 8
weeks
Trade Finance

Credit
Administration
Bills and
Remittance

Information Collection Methods

The primary as well as secondary information has been used to prepare this report.

  Primary Sources

a.       Observation during internship in HBL

b.      Questionnaire with employees and customers of HBL

c.       Files, registers, computer data

  Secondary Sources

a.       Internet Surfing

b.      Reports and Brochures

c.       Publications and journals

Remittance department:

Remittance in general means transfer of money from one place to another place.  Bills and
remittance department is concerned with fund transfer, throughout the country and world,
currency exchange, issuance of draft, telex transfer, advance payments, collections and clearance
of cheques. Remittance is the flow of money from one economy to another, which is sent by

13
INTERNSHIP REPORT

migrant workers. It can be both internal and external. Remittance creates multiplier effect in
domestic country. Money coming through remittance increases investment and saving.
Remittance also has positive effect on balance of payment.

Generally, remittance refers to that portion of migrant’s earnings sent from the migration
destination to the place of origin. Even though they can also be sent in kind, the term
‘remittance’ is normally limited to monetary and other cash transmitted by migrant works to their
families and communities.

Remittance business was created by the foreign employment. These remittances are generally
used to cover day to day living expenses, to provide a cushion against emergencies and making
small investment. In developing countries like Nepal, these remittances noticeably exceed
foreign direct investment (FDI). Therefore, the government should pay more and more attention
in developing appropriate strategies to remittance flows as important financial sources to boost
economy development. Simple process of fund transfer can be shown through following figure:

Figure 9: process of fund transfer

Clearance:

Modernizing the Banking sector in Nepal is an essential strategic objective that Nepal Rastra
Bank seeks to realize by implementing an advanced cheque clearing solution that manages the
daily cheque clearing cycle electronically.

14
INTERNSHIP REPORT

ECC is the state-of-the-art interbank cheque clearing solution that has replaced the manual
cheque clearing solution in Nepal. It is an image-based, cost-effective, cheque clearing and
settlement solution, where the original paper cheques are transferred to scanned images in order
to be presented electronically through the secured communication channels from the member in
which they are deposited to the member on which they are drawn resulting in a faster access to
funds, lower transportation expenses and increased cheque trust.

ECC calculates the multilateral net clearing position and sends to the Settlement System of Nepal
Rastra Bank for settlement of the net clearing position of the direct member. The Central System
of the clearing mechanism lies at Nepal Clearing House Limited.

The Clearing House main activities can be summarized as the following:

1.      Receiving cheques from presenting members for outward clearing, and assuring the
presented cheques validity.

2. Transmitting cheques to respective Paying members for inward clearing

3.  Receiving replied cheques and rejected cheques from paying members

4.  Transmitting replied cheques and returned cheques to Presenting members.

5.  Ending the clearing session of the current business day.

6.  Generating the Net Clearing Position (NCP) and submitting the file to NRB for settlement
through the direct members’ accounts.

7.  Starting a new clearing session.

 Clearing Section

Clearing section is one of the counters under the bills and remittance department where both the
inward and the outward cheques are handled. An individual might receive payments via cheques
of various banks. ECC (Electronic Cheques Clearing) is a software mechanism that brings
together all its members (financial institutions) for clearings of the cheques. The cheques of
those financial institutions that are not the member of ECC are cleared in the clearing section of
the NRB.

The activities done in clearing section are:

15
INTERNSHIP REPORT

         Receiving the cheque for clearing and endorsing the cheque

         Making entry in the Globus system for clearing

         Informing the client in case of cheque return

         Returning the rejected cheque to the respective clients and maintain proper records

         Handling queries of the customer

         Returning the rejected cheque to the respective clients and maintain proper records

RESPONSIBILITIES

Presenting Member Responsibilities:

Non-conforming cheques:

i. A cheque that does not conform to the NRB Cheque Standards and Specifications.

ii. A cheque with missing payee name, date, amount in words and/or figures, account number,
signature and/or Ultra Violet fields, watermark, microprint of the signature line.

iii. Cheque date is ‘invalid’ (defined as postdated or stale). iv. The amount in words and figures
are not matching.

v. A cheque with amended MICR line information, i.e. cheque serial number, member code,
branch code, account number, and/or transaction code field.

vi. Cheques mutilated by members or customers. vii. Cheques with apparent alterations

Trade finance department:

Trade finance represents monetary activities related to commerce and international trade. Trade
finance includes lending, the issuance of letters of credit, factoring, export credit and insurance.
Companies involved with trade finance include importers and exporters, banks and financiers,
insurers and export credit agencies, and service providers.

The function of trade finance is to introduce a third-party to transactions to remove the payment
risk and the supply risk while providing the exporter with receivables according to the agreement
and the importer with extended credit. 

16
INTERNSHIP REPORT

Letter of credit:

A Letter of Credit, simply defined, is a written instrument issued by a bank at the request of its
customer, the Importer (Buyer), whereby the bank promises to pay the Exporter (Beneficiary) for
goods or services, provided that the Exporter presents all documents called for, exactly as
stipulated in the Letter of Credit, and meet all other terms and conditions set out in the letter of
Credit. A Letter of Credit is also commonly referred to as a Documentary Credit.

A "Letter of Credit" is used as an instrument for settlement of payment arising out of commercial
transactions like sales/purchases in national/international trade. We issue every types of LC as
per the requirement of our customers. The common types are as under:

1. Sight LC
2. Usance LC
3. Differed/mix payment
4. Revolving LC
5. Confirmed LC
6. Transferable LC
7. Back to back LC
8. Advance Payment LC
9. Discounting LC

Documents required for issuing a Letter of Credit-

•    Proforma Invoice/Sales contract/Indent containing at least-

o    Harmonic code (in eight digits) of the goods to be imported,
o    Country of Origin
o    Delivery and Payment terms and various other details like rate, quantity, total value,
shipment country etc. (wherever applicable)
o    Bi.Bi.Ni. Form No. 3 (Mandatory as per NRB) with LC Application Form
      Other documents required are-

17
INTERNSHIP REPORT

o    Firm/Company Registration Certificate

o    PAN Certificate
o    Board minute (if applicable)
o    MOA (Memorandum of Association)
o    AOA (Article of Association)
o    Citizenship
o    Latest Tax Clearance Certificate

Before issuing a LC, you will require to have approved credit limits sanctioned by the bank.
Moreover, imports and exports transactions that involve foreign currencies are subject to Central
Bank (NRB)'s foreign exchange regulations and other International rules like UCPDC 600, URR
etc.

4.2.2. Bank guarantee:

Banks guarantees are written obligations of the issuing bank (HBL) to pay a sum on to a
beneficiary on behalf of its customers in the event that the customers themselves do not pay the
beneficiary. Through such guarantee letters, HBL undertakes responsibilities to provide fund
(guarantee amount), following a default by you of your contractual or other obligations.

Letters of Guarantee can be in the form of Bank Guarantees, Performance Bonds, Bid Bonds,
Shipping Guarantees, Advance Payment Guarantees, Counter Guarantees, Supplier Credit
Guarantees etc.

Features and Benefits

•    Secure customers entering into bids, sales contracts, and tenders.
•    Fulfillment of contracts with counterparties, based on the guarantee terms.

1. Bid Bond (tender bond)

Its purpose is to secure any claims by the party inviting the tender on the tenderer in the event of
withdrawal of the bid before its expiry date or if the bid is modified unilaterally. It is also used if
the tender, upon being awarded the contract, refuses to sign the contract or provide further
guarantees on request.

18
INTERNSHIP REPORT

For issuance of bid bonds, customers need credit line from the bank.
 
2. Performance Bond Guarantee
As the name implies, performance bonds are a means of guaranteeing the performance of a
company to live up to what it is promising to do. This also applies to any subcontractors or
material suppliers that company may employ. All parties must adhere to certain cost, time, and
quality criteria based on what they've been contracted to produce.     
This guarantee is asked for by the beneficiary once it has elected a party to perform a certain
task. In case the terms and conditions are violated by the customer, the beneficiary will invoke
the guarantee and will obtain compensation for his loss.

3. Advance Payment Guarantees

Some contracts require that some percentage of Advance payment be made against the contract
awarded. In such cases the Buyer or the employer may seek an advance payment guarantee from
the bank with an undertaking to pay the guaranteed sum to the buyer if the contractor has failed
to comply with the terms and conditions of the contract.

5. Custom guarantee:

An agreement to cover a customs debt that has or will arise from certain customs procedure. This
is known as an actual or potential debt. Once, you’re authorized, you’ll need to provide a
guarantee to enter goods into custom procedure. And defer customs duties. Also it is a written
document issued by bank to customs authority at the request of applicant to guarantee that the
applicant will fulfill the obligation of paying custom duties.

6. Shipping Indemnity
Sometimes under an import LC, if the transport document (bills of lading) and other related
documents do not arrive on the due time at the issuing bank's counter even after the goods have
reached to the destined entry point, this type of guarantee is issued in favor of the shipping
company/port authority to release the imported goods.
Once the original documents arrive at the LC issuing bank and are submitted to the shipping
company, guarantee will be released.

19
INTERNSHIP REPORT

Documents required: 
The list below is a very comprehensive list of paper; however some of the documents listed
below may not be relevant in some cases.
•    Basic Information Sheet to be filled up and submitted by the customer.
•    Citizenship and/or valid permanent ID of the borrower/authorized persons and guarantors.
•    Company Registration Certificate
•    Copy of PAN/VAT registration with tax payment receipt.
•    Copy of partnership deed in case of partnership firm.
•    Copies of Articles and Memorandum of Association and certificates of incorporation of
companies.
•    Board minute in case of private limited company.
•    Audited, Mangament prepared or provisional financial statements of last 2 years for the
running company and projected financial statement for the new company for the next 5 years.
•    Authenticated copy documents relating to security offered/ applies to valuation report:
o    Title Deed (Lalpurja)
o    Blue print of cadastral map (Napi Naksa) certified by Napi Office
o    Recent land tax payment receipt from malpot office (Tiro tireko rashid)
o    Wealth tax payment receipt of the borrower
o    Copy of property transfer deed Certificate from municipality stating the name of land owners
of four corners along with kitta no. (Char-Killa Pramanit Gareko)
o    Citizenship certificate of landlord
o    proved/Certified building drawing along with the approval (Naksha & Pass Certificate)
o    "No objection Letter"(NOC) in case of collateral owned by third party (Manjurinama)
o    NOC from legal hires of owner of the company/Institution mortgage of the property(ies)
o    Relation certificate issued by local authority
•    Resume of the major promoters with highlighting of his technical qualification business

20
INTERNSHIP REPORT

experience and expertise.

•    Business plan/proposal report

Credit administration department:

The Credit Administration Department’s (CAD) responsibility is to make sure that all financing
facilities are well documented and cover HBL exposure.

The main functions of CAD include preparation of all loan documents, record keeping and safe
custody of all type of legal documents, arrangement of disbursement of loan facility once
security documents are complete, liaising with the Bank's lawyers, frequently reviewing portfolio
/ credit and security files, etc. An excellent turnaround time is ensured in the department.

1. Utilize Credit Risk Rating to Identify Risk in the Loan Portfolio by:

o Clearly defining credit grades and applying them to various types of borrowers

o Utilizing a clear, objective and measurable loan grading system

2. Loan Documentation Procedures that will:

o Identify the Borrower's legal structure

o Identify, value and properly classify the collateral (emphasizing appraisal

reviews)

o Evidence the debt outstanding

o Attach the bank's security interest in the collateral

o Perfect the bank's lien position in the collateral

21
INTERNSHIP REPORT

3. Effective Loan Portfolio Management by:

o Defining the expectations of loan officers in the management of their loan

portfolio

o Using Loan Agreements, Covenant Compliance Reports and other monitoring

tools to manage the loan portfolio

o Adopting prudent commercial real estate loan workout strategies for problem
loans

4. Calculating and Maintaining an Adequate Allowance for Loans and Lease Losses

o Reviewing and Documenting the ALLL methodology

2.2 Problem solved

• Filing in communication gap between the staff and customers.

• Answering the queries of the customers.

• Organizing the files, papers, forms, stationery items in the reachable places.

• Redoing or editing the items previously found faulty.

• Helped the staffs in finding the files in department.

• Helped to find out the missing document.

• Helped to fill out forms like BI.BI.NI.

• Helped to prepare file for import LC, export LC.

• Reducing the workload problem by sharing the tasks with other staffs.

2.3 Intern’s key observation

22
INTERNSHIP REPORT

The six weeks internship program was fruitful and a great learning experience for the intern.
The internee learned about the real life working scenario in one of the top commercial bank of
Nepal. It was a great exposure to the internee. The internee was able to learn various new
knowledge as well as the practical implications of various theoretical knowledge after the eight
weeks internship exposure. As an intern I got an opportunity to observe the working environment
of trade finance department , Credit administration department, remittance department.

In Trade finance department , activities related to trade and guarantee take place. It involves
payment through letter of credit, telex transfer, document collection and issue of guarantee. The
work of staffs are divided. And the works of department are interconnected to each other. There
is one supervisor who looks after the performance of other staffs and one department head.
Since, all the works are interrelated proper communication between staff is very important for
the proper performance.

The Credit Administration Department’s (CAD) responsibility is to make sure that all financing
facilities are well documented and fully cover HBL’s exposure. The main functions of CAD
include preparation of all loan documents, record keeping and safe custody of all type of legal
documents, arrangement of disbursement of loan facility once security documents are complete,
liaising with the Bank's lawyers, frequently reviewing portfolio / credit and security files, etc. An
excellent turn around time is ensured in the department.

Remittance is a quick and easy way of transferring money to Nepal by nepali’s living abroad.
HBL Remittance provides remitters multiple ways to send money to their loved ones. I was
placed in clearing section of the department. Where we received external cheques from other
banks. Since, it was Ashadh Masanta period as the end of the month, there many customers who
came for cheque clearing. And due to it, the clearance section was very busy. And as an intern I
was of great help to receive those cheques.

The staffs were very cooperative. They were always there to explain about the activities
performed despite their busy schedules. All the staffs of departments worked as a team and you
could see spirits among them. Maintaining proper discipline is very important for the
organization. I learnt the discipline that was required to work in a bank such as not using
cellphones during work hour, greeting everyone, and maintain a good communication.

23
INTERNSHIP REPORT

Chapter III
Lesson learnt and feedback

3.1 key skills and attitude learnt

The internship program has provided the interns with lots of opportunities to learn about
different aspects of an organization as well as it has introduced with the real world situation.
Only theoretical knowledge is not enough, rather than implying

theory into practical knowledge will help us learn many things. The internship in HBL provided
a great opportunity to learn about different aspects of the banking sector. It is one of the most
important industries that enhances the economic activities of the country. Working with the
professional in the organization was challenging as well as a great experience.

The six weeks of internship period was a platform to gather knowledge. The internship period
became a fun experience rather than a requirement. As an Intern, I have obtained insights into
career opportunities through interaction, observation and work experience in the organization
and also built another step towards success through interpersonal, managerial communication
and entrepreneurial skills. Being exposed to professional working environment, I have
understood about the corporate social responsibility. The most important lesson learnt as an
intern has been listed as follows:-

1. Interpersonal skills:
Through the internship program, I have developed my interpersonal skills better than
before. I am able to communicate effectively in writing and in person. I can easily
participate in team activity and if necessary I can lead my team.
2. Time management skills:
Planning out our time effectively in order to deliver excellent quality on-time is therefore
one of the most critical skills one must learn. The internship program taught me how to
manage the time and complete the task effectively even in pressurized environment.
3. Discipline:

24
 INTERNSHIP REPORT

SBL has a very strict policy regarding discipline. Unnecessary disturbance within the
organization was very rare. So, I learnt about the disciplines to be maintained within the
organization.   

4. Work ethics:

During my internship, I learnt about work ethics, what works should be done and what
works shouldn’t be done while working in an organization. The work ethics also include
how to behave well, how to be well-dressed in an organization, what ought to do and what
ought not to do.

5. Problem solving skills:

The ability to find creative solutions to problems is a crucial skill for a young professional
in any career. This internship provided me chance to solve different problems that may
arise in the working environment. I assisted my supervisors in solving many such
problems.

6. Positive attitude:

A positive attitude is considered a “soft skill” because it represents a character trait and an
interpersonal skill. I have developed positive attitude through the internship.  It’s a
mentality that can affect all aspects of our job, from improving our work ethic to being
open to new opportunities and responsibilities.

3.2 Feedback to the organization:

The corporate culture of HBL is very appealing and warm. But it is not free from loopholes. I
would like to give following feedback to the organization:
 The infrastructures should be properly maintained.

25
 INTERNSHIP REPORT

 The necessary and required amount of stationery item should be made available on time
so that there is no delay in execution of work.
 Waste paper should be utilized properly for non-official use rather than tearing it off.

 The staff are less motivated and hence there should be proper motivating factors.

 Introducing new product in the market so that more number of customers will be
attracted.

 Expansion of branches all over Nepal.

 An extra computer for the intern must be provided because most of the intern’s work
Involves the use of computer.

3.3 Feedback to college/university

An internship is an opportunity to apply the knowledge gained from academic studies into
practical workplace setting. Internships are quickly becoming essential for any job and can offer
a lot of experience to students hoping to get ahead. Completing an  internship not only bolster
our resume, but allows us to acquire essential professional skills that will help us succeed in our
career; gives us stronger credibility in a job interview; sets us apart from other applicants when it
is time to secure a job; and gives us the opportunity to network and make useful professional
connections. Internship program may range from few months to a year. Students gain training,
develop new skills and even supervision facilitates learning during internship.

Some of the suggestions that I would like to give the university are:

 Internship program would have been more successful and less hectic if regular classes
were not conducted and assignments were not given simultaneously with the internship
program.
 There should have been proper and timely guidance and supervision for report writing by
the internship coordinators.
 Because internship was conducted with the classes of 6 th semester, I faced difficulty to
manage time. Due to which I didn’t even had breakfast in most of the days. And lunch

26
INTERNSHIP REPORT

break was given only on 3pm. If PU had arranged internship time in more flexible time
then it would had been much more efficient.
 But I did had a very good practical experience and got to know various people of the
organization. And learned new things through internship.

 Universities should try to provide such opportunities for more than 8 or 10 weeks because
the present time is insufficient to learn everything about the organization. The time when
we feel that we are learning deeper about the organization, we have to leave the
organization.

Hence, I can sum up by saying that my internship experience was a milestone to my

academic and professional experience. I thoroughly enjoyed the challenges that came
along every single day. These lessons that I have learned will be a valuable one for my
future endeavors as well.  

Reference:

 https://himalayanbank.com/
 https://www.wikipedia.org/
 Reference from library : senior’s internship report
 https://www.investopedia.com/terms/t/tradefinance.asp#ixzz5PiIRrVEK
 https://www.megabanknepal.com/page/bank-guarantee

27
INTERNSHIP REPORT

 www.scribd.com
 www.summerinternship.com

28
INTERNSHIP REPORT

Annex:

Balance sheet:

29
INTERNSHIP REPORT

Profit and loss account:

30