CHAPTER1 INTRODUCTION 1.1 ORGANIZA ORGANIZATIO TION N PROFILE Nabil Bank Limited is Nepal's first major joint venture Bank, which commenced operation
on 12th July 1!"# $ubai Bank Limited was the initial forei%n joint venture partner with &( e)uity investment investment## *he shares owned by $ubai Bank Limited Limited were transferred transferred to +mirates +mirates Bank nternation nternational al Limited, Limited, $ubai by virtue of its anne-ation anne-ation with the latter# latter# Later on, +mirates Bank nternational Limited sold its entire &( e)uity holdin% to National Bank Limited, Limited, Ban%ladesh# Ban%ladesh# Nabil Bank was initially initially establish established ed under the name of Nepal .rab .rab Bank Limited# Limited# /owever, /owever, later later on with the help of special resolution resolution passed passed on the .nnual .nnual 0eneral eetin%, the name Nepal .rab Bank Limited had been chan%ed to Nabil Bank Limited on $ecember 1st, 21# Nabil was incorporated with the objective of e-tendin% nternational 3tandard modern bankin% services to various sectors of the society# 4ursuin% its objective, Nabil provides a full ran%e of commercial bankin% services throu%h its " points of representation across the kin%dom and over 15 reputed correspondent banks across the %lobe# Nabil Bank has a history and culture of its own of settin% settin% standard of operations operations and providin% services# t provides international )uality of services to its customers and some invaluable advices to its clients with the help of professionals hired by the bank# Nabil Bank, as a pioneer in introducin% many innovative products and marketin% concepts in the domestic bankin% sector, represents a milestone in the bankin% history of Nepal as it started an era of modern bankin% with customer satisfaction measured as a focal objective while doin% business# t provides international )uality of services to its customers and some invaluable advices to its clients with the help of professionals hired by the bank# Nabil Bank has e-panded its si6e and volume of transactio transactions ns and it %ives employment employment to more than staff members who are dedicated professionals workers *here are total & branches and 55 .*s loun%es launched by Nabil Bank to provide intense facilities to their customers# (See Annex Annex I for the lit of !r"n#he of N"$il !"n%& *oday Nabil Bank holds one of the stron%est networks in and outside Nepal compared to other financial institutions of Nepal# Nabil Bank today can be termed as a full service bank in every sense, which is able to meet entire ran%e of financial re)uirements and services of its customers and clients# t is the pioneer commercial bank of Nepalese economy, which sets
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the benchmark for the industry# *he mana%ement and the board members are the true assets of the or%ani6ation who have made it what it is today#
1.1.1 O!'ECTIE OF STUD)
*he primary objective of this study is to %et a better understandin% of 7entrali6ed *rade 8peration in commercial bank and the operational procedure of different administrative departments of 7*8# 9ollowin% are the objective of study broken down into specific and %eneral objectives# 0eneral: •
*o understand overall activities of 7entral *rade 8peration department of Nabil Bank /ead office, *eendhara# *eendhara#
3pecific: • • •
*o understand mechanism and processes re%ardin% Letter of 7redit# *o understand different department functions and structure of 7*8 d epartment *o understand different issues and challen%es of 7*8 department
1.1.* SCOPE OF THE STUD)
*his internship report will help individuals to understand the operational processes of 7*8 department of Nabil Bank Ltd which discusses the mechanism of L7# *his report involves methodolo%y used under the study and hints candidates for their future internship# .s far as possible, every effort has been made to ensure that all available data are included and reported without any systematic or natural biasness#
1.1.+ LI,ITATION LI,ITATION OF THE STUD)
.s this research was conducted alon% with the internship and other semester course, ade)uate detail effort that these researches re)uire could not be devoted# 3econdly, the source of information is very limited as it is based on the observation; mentor
•
•
•
•
•
=epetitive types of activities were speciali6ed and assi%ned as specific and %iven importance too# 3o, had to wait for some chance like old intern absenteeism to learn new thin%s like preparin% Bi#Bi#Ni, check fillin%, recordin% in $B3 etc# Busy schedule of employees and mentor was limitations on %ettin% replies to the )uestions spontaneously# 3oftcopy note provided by the bank
*. LITERATURE REIE-
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7+N*=.L *=.$+ 84+=.*8N: central trade operation is simply the centrali6ed version of trade operations of different branches of Nabil Bank at its head office# t deals with the different mechanism of trade finance like import letter of credit, e-port letter of credit, forward contract, bid bond, performance bond, counter %uarantee, advance payment %uarantee and shippin% indemnity# *.1 ,EANING AND DEFINITION OF LETTER OF CREDIT
$ocumentary 7redit >$7?, popularly known as letter of credit is the safest and convenient means of payin% for e-ports amon% all other e-istin% methods of payment# t is widely used to effect payments in domestic and international trade# . written undertakin% is issued by a bank >usually referred to as the issuin% bank? on the instructions of the buyer of %oods to the seller# *he payment is made under conditions stated in the undertakin%# 4ayments are always up to a stated limit and a%ainst stipulated documents# .s per the definition of nternational 7hamber of 7ommerce >77? @documentary credit is any arrangement however named or described whereby a bank, (the issuing bank) acting at the request and in accordance with the instructions of a customer (the applicant), is to make payment to or to the order of a third party (the beneficiary) or is to pay, accept or negotiate bill of exchange (drafts) drawn by the beneficiary, or authorise such payments to be made or such drafts to be paid, accepted or negotiated by a other bank against stipulated documents in compliance with stipulated terms and conditions.@ *.* I,PORTANCEADANTAGE OF LETTER OF CREDIT
*he importanceA.dvanta%es of L7 >mentor
• •
.ssurance his bank will refuse payment to seller unless terms and con dition %iven by him to his bank as stipulated in the credit are met# +-tended terms of payment which in any other form of payments would not be available# =efinance of %oods until they are marketed#
*o the 3eller • •
•
=elies more on the credit e-tendin% bank or the confirmin% bank rather than on the buyer# Less apprehensive that payment for %oods mi%ht be delayed or jeopardi6ed by political acts or other problems in the buyer
*.+ T)PES OF LC
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*he various types of letter of credit are as follows: 1. Re/o#"$le LC0 *hese are the L73 that maybe amendedAcancelled at anytime by the buyer
without the approval of the seller# *hus, it does not provide any sort of protection to the seller and is not much in use these days *. Irre/o#"$le LC0 *his type of L7 cannot be cancelled or amended without the a%reement of
all the parties includin% the e-porter# *he issuin% bank provides a bindin% undertakin% to the beneficiary %iven that all the terms and conditions have been met# rrevocable L7 provides assurance to the beneficiary that the payment for his %oods or services will be received as soon as the L7 process comes to an end# nder 74$7 all letters of credit are irrevocable# +. Un#onfire2 LC0 t is that Letter of 7redit that is forwarded by the advisin% bank to the
beneficiary >e-porter? without addin% its own undertakin% to make a payment at a future date but confirms the authenticity of the credit#
3. Confire2 LC0 *his is type of L7 where a bank usually in e-porter
confirmation to the L7 where confirmin% bank must make the payment to beneficiary if the complaint documents are presented at their counter# .lso, if the issuin% bank or the applicant fails to make the payment ,confirmin% bank holds this commitment# n such L7 confirmation is added to the L7 for the beneficiary on the re)uest of the beneficiary
commodity between the same e-porter and importer# *he credit must show that it is a revolvin% L7# *he L7 may revolve automatically or under some provisions# t helps to avoid the repetitious task of openin%Aamendin% the letter of credit# 6.Tr"nfer"$le LC0 nder the *ransferable L7, the e-porter can make a re)uest to the
payin%Ane%otiatin% bank to make partialAfull payment of the credit value that is available to the third parties#
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7. !"#% to $"#% LC0 Back to back L7 can be used as a substitute to the transferable L7# n this
type of L7, one L7 is used as a security to open a second L7 that is issued by the advisin% bank in favor of the e-porter
receivin% the ori%inal documents of the credit complaint by the issuin% bank# 9. Tie LC (U"n#e&0 n the *ime L7, the payment needs to be made at the maturity after
receivin% the ori%inal documents of the credit complaint by the issuin% bank# 1:. St"n2$; LC0 *he standby letter of credit is different from the documentary letter of credit#
*he documentary letter of credit is the primary payment mechanism whereas the standby letter of credit acts as the secondary payment mechanism# *his type of %uarantee provides %uarantee to the beneficiary re%ardin% the performance of the applicant
*.3 TER,S AND CONDITIONS IN LC • • • • •
• • • •
Banks deal in documents not with the %oods Non documentary conditions should thus be avoided Banks will i%nore any non documentary conditions mentioned in the L7 *erms and conditions mentioned in the L7 should be precise *erms and conditions re)uirin% documentary evidence should clearly mention the assures of such documents 7onditions put in the L7 should be practically feasible nusual terms and conditions should be avoided =e%ulatory conditions to be ensured .ny other specific conditions
*.4 ,AIN CONTENTS AND FIELDS OF LC INCOTER,S0 *he word nco term is the abbreviation of nternational 7ommercial *erms# ncoterms are the price terms used to define the responsibilities of the buyer and seller as to
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the cost, insurance, frei%ht, e-port and import clearance and other char%es incurred durin% the shipment of %oods from the sellers warehouse to buyers place# *he N78*+=3 was first published in 1D and it is revised periodically to keep up with chan%es in the international trade needs# *he complete definition of each term is available from the current publicationCCCN78*+=3 21# *he seven rules defined by incoterms 21 for any modes of transportation are: +EFC +- worknamed place of delivery? *he seller makes the %oods available at its premises# *his term places the ma-imum obli%ation on the buyer and minimum obli%ation on the seller# *he +- works term is often used when makin% an initial )uotation for the sale of %oods without any costs included# +EF means that a seller has the %oods ready for the collectioin at his premises >works, factory, warehouse, plant? on the date a%reed upon# *he buyer pays all transportation costs and also bears the risks for brin%in% the %oods to their final destination# *he seller doesnnamed place of delivery? *he seller hands over the %oods, cleared for e-port, into the disposal of the first carrier >named by the buyer? at the named place# *he seller pays for carria%e to the named point of delivery, and risk passes when the %oods are handed over to the first carrier# 74*C 7arria%e 4aid *o >named place of destinatioin? *he seller pays for carria%e# =isk transfers to buyers upon handin% %oods over to the first carrier# 74C 7arria%e and nsurance 4aid to >named place of destination? 74 is the containeri6ed transportAmultimodal e)uivalent of 79# 3eller pays for carria%e and insurance to the named destination point, but risk passes when the %oods are handed over to the first carrier#
$.*C $elivered at *erminal >named terminal at port or place of destination? 3eller pays for carria%e to the terminal, e-cept for costs related to import clearance, and assumes all risk up to the point that the %oods are unloaded at the terminal# 7 | P a g e
$.4C $elivered at 4lace >named place of destination? 3eller pays for carria%e to the named place, e-cept for costs related to import clearance, and assumes all risks prior to the point that the %oods are ready for unloadin% by the buyer# $$4C $elivered $uty 4aid >named place of destination? 3eller is responsible for deliverin% the %oods to the named place in the country of the buyer, and pays all costs in brin%in% the %oods to the destination includin% import duties and ta-es# *his term places the ma-imum obli%ations on the seller and minimum obli%ation on the buyer#
PROFOR,A INOICESALES CONTRACT0 4roforma invoice includes name of the contractin% parties; the seller and the buyer# t should be si%ned and stamped by both the parties# t should include *enor>si%ht, usance or otherwise?, description of imported 0oods, ei%ht di%it /armonic code that denotes the imported %oods, proper incoterm in the proforma invoice, proper country of ori%in, validity of contract and unit price and total amount# S-IFT0 3F9* refers to 3ociety for Forldwide nterbank 9inancial *elecommunication# t is the fastest and most secured mode of transmission of financial messa%es# 3pecific messa%e types >*s? as per the nature of the transaction is indicated# 4reCformatted template, re)uire specific values in each field, conditional values as well in some fields# 7ertain characters are not allowed e#%G,H,I,,(,K,etc#
*.6 ,A'OR RULE OF NR! IN DC OPERATION0
No $7 is re)uired for import of %oods worth 3$ &or e)uivalent# *he importer can send advance payment to the supplier# *his is valid for import from third countries other than ndia#
*.7 A,END,ENT OF LC
3eller may ask for amendment if any of the conditions mentioned in the L7 is practically not possible for him to comply with# L7 will also be amended if the underlyin% contract between 8 | P a g e
the seller and he buyer is amended# .n irrevocable L7 can be amended only by the consent of the all the concerned parties, vi6 the buyer, the seller, the issuin% bank and the confirmin% bank >if any?# 9urther amendment must be advised to the same bank to which the ori%inal L7 is advised#
CHAPTER + ,ETHODS AND ,ETHODOLOG)
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.ccordin% to the desi%ned patterned of this pro%ram, students need to complete internship for the period of ! weeks and prepare the report# *he report is prepared by usin% the information that is obtained from different sources like booklet, websites, and report from the Nab il bank# 3ome of the methods followed to successfully accomplish this internship are as follows: +.1 Or5"ni<"tion ele#tion
Bein% a B$9in student speciali6in% in M9inance, doin% an internship in a reputed financial institution is always in a top priority# Nevertheless, selectin% an or%ani6ation has been a tou%h job because of the numbers of alternatives available in the market and of all the dilemmas re%ardin% the top bank with hun%er of ample of work e-perience lead to one# nternship from a reputed financial institution helps to build career by creatin% bond between classroom knowled%e and practical business world e-periences# 3o, Nabil Bank Limited came as preference for the internship pro%ram so that the intern can mould his class room knowled%e into real life workin% e-perience# *he recommendation letter provided by the colle%e was dropped in the head office, $urbar ar%, alon% with the 7O# *hen and there, the intern was informed that he was selected and was asked to commence the internship period at the head office itself in 7entral *rade 8peration department# 9inally, the intern be%an the internship with Nabil Bank with effect from &th November and continued till "th January , completin% the stipulated ! weeks of internship# +.* Pl"#eent
=e%ardin% the placement, intern was placed at /ead 8ffice, $urbar ar% in 7entral *rade 8peration>7*8? department under the supervision of the 7*8 chief r# Jyoti Bahadur P7 and 7*8 supervisor r# anish =aj aharjan alon% with my mentor r# =abi .charya>7*8Cofficer? and other various department staffs as well# *he intern worked unde r the supervision of staffs and performed each and every task efficiently to meet their e-pectations# $urin% the period, intern %ot an opportunity to learn about workin% procedures and, %et familiar or%ani6ational culture and workin% environment most specifically related to letter of credit# $urin% the period, the student %ot full support and cooperation from the staff members and maintained workin% environment with each of them#
De="rtent Pl"#e2
7entral *rade 8peration
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S>=er/ior
r# anish =aj aharjan
Mentor Mr. Rabi Acharya
T"$le 1.10 De="rtent Pl"#e2 "n2 S>=er/ior "n2 ,entor. +.+ D>r"tion of Internhi=
.s per the * curriculum intern has ei%ht weeks to learn about the or%ani6ation functions and its operation# $urin% the duration of ei%ht weeks intern was only placed at 7*8# +ven thou%h intern was placed in 7*8 for ei%ht weeks, it was ample for anyone as even the ei%ht weeks looked lesser to work and know all the process of the department# .s per the curriculum intern worked in Nabil bank corporate office from &th November, 21" to "th January, 21&#
F++P3
1
2
"
&
D
5
!
7entral *rade 8peration
T"$le 1.*0 D>r"tion of Internhi=
+.3 ,etho2 >e2
Nabil Bank has its 7*8 department as competitive advanta%e in compare to other very few trade operations of commercial banks that operate its 7*8# Nabil Bank
nteraction with mentors: 7onfusion and an ur%e for %ood understandin% in the conte-t of my activities had stimulated me to a situation of nteraction with mentors#
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nteraction with mentors is helpful in understandin% the moral of employees, or%ani6ation behavior, reflectin% importance of effective communication and understandin% linka%e between different activities of 7*8 department# # Learnin% by doin%: *his method involves observation as well as interaction with mentor# n this method personal attitude and efficacy are important personal factors# *his factor syner%i6es the or%ani6ational performances#
+.4 SOURCES OF DATA
9or the report the data are collected from primary source and secondary source# *hey are as follows: Pri"r; D"t"
4rimary $ata refers to the raw data that has neither been processed nor manipulated# t is the data that has been collected to carry out a specific task and they are mainly the firstC
hand data#
Fhile studyin% about the project came across primary data from different sources which are as follows:
$irect formal and informal interaction with the staff
nformal )uestionnaire responses the knowled%e on that specific department#
3crutiny of workin% environment of bank
8bservation of various departments of banks
Se#on2"r; D"t"0
*he secondary sources of data include the data that have been prepared by others , for their use which are not ori%inal #*hey are the readily available data that can be used for reference althou%h
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they may not be as accurate as the primary data# *he main sources of secondary data are as follows: • • • • • • • •
.nnual =eports of Nabil Bank Brochures 4olicy anuals .rticles published in different newspapers about L7 operations Banks website 4aper documents used by the bank like L7 application, checklist, etc N=B $irectives and 7irculars on commercial banks reports on the internet, etc
CHAPTER 3 RESULTS
*he results are in form of description of understandin%, the operation of the department, and %eneral overview of 7*8 department, which came out of the study upon use of methods and methodolo%y stated in previous chapter# 13 | P a g e
*he results are process oriented and the necessary discussions are included consecutively to better describe the results# *his has resulted in mer%er of the two sections of the report; result and discussions# *he results of L7 operation are discussed as:
3.1 LETTER OF CREDIT FLOLetter of #re2it flo? "t N"$il !"n% Liite20 P"rt@1
1# .t first the credit worthiness of customer is checked and on the basis of collateral, cash deposits of customer, they are issued a certain line of credit # 2# 7ustomers fills L7 .pplication form at the Nabil Bank which is made as per current version of 74$7D # 7ustomers should submit proforma invoiceAsales contract >which should be si%ned and stamped by both the parties? alon% with L7 application form which should clearly mention the name of contractin% parties i#e# buyer and seller, tenor >si%ht, usance or otherwise?,/armonic code number>should be of ! di%its?, ncoterm, country of ori%in, e-piry of contract, unit price and total amount# "# 7ustomer attaches the important documents such as nsurance 7ertificate, 9irm re%istration certificate and Bi Bi Ni 9ormC alon% with proforma nvoice# &# .fter the above steps are completed by applicant , employees of Nabil Bank checks whether the 0oods that are bein% imported are not prohibited by the central bank or other re%ulatory authorities, application submitted by customer is free of error or not, 4ermission of the concerned authority is obtained wherever applicable or not# D# *hen employees create L7 throu%h after doin% necessary entry in software known as 9inacle# 5# *he advisin%Aconfirmin% bank is informed about the L7 # *hese banks are communicated with the help of 3F9*# P"rt@* !# .fter the confirmin% bank have received L7 they check and inform the beneficiary so as
to %et the %oods ready# # *hen the beneficiary %oes to the transport company and shippin% company %enerates transport documents and hand it over to beneficiary# *he shippin% company ships the
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%oods to the destination port and after which the transport documents alon% with other documents are submitted to the advisin%Aconfirmin% bank by the beneficiary# 1# *he documents are send to the issuin% bank i#e# Nabil bank Limited after recheckin% the documents by the advisin%Aconfirmin% bank# 11# Nabil Bank reCchecks the received documents whether they are in accordance with the L7 terms and conditions, if they find any discrepancies applicant is informed about the discrepant documents but if the document is clean it %ives the documents to the applicant and forwards the payment to the advisin% Bank# 12# *he applicant then uses the transport documents to release the %oods from the bank to the destination port# *hen he comes to the bank and takes the BiBiNi " form to clear the %oods throu%h the custom office and %et the duty clearin% certificate# 1# *hen all the remainin% documents are send to Nabil Bank alon% with duty clearin% certificate# 1"# Bank then e-amines all the documents received from applicant and closes the file#
n this way, L7 process at Nabil Bank is completed# *here are total 1" employees in mport L7 section who perform all their tasks in a %iven manner#
3.*
,"or Do#>ent reB>ire2 for LC0
Coer#i"l In/oi#e0 . commercial invoice must contain description of the %oods that has been
shipped like the description of the items, cost of items per unit, number of items supplied, various transport char%es and fees, date of shipment and mode of transport, prices, discounts as well as the delivery and payment terms and must be issued by the beneficiary made out in the name of the applicant# Tr"n=ort 2o#>ent0 *hey are the railAtruck receipt, parcel post receipt, inland waterway bill
of ladin% >canal, river, etc?, airway bill, etc# 3ome transport documents such as Bill of ladin% is ne%otiable if it transfers title to %oods# . bank will only accept a clean transport document# 15 | P a g e
!ill of l"2in50 t is a document used in forei%n trade# t is a contract for delivery from the port of
shipment to the port of destination# . bill of ladin% must indicate the name of the carrier and also must indicate that the %oods that has been shipped# oreover, it also must show shipment from the port of loadin% to the port of dischar%e stated in the credit# In>r"n#e Poli#;0 t is the document that is %iven by the insurance company if the e-porter is
responsible for arran%in% insurance and minimum insurance should be 11( of invoice value# t shows the important provisions of the insurance contract# nsurance policy %enerally covers all risks e-cludin% risks such as war, strikes and riots# !ill of Ex#h"n5e0 t is an unconditional demand for the payment made by one party to another#
t must be in written form and must be si%ned as well as dated# . bill of e-chan%e is also called a draft# Certifi#"te of Ori5in0 *his document must state that the %oods in a particular shipment have
been wholly producedAmanufactured or processed in a particular country# .nd may provide importer with preferential duty rate# t is in a printed form that is completed by the e-porter and is certified by the issuin% body# Normally, it is issued by the 7hamber of 7ommerce# P"#%in5 Lit0 t is the list of packin% of %oods bein% sent that is usually included in each
shippin% packa%e and %ives the information about the )uantity and wei%hts# t is prepared by the shipper and is sent to the consi%nee for the accurate tallyin% of the %oods that has been delivered# In=e#tion Certifi#"te0 t is re)uested by an a%ent of the applicant to ensure )uality of %oods# -ei5ht lit0 t is a document statin% wei%ht of %oods#
3.+ DOCU,ENTS REUIRED FOR ISSUANCE OF LC IN N"$il !"n% Liite20
9or issuin% a L7, at first applicant needs to have approved credit limits sanctioned by the bank# .ccordin% to 7entral bank>Nepal =astra Bank ? re%ulations, followin% documents should be presented by applicant alon% with the L7 .pplication form : •
4roforma nvoiceAsales contract containin% the followin%: C /armonic 7ode number of the %oods that is bein% imported# /armonic code should be of at least ! di%its# C 7ountry of ori%in
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C 4ayment term •
4.N >4ermanent .ccount number? 7ertificate
•
7ompany =e%istration 7ertificate
Nabil offers various products to finance the trade, it offers mport loan and import bill discountin% for the importers# 3.3 REGULATOR) REUIRE,ENTS0
.ll the L7s that are opened are reported ne-t day to *he 7entral Bank# .lso, as a result of the restrictions on for e- tradin% imposed by Nepal =astra Bank >7entral Bank? all the transactions in currencies other than the ndian currency >N=? has to be reported# *he applicant availin% to the L7 facility need to fill the forms on 9orei%n +-chan%e =e%ulations called Bi# Bi# Ni# which the bank need to submit to the central bank for recordin%# Bi#Bi#Ni# is divided into two halves amon% which 1st half is filled by applicant itself and second half is filled by issuin% bank#>=efer to the .ppendi- 2 for the Bi#Bi# Ni# format?#
3.4 PROCESSES FOR LC
*he use of $B3 and 9inacle has %ained popularity# 8ri%inal documents are mana%ed in a file with L7 number and .pplicant
.ssist department staffs in makin% a L7 file# /elped in the proper handlin% and storin% of the respective files#
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• • •
• •
3erved as a helpin% hand in the fillin% of the L7 file and application# /elped in the checkin% of the files like: amount, date, information mentioned# /elped in tallyin% the different documents provided by the respective parties involved in the L7 to approve the documents are le%itimate# /elped in keepin% tracks of the documents arrival and copy documents# /elped in keepin% records of the files throu%h the software F$3 used by the department#
3.6 Ri% Ao#i"te2 ?ith Letter of Cre2it0
*he risks associated with import L7s can be broadly classified into: •
9inancial standin% of the importer: /e should be in a position to arran%e for funds re)uired at the time of retirement of bills under L7# *his involves an appraisal of the
•
credit worthiness of the importer as a borrower# .cceptability and sale ability of the %oods: *his is a %eneric risk associated with all modes of international trade, and may affect the importer
•
consi%nment# 3tatus of the e-porter >or beneficiary of the L7?: *his is the risk inherent in a situation
•
that an errant may ship substandard %oods# 7ountry =isk: *his includes risk elements like the political and economic stability of a country and e-chan%e controls etc# 7ountry risk is, however more pertinent for e-porters
•
rather than importer of %oods# 9orei%n e-chan%e risk: . depreciation in the local currency i#e# the transaction currency may lead the importer to pay more for the consi%nment than ori%inally envisa%ed# *his may render the L7 account irre%ular from the very be%innin%#
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CHAPTER 4 DISCUSSIONS 4.1 ISSUES OF CTO DEPART,ENT
3ometimes durin% the processes of L7 it was found that proper communication between different departments was at utmost necessity# *he conflictin% situations re%ardin% documents may arise and be solved by discussions with the head officer and mana%ers# onitorin% and evaluation was done by 7*8 head#r# Jyoti Bahadur karki was head of 7*8 department# 9urther activities of 7*8 head was to check, verify and correct documents, monitorin% and assurin% corrections for the mistakes of employees and assi%nin% important work to employees# /ence this reflected as knowled%e to me for the importance of monitorin% and evaluation
*he numbers of L7 opened on an avera%e were 2 per day# .fter pm bank does not accept any L7
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%oods are received by applicant# N7+LL and Nepal *elecom are found to be amon% the applicant who order
CHAPTER6 CONCLUSION AND RECO,,ENDATION 6.1 Con#l>ion
$urin% whole period of internship and the preparation of this report, intern learnt a lot about the bankin% operations, about Nabil Bank in particular# *he internship has been fruitful in many ways to the intern# Before, the intern knew only a little about the bankin% sector but internship helped her to analy6e and e-amine the bankin% system and the operations raisin% different )uestions in the mind# *he %rowth of financial sector in Nepal is much better compared to other sectors in the country# *he economic reform initiated by the %overnment more than one and half year decade a%o have chan%ed the landscape of several sectors of the Nepalese economy includin% financial sector# $espite the decade
monitor the bankin% system properly and enhance competitiveness with a stron% and credible re%ulatory# Nabil bank is the first joint venture which aims to serve valued customers throu%h )uality and advancement of services throu%hout the nation and widely providin% its product and services throu%h the lar%ely e-tended network# t represents a milestone in the bankin% history of Nepal by introducin% many innovative products and marketin% concept in the domestic bankin% sector and measures customer satisfaction as a focal objective of doin% business# Nabil services reach the e-treme of the country to facilitate its customer and build the trust of individual and business houses for the commercial bankin% industry# *he recuperation of the bank in terms of its financial position, its adjustment to technolo%ical advancement and customer faith and trust shows that the bank at present and in future touches the sky in bankin% performance# $urin% the internship period, intern %ot an opportunity to learn a lot about the bankin% sector and analy6e its various aspects# ntern has worked in the areas of Letter of 7redit in the 7*8 department# *his department has helped the intern to %ain knowled%e about 3F9* messa%es, procedures of issuin% letter of credit, process of how trade operations actually takes place amon% the importer and e-porter, the le%itimate documents re)uired, fillin% of forms like application checklist, copy document checklist, B B N forms, che)ue writin% etc# *he activities that are performed in these departments include makin% a new L7 file, recordin% the entry of document arrival in wdms software as used by the department employees, filin%, verifyin% the copy docs with ori%inal ones etc# ntern worked in the department to learn about the process of how L7 is used and plays a major role in the trade business as we know# *he internship at Nabil Bank helped intern to %ain inCdepth knowled%e about real workin% environment, interpersonal and communication skills, or%ani6ational culture and behavior, professional )ualities and team buildin% spirit as well as workin% principles of commercial banks# Besides, observin% and learnin% the various activities in the department, intern performed the various task# $urin% that period, intern found that costumers are the key focus and %reatest asset of the bank and time mana%ement was everythin%# *hus, the bank always focused to maintain lon% term relationship with customer and retain them by providin% better services and completin% its ali%ned task in time# 3imilarly, proper coordination and cooperation amon% the entire department is needed for %rowth of or%ani6ation# 21 | P a g e
6.* Re#oen2"tion
f the three most important thin%s in the =eal +state are location, location, location, the three most important thin%s in commercial and standby credits are documents, documents, documents# /ence for the operation of Letter of 7redits or $ocumentary credits one should educate themselves on the rules incorporated by 74 and 77 .rticle &# 4arties involvin% in L7 should be able to control the process from the start by limitin% the number and comple-ity of documents re)uired under the credit# 8ne should not permit the documents which are contin%ent upon the approval of buyer, and do not allow documentary re)uirements which are impossible to fulfill# 8ne should be disciplined in their presentation of documents# 8ne should re)uest the confirmin% bank if they are uncertain of the ssuin% Bank
REFERENCES -E!SITES0
htt=0???.h5.or5"rti#le."=i2*8946 htt=0???.oe#.2o#.5o/o5#o##i#let#re2.htl htt=0???.n"$il$"n%.#oI=ortLC16
http:AAen#wikipedia#or%AwikiALetterRofRcredit htt=0???.tr"2e/.net2o?nlo"2tool5>i2e*l#.=2f
!oo%0 3aunders, .#, K 7ornett, # # >25?# Financial Market and nstitution. New $elhi: *he c0rawC/ill 7ompanies# 3hrestha, # P#, K Bahadur, B# $# >25?# Financial Market ! nstitutions. Pathmandu: .smita 4ublication#
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*hapa, P# >211?# Fundamentals of investments . Pathmandu: .smita Books 4ublications 4vt# Limited#
APPENDI A==en2ix II0 N"$il !r"n#he SN. 1
!r"n#he *eendhara Branch
Lo#"tion $urbarmar%h, Pathmandu
2
Nabil /ouse
Pamaladi, kathmandu
Pantipath Branch
Pantipath, Pathmandu
"
*ripureshwor Branch
*ripureshwor
&
Newroad Branch
Newroad, Pathmandu
D
Jorpati Branch
Jorpati, Pathmandu
5
Birjun% Branch
.darsh Na%ar, birjun%
!
4/7 Branch
4owerhouse 7howk, Birjun%
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Biratna%ar Branch
0oswara road, Biratna%ar
1
Lalitpur Branch
Pupondal, lalitpur
11
tahari Branch
ain road, tahari
12
Butwal Branch
ain road Butwal
1
4okhara Branch
Newroad, 4okhara
1"
Bhairahawa Branch
Nayapath, Bhairahawa
1&
Nepal%unj Branch
$hamboji, Nepal%unj
1D
Lakeside Branch
Lake 3ide, 4okhara
15
+-chan%e 7ounter
*ribhuvan nternational .irport, Pathmandu
1!
$haran Branch
ahendra 7howk, $haran
1
Bhalwadi Branch
Bhalwadi, =upandehi
2
aharaj%unj Branch
aharaj%unj, Pathmandu
21
Birtamod Branch
Birtamode, Jhapa
22
$amak Branch
$amak, Jhapa
2
/etauda Branch
Bank =oad, /etauda ", akawanpur
2"
Narayan%adh Branch
3ahid 7hock ,Narayan%adh, 7hitwan
2&
Ba%lun% Branch
ahendrapath, Ba%lun%
2D
. *ulsipur Branch
3hitalpur =oad, *ulsipur
25
0horahi Branch
0horahi, $an%
2!
$han%adhi Branch
ain =oad, Fard ", $han%adhi
2
ahendrana%ar Branch
ahendrana%ar, Panchanpur
New Baneshwor Branch
New Baneshwor, Pathamandu
1
/alchowk Branch
/alchowk, 3woyambhu
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2
*hamel Branch
*hamel, Pathmandu
Paushaltar Branch
Paushaltar, Bhaktapur
"
7habhil Branch
7habhil, Pathmandu
&
aitidevi Branch
aitidevi, Pathmandu
D
3atdobato Branch
3atdobato, Lalitpur
5
Balaju Branch
Balaju, Pathmandu
!
Puleshwor Branch
Palimati, Pathmandu
Phandbari Branch
Phandbari, 3hankhuwashabha
"
7harikot Branch
7harikot, $olakha
"1
$hulikhel Branch
$hulikhel, Pavre
"2
0orkha Branch
0orkha unicipality, 0orkha
"
Besisahar Branch
Besisahar, Lamjun%
""
7handra%adhi Branch
7handra%adhi, Jhapa
"&
$hapashi Branch
$hapshi, Pathmandu
"D
An"n"5"r !r"n#h
An"n"5"r "th"n2>
"5
Sin""n5"l !r"n#h
"th"n2>,etro=olit"n #it; Sin""n5"l
"!
0warko Branch
G?"r%o !"l%>"ri
"
Att"r%hel !r"n#h
'or="tiAtt"r%hel "th"n2>
&
'"n"%=>r !r"n#h
'"n"%=>r Dh" Dh"n>h"
>3ource: www#nabilbank#com?
25 | P a g e
Appendix II: List of Commercials Banks in Nepal S.No N N"e
O=er"tion D"te (A.D.&
He"2 Offi#e
1
Nepal Bank i!i"e#
1937$11$15
%a"h!an#&
2
Ra'"riya Bani(ya Bank
1966$01$23
%a"h!an#&
3
Agric&l"&re )e*el+p!en" Bank "#.
1968$01$02
%a"h!an#&
4
NAB, Bank i!i"e#
1984$07$16
%a"h!an#&
5
Nepal ,n*e'"!en" Bank i!i"e#
1986$02$27
%a"h!an#&
6
-"an#ar#
1987$01$30
%a"h!an#&
har"ere#
Bank
Nepal
i!i"e#. 7
/i!alayan Bank i!i"e#
1993$01$18
%a"h!an#&
8
Nepal -B, Bank i!i"e#
1993$07$07
%a"h!an#&
9
Nepal Bangla#e'h Bank i!i"e#
05$06$1994
%a"h!an#&
10
*ere'" Bank i!i"e#
1994$10$18
%a"h!an#&
11
Bank + %a"h!an#& i!i"e#
1995$03$12
%a"h!an#&
12
Nepal re#i" an# +!!erce Bank
1996$10$14
R&pen#ehi
1998$07$17
hi"an
1998$07$21
M+rang
i!i"e# 13 14
&!bini Bank i!i"e# Nepal ,n#&'"rial +!!ercial Bank "#
15
Machhap&chhre Bank i!i"e#
2000$10$03
P+khara
16
%&!ari Bank i!i"e#
2001$04$03
%a"h!an#&
17
a!i Bank i!i"e#
2002$04$03
Birg&n( Par'a
18
-i##har"ha Bank i!i"e#
2002$12$24
%a"h!an#&
19
l+bal ,M Bank "#.
2007$01$02
Birg&n( Par'a
20
i"ien' Bank ,n"erna"i+nal "#.
2007$6$21
%a"h!an#&
21
Pri!e +!!ercial Bank "#
2007$9$24
%a"h!an#&
22
-&nri'e Bank "#.
2007$10$12
%a"h!an#&
23
Bank + A'ia Nepal "#.
2007$10$12
%a"h!an#&
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24
ran# Bank Nepal
2008$05$25
%a!ala#i
25
NMB Bank "#
1996$11$26
Babar!ahal
26
%i'" Merchan" Banking inance "#.
2003$02$21
%a!alp+khari
27
ana"a Bank Nepal "#
2010$04$28
Ne Bane'h+r
28
Mega Bank Nepal i!i"e#
2010$07$23
%an"ipa"h%"!
29
+!!er :r&'" Bank
2010$09$20
%a!ala#i
30
i*il Bank "#
2010$11$26
%a!ala#i
31
en"&ry Bank "#
2011$03$10
P&"ali'a#ak
32
-ani!a Bank
Naal ;-+&rce< .nabilbank.c+!=
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