SECTION I

INTRODUCTION

1.1 General Background

1.1.1 Meaning of Bank

A Bank is an organization whose primary functions are concentrated with accumulation of idle money from General public and advancing loan to individuals, traders industries and business houses for expenditure. Generally the bank collects money from those who have spare of it from their income on which it pays interest regularly. The money thus accumulated can be invested different sectors such as business, foreign trades, agricultures industry and social works for which it charges certain percentages of interest which is higher than interest paid by the bank to accumulated fund. Such charges on advancing loan is the major revenue sources of the bank by which it can bear administration expenses incurring in the process of operating its activities. Thus the bank is a good mediator between depositors and loan takers. To know the precise and clear meaning of bank, some experts definition can be given. Chambers twentieth century dictionary defines a bank as an Institutions for keeping, lending and exchanging etc of money.

According to Crowther A banker is a dealer in debts. The bankers business is then to take the debts of other to people, to offer his own in exchange and thereby to create money. According to World Bank, Banks are the financial institutions that accept funds in the form of deposit repayable on demand or short notice.

Therefore a bank is a financial institution, which collects deposits and in turn provides loans by creating credit. Today banking is such a vague tern, it does a lot more then deposits and credit like remitting money, issue of money guarantee, letter of credit, controlling, payment, other agency functions, monetary activity of country etc. are also the major function of bank. This multiplicity of bank service and function has led to a bank being labeled financial supermarket.

1.1.2 Origin and Evolution of Banks:

There is no unanimity among the economists about the origin of the world banking the term bank derives from the Italian World Bank which refers to the bench on which the banker would keep its money for lending and exchanging. Some person tract its origin from the Latin word Bancus which refers to the bench on which the banker would keep its money and his record it is believed that the ancestors of modern banking system were merchants goldsmiths and money lenders. Modern banking showed its seed in the medieval Italy despite strong Christian prohibitions against charging interest.

The first banks called the banks of Venice were established in Venice Italyin 1157A.D to finance bank of Genoa was establish in 1401and 1408 respectively. After that bank of Amsterdam was established in 1609A D when the bank ofEngland was established in 1940 it played the vital role for the development of modern banking system. After its establishment banks spread all over the world.

1.1.3 Banking history in Nepal

In the context of Nepal like as in other country the goldsmiths and landlord was the ancient banker. The Nepalese people were highly exploited by Shahu Mahajan by charging higher interest rate compound interest rate and even by manipulating the principal amount .if we try to see the history of banking transaction in depth evidence of money lending function are found in practice before 8th century. In 780 B.S. Gunakamadev the ruler of Kathmandu reconstructed Kathmandu valley by borrowing debt from the people .14th century Tanka dhari system had been running .in the period of Ranodip Singh in Kathmandu established an office called Tejarath Adda from this office the government distributed salary t0 their employees and provided loans to government employment @ 5% of interest against the security of gold sliver etc.

Because of the development of economic activities in Nepal the above institution could not be fulfilled the need of people so in Kartik 30, 1994, BS Nepal bank limited was established as one of the semi government commercial bank which had 10 million authorized capital and 842000paod of capital .it has done the pioneering function in spreading the banking habits among the people. Having felt a need of central bank to control and direct the commercial bank and help the government for making monetary policies Nepal Rastra Bank was set up in 14 Baisakh 2013 B.S.

To fulfill the growing credit requirement of the country the commercial bank Rastriya Banijya Bank was establish in 10th Bhadra 2022B.S Rastriya Banijya Bank is also to provide facilities for the economic welfare of the general public. Nepal is an agriculture country to develop agriculture system and industry agriculture Development Bank and Nepal Industrial Development Corporation was established in 2024BS and 2016 BS respectively.

The initiation of the financial sector liberalization policy by Nepal Rastra Bank a board of joint venture banks entered with the view to accelerate the race of development of nation. At present there are many joint venture banks, which are running successfully in a competitive environment. His majesty government deliberates policy of allowing foreign joint venture banks to operate in Nepalbasically targeted to encourage local tradition commercial bank to enhance their capacity through competitors efficiencies mechanization modernization and prompt customer service. Nepal Arab Bank LTD was established in 2041as a first foreign joint venture bank.

LIST OF LICESCED COMMERCIAL BANK IN NEPAL: S.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Name of commercial banks Nepal Bank ltd. Rastriya Banijya Bank Ltd. Agriculture Development Bank Ltd. Nabil Bank Ltd. Nepal Investment Bank Ltd. Standard Chartered Bank Nepal Ltd. Himalayan Bank Ltd. Nepal SBI Bank Ltd. Nepal Banladesh Bank Ltd. Everest Bank Ltd. Bank of Kathmandu Ltd. Nepal Credit and Commercial Bank ltd. Lumbini Bank Ltd. Nepal Industrial and Commercial Bank Ltd. Machhapuchre Bank Ltd. Kumari Bank Ltd. Laxmi Bank Ltd. Siddhartha Bank Ltd. Global Bank Ltd. Citizens Bank International Ltd. Prime Commercial Bank Ltd. Sunrise Bank Ltd.

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Bank of Asia Nepal Ltd. DCBL Bank Ltd. NMB Bank Nepal Ltd. Kist Bank Ltd. Janata Bank Nepal Ltd. Mega Bank Nepal Ltd. Commerce and Trust Bank Nepal Ltd. Civil Bank Ltd. Century Commercial Bank Ltd.

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Source: www.nrb.org.np 3 FUNCTIONS OF COMMERCIAL BANKS: accepting Deposits: Advancing of Loans: Issuing of letters of credit to customers Issuing of bank draft and travels cheque etc for transfer of funds from one place to another. Dealing in foreign exchange and financial foreign trade by accepting or collecting foreign bill of exchange. Underwriting loans to be raised public bodied and corporations. Providing safety vaults or lock for the safe custody of valuables and securities of the customers. Remittance of money Agency Functions

OVERVIEW OF NEPAL INVESTMENT BANK LTD.

Nepal Investment Bank Ltd. (NIBL), previously Nepal Indosuez Bank Ltd., was established in 1986 as a joint venture between Nepalese and French partners. The French partner (holding 50% of the capital of NIBL) was Credit Agricole Indosuez, a subsidiary of one the largest banking group in the world.

With the decision of Credit Agricole Indosuez to divest, a group of companies comprising of bankers, professionals, industrialists and businessmen, had acquired on April 2002 the 50% shareholding of Credit Agricole Indosuez in Nepal Indosuez Bank Ltd. The name of the bank has been changed to Nepal Investment Bank Ltd. upon approval of banks Annual General Meeting, Nepal Rastra Bank and Company Registrars office with the following shareholding structure.

A group of companies holding 50% of the capital Rashtriya Banijya Bank holding 15% of the Capital. Rashtriya Beema Sansthan holding the same percentage. The remaining 20% being held by the General Public (which means that NIBL is a Company listed on the Nepal Stock Exchange).

5 Different account offered by NIBL

Normal Saving Account

E-Zee Saving account Social Deposit Account

Afnai Bachat Khata LOTUS Saving

E-Zee Student Account (ESA)

Keta Keti Bachat Khata

Different Loans Provided by NIBL

Home loan Education loan vehicle loan loan against Gold and silver

7Different services ATM Credit Card Debit Card Deposits eBanking Locker NTC Mobile Bill Payment Loans

Core Values and Ethical Principles:

Our core values tell us, our customers and the communities we serve, who we really are; what we are about; and the principles by which we pledge to conduct business. In essence, we believe that success can only be achieved by living our core values and principles: Customer Focus: At NIBL, our prime focus is to perfect our customer service. Customers are our first priority and driving force. We wish to gain customer confidence and be their trusted partner. Quality: We believe a quality service experience is a paramount to our customers and we are strongly committed in fulfilling this ideal. Honesty and Integrity: We ensure the highest level of integrity to our customers, creating an ongoing relationship of trust and confidence. We treat our customers with honesty, fairness and respect. Belief in our people: We recognize that employees are our most valuable asset and our competitive strength. We respect the worth and dignity of individual employees who devote their careers for the progress of the Bank. Teamwork: We are a firm believer in team work and feel that loyal and motivated teams can produce extraordinary results. We are drived by a performance culture where recognition and rewards are based on individual merit and demonstrated track record. Good Corporate Governance: Effective Corporate Governance procedures are essential to achieve and maintain public trust and confidence in any company, more so in a banking company. At NIBL, we are committed in following best practices resulting in good corporate governance. Corporate Social Responsibility: As a responsible corporate citizen, we consider it important to act in a responsible manner towards the environment and society. Our commitment has always been to behave ethically and contribute towards the improvement of quality of life of our people, the community and greatly the society, of which we are an integral part.

Strategic Objectives

Strategic Objectives

To develop a customer oriented service culture with special emphasis on customer care and convenience To increase our market share by following a disciplined growth strategy

To leverage our technology platform and pen scalable systems to achieve cost-effective operations, efficient MIS, improved delivery capability and high service standards To develop innovative products and services that attracts our targeted customers and market segments To continue to develop products and services that reduce our cost of funds To maintain a high quality assets portfolio to achieve strong and sustainable returns and to continuously build shareholders value To explore new avenues for growth and profitability