DECLARATION

We hereby declare that this project carried out by us is a result of our own research carried out in the year 2011/12. It has not been previously submitted to any other university for any other examination.

ACKNOWLEDGEMENT
This report has been under taken in partial fulfillment of Bachelor in Business Administration of Kathmandu University.

We sincerely thanks to Mr. Prabir SJB Rana, Head of Human Resource Department of NIBL, for giving us opportunity to work as interns in the organization as well as Mrs. Dina Lama and Miss. Sarina Khadgi, officers of HR department, who gave us brief orientation of HR function as a whole and introduced us to the various staffs of the company. They also let us participate in several departments of the company to know how a bank works and functions, provided training on time management and self motivation.

We would also like to express our sincere thanks to Mrs. Rachana K.C (Locker Department), Mr. Bijay (Remittance Department), Mrs. Srijana (Card center), Mr. Sujan Tuladhar, Mrs. Rajita Shakya (General Service department), Mrs. Usha Pandey and other GSD and Customer service department staffs for their valuable cooperation and their time. We would also like to sincerely thank to Mr ... for helping us in our every stage of our course.

Sincerely, Sanju Khadka

Executive Summary
This report on banking products and customer relationship management of Nepal Investment Bank has been conducted under the partial fulfillment of the BBS course. The main objective of conducting this study was to get details about banking products and customer relationship of Nepal Investment Bank. During this period we had gained knowledge on various aspects of banking.

This report has been organized in four parts that deals with various aspects of commercial bank i.e. NIBL. The project report design employed a complete analysis of banking products and customer relationship management with its implication.

IT gives a person an idea of dynamic and versatile professional world as well as an exposure to the complexities of the world. The study result will be helpful to NIBL to survive in competitive market as well as to provide better service to the customer with the help of which the bank can extend its services. The study result will also be useful for completion of our BBA course.

NIBL provide different types of deposit service like current deposit service, saving deposit service, fixed deposit service, call deposit and provide different types of loan to those who are needed of fund. Apart for accepting deposit and sanctioning of loan it provides other various service like e-banking, ATM service, NTC mobile bill payment, card service such as debit card, credit card, privilege card and safe deposit locker.

NIBL more than any other aspects gives value to its customers. It focuses on providing better customer service depending upon the customer comfort level. It focuses on what customer want rather than what it wants customer to adapt and fulfill it.

In conclusion, the bank is performing extremely well with its customer base of more than eighty thousand customers. The bank is still seeking place where they can provide and introduce new and more advanced facilities to the customers.

Table of Contents Contents

DECLARATION ........................................................................................................... 1 ACKNOWLEDGEMENT ............................................................................................. 2 Executive Summary ....................................................................................................... 3 List of Tables ................................................................................................................. 6 List of Acronyms ........................................................................................................... 7 PART ONE: INTRODUCTION .................................................................................... 8 Part one: Introduction .................................................................................................... 8 1.1Background ........................................................................................................... 8 1.2 Goals and Objectives of Internship ...................................................................... 8 1.3Description of Roles/ Jobs performed in the internship........................................ 9 1.4 Roles/ Jobs of departmental head/ Interns supervisors ..................................... 11 PART TWO: INTRODUCTION OF INDUSTRY & COMPANY ....................... 14 Part Two: Introduction of Industry & Company.......................................................... 14 2.1 INTRODUCTION OF NEPAL INVESTMENT BANK LIMITED ................. 14 2.1. A Vision, Mission and Objectives of Nepal Investment Bank Limited ....... 15 2.1.B Strategies of NIBL ..................................................................................... 16 2.1.C MAJOR BUSINESS AND SERVICES OFFERED BY NIBL: ................ 16 2.1.D Organizational structure of Nepal Investment Bank Limited .................... 19 2.2 Task Environment (PORTERS Analysis) Of NIBL ......................................... 21 Part Three: Presentation of Major Products Undertaken ............................................. 25 Section I ................................................................................................................... 25 3.1.1 Brief background of the specific assignment / Project: .............................. 25 3.1.2 Objective of the Study ................................................................................ 25 3.1.3Scope of the project ..................................................................................... 26 Limitations and Constraints of the project ........................................................... 26 Section II .................................................................................................................. 27 3.2 Conceptual Framework .................................................................................. 27 SECTION III ............................................................................................................ 30 3.3STUDY METHODOLOGY ........................................................................... 30 Section IV: ............................................................................................................... 31 3.4.1 Banking Products and Customer Relationship Management: .................... 31 3.4.2 Major Findings ............................................................................................ 43 Section V .................................................................................................................. 48 Conclusions and Suggestions............................................................................... 48 5

PART FOUR: REFLECTION OF INTERNSHIP ....................................................... 50 Part 4: Reflection of Internship .................................................................................... 50 Bibliography ................................................................................................................ 52 APPENDIX .................................................................................................................. 53

List of Tables
Table 1: Services Offered By NIBL ............................................................................ 16 Table 2: Saving Deposits ............................................................................................. 34 6

Table 3: Fixed Deposit ................................................................................................. 35 Table 4: Lending Rates ................................................................................................ 36

List of Figure

List of Acronyms
NIBL= Nepal Investment Bank LTD EBL= Everest Bank Limited HBL= Himalayan Bank Limited SCBNL=Standard Chartered Bank Of Nepal Limited CSD= Customer Service department. GSD= General Service department. HR= Human Resource. ATM =Automated Teller Machine. NTC = Nepal Telecom MIS = Management Information System. AGM =Annual General Meeting. ABBS= Any Branch Banking Service. LC=Letter of Credit. E banking= Electronic Banking FD= Fixed Deposit

PART ONE: INTRODUCTION

Part one: Introduction
1.1Background
This section provides a brief background on internship goals and objectives. The internship program comprised various kinds of task performed in various department like share department, customer service department, locker department, card center and so on. It also includes strengths and weaknesses we identified during our internship at NIBL and also the skills and knowledge we acquired during our internship. The operational task comprises of Analysis of Banking Products and Customer Relationship Management.

1.2 Goals and Objectives of Internship

Participating in an academic internship is one of the best experiences we have had over the course of our studies and involvement at the college and universities. It helped us to realize our strengths and weakness and paved the way in boosting up our skills in other to achieve long term goals as it helped us realized our potentialities and pursue our career in those fields.

Prior to our internship at NIBL, we had planned our goals and objectives, which would be achieved during our internship period from the bank. The main objective of the internship is to gain insight into operational and administrative aspect of commercial banking. In order to reach the broad objectives, some specific objectives are identified. These are: i. To gain experience in a real life working environment. To enhance skills and knowledge in commercial banking sector. Developing personal and professional skills. To develop knowledge about entire business activities. To develop sense of responsibility in work.

ii. iii. iv. v.

1.3Description of Roles
SHARE DEPARTMENT Share Department is such department where we distributed Right Share to its Shareholder. We got knowledge about share verification and real transaction of share. Here we got acquainted with the filling of share certificates and their follow-ups.

CUSTOMER SERVICE DEPARTMENT In this department, we helped customer in filling forms, issuing ATM cards to new account holders, renewal of cards and issuing cheques who have applied for it. Mainly here we were able to understand how to handle customers, their requests, complaints and rush during prime time. Customer interaction is the main aspect of this department.

LOCKER DEPARTMENT In this department we learned the locker policy; we recorded daily customers in this department and gave locker keys to them after proper verification and identification of customers. We also guided customers in opening locker account. It gave us insight and some experiences in functioning and operation of Locker facility.

GENERAL SERVICE DEPARTMENT GSD is all about looking at overall outlook, whether the things in the bank are properly kept or not. We also recorded Petrol and Diesel consumption by NIBL staffs. After working in this department we came to know that GSD is necessary for every organization because it provides all the materials needed for the organization.

REMITTANCE DEPARTMENT In remittance department, we learnt about how to transfer money to and fro, from foreign country to home country and how to handle the suppliers in respect of remittances. We were also engaged in sending faxes to respective customers and managing and preserving the files. Remittance basically identified as transfer of money from one location to another.

CARD CENTRE In this department, we came to know about preparation of ATM cards, how signature and photo of cardholders are printed in card. Here we were involved in dispatch of bundles of cards to respective branches; hence to be distributed to respective cardholders after proper verification.

CONCLUSION The whole internship was great experience not just for our academic side as well as for our personal life and career. It helped us in understanding different sectors of bank and its functions as well as the real environment in which it works. We got an opportunity to apply our classroom knowledge in the practical use.

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1.4 Roles/ Jobs of departmental head/ Interns supervisors

Different departments have their own responsibilities and duties to be performed. As per the policy of the bank and the concentration of the departments, each department heads have their own roles and authority. Hence, the head of the department has a big role to play in the development process of the bank. The roles of the department heads of those departments in which the interns were enrolled are as follows:

i) Customer Service Department: Ms. Supriya Khadka Mrs. Supriya Khadka responsibilities are as follows: Opening the a/c of companys and corporate houses. Handling issues related to a/c of corporate houses. Keeping detailed record of companies account holders. As Mrs. Supriya role is similar to ours role; as we helped customer in filling forms, issuing ATM cards to new account holder, renewal of cards and issuing cheques who have applied for it.

ii) Card Centre: Ms. Reena Chand The roles to be performed of Mr. Reena Chand are: Keeping record of debit and credit card issued to customers. Analyzing the detail of customers required before issue of credit card. Accepting leave letter and granting sick or informal leave to employees. We performed the role of scanning the photo and verify the signature of the person who applied for debit card, which is somewhat similar to her role as she is also involved in verification process.

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iii) Remittance Department: Mr. Bikash Thapa

The roles of Mr. Bikash Thapa are:

Keeping record of amount inward from outside countries. Handling complaints of different remitters relatives who did not receive
money.

Clarify the details about remitters from his/ her relatives before providing the
money. Similar to the roles performed by Mr. Bikash Thapa, we also kept track record of the remitters and after clarification and proper verification of the details from their relatives; we forwarded the remittance files for the payment of money hence remitted.

iv) General Service Department: Mrs. Usha Pandey

The roles of Mrs. Usha Pandey are: Keeping track record of all the suppliers Accepting leave letter and granting sick or informal leave to GSD staffs. Handling complaints of clients As the role performed by Mrs. Usha Pandey, we also performed the similar roles as to keep record of goods receipt expenses from suppliers and orders placed and also cross verifying them. We also recorded the fuel expenses and verified them against the limits provided as such.

v) Locker Department: Mr. Babu Ram Maharjan

Roles of Mr. Babu Ram Maharjan are: Keeping record of locker holders. Inform to the customers who has taken loan from locker in collateral to gold ornaments about their interest payments Sending the gold ornaments of customers for auctioning from whom interest and principal of loan has not been received against locker as collateral, after informing to locker holders. As role performed by Mr. Babu Ram, we also recorded the daily customers and gave locker keys to them after proper verification and identification of customers. We also guided customers in opening locker account. 12

vi) Share Department: Mrs. Rekha

Roles of Mrs. Rekha are: Distributing forms for right share to the shareholders. To inform the shareholders regarding the issue of right shares and also informed them about the necessary documents required for purchase of the shares. To register the received forms into the system and the register too.

Our role was to verify shares and their transactions. Also, we were to make proper fillings of share certificates, which was similar to her roles.

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PART TWO: INTRODUCTION OF INDUSTRY & COMPANY

Part Two: Introduction of Industry & Company
2.1 INTRODUCTION OF NEPAL INVESTMENT BANK LIMITED
Nepal Investment Bank Ltd. (NIBL), previously Nepal Indosuez Bank Ltd., was established in 1986 as a joint venture between Nepalese and French partners. The French partner (holding 50% of the capital of NIBL) was Credit Agricole Indosuez, a subsidiary of one the largest banking group in the world. With the decision of Credit Agricole Indosuez to divest, a group of companies comprising of bankers, professionals, industrialists and businessmen acquired the 50% shareholding of Credit Agricole Indosuez in Nepal Indosuez Bank Ltd. on April 2002.

The name of the bank had been changed to Nepal Investment Bank Ltd. upon the approval of the banks Annual General Meeting, Nepal Rastra Bank and the Company Registrars office with the following shareholding structure. A group of companies holding 50% of the Capital. (Organized Institutions) Rastriya Banijya Bank holding 15% of the Capital. Rastriya Beema Sansthan holding 15% of the Capital. The remaining 20% being held by the General Public (which means that NIBL is a Company listed on the Nepal Stock Exchange). Share Holding Structure of NIBL

Figure 1: Share Holding Structure of NIBL

20% 15% 15%

Organized Institutions 50% Rastriya Banijya Bank Rastriya Beema Sansthan General Public

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2.1. A Vision, Mission and Objectives of Nepal Investment Bank Limited

Vision: Our Vision is to be the most preferred provider of Financial Services in Nepal.

Mission Statement: To be the leading Nepali bank, delivering world class service through the blending of state-of-the-art technology and visionary management in partnership with competent and committed staff, to achieve sound financial health with sustainable value addition to all our stakeholders. We are committed to do this mission while ensuring the highest levels of ethical standards, professional integrity, corporate governance and regulatory compliance.

Strategic Objectives & Goals of NIBL:

To develop a customer oriented service culture with special emphasis on customer care and convenience. To increase our market share by following a disciplined growth strategy. To leverage our technology platform and pen scalable systems to achieve costeffective operations, efficient MIS, improved delivery capability and high service standards.

To develop innovative products and services that attracts our targeted customers and market segments.

To continue to develop products and services that reduces our cost of funds. To maintain a high quality assets portfolio to achieve strong and sustainable returns and to continuously build shareholders value.

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2.1.B Strategies of NIBL

Some of the major strategies of NIBL are listed below: With a view to expand and provide wider network to its customer, NIBL is in planning to open more branches both outside and inside the Valley. In order to speed up distribution of remittance and cover remote areas, NIBL is in the process of appointing more distributing agents. To implement growth strategy effectively. To achieve sound financial health with sustainable value addition to all our stakeholders.

2.1.C MAJOR BUSINESS AND SERVICES OFFERED BY NIBL:

Services provided by NIBL

Table 1: Services Offered By NIBL

Services i)Current Account

Description
An account which can be opened by any individual or company with zero interest rate.

ii)Savings
EZee saving Provides 4% interest, easy to acquire locker, free e-banking, free issuance of VISA Electron Debit Card valid in Nepal and India.

Social deposit account

The Social Deposit Account permits any INGO/NGO account holder to claim a share in the profits of the account.

Ketaketi Bachat Khata

This account is only for minors (1-16 years of age) where parents can keep 16

their money for their children education. Lotus Saving Account This account is for those customers who like to earn more from their interest rate of their savings by depositing minimum Rs1000 in bank. Parivar Bachat Khata This account has been created for the family who keep their savings in this account for betterment for their future. NIBL Saving Bonanza This new scheme will help the customer to earn interest at 6.5% within balance of 1lakh to 5 lakh and above 5 lakh will help them earn 7.5% of interest rate. Normal Saving Account This account enables the customer to keep their normal savings.
EZee Student saving This account enables the student to keep their small savings and earn interest in return. Afnai Bachat Khata This account enable the people to open their account at Rs. 1 and enjoy the banking services.

iii) Fixed deposit

This scheme helps the customer to keep their hard earn money safe for a certain period of time and provide them with more return depending upon the tenure.

iv) Loan and Advances

NIBL provides loan on the basis of its requirement of customers and after detail analysis of necessary documents.

v) Trade Finance

NIBL provides different services regarding transfer of funds.

Letter of Credit

It is a non funded credit facility provided by the bank to make payment to beneficiary if conditions contained in letter of credit are satisfied.

Letter of Guarantee

This is irrevocable commitment on part of

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bank to make payment to beneficiary, if client fails to perform as per terms of underlying contract with beneficiary. vi) Remittances NIBL offers one of the safest and the most secured means of money transfer to Nepal. Remitters can send money to NIBL from any part of the globe. vii) Cash Management Services NIBL provides cash management service by collecting bills receivables more

efficiently if organization is engaged in exporting goods to India.

viii) Other services E banking This service allows customer to avail online banking transactions from any part of the world.
Locker This service allows the a/c holder to keep their valuable documents, ornaments, etc. in the locker. Debit card

Visa Electron Debit Card allows our valued customers with further flexibility in payment.

Credit card

A Credit Card is a payment card, which enables you with the option of making purchases on credit.

Premier banking services

An executive lounge in the main office building first floor to cater to all your banking needs.

Utility bill payments

NIBL Utility Payment service is the easiest and smartest way to manage and pay your utility bills through banks counter, e Banking and ATM anytime, anywhere without standing in queues..

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2.1.D Organizational structure of Nepal Investment Bank Limited

The structure of NIBL lies in between bureaucratic and organic structure with departments and each department with a head or supervisor. NIBL has the good provision of job rotation, job enrichment and job enlargement. However, decision making authority being centralized lies in the hand of top management.
CHAIRMAN

BOARD OF DIRECTORS

CHIEF EXECUTIVE DIRECTOR

GENERAL MANAGER

DEPUTY GENERAL MANAGER

ASSISTANT GENERAL MANAGER

SENIOR MANAGERS

DEPUTY MANAGERS

ASSISTANT MANAGERS

Figure 1: Organizational Structure of NIBL( Source: www.nibl.com.np)

Board of Directors Mr. Prithivi Bahadur Pandey Mr. Prajanaya Rajbhandari Mr. Deepak Man Sherchan Mr. Krishna Prasad Sharma Dr. Shiva Hari Shrestha Mr. Surendra Bahadur Singh Mr. Damodar Prasad Sharma Pandey

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Management Prithivi Bahadur Pandy Jyoti Prakash Pandey Deputy General Manager Rajan Kumar Amatya Assistant General Managers Bijendra Suwal Anuj Mani Timilsina Manju Basnett Department Heads Deepak K Shrestha Deepak Shrestha Rabin Sijapati Shreechandra Bhatta Bikash Thapa Sachin Tibrewal Sanjeev Karki Tul Jung Pandey Prabir SJB Rana Sammit Bhattarai Binod Kumar Upadhaya Shivanth Pand
Figure 2: MANAGEMENT

Chairman/Chief Executive Director General Manager

Retail Banking

Information Technology Corporate Banking Putalisadak Branch Manager

Trade Finance Legal Operations Branch Co-ordination Cell Cards & Remittance Accounts Cash & Transfer Reconciliation Human Resource Credit Administration Internal Audit and Compliance Research & Development
TEAM OF NEPAL INVESTMENT BANK(Source:

www.nibl.com.np)

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2.2 Task Environment (PORTERS Analysis) Of NIBL

Porters approach contends that an organization is most concerned with the intensity of competition within its industry. The level of this intensity is determined by five basic competitive forces. An organization must carefully scan the task environment to assess the importance to its success of each of the following six forces:

Figure 3: Porter Analysis

1. Threat of New Entrants: New entrants to an industry typically bring to it new capacity, a desire to gain market Share and substantial resources and are therefore, threats to an organization. The threat of entry depends on the presence of entrance barriers and the reaction that can be expected from existing competition.

The level of competition among the 29 commercial banks has increased to great extend. However, the threat of new entrants in the banking industry is low; due to the umbrella act (capital requirement is 100Crores); it has become even more challenging for newer entrants to enter in the market.

2. Rivalry among Existing Firms The existence of many competitors in the market is due to following reasons: a) Limited market to serve. b) Limited industry growth.

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c) Lowering of spread margin. d) Fierce price competition.

3. Threat of Substitutes Products or Services In effect, all organizations in an industry are competing with industries that produce substitute products. Substitute products are those products that appear to be different but can satisfy the same need as another product. The threat of substitutes product and services in the banking industry are medium. People have various other options available other than bank. There has been an immense growth in the establishment of finance companies, cooperatives and other financial institution where people can invest their money. Therefore, there is a high degree of difference in few of these services:

a) Plastic money- credit card, debit card, ATM card b) Any branch banking services c) International business-letter of credit

4. Bargaining Power of Buyers Buyers affect an industry through their ability to force down prices, bargain for higher quality or more services, and play competitors against each other. The borrowers are the prime customers of any bank. Customers are highly involved with banking activities. Therefore, there is high bargaining power of the buyers in commercial banks.

5. Bargaining Power of Suppliers Suppliers can affect an industry through their ability to raise prices or reduce the quality of purchased goods and services. A supplier group is powerful if some of the following apply:

a) The supplier industry is dominated by few companies, but sells too many. b) Substitutes are not readily available

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In banks, depositors and creditors are considered as its actual supplier because the basic raw materials for banks are its deposit, which is provided to the bank by its depositors as well as its creditors. Banks are finding it difficult to invest the large volume of deposit profitably. The huge supply in the deposits, there is a continuous decrease in the interest rate to the depositors. This trend shows that the bargaining power of the suppliers is low due to the large volume of suppliers who want to deposit in the bank.

In contrary, in present situation lack of deposits have increased the interest rates in deposits, which has shown in increase in bargaining power of the suppliers or depositors.

6. Relative power of other stakeholder: The power of other stakeholders defines the group of government, local communities, creditors, special-interest groups, unions, shareholders, and complementors. The stakeholders have the power to exercise their authority into the banking sector but in real life situation they do not generally interfere in its working. The stakeholders only see the banks performance in black and white during the annual general meeting (AGM).
MAJOR COMPETITORS

Competition in banking sector is getting tougher day by day. Banks are trying to attract more clients by offering new facilities and convenient services. Banks are launching new products so that people switch their current bank. Some of the major competitors of NIBL are as follows: Standard Chartered Bank Ltd. NABIL Bank Ltd. Bank of Kathmandu Everest Bank Ltd

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Standard Chartered Bank Ltd.: Since its establishment in 1987 A.D offers a full range of banking products and services to its customers. Currently, it has been providing priority banking card and diva credit card to its customers.

Nabil Bank Ltd.: It was established in the year 1984 A.D as the first joint venture bank of Nepal has reached to a great height with their high concern to customer satisfaction. Currently, it has been providing 11% in fixed deposit and many other services.

Bank of Kathmandu Ltd.: It started its operation in March 1995 with a commitment to deliver quality service to customers, generating good return to shareholders, providing attractive incentives to employees and serving the community through stronger corporate social responsibility. Currently, it has been introduced scheme of 11% at premium fixed deposit and 7% in my choice saving account.

Everest Bank Limited: Everest Bank Limited (EBL) started its operation in 1994 with joint venture partnership with Punjab National Bank, holding 20% equity in the bank. It is considered as the pioneer in extending various customer friendly products as such as Home Loan, Education Loan and currently providing 10% p.a in fixed deposit and 6.5% p.a in saving in EZee supreme account.

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PART THREE: PRESENTATION OF MAJOR PRODUCTS UNDERTAKEN

Part Three: Presentation of Major Products Undertaken
Section I

3.1.1 Brief background of the specific assignment / Project:

Title of the Project: Analysis of Banking Products and Customer Relationship Management of Nepal Investment Bank Limited. Need of the specific project undertaken: Deposit and lending are one of the most common activities performed by bank which is one of its major products/ services offered by NIBL. Bank benefits from it and at the same time face greater risk as well.

No bank has desire to lose its customer since it is one of the major source of survival. So, bank tries to communicate through its different medium so that it can provide maximum benefits to its customer. So, to analyze the banking products and services of NIBL and to understand the implications of customer relationship management in banking industry at large is our need of the specific project undertaken.
3.1.2 Objective of the Study

The proposed report will try to address the following issues: 1. To understand the importance of banking products. 2. To examine and evaluate the banking products for marketing analysis. 3. To help in search of new products for commercial banks. 4. To understand the customer relationship management. 5. To overview the importance of customer relationship management in commercial bank.

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3.1.3Scope of the project

The scope of the study entails a broad overview of banking products and customer relationship management. The study has paid greater emphasis on the Nepalese context by focusing more on the banking products and customer relationship management that bridge the gap between bank and customer which would be employed by banking sector.

Limitations and Constraints of the project

Though efforts have been made to make the study more realistic, practicable and applicable in the Nepalese context, the study had certain limitations as follows:

1. The project specified, dealt with only brief overview of the subject matter. 2. Lack of theoretical knowledge on customer relationship management at the place of performance as it is new management for study. 3. The proposed area of study is limited to only one bank. 4. The scarcity of time has restricted in adopting the data and subject matter collection. 5. Limited information available in websites of bank. 6. Difficult to collect data on basis of customer perception.

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Section II
As part of the specific assignment/project, this section offers a general conceptual framework that guided the project.

3.2 Conceptual Framework

In order to understand the different product position of NIBL at different sectors and its financial performance during different fiscal years we conducted this study Which is explained by the following figure: Step 1: Selection of the Organization

Step 2: Worked as Intern for 9 weeks in NIBL

Step 3: Unstructured interview with the staffs of related departments

Step 4: Collection of information by visiting websites of other commercial banks

Step 5: Analysis of data and information collected

Step 6: Preparing initial draft

Step 7: Consulting and discussing the report with the corporate staff of NIBL

Step 8: Preparation of the final report.

Figure 4: Conceptual Framework Of Project

Our report is based on the following topics which worked as framework for preparation of this report. Our actions were guided by these topics: Types of Deposit of NIBL Keta Keti Bachat khata Ezee saving Lotus saving

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Normal saving account Current account, etc.

Services provided by customer service department e-banking debit card credit card privilege card

Based on the above mentioned topics, we developed the procedures for obtaining the required information as well as fulfilling the required criteria. The steps are as described as follows:

Selection of the organization: As this report is based on the banking products and customer relationship management, our selection of the organization is based on the criteria that the organization should be involved in providing various services to its customers with variety of products and which holds good market position, thus we chose NIBL for our study. We conducted the study through internship program.

Worked as intern for nine weeks: Considering the time frame provided to us, we decided to fully utilize it and so, we worked as intern in NIBL for nine weeks. We worked in many departments specially the customer service department, which helped us to a great extent for preparing this report.

Unstructured interview with staffs of related departments: To gain more information about the banking products and customer relationship, we also interviewed different staffs of the related departments. The interview was unstructured as it provided ease to answer the questions and is not limited to boundary of the scope. Based on the framework of the topic, the questions were asked and related information was gathered.

Collection of information by visiting websites of other commercial bank: The competition in banking sector is very stiff. So, we also have to consider the competitors of NIBL and compare and analyze over lending position and market 28

position of NIBL. Thus we considered four major competitors of NIBL. We collected information about the financial performance of each and the overall market position of NIBL.

Analysis of data and information collected: To analyze the collected information, various statistical tools and analysis have been used. Use of graphs, pie chart, bar charts has facilitated the proper evaluation of the findings. Similarly, Potters Industrial Analysis has been used for proper analysis of the competitive position and also to analyze the functional activities of NIBL.

Preparing initial draft: On the basis of the collected information and experience gained from internship, we prepared the initial draft of the report. Based on the information collected as required by the guidelines, the initial draft was prepared.

Consulting and discussing the report with the corporate staffs of the NIBL: After the initial draft was prepared, we discussed and consulted about the report with the corporate staffs. We asked for their feedback and advice for the improvement.

Final Report: After completion of all the above steps, finally the final report was prepared. The final report includes all the topics we pointed out to provide us as guidelines.

INPUT -Selection of Organization - Working as intern

PROCESS

OUTPUT Report on Banking Products and Customer Relationship Management

- interviewing, - Collection and analysis of data - preparing initial draft

Figure5: IOP model

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SECTION III 3.3STUDY METHODOLOGY

NATURE OF THE DATA As per the study we have conducted the data can be categorized as Qualitative and Quantitative. We have subdivided the qualitative and quantitative data as per the source.

Primary source: The unstructured interview with the head of various departments and with other staffs of NIBL.

Secondary Source: Visited websites of NIBL and other commercial banks. Various articles published in the newspapers. Information about NIBL from friends and other relatives.

RESEACRH TECHNIQUE The research study was conducted with in-depth interview with the personnel of the various banks. We also conducted and elaborate interview of the head of corporate banking in NIBL at Durbarmarg Branch, where we did our internship.

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Section IV: 3.4.1 Banking Products and Customer Relationship Management: A) Banking products: 1) Current Account:
An account which can be opened by any individual or company with zero interest rate. Any individual or company can deposit and withdraw money at any day. Especially this account is opened by the company more than the individuals.

2) Saving Account: To keep pace with the growing needs and backed by a cutting edge, global technology and superior customer service, the bank has rolled out various forms of saving account. They are:

2.1EZee saving: Features are: 4% per annum Interest on Daily available balance.* Minimum Balance : NPR 50,000.00 Waiver of key deposit fee for lockers Special health package at National Reference Laboratory (NRL) Free E-banking and issuance of VISA Electron Debit Card valid in Nepal and India Free Any Branch Banking Service (ABBS) Accidental Insurance

2.2 Social Deposit Account: NIBL believes in its social responsibility. With this in mind NIBL has started a unique, first of its kind scheme which shares with society a little of what it achieves. The Social Deposit Account permits any INGO/NGO account holder to claim a share in the profits of the account.. Features are:

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Bank will contribute 50% of the earnings generated from your account on a semi-annual basis. A source of fund for your charitable activities can be locally raised. Continue earning interest on your account.

2.3Ketaketi Bachat Khata: Features: No Minimum balance

Benefits: Visa electron debit card @ NPR 200.00 per annum, valid in Nepal and India Discount Privilege card* Free e Banking facility-pay school fees online Free birthday cake for the account holder (minor)** NPR 100 contribution from the bank as soon as the account is opened.

2.4Lotus Saving Features: Minimum balance of NPR 1, 000/-

Benefits: Visa electron debit card @ NPR 200.00 per annum, valid in Nepal and India Free e Banking facility ABBS facility No maintenance charge

2.5EZee Student Account Features: Minimum balance of NPR 2,000/-

Benefits: Visa electron debit card @ NPR 200.00 per annum valid in Nepal and India Free e Banking facility 50% waiver on TC issuance 50% waiver on Draft

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2.6Parivar Bachat Khata Features: Minimum opening balance Rs 2500/Maturity period, Maximum of 3 years Minimum monthly deposit Rs 500/Minors receive cakes on their birthday Parents/guardian is to have an account with NIBL and from their account the money will be transferred to this account through Standing Instruction.

2.7NIBL Saving Bonanza Features: Up to NPR 5,000,000.00 (Interest rate @ 6.50% on daily balance *) Above NPR 5,000,000.00 (Interest rate @ 7.50% on daily balance * Minimum Balance of NPR 1,00,000.00 Interest on the daily balance Free Utility Payment for Nepal Telecom Pre-Paid Recharge, Post Paid/PSTN Bills, Schools. ISPs, Cable networks, Insurance & Yeti Air eTicket Accidental Insurance

2.8Normal Saving Account Features:

Minimum Balance : NPR 20,000.00*

Benefits: Unlimited deposits and withdrawals Free eBanking VISA Electron Debit Card valid in Nepal and India Any Branch Banking Service (ABBS) Cheque book facility

2.9Afnai Bachat Khata Features:

Minimum balance of NPR 1/-

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Benefits:

Visa electron debit card @ NPR 200.00 per annum, valid in Nepal and India. Free eBanking facility Free ABBS within Kathmandu valley No maintenance charge
Table 2: Saving Deposits

Savings Afnai Bachat Khata Normal Saving Account Parivar Bachat Khata EZee saving Account EZee student Account Lotus Saving NIBL Saving Bonanza Keta Keti Bachat Khata

Interest Rate 2% 2.50% 3% 4% 2.50% 2.25% 6.50% 3%

Interest Rate
7% 6% 5% 4% 3% 2% 1% 0%

Interest Rate

Figure 6: Interest rate Of Savings

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3) Fixed Deposit: This scheme helps the people to keep their money safe for a particular period without using it in the middle of the period and earn higher rate of return in form of interest. Interest rate varies with the deposit made for the period the customer choose

Table 3: Fixed Deposit

Fixed Deposits

Prime

Others

1 Month 3 Month 6 Month 1 Year 2 Years Above 2 Years Special Deposit Account

6% 6.50% 7% 7.50% 8% 8.50% 10%

5.50% 6% 6.50% 7% 7.50% 8% 9% 10.50%

NIBL Special Fixed Deposit 11% Account Special Bulk Fixed Deposit 11.50% Account

11%

35

14% 12% 10% 8% 6% 4% 2% 0%

Prime Others

Figure 7: Fixed deposit A/C

4) Loan and Advances: NIBL provides loan based on its customer requirements and after detail analysis of the necessary documents. So, different types of loan based on their interest rate are:

Table 4: Lending Rates

Lending Rates % per annum Corporate/Multinational Prime Term Loan Export Credit Overdraft Working Capital Short Term Loan / Time Loan Trust Receipt 90 days Deprived Sector Hire Purchase Loan Loan Against Govt. Bonds** 15.00 13.50 15.50 15.50 15.00 13.50 9.50 13.50 9.50 Others 15.50 14.00 16.50 16.50 15.50 14.50 10.50 14.50

36

Other Loans Housing Loan (Up to 5yrs) Housing Loan(Above 5yrs)

16.50 13.50

14.50

18 16 14 12 10 8 6 4 2 0

Lending Rates % per annum Prime Lending Rates % per annum Others

Figure 8: Lending rates

5) Trade Finance: It includes letter of credit and letter of guarantee. i) Letter of Credit (LC): It is a non funded credit facility provided by the bank to make payment to beneficiary if conditions contained in letter of credit are satisfied. It includes irrevocable LC, commercial LC, Demand LC and Usance LC. ii) Letter of Guarantee: This is irrevocable commitment on part of bank to make payment to beneficiary, if client fails to perform as per terms of underlying contract with beneficiary. Final guarantee and performance guarantee are its type.

6) Remittances: NIBL offers one of the safest and the most secured means of money transfer to Nepal. Remitters can send money to NIBL from any part of the globe. NIBL is using Prithvi Express, NIBLs in house remittance software for transferring fund worldwide. SWIFT Transfer: NIBL offers fast and reliable money transfer through 37

SWIFT. The bank account with NIBL can be created with remittance from anywhere in the world. The remitter has to mention the NIBLs SWIFT addresses NIBLNPKT and the beneficiary details to transfer money to Nepal.

7) Cash Management Services: NIBL provides cash management service by collecting bills receivables more efficiently if organization is engaged in exporting goods to India. NIBLs correspondent bank in India will collect cheque from customers, buyers and credit their account in a shorter time through the bank.

8) Other services: a) E banking: It allows you to avail online banking transactions from any part of the world. With the change in technology, Nepal Investment Bank Ltd, more than ever, felt the need for banking convenience for their clients. Features: Help to view account summary, statement, etc. Help to view history of payments made. Help to transfer the fund yourself/ linked account. Help to view the history of prepaid pins purchased. Help to submit different requests.

b) Locker: This service allows the a/c holder to keep their valuable documents, ornaments, etc. in the locker. Safe Deposit Lockers are located in a safe &, secure location at few of our branches. These lockers have been built to weather the rigors of nature &, are equipped with many special security features to ensure the highest standard of safety maximum protection.

a) Debit Card: 38

NIBL has always provided innovative, enhanced and worldclass products and services to its customers. We are pleased to offer two more, in the form of Visa Credit Card and Visa Debit Card. This gives NIBL another first: Visa Electron Debit Card in Nepal, thereby providing our valued customers with further flexibility in payment.

b) Credit Card: A Credit Card is a payment card, which enables you with the option of making purchases on credit. Spend now and pay later! It is a convenient financial management tool. It offers many benefits, however at the same time it also carries many responsibilities to the holder thereof. It provides you with a freedom from the burden of carrying cash. Credit cards have very wide applications, wider than the currency notes and safer than them too!

c) Premier Banking Services: Features: Issuance of drafts and travelers cheques for free of charge*. No key deposit for lockers. Free issuance of VISA Gold Credit Card & VISA Electron Debit Card. Any Branch Banking Services (ABBS) for free.

d) Utility bill payments: NIBL Utility Payment service is the easiest and smartest way to manage and pay your utility bills through banks counter, eBanking and ATM anytime, anywhere without standing in queues. Make all your bill payments from the convenience of your home or office.

NIBL has tied up with major organizations across the country to facilitate payment of bills for Utilities (Schools, Insurance, Telephone, Internet and Mobile). 39

B) Customer Relationship Management

As we know customers cant be ignored at any cost by any organization especially banks. So, NIBL tries to provide best services than its competitors and used the following concept or activities to increase customer satisfaction:

i) Communication: NIBL views imparting effective communications related to banking, financial and general economy as a serious and natural responsibility of a quality conscious financial institution. It has carried out some of the activities to make communication more effective. They are:

Bank has started its e banking service to communicate its customer more quickly than before.

Bank email the customer statements if required by customer, etc.

ii) Know Your Customer: Customer is like a dice, which plays vital role in the success or the failure of any commercial organization. Similarly, as dice enables one to win or loose the game. So, it is the most important task for any organization to know its potential customer who directly affects the business transaction. KYC has categorized customers on the basis of saving attitude, operating business, entertainment scheme, etc.

ACCOUNT HOLDERS Some of the documents Required for Individual Account and Business Account are listed below: A)Individual Account: 1. Personal NPR Account (For Nepalese Citizen) o Certified True copy of Identification Document viz Citizenship, Passport, Driving License, NG/N Official IDs. 40

o Two Photographs of Account Holder. o Discharge relating to instruction by fax. 2. Joint NPR Account (For Nepalese Citizen) o Certified True copy of Identification Document viz Citizenship, Passport, Driving License, NG/N Official IDs . o Two Photographs of Account Holder. o Discharge relating to instruction by fax. 3. Personal NPR Account (For Indian Citizen) o Certified True copy of Identification Document viz Citizenship, Passport or Registration Certificate from Indian Embassy. o Two Photographs of Account Holder. o Discharge relating to instruction by fax. 4. Personal NPR and FC Account (For Foreign National) o Certified True copy of Passport o Certified True copy of Valid Visa other than Tourist Visa and Entry Stamp. o Two Photographs of Account Holder. o Discharge relating to instruction by fax. 5. Joint NPR Account (For Foreign National) o Certified True copy of Passport o Certified True copy of Valid Visa other than Tourist Visa and Entry Stamp o Two Photographs of Account Holder. o Discharge relating to instruction by fax.

B)Business account: 1. NPR Account of Company (Registered in Nepal) o Certified true copy of renewed Company Registration Certificate. o Certified true copy of renewed Income Tax or VAT Registration Certificate. o Certified true copy of Memorandum and Articles. o Certified true copy of board resolution for opening and operation of account. o Certified list of present Board of Directors.

41

o Copy of Certificate of Commencement of Business, in case of Public Ltd. Company. 2. Account of Clubs, Societies and Associations (NPR) o Certified true copy of Registration Certificate. o Certified true copy of by-laws. o Copy of resolutions to open and operate the account. o Request Letter to open the A/C. o List of office bearers. o Affiliation Certificate with the social welfare council or other council concerned. 3. Proprietorship Account (NPR) o Certified true copy of renewed Registration Certificate. o Certified true copy of renewed Income Tax or VAT Registration Certificate. o Request Letter to open the A/C. o Discharge relating to instruction by fax. o Certified True copy of Identification Document via Citizenship, Passport, Driving License, and NG/N Official ID of Proprietor. o Two Photographs of Account holder. 4. Account of Partnership (NPR) o Certified true copy of renewed Registration Certificate. o Certified true copy of renewed Income Tax or VAT Registration Certificate. o Certified true copy of Partnership deed (agreement). o Request Letter to open the A/C signed by all partners mentioning opening and operation of account. o Discharge relating to instruction by fax.

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3.4.2 Major Findings

This section includes the findings of customer perception about banking products i.e. level of customer satisfaction based on banking products. For This, we have conducted a survey to 20 customers to find out their view about NIBL products and services. 1. In terms of fast and efficient service you received from NIBL, how satisfied are you with the following?

Very satisfied 4

Satisfied

Neutral

Dissatisfied

Very dissatisfied

Chart Title
0% 20% 20%

Very satisfied Satisfied Neutral

25% 35%

Dissatisfied Very dissatisfied

Interpretation: Out of total respondents, 20% were very satisfied, 35% were satisfied and 25% were neutral about the service and 20% were dissatisfied. It clarifies that most of

43

the customers prefer fast and efficient service in order to have safe transaction and save time.

2. In terms of the service you expect from the telephone/Email, how satisfied are you?
Very satisfied 8 7 5 0 Satisfied Neutral Dissatisfied Very dissatisfied 0

Chart Title
0% 0% Very satisfied 40% Satisfied Neutral Dissatisfied 35% Very dissatisfied

25%

Interpretation: Out of total respondents, 40% were very satisfied, 35% were satisfied, 25% were neutral and none were dissatisfied. It clarifies that the bank has provide effective telecommunication services to its customers.

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3. In terms of Keta Keti Bachat Khata, how satisfied are you with this scheme?

Very satisfied 7

Satisfied

Neutral

Dissatisfied

Very dissatisfied

Chart Title
0% 15% 35% 25% Very satisfied Satisfied Neutral Dissatisfied Very dissatisfied 25%

Interpretation: Out of total respondents, 35% are very satisfied, 25% are satisfied, 15%are neutral and 15% are dissatisfied and none are very dissatisfied which clarifies that more than 50% of people liked this scheme.

45

4. Are you satisfied with the loan procedure carried out by NIBL?
Very satisfied 7 5 8 0 Satisfied Neutral Dissatisfied Very dissatisfied 0

Chart Title
0% 0%

Very satisfied 40% 35% Satisfied Neutral Dissatisfied Very dissatisfied 25%

Interpretation: Out of total respondents, 35% of the customers are very satisfied, 25% are satisfied and 40% are neutral and none are dissatisfied which clarifies that they are satisfied with the loan procedure carried out by NIBL.

46

5. Are you satisfied with the services provided by NIBL in rural areas?
Very satisfied 4 5 2 4 Satisfied Neutral Dissatisfied Very dissatisfied 5

Chart Title
20% Very satisfied Satisfied Neutral 20% 10% 25% Dissatisfied Very dissatisfied

25%

Interpretation: Out of total respondents, only 20% are very satisfied, 25% are satisfied, 10% are neutral , 20% are dissatisfied and 25% are very dissatisfied which shows that in total 45% are dissatisfied which is a concern for the organization which has to be looked into very seriously.

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Section V Conclusions and Suggestions

After completing our training at a NIBL, we developed a lot of confidence to the extent that, we can take decisions in all the customer service matters & those concerned with the steps to be taken for gaining the hold of the competitive market.

This training gave us the opportunity to develop a new dimension to our personality in a much better way. It was a great experience for me to get banking exposure that will be helpful for me to enter in the competitive world. This training has given me the opportunity to learn how top executives & managers take decisions with respect to the changing environment & situations.

Generally, customer perception about any product is different and they have many options available in terms of variety of products offered by different companies.

Similarly, in case of NIBL, it provides variety of products under saving account, fixed deposit account, loan, remittances, utility payment services, etc to its customers in order to gain competitive advantage. NIBL with its establishment of various branches across the country has enabled the people of every sector to utilize the service of deposit, take loan from bank, to use debit card and debit card, etc. which has helped customers to do banking transaction from where they are, need not to go anywhere. NIBL has used the concept of Know Your Customer by which it has been able to

48

know what are the customer needs, what they are not happy with which provide the way of improvement and focus on providing maximum benefit to customers. In order to communicate information quickly to its customers and help them do banking transaction it has introduced e banking.

After the analysis of project, the following suggestions for improvement are:

May I Help You: The concept of "May I Help You" is very important for providing good customer service because just by having the knowledge of customer needs is not enough; it needs to be bring out in practice to fulfill it through the above concept.

Enquiry Counter: The enquiry counter is very important for providing efficient service to customers. When a customer enters a branch, he has some queries, which must be answered quickly because customer does not like to waste their time.

Focus on dissatisfied and neutral customers: Dissatisfied employees and the neutral customers are the one which organization need to give highly important because loss of them will cause the organization to its potential customers. So, they need to find out the reason for their dissatisfaction and solve them as quickly as possible.

E-Shopping: E-shopping system is required to be established in this bank which is must. Customer Awareness: The customer should be consistently informed & updates about the new facilities & new services.

Well trained customer' care staff: For satisfactory handling of queries, to establish good standards, outstanding performance & high benchmark well-trained staff is a pre-requisite hence the same goes "We make banking a pleasure".

High penetration in untapped markets: Approaching all the potential clients, making them aware about various 49

instruments & converting them as customers. Focus on rural areas: As shown by the stats earlier that NIBL need to focus on rural areas more by developing appropriate strategy so that it can convert potential customers into permanent customers.

PART FOUR: REFLECTION OF INTERNSHIP

Part 4: Reflection of Internship
Carrying out this internship has been a great experience to gain professional skills as well as utilize academic skills. To carry out internship we had some following objectives and to extent we met they are: To gain experience in a real life working environment: We have been able to meet this objectives successfully as we got chance to work in a completely different environment to which we were not familiar to.

To enhance skills and knowledge in commercial banking sector:

Through this internship, we were able to enhance our skills and knowledge to work in this sector and helped us to utilize it in other field.

Developing personal and professional skills:

Personally, we had been able to develop our communication skills, concentration skills and professionally to deal with customers directly and other clients.

To develop knowledge about entire business activities:

By this internship program, we were able to develop knowledge about entire business activities which we were not familiar before joining in NIBL as intern.

To develop sense of responsibility in work:

By working as an intern in NIBL, it generated a sense of responsibility within us towards the work which was our main objectives.

Skills and Knowledge acquired during internship: a) Improved communication skill at CSD: 50

Since we were placed at the CSD, the most basic task to be performed was to interact with the customers and to assure customer satisfaction too. We had to attend the customers with utmost care and comfort. So, basically we learned how to interact with the customers and conduct a meaningful conversation.

b) Technical skills: As we worked in many departments, we were able to gain technical skills like to scan, input of data, modifying it, verification with the system, etc. c) Relationship skills: During the intern, we developed relationship skills also by working with various staffs and departmental heads and interaction with customers. d) Conflict management skills: During intern, we were able to develop conflict management skills. As in the bank customers came with their complaint regarding debit card, a/c related issues, etc. So, while handling them we learnt this skill. All above skills are required in this field as each skill is required in different areas of bank like to maintain good relationship with customers, staffs, to handle conflicts, technical areas to handle, etc.

Such skills and knowledge gained during the internship program will help us in the following way in the future: Adjust in the real working environment. To work with different people of different culture. Able to handle conflicts in a peaceful manner. Will be able to handle technical areas in work activities. Will be able to cope up with the future challenges.

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Bibliography
1. (2007-2008). Annual Report of NIBL 2.(2008-2009). Annual Report of NIBL. 3.Rose, P. S. Commercial Bank Management. 4.Wheelen, T. L., Hunger, D. J., & Rangaranjan, K. Strategic Management & Business Policy. Websites: 1. www.nibl.com.np 2. www.kumaribank.com 3. www.laxmibank.com 4. www.standardchartered.com.np 5. www.bok.com.np 6. www.everestbankltd.com

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APPENDIX
Questionnaire We developed a following questionnaire for the NIBL customers in order to have their specific view about NIBL. We had done a survey to about 20 customers. 1. In terms of fast and efficient service you received from NIBL, how satisfied are you with the following?
Very satisfied Satisfied Neutral Dissatisfied Very dissatisfied

2. In terms of the service you expect from the telephone/Email, how satisfied are you?
Very Satisfied Neutral Dissatisfied Very

53

satisfied

dissatisfied

3. In terms of Keta Keti Bachat Khata, how satisfied are you with this scheme?
Very satisfied Satisfied Neutral Dissatisfied Very dissatisfied

4. Are you satisfied with the loan procedure carried out by NIBL?
Very satisfied Satisfied Neutral Dissatisfied Very dissatisfied

5. Are you satisfied with the services provided by NIBL in rural areas?
Very satisfied Satisfied Neutral Dissatisfied Very dissatisfied

54

55