Kathmandu University School of Management

Nepal College of Management

Internship Report

Title of the project: Customer Service

As part of the requirement for BBA Programme

Internship Programme Code: RIS 401

Internship Employer
Laxmi Bank Ltd., Sukedhara and Lagankhel Branch

Work Supervisor: Mrs. Amita Rayamajhi

Mr. Sohan Tamrakar

Intern
Mr. Madhu Sudan Koirala, KUSOMs Redg No: A007231-06

31 May 2010
 PREFACE

As per the curricular of Nepal College of Management affiliated to Kathmandu

University, I was assigned to undergo an internship report in an organization during the
last semester of the program after a proper study in the required field.

To conduct this study, I choose Laxmi Bank Limited (LXBL), earlier known as Hisef
Finance. During the period of this study, I tried to discover as much as possible about
customer services on Customer Service Department and conducted a research on
Customer Service Department at Laxmi Bank and Collaboration of Laxmi Bank
of Sukedhara with Subisu Cable for its Bill Payment.

The purpose of this project work was to relate the theoretical knowledge acquired in our
academic period in a real life situation and gain the practical knowledge as well as
experience. The project also had an intension to help me understand, analyze and present
the basic practices in the Nepalese commercial bank. It also helped me to gain an insight
of various players in the banking sector and helped to analyze the industry as a whole.
SIGNATURE PAGE

I/We certify that I/We have read this document and in my/our opinion, it is satisfactory in
scope and quality as internship program in partial fulfillment for BBA Course held at
Nepal College of Management, Kathmandu University during the spring of 2010.

(Signature)
Project Evaluator
Nepal College of Management
 DECLARATION

I, the undersigned declare that this project entitled is a result of my own study and
research carried out in the year 2010. It has not been previously submitted to any other
Universities or Examination.

Signature:

Mr. Madhu Sudan Koirala

BBA 2006-2010

Nepal College of Management

 ACKNOWLEDGEMENT

I express my immense feeling to those people and institutions that have throughout
extended their help in various ways in order to complete this project.

I am greatly obliged to thank and express my gratitude to Kathmandu University for

designing such a curriculum which allows the student to acquire as well as enhance
knowledge of real work setting through internship.

I am even thankful to Laxmi Banks Head Office, Sukedhara, and Lagankhel Branch, for
accepting me as intern and giving me the opportunity to learn more. My special thanks
Head of Human Resource, Mr. Amit Sharma, for accepting my letter of request to work at
LXBL.

I am indebted to Mr. Amit Adhikari, Sukedhara Branch Manager and Euden Koirala,
Lagankhel Branch Manager, who supervised me during the period of internship. I would
also like to thank to personnel of different departments, especially Mr. Sabin Shakya, Mr.
Bipin Karmacharya, Mrs. Surina Shakya, Mr. Rajan Shrestha, Ms. Isha Tamrakar, and
Mrs. Abhilasha Bhandari. At the same time, I am also grateful to all those who guided me
and helped me in getting an insight into the functioning of different departments.

I would even like to specially thank Nepal College of Management. My, special thanks to
Principal Mr. Rabi Man Shakya and Mr. Manoj Nepal for always guiding me.

Last but not least; I would like to thank Ms. Poonam Pandey and Ms. Astika Karki and
everyone who has directly or indirectly helped me in this project.
 Executive Summary

Laxmi bank was established in April 2002 as 16th commercial bank in Nepal. It was
merged with HISEF Finance Limited as the first generation finance company. Its head
office is in Birgunj and corporate office is in Hattisar, Kathmandu. Products offered by
Laxmi Bank are: Loan, Credit cards, Savings, Bancassurence, and Microfinance.

Laxmi Bank today offers the widest range of personal banking solutions and is a tough
leader in the retail banking space. Apart from a strong technology that supports the
Banks electronic service delivery systems such as the internet banking, mobile banking
(mobile money) and ATMs. Laxmi Bank continues to increase its distribution network in
a strategic manner and currently has 22 branches 9 within Kathmandu valley.

The mission statement of the company is stated as Laxmi Bank is committed to

excellence in delivery of entire gamut of financial services in order to achieve sound
business growth and maximize stake holder values by embracing team spirit, progressive
technology and good corporate governance.

With a view to providing safe, seamless, quick and advance banking services, the bank
has been heavily investing in contemporary banking technologies.

The bank is concerned with rendering quick and prompt banking services to the
customers, to make a qualitative lending in the Nepalese market to support all kinds of
businesses including personal needs of the Nepalese citizens. There are around four
hundred staff members, who are working for LXBL. The bank focuses on providing
customer service and extends personalized service to gain confidence of the customers
who are still deprived of basic banking service. Throughout my Internship tenure, I had
worked under Customer Service Department at Sukedhara and Lagankhel Branch.

I choose to perform my internship at banking industry to better understand the role of

banks in the economy. Through the environment analysis, banking industry is only one of
the major industries, which is able to place as a strong investment sector despite of large
competitor base. If we look after the current scenario and market then, about the banking
scenario of Nepal there are all together around twenty seven, commercial banks in Nepal,
were all these commercial banks are running on profit compared to other industries such
as textile, carpets, tire industry. Despite of the fact, that Nepal is developing nation with
primitive market structure, every commercial bank are capable of turning profit out of
every activities that they make. Internship at LXBL for 3 months has been one of the
most significant internship experiences. Although its my first internship, it has helped me
to analyze my internal strength and weakness and developed me professionally. During
this internship I worked mainly on two projects one is on Customer Service
Department and another is on Collaboration of Laxmi Bank of Sukedhara with
Subisu Cable for its Bill Payment. This project helps me to mould myself with real
world scenario. With continuous hard work and effort at CSD I was able to develop good
relationship with LXBL staffs and management as well as with unknown faces. This
experience taught me importance of personal relationship and consequently, helped to
develop interpersonal relationship skills.
 LIST OF ACRONYMS

LXBL - Laxmi Bank Limited

NRB - Nepal Rastra Bank
KU Kathmandu University
NCM Nepal College of Management
KUSOM Kathmandu University School of Management
CSD Customer Service Department
BOD Board of Director
ATM Automated Teller Machine
GM General Manager
BM Branch Manager
GSA Green Saving Account
SWOT Strengths, Weaknesses, Opportunities and Threats
RBB Rastriya Banijya Bank
GDP Gross Domestic Product
CSR Corporate Social Relationship
IFAS Internal Factor Analysis
EFAS External Factor Analysis
SFAS Strategic Factor Analysis
SRB Sunrise Bank Limited
P/L Profit and Loss
 Table of Contents
Part One
INTRODUCTION

Page No.
1. Background
2. Goal/Objectives of Internship
3. Roles/Jobs performed in the Internship
4. Roles/Jobs of departmental head/Interns Supervisor

Part Two
INTRODUCTION OF INDUSTRY & COMPANY
Section I
1. Introduction of the Company
2. Mission/Purpose/Objectives/Goals of the Company
3. Organizational Strategies
4. Major products of the Company
5. Organizational structure

Section II
1. Organizations General and Competitive Environment

Part Three
PRESENTATION OF MAJOR PROJECT/S UNDERTAKEN
Section I: Introduction
Project A
1. Introduction of the Project
 2. Objectives of the Project
3. Scope and Limitations of the Project

Project B
1. Introduction of the Project
2. Objectives of the Project
3. Scope and Limitations of the Project

Section II: Conceptual Framework

1. Review of related Literature

Section III: Methodology

1. The Methodology and Procedure of Project/s

Section IV: Presentation and Analysis of the Project/s

1. Analysis of the Project
2. Findings from the Analysis of the Project

Section V: Conclusions
1. Project/s specific Conclusion
2. Suggestions

Part Four
REFLECTION OF INTERNSHIP
References
Appendix
List of Tables
Table 1: Commercial Bank in Nepal
Table 2: Competitive Analysis in terms of Product and Services offered
Table 3: Methodology undertaken
Table 4: Distribution of Questionnaire
Table 5: Household Survey using Internet and different Service Provider
List of Figures

Figure 1: Process of Deposit

Figure 2: Process of Payment

Figure 3: Credit Process

Figure 4: Major Functions of Commercial Banks

Figure 5: Ownership Structure

Figure 6: Organizational Chart of Laxmi Bank

Figure 7: Environmental Analysis

Figure 8: Porters Analysis

Figure 9: Conceptual Framework

Figure 10: Classification According to Gender

Figure 11: Classification According to Age

Figure 12: Classification According to Occupation

Figure 13: Ranking the Customer Service

Figure 14: Satisfaction Level of Customers

Figure 15: Requirement for Extra Facility

Figure 16: Reason for using LXBL Service

Figure 17: Selective Service Requirement

Figure 18: Deposit Account Possessed to other bank by LXBL Customers

Figure 19: Product mostly used

GANTT CHART

SN Task March April

1 Reviewing bank profile, introduction with

supervisor and various department, work on
various department and did marketing
2 Literature review, field visit and secondary
data collection
3 Focus group discussion

4 Questionnaire preparation and review

5 Questionnaire distribution and data

collection
6 Data entry and analysis

7 Writing report and presenting it to BM

8 Report writing of overall internship

9 Finalizing internship report

 Part One

INTRODUCTION

1. BACKGROUND
Nepal College of Management affiliated to Kathmandu University have set up Internship
Program under which the students are required to involve in one of the established
organization as Interns and prepare internship report by working there. This report is a
part of the undergraduate program under Kathmandu University School of Management
(KUSOM) which offers management internship to the students pursuing BBA in the
eighth semester. The internship is an eight week program designed to provide students an
opportunity for a meaningful career-related experience in a real organizational setting
before they graduate. It gives the students an opportunity to practice and expand their
skills and knowledge learned in the classroom in substantive work situation. In addition,
it will help the students earn credit and increased marketability for the permanent job
search while learning more about a specific field and applying classroom knowledge in a
corporate environment. Bookish knowledge only is not as useful as the knowledge
obtained in the real world. This internship program provides an opportunity to learn in
the real work situation and an experience which can help the students to achieve their
goals.

Laxmi Bank Limited is a financial intermediary who is primarily responsible for the
transfer of monetary resources from the net savers to the net users. It is committed to
fulfill the financial requirements of the people from different walk of life. Laxmi bank
has head office at Birgunj and corporate office at Hattisar, this bank provides modern
banking facilities in safe and sound manner. This bank was chosen for the internship
purpose because it was founded by the key economic players of Nepal and I had a keen
interest on knowing how it worked from the very beginning of its establishment. I wanted
to learn how the different department worked and how the employees communicated with
the customers. Learning is a greatest experience one can ever have which can help
achieve the dreams of life. I wanted to learn as much as possible about the bank, and
the system by which it works.
2. GOALS AND OBJECTIVES OF INTERNSHIP

While joining Laxmi Bank, I wanted to learn as much as possible. I knew that an
internship is an opportunity to learn which helps us put the theories we learnt in the books
into practice. It will help us build our career. It is the period when we will be able to
groom ourselves and become ready to join the real world. During the internship period, I
had planned to achieve the following goals:

To learn about the overall function of different departments of Laxmi Bank

(LXBL) namely Customer Service Department (CSD), Credit Department and
Operations in brief.

To learn as much as possible from the members of the bank through good and
friendly relationship.

To learn about different products of the bank.

To increase communication skills and interpersonal skills by communicating

with the customers in the CSD.

To increase the marketing skills by going for marketing with the seniors and
selling the products.

To increase the PR by knowing different people.

To conduct a customer satisfaction survey related to the customers satisfaction

in terms of different departments to which the customers are directly
interacting.

To find out what the customers attitude towards the service provided by the
bank.
 To use the theoretical knowledge from the coursework to conduct survey and
analyze the result.

To learn more about what happens in the banking sector and compare it to the
theoretical knowledge obtained in the lectures.

3. ROLES/ JOBS PERFORMED IN INTERNSHIP

I have spent majority of the time in Customer Service Department but the job performed
by me was not limited to CSD. What I believe as an intern I should learn overall
functions of the bank and I did the same. During the internship period, the intern was
placed in various departments and was expected to do the general tasks that are carried
out by the respective employees. In addition, the intern was assigned with various
projects to learn the real work experience. The details of the jobs performed during the
internship programs are as follows:

Customer Service Department

This is the first point of contact between the employee and the customers. This
department is responsible for handling the queries of the customers, selling the
deposit products, issuing the cheque books, account statements, ATM cards,
handling all the A/C opening forms, preparing the remittance form for the
customers and all other general functions.

Roles of the intern:

Handling the queries of the customers about their accounts and about the
products.
 Suggesting the customers about the bank products and services.

Helping the customers fill the account opening form and the remittance
form.

Preparing the cheques and issuing them.

Issuing the ATM cards.

Filling the account closing form and destroying the old cheque books and
the ATM cards.

Operations department

The operations department included the clearing, the teller and the accounts
section. There wasnt separate department as the clearing department or the
accounts department.

Clearing section

The clearing section is responsible to collect the cheques of the other banks which are
presented by the customers and then present in the Nepal Rastra bank for the clearing
process. They then collect the cheques of LXBL which are brought by other banks.

Role of the intern:

To enter manually the outward billing cheques (OBC) in the register.

To maintain the OBC to be taken to the NRB.

Teller
The teller handled all the transactions involving the cash. It carried out the deposits,
withdrawals and transferred the amount from one account to the other.

Role of the intern:

To learn the general deposit and withdrawal transaction entry in the Flexcube
software

To sort and bundle the cash.

To assist the teller when large transactions come.

To present the slips of the large transactions to the operation head to clear up the
stacked transactions.

Accounts

The accounts section is responsible for maintaining the various accounting records of the
bank. It has to maintain the records of the income, expenses, cheques that goes for the
clearing, the issue of managers cheque, etc. They have to maintain proper records of the
accounts of the bank at the other banks and issue cheques whenever cash is required at
the teller.

Roles of the intern:

 To assist the accounts section member in entering the transactions of the
salary account.

To prepare the journal vouchers of the expense.

Credit Department

This is the department which the customers approach when they are in need of loans. The
department is responsible to analyze the customers who apply for the loans. They
evaluate the income flows of the client and also their collateral. This is one of the main
departments in any bank.

Roles of the intern:

To learn the files of the different types of loan.

To learn the documentation requirements for the application of the loan and the
procedure that is carried out in any loan process

Due to liquidity crunch in Nepal, NRB has passed a circular that restricts the process
of lending and loan approval. So, to fight with such economy crisis all the commercial
banks started creating new scheme and products to attract deposits. In align with this; I
was approached with the project-Collaboration of Laxmi Bank of Sukedhara with
Subisu Cable for its Bill Payment

4. ROLES OF DEPARTMENTAL HEADS AND THE INTERN

SUPERVISOR

Customer Service Officer

CSD is one of the most important departments for reasons that they actually give the
impression to the customers of how the overall company works. People judge a company
looking at the customer service department. Mr. Sohan Tamrakar of Lagankhel Branch
and Amita Rayamajhi of Sukedhara branch are responsible for the following tasks:
 To maintain good customer relations

To provide high quality and personalized services to customers

To entertain the queries of customers regarding various products and information

To provide prompt service to the external as well as internal customers efficiently

maintaining harmonious relationship with them

Help the customers open the new accounts in the bank

Assist the customers through the cumbersome procedure of account opening

Answer the telephone queries

Check the account balance of customers

Provide customers with bank statements

Provide customers with the debit cards

Assist customers in the e-banking

To coordinate with operational staff to achieve specified target and overall

objective of bank

The job purpose of the supervisor of CSD is:

Provide efficient service to all the customers

Attract and record deposits from individual customers and companies

Thus, from the responsibilities and job purpose and personally working in the CSD for
about two month, interns got a glimpse of how hectic and how demanding the work at
this department is.

Clearing section

This is the section which collects all the cheques received of the other banks and then
goes to the clearing house for the exchange with the respective banks so that the
customers get their payment amount on time. Mr. Bipin Karmacharya is responsible for
following task:

To collect and enter in the register the outward cheques coming in the bank.

To enter the outward cheques in the system.

To ensure that the cheques are properly stamped.

To go to the clearing house for the exchange.

Teller

The teller is mainly responsible for taking deposits and payment of cash. They are also
responsible for the transfer of funds from one account to another.

The roles of the staff at the teller are as follows:

Maintain the positive relationship with the customers.

Accept the cash deposits and make payment of cheques and self withdrawal slip
after verifying the signatures.

Provide additional services such as payment of remittance, exchanging the foreign

currency, etc.
 Reconcile timely the amount in the teller with the amount in the cash flow of the
system.

At the end of the day, list all the transactions for the day and present to the head
for reconciliation.

Figure 1: Process of Deposit Figure 2: Process of Payment

As the name implies, credit or loan department is responsible for giving different types of
loans to the needy customers. Giving loans is the most risky function of the bank, as there
is no cent percent gurantee that the loan taker repays the loan. So the loan officer needs to
do their homework thoroughly. Mrs. Surina Shakya is the loan officer. The major
responsibilities of Mrs. Shakya are:

Check and verify the collateral

Inspect whether the loan will be recovered within time

Authenticate if the loan is taken for the actual purpose

 In order to verify if the loan is for actual purpose, site visits are done in different
places

Progress report is prepared regularly

The credit process is an extensive process which needs a lot of documentation and
evaluation. The credit officers have to do a lot of work and have to be extra careful while
analyzing the credibility of the probable client. The loan process is carried out by the
credit department is shown in the following diagram:
 Figure 3: Credit Process

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In general, we usually see the tendency of building a house for personal use from the
money that is taken as loan from the bank for the purpose of building a grocery store.
This is just one example of the fraudulent activity that people indulge them into. Thus,
the officers of the loan department need to be alert all the time to see where the money is
channeling.
 Part Two

INTRODUCTION OF COMPANY

1. Introduction to Commercial Banks

The commercial banks are those banks that pool together the saving of community and
arrange for their productive use. They activate the idle money to the different productive
areas. They supply the financial needs of modern business by various means. Most of the
banks in the world are found established with a view to finance and help in developing
trade, industry and commerce; In fact, commercial banks can be defined according to the
function they perform, like acceptance of deposits, advancing loan, agents, etc.

Figure 4: Major Functions of Commercial Banks

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M anagem age
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T hrift or F unction n Insuran
S aving ce
F unction F unctio
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P aym e MOD
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Commercial Bank in Nepal

The first organized institution to carry out the function of borrowing and lending was
established in 1994 B.S. (Nepal Bank Limited) was established as the first commercial
bank in Nepal. Later Rastriya Banijya Bank was established on 2002 B.S. to give access
to banking to as much individual as possible. The establishment of RBB helped to
enhance the domestic banking services and also helped to deal in foreign trade with move
ease. After that many commercial banks were established, this helped in enhancing the
banking knowledge to almost every individual of the country.

Today, several commercial as well development banks that have been and are working
smoothly in Nepal since many years now, some are newly established and some have
been promoted to commercial banks from other class of bank. The list of commercial
banks that exist in Nepal till 2067 B.S. along with their establishment date, head office
and their joint venture partner are as follows:

Table 1: Commercial Banks in Nepal

S. Commercial Banks Established Head Office Joint Venture
No (BS) Partner

1. Nepal Bank Ltd. 1994/07/03 Kathmandu Sole Operation

2. Rastriya Banijya Bank 2022/10/10 Kathmandu Sole Operation

3. Agriculture Development 2024/11/07 Kathmandu Sole Operation

Bank

4. Nabil/Nepal Arab Bank Ltd. 2041/03/29 Kathmandu Dubai Bank

5. Nepal Investment Bank Ltd. 2042/11/16 Kathmandu Indo Suez Bank

6. Standard Chartered Bank 2043/1016 Kathmandu Grindlays Bank

7. Himalayan Bank Ltd. 2049/10/05 Kathmandu Habib Bank of

Pakistan

8. Nepal Bangladesh Bank Ltd. 2050/02/23 Kathmandu IFIC Bank,

Bangladesh

9. Nepal SBI 2050/03/23 Kathmandu State Bank of

Bank India
 10. Everest Bank Ltd. 2051/07/01 Kathmandu Punjab
National Bank

11 Bank of Kathmandu Ltd. 2051/11/28 Kathmandu Siam

Commercial
Bank

12. Nepal Credit & Commerce 2053/06/28 Siddharthanagar Bank of

Bank Ltd. Ceylon

13. Lumbini Bank Ltd. 2055/04/01 Narayanghat Sole Operation

14. Nepal Industrial & 2055/04/05 Biratnagar Sole Operation

Commercial Bank Ltd.

15. Kumari Bank Ltd. 2056/06/24 Kathmandu Sole Operation

16. Machapuchhure Bank 2057 Pokhara Sole Operation

17. Laxmi Bank Ltd. 2058/06/11 Birgunj Sole Operation

18. Siddhartha Bank Ltd. 2058/06/12 Kathmandu Sole Operation

19. Global Bank Ltd. 2063 Birgunj Sole Operation

20. Citizen Intl Bank 2063 Kathmandu Sole Operation

21. Prime Bank 2064 Kathmandu Sole Operation

22. Sunrise Bank 2064 Kathmandu Sole Operation

23. Bank of Asia Nepal 2064 Kathmandu Sole Operation

24. Development Credit Bank 2065 Kathmandu Sole Operation

25. Nepal Merchant Bank 2065 Kathmandu Sole Operation

26. KIST Bank Ltd. 2066 Kathmandu Sole Operation

27. Janata Bank Nepal Ltd. 2067 Kathmandu Sole Operation

Introduction of Laxmi Bank Limited

Laxmi Bank, one of the leading commercial bank of Nepal, was incorporated in April
2002 as the 16th commercial bank in the country with Rs. 15 billion from Birgunj. After
merged with HISEF finance company at 2004, bank has widened its services and
operation. Its corporate office is located at Hattisar, Kathmandu.

Laxmi bank, as a pioneer in introducing many innovative products and marketing

concepts in the domestic banking sector, represents a milestone in the banking history of
Nepal as it started an era in modern with customer satisfaction measured as a focal
objective while doing business.

Laxmi Bank today offers the widest range of personal banking solutions and is a tough
leader in the retail banking space. Apart from a strong technology that supports the
Banks electronic service delivery systems such as the internet banking, mobile banking
(mobile money) and ATMs. Laxmi Bank continues to increase its distribution network in
a strategic manner and currently has 22 branches 9 within Kathmandu valley.

Due to strong information technology, high standards of corporate governance,

innovation and prudential risk management Laxmi Bank have proven its superiority
amongst other.

Please refer Appendix 1, 2 and 3 to know more about Balance Sheet, P/L Account
and Principle Indicators that has key influence on Laxmi Banks performance.

Ownership Structure
Promoter Group representing the countys leading business groups 55.42%
Citizen Investment Trust, a government of Nepal undertaking 9.02%
General Public comprising of more than 10,000 shareholders 35.56%

Figure 5: Ownership Structure

 36%
General Public Citizen Investment Trust Promoter Group
55%

9%

Mission Statement
Committed to excellence in delivery of entire gamut of financial services in order to
achieve sound business growth and maximize stakeholder values by embracing team
spirit, progressive technology and good corporate governance.LXBL is committed to
execute this mission while ensuring the highest levels of ethical standards, professional
integrity, corporate governance and regulatory compliance.

Vision Statement
A bank with the best asset book
Provider of most integrated financial services
Key player and a thought leader in the financial services
Best IT capability
Preferred employer in the financial sector

Core Values and Ethical Principles

The core values lets the institute, customers and the communities know what they serve,
who they really are and the principles by which they pledged to conduct business. In
essence, the bank believes that the success can only be reaped by living their core values
and principles they are- customer focus, quality, honesty and integrity, belief in staff,
good corporate governance, corporate social responsibility and teamwork.
Organizational Objectives
To explore new avenues for growth and profitability
To continue to develop products and services that would reduce cost of funds
To develop a customer oriented service culture with special emphasis on customer
care and convenience
To increase the market share by following a disciplined growth strategy
To leverage the technology platform and open scalable systems to achieve cost-
effective operations, efficient MIS, improve delivery capability and high service
standards
To develop innovative product and service that would attract targeted customers
and market segments
To maintain a high quality asset portfolio to achieve strong and sustainable returns
and to continuously build shareholders value

Product and Services of Laxmi Bank

1. On the basis of Deposits

Deposit services

Current Account Green Saving Account Orange Saving

Saving Account Super Women Saving Laxmi Saving

Normal Saving Account Shakti Saving Money Market Account

Minor Saving
Call Account Pay Roll Saving
Personal Reserve
Investor Saving
Regular Saving Account

Fixed Deposit Super Women Gold

Manokamana Saving Deposit
2. On the basis of Loans and Advances
 Loans and Advances

Overdraft Term Loan Personal Loan

Small Business Loan Auto Loan Supply Finance

Working Capital Loan Home Loan Bill Purchases or

Negotiation

4. On the basis of Remittance Products

Remittance Products

Express Money Transfer SWIFT Transfer Demand Drafts

Travelers Cheque Fund Transfer Remittance Inward-

Outward
Clearing/Collection ABBS

4. On the basis of Card Products

Card Services

ATM/Debit Card Visa Credit Card

5. On the basis of Auxiliary Services

 Auxiliary Services

Bancassurance Internet Banking Treasury Services

Financial Advisory Mobile Money Travel Related

Services

Safe Deposit Locker SMS Alert and Banking Portfolio Management

Services

Organizational Structure

The main body of LXBL is centered in the Board of Directors (BOD) which consists of
one chairman and 9 directors. This body makes the strategic decisions and also develops
various policies and strategies to materialize its vision and mission. These decisions are
communicated to the Chief Executive Officer (CEO) who with the support of GM and
other Officer executes the plans and responsibilities in various departments. The
organizational structure of Laxmi Bank is as follows:

Figure 6: Organizational Chart of Laxmi Bank

Board & Board Director

 Board of Director

Credit committee Planning Performance & IT Committee Audit

Personal Committee

Chairman and CEO Audit & inspection

General Manager

Assistant GM Deputy GM (Credit/Retail) Deputy GM

(Operations)

Head Retail Head Corporate

Head HR
Head
Customer Service Head Trade
General

Head Loan
Consumer Finance Head Credit
Head
Remittance

Deposit Marketing Branch Assistant GM

Coordinator

Head R&D
Head R&D Branches Credit Assistant GM

2. Organizations General and Competitive Environment

No organization exists in isolation. It is affected in one way or the other by the various
forces that occur in the environment. These forces are made up of opportunities and
threats. The environment can be divided into two main parts namely the internal
environment and the external environment.

Internal Environment

The internal environment includes the forces within the organization which affects the
success of the organization. An organization can be analyzed based on its resources,
culture, and structure. Laxmi Bank Limited has adequate resources adding value to the
company. These resources define the company distinctly in the market. The companys
corporate culture and how the organization is structured determine the strength or the
weakness of the company.

External Environment

It includes the general forces of the society that do not affect the short-run activities of
the organization but might affect the long-run activities of the organization. Such forces
are:

1. Economic Environment

These are the forces of the society such as GDP trends, interest rate, money supply,
unemployment level, inflation rate, disposable and discretionary income etc. that regulate
the economic variables of banking industry.

2. Technological Environment

These are the forces such as: new products, total government spending on R&D, internal
availability, telecommunication infrastructure etc. generate problem solving inventions.

3. Political-legal Environment
These are the forces such as: stability of government, law of hiring and firing, attitude
toward foreign companies, tax law, government regulation etc. which is beyond industry
control.

4. Socio-cultural Environment

These are the forces such as: family composition, workforce culture, lifestyle,
demographics etc. that regulates the norms, values, mores and customs of the society.

Figure 7: Environmental Analysis

Task Environment: Porters Analysis of Industry

Michael Porters analysis is an important analysis when it comes to analysis of the
environment. According to Porter, there are 5 forces which affect the working of any
industry. The 6th force analyzed here was added later. These forces are as follows:

Threat of new entrants: Due to the entry of new banks which come up with
competitive products, the existing banks have to come up with better products so
that they can survive in the market. The new banks come up with new ideas and
new technology. This makes the bank to take some action. Similar is the case with
LXBL. Many new banks have been commenced and many are in the pipeline.
Every now and then, LXBL has to analyze the environment and try hard to come
up with new products and satisfy their customers.
Rivalry among existing firms: The competition in the banking sector is very
high. As mentioned earlier, there are many banks on the pipeline, theres a cut-
throat competition. The existing banks are always analyzing each others footstep.
They have to make sure that they do not lag behind. The banks try to differentiate
themselves in terms of the services they provide. They also choose some moves
such as changing the prices, improving product differentiation, etc.
Bargaining power of the buyers: In case of the banks, the buyers are the
customers. The banking sector is becoming customer dictated. With many banks
providing the same services, the customers have choice and the service providers
just have to be the best. The bank has to think of the customers whenever they
want to make some actions. The bank has to be customer oriented in order to
attract the customers.
Bargaining power of the suppliers: By suppliers, we mean the depositors.
They are the ones who provide the bank with the deposits which the bank
intermediates to the borrowers. The higher the volume of the deposits, the more
the bank provides them priority and has a high say in the services they receive.
The bank to think of their welfare and provide them with cash whenever they
want it. They have a high bargaining power.
Threat of substitute products: All the banks are targeting the same groups be
it in terms of the sectors or in terms of the distribution of the customers. The
banks are now coming up with similar products. For example saving accounts for
 the elderly and for the females. Due to this there has been a high competition and
the banks have to try to differentiate their product from those of the competitors.
They need to have a better offer in order to beat the competition.
Relative power of other stakeholders (addition to Porters Theory): The
shareholders, government, local community, unions, interest groups, etc. are the
stakeholders. These people are affected by the decision of the bank. Therefore,
they have their say in the bank. Whenever the bank takes any action, these
stakeholders should be considered. The decisions made should be in the mutual
understanding of all the stakeholders and the bank.

Figure 8: Porters Analysis

Competitive Analysis

In this part of the report, a brief comparison of the competitors of LXBL is being done.
Among the many banks in Kathmandu, 2 among them are chosen as the major
competitors of LXBL. These banks are chosen because they are located in similar place
and their products are competitive. This makes the comparison more relevant as they
have similar customers. The following banks including LXBL have been selected for the
analysis which is as follows:

Laxmi Bank (LXBL)

Nabil Bank (NABIL)
Sunrise Bank (SRB)

The products and services offered by the above mentioned banks are compared for this
analysis which is as follows:

Table 2: Competitive analysis in terms of Products and Services offered

LXBL NABIL SRB

Interest Rate on Saving 8.00 % 6.00 % 8.50%

(Highest % offered on daily basis)

Fixed deposit 11.75 % 11.00 % 11.50 %

(Maximum interest offered)

Overdraft 11-14 % 8-12% 10-12.5%

(Maximum interest charged)

Term loan 11-14 % 8-12 % 10-12.5%

(Maximum interest offered)

Housing loan 11-14 % 8-12 % 10-12.5 %

(Minimum interest charged)

From the above table, it is clear that LXBL offers more interest than its competitor in
average.

Part Three

PRESENTATION OF MAJOR PROJECT/S

UNDERTAKEN

Section I: Introduction
Project A: Research on Customer Service Department

1. Introduction of the Project

In internship the best way to learn is from front desk. The starting phase in internship for
most interns always begins from interaction with customers. It is the service that may
either attract more number of customers or lessen their numbers. As I have done
internship both at Sukedhara and Lagankhel branch, I mainly focus on Customer Service
Department. Within the time interval of internship, the expectation of customers always
seemed to be increasing, whereas the department lacks to meet their demands this might
be because of lack in resources, numbers of staff, space problem and intense competition.

Due to this, management of LXBL is always interested about the reasons behind the gap
and way to mould the organization. CSD mainly focuses on complaints and queries of
actual and potential customers. Complaints might vary from poor services to late
responses and queries might be regarding way to improve gray areas. In my internship I
mostly spend times on counseling the customers regarding products and their benefits.

As a result, the attention always seemed to be moving towards the role and actual service
the CSD was rendering. Thus, I was provided with the project of analyzing the current
positioning of the CSD, problems and way to improve. I have to submit this project
within 15 days to the BM.

2. Aims and Objectives of Project

The major aim of conducting the research regarding CSD was to provide the management
with the information regarding current level of positioning CSD holds. This was
particularly aimed at customers perception and to some extent even to the staff of the
institute.

LXBL has always tried to formulate ways to provide with overall customer satisfaction.
For this not just for LXBL, but every CSD is the primary stoppage point, which in terms
of the responses it provides, can judge and fulfill the customers with their expectation. So
does LXBL, for which the research was conducted.
With the arousing complaints from the CSD, LXBL management was much concerned
about the performance and ways to bring about remedies to improve their level.

The major aim of Interns was not just limited to provide the management with the result,
but also to personally and professionally learn out of it. Focusing on the future career
path, benefiting out the observation and learning made, this research was performed.

So, paying attention to the concern of the management, and to gain more insight of CSD,
the major Objectives of conducting the research are as follows:

Find out the response of customers towards CSD

Comparison of LXBL and other banks CSD
Satisfaction as per the services provided by the department
Leveling of the department as per the customers experience while dealing
personally
Expectation of customers from the department
Internal/External factors affecting CSD

3. Scope and limitation of Project

The research undertaken for Customer Service Department represents with the response
from only one section of LXBL. The management was concerned with the problems
within CSD and ways to fight with it. The project has been done both at Sukedhara and
Lagankhel branch in 15 days which was quite difficult.

However, from the study undertaken, interns would be able to provide with the actual
figure of response of their current customers as well as view from the internal staffs.

With the presented results out of the study made, the institute could go ahead in
formulating and implementing necessary steps for the improvement of the department. In
brief the scope of the study focuses on:

Understand the response of customers toward CSD

 Recognize the expectation and preference of the customers from the respective
department
Improvement to be made in the department

During this project major constraint is information. Information plays an important role
in CSD. Both management and customers hesitate to share information which makes
somewhat difficult.

Project B: Collaboration of Laxmi Bank of Sukedhara with Subisu Cable for

its Bill Payment

1. Introduction of the Project

Sukedhara branch is the newly launched branch of Laxmi bank though there are various
services provided by Laxmi Bank. This might be the unique which basically deal with
benefits to Laxmi Bank and Subisu Cable from collaboration. Keeping customer
satisfaction on mind this project would be advantageous and help to keep touch with the
customers. Due to huge demand and success from other branches, Sukedhara branch also
felt the necessity and BM provided me and two of my friends (Ms. Poonam Pandey and
Ms. Astika Karki) to study the feasibility of the project in that locality.

For this project we visited Subisu Cable at Baluwatar and talked to the related person and
they were cooperative and responded positively. They even provided us some suggestions
and guidelines required to carry out the project. Thereafter, we manage to talk to the
existing customers who regularly visit to the bank, and the potential customer nearby
Sukedhara area. The need for carrying out this project was to provide more and better
service to retain the existing customers and attract the potential customers, to save the
time and burden of customer.

Due to the increase in financial institution there is cut throat competition, in order to cope
with this situation LXBL has chosen to generate money through various innovative
services. This project is also a way to generate money. We are required to present this
project within 1 week with background of Subisu, operating procedure and flow chart,
benefits with collaboration to all i.e. bank, Subisu and customers, promotional measures,
SWOT of Laxmi Bank with suggestion.

2. Aims and Objectives of the Project

The objectives of the project are given below:

To satisfy existing customers and to attract potential customers

To generate income

To launch innovative and easy service that is always desire by customers

To beat competition

For widening the range of products and services

To increase goodwill

To market LXBL through collaboration

To recommend management how the project can be successful

To benefit LXBL, Subisu as well as customers through this collaboration

To have practical knowledge in real world situation to interns

For studying feasibility of the project and suggesting the management

How to widen this service throughout Laxmi Bank branches

3. Scope and limitations of Project

Banking industry is highly service oriented. So its overall success depends on the
customers satisfaction regarding its service and their expectations. Project must always
focus on how to retain actual and potential customers through value added services. Not
only bank should focus on gaining profit but also prove to be social being i.e. win-win
situation. Therefore this study extent how LXBL will be benefited through collaboration
and provide necessary recommendation and feedback to introduce this service at
Sukedhara as well as other branches. This can help the bank to make the necessary
improvements to meet the overall objectives for all three parties i.e. LXBL, Subisu and
the customers.

Limitations

The limitations and constraints of the project caused by the uncontrollable forces are as
follows:

During research cost, time, resources and information are major constraints. The
time frame for the research was very limited.

The customers were not available most of the time when the survey was
conducted outdoor.

The customers were reluctant and skeptic to answer the questions.

Large scale research was not possible due to the constraints and the restrictions
posed by the organization.

Kapan area is too big for research.

This research is raw material for LXBL growth and helps to be more competitive and
advance, as we know that if banks are able to utilize their raw material, they could be
more productive and competitive in market in terms of their product and other financial
services. It is quite significant to clearly segment the market, identify the potential
customers and promotion of financial products and services is also equally important.

Section II: Conceptual Framework

The most important asset of an organization is its customer. Increasingly service

organizations are using customer satisfaction as major of its success. The importance of
customer service is not only due to national competition but also to the global level.
An organization success depends on:

how many customer it has

how often they use the product and services of organization

how satisfied they are by using product and services

to what level the organization is able to fulfill and satisfy the customer need,
wants and desire

how the service organization are able to create the value proposition with their
existing as well as potential prospects

how the organization are consistent toward satisfying and retaining their valuable
customers

According to Wikipedia Customer service is a series of activities designed to enhance

the level of customer satisfaction that is, the feeling that a product or service has met the
customer expectation. The CSD is responsible for handling, order processing, product
and service questions, pricing information, system transfers, and other general inquiries.
Like every organization, LXBL is also highly concerned regarding customer satisfaction,
where increase customer satisfaction relates to increase in the productivity of the LXBL.
In order to increase its customer service, the bank has applied and experiment the concept
of Total Quality Management and Kaizen.

It's a well known fact that no business can exist without customers. The customers have
become one of the key issues for the companies in their effort to improve quality. In a
competitive marketplace where businesses compete for customers, customer satisfaction
is seen as a key differentiator and increasingly has become a key element of business
strategy. Some of the scholars focus CSD in various ways:

According to Kevin Cacioppo (1998), The gulf between satisfied customers and
completely satisfied customers can swallow a business.
According to Jones and Sesser (1995), Complete customer satisfaction is the key to
securing customer loyalty and generating superior long term financial performance.

According to Wikipedia, Customer satisfaction, in a business term is a measure of how

products and services supplied by a company meet or surpass customer expectation.

As per my project CSD research and Collaboration of LXBL with Subisu for its bill
payment, customer service and their satisfaction is the major ingredients that has to do
with succession of the organization. For this purpose various studies, research, data
analysis have been made within the boundary of project criteria.

Figure 9: Conceptual Framework

Feedback + Identification of Problem

CSD Customers

Interns/Research
Team

Identification of Problem

Collection of Data

Data Collection Tools

Data Collection and Analysis

Presentation of Data

After developing the conceptualFinding

framework
and Suggestion
of the project that is undertaken, now its
necessary to measure the strengths, weaknesses, opportunities and threats of the
organization which would be based on customer care performance, customer retention,
training and development, HR management, benchmarking, its product and services,
technology, quality system, CSR, promotional activities that can be analyzed as well as
summarized as IFAS, EFAS, SFAS matrix which is shown in Appendix 4, 5 and 6.

The IFAS, EFAS and SFAS matrix have been developed to deal with environmental
scanning of an organization. When used together, they are a powerful set of analytical
tool for strategic analysis (Strategic Management and Business Policy, Wheelen et al., 9 th
edition, Pearson Education)

I also went through TQM book by Besterfield et al, 3 rd edition, Pearson Education which
has the description of Teboul Model. It describes the degree to which the customer
experience of a service or product matches experience.

I have also gone through 4Ps of Marketing i.e. product, price, place and promotion which
to directly deal with the customer by satisfying their need, wants and demands and
creating the value proposition (Principle of Marketing, Philip Kotler et al, 6th Edition,
TATA McGraw Hill).

According to Kano Model, it represents 3 major areas of Customer Satisfaction i.e.

explicit requirement, innovation and unstated or unspoken requirements (Besterfield et al,
3rd edition, Pearson Education).

Using customers compliant and the service quality plus customer retention has been
given a keen interest while on going through this project which illustrates that although
complaints are reactive they are very vital in gathering data on customer perception, a
dissatisfied customer can easily become a lost customer so many organization use
customer dissatisfaction as the primary measure to access their process improvement
effort.

Customer service is the set of activities an organization uses to win and retain customer
satisfaction, customer retention is more powerful and effective than customer satisfaction
so, improved service frequently carries a cost but organization must determine its return
that significantly improve revenue and market share.

Frontline people are the value able source of information and deals with customer which
make them the best employee worthy for the companys customer.
Section III. Methodology

The research methodology is the framework of how the research will be carried out. It
refers to the various sequential steps that are adopted in the study. It guides the research
process which helps the research to have a standard and also help to measure how much
have been achieved. It includes various research methods that were used as a part for
Customer Service Research and Collaboration of Laxmi Bank of Sukedhara with
Subisu Cable for its Bill Payment.

Research Background

Proper research design being a major aspect for gathering the relevant information
regarding LXBL was considered to be an important work. Due to security, privacy and
confidentiality of certain information, the attempt was little led back in order to know
about the exact number of customer holding LXBL account in different branches.

Following task was undertaken for CSD research and Subisu project:

Cross-questioned the staff, especially from CSD and Subisu to know about the
responses they came across regarding LXBL service

Designed questionnaire to gain understanding of the customers

Visited other banks like NABIL, Sunrise, and Machapuchhure and Subisu office
to collect the information regarding services provided by them

Study Approach

Majorly, the study was conducted for gathering different sort of information using
Observation, Exploratory and Descriptive research. The research was conducted through
three different stages, presented in the table below:
 Table 3: Methodology Undertaken

Stage Research Conducted

I Observation and Adaptation Research

II Exploratory Research

III Descriptive Research

Qualitative Research
Quantitative Research

I. Observation and Adaptation Research

In the beginning of first stage, observation was made during the internship program at
LXBL. My internship period is only for 2 months, so it is impossible to know exact about
all functioning of the job. I focused mainly on my CSD and my project. But I have
learned as much as possible about other department. During internship I spent most of
time in learning and thereafter adopting, which proved to be quite beneficiary for the
completion of the project.

II. Exploratory Research

The second stage was exploratory research which basically included the unstructured
questions (informal interview with the staffs) asked to understand about CSD, banking
environment, various product and their innovation, etc. This is not only for LXBL staffs
but with other banks staffs i.e. NABIL, SBL, Machapuchhure and Subisu cable.

III. Descriptive Research

At the final stage descriptive research was used. This research was carried out to
understand CSD and Collaboration between LXBL and Subisu and also to know about
the likeliness of its growth in future. Within descriptive research, there are two categories
of research:

a. Qualitative Research

Under qualitative research we look upon literature review which deals upon various
publication and literature related to CSD and Subisu. Various site visit, deposit forms,
flyers, and brochures are considered to be important while preparing report.

Along with this Unstructured Interview was also taken with customers, staffs of various
bank and Subisu.

b. Quantitative Research

Under quantitative research, a set of questionnaire was prepared in order to know about
the preference of the customers about CSD and Subisu bill payment. The focus was not
only made on actual customers, but also to the potential customers. The research aimed
out to find out the improvement in CSD and the feasibility of LXBL collaboration with
Subisu.

Variables Measured

The variables measured for Project A are: gender, age group, occupation, importance of
CSD, satisfaction level of customers, demand for new services, reasons behind using
LXBL services, required services under CSD, different bank account hold by LXBL
customers and services mostly used by LXBL customers.

The variables measured for Project B are: household using cable and internet, Subisu
competitors, LXBL customers using Subisu cable also in terms of potential customers
and customers preference towards this service.

Section IV: Presentation and Analysis

Presentation and Analysis of Project A

Since there is huge flow and the hurdle of customers at LXBL, I have taken 50 customers
for research purpose. I have also taken consideration of 18 LXBL staff of Sukedhara and
Lagankhel branch. I have found more difficult to conduct research on the basis of
Observation or Exploratory research so as per analysis of working environment
Descriptive research methodology was considered to be appropriate for the conduction.

Distribution of Questionnaire

The research contains 20 questions for each respondent and on the basis of their
responses conclusion was drawn up. The form of questionnaire distribution was
Structured Questionnaire. Instead of 50 customers, 5 customers were provided with
incomplete questionnaire. The distribution of questionnaire was made on the following
basis:

Please refer Appendix 7 and 8 for structured and unstructured questionnaire.

Table 4: Distribution of Questionnaire

Respondent Distribution Completed Responses

Staffs 18 18

Current customers 50 45

From the research undertaken, looking at the responses provided, the Data Analysis for
CSD research made is presented below:

ANALYSIS OF CUSTOMER SERVICE DEPARTMENT

ON THE BASIS OF GENDER

>> Current Customers

Respondent Total Numbers

Male 18

Female 27

>> Banking Staffs

Respondent Total Numbers

Male 8

Female 10

Figure 10: Classification according to Gender

41%
Female(37)
59% Male(26)

Above figure depicts that among the total respondent of 63, that is 100%, 26 of them
were male and the rest 37 were female. That sums up to 59% female respondent and 41%
of male respondents. This might be amazing fact to know about. At LXBL there are more
female customers because here the products are more attractive for female rather than
male. So, this might be reason for more female staffs.

AGE GROUP

>> No. of respondents according to Age group

Age group 18-25 26-35 36-45 46 and over

No. of 24 17 12 10
Respondents

Figure 11: Classification according to Age group

16%

38% 18-25(24)
26-35(17)
19%
36-45(12)
46 and over(10)

27%

Among the total respondents, a total number of 24 out of 63 (that sums to 38%) of the
respondents were between the age group of 18-25, this shows how many young people
are opening bank accounts. There is one thing to understand from this figure that 25 to
above age groups the respondents are lesser in numbers that of less than 25 because this
might be lack of banking knowledge, banks effort and peoples preference. One of the
credits for LXBL success is deposit scheme of Super Women Saving and Green
Saving Account which yields higher interest rate.

OCCUPATION

>> No. of Respondents according to their Occupation

Occupation Service Student Business House Others
Holder s Person Hold

No. of 23 15 14 7 4
Respondents

Figure 12: Classification according to Occupation

7%
11%
Service Holder(23)
36%
Students(15)
Business Person(14)
22% Household(7)
Others(4)
24%

Service holders have large account in LXBL. In case of Lagankhel branch most of
account is of District Development Committee (DDC) staff, Patan Hospital staff and
security officers. This might be due to highest yield than other normal saving accounts
provided to general public. Staff account is getting much popularity in LXBL due to free
ATM services, free cheque book and no account opening fee. Other reason might be due
to compulsion of salary purpose and contract. As compare to this, student also has greater
existence in LXBL account (24%).

IMPORTANCE OF CUSTOMER SERVICE DEPARTMENT

Figure 13: Ranking the Customer Service

 11% 2%

Very Important(30) Important(25) 48%

Not Important(7) Not Known(1)
39%

Firstly the most important thing for the researchers was to verify whether or not the
customers find the customer service as an important aspect in a banking environment.
The responses that the customers gave were overwhelmingly positive. Nearly half (48%)
of the total respondents believed that it is a very important aspect and that it should not be
neglected. The rest 39% believed that it is important and 11% thought it is not important.
But interesting fact is that about 2% doesnt know about CSD. So, we can also conclude
that there are some customers who by necessarily have an account but doesnt know what
bank is all about.

SATISFACTION LEVEL WITH CUSTOMER SERVICE

Figure 14: Satisfaction level of Customers

35%
Satisfied(41)
Not Satisfied(22)
65%

Customers are the driving force of any business. The business exists because of the
customers. From the research, among some of internal and mostly external customers, it
is shown that the customers are satisfy (65%) with the services offered by LXBL.
Whereas 35% of customers seemed to be dissatisfied with the present services and want
corrective action as soon as possible.

DEMAND OF NEW SERVICES

Figure 15: Requirement for Extra Facilities

60%
50%
40%
30%
20%
10%
0%

Among these who responded that they are not satisfied with the services of the bank
specified that they if some extra services were added, they would be contented. A greater
part of 54% of customers responded that they would be happy if there was quick problem
solving and response. This suggests that, LXBL management must be focus toward grey
areas which was before neglected. Management must listen the voice for other services
too like ATMs outside valley, old aged saving and others (private banking, etc.)

REASONS BEHIND USING LXBL SERVICE

Figure 16: Reason for Using LXBL Service
40%
35%
30%
25%
20%
15%
10%
5%
0%

From this bar diagram we come to know that about 35% of customers prefer Laxmi bank
because of high interest rate. As per research, location of Laxmi bank branches and its
ATM services are other core areas where it is gaining popularity. Others are wide range of
products, mobile money and good market share, friendly environment, well capable
management and many more are also reasons behind customer attraction towards Laxmi
bank products.

REQUIRED SERVICES UNDER CUSTOMER SERVICE DEPARTMENT

Figure 17: Selective Services Requirement

40%

35%

30%

25%

20%

15%

10%

5%

0%
Proper Customer Response (24) Quick Problem Solving (15) Others (7)

Among the 63 respondent, a total of 24 customers believe that proper customer responses
are the most important thing when it comes to CSD. This means that most of the
customers want proper response by those behind the customer service desk. The next
issue that is given priority is quick problem solving. 15 out of 63 people believe that their
problems need to be solved immediately as they are addressed. Others also have opinion
to provide service throughout the week, even some complain for unfriendly environment,
frequent ATM failure and unskilled personnel at CSD.

DEPOSIT ACCOUNTS TO OTHER BANKS

 Figure 18: Deposit Account Possessed to Other Banks

22%

Yes(49)
No(14)

78%

The bank culture of our country is such that people have bank accounts in many banks.
They generally have fixed deposits accounts in Finance companies which offer highest
interests, and savings account in those banks which offer most convenient services. Thus,
most of the customers i.e. 78% have deposit accounts in other banks also. I have found
one fact more interesting that people open account on other banks only to have an
account and ATM because it is free of cost.

SEVICES MOSTLY USED BY LXBL CUSTOMERS

Figure 19: Products Mostly Used

40%
35%
30%
25%
20%
15%
10%
5%
0%

In this figure, deposit holds the maximum percentage (36%) this might be due to higher
interest rate and efficient marketing. Due to less commission and better business
transaction in foreign country remittance services at LXBL is at good position. While
dealing with Loans and Advances it is less in used due to NRB act and liquidity crunch.
Others services like e-banking, locker facilities, etc.

Presentation and Analysis of Project B

For the research regarding Subisu, 100 sample sizes were randomly chosen within an
approximate population of about 20000 at Kapan area (Source: Ministry of Health and
Population). The research was based on knowing about the internet user for different
service providers within theses household of Kapan so, a questionnaire was prepared and
presented them on a random basis. The following result was found:

Table 5: Household Survey Using Internet of Different Service Provider

Respondents Internet Service Providers(ISP)

13% Subisu

25% Nepal Telecom(NTC)

20% World Link

42% Others

From the above research, we found that NTC has the highest number of customers
followed by World Link and Subisu i.e. 25, 20, 13 households per 100 respectively.
Others network like G-Link, Broad Link, UTL, Ncell, etc covers 42% of the market share
for Kapan. After this analysis we are able to find out the competitors for Subisu as well as
the potential customers for Subisu through competitor analysis.

While regarding LXBL customers using Subisu Cable we found out that 10% of total
population of Kapan are the customers of Laxmi Bank where 5% of the total customers
are the user of Subisu Cable.(Source: Internal database of Laxmi bank)

Subisu offers a suite of fully-managed network services developed specifically to address

the rapidly evolving network performance requirements of medium businesses and large
enterprise organizations as well as households. Subisu with its efficient operational task
can help Laxmi bank and its customer, and also has the potential to increase the customer
of Laxmi Bank for the efficient performance of BILL PAYMENT. The operation takes
place for bill payment at LXBL is as follows:

Advice people using Subisu Cable of Sukedhara locality to open accounts in this
branch.

Bank will directly pay their bills to Subisu Cable from their accounts after every
three months.

Bank will use a separate database to keep records of their customers regarding
their bill payments.

Bank will charge Rs. 5 for each payment as a service charge.

Bank can use mobile money and SMS alert to enhance this service. (Whenever
the customer lacks deposit to pay the bills, he/she can transfer deposits using
mobile money from their relatives account to their account. The bank can then
make timely payments to Subisu Company. With the help of SMS alert the bank
can also inform the customers immediately after paying the bill.)

Please refer to Appendix 9 for the Operational Flow Chart of Bill of Payment of Subisu at
LXBL.

Major Findings
From the observation made on both the staffs and the current customers, analysis was
conducted as per of their reactions. Total number of sample was 63 out of which 18 was
internal whereas 50 were external of which 5 respondents was not involved due to
incomplete questionnaire. So, out of that, some important and useful findings gathered
are as follows:

In CSD Research
 Analyzing the customer by their age group we found that 18-25 age group was the
highest followed by 26-35 aged customers.

Analyzing the customer by their occupation service holders accounts highest

followed by students and business persons.

While analyzing the importance of CSD 48% found it very important but
surprisingly 39% found it unimportant.

While measuring the satisfaction level of customer of LXBL 65% of the

customers are satisfied.

In regardance to demand of new services majority of customers demanded quick

response and problem solving at LXBL.

Maximum number of people rated high interest rate (saving) for using LXBL
services while compare to other services.

About 80% of the LXBL customers possess account in other banks too.

Deposit service account holds 36% of the customers as compare to other services.

In Subisu Project

We found that NTC has the highest number of customers followed by World Link
and Subisu i.e. 25, 20, 13 households per 100 respectively.

Laxmi Bank has 5% of its customers Subisu and has prospect to increase through
promotional activities in Kapan.

The major competitors for Subisu were NTC and World Link.
Section V: Conclusions
From this research, several issues are found which needs to be emphasized for LXBLs
greater success. Most of the information was gained from the formation of the structured
questionnaire, interview as well as internal database of LXBL. It was seen that though the
bank has been catering generic services to its customers, the expectations of the
customers still have not been met to ensure complete customer satisfaction.

In regard to the CSD survey as an assignment we had been taken into consideration for
the feedback of both internal and external customers for the greater accuracy. There were
frequent complaints that the department was not functioning up to the mark thus, to
reveal the truth about the aspects of department are the customer disliking, a survey was
carried out. The result of the CSD was lacking on various area mostly on customer
response.

To achieve its mission of establishing itself as one of the potential national development
banks, LXBL should meet the customers expectation at any cost and delight them
always.

For a banking sector to lead ahead from its competition, it needs to capture the potential
segment of customers by offering them more than what they expect. Together with that,
the CSD could work on the minor flaws that it has and work on it to make itself as good
as the other departments of the bank. The CSD is a very important department which
gives an impression to the outsiders about the bank, so it needs to be good in order to
attract and retain.

Project undertaken for Subisu following benefits were found for LXBL, Subisu as
well as Customers.

Benefits to Laxmi Bank:

Increases the use of mobile money and SMS alert.

Buzz marketing through customers.

 Increases the probability for the customers to take other services (like:
Mobile Money, Remittance, locker system, etc)

By providing this service, Laxmi Bank will be engaged in its corporate

social responsibility.

This will increase Laxmi Banks goodwill.

Laxmi Bank will get a certain amount of commission from Subisu.

After the success of this project in Sukedhara branch similar project can
later be implemented in other branches as well.

Benefits to Subisu Cable:

Use of capital incentive rather than labor incentive.

Subisu cable itself will get promoted by collaborating with highly reputed
organization like Laxmi Bank.

Cut down of expenses (e.g. salary, stationery, transportation, etc)

Benefits to Customers:
Saving of travelling cost and time.

Increase in banking knowledge.

Networking and relationship is built among customers and bank.

Increases the customers saving habit.

Suggestions
Nothing in the world is build up as perfect. Certain flaws, weaknesses are possessed by
everything, so does banking institutes. In similar sense, LXBL, in its way of performing
and dealing with the customers, consists of some drawbacks. As per this, certain General
as well as Specific recommendation are provided to the institute, which are as follows:
I. General Suggestions
The banks should come up with wide variety of products and services and focus
on service proliferation

Proficiency in interdepartmental communication should be given more priority

The customer portfolio if diversified, a wide array of customers can be attracted

plus the risk factor can be minimized

The different schemes that the bank comes up with needs to be marketed in a
proper manner

The internal customers of the bank, the employees need to be motivated and
appraised in a handsome manner

The human resource can be improvised and harnessed by the in house trainings
and workshops

The physical facilities of the bank can be improved e.g. spacious area, couches
and chairs for the customers to sit and relax

II. Specific Suggestions

a. Higher Interest rate:
According to the specific research conducted, the response to the needs of higher interest
rate is maximum. This is particularly because many financial institutions are providing
around 5-8% interest on deposit account which implies that customer are not satisfied
with the current interest rate of the bank. The other competitors are providing similar
services at a higher interest rate which is far more attractive than that of LXBL.

b. Better customer service:

Stable, healthy growth is built on the profitability of the customer, not on their raw no, of
loyalty. The two researches that were carried out had some part of service department`s
issue involved.
c. Employee Lounge:
A bankers job is very monotonous and tedious process. It demands utmost attention and
makes them exhausted, if there was some kind of recreation area for the employees where
they could go and relax for a while, it would be much helpful. The employee recreation
lounge would act as a refresher for the employees and recharge them for the next difficult
shift.

d. Specialized service for Special customers:

The special customers with various accounts in the bank, taking occasional loans, owing
the locker facilities should be properly treated by the bank. They are the sources of a lot
of earnings for the banks. Therefore, the bank can devise a specialized service whereby,
special clients can be offered loan as a subsidized rate or extended credit, gift vouchers
etc.
 Part Four
REFLECTION OF INTERNSHIP

When everyone is thinking that I am living a laid back life, I actually am passing through
one of the most important phases of my life, the phase where I decide what decisions I
will take to mould my career as per my requirements, qualifications and interests. This
phase has various dimensions to my life at this moment like anxiety, nervousness,
confusions, dilemmas, decisions about priorities, fighting with the limit of time. The
anxiety of what is next in the experience of the other departments I will be recruited is
very exciting as I am getting the opportunity to get into the type of working place I want
to work in. This is a very important thing as I will be able to let go of all the complexities
that would inadvertently stop me from fulfilling my dream and my career.

During this internship, I will also be able to let go of all the dilemmas that I have related
to my career decisions like whether to enter into a job as my goal persists or to start up or
continue my family business or to go for a Masters degree right after the completion of
my BBA course. Taking this decision would be a lot easier after the completion of the
internship period as I will be able to decide what is right and what is not for my future
ahead. In our day to day life we have to prioritize many issues over other so as to give
ample attention and time for the important ones. This requirement of my punctuality in
my work has made me able to prioritize my career and studies over other issues like
friends, parties etc.

Now, I suddenly am realizing that we are bound by the limit of time whereas previously I
thought I have ample time for everything. This limit of time has made me realize the
value of time and how to organize every activity so as to give my time to other issues as
well. This realization of importance of time will no doubt help me in anything I do in the
future as for every professional, time is the one of the rarest and important assets he has.
Finally, my dream of being a professional seems to be a possibility and getting an
experience even before I finished my studies is an important experience. The things I will
learn will help in my career and also in my studies ahead. I pursue further to gain the
maximum knowledge from the experience and enrich in my life and career ahead.

Achieved Goals/Objectives
Knew about the importance of fragmentation in the works

Knew about the market positioning of Laxmi Bank

Knew about the daily transaction carried out

Knew about the structuring of the institute and their functions

To learn about the overall function of different departments of Laxmi Bank

(LXBL) namely Customer Service Department (CSD), other department in brief.

To learn as much as possible from the members of the bank through good and
friendly relationship.

To learn about different products of the bank.

To increase communication skills and interpersonal skills by communicating with

the customers in the CSD.

Not Achieved Goals

Found less matchup with theoretical and practical learning during work

Less array of knowledge regarding remote area branching of bank

Less reflection regarding coping with sudden changes by the institute

REFERANCES
Print Sources-Books

Rose Peter S.s Commercial Bank Management, 4th and 5th Edition

Philip Kotler et als Principle of Marketing, 12th Edition

Besterfield et als Total Quality of Management, 3rd Edition

Harvey Maylors Project Management, 3rd Edition

Thomas L. Wheelen et als Strategic Management and Business Policy, 9th Edition

Article in a Monthly magazine

BOSS, February 2010

Harvard Business Review, April 2010

Article in Journal

Kathmandu Post, March 2010

Abhiyan, April 2010

Others Sources

Brochures of other banks like Nabil, Sunrise Bank and Machhapuchure Bank
Account opening forms of Nabil, Sunrise Bank and Machhapuchure Bank

Electronic Sources

www.laxmibank.com
www.nrb.org.np
www.nabilbank.com
www.sunrisebank.com
www.google.com
 www.wikipedia.com
www.machbank.com

Annual Report

Annual Report of Laxmi Bank 2007/08, 2008/09

Annual Report of Nabil, Sunrise Bank and Machhapuchure Bank

APPENDIXES
Appendix 4: Internal Factor Analysis Summary (IFAS): Laxmi Bank Limited

Internal Strategic Weight Ratin Weighted Score Comments

Factors g

Strength

Brand Equity 0.15 4.5 0.675 Large amount of loyal

customer

Advanced Technology 0.10 4 0.4 Advanced Flexcube

technology

Benchmarking 0.10 5 0.5 Maintain global

standard(paperless
product)
Quality Customer 0.10 4.5 0.45 Customer focused
Service and Innovative
product

Training and 0.05 4 0.2 Skilled and professional

Development training team

Weakness

Stringent policy 0.10 2 0.2 Tight control

Centralized Management 0.10 2 0.2 Time consuming

Limited product and 0.05 3 0.15 No comment

services in branch
Lesser no. of staff in 0.20 2 0.4 Slow service
branch

Branches and ATM 0.05 1.5 0.075 Fewer ATMs outside the
service valley

Total score 1 3.25

Appendix 5: External Factor Analysis Summary (EFAS): Laxmi Bank

Limited

External Strategic Weight Rating Weighted Score Comments

Factors

Opportunities

Increasing urban 0.10 3 0.30 Growth of urbanization

population

Increase in customer 0.10 5 0.5 Awareness of banking

knowledge in knowledge
banking
Increase in single 0.15 3 0.45 More customer base
family formation

Increase women 0.05 3 0.15 Increase in diversity

workforce

Changing lifestyle 0.10 5 0.5 More demand for service

Threats
Decrease in GDP 0.10 2 0.2 Lower banking transaction

Intense competition 0.15 3 0.45 Increase in no. of bank

Stringent labor law 0.05 3 0.15 No comment

Unstable 0.10 3 0.3 Unstable rules and

government regulation
Threats of new 0.10 3 0.3 New entrants for local as
entrants well as international arena

Total Score 1 3.3

Appendix 6: Strategic Factor Analysis Summary (SFAS) Matrix

Strategic Factor Weight Rating Weighted S* I* L* Comments(S)

Score

Brand Equity 0.20 4 0.8 * Loyal Customer

Quality customer 0.10 4 0.4 * Customer focused

service innovative
product(S)
Benchmarking(S) 0.05 4 0.2 * Maintain global
standard(paperless
product)
Limited products 0.10 2 0.2 * * No comment
and services in the
branches(w)
Lesser staff in the 0.10 2 0.2 * Slow service
branches(W)

Branches and ATM 0.05 2 0.1 * * Fewer ATMs outside the

service(W) valley

Increasing 0.10 4 0.4 * Awareness on banking

customer product and service
knowledge(O)

Changing 0.15 4 0.6 * More demand for

lifestyle(O) product and service

Intense 0.10 5 0.5 * * * Variety of service

competition(T) offered by other bank
Threats of new 0.05 4 0.2 * New entrants from local
entrants(t) and international arena.

Total 1 3.6

Note: S*-Short term, I*-Intermediate term, L*-Long term

Appendix 7: Structured Questionnaire for Research on CSD

Namaste,

I am the student of Nepal College of Management (NCM) currently in the 8th

semester. Following is a research based questionnaire for Customer Service
Department of Laxmi Bank (LXBL) as a fulfillment of course offered by
Kathmandu University (KU) under Internship program at LXBL. Your cooperation
will be highly appreciated in this regard. I assure that the information provided will
be kept confidential and shall be used only for the academic purpose.

Name:

Name of Organization (if involved):

Hometown:

Gender
Male Female
Age
18-25 26-35 36-45 46 and over
Occupation (Please tick the most appropriate option)
Service Holder Student Business Person Household Others
1. Do you hold account in the other bank?
Yes No
2. In which bank you hold your account?
LXBL Other (Please specify)..
3. Are you satisfied with the services provided by LXBL?
Satisfied Not Satisfied

4. If, YES, which service you most satisfied with?

Deposits Loan and Advances Treasury Services
Remittance Services Mobile Money Others
5. Why did you like the LXBL service?
High Interest Rate Well Located Wide Range of Products
Mobile Money Others

6. Services needed to be upgraded at LXBL?

Adding ATMs Outside Valley Spacious Service Areas Old Aged Saving
Others Quick Response and Problem Solving

6. Is there any importance of CSD at Laxmi Bank?

Very Important Important

Not Important Not Known

7. Areas needed to be improved?

Proper Customer Response Friendly Environment 24/7 Service

Quick Problem Solving Others

8. Are you planning to continue your relationship with LXBL?

Yes Cant Say No

9. If NO, please state the reason

10. Your suggestion/recommendation to bank (if any)

Thank You

Have a Nice Day!!!

*************************

Appendix 8: Questionnaire for Unstructured Interview

Who are the target customers or who are the potential customers for Laxmi Bank?

How well the Laxmi bank is established in the market?

What is the main mission and vision of LXBL?

Did Subisu have customers around Nepal, how many numbers might be there in
Kapan area?

Did this type of collaboration is done before? With whom? Is it profitable?

What is the main objective and strategy of whole CSD and Laxmi bank?

Who might be the most responsible for satisfying customer?

Is LXBL thinking any way to improve its services? How?

As other banks are coming with similar products and services how Laxmi bank
will keep it differently?

What type of response or feedback LXBL has come across? Is LXBL preparing
for it?

What fee did Subisu Charges to you? Is there any difficulty for payment? Is there
any late charge on cable?

Did Subisu have any contract with other financial institution for bill payment?

How much does it cost for only receiving and handling all billing procedure of
Subisu cable annually?
Appendix 9: Operational Flow Chart
Start

Subisu opens an account in Laxmi Bank

Subisu tells its customers to open an account in Laxmi Bank

Is the customer willing to subscribe to the

service?
No
Customers will go to Subisus office
to make the quarterly payment

Yes

Does the customer already have an account

in Laxmi Bank?

No
Customer will open an account

Yes
Customer will subscribe to the service

Is there sufficient balance in customers

account? No Laxmi Bank will post their names in
their web site and Subisu will take
the necessary action

Yes
After every three months, bank will debit
customers account and credit Subisu's
account

Subisu will check its account statement

online or through SMS alert

END