CHAPTER I

1.1 Background of the Study

Internship program is a career-related work experience conducted as an integral part of the academic program. It is very essential to get exposure to "real" business projects and problems, development of managerial skills and increased insights regarding organizational work environments thereby enhancing communication skills as the foundation of professional correspondences and understanding the general structure of most business situations by acquiring the new information and ideas so as to apply them for the benefits of the organization as well as the ones own career development.

The term Bank was derived from an Italian word Banca. Banks perform various specialized functions. Banks may be defined in terms of the various functions it performs. So it is quite impossible to define bank in just one word. However, bank can be described as such a financial institution that takes in funds as deposits repayable on demand or at short notice.

According to the Shorter Oxford English Dictionary, Bank is an establishment for the custody of money received from or on behalf of its customers. Its essential duty is to pay their drafts on it, its profit arise from the use of the money left unemployed by them.Types of BankThere are many types of bank among them the main types of bank can be categorized as follows:a) Commercial Bankb)Development Bankb) Central Bank

1.2 Brief Introduction about Commercial BankA commercial bank is a financial intermediary which collects credit from lenders in the form of deposits and lends in the form of loans. Encyclopedia Says: Commercial banking activities are different than those of investment banking, which include underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients. Commercial Bank means a bank which conducts currency exchange transactions, accepts deposits, supplies credit and performs commercial dealings other than those banks which have been prescribed as with co-operative, agricultural, industrial or any other specific objective.Although commercial banks are privately owned enterprises they have been given the extra ordinary power to create money in form of demand deposits as well as to extinguish money so created. They borrow from those who are not immediately spending all their current receipts and they lend to those who have intentions of immediately spending on goods beyond the range of their own current receipts. They accept deposits and pool those funds to provide credit either directly by lending, or indirectly by investing through the capital markets. Within the global financial markets, these institutions connect market participants with capital deficits (borrowers) to market participants with capital surpluses (investors and lenders) by transferring funds from those parties who have surplus funds to invest (financial assets) to those parties who borrow funds to invest in real assets.

1.3 Banking in Nepal

Banking services are the integral part of the people and without the facilities, it has become very difficult to conduct the daily personal and business activites. The overall of the financial services is however more concentrated in urban areas and still a large population dont have access to these services.In 1957 AD Industrial Development Bank was established to promote the industrialization in Nepal, which was later converted into Nepal Industrial Development Corporation (NIDC). Rastria Banijya Bank was established in 1965 AD as second commercial bank of Nepal. The financial shapes of these two commercial banks have a tremendous impact on the economy. As the agriculture is the basic occupation of major Nepalese, the development of these sectors plays the prime role in the economy so, separate Agriculture Development Bank was established in 1968 AD. After declaring free economy and privatization policy, government encouraged the foreign bank for joint venture in Nepal. Then a lot of commercial banks were established in the country.In Nepal, financial institution refers to Commercial Banks, Development Bank, Finance Companies and Microfinance Institution. NRB is the regulatory and supervisory authority of all financial institutions operating within the boundaries of Nepal. In simple language, we can say, banks are the financial intermediaries that are involved in monetary transaction of depositors and borrowers that fulfill both needs. Within the last few years, Nepalese financial system has grown in terms of volume and size of business and market respectively. In Nepal, there are 31 Commercial Banks, 87 Development Banks, 79 Finance Companies and 21 Microfinance and 16 Co-operatives and 38 NGOs Institutions as on January 2011.

Table I: List of Commercial Banks in Nepal as of January 2012S. NoNamesOperation date(A.D)Paid up capital(in millions)

1Nepal Bank Ltd.1937/11/15308.4

2Rastriya Banijya Bank1966/01/151,172.3

3Agriculture Development Bank Ltd.1968/01/029,437.5

4NABIL Bank Ltd.1984/07/162,029.8

5Nepal Investment Bank Ltd.1986/02/272,409.1

6Standard Chartered Bank Nepal Ltd.1987/01/301,398.5

7Himalayan Bank Ltd.1993/01/181,600.0

8Nepal SBI Bank Ltd.1993/07/071,653.6

9Nepal Bangladesh Bank Ltd.1994/06/051,860.3

10Everest bank Ltd.1994/10/181,079.6

11Bank of Kathmandu Ltd.1995/03/121,359.5

12Nepal Credit and Commerce Bank Ltd.1996/10/141,399.6

13Lumbini Bank Ltd.1998/07/171,294.5

14Nepal Industrial & Commerce Bank1998/07/211,311.5

15Machhapuchhre Bank Ltd.2000/10/031,627.2

16Kumari Bank Ltd.2001/04/031,306.0

17Laxmi Bank Ltd.2002/04/031,613.5

18Siddhartha Bank Ltd.2002/12/241,561.0

19Global Bank Ltd.2007/01/021,473.4

20Citizens Bank International Ltd.2007/06/211,207.0

21Prime Commercial Bank Ltd. 2007/09/241,210.0

22Sunrise Bank Ltd.2007/10/121,625.0

23Bank of Asia Nepal Ltd.2007/10/121,500.0

24DCBL Bank Ltd.2008/05/251,920.9

25NMB Bank Ltd.2008/06/051,651.6

26Kist Bank Ltd.2009/05/072,000.0

27Janta Bank Nepal Ltd.2010/04/051,400.0

28Mega Bank Nepal Ltd.2010/07/231,631.0

29Commerz & Trust Bank Nepal Ltd.2010/09/201,400.0

30Civil Bank Ltd.2010/11/261,200.0

31Century Commercial Bank Ltd.2011/01/232,000.0

1.4 Objective of the studyThe general objective of the internship program is for the partial fulfillment of the requirement for the degree of Bachelors of Business Administration- Banking and Insurance.The specific objectives of this study are: To understand the organizational environment and culture. To acquire different aspect of knowledge regarding the staffs and individuals working in an organization. To evaluate the financial strengths and weakness of the firm. To measure the ability of a firm to meet its short terms obligation and reflect the financial solving of firm. To develop skills in the appliance of theory to practical work situations. To get exposed to the practical work place and understand its function, structure and other operation activities. To understand the core concept of credit risk management and credit administration.

1.5 Limitations of the Study This report is based on short period study. The entire course of internship was two months. Hence, the conclusion drawn consists only the above period. The analysis covers small area because of limited time and constraints of the bank. The analysis fails to find the overall facts relating to MBNL.

1.6 Research MethodologyResearch methodology refers to the various sequential steps to adopt by a researcher in studying a problem with certain objectives in view. The research design of the study is descriptive, exploratory, and analytical. Descriptive design is concerned with describing the events, policies, programs, and strategies which are already planned and rigid, by the government, and firms. Exploratory research studies main purpose is to formulate a problem finding and this type of research is essential for the areas not much is known. So, this study follows the exploratory designs. However, the plans, policies and strategies regarding banking can be obtained through secondary sources. So, the report follows descriptive design.

1.7 Data collection proceduresi) Primary DataPrimary data are original data gathered by for the research project at hand. Thus, these data are collected for meeting the specific objectives of the study. Primary data can be collected through interviews, observations or experiments. During the internship, primary data were collected by informal interview with the supervisors.

ii) Secondary DataSecondary data are often in published form, however the unpublished data such as the records, reports or statistics gathered or compiled by others prior to our study are also secondary data. A source of such data includes sales information, accounting data, documents, payments, bulletins, books and periodicals published reports etc. Much information in this report is based on the secondary data gathering.

CHAPTER II

ORGANIZATIONAL BACKGROUND

2.1 Introduction to Mega Bank Nepal Limited

Recognizing that banking activity has been limited to the urban and semi-urban areas of Nepal, Mega bank has been set up not only to provide better products and services that are currently on offer in the financial sector but also to penetrate and tap the virgin rural market. The promoters shared a vision to make Mega Bank a catalyst for the promotion of financial inclusion in Nepal.The initial concept of establishing a truly inclusive MEGA bank was envisioned by a group of individuals from a diverse range of backgrounds two years to the formal inauguration of the Bank. These individuals who initially conceptualized the establishment of this institution were propelled by their vision to establish a national level banking institution that would provide the highest levels of professional banking service with a personal touch, throughout the nation, to all Nepalese. It is the realization of this aspiration that lead to the incorporation of Mega Bank Nepal Limited as Nepal's largest A class commercial bank with an authorized capital of Rs.4 billion and an issued capital of Rs.2.33 billion.The Bank has been promoted by 1219 promoters spread across 63 of Nepal's 75 districts. The promoters are divided into 6 clusters, with each cluster being represented by one seat on the Bank's Board; Professor Dr. Madan Kumar Dahal is the Chairman of Mega Bank Nepal Limited's Board. A senior economist of Nepal holding a Doctorate Degree in Economics, Dr. Dahal is a respected personality in the South Asian region for his insightful contributions and analytical papers on national, regional and international economic issues. The promoters are represented in the Board of Directors, comprising of accomplished personalities from the field of tourism, development, academicians, economists and businessmen.

2.2 Objectives of MBNL Vision The seed planted by the Bank's Promoters in their initial deliberations is today the core of Mega Bank's Vision - to be the banker to every Nepali, delivering five star quality services to all its customers. Our Vision is who we want to be, and everything we have done to date, and everything we will do as we build the Bank going forward will be centered around ensuring Mega Bank works towards becoming the 'Banker of every Nepali from Plough to Power - Halo to Hydro'.

Mission In order to move towards the realization of our Vision, which enlightens us on 'Who we want to be', we have articulated a statement of Mission to clearly state 'Where we want to be'. Our Mega Mission is to consistently deliver 'Service Excellence to Create Mutually Beneficial Relationships' with all our stakeholders.

Values Each and every member of the Mega Team is committed to delivering service excellence and working towards providing five star quality banking to Customers, Shareholders, Regulators, Community, and Staff, creating, building and strengthening relationships of mutual benefit. In order to achieve our Mission all of us are committed to our Mega Values of being Service Centric, Transformational, Action Oriented, Result Focused, Synergistic, everyday in everything we do. The acronym of our Values is S.T.A.R.S. reflecting our commitment to the Mega Service culture.

2.3 Organization Structure of MBNL There are nine Board of Directors in MBNL. The Chief Executive Officer of MBNL is Mr. Anil Keshari Shah. Ms. Anupama Khunjeli is the Chief Operating Officer while Mr. Govinda Gurung and Ms. Raveena Desraj Shrestha are the Chief of Corporate Banking and Chief of Consumer Banking & Corporate Affairs respectively. And under them there are different department who have to report to them such as Human Resource, Credit Department, IT department, Marketing and so on.

Fig. 1 Organizational Structure of MBNL

CEOBOD

CompanySecretaryGlobal Markets & Operations (DGM)Corporate Banking(DGM)Consumer Banking(DGM)

Mega SME Banking (M3)Media Corporate Credit (M3)Risk, Compliance & Support (M4)

Internal Audit

Mega Micro Banking (M1)Deposit Marketing Remittance & Cards Centre (M4)Consumer Lending Department (M2)Legal & Shares (M3)

Credit Administration(M2)

Global Markets & Trade Finance (M2)Operations & Shared Distribution (M2)Human Resources (M2)Administration & Network Expansion (M2)Branch Manager MB (ATM Cell (M2)

Mega Corporate Affairs (M1)

Finance & Planning (M1)IT & SWIFT (M1)Mega Marketing Centre (M2)

Treasury Front OfficeTrade Finance

NPA ManagementCredit RiskOperations Risk & Compliance Development Treasury Back OfficeMega Remittance Centre Mega Card Centre 25

2.8

Reconciliation Development

2.4 Current Capital Structure

Table II: Current Capital StructureAuthorized capital4 Billion

Issued Capital2.33 Billion

Paid up Capital Shareholding1.63 Billion

Head OfficeKantipath

Branch OfficeKantipath (Ktm), Syaffrubeshi (Rasuwa), Kapan (Ktm), Sandhikharka (Argakhanchi), Baneshwor (Ktm), Pokhara (Kaski), Jawalakhel (Lalitpur), Biratnagar (Koshi), Birgunj (Parsa), Newroad (Ktm), Butwal (Rupandehi), Hariwan (Sarlahi), Chautara (Sindhupalchowk)

Number of Employees236

Computerized BranchesAll

District CoveredAll

2.5 Composition of Board of DirectorsTable III: Board of Directors of MBNL

NamesDesignation

Dr. Madan Kumar DahalChairman

Dr. Duman ThapaDirector

Dr. Govinda NepalDirector

Mr. Bhoj Bahadur ShahDirector

Mr. Mukti Ram PandeyDirector

Mr. Gopal KhanalDirector

Mr. Rameswor SapkotaDirector

Mr. Indra Bahadur MallaDirector

Mr. Bijaya SambahapheDirector

2.6 Network Overview

Branches of Mega Bank Nepal Limited

1. Corporate office - Kantipath branch2. Branch - Jawalakhel3. Branch - Pokhara4. Branch - Biratnagar5. Branch - Hariwan6. Branch - New Baneshwor7. Branch - Chautara8. Branch - Kapan9. Branch - Birgunj10. Branch - Butwal11. Branch - Kantipath12. Branch - Syafru Besi13. Branch - Arghakhachi14. Branch - Teku2.7 Description of the products and services of MBNL

1. Consumer BankingThe personnel at Consumer Banking are equipped to provide a 5 Star banking experience each time one makes a visit to the Bank. Ones entire personal financial needs are duly taken care of in order to be able to match his/her expectations. The various products at Consumer Banking are: a) Account and Deposit

LCY Denominated Account

FCY Denominated Account

Mega Lokapriya Bachat Khata Mega Current Deposit Account Mega Byapar Bachat Khata Mega Fixed Deposit Account Mega Dhamaka Mudhati Khata Mega Swabhiman Bachat Khata Mega Nari Special Account

Special Current Account FX Current AccountFCY Call Account FCY Current Convertible Account Saving Account FCY Fixed Deposit Account

b) Consumer Lending Mega Auto Loan Mega Home Loan Mega Mortgage Loan Mega Mortgage Overdraft Mega Personal Loan Mega Education Loan Mega Margin Lending Mega Loan Against Fixed Deposit Mega Loan Against Govt. Securitiesc) Remittance Mega Remit

d) Card

2) Corporate BankingCorporate Banking reflects Mega Bank's strengths in providing its corporate clients in Nepal, a wide array of commercial, transactional and electronic banking products. It achieves this through innovative product development and a well-integrated approach to relationship management. The products which Mega Bank Nepal Limited has introduced are: Corporate Lending Trade Finance Letter of Credit and Bank Guarantee

3) SME BankingSME is an abbreviated form of Small and Medium Enterprises which refers to a certain class/segment of customer/clients based on their size of company/business or size of their balance sheet and turnover. To note, SME banking doesn't mean SME financing only.Hence, "SME Banking" is a business relationship with small and medium scale enterprises by segmenting them into a special category and offering them a complete package of banking products and services in holistic approach.

4) Micro BankingMega Micro Banking is an initiative for catering '5 Star' banking services to the poor and economically marginalized people of the nation. It is characterized by small size of loan and small saving mobilization among the small entrepreneurs and low income groups. Account and Deposit Mega Micro Compulsory Saving Micro Lending 5) Direct Banking

CHAPTER III

ANALYSIS AND PRESENTATION

3.1 Credit Risk Management

The word Credit is basically reliance on the truth of something said or done. It is the ground of confidence or belief. It is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately (thereby generating a debt), but instead arranges either to repay or return those resources (other materials of equal value) at a later date. Credit riskis an investor's risk of loss arising from a borrower who does not make payments as promised. Such an event is called adefault. Other terms for credit risk aredefault riskandcounterparty risk. It refers the risk of negative effects on the financial result and capital of the bank caused by borrowers default on its obligations to the bank. It is the major risk that banks are exposed during the normal course of lending and credit underwriting. Credit risk arises from non-performance by a borrower.MBNLs branch offices deals with consumer loans like auto loan, personal loan, mortgage loan etc. and SME loans head office is responsible for the corporate loans. Credit proposals are then prepared by the credit relationship managers assigned in different branches and then sent to CRD for proper evaluation.

It is compulsory to check the probability of event of default by making a comprehensive evaluation of all the proposals such that credit is provided to the reliable and trustworthy person and organization and there occurs no default. Credit risk analysis is principal function in credit processing to visualize and measure the probability of default causing loss in particular credit proposal and thus is very crucial for a credit decision. It is with the help of the collected information and documents like site visit report, financial records, CICL report etc. that are provided by the RM, credit risk officers evaluate the proposals. The financial highlights are the most crucial information as with the help of ratio analysis the current state of the client is correctly interpreted. The analysis is done as per Five Pillar analysis and PEST analysis that is applicable in overall industry analysis. After proper evaluation of the proposals, suggestions for approvals or reasons for disapproval of the loan to the client are mentioned with valid reasons and justification. With the suggestions that are provided by the credit risk officers, the proposal is forwarded for further approval from respective heads. If the loan is approved by the respective heads, the proposal is sent to CAD to make necessary loan agreement with the client.

In general, Risk management process involves Identification, Measurement, Monitoring and Controlling. CRM should by and large evaluate the following risks in a credit proposal and give their opinion/remarks as appropriate so as to enable the decision making process.

i) Credit risk:Credit risk refers to the probability of default due to uncertainty of counter partys ability to pay its obligations towards the bank. CRM should primarily foresee measure and evaluate 3 types of risk parameter under Credit risk such as: Probability of default due to counter partys inability to pay its loan principal and interest. In case of event of default, how much is the amount (principal and interest) at risk. How much is the likely realizable value.

ii) Financial risk:CRM should review and analyze all the financial statement, indicators, ratios (mainly probability, leverage and turnover), cash flow and other financial parameters and make sure that all of them are within the acceptable norms.

iii) Product risk:Nature of product, style, brand value, life, diversification, factor of obsolescence, availability of substitutes, quality, product life cycle etc. are some of the attributes to be analyzed under Product Risk Evaluation.

iv) Production/Operational risk:Human resource/Labor availability, their skill, HR/Labor relations with management, plant and equipment, cost of operation, obsolescence factor, technological advancement, insurability, availability and cost of energy and other utilities, regularity in supply of raw material etc are to be checked under the production/operation risk.

v) Market risk:Demand/Supply situation, seasonality of the product, competition factor, brand value, product acceptability, price fluctuation, entry/exit barriers, company sales strategy, distribution system, relation with buyer/suppliers, market share, advertising and promotional activities etc. need to be reviewed and analyzed under the Market Risk Evaluation. Also, government regulation and economic condition should be taken in consideration while evaluating the industry/market risk.

vi) Technological risk:Availability or compatibility of technology, replacement/cost, chances of being obsolete, availability of technological resources, repair or maintenance, spare parts etc are the major consideration for the technology risk assessment.

vii) Management risk:Management risk includes integrity, competence, experience/expertise, nature of alliances of promoter or management team, succession plan etc. are to be analyzed under management risk.

viii) Sovereign risk:Sovereign risk is crucial when the credit is advanced against the security of government securities and/or if loan is given to Government institution. Hence, in such case, sovereign risk should be analyzed.

ix) Security/Collateral risk:Authenticity of title/ownership, sufficiency, quality potential deterioration, potential realizable value in case of event of default, control over the security/collateral, execution/strength of security documents etc needs to be evaluated and checked under the security risk.

x) Other risk:Besides above, CRM has to thoroughly evaluate the risk such as interest rate risk, portfolio concentration risk, exchange risk, liquidity risk, capital flight risk, fund siphoning risk, inflation risk etc needs to be evaluated. Since, rather than these risks all other risk is also to be analyzed/evaluated depending upon the type of project/business.

3.2 Procedure of the Assignment1. Firstly the credit proposals are received that are prepared by the RM. CRM obtains credit proposal for various loans like demand/short term loan, trust receipt loan, mortgage loan, auto loan, overdraft, term loan, letter of credit, bank guarantee, etc.2. It should then be checked if all the required documents are available or not. The requirement of the document can vary according to the credit proposals. The general documents required are: Complete and signed loan form of the costumer. Citizenship and/or valid permanent ID of the borrower/authorized persons along with the photographs. Business registration certificate with respective department. Copy of PAN/VAT registration with tax payment receipt. Copy of partnership deed in case of partnership firm. Extract of resolution of Board meeting in case of partnership and/or limited liability Company along with the proposed loan limits, security offered, authorized persons for needful proceedings and legal/security documentation for availing loans and other relevant matters certified by the Chairman and/or Company Secretary. Extract of minute of the special general meeting in case of loans more than core capital (equity and free reserves) of the company. Authenticated copy documents relating to security offered. The details of other projects promoted by them and the status of those projects. Audited financial statements of last two years for the running company and projected financial statement for the new company for the next five years or for total payback period whichever is lower. Latest stock report, receivables report, payables report and other banks outstanding report. Net worth statement of the client and the personal guarantee. CICL report of the client. Any other documents prescribed by the competent authority from time to time and case by case. It should be noted that all the photocopied documents are verified with the original and signed by the RM otherwise, the documents cannot be taken as reliable document.

3. After the documents and the proposal is thoroughly checked by the credit risk officers, if any points are confusing or if any documents are pending, such can be communicated to the respective RM. Credit risk officers are not allowed to have any direct communication with the prospective client as there might be a situation for biasness or favoritism.

4. After the document has been scrutinized, summary of credit proposal is prepared wherein, personal information of the client, the type of loan proposed, pricing, tenor and 5 Cs analysis i.e. capacity, character/creditworthiness, capital, collateral a condition is mentioned along with the key risk associated i.e. business/industry risk, financial risk, management risk, collateral risk and repayment source and its mitigations are mentioned accordingly. Further any other recommendations are also pointed out if any.

5. The proposal is likely to get positive feedback under following circumstances: The integrity of promoters and management is exceptionally good and show total commitment and confidence with relevant experience, expertise and technical know-how. All the financial indicators exhibited in the proposals financial statements and/or projected financials are authentic/ reliable and are within the acceptable norms. The project has some priority according to governments policy. The national/international industry/trade environment is favorable. The technology to be adopted is well proven. The product has a distinct market potential/ feasibility. The project cost is reasonable and is comparable with similar projects. The quality is security/ collateral offered is good and salable having reasonably good realizable value. However, the proposal is likely to be rejected if some of the following features are observed: CICL about the promoter is not satisfactory. Overall supply chain management is not satisfactory. Product does not have adequate market potential. Overall industry/trade environment is not favorable. The product belongs to a low priority sector. Setting up of the unit would adversely affect the existing units. Promoters/ Management integrity and credibility have not been found to be good in the past. Promoters are defaulters and/or financial/ economic offenders. Net worth of the directors/promoters is not satisfactory. Financial position and/or indicators including that of leveraging position (Debt/Equity) of the company are not satisfactory. Cost of the project is unduly escalated/ excessive. Financial indicators derived from the existing or projected financial statements are unfavorable. Issues regarding the collateral to be mortgaged are aroused. The clients 3 generation family or the personal guarantor falls in black list issued by Credit bureau. The transactions in the account are not found to be satisfactory. Any other issues which are not compatible to NRB directives, Banks policy, law of land and prudent banking norms.

6. After the comprehensive evaluation is conducted, the proposal and the summary just prepared are sent to the head for further approval.

CHAPTER IVSUMMARY AND CONCLUSION4.1 SummaryThe objective of the internship is to gain practical knowledge about the banking operation at MBNL. The specific objective is to understand the function of the credit risk department and the risk associated with the lending function of the bank.Various risk are connected with the credit proposals like business risk, financial risk, collateral risk etc. These risks should be effectively evaluated by the credit risk officers such that defaults in loan are not aroused. The credit risk officers should think with the possible risk that might occur and have sharp eyes to catch the misleading information that are provided by the clients. Its the general function of the Credit Risk Officer to know where the banks money is being played. The main objective of the Credit Risk Department is not only to approve/ reject credit proposals but to make sure the credit is returned to the bank as well. Even though high lending means high earning to the banks, these phenomena should be properly evaluated such that fraud costumers are rejected.The rules and regulations which are forwarded by Nepal Rastra Bank are strictly followed by the banks product papers. All the necessary analysis and conditions are to be according to the norms and regulations of NRB. Credit proposal associated with loans that are against the NRBs directives like loan against highly perishable goods, arms and ammunition, non addictive medical drugs etc. are rejected at once. 4.2 Experiences as an InternOverall, my internship period was very fruitful, productive, creative and rewarding. I am privileged to have been supported by such helpful people who taught me from the basics and helped me gain practical knowledge. The organizational culture, sharing and caring attitude of the employees are what I adore and respect in MBNL. My involvement in MBNL has helped my confidence grow with adequate exposure.

4.3 ConclusionCredit Risk Department is an integral part of any financial institution and it is compulsory to have a risk department according to the recent directives of NRB.. Not being an exception, MBNL also have a very strong team of managers to deal with risk associated with credit proposals. The lending portfolio of every bank determines their growth and progress in the market. Banks are always concentrated upon collecting and lending of cash to various parties. Either it be with tempting schemes or with lucrative interest rate, banks are always concentrated upon their growth and progress in regards to providing lending services to its valued customers.The information about risk associated with credit proposals of MBNL shows that there are various types of risk associated with the credit proposals. The risks are analyzed either to outlay the character of the client or to determine the ability of the client to payback the loaned amount with the pre-specified interest on right time or to check the organizations background and credit worthiness. The CRD is considered as the foundation of the earnings for the banks. The maintenance of the status of the company like in terms of liquidity and leverage depends upon the proper functioning of this department. It is one of the important departments which is associated directly with the growth and progress of ay bank. As it has its function associated with risk related with credit proposal it proves to be the governing body to rest public money in the safe hands of the customers. As a whole, the internship period for me was very productive. In the initial few days of my internship period I was assigned to the read the product papers to evaluate the credit files. With this I got the idea about various loans products and the criteria or condition under which the proposal can be approved. Further I was given the opportunity to read the proposal and make the comprehensive evaluation of the proposal. Starting with the personal loan proposal like auto loan I gained more confidence regularly to evaluate other corporate proposals too.Working as an intern, I was satisfied and had wonderful opportunity of getting a real life working experience which would add value in learning of MBA. Its through this opportunity I believed that having a compulsory internship as a requirement of the MBA degree is a very good decision. This helped me have a practical experience along with our theoretical knowledge. It help build me confidence and changed my approach toward working in corporate world is hard.4.4 RecommendationsAfter the completion of my internship, I gained a lot of experience and have developed a confidence that I can stand in the outer world. During my internship, I felt that works that I was assigned were highly appreciable that helped me to develop my inner strength. However, I would like to give some recommendation to the management of bank regarding some of the work related issues that I have experienced during my internship which are as follows: There should be clear descriptions on what interns are suppose to do rather than just waiting for the supervisor to give the general operation tasks. Rotation policy for the interns in the bank will help them gain an exposure in various departments. Proper division of number of interns in a certain department. Even though the software cannot be used by interns, dummy software can be maintained for teaching purpose only for interns.

Program workplace relationshipThe internship program can be improved further if following steps can be implemented by the colleges and the university: The major software that are used in the bank and financial institutions like Oracle-Flexcube, Newton, Finnacle etc. can be taught in general in colleges so that it could be easy for the interns to understand the transactions that are done in the institutions even though they are not allowed to use it. The college can help the students by giving general ideas about the current position and practices of the different organizations so that the students can understand and choose the correct place according to their personal ability and career path.

APPENDIXProduct FeatureTable V: Interest on loans and AdvancesTypes of loanPrime rate p.a.Other p.a.

Overdraft15.00%16.00% - 17.00%

Term Loan15.50%15.00% - 16.00%

Demand Loan14.50%15.00% - 16.00%

Cash Credit Loan14.00%14.00% - 15.00%

Import Finance13.00% - 14.00%14.00% - 16.00%

Short Term Loan14.00% - 15.00%15.00% - 16.00%

Pledge Loan15.00% - 18.00%

Export Finance13.00% - 14.00%14.00% - 16.00%

SME Loan12.99% - 16.99%

Deprived Sector LoanIndividuals: 20.00% - 21.00%Institutions: 11.00% - 14.00%

Mortgage Overdraft16.00%17.00% - 18.00%

Mortgage Loan: Up to 5 years Up to 8 years Up to 15 years 14.00%15.00%16.00% 15.00%16.00%17.00%

Housing Loan: Up to 5 years Up to 10 years Up to 15 years Up to 20 years 13.00%14.00%15.00%16.00% 14.00%15.00%16.00%17.00%

Auto Loan:PrivateCommercial 13.00%15.50% 14.00%16.50%

Margin Lending16.00%17.00% - 18.00%

Loan against FDROwn Bank: +2.00% or minimum 13.00%Other Bank: +3.00% or minimum 14.00%

Loan against Govt. Securities+2.00% or minimum 14.00%

LCY Loan against FCY Deposit12.00% - 14.00%

Other Loans18.00% - 21.00%

BIBLIOGRAPHY

1. www.megabanknepal.com2. www.nrb.org.np3. Wikipedia and Encyclopedia (www.google.com)4. Financial Institutions and Markets; by Kiran Thapa and Bharat Parajuli, Januka Publication, Kathmandu5. Financial Institutions and Market; Meir Kohn, Second Edition, Oxford University Press,