An

Internship Report
On
Agricultural Development Bank Limited
(Customers Service Department, ECC)

Submitted By:
Laxman Sharma
Platinum Management College
Exam Roll No: 14030685
P.U. Registration No: 2013-2-03-1889

Submitted To:
Office of the Controller of Examination
Faculty of Management
Pokhara University

In the partial fulfillment of the requirements for the degree of

Bachelors of Business Administration (BBA)
Kathmandu, Nepal April 2017
 DECLARATION

I hereby declare that the internship report entitled An Internship Report On

Agricultural Development Bank Limited (Customers Service Department, ECC)
submitted to the office of the dean, Faculty of Management, Pokhara University is my
original work done in the form of partial fulfillment of the requirement for the degree
of Bachelor in Business Administration (BBA) under the supervision and guidance of
Principal, Mr. Pradeep Aryal, Vice Principal, Krishna Neupane and all the faculty
members of the Platinum Management College. The results embodied in this thesis
have not been submitted to any other university or institute for the award of any
degree or diploma.

Name of the student: Laxman Sharma

Signature:..

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 ACKNOWLEDGEMENT

As a partial fulfillment of BBA course of Pokhara University, it is required to undergo

eight weeks of internship program. For this, I thank Pokhara University for providing
such a great exposure to the practical field of the banking sector of Nepal.

Similarly, I would like to extend my sincere thanks and gratitude to HR Department of

ADBL who accepted me as an intern in ADBL and provided me the opportunity to
learn and contribute my knowledge in practical environment. My special thanks goes
to Ms Shashi Adhikari , branch manager of ADBL, Maitidevi for selecting me as an
intern. I also want to express my gratitude to Ms shailaja kc, Chief Section Officer for
selfless guidance and support during my intern period. I would also like to thank Ms
manju shahi for helping me in KYC department. Im grateful to all the staff members
of the ADBL bank for their selfless support and their encouragement. Their response
and support made me know about general operation of banks system and procedure.

I am highly indebted to Platinum Management College, for their cordial co-operation,

supervision and inspiration without which this report would not have come into
existence.

Lastly, I thank almighty, my family, my friends for their constant encouragement

without which this internship would not be possible.

Regards,
Laxman Sharma

3
Table & Fig no List of Tables and Figures Page No

Table 1.1 Divisions of Weeks and Activities Performed 5

Table 2.1 Classifications of Banks in Terms of Capital 12
Table 2.2 Names of Commercials Banks of Nepal 14
Table 3.1 Ownership Structure of ADBL 20
Fig 3.1 Organizational Structure of ADBL 19
Fig 3.2 Networks of ADBL 20

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 ABBREVIATIONS

ATM: Automated Teller Machine

ADBL: Agricultural Development Bank Limited
KYC: Know Your Customers
BBA: Bachelor of Business Administration
FY: Fiscal Year
EPS: Earning Per Share
CSD: Customer Service Department
L/C: Letter of Credit
NBL: Nepal Bank Limited
NRB: Nepal Rastriya Bank
SMS: Short Message Service
PU: Pokhara University
BAFIA: Bank and Financial Institution Act
HRD: Human Resources Department

5
 Table of Contents
Chapter 1 Introduction
1.1 Background 1
1.2 Objectives of the Study 2
1.3 Methodology 3
1.4Limitations of the Study
6

Chapter 2 Introduction to Banking Industry

2.1 Meaning and Definition of Bank 8
2.2 Origin of Banking 9
2.3 Evolution of Bank in Nepal 11
2.4 Current Banking Scenario of Nepal 12
2.5 Types of Bank 13

Chapter 3 Introduction to Agricultural Development Bank Limited

3.1 Brief Introduction 17
3.2 Visions 18
3.3 Mission 18
3.4 Objectives 18
3.5 Corporate Conduct 18
3.6 Core Values and Ethical Principles 19
3.7 Organizational Structure of ADBL 20
3.8 Ownership Structure and Share Capital of ADBL 21
3.9 Network of ADBL 21
3.10 Board of Directors 22
3.11 Products of ADBL 22
3.12 Analysis of ADBL 23
3.13 For Investors 29
3.14 Capital Plan 30
3.15 Prospects and Challenges 31
3.16 Financial Highlight 31

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Chapter 4: Analysis of Activities done and Problems Solved
4.1 Background
33
4.2. Customer Service Department 33
4.3 Activities Done in Customer Service Department 33
4.4 Clearing Department 38
4.5 Other activities were done and problem solved 40

Chapter 5: Conclusion and Lessons Learnt

5.1 Conclusion 41
5.2 Lessons Learnt 42
5.3 Recommendation 43

BIBLOGRAPHY

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 Chapter 1

INTRODUCTION

1.1 Background
Nepal is a developing country. Its economic growth and prosperity rely on the
performance of the upcoming human resources. The quality of these human resources
depends upon the knowledge and skills they have obtained from their academic
background.

Pokhara University (PU) is the largest and oldest university in Nepal. It is the pioneer
university in providing management education in Nepal and since its establishment it
has been providing an excellent education to the students. TU has designed various
management degrees under Faculty of Management (FOM) and among them one of
the outstanding developments is in the form of Bachelors in Business Administration
(BBA). This program is a felt necessity to link between knowledge and practice to
give professionalism as the pressing requirement of HR Development to suit micro-
economic needs of the country. The whole BBA program comprises of 120 credits
hour.

Among these, the internship program is designed with the view to developing
students skill in object-oriented business management, capable of understanding and
solving real life business related problems. It provides practical exposure and help
students to understand corporate world. This course deals with the fundamental
concept of corporate worlds, which are essential for any persons conspiring to be the
active participant of this competitive world.

As per the course requirement of the BBA program every seventh semester, the
student should prepare the internship report after the completion of the two months
internship in the institution. This internship had been fruitful because it had helped me
to see the same things from the two opposite directions and find the difference in the
perception of these two completely opposite sides as a neutral observer.

8
Internship Program is a feature of PU BBA Program that is compulsory to fulfill the
partial requirement for the degree of BBA, which provides the perfect platform for the
students to utilize their theoretical knowledge in real life situations. It helps them to
observe, study and explore new facts and understand how an organization actually
functions. In simple words, the internship program is designed with opportunity of
learning how to translate the theoretical knowledge into wise actions through
exposure to a real organizational environment. Summing up, internship is simply the
applied form of knowledge. It is relatively short-term in nature with the primary focus
of getting on-the-job training.

Agricultural Development Bank Limited (ADBL), the pioneer of modern banking in

Nepal, was established to facilitate the consumer with its deposit and credit facilities.
Since the internship is completed in ADBL, this report is the outcome of the valuable
real-life experiences obtained during the internship in that organization. Getting
involved in ADBL as an intern in various departments, internee was able to confront
the real job-place experience and got the chance to feel the different situations from
the perspective of both the employees and the customers.

1.2 Objectives of the Study

The general objective of an internship program in BBA is primarily designed to
enable the students to support them as grounded career persons who know the real-life
working situations and had already felt the pressure of the job place environment. It is
also a platform to show the ability to mold the theoretical knowledge learned
throughout the BBA program as per the requirement of the job placement.

The main goal is to highlight the activities carried out in ADBL. It helps the students
to be prepared for the future through the little knowledge gained from the two months
of the job like experience. The specific objectives are jotted down in nutshell below:-

To explore the applicability of theoretical knowledge in the practical

workplace.
To develop managerial and communication skills to tackle the real life
situations.

2
 To get the practical exposure and understand the institutional cultures and
valuesystem of the corporate world.
To gather the knowledge on the various activities performed in various
departments of the bank and be aware of the products and services.
To develop the ability to handle various kinds of customers with varying
knowledge level, problems, and requirements.

1.3 Methodology
This internship report is the study of particular subject backed by the collection,
compilation, presentation and interpretation of relevant information. It starts from the
selection of the organization for the internship, performance of different kinds of
activities and placement in different parts of the organization and last collection of
various primary and secondary data for the preparation of the report
It helped to analyze the findings in meeting the objectives of the study.

1.3.1 Sources of Data:

For the report the data are collected from the primary source and secondary source.
They are as follows:
i) Primary Data
Observation of working environment of the bank.
Visited banks and practiced as the intern in order to associate with different
aspects of the banks.
Met with the customers of the bank and had direct contact with them for
relevant information.
Informal discussion and interaction with the staff of the bank.

ii) Secondary Data

Annual report of Agricultural Development Bank Limited (ADBL).
Information from the official website of ADBL- www.adbl.gov.np
Notices and Working guideline of ADBL
Application form for different type of account opening
Browsers of the different types of account
Official website of Bank (NRB)- www.nrb.org.np

1.3.2 Organization Selection

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As the selection of BBA specialization for the final semester was Business Finance,
the selection of a good organization was very important. BBA graduates see banking
career to be most lucrative, so commercial banks with diversity in products and better
working and learning environment for interns are the best choice for an intern.
Developing competencies is possible by working as a member of the bank rather
being treated as an intern.

Taking into consideration the numerous options available for the internship, various
pros and cons of each of the alternatives was thoroughly analyzed. After discussions
with various teachers and faculties, ADBL, the commercial bank of Nepal was chosen
for the unique set of advantages it offered. Most importantly ADBL rotates Internee in
various department of the bank to learn about the activities of the bank as a whole.
The bank was approached dropping recommendation letter of college and Curriculum
vitae.

1.3.3 Placement
After a week, the date for an intern was informed and a contract letter was signed
agreeing all the terms and conditions of the bank. The internship was started from 26 th
Poush, 2073.Intern was appointed at HR Department of ADBL Maitidevi,
Kathmandu. Intern was provided with an opportunity to understand all the
functionalities of the bank, especially all those performed in that branch except
handling cash. Intern had several departments to work for and learn the specific
importance and working pedagogy of each department during the short eight weeks
period. Intern was placed in various departments like Customer Service Department,
and Remittance & Clearing Department.

Internee was placed in the internal and external places of these departments. All these
departments had an internal as well as external placement area. The period for
placement was 26th Poush 2073 to 26th of Falgun 2073 from 10:00 am to 5:00 pm. The
placement was made five weeks in Customer Service Department, three weeks in
Clearing Department. The rotation of placement was changed every Sunday. In the
case of lack of staffs in some departments, internee was placed in required places.

4
 1.3.4 Duration of Internship
Pokhara University (P.U.), Faculty of Management, has defined the duration of
internship for 2 months of working time at the organization. So, in order to fulfill this
requirement, an internship was done for two months starting from 26 th of Poush 2073
to 26th of Falgun 2073 from 10:00 am to 5:00 pm.
The duration of interns work in each department is presented below:

Table 1.1: Division of Weeks and Activities Performed

Activities/Week 1st 2nd 3rd 4th 5th 6th 7th 8th

Customer Service Department
1.3.5
Clearing Department
Activities
Performed in Bank
Every department needs to perform a different function and internee had the good
opportunity to learn and practice various activities. During the eight weeks of the
internship intern has been involved in various department as explained below:

i) Customer Service Department

Account operation (account opening and closing)
Process from printing cheques to submitting to final customers
Assisting customer to fill various forms (ATM, account opening,
account closing, SMS banking, e-banking, new signature
card, new cheque, KYC)
Photo, signature card scanning and entering in software
Checking balance and finding account number
Printing bank statement
Forwarding customer to respective department as per the requirement of
customers
ii) Clearing Department
Endorsing the cheques
Keeping record of clearing cheques as well as returned cheques
Forward inter-bank cheques to head office
Transmitting cheques to respective paying members for inward clearing
Ending the clearing session of the current business day

1.4 Limitations of the study

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Despite lots of opportunities prevailing for the study, there were few limitations,
which restricted the study and they are:
It was difficult to have the in-depth study of all the departments due to the
time constraints.
The banks policy in keeping some matters confidential prevented from
analyzing various critical facts and issues.
Limited availability of annual reports, office records, and other published
and unpublished source of data.
Time and resources constraints are the major limitations of this report.
Despite the sincere effort and willingness to help of the bank executives,
their busy schedules could not give to interne as per the expectations.
This report does not explain the overall functioning of the bank.
Since the intern is confined to few departments, only the related data of
limited departments are available
However, ignoring all limitations, it has been best tried to gain adequate banking
knowledge and sincerely perform the task assigned.

Chapter 2

INTRODUCTION TO BANKING INDUSTRY

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2.1 Meaning and Definition of Bank
A Bank is a depository financial institution, which purchases money and sells money
for money. In other words, Bank is financial institution that deals with monetary
transactions in this way; a bank is a sensitive sector of the industry because it plays
with the public money. The primary operating activity of any bank is to collect fund in
the form of deposit from the surplus sector of the economy and transfer this collected
fund to the deficit unit of the economy in the form of loans. The benefit that the
surplus unit gets by depositing their access fund in the bank and the charge that the
deficit unit pays for using the fund of the bank are both expressed in percentage and
that rate is known as the interest rate. The difference between the lending interest rate
and borrowing interest rate is called interest spread and this spread is the major source
of income of any bank.

Bank is a financial intermediary, which creates the relationship with both the surplus
units and the deficit units. To create the relationship with these units, bank offers
various financial products and the person who purchase that product will knowingly
or unknowingly becomes the relative of the bank. The major financial products that
any bank offers to the public are various deposits schemes and the loan schemes. The
one who are in need of money or funds purchases the loan products as per their
requirement and the one who have excess funds purchases the deposits schemes.

Bank exists in the economy to perform the function of the

intermediary. Banks intermediates not only the surplus and deficit
units but also perform various management activity to create a
balance in the economy. It should perform the size inter-
mediation because in general surplus units are large in number but
they less amount of surplus funds and the opposite scenario is of
the deficit side. Similarly it should perform the maturity and
information inter-mediation as per the requirement.

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Basically, banks are those financial institutions that offer the widest
range of financial services- providing credit and encouraging
savings; and also perform the widest range of financial functions for
all type of business firm in the economy. Commercial bank is the
term used for a normal bank to distinguish it from an investment
bank. It raises fund by collecting deposits from business and
consumers. It also buys corporate bonds and government bonds. Its
primary liabilities are deposits and primary assets are loans and
bonds. The banks, which perform all kinds of banking and generally
finances trade and commerce, are called commercial banks.
Commercial bank is merely a business firm engaged in
financial inter-mediation as well as additional functions under strict
supervision and control of central bank.
In the present context, bank had become the basic need of the human, which performs
not only the basic financial activities but also performs the non-financial activities to
ease the human life.
According to Nepal Rastra Bank Act 2002 Bank is a financial institution, which
provides financial services that may be in the form of accepting deposits, advancing
loan, providing necessary technical advice, dealing over foreign currencies, remitting
funds, etc.
According to Indian Banking Company Act 1949 Banking means the accepting for
the purpose of lending or investment of deposit of money from the public, repayable
on demand or otherwise and withdrawal by cheque draft order or otherwise.
According to C.W. CrowtherBank is an institution which collects money from
those who have it to spare and who are saving it out of their income and lends this
money out to those who require it.

So, bank may be defined as financial intermediary between depositors and the credit
seekers. Bank is among the most important financial institutions in the economy and
essential business in thousands of local towns and cities. Bank plays different kinds of
roles like intermediary, underwriter, utility payers etc.

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2.2 Origin of Banking
The concept of bank had started to evolve in the brilliant human mind immediately
after the humans were able to realize and develop money. Though money had made
the human life much easier than before but ancient humans started to realize the
complexities that evolution of money had created in their life. So, in order to
overcome these complexities and the difficulties that were attached with the benefit of
money, the concept of banking emerged in the human mind. Earlier the moneylenders
and the landlords perform the banking activities as the informal banks but later the
activities of these people are formalized and the concept of bank as an institution had
emerged.

Moving towards the word Bank, it is thought to be derived from the Italian word
Banco, Latin word Bancus and French word Banque because all meant the
bench in which the bankers would keep money and its records. The Jews of Lambardy
were thought to be the early bankers who transacted third business at the benches in
the marketplace and when they were unable to meet their liabilities, the depositors
used to break their benches and this tradition had given birth to a banking term
Bankrupt.

Banks were first introduced in Rome with its vast trade networks that extended
throughout the Europe, Asia and much of Africa. Following the footsteps of this
bank, other banks were also established. Namely: Bank of Barcelona (1401), Bank of
Genoa (1407), Bank of England (1594) and Bank of Amsterdam (1609). Likewise
India established its first bank, Bank of Hindustan in 1770. These modern banks
gradually replaced the merchants, goldsmith and moneylenders. In 1960s banking
was introduced to world because of increase in their worldwide operations and
increase in multinational companies.

Nowadays, banks are referred to as lifeblood for business houses as they offer many
facilities like travelerscheque, insurance services, pension services and other
investments. The crucial breakthrough in the modern banking history was made in
1694 A.D when the first modern bank The Bank of England was established. After
the establishment of this first English Bank, Banking sector had experienced various

9
ups and downs but still they persisted and because of that persistence they are now
able to exist in this 21st century world as one of the essential element of human life.
Presently, banks are not only the deposits collecting and loan lending institutions but
also the institutions, which helps its customers from various ways as per their
convenience and ability with full security. They had been developed as the essential
service providing institutions in this rushing world. The banks had start affecting the
lifestyle of the citizens as well as the economy of the country as well. The recent
recession of 2008 is the outcome of the inefficient banking practice and the world had
to suffer much only because of the inefficiency and negligence of a single banking
sector. Hence, banking had become an important element of the world economy in the
present time.

2.3 Evolution of Bank in Nepal

The history of banking in Nepal is believed to be start from the time of Prime Minister
Ranoddip Singh in 1877 A.D. He introduced many financial and economic reforms.
The Tejaratha Adda was established at that time and its basic purpose was to provide
credit facilities to the general public at a very concessional interest rate of 5%. The
Tejarath Adda disbursed credit to the people on the basis of collateral of gold and
silver. All employees of government were also eligible for this type of loan, which
was settled by deducting from their salary. Tejarath Adda extended credit only; it did
not accept deposits from the public. Hence, the establishment of Tejarath Adda is
regarded as the foundation of modern banking in Nepal. However, Kaushi Tosh
Khana established during the regime of King Prithvi Narayan Shah is also considered
as the first step towards initiating banking development in Nepal.

Nepal entered the world of banking with the establishment of Nepal bank limited in
1994 B.S which was founded by Judda Samsher, as a semi-government organization
without the existence of a central bank in the country under special Banking Act 1936,
having elementary functions of a commercial bank. 51% of the paid up capital of
Nepal Bank Limited is owned by the Government and 49% owned by the public. Its
main function was to provide loans and accept deposits. Later, on Nepal Rastra Bank
was set up on 2013 B.S. as the first central bank under Nepal Rastra Bank Act 2012
B.S with an objective of supervising, protecting and directing the functions of
10
commercial banking activities. The bank was completely government ownership bank
and it also started to issues notes since 2016 B.S. Another commercial bank fully
owned by the government, RastriyaBanijya Bank was established in 1996, which
made it possible for the Nepal Rastra Bank to devote more attention to the important
aspects of economic, monetary and fiscal development.
Nepalese banking sector hadnt experienced much growth till 1980s because of the
closed policies of Nepal Government. Till 1980s banking industry hadnt been opened
to the private sectors and the foreign investments. But after 1980s Nepal government
liberalized its banking policies and opened the door for the private and foreign
sectors. The privatization, tariff adjustments, liberalization of industrial licensing,
easing of terms of foreign investments, liberal trade, and foreign exchange regime
were the motivating factors for the development of Nepalese Banking Sector.

Only after 2041 B.S, Nepal government allowed joint venture banks to operate in the
country, which gave a new horizon to the financial sector. Nepal Arab Bank Limited
later renamed as Nabil Bank Limited established in B.S. 2041 as a first joint venture
bank proved to be a milestone in the history of banking which gave hope to the
sluggish financial sector. Thereafter, two foreign joint venture banks, Nepal Indosuez
Bank Ltd. (now called as Nepal Investment Bank) and Nepal Grind lays Bank Ltd
(now called as Standard Chartered Bank Nepal Ltd.) was established in 1986 and
1987 respectively. Then after, several commercial banks have been established in the
recent years.

2.4 Current Banking Scenario of Nepal

After the restoration of democracy in Nepal, there has been tremendous development
in the banking sector. The economic and financial reform policies undertaken by the
government have increased both number of banks and the types of services offered.
Banks are gradually shifting towards IT-based solution to enhance service delivery in
order to address customer concerns. Banks have launched various products like E-
banking, ATM, mobile banking which facilities several account query tools, including
account balances, thereby minimizing the need for customers to visit banks.

Banks are gradually starting to realize that, in todays competitive banking

environment, exemplary customer service is one of the distinguishing characteristics

11
that banks can exploit to establish a competitive edge. Since most banks offer
comparable products and services, they should continually search for a competitive
advantage that will attract new customers and help retain existing ones. Banks are,
therefore, looking to develop innovative products and services to maintain superior
customer services levels while at the same time remaining profitable. With the number
of market players in the rise, the competition has been obviously growing in the
banking industry. The most obvious effect of the rising competition can be seen in the
interest rates offered by the banks.

2.5 Types of Banks

As a number of banks increase its regulation also becomes tough. For the purpose of
regulation and controlled NRB had divided the depository financial institutions into
four classes on the basis of minimum paid up capital requirement and functions. This
classification is the unique feature of Nepalese banking industry only and there is no
such classification globally.

Table 2.1 Classification of banks in terms of Capital

Category (Class) Paid-up Capital Paid-up Capital Percentage
(before mid July, (after mid July, (%)Changed
2017) 2017)
Commercial Banks(A) 2000000000 8000000000 300
Development Banks 640000000 2500000000 290.62
(National level)(B)
Development Banks (4-10 200000000- 1200000000 300-500
districts)(B) 300000000
Development Banks (1-3 100000000- 500000000 66.67-400
districts)(B) 300000000
Finance Companies 300000000 800000000 166.67
(National level)(C)
Micro-Finance Companies 100000000- 400000000 33.33-300
(1-3 districts)(D) 300000000

2.5.1 Commercial Bank

Commercial Bank is the A class depository financial intermediary who raises funds
by collecting deposits from businesses and consumers and provides loans to
12
businesses and consumers. It also buys corporate bonds and government bonds. Its
primary liabilities are deposits and primary assets are loans and bonds. Commercial
banks came into existence mainly with the objectives of collecting the idle funds,
mobilizing them into the productive sector in order to enhance the overall economic
development of the nation. They have the responsibility of safeguarding the interest of
the depositors, the shareholders and the society they are serving.

According to NRB act, Commercial Banks are those depository financial institutions
which possess the below features:
Has the minimum paid up capital of 8 billion
No limit on resource mobilization
Can operate nationwide
Can do all fund based as well as non-fund based activities

The commercial banks operating in Nepal are permitted to do both the fund based and
non-fund based activities as the global commercial banks.
Functions of Commercial Banks in Nepal
The functions of commercial banks are divided into two categories:
1) Primary Functions
The primary functions of a commercial bank include:
Accepting deposit
Advancing loan
Discounting bill of exchange
Transfer of money

2) Secondary Functions
The secondary functions of a commercial bank include:
Issuing letters of credit, travelers' cheques, circular notes etc.
Undertaking safe custody of valuables, important documents, and securities by
providing safe deposit vaults or lockers.
Transferring money from one place to another and from one branch to another
branch of the bank.
Standing guarantee on behalf of its customers, for making payments for
purchase of goods, machinery, vehicles etc.
Collecting and supplying business information.
Issuing demand drafts and pay orders and

13
 Providing reports on the credit worthiness of customers.
Thus, the primary and secondary functions performed by bank are the essential to
meet the overall objectives of the bank.

2.5.1.2 Importance of commercial bank

Encourage saving
Helpful in industrial and economic development
Facilitate remittance collection
Representative of collection
Loan facility
Safety of fund
No need of money handling

Table 2.2 Names of Commercials Banks of Nepal

No Name of Commercial Banks Established Date
1 Nepal Bank Ltd. 1957
2 Rastriya Banijya Bank Ltd. 1966
3 Agricultural Development Bank Ltd. 1968
4 Nabil Bank Ltd. 1984
5 Nepal Investment Bank Ltd 1986
6 Standard Charted Bank Nepal Ltd 1987
7 Himalayan Bank Ltd 1993
8 Nepal SBI Bank Ltd 1993
9 Nepal Bangladesh Bank Limited 1993
10 Everest Bank Limited 1994
11 Bank Of Kathmandu Lumbini Ltd 1995
12 Nepal Credit And Commerce Bank Ltd 1996
13 Machhapuchre Bank Limited 2000
14 Kumari Bank Ltd 2002
15 Laxmi Bank Ltd 2002
16 Siddharth Bank Ltd 2002
17 Global IME Ltd 2013
18 Citizens Bank International Ltd 2007
19 Prime Commercial Bank Ltd 2007
20 NIC Asia Nepal Ltd 2013
21 NMB Bank Ltd 2009
22 Prabhu Bank Ltd 2009
23 Mega Bank Ltd 2009
24 Sunrise Bank Ltd 2009
25 Janata Bank Ltd 2009
26 Civil Bank Ltd 2010
27 Century Commercial Bank 2011

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28 Sanima Bank Ltd 2011

Chapter 3
Introduction to Agricultural Development Bank Limited

15
 Official Logo of Agricultural
Development Bank Limited

3.1 Brief introduction to Agricultural Development Bank Limited

Agricultural Development Bank Limited (ADBL) is an autonomous organization
largely owned by Government of Nepal. The bank has been working as a premier
rural credit institution since the last three decades, contributing a more than 67 percent
of institutional credit supply in the country. Hence, rural finance is the principal
operational area of ADBL. Furthermore, the bank has also been involved in
commercial banking operations since 1984.

With the main objective of providing institutional credit for enhancing the production
and productivity of the agricultural sector in the country, the Agricultural
Development Bank, Nepal was established in 1968 under the ADBN Act 1967, as
successor to the cooperative Bank. The Land Reform Savings Corporation was
merged with ADBN in 1973. Subsequent amendments to the Act empowered the bank
to extend credit to small farmers under group liability and expand the scope of
financing to promote cottage industries. The amendments also permitted the bank to
engage in commercial banking activities for the mobilization of domestic resources.

The enactment of Bank and Financial Institution Act (BAFIA) abolished all Acts
related to financial institutions including the ADBN Act, 1967. In line with the
BAFIA, ADBL has been incorporated as a public limited company on July 14, 2005.
16
Thus, ADBL operates as an "A" category financial Institution under the legal
framework of BAFIA and the Company Act, 2053.

3.2 Vision

To be a Mass-based Complete Bank serving from Urban

to Rural.

3.3Mission

To deliver comprehensive banking solution strengthening its extensive

network.

3.4Objective

To provide quality banking services

To adopt market driven strategy

To obtain sustained and competitive return on investment.

3.5Corporate Conduct

In achieving its corporate objective in pursuit of its corporate mission and vision,
ADBL will:

Comply with all relevant legislation, codes of conduct and standards of good
corporate citizenship in Nepal while maintaining full autonomy in the
management of its operations;

Conduct its operations in an open and transparent manner;

Put local resources to work for local development, serving the rural
community and its aspirations;

17
 Provide a full and balanced rage of financial products and services that
satisfies the needs of the rural population of Nepal, on a profitable and
sustainable basis;

Strive consistently to provide improved products and services to its clients at

reasonable cost, using modern banking, information and communication
technology in the most appropriate form to its clients needs;

Be vigorous in building reputation for professionalism, competitive pricing,

reliability and quality of service and innovation;

Operate in accordance with best banking practice, acting with financial

prudence and keeping in mind the need to balance profitability with asset
preservation and liquidity and to safeguard depositor's funds;

Work together with its employees to develop their capabilities to contribute to

achievement of the bank's objectives, promoting excellence, rewarding
achievement and providing them the opportunity to share in the bank's
success;

Develop mutually acceptable relationship with government in the pursuit of

improvement in living standards in rural areas, while respecting best financial
practices;

Ensure that its activities contribute to the environmental stability and overall
improvement of living standards in Nepal; and

Judge the bank's success against the measures that include profitability,
portfolio quality in terms of minimal arrears and non-performing loans,
portfolio worth, total deposits, geographic outreach and public image.

3.6 Core Values and Ethical Principles

The core values let the institute, customers and communities know what they serve,
who they really are and the principles by which they pledge to conduct business. In

18
essence, the bank believes that success can only be achieved by being true to the core
values and principles.

Customer Focus
At ADBL, the prime focus is to perfect the customer service. Customers are their first
priority and driving forces. So, they wish to gain customer confidence and be their
trusting partner.

Quality
They believe that the quality service experience is paramount to their customer and
are strongly committed to fulfilling this ideal.

Belief in staff
At ADBL, every staff is recognized as important assets and competitive strengths and
their worth and dignity is respected for the progress of the bank.
Honesty and Integrity
At ADBL, they ensure the higher level of integrity to the customer, creating an
ongoing relationship of trust and confidence with a belief of treating each customer
with honesty, fairness and respect.

Teamwork
ADBL is a firm believer in teamwork and feels that loyal and motivated teams can
produce extraordinary results. They are driven by a performance culture when
recognition and rewards are based on individual merit and demonstrated a track
record.

3.7 Organizational Structure of ADBL

Organization structure is the specified path through which the formal command of
authority and responsibility flows. The organization structure of ADBL is presented in
the following diagram.

19
 Fig 3.1 Organizational Structure of ADBL

3.8Ownership Structure and Share Capital of ADBL

Promoters (Government of Nepal) holds 51% of the companys stocks and the general
public holds 49%. Additionally, the company has also issued Rs.6.44 billion worth of
Non-cumulative Irredeemable Preference Shares, which is owned completely by the
Government of Nepal. The company pays 6% interest to the preference shareholders.
According to the banks Q4 report, ADBL has the highest interest income and net
interest income among all the commercial banks in Nepal.

Table 3.1 Ownership Structure of ADBL

Promoter share 51%

General Public 49%

Total 100%

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3.9 Network of ADBL

ADBL has the largest number of branches in Nepal with 230 banking branches.

Fig 3.2 Network of ADBL

Network

Central Region
Western Region
Mid-Western Region
Eastern Region
Far-Western Region

3.10 Board of Directors

The Board of Directors is the apex body of the bank. It formulates policies as well as
strategies and provides guidance to the management. The Board comprises a total of
nine members; four members representing Government of Nepal and four members
representing individual shareholders. Besides, the Board as per the BAFIA nominates
one member. Audit Committee and Governance Sub- Committee in the area of
internal control and good governance support the Board respectively.

The Chief Executive Officer executes the day-to-day operation of the bank. Four
Deputy General Managers and 18 Division Chiefs closely assist the Chief Executive
Officer. Moreover, Assets support Chief Executive Officer and Liabilities
Management Sub-Committee for various activities related to risk management.

Table 3.2 Board of Directors

Mr. Pramod Kumar Karki Chairman

21
 Mr. Bishnu Prasad Nepal Member

Mr. Yogendra Kumar Karki Member

Dr. Chandra BahadurAdhikari Member

Ms. Laxmi Devi Manandhar Member

Mr Ramesh Kumar Mahat Member

Mr. ManojBasnet Member

Mr. Govind Prasad Bhattarai Member

3.11 Products of ADBL

ADBL like all other commercial banks generate its revenue mainly from its credit
creation ability and finances its credit creation from deposits. Thus, mainly the
products can be categorized into two major heading deposits and loans. However,
there are other various product/services of ADBL that has enabled it to retain its
customer for more than seventy years. ADBL is not just business, its the facility for
the citizen belonging to every corner of the country and in even in the entire globe.
Remittance, utility payment service, SMS banking, internet banking, ABBS all form
an array of consumer oriented service that are aiding for ADBL corporate image and
untrammeled consumer loyalty.

ADBL products are briefly described below:

1. Deposits
ADBL offers a wide range of deposit products that caters the requirement. Namely:
Savings Deposit
Current Deposit
FixedDeposit

2. Loan
ADBL offers a wide range of tailor-made funded and non-funded credit facilities to
suit funding requirements. Namely:
Corporate Loan
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 Retail and Consumer Loan

3. ABBS
ADBL is proud to announce that all together 230 branches are enabled for ABBS. In
ABBS, customers having account with ADBL can access account from any online
ADBL's branch.

4. Nepal Remit
ADBL Remit - an online/internet based Remittance Service for the purpose of
facilitating to transfer the earnings of Nepalese and Nepalese Expatriates with very
minimal charge.

5. Internet Banking
ADBL introduced Internet Banking with following features:
Save time- you don't need to queue at a branch.
Bank when you want, day and night, where it suits you.
6. SMS Banking
Customers have access to banking needs without ever having to wait in queues.
Features:
Instant Balance Information and Account statement print request
Latest Exchange rate of foreign currency

7. ATM/Debit Cards
ADBL ATM allows its customer to access vast network of ATMs located in major
cities in Nepal. It allows the cardholder to withdraw cash, inquire account balances
and to pay.

8. Safe Deposit Vaults

It helps to store items like important papers like insurance policies, family records,
birth certificates, deeds, titles, leases, contracts, bonds, and certificates of deposit,
jewels, etc.

3.12Analysis of ADBL

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Agriculture Development Bank has a core capital of Rs.9.86 arba. This includes
Rs.3.42 arba Common Stock and Rs.6.44 arba Preference Shares.

According to the Q4 2073 report the bank has the highest reserves among all the
commercial banks. The banks reserves stands at 4.97 billion which is more than its
paid up capital by Rs.1.55 arba.

The banks deposit collection has been increasing throughout our review period. It has
more than doubled in just the past 6 years and reached Rs.76.92 arba. Deposit
collection of the bank is increased by 20.96% in FY 2070/71 and by 16.73% in FY
71/72.
The banks mobilization of its funds has also been increasing throughout our review
period. The banks investments in the past 6 years have grown by almost 3 folds from
Rs.4.54 billion in FY 2066/67 to Rs.13.52 billion in FY 2071/72. The banks loans
and advances have also doubled during the same period. Loans and Advances grew
from Rs.33.88 billion in FY 2066/67 to Rs.66.60 billion in FY 2071/72.

24
Interest income, which is the banks primary income, has increased quite rapidly from
FY 2066/67 to FY 2070/71. It increased from Rs.5.28 billion in FY 2066/67 to
Rs.8.46 billion in FY 2070/71, which is an overall increase of about 60%.

However, the bank only managed to increase its interest income by 0.14% in FY
2071/72, which might be a cause for concern. During the same period the interest
expenses decreased by 15.2% which caused the net interest income to increase by
12.88%.

The banks net interest income has been increasing since FY 2066/67 and only
decreased once in FY 2070/71 by 2.05%. The net interest income of the bank in Q4
2072 is 5.21 billion

25
The banks operating profit, which was negative by Rs.1.22 billion in FY 2066/67, has
now become positive by Rs.1.71 billion. The banks operating profit becoming
positive is extremely good news for the bank and its investors. This means the bank
has finally become profitable in its core business. The banks operating profit
increased more than 200% in FY 2071/72.

The bank comes 3rd among all the commercial banks traded in NEPSE in terms of net
profit. The bank earned a net profit of Rs.1.88 billion in FY 2071/72. This is an
increase in profit of more than 23% which can be considered very good.
26
The bank also has the highest staff expenses among all the commercial banks. It spent
Rs.2.96 billion in FY 2071/72 on staff expenses. Although the figure might seem
huge, this is a decrease of 10.84% compared to last year. The bank has recognized its
staff expenses issue and is taking major steps to reduce this cost. 304 employees
retired from the bank last fiscal year and approximately 300 more are expected to
retire this fiscal year. This should go a long way in reducing the companys staff
expenses.

27
The bank managed to write back Rs.602 million and still has Rs.903 million in loan
loss provisions. If the bank manages to write back more of its provisions, the banks
net profit will increase even further.

The banks earning per share, which had remained above Rs.60 from FY 2066/67 to
FY 2069/70, fell to Rs.47.53 and Rs.43.52 in FY 2070/71 and FY 2071/72
respectively. This might seem alarming but this actually healthier. The current EPS
represents the earnings from the banks core business instead of earnings from the sale
of assets. The EPS is sustainable and will only grow in the future if the bank manages
to perform well.

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The banks CD ratio currently stands at 76.70% and its Capital Adequacy Ratio is at a
comfortable 12.55%. The banks liquidity ratio stands at 28.92%.

The banks Non-Performing Loan to Total Loan decreased by more than 17.03% from
5.46% in FY 2070/71 to 4.53% FY 2071/72. Although this is a good improvement it is
still dangerously high. The banks net worth per share in FY 2070/71 stands at
Rs.471.13.

3.13 For Investors

ADBL with a total share capital of Rs.9.86 arba has already shown that it can manage
a large amount of capital. The bank has infrastructure already in place to mobilize
large funds which means the bank has advantage over other banks which have to set
up new infrastructure to be able to mobilize the funds they will have once their capital
reaches Rs.8 billion.

As of Q4 2072, the bank has an EPS of Rs.43.52. With a closing price of Rs.494, the
PE ratio turns out to be just 11.35. The bank would be considered undervalued even in
normal circumstances but given the current level of the market and the average PE
ratio of the banking industry (which is 28.54), the bank is highly undervalued.

29
The bank distributed 31.58% cash dividend in FY 2069/70 and 7% bonus and 8.79%
cash in FY 2070/71. The dividend for this year depends on the banks capital plan.
Regardless, the banks dividends are sure to be more than what it distributed the
previous year.

3.14Capital Plan

The bank had planned to include its non-cumulative irredeemable preference shares in
its capital plan. The bank has preference shares of Rs.6.44 billion and common stocks
of Rs.3.42 billion. This would mean that it didnt need to raise its capital to reach the
Rs.8 billion-target set by NRB.

However, a recent circular issued by the NRB that instructs banks to not include
preference shares in their capital plan means the bank has to find some other way of
increasing its paid up capital to Rs.8 billion. As of now the bank is short Rs.4.58
billion which the bank can raise just by issuing bonus shares. The banks reserves and
earnings are high enough to raise its capital to Rs.8 billion just by issuing bonus
shares.

30
The bank also has the option to call a rights issue and merge and acquire other smaller
institutions. But considering that the bank has large investments by the Government of
Nepal it might be hesitant to invest more in the bank, which means that a rights call
may not be very likely. Merger and acquisitions are also less likely due the same
reason.

The bank and the NRB are most likely to reach an agreement whereby the current
preference shares of the bank can be included in the capital plan thereby removing the
need for the bank to raise more capital.

3.15Prospects and Challenges

The bank has extremely high potential to become one of the most profitable
institutions in Nepal. The reach granted to the bank due to its large number of
branches is unparalleled. The banks branches are also geographically diverse and
cover all the regions of Nepal.

One of the major challenges facing the company is the high number of employees it
has. The bank has one of the largest numbers of employees among all the banks in
Nepal. This has resulted in the bank having to spend a very high amount in its
employees.

Another problem the company has is the employee unions, which have made it very
difficult to run the organization efficiently.

3.16Financial Highlight

31
 Balance Sheet

Income Statement

Key Ratios

32
 Chapter 4

ANALYSIS OF ACTIVITIES DONE AND PROBLEMS SOLVED

4.1. Background
The internship was conducted in the Customer Service Department and Marketing
department of the bank under the guidance of operation in-charge. Placement in these
departments provided the exposure and understanding of the various service and
procedures of the bank and its relationship with its customers. All the experience and
knowledge gained in the 8 weeks of the internship is explained in this chapter.
Marketing is the important part of any financial institution. ADBL has also given
utmost priority to this department. Internee got the chance to observe the activities of
the marketing department. In order to provide the practical knowledge and personal
dealing ability to the internee, ADBL had given the target of 40 new accounts to every

33
internee, which I had also fulfilled successfully. Going through this target internee
could learn about dealing with the customers and got the chance to develop personal
and communication skills.

4.2. Customer Service Department

Customer service is the front desk of any organization. It is the place where customers
make the first contact with the bank. The image and the reputation of the bank depend
upon effective functioning of this department. It includes responding to customers
questions and complaints in a thorough and timely manner and interacting with
customers through face-to-face meetings, telephone, mail, fax, and email. It is very
important to know that a highly satisfied customer stays loyal longer, buys more as
the organization introduces the new product, pays less attention to competing brands
and is less sensitive to price. Having a significant number of this kind of customers is
only possible through the efficient functioning of customer service department of any
organization.

4.3 Activities Done in Customer Service Department

This department is responsible for carrying various activities starting from the
opening of an account to the value additional process as a part of after sales service.
The different activities done in CSD throughout the internship period are:

4.3.1 Dealing with customers

Customer counseling is most important functions of customer service department. It is
the responsibility of internee to provide the information regarding the bank and its
various products and services. For dealing customers in, CSD, the staff should have
adequate knowledge about the various products and the services of the bank and
should have good communication skill to communicate correctly, precisely and
politely. The inquiry about bank rules, problems of ATM cards, procedures of opening
a new account, fund transfers were the major queries to be answered. Apart from face
to face interaction, the internee has to receive incoming calls and respond to the
queries. The regular follow-up and the contacts with the customer are essential to flow
important messages such as pending documents yet to be provided, delivery of
chequebooks and ATM cards.
34
4.3.2. Account opening
Account opening is the initial step in deposit collection. It is one of the crucial
functions of the commercial bank. The account opening form contains the
accountholders name, permanent and temporary address, occupation, contact number
and signature of the account holder and the type of account preferred to open. Along
with an account opening form he/she should present two-passport size recent photo of
own, one copy of citizenship certificate. That should be verified with original
documents. The customers should also include the name and details of the nominee.
After the form is filled, the account number is given as per register sequence. After
this, the customers data are stored in the computer system (FLEX CUBE) after
verification by operation in-charge. The account opening form along with other
necessary documents is kept in a file in a serial order as per account number for future
reference.
The bank opens new account two different ways:

Personal account
Any individual who is capable of entering into the contract can open an account in the
bank. He/she can open the account in all convertible currencies directed by NRB. Two
or more individuals can also open a joint account in their names.

The basic requirement of opening a personal account:

The account holder must be present in business desk in the time of opening an
account.
Fill up the prescribed application form.
Original copy of identification document i.e. citizenship or passport and
photocopy to be attached with the application form.
Two passports size photograph of the account holder.
Nominee form and citizenship of the nominee.
One introducer is required for the new customer to open an account.

Corporate account

35
Any registered firms, organizations and corporations can open the corporate account
in the bank for smooth business transactions. The corporate account can be opened in
all the convertible currencies directed by NRB. The firms can open the account by
providing the prescribed documents. All the original documents should be presented
for verification. The basic requirements of opening a corporate account are:
For Proprietorship Firm
Declaration of Sole Proprietorship.
A copy of Firm Registration Certificate.
A copy of Income Tax Registration Certificate.
A copy of identification paper of promoter/ accountoperators
Two copies of the recent photograph of proprietor should also be obtained.

For Partnership Firm

Letter of Partnership duly signed by all partners.
A copy of Partnership Deed duly attested.
Certified copy of Partnership Registration.
Identification papers of all partners and account operators.
Income tax registration/renewed certificate.

For Corporate Bodies

Certified copies of Memorandum and Articles of Association of the company.
List of existing directors.
Resolution of Board of Directors to open and operate the account.
Company registration and Income Tax registration certificate.
Identification papers of directors and account operators.
Notification of appointment of office bearers as authorized account operators
in case of Corporations.

Process of opening new account (saving and current)

Provide new account opening form to the customers (individual or corporate).
After the customer has filled up the form, review the form so that all the
required information is provided.
Check all the essential documents and verify them with the original one.

36
 The customer is requested to fill the deposit slip to deposit the minimum
balance of concerned scheme and charges the necessary charge for ATM card
and other services if applicable.
The details of the customer are entered into the bank software (i.e. FLEX) to
get customer id and account number.
The signatures and stamps are scanned and loaded in the bank software
The Operation in-charge verify and approve the account
The account opening form along with other necessary documents is kept in a
file in a serial order as per account number for future reference

Process for opening fixed account (time deposit)

The customer is requested to fill the application for time deposit specifying
account holders name, amount, maturity period and other details.
the customer does not have any account in the bank, then he/she should open
saving account initially in order to credit the interest of time deposit.
Time deposit application is verified by operation in-charge.
The customer is requested to deposit either cash or cheque in his/her saving
account.
Fixed Deposit Receipt (FDR) or time deposit certificate is issued to the
customer as the proof of fixed account after accepting the deposit.

4.3.3 Account closing

The entire request for the closure of accounts must be made in writing form and duly
signed by the account holder. All unused cheques leaves, ATM card, locker key must
be submitted to the bank. The bank charges a certain amount for the process.

Procedure of account closing

The customer willing to close the account should fill up the account closing
form.
For the closure of accounts unused cheques and ATM should be returned to the
bank.
Before closing any accounts, the bank's staff verifies the signature, checks all
the liabilities of the customer in the bank.
For the closure of the individual account and sole proprietorship account, the
account holder should visit bank himself / herself. Similarly, in the case of
joint account all the account holders should be present.

37
 Settlement of the balance after deducting all the required charges. Ensure that
no balance is left in the customers account.
Close the account in the banking system.
The account closing form with all the documents is to be filed in the account-
closing file.
The returned ATM card should be destroyed and blocked.

4.3.4 Cheque book issue

Cheque book is issued for the new account and for the existing account holder on the
request by submitting their cheque requisition.
Process for cheque book issue
For new account, customer should fill the request for the cheque-book in the
account opening form.
For existing account, customer needs to fill up the slip, which is inside the
chequebook.
For new account holder, only 10 leaves of cheques are issued and after the first
issuance, a number of leafs are provided as per the customers demand.
The account holder or agent (whose name is in requisition slip) should be
present while receiving chequebook.
Once chequebook becomes ready need to make entry in the chequebook
register which includes details such as (date, a/c number, a/c name, receivers
name, and receivers signature, initial of staff)
Cheque book needs to be finally rechecked at the time of handing over to the
recipient.
The old requisition slip (presented for the demand of cheque) should be filed
for future purpose.

4.3.5 Distribution of ATM card

CSD is responsible for distribution of ATM card. The customer can make the use of
ATM card with payment of Rs250 per year. Once the form is filled, the request for
ATM cards is forwarded to the card department and card department makes the card
and sent to the respective branch office.
Process of ATM card distribution
A collection of the ATM card received from card department.

38
 Maintain record and inform the respected cardholders about the delivery of the
card.
On the presence of cardholder, the card and account details are filled up in
card register. The card register includes information about (date, A/C number,
A/C name, card number, delivery date, the signature of the receiver, initials of
staff).
Signature is verified with the signature of card requisition provided during the
time of A/C opening.
After verifying the signature, the card is distributed along with pin code
(default pin code initially provided by account holder while filling the form)
and other details about card activation, using process.
The account holder is suggested to use the ATM card only after 24 hours of
receiving and for changing pin code for the activation of the card.

4.3.6 Issue and distribution I-connect username and password

Internet banking facility of ADBL is free of cost service provided to all A/C holders,
where one can enjoy checking balance, transferring money, stop payment, view, and
print statement, etc.
Process for i-connect distribution
In order to receive this service, the account holder has to fill up i-connect form
and maintain authorized signature.
After verifying the details employees in CSD gets to log in to I- connect
service, add details and the system prints username and password.
The confidential username and password printed are then distributed to the
respected a/c holder maintaining acknowledgment for i-connect username and
password.
The account holder then can use internet banking presented in home page of
SBL i.e. www.siddharthabank.com

4.3.7 Account Statement printing

Account statement is a printed document issued by the Bank to the demanded account
holder and contains the total available balance in the particular account till the date
along with the amount of interest earned. The statement is provided to the account
holder or his/her agent who come with the letter mentioning about providing
statement along with the signature of account holder only. In the case of any

39
organizations letter mentioning about providing balance statement along with
companys stamp is the must.

4.3.8 Withdrawal Slip

Withdrawal slips are same as cheques offered by Bank for withdrawal of cash from a
particular account in the absence of checks. Customers will need to be present at the
counters of the bank and fill in the required details in the Withdrawal Slip Requisition
register and on verification of the signature CSD will issue the Withdrawal Slip to the
customer. Such slips need to be authorized by Customer service supervisor, Branch
Manager or Customer Service Managers. These facilities are offered cost-free by
ADBL.

4.3.9 Filing and record keeping

All the documents created for various purposes relating to the individual account,
corporate accounts, requisition of cheques, various forms, charges payment slips etc.
must be well documented, indexed and filled in their proper places for future
reference. They should be placed in a fire proof cabinet under lock and key. Where
possible separate cabinets should be maintained for the different type of account with
clear identification on the locker indicating the starting and ending numbers of the
files stored in particular lockers/cabinets.

4.4 Clearing Department

Observed inward and outward clearing of cheques.
Observed swift transfer.
Sent other banks cheques to NRB and brought NIBLs cheque from NRB.
Informed the customers if their cheque had been returned from NRB.
Recorded the details about the cheque being returned and the cheque that was
already returned to the customers.
Done photocopy and assisted employees in the filing.

4.5 Other activities were done and problem solved

CSD and problems are not- detachable terms. One of the main functions of CSD is to
solve the problems. During the internship period, the following problems were solved.
40
 Problems related to the malfunctioning of the ATM Machines
The problem that the CSD officer should face daily is to manage the angry customer
who had to face problems due to malfunctioning of the ATM machine. The CSD
officer clarifies the actual scenario and apologizes if it is due to the fault of the
machine otherwise pointed out the fault of the customer.

Problems related to the mistakes due to the error in the system

Sometimes due to various reasons, the customers account would be debited twice for
the same charge or something similar to this occurs. Also, sometimes the ATM
Machine doesnt provide the cash but the account is debited. This and other these
kinds of system errors makes the customer dissatisfied and hence the dissatisfied
customer arrives at the CSD and this kind of problems are to be handled by the CSD
officer.

Problem-related to the change of rules and regulations

The rules related to the operation of the banks, the interest rates, the charges are
revised time to time to cope with the dynamic environment,, but the customers dont
easily accept the change. Hence the CSD officer should inform the customer about the
change, its need and relevance to the organization, which is really a hard and tedious
job to perform.

41
 Chapter 5

CONCLUSION AND LESSONS LEARNT

5.1 Conclusion
The banking system in Nepal is gearing up for another round of competition with the
second phase of financial sector reform and international standard oriented reforms
underway. Nepalese financial system, basically the banking business, has broadened
in number and diversified in the modern financial instrument. As the Nepalese
financial market witnesses the domination of banking sector, it is necessary to monitor
the banking system properly and enhance competitiveness with a strong, credible
regulatory and supervisory bank.

ADBL is one of the leading commercial banks with a vision of being the most
preferred provider of financial services in Nepal. It has the highest customer base and
is the topmost lender amongst the private sector banks in Nepal. So as to accomplish
its objective, credit department plays a pivotal role in making a loan lending decision
in the most productive sectors analyzing all the risks associated and taking steps to
monitor and recover the amount due.

Credit Department is thus one the most sensitive department as the quality of the loan;
borrower and securities determine the health of any bank as well as the banker. It

42
checks and evaluates different types of loan proposals like education loan, home loan,
short-term loan etc. It is necessary for the bank because this department helps to
analyze the various types of risks occurred and mitigates the risks of the loan before
and after granting the loan. Credit Department makes the loan safe because this
department analyzes the financial condition of both individual borrower and
institutional borrower by assessing the income and expenditure. Thus, credit
department of ADBL is the major department, which performs the various activities of
controlling the credit and keeping the bank free from any future fallacy. It plays a
major function in ADBL to control each and every loan proposals before granting the
loan to the consumers and also taking necessary actions to recover the amount if the
customer turns out to be the default.
Therefore, intern concludes that Credit Department plays a major function to control
each and every document before granting the loan to the customer as well as keeping
an eye on customers actions after credit approval in order to minimize the various
types of risks. It analyzes the financial condition of the borrower and tries to make it
easy for granting the loan. Credit department is thus the most crucial department that
attempts to make the banks portfolio highly profitable and thus responsible for its
success in the competitive business environment.

5.2 Lessons Learnt

The duration of internship lasted for around two months and during the course of the
internship there were various lessons that intern was able to learn. This internship was
a great opportunity for the intern to face real-life work scenarios after four years in the
classroom, and it must be said that it was a great learning experience for her. Some of
the lessons intern learnt during her time as an intern at Agricultural Development
Bank Limited could be summarized as follows:

The day-to-day operation of Credit Department and the process involved with
it.
Coordination of workforce and the various activities for the smooth operation
of the bank.
Importance and role of the banking industry in the in the development of the
economy.

43
 The friendly environment, good organizational culture, and efficient
management being the various reasons behind the success of ADBL despite
the heavy workload.
Use of theoretical knowledge into the practical working environment and also
became aware of the huge gap between theoretical knowledge and real life
situation.
The importance of time management and punctuality.
The importance of interpersonal communication skills in professional life.
Promotion of efficiency and effectiveness through sincerity and confidence.
Use and operate various machinery, equipment, and systems.
Work under pressure.
It was a great opportunity to be a part of Agricultural Development Bank Ltd and
learned the during the eight weeks internship program. This has given the intern
adequate feedback on how to face challenges in practical terms and mix up with the
organization culture giving her best for the betterment of individual as well as
organizations career.

5.3 Recommendation

The employees should be more productive and communicative so that they

can focus on effective services.
The organization should reduce absenteeism
The employees should be motivated so that they can be more productive
and customer centric.
Customers queries and complains should be handled properly and patiently
as some of them were responded with inadequate information.
Inter department communication should be induced and encouraged.
Reliable and effective services should be provided to the customers.
Latest tools and technologies should be used.

44
 BIBLIOGRAPHY

1. Agricultural development bank limited (2071/2072) Annual Report. ADBL:

Kathmandu
2. Agrawal, G.R. (2004). Business Policy and Strategic Management in Nepal.
Kathmandu: M.K. Publishers and Distributers
3. Awale, Sushil (2012). Services Marketing. Kathmandu: Buddha Academics
Publishers and Distibuters.
4. Dahal, Bhuwan&Dahal, Sarita (2000). A Handbook of Banking. Kathmandu:
Asmita Publication.
5. <http://www.adbl.gov.np> (2017), Agricultural Development Bank Limited.
Available
6. <http://www.nrb.org.np> (2017), Nepal Rastriya Bank. Available
7. <http://www.sharesansar.com> (2017) Company Analysis: ADBL. Available

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