Bishal Pokhrel Report PDF

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A Report of on “HIMALAYAN BANK LTD” Bharatpur, Branch

Submitted By: Bishal Pokhrel

In the partial fulfillment of the requirement for the degree of Bachelors of Business Administration & Banking Insurance

At Boston International College Pokhara University

Chitwan, Nepal November, 2020

ACKNOWLEDGEMENT

A Project has been developed in order to fulfill the partial requirement of Pokhara University for the completion of BBA-BI Degree. This is my great pleasure to present the report to learn banking activities in the Himalayan Bank Limited. This report helps me to know about the practical exposure of various departments of banking system. I would like to extend my sincere gratitude to Branch Manager, Mr. Sabut Rai for their role about my project. I am highly appreciated to other HBL staffs for their unlimited support and helpful work environment and for providing me guidance.

With Thanks Bishal Pokhrel

Chapter: One Introduction We all are well known with the fact that the economic growth and prosperity of any nation highly rely on the performance of the upcoming human resources. The quality of these human resources depends upon the knowledge and skills they have obtained from their academic background. Himalayan Bank was established in 1993 in joint venture with Habib Bank Limited of Pakistan. Despite the tough competition in the Nepalese Banking sector, Himalayan Bank has been able to maintain a lead in the primary banking activities- Loans and Deposits. Legacy of Himalayan lives on in an institution that's known throughout Nepal for its innovative approaches to merchandising and customer service. Products such as Premium Savings Account, HBL Proprietary Card and Millionaire Deposit Scheme besides services such as ATMs and Telebanking were first introduced by HBL. Other financial institutions in the country have been following our lead by introducing similar products and services. Therefore, we stand for the innovations that we bring about in this country to help our Customers besides modernizing the banking sector. With the highest deposit base and loan portfolio amongst private sector banks and extending guarantees to correspondent banks covering exposure of other local banks under our credit standing with foreign correspondent banks, we believe we obviously lead the banking sector of Nepal. The most recent rating of HBL by Bankers’ Almanac as country’s number 1 Bank easily confirms our claim. All Branches of HBL are integrated into Globus (developed by Temenos), the single Banking software where the Bank has made substantial investments. This has helped the Bank provide services like ‘Any Branch Banking Facility’, Internet Banking and SMS Banking. Living up to the expectations and aspirations of the Customers and other stakeholders of being innovative, HBL introduced several new products and services. Millionaire Deposit Scheme, Small and Medium Enterprises Loan, Pre-paid Visa Card, International Travel Quota Credit Card, Consumer Finance through Credit Card and online TOEFL, SAT, IELTS, etc. fee payment facility is some of the products and services. HBL also has a dedicated offsite ‘Disaster Recovery Management System’. Looking at the number of Nepalese workers abroad and their need for formal money transfer channel; HBL has developed exclusive and proprietary online money transfer software- Himal RemitTM. By deputing our own staff with technical tie-ups with local exchange houses and banks, in the Middle East and Gulf region, HBL is the biggest inward remittance handling Bank in Nepal. All this only reflects that HBL has an outside-in rather than inside-out approach where Customers’ needs and wants stand first.

Chapter: Two Objectives of the Study

Every action is directed towards accomplishing certain objectives. Report is in itself a new learning pedagogy, which provides the floor for the practical exposure of theoretical knowledge. The general objective of the study is to understand the banking organization, its structure, working procedures and risk associated with it. However, the specific objectives of the study are: •

To find out the EPS, PE ration and dividend

•

To find out whether to invest or not in the secondary market

•

To find out the financial position of the company

Overview of the Organization Bank is a financial institution that accepts deposits from the depositors and provides loan to those who need the money against security collateral. In other words, a bank connects customers having capital deficits to customers with capital surpluses. Banks are established under the authority of the government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions and provide other financial services to its customers. The primary objective of the bank is to collect the ideal money and invest it in the productive sector. Bank is the backbone of any country as it helps to stabilize (control inflation) the economy. Banks in Nepal are operated under “Bank and Financial Institution Act-2063”. According to BFIs there are four categories of banks. These banks are categorized on the basis of its function and paid-up capital into four categories i.e. A-class, B-class, C-class and D-class. Nepal is a developing country where the majority of people are poor, unemployed and engaged in traditional agriculture. There is acute shortage of capital in a country like ours. People lack initiative and enterprise. Means of transport are undeveloped. Industry is depressed. The banks are helping in overcoming these obstacles and promoting economic development. They help in mobilising savings through network of branch banking. People in developing countries have low incomes but the banks induce them to save by introducing variety of deposit schemes to suit the needs of individual depositors. They also mobilise idle savings of the few rich. By mobilising savings, the banks channelize them into productive investments. Thus, they help in the capital formation of a developing country. Himalayan Bank Limited is one of the commercial banks of Nepal which falls under A-Class. Its prime concern is to contribute on socio-economic development of the country through diversified range of banking products & services. The bank is mainly focused to support accelerating the development of emerging sectors of the economy.

Brief History Himalayan Bank was established in 1993 in joint venture with Habib Bank Limited of Pakistan. Despite the cut-throat competition in the Nepalese Banking sector, Himalayan Bank has been able to maintain a lead in the primary banking activities- Loans and Deposits. It goes with a punch line “The Power to Lead”. Legacy of Himalayan lives on in an institution that's known throughout Nepal for its innovative approaches to merchandising and customer service. Products such as Premium Savings Account, HBL Proprietary Card and Millionaire Deposit Scheme besides services such as ATMs and Telebanking were first introduced by HBL. Other financial institutions in the country have been following our lead by introducing similar products and services. Therefore, HBL stand for the innovations that bring about in this country to help customers besides modernizing the banking sector. With the highest deposit base and loan portfolio amongst private sector banks and extending guarantees to correspondent banks covering exposure of other local banks under the credit standing with foreign correspondent banks, HBL believe it as lead the banking sector of Nepal. The last year rating of HBL by Bankers’ Almanac as country’s number 1 Bank easily confirms our claim. Other awards and recognitions received by the bank in the past 6 years also ranks the bank in high positions with awards like: Best Presented Account Award- 2008 awarded by The Institute of Chartered Accountants of Nepal. Number 1 bank of Nepal-2006 awarded by the Bankers’ Almanac, Britain Number 1 bank of Nepal-2003 awarded by the Bankers’ Almanac, Britain National Excellence Award- 2003 awarded by federation of Nepal chambers of Commerce and Industry.

Number of employees Altogether there are 26 staffs in Bharatpur Branch. They are: 

Branch manager: 1 staff



Operation Incharge: 1 staff



Account sector: 1 staff



Teller head: 1 staff



Loan department: 3 staffs



Remittance department: 1 staff



Teller department: 6 staffs



Customer service department: 3 staff (1 HBL contract staff)



Security guard: 4 staffs



Messenger: 2 staffs



Driver: 1 staff



Cleaner: 2 staffs

Product Lines A. Deposit product 

Fixed deposits



Call Account



Current account



Premium saving account (PSA)



Normal saving account



Super premium saving account



Bishesh Saving Account



Shareholder’s saving account



Recurring saving account



Jumbo Term deposits



Himal saving account



Himal remit saving account

B.Loans Loan facilities provided by HBL are:

1. Corporate Loan Corporate loan of HBL is classified in two categories. They are: Funded Facilities

Non- funded facilities



Project / Consortium Loan



Bank Guarantee



Non-Revolving Cash Credit



Letters of Credit



Working Capital Financing



Overdraft Facility



Demand Loan



Revolving Cash Credit



Import Credit for Telex Transfer and Demand Draft Payment



Trust Receipt Loan



Export Credit Facilities



Pledge Loan



Clean Bills purchased and discounted



Documentary Bills Purchased and Discounted

2.

Retail/ Consumer Loan



Hire Purchase Loan



Housing Loan



Subidha Loan



Credit Card Loan



Loan against Fixed Deposit Receipt



Loan against Government Bonds & Bonds of Bank



Loan against First Class Bank Guarantees



Loan against Shares

Small and medium enterprises loan (SME Loan) Funded/Non-Funded Facility in range of Rs. 0.5 M to Rs. 40.0 M

C. International Banking (LC) To assist its trading customers, HBL offers Letter of Credit (LC) facilities. Customers can place their LC application in any of HBL branches. The fees/ charges are one of the lowest amongst the commercial banks of Nepal. The customers enjoy wide correspondent network of HBL in addition to attractive rates.

D. HIMAL Remit Himalayan Bank Ltd. is a pioneer in the field of retail money transfer business with over a decade long customized service delivery experience in the field. Himal Remit is a state-of-the-art web-based online money transfer system. It is easily accessible through website of HBL. It can

be directly accessed by all branches and network thus ensuring prompt execution of the remittance. The product is monitored and serviced 24/7 by Remittance Promotion Department of HBL dedicated to deliver fast and reliable services to the customers. Himal Remit has the largest payment network covering all cities, towns and villages of the country and is capable of paying at more than thousand locations across Nepal which is in ever growing trend as per the demand of local customers and service providers.

E. Safe Deposit Lockers Looking at the varying needs and wants of the customers, HBL offers locker facilities of various sizes as per customer’s preference and convenience of location. Customers availing of this facility enjoy not only peace of mind in terms of security of their valuable belongings but also one of the most attractive rates and ease of location.

F. Cards Services HBL provides various card facilities to the customers can withdraw cash as well as purchase goods from several merchants. Customers use these cards at any ATM terminal of HBL networks as well as SCT network also. HBL provides ATM services to their customer, which is open 24 hours, a bay, 7 days a week, and 365 days a year. The cards facilities by HBL are:



ATMs Card



VISA Debit and Credit Card



SCT CARD

G. SMS Banking and E-Banking SMS Banking allows customers to check their balance, status of cheque (encased or not), HBL’s foreign exchange rate and contact numbers of branches. Through the customer service department customers fill up the application form to apply for these services. After fulfilment of the application form, the information regarding customer are sent to the information department for further process. After that pin number issued by the information department is provided to the customer through the customer service department. By using E- Banking and SMS Banking

customer can make inquiry for balance and can get the mini statement by using the electronics means and mobile by suing SMS.

Chapter: Two Research Methodology Used As we all know there are mainly two ways of collecting the data information. They are Primary and Secondary Data Collection. These two data collection methods have their own importance to the report. Sometimes the primary data is more useful in making report and sometimes secondary data gives the more information which we are unable to extract the information. To obtain the data and to fulfill the set of objectives regarding study, the researcher has collected mainly primary data, secondary data. The information was also collected to sustain the findings derived from the secondary data. But in overall report analysis both the primary and secondary data had equal importance in gathering the information. Secondary data is collected from other consumers and prospects of the organization. The process of data collection is mainly done from the bank official website. Some of the secondary data that are uses in this report are from bank website and from the company, the journal and news that have been published. Source and Collection of Information In this report, mainly secondary data are used to prepare this report. Secondary data or source have been used for reference as well as analysis and interpretation. Secondary sources or data used in the study are annual report published by banks and different newspapers.

Conclusion Market Price Share is 728 where percentage change is 7.22 and according to FY 077 the EPS is 15.62. PE ratio of Himalayan Bank is 46.61 and Book Value is 191.59. Dividend is 1.32 % and last year was 1.58 % and the bonus percentage is 25%. And recently. Himlayan bank proposed 14% bonus share and 6% cash dividend for the 077-078 FY. So, we can conclude that the dividend of the company has been decreasing form the last year by 50% where pe ratio is also high so I don’t think we should invest in this bank.

References:



Himalayan Bank Limited. (2018, March). Retrieved from www.himalayanbank.com.



Himalayan Bank Limited. (2017/18). Annual Report . Financial Department, Kathmandu....