A CASE STUDY ON NEPAL BANK LIMITED

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

Corporate Vision:
"Pioneer Bank with customer service excellence"

Mission Statement: BEST

 Building trusted and united customer relationship
 Ensuring quality customer service
 Service access to all
 Technology driven banking service

Core Values:
 Honesty, transparency, integrity and ethics
 Respect to customers and fellow associates
 Learning and knowledge sharing
 Teamwork, ownership and accountability
 Contribute to society and environment

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

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HISTORY
His Majesty King Tribhuvan inaugurated Nepal Bank Limited on Kartik 30,1994 Bikram
Sambat. This marked the beginning of an era of formal banking in Nepal. Until then all monetary
tractions were carried out by private dealers and trading center.

Then Prime Minister Maharaja Juddha Shumsher J.B.R. speaking on the occasion with the kind
permission of His Majesty the King stated this work which is being done in the larger interest of
the nation is a great moment for me. Until today a bank could not be opened in Nepal. Therefore
this bank, which is being established under the name of Nepal Bank Limited to fill that, need and
to be inaugurated by His Majesty the King, is a moment of great joy and happiness.

The Bank's objectives to render service to the people whether rich or poor and to contribute to
the nation's development will also need the support and best wishes of all, which I am confident
will be forthcoming.

In that era, very few understood or had confidence in this new concept of formal banking. Rising
equity shares were not easy and mobilization of deposits even more difficult. This was evident
when the bank floated equity shares worth NRs. 2,500,000, but was successful only in raising
NRs. 842,000.

In the absence of any bank in Nepal the economic progress of the country was being hampered
and causing inconvenience to the people and therefore with the objective of fulfilling that need
by providing service to the people and for the betterment of the country, this law in hereby
promulgated for the establishment of the Bank and its operation

The total deposits for the first year was NRs. 17,02,025 where current deposits was about NRs.
12,98,898 fixed was about NRs. 3,88,964 and saving was NRs. 14,163. Loan disbursed and
outstanding at the end of the first year was NRs. 1,985,000.

From the very conception and its creation, Nepal Bank Ltd, was as joint venture between the
government and the private sector. Out of 2500 equity shares of NRs. 100 face value, 40% was
subscribed by the government and the balanced i.e. 60% was offered for the sale to private
sector. There were only 10 shareholders when the bank first started.

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IPO MODEL
Accept deposits from different savers like individuals , households, government organizations,
business firm and institutions among others and providing loan to business firm , individuals.

ORGANIZATION STRUCTURE
The bank is under the control of NRB. NRB has appointed a five members management
committee. This management committee performs as the Board of Directors of the bank. Chief
executive officer is under the Board of Directors (BOD) followed by General Managers (GM),
Deputy General Manager (DGM) and then other departments. The simplified organization
structure of NBL is shown below:

Fig: Organization Structure of NBL

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FORMS OF OWNERSHIP
Nepal Bank Limited is a government owned company.

Shareholding Composition of NBL

The ownership composition of NBL can be described by the following table. However, recently
the government ownership has been decreased as certain percentages of shares have been sold to
the general public (employees). Here is a table showing the shareholding composition of Nepal
Bank Limited.

S.N. Ownership Percentage

1. Government of Nepal 40.49

2. ‘A’ Class Financial Institutions 4.92

3. NRB Licensed Financial Institutions 3.42

4. Other Institutions 0.52

5. General Public 49.94

6. Others 0.71

Total 100

PRODUCT AND SERVICES OF NBL

NBL 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 NBL
that has enabled it to retain its customer for more than seventy years. NBL is not just business,
it’s 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 NBL corporate image and untrammeled
consumer loyalty.

NBL products are briefly described below:

• Deposits:

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NBL offers a wide range of deposit products that caters the requirement. Namely:

 Savings Deposit
 Current Deposit
 Fixed Deposit

• Loan:

NBL offers a wide range of tailor-made funded and non-funded credit facilities to suit funding
requirements. Namely:

 Corporate Loan
 Retail/ Consumer Loans

• ABBS:

NBL is proud to announce that all together 114 branches are enabled for ABBS. In ABBS,
customers having account with NBL can access account from any online NBL's branch.

• Nepal Remit:

NBL 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.

• Internet Banking

NBL 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.

• 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

• ATM/Debit Cards:

NBL 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.

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• 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.

Here is a table showing products and services provided by NBL.

Products and Services

Deposits Loan and Advances Remittance Other Services

Current Consumer Loan Corporate Loan Web NBL Debit

Card

Saving Margin Working Capital Swift Safety Deposit

Fixed Auto Hypothecation Fax SMS Banking

Home Consortium Draft ABBS

Personal ATM Debit

Card

Fig : products and services of NBL

PERSONAL POLICIES
According to Dale Yoder ‘a policy is pre-determined selected course— established as a guide
towards accepted goals and objectives’.

A personnel policy should have two types of objectives viz., general objectives and specific
objectives. General objectives express top management’s philosophy of human resources
whereas specific objectives refer to specific activities like staffing, training, wages and,
motivation.

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Here are some personal policies of Nepal Bank Limited

 Optimum Use of Human Resources.

 Training Of Employees for better work performance.
 Sound Industrial Relations and healthy working environment in the organization.
 Payment of Fair Wages to employees according to their level.
 Security of Employment through medical policy, insurance policy and other polices.
 Respecting Human Dignity.

MANPOWER PLANNING
Manpower planning is the process of estimating the optimum number of people required for
completing a project, task or a goal within time. Manpower planning includes parameters like
number of personnel, different types of skills, time period etc. It is a never ending continuous
process to make sure that the business has the optimized resources available when required
taking into consideration the upcoming future projects and also the replacement of the
outgoing employees.

Manpower Planning which is also called as Human Resource Planning consists of putting
right number of people, right kind of people at the right place, right time, doing the right
things for which they are suited for the achievement of goals of the organization. Human
Resource Planning has got an important place in the arena of industrialization. Human
Resource Planning has to be a systems approach and is carried out in a set procedure. The
manpower planning procedure of Nepal Bank Limited is as follows:

 Analysing the current manpower inventory: Under this Nepal Bank Limited, analyze its
current and existing manpower of each level employed in each department. In this
process, the service tenure of employees and employee’s retirement are also analyzed.

 Making future manpower forecasts: Under this Nepal Bank Limited, find out the need for
future human resources need after analyzing the current and existing pools of human
resources based on its work load and work requirements and also based on need of
employees needed for operating existing new branches.

 Developing employment programmes: After analyzing the current and existing

manpower and forcasting the need manpower, Nepal Bank Limited’s Human Resources
Department frame and develop accordingly, which include recruitment, selection
procedures and placement plans along with coordination with Public Service Commission
for assisting in manpower selection process.

 Design training programmes.

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 Provides training related to banking knowledge and skills which are helpful for
employees at work place.

Recruitment and selection of manpower

Based on the manpower need ,Nepal Bank Limiteed announces vacancy for the need of
employees with coordination of public service commission. It conducts written exam and
candidate selected in exam are called for final interview. After conducting the interview final
list of successful candidates are called for joining the organization.

Training and development of manpower

Nepal Bank Limited conducts various training programmes for its employees from time to
time for the skill and knowledge development of its employees. It spends about 3% of its
operating expenses in trai ning and development. It provides in house training as well as
training from experts and also sends its employees to foreign countries like India ,China
,Bangladesh and other countries.

Job Evaluation
Job evaluation is the process of analyzing and assessing various jobs systematically to
ascertain their relative worth in an organization. Job evaluation is an assessment of the
relative worth of various jobs on the basis of a consistent set of job and personal factors, such
as qualifications and skills required.

In case of Nepal Bank Limited ,the requirement for Assistant level employee is Bachelor
degree where as for Officer Level ,the requirement is Master’s degree in related fields.

Merit rating
Merit rating is the systematic evaluation of the performance of an employee on the job in
terms of the requirements of the job.

It may also be ascertained by comparing the superiority of an employee over others. Quantity
and quality of work, attendance, obedience, skill, desire to learn, loyalty, family background,
personality, etc. are some of the factors that are taken into consideration in assessing merit.

Main aim of merit rating is the evaluation of the performance of employees. Employer can
give reward on the basis of merit of employees. It is also helpful to compare the quality of
different employees.

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In case of Nepal Bank Limited performance of employees are measured every year and in
case of promotion, NBL provides promotion to its employees through internal competition
exam and file promotion.

Wage and Incentives

It is based on government salary scale and incentives are provided according to the bank
policy. Incentives also vary according to geographical locations.

MOTIVATION
Generally speaking, motivation is what energizes, maintains, and controls behavior. As such,
it is clear why it plays an important role in the workplace. But empirically measuring that
role is another matter; it is challenging to capture an individual’s drive in quantitative metrics
in order to ascertain the degree to which higher motivation is responsible for higher
productivity. However, it is widely accepted that motivated employees generate higher value
and lead to more substantial levels of achievement. The management of motivation is
therefore a critical element of success in any business; with an increase in productivity, an
organization can achieve higher levels of output.

The motivation steps in Nepal Bank Limited are :

 Fair treatment to employees.

 Training for employees for their better performance and enhancement of skills and
knowledge.
 Suitable benefits and allowance.
 Self motivation.

LEADERSHIP
In a branch, Branch Manager performs the Leadership role. In a department , department

Head performs the leadership role. NBL is lead by CEO as a whole.

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MANAGEMENT INFORMATION SYSTEM(MIS)
A management information system (MIS) is a computer system consisting of hardware and
software that serves as the backbone of an organization’s operations. An MIS gathers data from
multiple online systems, analyzes the information, and reports data to aid in management
decision-making.

MIS is also the study of how such systems work.

NBL uses pumori iv as banking software for conducting its day to day banking operations and
transactions. It has its own server for maintaining its branch network and data. Nepal bank has
IT department for conducting MIS related works.

SWOT Analysis of NBL

A strategic plan or mission for the future begins with an assessment of the current situation in
which the organization exists. The organization has to analyze the potential strengths to gain
competitive advantage. It helps to predict the possible opportunities to capture the possible gains
and advantages for growth and development.

Strengths:

Organizational strengths are usually derived from its financial, human and other resources.
 A wide network of branches commercialized in rural and urban areas
 Increasing deposit schemes targeting high, middle and low-level customers.
 ABBS has made the customer to deposit and withdraw funds in any branch of the bank.
 Use of latest technology (i.e. SMS banking, e-banking, ABBS, ATM cards)
 Well, classified products and services catering the needs of customers.

Weaknesses:

 They are lacking elements that disable an organization to achieve its goal
 Customers are attracted towards other financial institution that provides higher interest
rate than the commercial bank.
 Banks collect a large amount of fund but don’t have proper investment sector due to poor
government.
 Due to lack of proper regulation system loans provided by the bank, loans are converted
into bad debt.
 Though the bank has reached to all the regional level, still many of the people don’t have
the knowledge about the bank.
 Some departments still hold paper-based data which is tedious and time-consuming.

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SUGGESTIONS AND RECOMENDATIONS
Some of the recommendation that would recommend to some of the problems discussed in the
above section, that might increase the efficiency of the organization are listed below:

 NBL should develop modern connectivity architecture to effectively maintain an online

connection of the branch with other branches and also the ATM link which may include
using modern technologies like fiber cable, router etc. also backup links should be
developed.
 Incentives schemes should be developed for the employee that can helpto motivate them.

 Website should be updated timely.

 The bank should be more focused on enriching its human resource management;
emphasis should be given on quality of work force rather than quantity.

 Should focus on customer satisfaction.

 The response should be quick and immediate.

CONCLUSION

Nepal Bank Limited is one of the leading commercial bank in the country and major player in
the banking industry of the country. It is serving almost every corner of the country through its
branch networks. NBL is marching in the path of success by running in profits as well as
providing different services and features to its clients and even seems successful in creating a
goodwill and image in the mind of customers through the services provided. NBL is excellent in
terms of their services despite with some pros and cons with the issue related to customer
satisfaction. It can perform better in future by updating its working styles and strategy and also
by regulating its drawbacks, overcoming with their weakness and doing their best to retain
quality services.

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REFERENCES

Nepal bank limited official website , https://www.nepalbank.com.np/

http://internshipreportpresentaion.blogspot.com/2015/10/internship-report-on-nepal-bank-
limited.html

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