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, KUSOM’s 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 Bank’s 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

Bank’s 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 it’s 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/Intern’s 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. Organization’s 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: Porter’s 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 wasn’t 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 manager’s 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

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

Application for loan

Valuation of property

Credit memorandum

Credit committee approval

Offer letter

Debit authority and Promissory note

Property hault

Internal memo for disbursement

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

Commercial Bank in Nepal

THE MODERN

BANK

Credit Function

Trust Function

Investment/planning Function

Payment Function

Thrift or Saving

Function

Cash Management

Function

Brokerage Function

Insurance Function

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. No

Commercial Banks Established (BS)

Head Office Joint Venture Partner

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

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

3. Agriculture Development Bank

2024/11/07 Kathmandu Sole Operation

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 Grindlay’s 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 Bank 2050/03/23 Kathmandu State Bank of 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 Bank Ltd.

2053/06/28 Siddharthanagar Bank of Ceylon

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

14. Nepal Industrial & Commercial Bank Ltd.

2055/04/05 Biratnagar Sole Operation

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

Bank’s 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 Bank’s performance.

Ownership Structure

Promoter Group representing the county’s 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

35.56%

9.02%

55.42%

General Public

Citizen Investment Trust

Promoter Group

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

2. On the basis of Loans and Advances

Deposit services

Current Account Green Saving Account Orange Saving

Saving Account

Normal Saving Account

Super Women Saving

Shakti Saving

Laxmi Saving

Money Market Account

Call AccountMinor Saving

Pay Roll Saving

Regular Saving

Personal Reserve Account

Investor Saving

Fixed Deposit Super Women Gold DepositManokamana Saving

4. On the basis of Remittance Products

4. On the basis of Card Products

5. On the basis of Auxiliary Services

Loans and Advances

Overdraft Term Loan Personal Loan

Small Business Loan Auto Loan Supply Finance

Home LoanWorking Capital Loan Bill Purchases or Negotiation

Remittance Products

Express Money Transfer SWIFT Transfer Demand Drafts

Traveler’s Cheque Fund Transfer Remittance Inward-Outward

Clearing/Collection ABBS

Card Services

ATM/Debit Card Visa Credit Card

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:

Auxiliary Services

Bancassurance Treasury ServicesInternet Banking

Financial Advisory Mobile Money Travel Related Services

Safe Deposit Locker SMS Alert and Banking Portfolio Management Services

Figure 6: Organizational Chart of Laxmi Bank

Board & Board Director

Board of Director

Credit committee Planning Performance & Personal Committee

AuditIT Committee

Audit & inspectionChairman and CEO

General Manager

Assistant GM Deputy GM (Operations)

Deputy GM (Credit/Retail)

Head Retail

Customer Service

Consumer Finance

Deposit Marketing

Head R&D

Head Corporate

Head Trade

Head Credit

Branch Coordinator

Branches Credit

Head HR

Head Loan

Assistant GM

Assistant GM

Head General

Head Remittance

Head R&D

2. Organization’s 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 company’s

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: Porter’s Analysis of Industry

Michael Porter’s 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, there’s 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 Porter’s 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: Porter’s 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 (Highest % offered on daily basis)

8.00 % 6.00 % 8.50%

Fixed deposit (Maximum interest offered)

11.75 % 11.00 % 11.50 %

Overdraft (Maximum interest charged)

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

Term loan (Maximum interest offered)

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

Housing loan (Minimum interest charged)

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

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 customer’s 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

Finding and Suggestion

After developing the conceptual framework of the project that is undertaken, now it’s

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, 3rd 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 company’s 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 customer’s 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

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 Respondents

24 17 12 10

Figure 11: Classification according to Age group

38%

27%

19%

16%

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

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, bank’s 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 Holder

Students

Business Person

House Hold

Others

No. of Respondents

23 15 14 7 4

Figure 12: Classification according to Occupation

36%

24%

22%

11%

7%

Service Holder(23)Students(15)Business Person(14)Household(7)Others(4)

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

48%

39%

11%

2%

Very Important(30)Important(25)Not Important(7)Not Known(1)

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% doesn’t know about CSD. So, we can also conclude

that there are some customers who by necessarily have an account but doesn’t know what

bank is all about.

SATISFACTION LEVEL WITH CUSTOMER SERVICE

Figure 14: Satisfaction level of Customers

65%

35%

Satisfied(41)Not Satisfied(22)

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

0%

20%

40%

60%

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

Higher interest rate (22)

Well located (15) Wide range of product (11)

Mobile money (8) Others (7)0%5%

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

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

Proper

Customer

Response

(24)

Frien

dly En

vironmen

t (6)

Quick Pro

blem So

lving (

15)

24/7 Se

rvices

(11)

Others (7

)0%5%

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

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

78%

22%

Yes(49)No(14)

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

Deposits(23) Loans and Advances(4)

Treasury Services(2)

Remittance Services(9)

Mobile Money(6)

Others(19)0%

5%

10%

15%

20%

25%

30%

35%

40%

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 LXBL’s

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 customer’s 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 banker’s 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 al’s Principle of Marketing, 12th Edition

Besterfield et al’s Total Quality of Management, 3rd Edition

Harvey Maylor’s Project Management, 3rd Edition

Thomas L. Wheelen et al’s 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 Factors

Weight Rating Weighted Score Comments

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 Service and Innovative product

0.10 4.5 0.45 Customer focused

Training and Development

0.05 4 0.2 Skilled and professional training team

Weakness

Stringent policy 0.10 2 0.2 Tight control

Centralized Management 0.10 2 0.2 Time consuming

Limited product and services in branch

0.05 3 0.15 No comment

Lesser no. of staff in branch

0.20 2 0.4 Slow service

Branches and ATM service

0.05 1.5 0.075 Fewer ATMs outside the valley

Total score 1 3.25

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

External Strategic Factors

Weight Rating Weighted Score Comments

Opportunities

Increasing urban population

0.10 3 0.30 Growth of urbanization

Increase in customer knowledge in banking

0.10 5 0.5 Awareness of banking knowledge

Increase in single family formation

0.15 3 0.45 More customer base

Increase women workforce

0.05 3 0.15 Increase in diversity

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 bankStringent labor law 0.05 3 0.15 No comment

Unstable government

0.10 3 0.3 Unstable rules and regulation

Threats of new entrants

0.10 3 0.3 New entrants for local as well as international arena

Total Score 1 3.3

Appendix 6: Strategic Factor Analysis Summary (SFAS) Matrix

Strategic Factor Weight Rating Weighted Score

S* I* L* Comments(S)

Brand Equity 0.20 4 0.8 * Loyal Customer

Quality customer service innovative product(S)

0.10 4 0.4 * Customer focused

Benchmarking(S) 0.05 4 0.2 * Maintain global standard(paperless product)

Limited products and services in the branches(w)

0.10 2 0.2 * * No comment

Lesser staff in the branches(W)

0.10 2 0.2 * Slow service

Branches and ATM service(W)

0.05 2 0.1 * * Fewer ATMs outside the valley

Increasing customer knowledge(O)

0.10 4 0.4 * Awareness on banking product and service

Changing lifestyle(O)

0.15 4 0.6 * More demand for product and service

Intense competition(T)

0.10 5 0.5 * * * Variety of service offered by other bank

Threats of new entrants(t)

0.05 4 0.2 * New entrants from local 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 Can’t 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

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?

Customer will open an account

Customer will subscribe to the service

Is there sufficient balance in customers

Laxmi Bank will post their names in their web site and Subisu will take the necessary action

Customers will go to Subisu’s office to make the quarterly payment

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

Does the customer already have an

account in Laxmi Bank?

END

No

Yes

No

Yes

No

Yes

Start