An Internship Report

on
CREDIT DEPARTMENT
of
NEPAL INVESTMENT BANK LIMITED

Submitted By:
Rashmi Shahi
South Asian Institute of Management
Exam Roll no.: 14218
PU registration no: 2014-2-62-0048
A Report Submitted To

Office of the Dean

Faculty of Management
Pokhara University

In the partial fulfillment of the requirement for the degree of

Masters in Business Administration (MBA)

Baneshwor, Kathmandu
September 15, 2016
 ACKNOWLEDGEMENTS

I have great pleasure in submitting this research report to the respected teachers and really
enjoying in expressing a deep sense of gratitude to seniors and juniors.

First of all, I wish to express my profound gratitude to the entire faculty members of South
Asian Institute of Management (SAIM). Their constant inspiration, opinions and support has
resulted in the completion of this work.

Thanks are due to authors of books, journals and articles that were consulted in course of
the study. I am extremely thankful to Human resource manager of NIBL for providing me with
the opportunity of internship. I also offer my thanks to the staffs of NIBL Pulchowk for their
constant help and co- operation.

The special thanks go to all of my friends for their regular motivation, support and help to
make this report possible.

Rashmi Shahi
Contents
Chapter One: Introduction .......................................................... Error! Bookmark not defined.
1.1 Background ....................................................................... Error! Bookmark not defined.
1.2 Objective of the Study....................................................... Error! Bookmark not defined.
1.3 Methodology ..................................................................... Error! Bookmark not defined.
1.3.1 Selection of the Organization .................................... Error! Bookmark not defined.
1.3.2 Placement .................................................................. Error! Bookmark not defined.
1.3.3 Duration of Internship................................................ Error! Bookmark not defined.
1.3.4 Source of Data Collection........................................... Error! Bookmark not defined.
1.4 Limitation of the Study...................................................... Error! Bookmark not defined.
Chapter Two: Introduction of Banking Industry ......................... Error! Bookmark not defined.
2.1 Background ....................................................................... Error! Bookmark not defined.
2.2 Origin of Bank.................................................................... Error! Bookmark not defined.
2.3 Development of World Banking Sector ............................ Error! Bookmark not defined.
2.4 History of Banking Development in Nepal ........................ Error! Bookmark not defined.
2.5 Current Scenario ............................................................... Error! Bookmark not defined.
2.6 Need of Banking ................................................................ Error! Bookmark not defined.
2.7 Commercial Bank .............................................................. Error! Bookmark not defined.
2.8 Functions of Commercial Bank ......................................... Error! Bookmark not defined.
2.9 Present Scenario of Commercial Banks in Nepal .............. Error! Bookmark not defined.
Chapter Three: Introduction of the Organization ....................... Error! Bookmark not defined.
3.1 An Overview of NIBL ......................................................... Error! Bookmark not defined.
3.1.1 Vision.......................................................................... Error! Bookmark not defined.
3.1.2 Mission Statement ..................................................... Error! Bookmark not defined.
3.1.3 Strategic Objectives of NIBL ....................................... Error! Bookmark not defined.
3.1.4 Core Values and Ethical Principles ............................. Error! Bookmark not defined.
3.2 Ownership Structure and Share Capital of NIBL ............... Error! Bookmark not defined.
3.3 Review of Banks Financial Performance .......................... Error! Bookmark not defined.
3.4 Major Products and Services of NIBL ................................ Error! Bookmark not defined.
3.4.1 Products of NIBL ......................................................... Error! Bookmark not defined.
3.4.2 Services of NIBL .......................................................... Error! Bookmark not defined.
3.5 Branches and ATMs of NIBL .............................................. Error! Bookmark not defined.
 3.6 SWOT Analysis................................................................... Error! Bookmark not defined.
3.7 Credit Department in NIBL ................................................ Error! Bookmark not defined.
3.7.1 Corporate Credit ........................................................ Error! Bookmark not defined.
3.7.2 Retail Credit................................................................ Error! Bookmark not defined.
3.7.3 Credit Administration Department ............................ Error! Bookmark not defined.
3.7.4 Loan Administration Department .............................. Error! Bookmark not defined.
Chapter Four: Analysis of Activities Done and Problem Solved.. Error! Bookmark not defined.
4.1 Activities Performed in the Organization.......................... Error! Bookmark not defined.
4.1.1 Customer Service Department................................... Error! Bookmark not defined.
4.1.2 Clearing Department.................................................. Error! Bookmark not defined.
4.2 Credit Department ............................................................ Error! Bookmark not defined.
4.3 Functions of Credit Department ....................................... Error! Bookmark not defined.
4.3.1 Relationship Building with Customers ....................... Error! Bookmark not defined.
4.3.2 Analyzing the Credibility of Customers ...................... Error! Bookmark not defined.
4.3.3 Credit Approval Process ............................................. Error! Bookmark not defined.
4.3.4 Collection, Monitoring and Recovery Activity ........... Error! Bookmark not defined.
4.4 Problems Encountered and Solved ................................... Error! Bookmark not defined.
Chapter Five: Conclusion and Lessons Learnt ............................. Error! Bookmark not defined.
5.1 Conclusion ......................................................................... Error! Bookmark not defined.
5.2 Lessons Learnt................................................................... Error! Bookmark not defined.
BIBLIOGRAPHY ............................................................................ Error! Bookmark not defined.
ANNEXURE .................................................................................. Error! Bookmark not defined.
 List of Tables

Table No. Content Page No.

1.1 Placement and duration 9

2.1 Financial Institution in Nepal 14

3.1 Share Capital and Ownership 19

3.2 Review of Banks Financial 21

Performance
3.3 Interest on Fixed Deposits 26

4.1 Credit Limit and Approving 40

Authority

List of Figures

Figure No. Content Page No.

3.1 Organization Structure of NIBL 19

3.2 NIBLS Ownership Structure 20

3.3 Review of Banks Financial 22

Performance
4.1 Credit Approval Process 37
 Abbreviations
HR Human Resource

NIBL Nepal Investment Bank Limited

CSD Customer Service Department

NRB Nepal Rastra Bank

ECC Electronic Cheque Clearing

DD Demand Draft

TT Telegraphic Transfer

MC Managers Cheque

L/C Letter of Credit

Forex Foreign exchange

ABBS Any Branch Banking Service

USD United States Dollar

NPR Nepalese Rupees

ATM Automated Teller Machine

SWIFT Society For worldwide Interbank Financial Telecommunication

TELEX Tele printer Exchange

UAE United Arab Emirates

ID Identity Card

KYC Know Your Customer