Prepared By:: An Internship Report of Nepal Rastra Bank (NRB)
Prepared By:: An Internship Report of Nepal Rastra Bank (NRB)
Prepared By:: An Internship Report of Nepal Rastra Bank (NRB)
Prepared by:
Subin Shrestha
Submitted to:
Banking, Baluwatar
This report is the result of continuous effort and extended support of many people. The
preparation of this report needed a lot of effort and suggestions of many people in order to get to
its complete form. Firstly I would like to thank King’s College (Affiliated to Westcliff
University, CA, Los Angeles) for designing a platform where we can gain not only theoretical
First and foremost, my major indebtedness goes to Nepal Rastra Bank, Banking Office,
Thapathali for giving us an opportunity to use our theoretical knowledge in the practical field in
course of my internship program. A sincere gratitude to Mr. Rajan Bikram Shah, Executive
Director, Banking Office, Thapathali, Mrs. Binita Bista (Acting Director), Deputy Director
Mr. Raj Kumar Shrestha, and Mr. Satendra Subedi for providing me such an opportunity to
complete my internship at their bank. I am very thankful to all the staffs of banking department
for providing me proper guidelines and valuable suggestion throughout the internship period and
Finally, I would like to pay heartwarming thanks to my family and my dear friends for their
valuable support and assistance. Though I am not a professional or experienced in this field but I
had tried my level best to make this project according to the internship guidelines.
Yours Sincerely,
Kabita Saud
King’s College
Table of contents
Topics
1. INTRODUCTION
1.1 Background
Transfer Department
5.1 Conclusion
Introduction
designed to develop socially responsive, creative, and result oriented management professionals
to fill up the middle level managerial positions in the rapidly growing business sectors in Nepal
and abroad. It is a 4 years course with eight semesters that prepares students step by step towards
Furthermore, internship helps bringing out the hidden capability of students and makes
them able to face the internal as well as external environmental challenges. Through the
provision of the internship; one can understand the real scenario of the organization by being the
member of that same organization for a predetermined period. As per the course requirement of
the BBA program every eighth semester student should prepare the internship report after the
completion of the eight weeks internship in the institution. Since I have completed the internship
in Nepal Rastra Bank, Central Office, this report is the outcome of the valuable real life
experiences that I obtained during the internship in that organization. Getting involved in NRB
as an intern in Financial Management Department; I got real job-place experience and got the
chance to feel the different situations from the perspective of both the employees and the
customers. This internship had been fruitful because it had helped me to see the same things
from the two opposite directions and find the difference in the perception of these two
The main objective of the internship is to explain banking practices of NRB gained during the
monthly accounts of those banks who does government transaction with NRB.
To have brief knowledge about rate determination and foreign currency management.
various departments that is in the banking office along with having practical know
To identify and study the problems and prospects of the organization using the
To relate the different management theories learnt in the classroom with the
To expand basic research skills by thoroughly going through the process of data
To learn how to deal with the different kind of customers of the organization along
customer satisfaction.
CHAPTER II
Nepal Rastra Bank (NRB), the Central Bank of Nepal, was established in 1956 under the NRB
Act, 1955, to discharge the central banking responsibilities including directing the development
of the emergent domestic financial sector. The functions and objectives of the bank have been
recast by the new NRB Act of 2002. Since inception, there has been a significant growth in both
the number and the activities of the domestic financial institutions. But the way how Central
bank has developed in Nepal has a curious history because it came only after the development of
commercial banks.
NRB is non- profit organization established under complete government ownership. It manages a
state's currency, money supply, and interest rates. NRB usually keep an eye on the commercial
banking system of a country and acts as a banker, advisor, the lender of the last resort and
The central office of NRB is located at Baluwatar and Thapathali in Kathmandu. There are 19
departments established to carry out its functions. The central administrative departments are
located at Baluwatar. The Banking office, Currency management department, Public debt
management department and bankers’ training center are located at Thapathali. NRB has opened
a number of offices and currency exchange counters in various parts of the economically active
areas in country. There are 7 offices outside Kathmandu Valley. They are located at: Biratnagar,
The objectives of NRB are crucial because of their significance influence in the workings and
methods of operations of financial market. To reflect the vibrant environment, the functions
objectives of the bank have been recast by the new NRB Act of 2002, the preamble of which lays
down the primary objectives of the bank as:
To make appropriate supervision of the banking and financial system in order to maintain
its stability and foster its healthy development
To promote entire banking and financial system of Nepal for enhancing its public
credibility
To regulate, inspect, supervise and monitor the banking and financial system
To avoid institutional failures- minimize the effects of the financial panics in the nation’s
financial system
To prohibit banks and financial institutions to deal with activities providing too risky for
them to face serious future financial consequences to avoid unfavorable financial
difficulties
To further enhance the public confidence in Nepal's entire banking and financial system
Nepal Rastra Bank is central regulating body of financial institution in Nepal. It consists of
diverse range of financial activities performed by various branches and division. The following
are the major Departments of Nepal Rastra Bank.
As an Intern I was assigned to observe and do job in the divisions and sections of Banking office.
Banking office is the main part of NRB operation. It undertakes diverse work being the agent of
government, as bank of banks and financial institutions. Banking office manages account of
government agencies & commercial banks, collects revenue , makes cash payment from the
government accounts, transfers from controller’s offices to the designated accounts as per the
instruction, prepares drafts, remits amounts within the country and outside, public debt
management functions i.e. keeping accounts of the government securities, payment of interest
and principle of government securities, payment of the pension to the retired NRB staffs,
undertaken by commercial banks on behalf of NRB. Kathmandu banking office has also been
operating a clearing house, which is responsible for clearing and settlement of negotiable
instruments (cheques and bills) in Kathmandu valley from the member banks and financial
Administration department,
Transfer department,
Ledger department,
ECC department,
o Remittance Section
o IC Section
A. Ledger department
This department acts as customer service department which is responsible to provide various
initial services to the government organizations, financial institutions and public institutions. It
1. Pension payment
Every month the pension is paid to the retired NRB staffs upon presenting the RED BOOK
which holds the details of their account number, name, address, employee identification, service
period, position during retirement, nominee of the account. With the input of account number in
the system of NRB i.e. Olympic we can easily get the information on how much pension is to be
paid. After the signature verification of the retired employee or the nominee the pension amount
is debited from the respective account. This is again validated by another staffs and if all the
details are correct then payment is made. If the retired staffs is unable to come to take the
pension then he/she can send some other person with the signed application “manjurinama” of
taking the pension amount on his/her behalf. But this works only for three months and after that
the employee him/herself should be present. This rule is made to avoid the fraud.
2. Account opening
Another function performed by ledger department is to open the account of the government
organization, financial institutions and public institutions which is done after fulfilling the
following criteria’s:
Recommendation letter from Financial Comptroller General Office (FCGO) and other
Signature card with the name and position along with signature of minimum two
3. Signature updates
During the course of operations there occur changes in the members of management committee,
board of directors. Hence, this department updates the signature of the newly appointed members
by removing the previous one which is done after the following criteria:
Letter from the respective organization with the authorized signature to change and
The process is made after the deputy director validates the letter and signature card
The function of the ledger department is to issue the cheque books to the organizations that have
accounts in NRB. The cheque is used by the organization to make the various payment and
transfers to their concerned parties. The cheque is issued upon fulfilling the following criteria:
Letter from the respective organization demanding the issuance of new cheque book with
minimum two compulsory authorized signatures, stamp of the organization and name of
If all the details is found feasible then the cheque is issued by imputing the cheque
A signature card is also given to the person who is receiving the cheque which needs to
be duly signed by the authorized person and bring back to ledger department.
Upon receiving the signature card, cheque is then made valid to use.
With the view to balance the supply and demand of money in the market NRB issues the 90-days
treasury bills, promissory note as well as development bonds to make investment. When the
money is being hold by the public then this instruments are issued in order to make the
investments in the development of the country. This department then provides the interest
amount semi-annually or annually along with the principal amount on the time of maturity. This
which contains information regarding the amount, interest rate, maturity date, date and
Liable person or (manjurinama) from the authorized person to get the interest and
principal amount.
Civil and national bond interest payments are done in every 6 months. For financial
Essentially, an electronic funds transfer is a transaction by which funds move from one
institution to another or one account to another at the direction of an institution’s customer and
through the transmission of electronic instruction messages that cause the institutions to make
the required bookkeeping entries and make the funds available. The funds transfer process
generally consists of a series of electronic messages sent between financial institutions directing
each to make the debit and credit accounting entries necessary to complete the transaction. NRB
uses Olympic software to transfer funds as per the message or voucher received for transfer. This
transfer of fund may be through electronic instruction messages (SWIFT) or through cheque. The
second and another important activity performed by the transfer department is recording the tax
voucher. Various organizations have to pay tax to the government, and this is paid by
Nepal Rastra Bank in collaboration with Nepal Clearing House Ltd (NCHL) operates ECC
system in Nepal. ECC System offers banks and financial institutions with an electronic medium
of cheque clearing and establishes a national payments gateway to facilitate electronic payments
& financial transactions across banks and financial institutions within the country. This system
has been made possible through the establishment of Nepal clearing house limited (NCHL).
Nepal Clearing House Limited (NCHL) is a public limited company established on 23rd
December 2008(9thMangsir 2065) under the leadership and guidance of Nepal Rastra Bank (The
Central Bank of Nepal) and Nepal Bankers Association. NCHL initially implement and operate
NCHL-ECC System in Nepal offering banks and financial institution with an electronic medium
of cheque clearing and later, establish a national payment gateway to facilitate electronic
payments and financial transactions across banks and financial institutions within the country.
Electronic Cheque Clearing (ECC) System provides means to electronically transfer cheque
images through a secure medium thus completely replacing the traditional physical routine of
moving paper-cheque among the banks and clearing house, which has resulted in significant
reduction of tedious and time consuming manual process of cheque clearing, both for the banks
Individual banks and financial institution are enrolled within NCHL network as participating
members and are responsible for their clearing operation. It has 128 members including bank and
financial institutions. The software used for electronic cheque clearing is ProgressSoft. Nepal
Clearing House (NCH-ECC) currently support cheques clearing of four currencies like Nepalese,
U.S Dollar, GBP, and Euro Dollar with presentment cut off time at 14:00, paying bank response
cut-off time at 15:00 and final settlement at 15:30 for standard, regular (Magnetic Ink Character
Reader (MICR)) cheques. Previously non-standard (existing non-MICR) cheques were also
presented for clearing but from 1st Ashoj 2072 only MICR cheques were accepted.
This department with the help of NCHL performs various functions which are as follows:
1. Clearing Outward:
Clearing outward is the process of crediting the account of the organization having account in
NRB. In clearing outward section, the customer presents cheques of different commercial banks
and financial institutions to be deposited to different accounts of NRB. Upon receiving the other
institutions cheque, outward section of NRB signs and endorses it, then scans it and sends to
concerned authority through progress software. It sends cheque to respective banks for approval
to deposit amounts to different payee’s accounts maintained at NRB. The cheques presented are
generally of four currencies i.e. Nepalese, U.S Dollar, GBP, and Euro Dollar.
2. Clearing Inward:
Clearing inward is the process of debiting the account of the organizations which have account in
the NRB upon the verification and acceptance of cheque presented electronically. In this process
the cheque of NRB presented in other financial institutions is scanned and send through progress
software. Original cheque remains with the concerned financial institutions. Upon Checking the
cheque no., a/c payee stamp, amount in figure and words, date, account no. from face cheque and
checking endorsement stamp, reference a/c from back, the cheques are accepted which goes to
Manual CFI. From Manual CFI both the accepted cheque and rejected cheque go to Financial
clearing with reason specified for rejection of cheque. From there, after verification for sufficient
balance and signature, the cheques go to Clearing Approval and finally accepted cheques are
3. Final settlement:
This final settlement is related to making the final settlement of clearing by debiting or crediting
the account of government organization and financial institutions as per the information received
from NCHL. NCHL receives information regarding the cheque being present, accept and reject.
With this it make the final report regarding the settlement of the amount by showing whether the
payment (Dr) is higher than deposit (Cr) of the organization then its account needs to be debited
and vice versa. Upon receiving the information at 3pm ECC department makes the final
settlement by posting it to the system. Since ECC at Thapathali, being the central office for
cheque clearing maintains parking account of NRB, it settles the accounts of all the branches of
NRB.
As name suggests, this department works for exchanging the Nepalese currency to foreign one and
vice versa. There were three sections in this department being remit in, remit out, L/C and IC. Remit
in was the section where foreign currency was exchanged into Nepalese and remit out is the reverse
one where Nepalese rupee is taken in exchange of foreign one. In remit out, SWIFT message were
also transferred to other banks. The Society for Worldwide Interbank Financial Telecommunication
(SWIFT) provides secure electronic financial messaging services to financial institutions. SWIFT
can communicate with its branches or correspondent institutions anywhere in the world. Remit in and
out deals only with the transactions of government staffs or the government organizations. Others
CHAPTER III
ANALYSIS OF WORKS AND ACTIVITES PERFORMED
Upon the placement in various departments I carried out various job as per the rules and
regulation of NRB. In every department I did not have the right to make input in the system due
to the high risks. The jobs performed by me in various departments are as follows:
1. ECC
o Technical clearing of regular NRB cheques to verify cheque date, amount, stamp of
concerned parties.
o Verifying the received physical cheques of other institution. (cheque date, amount,
signature, stamp)
o Scan the cheque and input the data such as account no, branch no, amount, date in the
Software.
o Check whether the cheques are approved or not, if not correct the mistake and send again.
1.3 Settlement
o Make an excel file (CSV) of the approved cheques present at clearing approval.
o Upload the file in the Oly Reply Software for NCL settlement and send to NCHL.
3. Transfer Department:
o Verify the voucher and cheque, cheque date, office code, amount and stamp.
4. Ledger Department
In this department I was responsible for helping the staffs on receiving the book from the pension
holders from the account where I need to verify whether the signature is done on the pension
book or not by the pension holder, accepting their application letter of “Manjurinama”.
Likewise, I was responsible for maintaining the record on register after cheque issuance to the
related organizations. I also verify and upload the signature card to the account of the various
institutions if they change their signature and members of their organization. Also, I performed
reconciliation of the pension payment of NRB staffs by matching the debit and credit amount by
putting the reference no. The main purpose of reconciliation is to make the balance zero. The
other work was to assist and observe the work of staffs when they are performing their jobs.
CHAPTER IV
SKILLS LEARNED
o Motivational factors
The employees are highly motivated with good salary, allowances like: lunch, adsl, medical, paid
leave annually, international tours, and trainings. All this provides employees to work
teamwork. They are always ready to help their colleagues in the time of need.
o Job rotation
In order to avoid the monotonous in the work the job is rotated often. Every employee are given
o Friendly environment
The environment in NRB is very friendly. Every single staffs, intern and the helpers were treated
equally. Every one maintains a healthy and friendly relationship in the organization.
With the use of system the flow of information as well as the communication is proper. All the
staffs can easily access the information regarding the recruitment, changes, notices that took
place in NRB
Issues identified
During my intern period I found various problems and issues in the departments which were
creating hindrance in the smooth operation of the work. Some of the issues were:
This is the major problem I found in NRB. In every department I found the lack of proper
process layout. In order to accomplish one task flow of process is not smooth. For E.g: in ledger
section the after the entry is made in counter, to validate one has to reach other corner and to
make payment to another again to another corner. The desk of staffs are placed inappropriately
o Overstaffing
Another major issue is the overstaffing. In most of the department I saw that the staffs have more
There is uneven distribution of job where some staffs have more workload whereas some have
minimum.
With the replacement of manual recording by software installment it has decreases the workload
but still some of the staffs are not efficient in using the system, software’s as well desktop. They
o Lack of maintenance
I highly found the lack of maintenance in terms of keeping the records on books, files and so on.
There is lack of proper storage and filing. The maintenance is needed for computers, printers,
o Lack of communication
There is also lack of communication between the departments or in the hierarchy level. For e.g.
in most of the cases fax message was made twice due to absence of upper level employees like:
knowledge. Chapters read in books turn into a valuable knowledge when student get to
understand those lessons by themselves, which is possible only through exposure to real working
environment of an organization. Internship has made it possible for students to learn and
understand from practical point of view. As an intern in Nepal Rastra Bank, the internee got to
learn an array of tasks of various departments. The important lessons learnt by the intern are:
The intern learnt that punctuality and time management can be a stepping stone to reach the
height of success. The intern learnt that key to get over continuous work pressure is effective
time management. In fact, the intern developed time management skills while doing the
internship at NRB.
Answering to the queries of customers and facilitating them with bank services through
telephone or direct contact helped the intern to develop communication skills. Reporting to the
NRB staff about work progress and sharing opinions with them actually nurtured by
communication skills.
Learnt interpersonal Relationship
The intern learnt the key to success is networking and knowing more people, through internship.
The intern learnt that developing an interpersonal relationship with employees and other interns
Chapter V
5.1 Conclusion
After the completion of the internship of Six weeks, the real meaning of the work life and the
actual pressure of the job had been felt. This feeling had changed the previous perception of the
job-life. It had been a fruitful experience for the present as well as for the future too. The charm
of the bankers’ life in the view of the public had been changed now and the reality of the charm
backed by the intense pressure had been felt. The ‘to be known world’ had been known now and
also a thought that, besides books and knowledge of the syllabic books there are a lot of things to
be known and learnt, had emerged. It was really a great opportunity to know new kinds of
people, new kinds of experiences, new kind of environment and a completely new atmosphere
around us. It was learning by doing kind of opportunity and had been successful to make a
Nepal Rastra Bank has had played the prominent role of Central bank and
maintains the smooth functioning of the economy. Being in NRB as an intern wouldn’t be much
interesting without the support of the NRB family. From them, I have learnt that the workplace is
also a family for any worker and how important is it for the social wellbeing of the worker.
Intern also got the chance to get wider variety of knowledge due to the support of the NRB
management.
While concluding this report, the intern is intensely satisfied with the internship
and its outcome. This experience will not only be beneficial today but also in the future where
the intern should work in the real life. Intern had a great experience working in NRB. Intern feels
proud to complete the internship in central bank of Nepal and hope this will prove me