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 one’s own career development.
The term “Bank” was derived from an Italian word “Banca”. ...view middle of the document...
“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 don’t 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...