LOAN ANALYSIS OF

NBL, Itahari, Sunsari

By

Dipesh Pradhan
PU Registration No.: 051-2-2-00358-2015
Symbol No.: 270446
Kasturi College, Itahari

An internship report submitted to the Purbanchal University, Faculty of Management in

partial fulfillment for the Degree of Bachelor of Business Administration (BBA)

May, 2019

Itahari
 Recommendation

This is to certify that the internship report

Entitled
Loan Analysis of Nepal Bank Limited
Itahari, Sunsari

Submitted by
Dipesh Pradhan

has been prepared as approved by this college in the prescribed format of the Faculty of
Management. This internship report is forwarded for examination.

Mr. Bhawanath Ghimire

Supervisor

Date:

ii
 VIVA voce sheet

We have conducted the viva voce examination of the internship report

Entitled
Loan Analysis of Nepal Bank Limited
Itahari, Sunsari

Submitted by
Dipesh Pradhan

and found the internship report to be the original work of the student and written
according to the prescribed format. We recommend the internship report to be
accepted as partial fulfillment of the requirements for the Degree of
Bachelor in Business Administration (BBA).

Viva Voce Committee

Head, Research Department: Prof. Dr. Kedar Prasad Poudel .................................

Member, Internship Report Supervisor: Mr. Bhawanath Ghimire .................................

Member, External Expert: .................................

Date:

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 Acknowledgement

In the preparation of this internship report, various persons from various sectors helped me in
each step I took. For the student of management, practical knowledge about the business
world becomes very much necessary. So, being the student of Kasturi College, I am very
much pleased to have this privilege of conducting internship program on NBL, Itahari
Branch.
Firstly, I am very much thankful to Purbanchal University for including the internship
program in BBA 7th semester course, which helped a lot for our future growth.
I would like to express my sincere thanks to Mr. Bhawanath Ghimire (report
supervisor) for his valuable suggestion, advice, instruction and guidance for preparing this
comprehensive internship report and i would like to express my special thanks to Prof. Dr.
Kedar Prasad Poudel, Chairman of Research Committee of Kasturi College.
My heartily thank to Mr. Damber Bahadur Bhandari, branch manager of Nepal Bank
limited, Itahari whose ongoing support help me to carry out all the elements in this report. I
would thanks to all of the staffs of Nepal Bank Limited, Itahari branch for their unbelievable
support.
My endless thank to my friends for their significant Co-operation and constructive
support in the preparation of this internship report. I would like to express my special thanks
to my parents for helping me financially in completing this report.

.........................
Dipesh Pradhan
7th Semester

v
 Table of Contents

Cover Page ii
Recommendation Sheet iii
Viva Voce Sheet iv
Certificate of Internship Training Organization v
Acknowledgement vi
List of Contents vii
List of Tables viii
List of Figures ix
Abbreviations x
Executive Summary xi

Chapter-I: Introduction

1.1 Overview of Organization 1

1.2 Brief History 2
1.3 Nature of the Organization 3
1.4 Business Volume 5
1.5 Nature and nature of Employees 6
1.6 Products and Services 7
1.7 Organizational Structure 10
1.8 Overall concerned Department 11
1.9 Objectives 12
1.10 Studying the Chosen Organization 12
1.11 Specific Objectives 13
1.12 Methodology 13

Chapter-II: Observation
2.1Functions of the Concerned Department 14
2.2 Detail of Assigned Work Responsibility 16
2.3 Problems Encountered During 20

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 2.4 Data Collection Methods 20
Chapter-III: Analysis and Review
3.1 Analysis of data collected 21
3.2 Critical Analysis of the Theoretical Concepts Relating to practical
Experiences in the Department 29
3.3 Knowledge learned from the work Assigned 30

2
Chapter- IV: Conclusion and Recommendations
4.1 Contribution of Internship in Knowledge gain 32
4.2 General comments and suggestions for the Bank 33
References 35
Annexure

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 Table of Contents

Table 1.1 Business Volume 5

Table 1.2 Employees 6
Table 3.1 Interest Rate 22
Table 3.2 Repayment period of Loan 22
Table 3.3 Statement of Total Deposit and Total Loan 23
Table 3.4 Home Loan on the Month of Poush and Magh, 2075 23
Table 3.5 Overdraft Loan on the Month of Poush and Magh, 2075 25
Table 3.6 Term loan on the Month of Poush and Magh, 2075 26
Table 3.7 Gold Loan on the Month of Poush and Magh, 2075 26
Table 3.8 Fixed Deposit Loan on the Month of Poush and Magh, 2075 27
Table 3.9 Personal Loan on the Month of Poush and Magh, 2075 27
Table 3.10 Hire Purchase Loan on the Month of Poush and Magh, 2075 28
Table 3.11 Lending Rate for Auto Loan 28
Table 3.12 Statement of Credit Deposit Ratio 29

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 List of Figures

Figure 1.1 Shareholding composition of NBL 4

Figure 1.2 Product and Service of NBL 9
Figure 1.3 Organization Structure of NBL 10
Figure 2.1 Working Procedure at Loan Department 16
Figure 2.2 Approval Process of Loan 18

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 Abbreviations

ABBS Any Branch Banking Service

AOD Assets Operation Department
ASB Application Supported by Blocked Amount
ATM Automated Teller Machine
BBA Bachelor in Business Administration
CAD Credit Administration Division
CI Credit Information
CIB Credit Information Bureau
CRD Customer Relation Department
CSD'S Customer Service Department
EMI Equal Money Installation
FPO Further Public Offering
IBC Inward Bill Collection
IPO Initial Public Offering
KYC Know Your Customer
LD Loan Department
LM Loan Manager
LTD Limited
MIS Management Information System
MSD Management Service Department
NBL Nepal Bank Limited
NRB Nepal Rastra Bank
OBC Outward Bill Collection
PAN Permanent Bill Number
Pvt. Private
RMD Risk Management Department

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RTG'S Real Time Gross Settlement
SMS Short Message Service

Executive Summary

As per the requirement of Purbanchal University course under BBA 7th program this report is
designed according to the knowledge gained on field base experiences. The main aim of the 8
weeks internship program is to provide internee an opportunity to implement their theoretical
knowledge practically. Out of the various area or sector for internship, I prefer banking
sector, more specifically Loan Analysis of Nepal Bank Ltd, Itahari Branch. This is the world
of economy, competitive service oriented product. The world is getting smaller and smaller in
terms of globalization due to the development of technology. Among the various business
firms banking plays very important role in an economy by providing various services like:
payment system, deposit, loan etc. but it is not easy to cope and function in the changing
globalized environment. This is only possible with the help of sound planning. Also Nepal
Bank Ltd. is the pioneer of banking in Nepalese history as well as one of the leading banks in
Nepalese environment with many branches all over the country.
Although this report is the outcome of 8 weeks experiences in CSD of NBL, I have
mentioned all the important information as far as possible. This report is basically based on
secondary data: also it's an outcome of various experience, interaction and analysis during
internship periods. Finally this report is the short and sweet outcome of continuous effort of 8
weeks program which will be beneficial for the understanding mechanism of planning.

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Chapter - I
Introduction

1.1 Overview of the Organization

Nepal Bank Limited is a limited liability company registered with Nepal Government
Company Register's Office under Company Act, 2063, have received "A" class licence from
Nepal Rastra Bank to perform banking business under bank and financial institutions Act,
2063. The bank was established in Kartik 30, 1994 B.S.(November 15, 1937) as the first
commercial bank of Nepal. Nepal Bank did all the commercial function and some function of
central bank as there was no bank in Nepal until NRB was established in 2022B.S. The
registered of this bank is located at Dharmapath, Nayasadak Kathmandu. The management of
this bank has been taken by Nepal Rastra Bank under its control since Chaitra 01, 2058 B.S.
(March 14, 2002A.D). It was formed as a joint venture between government and general
public. NBL's authorized capital was Rs.10million and issued capital Rs.2.5 million of which
paid-of-capital was Rs.842 thousand with 10 shareholders. The bank has been providing
banking through its branch office in the different geographical location of the country. It is
also called financial department store.

Corporate vision
The corporate vision of NBL is "Pioneer Bank with complete banking solution".

Mission of NBL
 Network for inclusion: Use bank's network to increase its reach all over the country
from urban areas to rural areas and help in improving the lifestyle of rural population
and in turn become the bank of choice of corporate, medium businesses and rural
market.
 Enhancing the value: To employees, shareholders, government and customers.
 World class banking services: provide world class banking services by achieving
excellence in customer service and adopting high level technology standard.

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Values of NBL
 Segmented business approach: For risk management and enhancement of efficiency
 Society partnership: with all stakeholders including the government, employees,
shareholders and customers.
 Innovation: Of business areas and processes for providing advanced banking services
and enhance competitiveness
 Responsiveness: Responding to the changing need of the market/society/business on
timely basis
 Integrity: Uphold trustworthiness and business ethic in the business process
 Total banking solution: To cater the need of all sections of society.

1.2 Brief History

His Majesty King Tribhuvan inaugurated Nepal Bank Limited on Kartik 30th 1994 B.S. This
marked the beginning of an era of formal banking in Nepal. Until then all monetary
transactions were carried out by private dealers and trading center.
Then Prime Minister Maharaja Juddha Shumsher J.B.R. speaking on the occasion
with the kind permission of His Majesty the king stated this work which is being done in the
larger interest of the nation is a great moment for me. Until today a bank could not opened in
Nepal. Therefore, this bank, which is being established under the name of Nepal Bank
Limited to fill that, need and to be inaugurated by his Majesty the king, is a moment of great
joy and happiness.
The bank's objectives to render service to the people whether rich or poor and to
contribute to the nation's development will also need the support and best wishes of all,
which I am confident, will be forthcoming.
In the era, very few understand or had confidence in this new concept of formal
banking. Rising equity shares were not easy and mobilization of deposit even more difficult.
This was evident when the bank floated equity shares worth NRs. 2,500,000 but was
successful only raising NRs. 842,000.
In the absence of any bank in Nepal the economic progress of the country was
hampered and causing inconvenience to the people and therefore with the objectives of
fulfilling that need by providing service to the people and for the betterment of the country,
this law is here by promulgated for the establishment of the bank and its operation.

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The total deposits for the first year was NRs.1702025where current deposits were
about NRs.12,98,898 fixed was about NRs.3,88,964 and saving was NRs.14,163. Loan
disbursed and outstanding at the end if first years was NRs.1,985,000.
From the very conception and its creation, Nepal Bank Limited, was as joint venture
between the government and the private sector. Out of 2500 equity shares of NRs.100 face
value, 40% was subscribed by the government and the balance i.e. 60% was offered for the
sale to private sector. There only 10 shareholders when the first start.

Vision of Nepal Bank Limited

 '' Pioneer bank with complete banking solution''
 ''To remain the lending financial institution of the country .''

Mission of Nepal Bank Limited

 NBL is a sound institution where depositors continue to have faith in the security of
their funds and measure at reasonable returns.
 Borrowers are assured of appropriate at reasonable price.

1.3 Nature of Organization

Nepal Bank Limited, the first bank of Nepal was established in November 15, 1937 A.D.
(Kartik,30,1994). It was formed under the principle of joint venture (Joint venture between
govt.& general public ). NBL's authorized capital was Rs.10milloin & issued capital Rs.2.5
million of which paid-up capital was Rs. 842 thousand with 10 shareholders. The bank has
been providing banking through its branch office in the different geographical location of the
country.

Objectives
Nepal Bank Limited has following objectives:
 Focus on building the positive net worth and meeting minimun capital requirement
over the coming five years.
 Focus on the increasing the customer base and market share.
 Maximize the potential /efficiency of bank's staff.
 Focus on minimizing the risk associated with the business.
 Focus on increasing the suitable profit.

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Shareholding Composition
NBL holds 62.21% shares by the government and rest of the shares i.e.37.79% is owned by
the public. The figure represented clearly shows the shareholding of NBL.

Figure1.1
Shareholding Composition of NBL
Source: www.nbl.com.np

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NBL Network Overview

Province wise branches No. of Branches
Province 1 30
Province 2 29
Province 3 44
Province 4 (Gandaki) 20
Province 5 25
Province 6 (Karnali) 06
Province 7 07
Total no of branches 161
Source: www.nbl.com.np

Composition of Board of Directors

Name( Connections) Type of Board Members
Mr. Basudev Adhikari Chairman of the board
Mr. Harisharan Pudasaini Member of the Board of Directors
Mr. Dipendra Bikram Thapa Member of the Board of Directors
Dr. Umakanta Silwaln Member of the Board of Directors
Mr. Ganga Prasad Gyawali Member of the Board of Directors
Source: www.nbl.com.np

1.4 Business Volume

Nepal Bank Limited Branch has around 12600 number of customers, with the total deposit of
Rs.70 crores. Which includes 9850 numbers of saving account, 2050 numbers of current
account and 700 are using other different facilities. It has been able to satisfy the customers
with all the emerging services that they have provided.

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Table 1.1
Business Volume of Nepal Bank Limited, Itahari Branch
Period Deposit Loan
Poush 2075 20581204 16259151
Magh 2075 28154547 22523638
Source: Nepal Bank Limited, Itahari

The collection of deposit at the end of Poush was Rs.20581204 and the total sanctioned loan
was Rs.16259151. The total deposit amount at the end of Magh was increased to
Rs.28154547 and the loan investment is Rs.22523638.

1.5 Nature and Number of Employees

The bank consists overall 22 members out of which 17 employees are permanent. The
employees are categorized on the basis of nature of journal and cash staff. The current
manpower of the bank is shown in the following table:

Table 1.2
Employees of Nepal Bank Limited, Itahari Branch
Designation Number of Employees
Branch Manager 1
Assistance Branch Manager 1
Assistance Manager 1
Operational Incharge 1
Assistance 8
Messenger 4
Security Guard 6
Total 22
Source: Nepal Bank Limited, Itahari Branch

The bank has provided various facilities to its staff. They are as follows:
 Loan facilities
 Yearly bonus
 24 days paid holiday in a year ( 12 days leave 12 days sick leave)
 Medical facilities

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 Insurance
 Festival allowance
 Overtime bonus

1.6 Products and Services

Nepal Bank is also one of the leading banks in Nepal. It provides almost every facility which
can satisfy the Nepalese citizen. It is the bank which has greatest branch all over the Nepal
because of its reliable services. The services provided by bank are:

Deposit
Nepal Bank Limited offers a wide range of deposit products that caters the requirement.
Nepal Bank Limited accepts deposit under the following three accounts:

Current account
Nepal Bank's current account saves the hassle of carrying around cash every month. The
account is non-interest bearing and it comes with a cheque book just need to write a cheque
whenever and wherever it's convenient.
A current account can be opened with a minimum amount decided by the specific
branch. Once the account is opened customer will receive cheque book containing 10
personalized cheques. To replace the cheque book once if run out of cheques, customers can
just present the replacement form at the bank off current cheque book at home branch and a
new one is arranged.

Saving Account
With a Nepal Bank Saving Account interest is calculated and credited to depositor's saving
accounts on the minimum monthly balance bi-annually. It is customer's passport to other
Nepal Bank products and services designed to help make managing the daily life easier and
more convenient. Initial deposit ranges are depending upon the branch and its level.

Fixed Account
Fixed Deposit can be opened with a minimum balance. Interest is payable quarterly. Tax is
deducted at source from the interest on saving deposit as per the Income Tax Act,
2058(2001). Nomination facility is available on fixed deposit. The tenure of fixed deposits

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are 3months, 6months, 1year, 2years to 5years. The parties eligible to open fixed deposit
account are individuals, minors, associations, clubs and societies.

Loan and Advances

There are various types of loan/advances products provided by NBL through its extensive
branches around the country:
 Consumers Loans
 Personal Loan
Personal Loans are provided to fulfill the personal needs of an individual. It is basically
provided against the land & building and other fixed properties of an individual. There are
two types of personal loans i.e. personal term loan and personal overdraft loan.

Auto Loan
This loan is provided for purchase of new vehicles. Auto loans are provided for both private
and commercial use.

Margin Lending
This loan is provided against the shares of companies, which are listed in Nepal Stock
Exchange (NEPSE) and acceptable to the bank. Any individuals, companies, and firms can
take this loan. But all the borrowers should be Nepalese citizen. This loan can be taken
against the shares owned by any person or company.

Home Loan
These loans are provided for purchase a plot of land and construct a building on it, purchase
of already built house, renovation, modification, extension of existing building and
construction of building on land already owned. The loan is provided to any individuals who
have regular and stable source of income.

NBL, Web Remit

After the successful completion of 79 years, NBL, introduce 'NBL Remit' - an online/internet
based Remittance Service for the purpose of facilitating to transfer the earnings of Nepalese
Expatriates in foreign countries, NBL remit is powered by domestic money transfer facility
through all of the bank's branches throughout the country with very minimal charge.

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Safe deposit vaults

The save deposit vaults facilitates provided by NBL helps customers to best protect their
valuable commodities and documents. Customer's valuables are safely stored in another
location other than their home or business, which provides safest protection for their
commodities and documents from fire and theft. Safe deposit vault provides protection for
valuable commodities like jewels, medals, rare stamp and negatives for important photos and
valuable documents like insurance policies, birth certificates, deeds, leases, contracts, bonds
etc in case of fire and theft.

SMS Banking Services

Nepal Bank Limited provides SMS (Short Message Service) banking service to its valuable
customers. NBL provides the service from all computerized branches. In SMS Banking
service, customer can get account information easily by sending SMS to 1994.

Any Branch Banking System (ABBS)

NBL is now having largest ABBS network with 38 branches throughout the country. In this
banking service, customer having account with NBL can access their account from any NBL
branches which are online or within the central node. In ABBS facility customers can deposit,
withdraw and remit money from any branch, which are connected with central node.

E-banking
Now NBL is just a click away. Customers can access their account in Nepal Bank Limited on
their desktop, from any place. NBL Internet Banking provides wide coverage of services in
order to facilitate valuable customers. Balance check, cheque stop, cheque issue, statement
print etc are some of the facilities under this service.

NBL ATM/Debit Card. NBL has introduced its ever-waiting ATM/Debit card by joining the
hands with smart choice technologies (SCT), the first company in Nepal to provide
networked ATMs.
NBL ATM/Debit Card of Nepal Bank allows its customer to access a vast network
of ATMs located in various points in Kathmandu and major cities within Nepal displaying
the SCT logo on it. NBL ATM outlets support cards from the banks associated with SCT as
well as visa and master cards.

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Application Supported by Blocked Amount (ASBA) Service

Nepal Bank Limited has been providing Application Supported by Blocking Amount
(ASBA) services since February 2017. This system temporarily blocks the applicant's amount
for any IPO/FPO share application in his/her own bank account and is described from the
accounts only after the allotment process. The customer is charged Rs.10 (In words Ten
Rupees only) per application for this service.

Other Services
Along with the above services, it also provides very effective customer service which helps
customer to get the facilities. It helps in making the telephone bill payment, insurance
payment, tax payment and also helps in paying the pensions to the government officials.

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1.6.1 Service provided by Nepal Bank Limited, Itahari branch.

Products/Services

Loans Remittance Others

Deposits
NBL Web Current Safe
NBL Personal
Remit NBL Deposit Trade
Saving
NBL Education
Remittance Fixed Finance SMS
NBL Auto Loans Banking Internet
Others
NBL Margin Banking ABBS

NBL Home Service Utility

Loans Payment
ATM/Debit
card
Inward Outward

SWIF SWIF

TT and Mail TT and Mail

Drafts Remittance
to
Drafts
Western Union
Money
Remittance from
Gulf
Figure 1.2
Products and services of NBL
Source: www.nbl.com.np

The products and services of Nepal Bank Limited, Itahari branch are loan and advances
which further includes personal loan, education loan, auto loan, margin lending and home
loan, remittance includes NBL web remit and NBL remittance which includes inward and
outward remittance, deposits and other services.

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1.7 Organizational Structure

Branch
Manager

Credit
Operation

General Cash
Relationship Administration
Remittance
RMD

Money Transfer Loan Administration/MI

Cash receive

IBC/OBC and payment

Personnel
MSD
Clearing

Customer Service

Figure 1.3
Organizational Structure of NBL, Itahari Branch
Source: Internal Profile of NBL, Itahari Branch

The above figure depicts the organizational structure of NBL, Itahari Branch. Branch
Manager serves as the head of the organizational that make the major decisions about the
overall performance and control the organization. Operation In-charge and Credit manager
work under Branch Manager. Operation In-charge supervises and control the remittance, cash
and general administration. Credit manager supervise and control the relationship and RMD.

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1.8 Overall Concerned Department

Customer Service Department (CSD)

It is the most important department of NBL. It is the enquiry sector and is established for
customer's convenience. The customer can take any type of information from this section. So,
the employees of this department are ready to handle every type of customers. This
department is responsible for dealing with different customers receiving the call, opening the
different account, distribution of cheques and so on.
Task, duties and accountability toward CSD
 To response to the customer's enquiry as of their necessity.
 To receive the telephone call and response the caller efficiently and effectively.
 To assist the customer in opening and closing different account.
 To issue new cheque book, summary or the statement of account.

Operation department
Under this department, various activities related to deposit and cash are done. This
department accepts various types of deposit. The interest rate is provided depending upon the
nature of deposit. Customers can deposit on saving, current, fixed, call, margin and other
types of accounts in which they are interested. Business customers are not authorized to have
saving deposit. Saving deposit is preferred to personal customer. In saving deposit and fixed
deposit customer get some interest. This department is also concerned with cash activities. It
performs the transaction of payment and depositing of money. The number of cheque issued
and amount withdrawn by the customer are daily recorded in this department. The exchange
of money is also done under this department.

Administration department
This department looks upon overall activities of the bank. It does the purchasing work of the
bank. The stationeries are purchased and are distributed from the administration department.
The letters and documents of the bank are sent from their department and they are received
too. It prefers profit and loss account. It looks after the salary, bonus, pension etc. of the
employees working in this bank.

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Credit department
In this department, bank provides loan to needy customer. Personal customers take loan
against their fixed deposit or for customer credit. There are various types of loan provided by
NBL and they are demand loan, overdraft, export loan, term loan, housing loan, auto loan,
education loan etc. Bank issue various types of guarantee also. Especially business customer
needs the bank guarantee.

Remittance Department
NBL Remit is an online/interest based remittance service for the purpose of facilitating to
transfer the earning o Nepalese and Nepalese expatriates in foreign countries with the help of
available NBL agents. Along with inward remittance from foreign countries, NBL-remit is
powered by domestic money transfer facility through all of the bank's branches throughout
the country with very minimal charge. NBL Remit Service is also operated by agents of
Nepal Bank who exist in different locations of the National and International topography.

1.9 Objectives of the Study

The primary objectives of the Study are to use the theoretical concepts in analyzing real life
of practical orientation in banking activities, which is a partial requirement BBA Program
but the objective behind this study is something broader. The board objectives of this study
are summarized in following manner.
 To highlight the activities carried out in NML.
 To make appraisal of customer service of this bank.
 To present an overview of NML.

1.10 Studying the Chosen Organization.

Selection of the organization for internship in initial and most crucial task. Success in the
fulfilment of the objectives of the internship completely depends on the type of the
organization that had been selected. As a student of banking and finance, financial institution
was thought to be better option for the internship. So. I initiated my action in doing the
internship in Nepal Bank Limited as it is the first and most reputed bank in Nepalese Banking
Industry. If follows the standard business procedure and contains good organizational culture.
The internship Nepal Bank Limited was possible only I dropped the recommendation letter of

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the college. along with my curriculum vitae, to the Branch Manager. The letter was further
send to the Head Office for acceptance. After the completion of internship, I have to face
interview by the Branch Manager along with two copies internship report.

Placement
Regarding the placement ,the internee was appointed to conduct the internship at the NBL
Branch Office, Itahari Sunsari. During the internship period the internee was placed in
Customer Service Department (CSD). The task was assigned as per the requirement of the
customer service department under the supervision of department head I was fortunate
enough to gain knowledge on that department under proper supervision of department head
and staffs during the internship period. I presented myself with full confidence and well
disciplined in this institution and create mutual trust among the staffs and get the opportunity
to learn functioning of customer service department.

Duration
The duration of internship has been defined for 8 weeks or 6 credit hours of working time at
the organization by Purwanchal University, Faculty of Management (FOM). So, in order to
fulfill this requirement internship was done for 8 weeks in NBL, Itahari Branch from
10:00am to 4:00 pm in Customer Service Department. In this period, I was placed in
customer service department making me able to achieve practical disclosure to functioning
process.

Activities Performed
As an internee various activities were done during internship period, which are providing
information to the customer account opening ,account closing ,making cheque book, balance
inquiry, record keeping and assisting customer in feeling forms, issuing slip for different type
of pensions, printing the statement of the customer account as per their requirement.

1.11 Specific Objective

 To explore the applicability of theoretical knowledge in the practical work place.
 To find out the customer needs and problems.
 To gather the knowledge on the various activities, perform in various departments of
the bank and be aware of the product and services.
 To study about the activities performed in customer service department.

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1.12 Methodology
Research methodology may be understood as a science of studying how research is done
scientifically. The research methodology is a way to systematically solve the research
problem along with the logic behind it. Here, the main aim of the study is to evaluate the loan
management procedure of Nepal Bank Limited, Itahari. To achieve the mentioned objective
of the study, appropriate research methodology has to be followed. Therefore, this support kit
should tell about the different sources of date collection procedure, population and sample of
the date.

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Chapter II
Observation

2.1 Observation

Observation is the active acquisition of information from a primary source. In living beings,
observation employs the sense. In science observation can also involve the recording of data
via the use of instruments .The term may also refer to any data collected during the scientific
activity. Observation can be qualitative, that is, only the absence of presence of property is
noted, or quantitative if a numerical value is attached to observed phenomenon by counting
or measuring.
However, observation is the act of noticing something or judgement for inference
from something seen or experienced. The information or detailed presented below is based on
learning and experiencing gor from working an observing the banking services of NBL
Itahari branch.

Function of the Concerned Department

Loan is an important aspect of ever financial institution. Loan management is simpler terms
refers to the management of loan. That is, it is related to make appropriate and profitable
found available in the bank. Although bank offers a wide spectrum of financial services,
lending has traditionally been their main function. Bank credit has been responsible for the
development and growth of much small and moderate types of business. The bank invests
most of its funds in loans and advances.
Loan is the sum of money that flows from one another with regard to some interest
usually against some security. Loan management means planning of available funds, make
the appropriate policies of lending in a manner that generates revenue to the bank and
safeguard the funds from defaults. Loan management policies can be defined as the decision
made in advance about the management of the credit. To meet the conflicting interact of
depositors, the established loan policy gives due regards to the liquidity and safety.
Considering this, loan management should carefully have established, communicated
properly to the lending office and implement effectively by lending offices. Therefore, how
well a bank perform its lending function has great deal to do with the economic health of the

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country because loan support the growth of new business and jobs within the bank territory
and promote its economic activity.
The careful management of monitoring of the investment lends to generate
profitability while maintaining risk at the profitable level, if not it may lead to major source
of loan performance. It is important for the loan management to think upon the existing
customers. Due to the current situation the bank keeps on revising rate on loan as well as
deposits.

Function of Loan Department

Lending money is one of the main functions of commercial bank. In the lending process,
selection of borrower is the most crucial and vital job for the banker. Before a customer
enjoys credit facilities, it is important that the application should qualify for 5Cs. The 5Cs
are:
 Character - Intension to pay back the loan
 Capacity - Borrower's competence in term of utilizing the fund profitability and
generate income
 Capital - Financial strength to cover the risk
 Condition - General business condition between two parties
 Collateral - Implies additional security
In additional, objective of the credit department is managing credit exposure of the bank,
maintaining credit risk, compliance of central Bank Ltd, recovering or collecting dues of
retail loans or advances. At present credit division perform following activities:
 Credit Approval Process
 Corporate Credit
 Retail Credit
 Collecting and Monitoring Activity
 Recovering
 Risk Management
The activities of this department includes managing the financial books of the bank,
checking all entries of the book are according to standard, preparing daily report for
Bangladesh Bank, revenue appropriation and calculation, setting the internal pricing rate etc.
loan is an assets to any financial institution. That is why it is very much necessary to ensure
that a loan does not become bad. The first step is ensuring that is to ask for proper
documentation of the loan application. A default loan might be very hard to recover due to

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lack of proper charge documents. This is where assets operation department of the Bank
comes into action. Assets operation department of the bank acts last frontier to mitigate all
loan related risk before disbursement of a loan. The function of the assets operation
department can be broadly categorized under two heads. The first one is the disbursement and
monitoring of loans. In this case the department disburse loan after terms of approval. This
department also periodically review conditions of past due loans, limit, expiry and document
deficiency.
The next operation of the department is to act as custodian and compliance of the
charge documents and prepare various MIS report for the Central Bank and other audit
authorities. The documents that required by AOD can be classified into three parts.
 First one is the business verification and related documents of the application.
 Second one is the basic charge documents like demand promissory note, letter of
continuity, letter of pledge, letter of hypothecation and some other documents.
 The third document that assets operation department need to disburse loan is the
security documents like post dated cheque for unsecured loan, fixed deposit or title
deed for secured loan.

2.2 Detail of Assigned Work Responsibility

Receiving CIs

Connecting VPN

Searching Credit Reports

Downloading the Report

Sending Mails to anches

Posting ro Excel

Figure 2.1
Working Procedure at Loan Department
Source: Loan Department Nepal Bank Limited, Itahari Branch

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Receiving Credit Information

The first and the foremost task that has to be done is receiving and collecting the information
about the credit customers through various Branches of NBL. The information is received
through fax mails. It contains detail information about the credit customer or the company.
Following types of information are included for further processing:

For the company

 Name of the company
 Company registration number
 Company registration date
 Company registration organization
 PAN number
 PAN registration date
 PAN registration district

For an Individual
 Name of the customer
 Citizenship number
 Citizenship issued date
 Citizenship issued district
 Father's name
 Grandfather's name
 Spouse's name

Connecting VPN
VPN has to be connected in order to get access to CB site. It's done by entering the password
after which website of CIB can easily accessed. It is important to get connected to VPN as
without which we cannot get access to the credit information site where detail information is
searched.

Searching Credit Report

After VPN has been connected, CIB site can be accessed by logging into the website
www.cibnepal.org.np and entering the password as provided. The detail which is received
from CI of the customer and the company is entered carefully. If any mistake is created while

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entering data, the report that we want may be found wrong or we may receive the false report.
When all the information is entered correctly, the credit report is received which contains all
the details of credit transaction i.e. of the individual or the company. But if that particular
customer or the company does not have any credit history then the report cannot be received.

Downloading Report
The reports that have been searched gets stored in the search history automatically which is
then downloaded one by one. These reports are downloaded to maintain records and for the
future reference. The downloaded reports are kept into separate folder on the basis of the
Branches they belong to, in other words from where the CIs have been received.

Sending Mails to the Branches

The task is complete until the credit reports are not sent to the respective branches. So those
reports attached and are sent through the mails from the official's website of NBL, where the
mailing address of various Branches and Branch Manager are available. The sent mails can
be forwarded if any mistakes are made while mailing. For example, if the report of branch are
not sent to the another Branch.

Posting to Excel
After completing all above mentioned step at last the information about the firms or the
customers are posted or recorded in excel in order to avoid the duplication of the work or any
kind of errors in efficient.

Approval Process
The approval process of loan is multi step processing of each and every financial institution.
The approval is based on the available information for the loan appraisals investigation of
correct information is the preliminary step of loan approval. The Bank practice takes into
account the principle of approval process as quoted by Kolb and Rodriquez. The approval
process are:

Loan Application Purpose Amount Sought Turnover Profitability

Name of the Borrower

Viability

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Legal Status of the Borrower

Security

Business
Address
Worth

Interview
Qualification

Post Credit Dealings

Inspections

Enquires
Figure 2.2
Approval Process of Loan
Source: Loan Department Nepal Bank, Itahari Branch

Loan Application
Loan application is required source of information given in a systematic manner required for
the assessment of the proposal. There is always a moral fear on the borrower that any
information furnished would soon turnout to his utter disadvantage with doubtful credibility
before banker. Bank have different scheme of loan variety of information. Some of the points
generally contained in the loan application are discussed below:
 Name of Borrower
The full name of the borrower to whom loan will be approved and who is legally
accountable for repayment is required.
 Legal Status of the Borrower
The legal status of the borrower whether he is individual, firm, partner, company etc
should be presented so as the trace the legal obligation and others.
 Address
For the future recovery, follow up and for all the correspondence, notices and
inspections the full permanent as well as temporary address is to be attached within.
 Qualification
A genuine businessman is also examined by his qualification. In addition, it is a factor
for the assessment of entrepreneurship risk and return.
 Post Credit Dealing

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One of the chief factor that any financial institution measures while providing loan is the
past credit dealings which indicates the plus and minus points of the borrowers as well as
the project.

Purpose
The specific purpose for which loan is taken must be explained so as to eliminate the misuse
of funds.

Amount Sought
A borrower indicates his requirements as per his calculation the bank approve the loan as per
the ratios passed on by head office.

Turnover
Existing capacity and yearly turnover information of the borrower is necessary to actually
find out the required amount of the loan he can be able to repay back.

Profitability
It indicates the success of the business in the term of figure from which the borrower assures
the repayment of the loan.

Viability
It refers to the fulfillment of the conditions required for the operation of the business so that
no disturbance will occur in the course of business.

Security
The security is the safeguard for the banker to rescue at the time of need. It is a cover for the
loan and liquidity of advances. Security can be turned into principal in the case of borrower is
not able to pay the debt.

Business Worth
This factor reflects the assets and liabilities of borrower. A bank cannot advance loan to the
borrower whose liability is higher than assets.

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Interview
Two-way traffic between the borrower and the institutional had result to clear cut approval.
Dialogue brings out inherent subtitles and unexpected clues assessment. Interview helps in
extracting essential and critical information from the borrower since the man is creature of
egos and emotions.

Inspection
Actually inspections related to the examination of nature of the project as well as the
collateral kept by borrower as well as "seeing believes". It assists to the available information
within actual.

Enquires
The real market is made for extra information from various other financial institutions with
regards to the borrower's personal to business habits.

2.3 Problem Encountered During.

Some of the problems encountered on the credit department are as follows:

 The formulas and processes that banks use to determine creditworthiness are very
inflexible, and some people take rejection personally, especially when they have been
counting on the loan to purchase a house.
 Errors on the loan can delay the loan process.
 Internet server problem is the main problem encountered during the internship period
on loan department as NBL, Itahari is government under controlled bank.

2.4 Data Collection Methods

Different data collection procedure is followed for this internship report. The researcher
collected data considering the environmental and condition of the bank. The researcher also
followed questionnaire method by asking various question about bank, its establishment date,
provision of facilities by bank, progress of the bank etc to the manager and other related
parties. The data and information collected for the internship report from different sources
namely primary source and secondary source.

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Primary Source
The method used in the primary are direct personal interview with in the different managerial
and non-managerial employees of NBL, Itahari. Likewise, observation of the different
departments, their functions working procedure during the time period of the internship, were
the other methods used to collect data in the bank.

Secondary Source
The method used in secondary source basically divided into two groups, internal and external
data. The internal data are collected from accounting data of the bank, internally generated
research reports, goswara of the bank, balance sheet of the bank etc. External data are those
which are related to outside the organization. Such includes books of NBL, published reports,
website of NBL and so on.

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Chapter III
Analysis and Review

3.1 Analysis of the Data Collected

Analysis of the data is important chapter of the internship report. It refers to the present of the
data and information in brief, comprehensive and correct ways, so that the readers can
understand it clearly. In this field report, data are presented and analyzed with the help of
financial tools and techniques etc. the data are classified, summarized, organized and
presented in the tables and figures.
The main purpose of this chapter is to evaluate and analyzed the financial
performance of the loan management made by Nepal Bank Limited, Itahari Branch and
present it in a suitable ways using table, diagrams and charts. The loan departments and its
record are the main sources of collecting data. Therefore, the analysis of loan is very crucial
for the success of the bank. Loan management helps to find about the financial strengths of
the bank.
The presentation analysis and interpretation of the data in this field have been doing
during the period of the internship from Poush 2074 to Falgun 2074.

3.1.1 Interest rate imposed by Nepal Bank Limited, Itahari Branch in different sectors.
Nepal Bank Limited, Itahari Branch provides loan in different sectors in different interest
rates. The interest rate differentials mainly based on the payback performance and rules and
condition of the head office of Bank. The interest structure of Nepal Bank Limited, Itahari
Branch can be shown by the help of following table.

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Table 3.1
Interest rate of Nepal Bank Limited Itahari Branch in Various Sectors
S.N Types of loan Interest Rate
1. Term Loan 7.5-10%
2. Home Loan 9.50-11%
3. Auto Loan 9-10%
4. Overdraft Loan 7.50-10%
5. Gold Loan 13-15%
6. SajiloByabasayik Karja(loan) 9.50%
7. NBL Flexi Loan 8.50-9.00%
Source: Record of Loan Department of Nepal Bank Limited, Itahari Branch

The table 3.1 shows the interest rate of Nepal Bank Limited, Itahari Branch. The above table,
it is clearly shown that Nepal Bank, Itahari Branch imposes higher interest rate in Gold loan
and Home loan. Nepal Bank Limited imposes lower interest rate in auto loan i.e. 9-10%.
Similarly, Nepal Bank, Itahari Branch imposes 7.50-10% on term loan, 7.50-10% on
overdraft loan and 9.50% on Sajilo Byabasayik Karja.

3.1.2 Repayment periods of loan of Nepal Bank Limited, Itahari branch. The repayment
period of the loan depends upon the types of loan and the collateral against the type of the
loan. Nepal Bank Limited, Itahari Branch provides different recovery time for the repayment
of the loan in different sectors. The following table shows the loan recovery periods of Nepal
Bank, Itahari.

Table 3.2
Repayment Period of Loan of Nepal Bank, Itahari Branch
S.N Types of Loan Repayment Period
1. Term Loan Maximum 8 years
2. Home Loan Maximum 5-15 years
3. Auto Loan 5-7 years
4. Gold Loan 1 years
5. Overdraft Loan 5-15 years
Source: Record of Loan Department of Nepal Bank Limited, Itahari
The table 3.2 shows that the total deposit and total loan of Nepal Bank Limited. From the
table, the researcher found that Nepal Bank limited mobilizes only 83.08% of its total deposit
amount in various sectors. The researcher also found that the amount of the deposit is higher
at the month of Poush and the amount of loan distributed is also higher in the same period.

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Figure 3.3
Statement of Total Deposit and Total Loan of Nepal Bank, Itahari Branch
Period Total Deposit Total Loan
Poush-Magh 2075 54424600 48526461
Magh-falgun 2075 50154468 32809392

Home Loan on the month of Poush- Magh and Magh-Falgun 2075

Period Amount
Poush-Magh 2075 11533599.19
Magh-Falgun 2075 13262550.86

Overdraft Loan on the month of Poush-Magh and Magh-Falgun 2075

Period Amount
Poush-Magh 2075 12192890.46
Magh-Falgun 2075 19404843.87

Term Loan in the month of Poush-Magh and Magh-Falgun 2075

Period Amount
Poush-Magh 2075 24494972.8
Magh-Falgun 2075 23067337.9

Gold Loan on the month of Poush-Magh and Magh-Falgun 2075

Period Amount
Poush-Magh 2075 6098017.57
Magh-Falgun 2075 6526426.09

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Fixed Deposit Loan on the month of Poush-Magh and Magh-Falgun 2075

Period Amount
Poush-Magh 2075 3657000
Magh-Falgun 2075 4360000

Personal Loan on the month of Poush-Magh and Magh-Falgun 2075

Period Amount
Poush-Magh 2075 1296850
Magh-Falgun 2075 1481683

Hire purchase Loan on the month of Poush-Magh and Magh-Falgun 2075

Period Amount
Poush-Magh 2075 1353697.51
Magh-Falgun 2075 1413614.82

3.1.3 Types of loan provided by Nepal Bank, Itahari Branch. Nepal Bank, Itahari
branch provides both commercial loan and consumer loan to its customers. It offers a
wide range of credit facilities as per customer’s requirements. The different types of
loans provided by Nepal Bank Limited, Itahari Branch are listed below:

Home Loan
This policy of Nepal Bank refers to the mobilization of amount in housing sector. Nepal
Bank, Itahari Branch provides home loan to those customers who are trying to build up their
economic status by constructing building. The loan provided to any individual who have
regular and stable source of income. Nepal Bank, Itahari Branch finance home loan
maximum up to 60% of its total house cost. The interest rate is charged 9.50-11%.
The Criteria for taking home loan as follows:
 The loan is provided to any individual who have regular and stable sources of income.
The loan can be given to any salaried and self employed individual.
 The borrower must be at least 21years and not exceed to 60years at the time of
maturity. The retirement age must be more than the tenure of loan.
 The loan will be provided to Nepalese citizens only.
 All the borrowers and guarantors should not be enlisted in ‘BLACKLIST’ of Nepal
Rastra Bank.

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 Two years work experience is needed for salaried and self-employed individuals.

Table 3.4
Home Loan on the month of Poush and Magh
Periods Amount
Poush2075 11533599.19
Magh2075 13262550.86
Source: Loan Department, Nepal Bank, Itahari Branch

The table 3.4 shows that the amount of loan provided by Nepal Bank, Itahari Branch in
housing sectors in Poush and Magh 2075. From the table, the researcher found that the
amount of loan provided in Nepal Bank limited is satisfactory. The total sanctioned loan on
the month of Poush was Rs.2 crores 15 lakh and on the month of Magh it was increased to
Rs.2 crores 32 lakh.
The loan management team judge the 5c’s of the client. The bank checks the entire
document submitted by the client for the loan. The loan department examines the earning
capacity and the loan repayment ability of the client. The security is evaluated by the loan
management team and after cutting the margin, the home loan amount is provided.

Overdraft Loan
Overdraft loan types of loan which is borrower can draw the cheque and current account up
to the limit at any time as per requirement. Nepal Bank, Itahari Branch currently provides the
overdraft loan for less than 1year. The minimum amount of loan can be sanctioned as
overdraft loan is Rs.500000 and the maximum amount is Rs.1billion (with regard to new
amendment). The maturity period of this type of loan is 1year. This loan can be resolved. The
interest rate of this loan is 7.5-9% depending upon the loan sanctioned amount and almost
chargeable.

Basic requirement for overdraft loan

 Business for which it is taken should be registered.
 The person should be Nepalese citizen.
 Interest payment should be made in every three months.
 Insurance of the business firm should be done.
 Land and Building should be kept as the collateral security.

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Table 3.5
Overdraft Loan on the month of Poush and Magh
Period Amount
Poush 2075 12192890.46
Magh 2075 19404843.87
Source: Nepal Bank Loan Department, Itahari sunsari

The table 3.5 shows the overdraft loan provided by NBL, Itahari branch in the month of
Poush and Magh. The table shows the amount of business overdraft loan in the month of
poush 2075 to magh 2075. The loan sanctioned on poush 2075 was 1 crore 21 lakh and on the
month of magh 2075 was 1 crore 94 lakh.

Term Loan
These types of loan are provided to all the needy people for the period of maximum 8 years.
The repayment of the loan should be paid on the equal installment basis and the loan is
provided against the collateral of immovable assets i.e. land and building. Nepal Bank, Itahari
Branch charge 7.50-10% interest on the loan.

Table 3.6
Term loan on the month of Poush and Magh
Period Amount
Poush 2075 24494972.8
Magh 2075 230667337.9
Source: Loan Department Nepal Bank, Itahari Branch

Gold Loan
The loan is sanctioned against the metal like gold falls under this grade. The cahier’s
additional guarantee is also needed. The loan amount is the 70% of the value of the gold,
valuation being based on the current market price. In the case, individual usually come for the
loan to meet their need of emergency. The loan and the interest rate are paid at the maturity
of the loan. The interest charged in this loan is 15%. Only few branches of Nepal Bank have
the facilities of Gold Loan. Among branches Itahari branch is also one of them.
Basic requirement of Gold Loan
 Gold as per collateral.
 Photocopy of the citizenship.

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 Must have the bank account on that bank.

Table3.7
Gold Loan on the Months of Poush and Magh (2075)
Period Amount
Poush 2075 6098017.57
Magh 2075 6526426.091
Source: Loan Department of NBL, Itahari Branch

The table 3.7 shows the amount of loan provided on the gold loan heading. From the table it
is found that amount of gold loan at the month of Poush is 60 lakhs and on the month of
Magh is 65 lakhs. Gold loan is one of the good loans in NBL, where the bank has invested
much of its fund. Loan loss provision on Gold loan is minimum then other loan.

Fixed deposit loan

The loan under this titled is given to the individuals against the receipt of fixed deposit that
individual has in that same bank. This is usually a short term loan and this amount is up to
90% of that total deposit. The interest rate is 2% higher than the rate provided by the bank at
their deposit.
Basic requirement for the Fixed Deposit Loan:
 Fixed deposit receipts.
 Photocopy of the citizenship card.

Table 3.8
Fixed Deposit Loan on the Month of Poush and Magh 2075
Period Amount
Poush 2075 3657000
Magh 2075 4360000
Source: Loan Department, Nepal Bank, Itahari Branch

The table 3.8 shows the amount of fixed deposit on the month of poush and magh 2075 from
NBL. From the above table it is found that fixed deposit loan at the month of Poush is
Rs.36.5lakhs and on the month of Magh is Rs.43.6 lakhs respectively.
Personal Loan . It is the loan
 Provided to fulfill the proposal need of an individual
 Provided against the collateral of land and building

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Basic requirement of Personal Loan

 Borrower must have regular and stable source of income
 Borrower must be Nepalese citizen

Table 3.9
Personal Loan on the Months of Poush and Magh 2075
Periods Amount
Poush 2075 1296850
Magh 2075 1481683
Source: Loan Department Nepal Bank, Itahari Sunsari

The table 3.9 shows the amount of Personal Loan provided by the NBL, Itahari branch. From
the table it’s found that amount of personal loan at the month of Poush 2075 is Rs.12.9lakh
and on the month of Magh it was Rs.14.81 lakh.

Hire Purchase Loan

The bank extends hire purchase loan for the purchase of office equipments, vehicles and
machine etc. for commercial purpose. The loans and advances where the Bank has authority
over the borrower goods for which he has withdrawn a balance is Hire Purchase Loan.

Table 3.10
Hire Purchase Loan on the Month of Poush and Magh 2075
Periods Amount
Poush 2075 1353697.15
Magh 2075 1413614.82
Source: Loan Department Nepal Bank, Itahari Sunsari
The table 3.10 shows the amount of the Hire Purchase Loan provided by the NBL, Itahari
branch .It is found that the amount of Hire Purchase Loan at the month of Poush and Magh
was 13.5 lakhs and 14.13 lakhs respectively.

Auto Loan
Auto Loan of NBL, refers to the vehicles loan having different maturity terms i.e. 5years,
7years, 4years etc. and Nepalaxmi auto loan for women. It is provided to purchase private
vehicles and commercial vehicles for both personal use and business use.

Table 3.11

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Lending Rate for Auto Loan

Auto Loan Interest Rate
Private Vehicles used 4 years term 9%
Private Vehicles used 5 years term 9.5%
Private Vehicles used 7 years term 10%
Private Vehicles used 5 years term 10.5%
Commercial Vehicles 3-5year term 10.5%
Nepalaxmi Auto Loan 8.5%
Source: Statement of Interest Rate of NBL, Itahari 2075

3.1.4 Credit deposit ratio of NBL, Itahari Branch. The Credit Deposit Ratio
measure the relationship between the total deposit and loan. Higher credit deposit
ratio shows more efficiency. The credit deposit is calculated by using following
formula.

Credit Deposit Ratio=

Table 3.12
Statement of Credit Deposit Ratio
Periods Total Deposit Total Loan Ratio
Poush 2075 34424600 28526461 0.82
Magh 2075 40154468 32809392 1.22
Source: Loan Department of Nepal Bank Limited, Itahari Branch

The table 3.12 shows the credit deposit ratio of NBL, Itahari Branch for 2 months for the
month of Poush and Magh. The researcher found that credit deposit ratio of magh is higher as
compared to the ratio of poush. The highest credit deposit is 1.22. Higher credit deposit ratio
indicates better performance. From the above credit deposit, it is clear that NBL is able to
mobilize its capital.

3.2 Critical Analysis on the Theoretical Concepts Relating to Practical Experience in

Loan Department. During the two months of internship period, the internee has viewed
various data and process of performance of lending transaction. The review of an academic
article was easier to identify than the internee involved practically. The main ideas were
usually found strongest the topic sentences of each paragraph for works the internee needed
to explain an attempt. The entire work was built around an unfamiliar concept.

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As researcher has learned different types of loan, what is loan, what is loan procedure
for providing loan on book or articles it is vast different comparing the practically working on
the department of credit. Working on loan department practically made an internee clearer
about all the topics that was learned on the college. Different procedure is applied on loan
department to provide loan to the different people or business firm. While doing an internship
an internee had observed the following gap:
 Evaluation of the ability of the company to honor its finance is done by loan analysis.
 Loan analysis issuance analyzed audited financial statement of NBL.
 An internee had studied the lien of the business is termed by overall analysis of a
banking transaction but the trustworthy of the business is calculated by loan analysis
of a bank.
 The objective of current analysis is to look both borrower and lending facility is
prepared.
 Financial analysis techniques, trend analysis, the executions of projections, detailed
analysis of the cash flow are included in loan analysis.
 Examination of collateral and other source of repayment as well as credit history and
management ability is also termed under loan analysis.
 Observation at all the features with the primary emphasis being the cash flow of the
borrower are done before approving a commercial loan to the customer.
Overall there is difference between practical knowledge and theoretical knowledge.

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3.3 Knowledge Gain from the Work Assigned

Providing Balance Statement

Balance Statement shows the complete transaction of the customer deposits, withdrawn and
final balance. These are confidential information so statements are provided only to the
account holder, in case of any organization letter mentioning about providing balance
statement to the customer in the supervisions of senior. Customers can receive their balance
statements from any branches of NBL.

Recording Cheque Book Issue, Debit Card Issue

There is various book mentioned in the bank which may be related to cheque book issue,
debit card issue, etc. These books are filled up by intern for the future reference of the
activities. It is the duty of the intern to record the cheque book issued and debit card issued
every day.

Preparation of Cheque
Cheques are just like paper cash. Customers who have finished their cheque book can ask for
another by filling up the cheque request slip which is in the cheque book mentioning the
cheque issued and the account detail of the account holders. Then new cheque book is
prepared by intern which may contain 1, 25, 50, 100, cheque leaves according to the
requirement. There should be authorized signature of CSD head in cheque issue book then
the signature is verified. Lastly, Intern provide cheque book to the customer taking
permission of staff.

Providing Information to the Customer

CSD aims to help the customer in every possible way, by listening to the complaints,
providing information on account balance, issuing ATM cards, features of account etc. Intern
provides information about each and every questions answer to the customers. Thus in a
sense, Customer Service, is an information desks which provides information to the
customers.

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Fill up the cash/cheque deposit voucher

It is not necessary that all the customers of the bank are educated. Many uneducated people
are also the customer of the bank who doesn’t know how to fill up the cash cheque voucher.
So to fill up that voucher they search for intern’s assistance.

Issue of debit card

For getting new debit card customer has to fill up a form and has to pay Rs.250. Customer
receive call from bank after their card has been arrived from the card department of NBL.
CSD issue it to the concern customer after verifying properly.

Responsibility assigned and discharged in card processing

Creating a card and making it available to the customer consisted to stepwise process. The
intern gets an opportunity to observe each step thoroughly and take active participation in
those steps. The different responsibility that the intern had undertaken during the internship
related to card issue are as follows:
 Receiving, recording and filling applications forms of debit card the account holders
who want to have the debit card fill up the application form in CSD. From the
recording of these forms finical is used by staff. After that the data entered in the
finical are verified by concern authority. Intern helps the customers fill up form of
the debit card.
 Providing card to the customer intern searches the card in the boxes as per the
alphabetical order and serial number given to the card. Then intern records issue of
card in card issue book and provides card to the customer.

Calling existing customer to update KYC and for payment of loan instalment
KYC forms of existing customers have to be updated as directed by NRB’S latest directive.
So I called many customers to visit the bank with the necessary documents like copy of
citizenship, utility bill payment receipt and one passport sized photo to update KYC.
I also called various customers to provide the information about the loan rates and
also to convince the amount to be paid for the loan they had taken on various basic and the
last date of paying the installment amount or the fines and penalty they will bear.

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Chapter IV
Conclusion and Recommendation

4.1 Conclusion

Nepal Bank, Itahari Branch is established with the objective of rendering the best services to
the people and proving them with different types of financial instruments and creating
infrastructure for national trade and business.
Nepal Bank, Itahari Branch is an important and one of the emerging as a largest
commercial bank in Nepal. It has been providing its services to the people and continuous in
the futures. People consider Nepal Bank as reliable place to keep their saving and do other
activities with it. It has been able to draw attention of a large group of customer, both
institutional and individual because of its variety of functions and cooperative staffs. Nepal
Bank should try to minimize its weakness and accelerate its strength factor so that maximum
profitability is achieved. The opportunities and strength of Nepal Bank are valuable
properties which must be analyzed and used in productive way to overcome the problems.
Nepal Bank Itahari Branch is one of the recognized branches. The bank has always
included in delivering innovative products and services suiting the customer’s requirements
and needs. Therefore, enriching, enabling, and standardizing their lives. The main objectives
of Nepal Bank, Itahari Branch is to accept deposit such as fixed deposit, current deposit, and
saving deposit as well as providing different types of loan such as business overdraft loan,
term loan, home loan, auto loan etc.
The internship report entitled Loan Analysis of Nepal Bank, Itahari Branch. The
report writer has presented and analyzed different types of loan and drawn some findings
after the study analysis. Some of the major findings of the studies are as follows:
 Nepal Bank Limited, Itahari Branch classifies loan in two types i.e. commercial
loan and consumer loan.
 Commercial loan is a loan provided to the business organization for the
commercial activities. Commercial loan includes overdraft loan and working
capital loan
 Commercial loan is provided to the consumer for the personal purpose. Consumer
loan includes Home Loan, Personal Loan, Fixed Deposit Loan, Gold Loan etc.

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 Nepal Bank, Itahari Branch has invested its most funds in home and overdraft
loan. It has also invested most of its fund on auto and higher purchase loan as
well as gold loan.
 In the study it can be seen that there is higher demand for Home Loan, Overdraft
Loan and Auto Loan.
 In the study it is found that Nepal Bank, Itahari Branch has increasing trend of
loan. And it has mobilized its available funds in different sectors at an increasing
rate.
 The credit deposit ratio of the bank is in increasing trend.
 The loan and advances provided in private sector are high. The private sector is
divided into two sector i.e. commercial and industry. NBL, Itahari has provided
higher loan in industrial sector than commercial sector.

4.1 Contribution of Internship in Knowledge Gain

An internship is an opportunity offered by an employer to potential employees, called interns,

to work at a firm for a fixed, limited period of time. Interns are usually undergraduates or
students, and most internship period last for any length of time between one week and
12months.
During the internship period of 8 weeks, internee has done various jobs in each
department personally. Internee was engaged in the work like account opening, account
closing, issuing cheque books, ATM cards, filling up the loan application form, preparing
balance sheet and almost all works of L.D, the internee worked with I.M and learned to
maintain good and friendly relationship with customers and went different stores to provide
the new loan schemes by NBL.
Some of the contribution internee has made to gain knowledge are as below:
 Internee has contributed ability to streamline office process. Internee developed a
new method for scheduling client appointments which led to decrease in scheduling
errors.
 Internee has brought unique vision to banks. Internee has experienced in the many
areas related to these bank current goals, including counseling the customers.
Internee helped at loan department to improve the counseling power to the customer.
 Internee previous work experience including innovation in many areas, including
strategies for more effective work.

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 Internee has contributed time after the office hour to manage the files and folders.

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4.2 General Comments and Suggestion for the Bank

Nepal Bank is one of the commercial bank that carries various operations. It is one of the
leading commercial bank of Nepal. While preparing this report, various weakness and
problems are identified. Therefore, the following suggestions are presented to overcome the
weakness and to improve the loan service provided by Nepal Bank, Itahari Branch.
 The Bank should conduct the awareness program to encourage people to deposit their
funds. By doing so the Bank can collect huge money and can provide loan in
different sectors.
 The bank should make careful attention to the deprived and neglected sector.
 The bank should provide education loan, loan for cottage industry etc with the lower
interest rate.
 Customer satisfaction and relation with them must be focused by the bank.
 The bank should manage more reliable software to provide dependable and consistent
quality service to the customers without any interruptions.
 The bank should introduce new and viable loan schemes to the generak public of
Itahari.
 The bank should operate various attractive policies to encourage people to take loan
and invest in productive sectors.
 The bank should adopt the latest technology to speed up its services.
 The bank should focus on the satisfaction of the office staffs and their need to
improve their efficiency.
 The bank should be more innovative to complete with increasing competition in the
market by providing various alternatives for providing loan and advances such as
increasing rate of interest.

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References

Agrawal, G.R (2007). Foundation of human resources management. Kathmandu: M.K

Publisher & Distributors.

Agrawal, G.R (2009). Project management. Kathmandu: M.K. Publishing & Distributors.

Annual Report of Nepal Bank Limited. Itahari Branch 2075

Chaudhary, A.K. (2063). Business statistics. Kathmandu: Bhudipuran Prakasan.

Dangol, R.M. (2061). Accounting for financial analysis and planning. Kathmandu: Taleju

Prakashan.

Jhingan, M.L. (2004). Money, banking international trade and public. New Delhi: Finance

India varinda Publication (Pvt) Ltd.

Joshi, Padamraj (2005). Fundamental of financial management. Kathmandu: Ashmita Books

Publication & Distributors.

Pandey, Durba Lal (2008). Fundamental accounting. Kathmandu: Asia Publication.

Varma, C.R.T. (2003). Fundamental of accounting. New Delhi: The Institute Charter

Accounting Of India.

Wolff and Pant. (2005). A social science research & thesis writing. Kathmandu: Buddha

Academic Publishers and Distributors Pvt. Ltd.

www.nbl.com.np

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Annexures

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