CHAPTER I

INTRODUCTION

1.1 Background Information

In general, a bank is an institution which deals with money and credit. But in broad sense,
Bank refers to the financial institution which accepts the deposit form different customers
and invests or lends that deposit in various sectors. Bank is very importance part for
economic development of a nation which pays interest for depositor‘s gives money back
when demanded and also provides loan to the needy person taking some securities.

A competitive, efficient, and healthy financial system is vital for enhancing growth,
efficiency and maintaining stability of the overall economy. It is essential for the healthy
sustainable growth of the country. As an economy grows and matures, its financial sector
must grow with it. It must able to meet the increasingly sophisticated demands that are
placed on it. A well-developed financial system promotes investment by identifying and
financing lucrative business opportunities, mobilizing saving, efficiently allocating
resources, helping diversify risks and facilitating the exchange of goods and services.
Within a short span of time, Nepalese financial system has grown significantly both in
terms of business volume and the size of markets. A number of financial with varied nature
of operation have come into existence offering a wide range of financial services. Till now
financial sector of Nepal include commercial banks, development banks, finance
companies, micro credit development banks, cooperatives and non-government
organization and some other non-bank financial institution.

Financial Institutions play an intermediary role in transferring funds form savers to the
investors who later invest the fund on most productive sector and this efficient allocation
of funds facilitate economic growth development of the country.

1
The globalization of financial market help financial institutions in introducing international
practices and standards; by improving quality, efficiency, and breadth of financial services;
and by allowing more stable sources of funds. Realizing the enormous potential benefits
that could be derived from the liberalization of financial services.

Nepal Bank Limited, The first bank of Nepal was established in November 15, 1937 A.D
(Kartik, 30, 1994). It was formed under the principle of Joint venture (Joint venture
between govt. & general public). NBL's authorized capital was Rs. 10 million & issued
capital Rs. 2.5 million of which paid-up capital was Rs. 842 thousand with 10
shareholders. The bank has been providing banking through its branch offices in the
different geographical locations of the country.

Commercial banks play a pivotal role in the economic development of the country. In
Nepal commercial banks are regarded as the backbone of financial sector. They perform
various functions for uplifting the economic activities.
Currently, there are almost 31 commercial banks in the country. Commercial banks are the
major players of the financial market as they have lion‘s share in country‘s deposits (81%)
and credit (72%) share in the capital market.

This report is prepared for the partial fulfillment for the requirement of degree in Bachelor
in Business Administration (BBA). Theoretical knowledge and academic concepts are
referred for the preparation of this report. This report is totally based on exploratory work
in Remittance Business Unit of Kumari Bank Limited.

The new age private sector banks can be said to be the forerunners in offering customer
oriented services. Likewise, KBL was established for providing the services to the
customers differently with their wish, in a customized manner. And this makes the bank
‗The Bank of First Choice‖ with successful completion of 18 Years. This experience gave a
great chance to gain practical experience about banking functioning, working in an
organization and utilizing conceptual knowledge in specific area of operation.

2
1.1.2 INTRODUCTION TO KBL

Kumari Bank Limited was registered in 2001 as the fifteen commercial bank to start
banking business in Nepal with its head office in Pokhara. Today, with a paid up capital of
NPR 8,685,573,127. It is one of fully fledged commercial bank operating in Nepal, and it
ranks in the topmost among the private commercial banks. Kumari Bank Limited is the
pioneer in introducing the latest technology in the banking industry in the country.

Kumari Bank Ltd has been providing wide - range of modern banking services through
109 points of representations located in various urban and semi urban part of the
country, with 77 outside valley branches, 26 inside valley branches, 3 extension counters
and 3 Branchless Banking Units. The bank is pioneer in providing some of the latest /
lucrative banking services like E-Banking and SMS Banking services in Nepal. The bank
always focus on building sound technology driven internal system to cater the changing
needs of the customers that enhance high comfort and value. The adoption of modern
Globus Software, developed by Temenos NV, Switzerland and arrangement of centralized
data base system enables customer to make highly secured transactions in any branch
regardless of having account with particular branch. Similarly the bank has been providing
365 days banking facilities, extended banking hours till 7 PM in the evening, Utility Bill
Payment Services, Inward and Outward Remittance services, Online remit Services and
various others banking services.

Visa Electron Debit Card, which is accessible in entire VISA linked ATMs (including 91
own ATMs) and POS (Point of Sale) terminals both in Nepal and India, has also added
convenience to the customers. The bank has been able to get recognition as an innovative
and fast growing institution striving to enhance customer value and satisfaction by backing
transparent business practice, professional management, corporate governance and total
quality management as the organizational mission.

The key focus of the bank is always center on serving unfulfilled needs of all classes of
customers located in various parts of the country by offering modern and competitive
banking products and services in their door step. The bank always prioritizes the priorities
of the valued customers.

3
1.2 Statement of the problem

Remittance is the process of transforming the fund from one place to another place. Today
most of the youth are going on abroad to earn money and they send that money to their
home. To send their money to their home they used remittance service.

The research tries to find out the problems that being faced while providing the remittance
service. KBL provides different types of service to their customer among them remittance
is one. In today context remittance is most importance need of people. So this survey aim
is to explain the remittance service of Kumari bank ltd and how they perform their service.
The problems are:

a) What are the main problem arise while providing remittance service?

b) What is the market condition of this service?

c) What are the situations of remittance in Kumari bank ltd?

d) How the Kumari bank does provide remittance services to their customer?

1.3 Objectives of the study

The objective of the fieldwork report is to analyze, interpret and investigate the Remittance
service of Kumari bank with the help of table. An objective is intent, communicated by a
statement describing the plan of the researcher in clear, measurable terms. This is done so
that the researcher has a clear understanding of exactly which variables to investigate and
what data type he or she is dealing with. Remittance service is one of the most importance
service provided by bank. It helps to transfer fund from one place to another.
This study will be useful to know about the remittance service. Specifically the study
intends to:

4
 a) To explain the Remittance Scenario of Kumari Bank Limited in brief.

b) To analyze the working procedure of KBL remit.

c) To state the facilities and services provided by the bank as remittance.

d) To acquire the information relating to the different charge on remittance

services

1.4 Significance of the study

Remittance is a transfer of money by a foreign worker to his\her home country or simply

sending amount from one country to another. Due to the remittance, fund transfer in safe,
fast in a low service charge. It is one of the sources of income for the bank. This study is
also helpful to know the different types of remittance service available in KBL. It is
importance to know the actual rate of remittance, which was taken by bank. Likewise this
study will be beneficial for following:

 This report can be a source of secondary data for researchers.

 It will be helpful to know about the remittance service of this bank.

 It will help the customer to make different decision relating to

remittance of KBL.

 Investor will be aware of the financial situation of KBL.

5
1.5 Limitation of the study

Although it provides a lot of information to the stakeholders and it is a depth study of

remittance business unit in KBL, it may not suit to other banks. There are a lot of
conditions that restrict the scope of study or affect the scope of the researcher finding
and are uncontrolled.
Some of the limitations of this report are as follows:

Researcher had to face some limitations to collect some information‘s about

remittance services of KBL as these were not so available for the general
publics.

Respondent were too busy to read the questions properly and tick the
answer of objective questions just for sake of completing the survey
quickly. So there is no guarantee that the data collected is 100 % correct and
accurate and hence while analyzing the researcher has considered level of
significance.

Due to time constraints, the data has only been collected from the clients of
KBL Mangal Bazar, Lalitpur, which may fail to represent the factual
scenario of the relationship between measurable variables.

There could be error on understanding and interpreting information

provided by respondents.

6
 CHAPTER II

LITREATURE REVIEW

2.1 Definition of Remittance Services:

The remittance service is also related with the foreign currency. Banking companies are
providing this service to facilitate the transfer of the funds from one country to another. As
we know that presently the Nepalese youth are flying in foreign countries for the search of
employment, the remittance service provided by the banking companies providing a safe
and legal way for them to send their earning to their home. This is not one side business;
banking companies are transferring the fund from Nepal to other countries also. These two
side business can be classified in Inward Remittance and outward Remittance, where
inward means to receive funds from foreign countries and outward means send funds to the
other countries. Banking companies are using different means for such fund transfer
(Resham Raj Regmi, 2064)

2.2 KBL and BOK Agreement on Remittance:

Kumari Bank limited (KBL) and Bank of Kathmandu (BOK) had signed an agreement to
provide remittance service of Kumari Remit-the remittance business of KBL.
According to a press statement, as per the agreement, BOK will provide Kumari Remit
service from its network of 50 branches. Uday K Upadhyay, acting CEO of KBL and
Prabin Prakash Chettri, CEO of BOK, signed an agreement. ―KBL has been providing
inward remittance from Qatar, UAE, Malaysia, USA, Russia and other Gulf and European
countries, ―the statement said.
The fund remitted by migrant workers through Kumari Remit from any part of the world
can be received by their relatives in Nepal from a network of more than 1,000 agents of
KBL along with branch network of BOK. (www.financialnepal.com)

7
2.3 Concept of Remittance:

A ―Remittance transfer‖ refers to the transfer of money from an individual, usually a

person who has emigrated from the city or country of origin, to another individual, usually
a relative who remains at home. Remittance transfers are typically person to person
payments and of low monetary value. There are two basic categories of remittance transfer.
 Domestic

 International

Remittance transfers may be domestic or international. Domestic remittances occur, for

example, when there is migration from rural to urban areas within a country. However, the
focus of this report is on international remittance transfers, which, for the purposes of the
report, are defined as cross-border person-to-person payments of relatively low value. In
practice the transfers are typically recurrent payments by migrant workers (e.g. who send
money to their families in their home country every month). For simplicity, in the rest of
the report such payments are usually referred to just as "remittance transfers" - i.e. it is
assumed they are international. The definition is designed to reflect the payment system
aspects of remittances. The emphasis is on person-to-person payments rather than
payments to purchase goods and services or business-to business payments. These person-
to-person payments are typically relatively low-value compared to, for example, wholesale
bank-to-bank transfers. Often the flows are between relatively low-income individuals and
the senders, as migrants, may not always be well integrated into all aspects of the host-
country's society and economy. In addition, although remittance transfers are typically
recurrent, in practice they are usually made as a series of individual instructions rather than
by standing. Although remittances are from an economic and social point of view of
special interest as a category of payment, it should be noted that from the point of view of
those providing remittance services, remittance transfers will sometimes be
indistinguishable from other retail (i.e. low value) cross border transfers because the RSP
is unable to identify that they are person-to-person. For example, the sender may be
making the payment not as an individual but on behalf of a small business they run, or it
may not be clear whether the (foreign) name of the recipient is that of an individual or

8
business may be because remitters vary the amounts that they send, because the RSP does
not accept standing orders or because
Remitters do not have to access to RSPs such as banks and other deposit takers who
provide standing order services. (www.scribd.com)

2.4 Productive Use of Remittance:

The National Migration Survey report published recently shows that Nepal‘s economy is
gradually entering into a vicious policy cycle of remittance. The report shows that
symptoms of the Dutch disease—erosion of external competitiveness, decline in the
manufacturing sector, higher disposable incomes and rising wage rates, appreciation of the
real exchange rate due to large amounts of foreign exchange inflow, shortage of laborers
both in the agriculture and manufacturing sectors, increased dependency on remittances
and vulnerability in the country‘s external sector—have been witnessed in the economy.
The report, however, reveals a positive impact of remittance at the household level.
Families receiving remittance are enjoying a comparatively better quality of life now than
in the past. One can observe that these families have been slowly overcoming the debt
burden, relatively comfortable houses with good toilets are being constructed, children are
studying in private schools if they are available nearby, and televisions and mobiles have
become common amenities. New market centers are emerging in the periphery; new kinds
of small businesses such as public telephone booths and cyber cafes; beauty parlors and
cosmetic shops, readymade garment outlets and stationery stores have increased;
employment opportunities in private schools and colleges has expanded and families are
shifting from rural areas to cities and new market centers.(www.ekantipur.com)

9
2.5 Conceptual Framework

A conceptual framework is an analytical tool with several variations and contexts. It is

used to make conceptual distinctions and organize ideas. Strong conceptual frameworks
capture something real and do this in a way that is easy to remember and apply.

This conceptual frame work describes the relationship of remittance with independent
variables based on the theoretical and empirical perspective. In the conceptual framework
for the analysis of the study for the measurement of the success of remittance service, we
have taken kumari remit as the dependent variables. Whereas Security, Service charge,
Worker Moving Abroad, Exchange rate, Time duration as independent variables which are
used for the measurement of customer satisfaction. The empirical results are described
from the following diagram:-

Figure: 1 Conceptual Framework

Independent variable

Security
Dependent variable

Kumari Remit Service Charge

Worker Moving Abroad

Exchange Rate

Time Duration

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Remittance services depend on several independent variables like security, service charge,
and national people working in foreign country, time duration and the exchange rates.
These variables directly or indirectly affect the remittance service.

Security: People prefer more secure transaction. If the remitted amount will
be transfer safely to the related person then they desires to transact with the
related bank otherwise not.

Service charge: There are different amount of charges on different banks, if

the service charge of one bank is higher than the other people will move
away toward the cheaper service provider and vice versa.

Worker moving abroad: The only legal way of transferring funds from
one country to another is remittance. If the number of citizen working in
foreign country is higher than higher amount of remittance will be collected
and vice versa.

Time duration: Those banks which provides the remittance service within
short period of time is more preferable.

Exchange rates: If the exchange rate of the country is very low then the
value of money will be decreases. Thus people don‘t try to send their
foreign currency to their home country.

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 CHAPTER III

RESEARCH METHODS

3.1 Study Area and Rationale for Selection

The basic study is to know remittance business unit. To meet the objective of the study,
data was collected by visiting Kumari Bank Ltd which provides the remittance service to
the general public by transferring money from one place to another. Because it situated
near my home town and it was easy for me to collect the related data

3.2 Nature and Source of Data

There are two types of data collection techniques used in my project work report:

Primary data collection method: In this report the primary data are collected being
observed and interviewed to the remittance department head.

Secondary data collection method: Secondary data means it already has been collected by
some other person and put in a systematic form. Secondary data had been collected by
referring to various websites, books, magazines, broachers of KBL, journals, and daily
newspaper for the information regarding to this project.

3.3 Population and Sample of the Study

Since the data are being collected through direct questionnaire to the related person, I
would choose some of the customers of the KBL as sample to acquire more and more
relevant information of my topic.

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3.4 Data Collection Tools and Techniques

Data may be obtained by using various tools and techniques. This research was conducted
by adapting the procedures like questionnaire because a questionnaire is a set of collection
of questions to gather responses from respondents on a given topic and is a main tool that
is used in survey research. And other techniques like interview and observations was used
and then the required data and information was collected.

3.5 Data Analysis and Interpretation

Report writing on ―Remittance Business Unit in KBL‖ can‘t be possible without data
analysis and interpretation to obtain useable and useful information, data were presented in
table and figure.

3.6 Ethical Consideration

Ethical issues are likely to be occurred at all stages of research project: when seeking
access to information, during data collection; as data are processed and analyzed, and when
they are reported. Some of the ethical issues that I will consider are as follows:

 I won‘t put any pressure on participants to grant access to information.

 Violate an individual‘s right to privacy.

 Force the respondent to provide personal and confidential data.

 Fabricate or replace the entire set of data.

 Select only the best data for reporting.

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 CHAPTER IV

DATA ANALYSIS AND MAJOR FINDINGS

4.1 Data Presentation and Analysis

This chapter is the most important part of research. Report writing on Remittance services
of Kumari Bank can‘t be possible without presenting and analyzing the data. Hence the
data are presented in table and figure. In this chapter the data are collected by using
questionnaire method and are presented and analyzed in order to come closer or met the
objectives of the research.

4.1.1 Questionnaire Brief

Raw data itself does not give any information. So, to derive the information from the data,
it should be analyzed and interpreted. In order to analyze the data in study the researcher
have used different types of tools like pie-chart, bar graph and tables to represent the major
findings and to conduct the research 20 customer of Kumari bank are asked questions and
the answers provided by them are analyzed.

4.1.2 Data Analysis Tools

Data gathered from various source were in raw from. They were managed, processed,
analyzed and presented in proper table and format through the use of statistical tools.

 Trend Analysis: It is statistical tool to analyze the data. For this study, it is used to
trace the trend line of the total remittance.
 Table: Tables are used for presenting data.
 Bar graph / Line graph
 Pie chart

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4.1.3 Types of Remittance

Domestic

International

4.1.3.1 Domestic Remittance

Domestic remittance transfer occurs when an individual transfers funds from one location
to another within the same country. The predominant pattern within these categories is that
the individual sending the funds, i.e., the remitter, hails from a rural area and has relocated
to an urban center.

4.1.3.2 International Remittance

An international remittance transfer involves an immigrant in a new country sending funds

to his country of origin, or to individuals (usually family) in a third country. Frequently,
the remitter has moved for the purpose of employment, from a developing country to an
industrialized one. Remittance transfers include neither the international sale and transfer
of goods nor the cross-border transfer of funds between businesses. For the purposes of
this brief, a remittance transfer will refer only to international remittances.

4.1.4 Nepalese Remittance Scenario

4.1.4.1 Background
Remittance is the flow of money from one economy to another, which is sent by migrant
workers. It can be both internal and external. External remittance plays a vital role in the
development of economy. Remittance creates multiplier effect in domestic economy.
Money coming through remittance increases savings and investments. Due to increased
investments, employment opportunities increases which helps in the development in the
economy.
Nepalese started to go out of the country for employment since Sugouli treaty. In 1815/16,
Gorkhas were enrolled in British Military services; however the importance was
recognized only after 1990. Nepal‘s economy at present is surviving on remittance.

15
Everyday around 1600 Nepalese leave for foreign employment. More than 1 million
Nepalese are working abroad.

Remittance has a broad positive impact on national economy of Nepal. Industry, export,
agriculture and tourism which are considered as the major contributors' of the economy
have been badly influenced by the ongoing insurgency. In such circumstances more and
more people especially from the rural areas are leaving the homeland in search of
employment. A World Bank report has listed Nepal as one of the top 20 remittance receipt
countries of the world.

The following table shows the trend of remittance in Nepal in different years from fiscal
year 2010-2018
Table: 1
Trend of remittance Receipt in Nepal
Year Amount (US $ in billions)
2010 3.464
2011 4.217
2012 4.793
2013 5.589
2014 5.889
2015 6.73
2016 6.612
2017 6.928
2018 8.064
(Source: www.worldbank.org)

According to the above table, we can see there is significant increase in remittance by the
year 2011 and then showing slight increase with slight fluctuation in the year 2016,
shifting tremendous raise by the year 2018.

16
The above table can be shown in line graph as below:

Figure: 2 Trend of remittance receipt in Nepal

Trend of remittance receipt in Nepal

2030

8.064
2025
6.928
6.612
6.73
2020 5.889
5.589
4.793
2018
2015 4.217 2017
2016
3.464 2015
2014
Amount (US $ in
2013 billions)
2010 2012
2011
2010
Year

2005

2000
1 2 3 4 5 6 7 8 9

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4.1.5 Process of Kumari Bank limited

Figure: 3 Process of Kumari Bank limited

Remitter Fills Receive

Secret keys
and details
Enter data in Provided
Beneficiary corresponding to
database

Fills
Remitting
agent
Send form Details of fund transfer

Provided KBL central database

to

Paying agent

Enter data
in No Reject
remittance

Yes

Fund provided

18
While transferring fund through the remittance of KBL, it has own remittance process. In
this process, first remit fill the receive form and then provided to the remitting agent.
Remitting agent enters the data in corresponding remittance database and after that they
provides secret key and details about fund to the beneficiary. They fill the form that
include the sender name and for whom that fund is to be provided. Database which is given
by remitting agent about detail of fund which is transfer is send to KBL data base. Form
which is provided by remitter was given to the paying agent and that form enters in
remittance database.

If that form matched then KBL provided that fund to the beneficiary otherwise KBL center
database reject it. In this way KBL provides remittance service to their customer.

4.1.6 Remittance Services in Kumari Bank Limited

KBL using different means for such fund transfer. They are:

 Swift
Through this system the remitter anywhere in the world can be remit or transfer the
fund in Nepal very easily, securely and quickly. The remitter can transfer the
money in Nepal through this means just by mentioning the bank‘s Swift identity
and beneficiary details.

 TT and Mail transfer

This is an arrangement under which banking companies send and receive funds
through tested telegraphically transferred funds. Now transfer is also equally in use.

 Drafts
Draft is another way by which banking companies are providing remittance service
to their customer. Nepalese banking companies are issuing draft in their customer
for outward remittance and accepting it for inward remittance.

19
4.1.7 Charges Imposed on Different Remittance Service

Table: 2 Charges Imposed on Different Remittance Service

Particular Tariff
INWARD REMITTANCE
Swift Remittance
Account Holder Up to eqv. USD 1000 Rs 100
Above eqv.USD 1000 Rs 250
Non Account Holder Up to eqv. USD 1000 Rs 250
Above eqv.USD1000 Rs 500
Transfer to other Banks in Nepal 0.10% or min. Rs 500
Remittance through other local bank Rs 500
Refund of inward Remittance USD 35
OUTWARD REMITTANCE
Manager‘s Cheque / NRB Cheque
Account holder 0.025% or min. Rs.100
Non account holder 0.035% or min Rs 250
NPR Draft/ Fax Transfer
Account holder 0.05%or min. Rs.200
Non account holder 0.10% or min. Rs.300
Financial institutions(outstation) 0.20% or min.Rs.500
INR Draft/SWIFT Transfer 0.25% or min. Rs.250
FCY Draft/SWIFT Transfer
For students and manpower 0.10%or min.Rs.150
For customers 0.15% or min. Rs.250
For others 0.25% or min.Rs.500

KBL use inward and outward remittance. In inward remittance, KBL takes tariff at swift
remittance it charges up to USD 1000 Rs 100 and above eqv.USD 1000 Rs 250 for account
holder. And for non-account holder up to eqv. USD 1000 Rs 250 and above eqv.USD 1000
Rs 500.While transforming the fund to other bank in Nepal and other local bank takes Rs
500 tariff. KBL takes refund of inward remittance USD 35.for outward remittance KBL

20
transfer takes tariff for account holder Rs 200 and for non-account holder 300 for the
financial institutions Rs 500 and for swift transfer Rs 250. It takes tariff for student and
manpower Rs 150. For its customer it takes Rs 250. KBL take tariff for other people Rs
500.

4.1.7.1 Charges

Domestic Fund Transfer (Branch to Branch)

Domestic Fund Transfer (Branch to Agent or Agent to Branch)
Foreign Inward Remittances (Foreign Agent to Branch or Domestic Agent)

Table: 3 Charges of Kumari Remit Domestic

S.N Remittance Amount (Rs) Charge (Rs)
1 0-300000 300
2 300001 and more 0.1%

While transferring fund in its own country KBL take a charge for providing service. They
take a charge Rs. 300 up to Rs 3 lakhs and 3 lakhs and above are 0.1% of total amount.

4.1.8 Remittance Flow from Different Firm, Company or Institution

Table: 4 Remittance Flow from Different Firm, Company or Institution

Name of Remitter No. of Transaction Amt. in USD Amt. in RS
Western Union 468 392064 35285760
Prithivi Remit 7464 4086996.6 367829694
Himal Remit 612 314568 28311120
JME 7800 4009200 360828000
IME 4680 2401353 216121770
Kumari Remit 456 234384 21094560
Prabhu Remit 228 117192 10547280
Reliable Remit 96 49344 4440960
Total 21804 116051016 1044461144

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According to above table, there are above 21804 numbers of transaction throughout the
country as remittance flow from different institutions up to the amount of RS 1044461144.

Figure: 4 Remittance Flow from Different Firm, Company or Institution

900
0

800
0

700
0

600
0

500
0

400
0

300
0

200
0

100
0

0
Western Hima JM IM Kumar Prabhu
Prithiv l E E i Reliabl
i Remi Remit e
Union Remit t Remit Remit

Bar Graph of Remittance Flow from Different Firm

Interpretation:
There are 21804 number of transaction in year 2013.The bar-chart presented depicts that
among them 7800 no. of transaction of total are found to be transacted by JME. So it is the
most preferable remit at Kumari bank limited whereas Prithivi remit is the second most
preferable remit and during that year 7464 number of transaction are transacted and
similarly others remit like IME, Prabhu, Western Union, Kumari, Reliable and Himal remit
are 4680, 228, 468, 456, 96, 612 number of transaction are transacted respectively

22
4.1.9 Purpose of Outward Remittance

Table: 5 Purpose of Outward Remittance

Purpose Amount (RS)
Education Loan 324000000
Business Loan 12000000
Total 336000000

In Kumari Bank Ltd the main purpose or the form of outward remittance is education and
business loan at different countries. Mainly the education loan is provided to the countries
named Australia, Newzeland and UK. Above 400 students are sent for the further studies
in those countries by providing education loan. According to the demand of customer it
also provides business loan to the different countries in the form of TT and Draft.

Figure: 5 Purpose of Outward Remittance

35000000
0

30000000
0

25000000
0

Amoun
20000000 t
0
10000000
150000000
0
5000000
0

0 Education Loan Business Loan

Bar Graph of Outward Remittance

Interpretation:
In the above bar graph approximately 336000000 amount of remittance flow outward from
the Kumari Bank Ltd to different countries for education loan as well as business loan.
Education loan is the main source of outflow of remittance. Only small part of remittance
is flow outward due to business loan.

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4.1.10 Origin and Primary Uses of Remittance

4.1.10.1 Uses for Daily Consumption

Table: 6 Uses for Daily Consumption

Sources Daily consumption (%)

India 84.6
Malaysia 52.1
Saudi Arabia 57.6
Qatar 55.4

United kingdom 74.2

Other Countries 59.1
Donor Agencies 41.9

In the above table the use of remittance for daily consumption by the individual in year
2011 is given. This can further explained by the illustration in pie chart.

Figure: 6 Uses for Daily Consumption

Daily Consumption India

Malaysia

Saudi Arabia

Qatar

U.K

Other
Countries

Pie Chart Showing Uses of Remittance from Different Countries in Daily Consumption

24
Interpretation:
In above pie chart, the remittance from different countries in was used for daily
consumption. From India 84.6 % is used for daily consumption which is the highest level
among other different countries like Malaysia, Saudi Arabia, Qatar, etc…

4.1.10.2 Uses for Education Purpose

Table: 7 Uses for Education Purpose

Sources Education (%)

India 2.2
Malaysia 4.3
Saudi Arabia 1.2
Qatar 5
United kingdom 0
Other Countries 6.3
Donor Agencies 16.1

For the purpose of getting education to their children, people are using remittance amount.
The remittance coming from donor agencies as donation which is 16.1% out of the total are
used for education purpose. From India 2.2%, from Malaysia 1.25, from Qatar 5% and
from other countries 6.3% remittance is used.
The following bar graph explains the use of remittance from different countries in
education sector well:

25
 Figure: 7 Uses for Education Purpose

Education
18
16
14
12
10
8
6
4 Education
2
0

Bar Diagram Showing uses of Inward remittance in Education Sector

Interpretation:
In year 2011 the use of remittance from U.K is equal to zero. And the highest use of
remittance for education purpose is donor agencies.

4.1.10.3 Uses for Capital Formation

Table: 8 Uses for Capital Formation

Sources Capital Formation (%)

India 2
Malaysia 4.3
Saudi Arabia 4.3
Qatar 6.2
United kingdom 3.6
Other Countries 4.6
Donor Agencies 0

Remittance flow from different countries is also used for the purpose of capital formation.
Remittance used for capital formation from India is 2%, from Malaysia is 4.3%, from
Qatar is 6.2%, from U.K is 3.6% and from other countries is 4.6%.

26
 Figure: 8 Uses for Capital Formation

Capital Formation

3 Capital Formation

Bar Graph Showing uses of Inward remittance in Capital formation Sector

Interpretation:
Highest amount of inward remittance from Qatar is used for the capital formation purpose,
whereas lowest from India.

4.1.10.4 Uses for Business Purpose

Table: 9 Uses for Business Purpose

Sources Business
India 0.3
Malaysia 1.2
Saudi Arabia 0.5
Qatar 0.3
United kingdom 2
Other Countries 1.6
Donor Agencies 0

27
One of the uses of remittance in Nepal is for business purpose. The inward remittance from
India which is used for business motive is only 0.3%, from Malaysia 1.2%, from Saudi
Arabia it is 0.5%, from Qatar it is 2%, and from other countries it is only1.6%.

Figure: 9 Uses for Business Purpose

Business
2.5

1.5

0.5 Business

Bar Graph Showing uses of Inward remittance in Business Sector

Interpretation:
In the above graph the use of remittance flow from the U.K is highest in business sector
whereas the use of remittance from Donor Agency is lowest i.e. zero. The second lowest
use of remittance is from India.

28
4.1.10.5 Uses for Household Properties

Table: 10 Uses for Household Properties

Sources Household Properties

India 4.2
Malaysia 5
Saudi Arabia 2.8
Qatar 4.3
United kingdom 2
Other Countries 1.9
Donor Agencies 0

Figure: 10 Uses for Household Properties

Household
6 Property
5

2
Household
Properties
1

Bar Graph Showing uses of Inward remittance in Household Property

Interpretation: In the above diagram the amount of remittance used for the purpose of
purchasing household properties is highest from the country Malaysia , second highest use
of money is from the country Qatar and the Indian currency is the currency which is in
third position for purchasing household properties.

29
4.1.10.6 Uses for Saving Purpose

Table: 11 Uses for Saving Purpose

Sources Saving
India 0.4
Malaysia 0.9
Saudi Arabia 0.8
Qatar 0.5
United kingdom 3.2
Other Countries 3.1
Donor Agencies 0

The remittance flow from the different countries is also used for the purpose of saving for
the future. There are different percent of remittance which is used for saving.

Figure: 11 Uses for Saving Purpose

Savin
3. g
5

2.
5

2
Savin
g
1.
1
5
0.
5

0 Indi Malaysia Qata U. Other

a Sau r K Countries Dono
di r
Agencies
Arabia
Bar Graph Showing uses of Inward Remittance for Saving
Interpretation: In the above bar diagram people receiving remittance from United Kingdom
saved the highest amount i.e. 3.2%, remittance from Malaysia is saved in 0.9%, from India
it is 0.4%, from Saudi Arabia it is 0.8% and from other countries it is 3.1%.

30
4.1.10.7 Uses for Repay Loan

Table: 12 Uses for Repay Loan

Sources Repay Loan (%)
India 4.5
Malaysia 30
Saudi Arabia 31
Qatar 25.8
United kingdom 10.2
Other Countries 19.1
Donor Agencies 0

In the developing countries like Nepal, people have practice in borrowing money for short
period from primary sector (directly from lenders) and repay it with high interest.

Figure: 12 Uses for Repay Loan

Repay
35 Loan
30
25
20
15
Repay
Loan
1
0
5
0 Indi Malaysia Qata U. Other
a Sau r K Countries Dono
di r
Agencies
Bar Arabia uses of
Graph Showing Inward remittance for Repaying of Loan
Interpretation: The remittance users use it for the purpose of repaying loan to the lenders.
The remittance from Saudi Arabia is used highly for the purpose of repaying loans. It is up
to 31%. 30% of the amount of remittance from Malaysia is used for repaying. The
remittance from Qatar, U.K, India is 25.8%,10.2%4.5% respectively are used for repaying.

31
4.1.10.8 Uses in Other Sector

Table: 13 Uses in Other Sector

Sources Others sectors
India 1.9
Malaysia 2.2
Saudi Arabia 2.1
Qatar 2.5
United kingdom 4.8
Other Countries 4.3
Donor Agencies 41.9

Figure: 13 Uses in Other Sector

Other
4 s
5
4
0
3
5
3
0 Other
s
2
5
2
0
1 Indi Malaysia Qata U. Other
5 a Sau r K Countries Dono
1 di r
Agencies
0 Arabia
Bar Graph Showing uses of Inward remittance in Business Sector of Nepal
5
0
Interpretation:
For the other purpose Donor Agencies and United Kingdom are the main source of
remittance.

32
4.2 Major Finding and Discussion

From my study I have found that remittance service was increasing in comparison to
previous year. KBL has provided different types of remittance services to their customers
KBL used both inward and outward remittance services also domestic fund transfer by
using suitable service charge. Funds are transfer by draft, telegraph, email. They are also
using different types of remittance service like IM, switch, Western union money transfer.
The major findings of my study are given below:

The concept and facilities of remittance is in increasing trend.

KBL uses both inward and outward remittance service by taking tariff. It
takes tariff according to the service i.e. inward and outward.

While providing remittance KBL take charges from its customer according
to the amount.

Kumari Bank use different types of fund transfer; they are swift, draft, TT
and mail transfer.

Kumari Bank take suitable charge for its service and it provides fast service
so most of the people use remittance of KBL.

There are different origin of remittance and the different areas where the
remittance is mostly used.

Kumari Bank Ltd uses different types of firms companies and institution for
the purpose of remitting. They are Western Union, Prithivi remit, Himal
remit, JME, IME, Kumari remit, reliable and Prabhu.

33
 CHAPTER V

SUMMARY AND CONCLUSIONS

5.1 Summary

Bank is essential for the economic development of the country. In modern age, we cannot
imagine the world and develop without bank. Bank is a financial institution which
collected deposit and provided loan to their customer. Bank provided different types of
facilities to their customer. Such as trade finance, remittances, loan e-banking, ATM
service etc. KBL is a commercial bank. It has permission to provide remittance service to
all other country. KBL provide remittance service in different countries and also its own
country. It takes service charge from their customer. It is a source of income of the bank
which increases the income of bank.

Remittance is the flow of money from one economy to another, which is sent by migrant
workers. It can be both internal and external. External remittance plays a vital role in the
development of economy. Remittance creates multiplier effect in domestic economy.
Money coming through remittance increases savings and investments. Due to increased
investments, employment opportunities increases which helps in the development.

The remittance service is also related with the foreign currency. Banking companies are
providing this service to facilitate the transfer of the funds from one country to another. As
we know that presently the Nepalese youth are flying in foreign countries for the search of
employment, the remittance service provided by the banking companies are transferring
the fund from Nepal to other countries also. These two side business can be classified in
Inward Remittance and Outward Remittance, where inward means to receive funds from
foreign countries and outward means to send funds to the other countries.

This research is helpful for those who want to use remittance service of KBL. By this
research anyone will be able to know by which process KBL provides remittance. For the

34
survey of 20 customers who use remittance service provided by KBL report as made.
While providing remittance service KBL take different tariff according to the types of
remittance i.e. inward and outward remittance. KBL take charge for providing service from
their customer. It takes charge Rs. 300 up to Rs 3lakh, and 3 lakh and above is 0.1% of
total amount.

KBL use different house to provide remittance service to its customer. KBL use both
inward and outward remittance to transfer the fund. Funds can also be transferred to any of
the following cities of the country directly from their branches as well as through their
local correspondents in Kathmandu. Pokhara, Birgunj, Hetauda, Biratnagar, Bhairawa,
Butwal, Birtamond, Buhabi, Damauli, Banepa, Nepalgunj, Narayangharh, Janakpur, and
Dhangadi in addition to the above, they also provide fund transfer service to other cities of
Nepal through their local correspondents. Outward remittance in Indian Rupees and other
foreign currencies will be made as per the rules and regulation of Nepal Rastra Bank (i.e.
Central Bank of Nepal).

5.2 Conclusion

Remittance is one of the integral aspects of KBL. It has been the major source of income
for the Bank that is earned in terms of commission and fee. KBL use this for development
of its other service and it help to increase the capital of KBL. It has been providing
remittance services through varieties of products and services. It provides the service to its
customer safely and quickly due to the facilities, customers are increase to use remittance
service of KBL. It has established relations with the various exchange houses like –
International Money Transfer (IME).

In depth study of Remittance business also revealed that it holds lot of potentialities and
scope in Remittance business with the presence of largest international tie-up, strong
domestic network, trust of the public, however, needs implementations of proper and
feasible strategies. The gist from customer perception analysis is that the advertising and
promotion regarding remittance services (both inward and domestic) should be more
intense and amplified, the service locations be easily accessible, promptness in service and
provision of security and image as a reliable agency be sustained. It is the service which

35
provides security of fund. In minimum charge it transfers the fund from one country to
other country. Remittance is one most importance need of people.

Finally, it can be concluded that Remittance business at KBL can increase if it is able to
capitalize on its strength, overcome its weaknesses, grab or utilize the opportunities
existing in the external environment and cope up with the throat competition. Today
business environment is competitive so to increase the customer KBL give better service to
their customer. It uses other house of remittance to transfer fund. For the competition KBL
use media for advertisement of remittance because it‘s a time of advertisement. People
believe on advertisement. People have not full information about remittance so KBL give
the information about remittance service which is provided by KBL.

5.3 Recommendation:

For Bank

Recommendation is given on the basis of study of research which is the area of

improvements. To improve its remittance services the major focus have to be given on fast
and cheap access while performing banking operations especially on remittance which
leads fast service to their customer.

For Customer

Customer should be well informed about the process of using the services and should focus
on security of information. If customer have detail knowledge of remittance services than
only they can use the service effectively and safely.

36
References

Books
Regmi, Resham raj.(2064).Banking law of Nepal.Kathmandu: Lumbini Pustak
Pasal.

Shrestha, Madhu sundar.(2009) Fundamentals of banking: Buddha academic.

Kathmandu.

Pant, Prem raj.(2009). Social Science Research and Thesis Writing.

Kathmandu:Buddha Publications.

E.Goraon. & K.Natarapan.,(2009) Banking theory, law and practice: Himalaya

publishing house.
N.T Somashekae., (2009) Banking: New age international (P) limites,New Delhi
Articles
Annual Report of Kumari Bank Limited

Brochures of Kumari Bank Limited

Websites

www.google.com
www.ekantipur.com
www.financialnepal.com
www.Kumaribank.com

37
 APPENDICES

Appendix 1
Questionnaire

SURVEY QUESTIONNAIRE

Dear respondent,

This survey is aimed at understanding on Remittance Business unit in Kumari Bank. In

meeting this objective, you have been duly selected as a member of the sample to provide
relevant and objective data needed to satisfy the quest for the knowledge. For that reason I
kindly request to spend a few minutes of your valuable time to fill in this questionnaire.

Information furnished by your side is taken only with the intention of accomplishing
research on understanding of remittance services. The information that you delivered will
be used for academic purpose only and I assure that information provided by yours side
will be kept strictly confidential.

Name:-

Sex:-

Designation:-

Name of the Organization:-

Date:-

Questionnaire for the organization:-

38
1) What are the remittance services provided by Kumari Bank ltd?

( ) Swift transfer ( ) Draft ( ) Email transfer

( ) TT ( ) Others

2) According to you how prompt the remittance service is?

( ) slow ( ) fast ( ) very fast

3) Which services is more preferable by the customer?

( ) Swift transfer ( ) Draft ( ) Email transfer

( ) TT ( ) Others

4) From which country does inward remittance flowing is high?

( ) Qatar ( ) Malaysia ( ) UAE

( ) Others European countries

5) What problem do you face while providing remittance services?

( ) System problem ( ) lack of awareness ( ) not access to internet

( ) Others

6) Do all the branches of Kumari Bank have remittance services?

( ) Yes ( ) No

39
 7) Is there any planning to bring new remittance services in future?

( ) Yes ( ) No

Subjective questions:

1) What is yours competitive strategy to beat similar services provided by

yours main competitors?

2) What are the major advantages from remittance to Kumari Bank Ltd?

3) What is the total number of customer using remittance services?

Questionnaire for the customers:

1) In yours opinion, does Kumari bank provides prompt remittance

services?

( ) yes ( ) no

2) Which service do you prefer more?

( ) Swift transfer ( ) Draft ( ) Email transfer

( ) TT ( ) Others

3) What is your perception towards remittance services?

( ) Highly Satisfied ( ) Moderate ( ) Not Satisfied

( ) not used yet

40