A Study On Customer Satisfaction and Digital Banking Sector of Agriculture Development Bank Limited
A Study On Customer Satisfaction and Digital Banking Sector of Agriculture Development Bank Limited
A Study On Customer Satisfaction and Digital Banking Sector of Agriculture Development Bank Limited
By
Gurudev Shah
Exam Roll No: 709270179
T.U. Registration No: 7-2-927-243-2019
SWOYAMBHU INTERNATIONAL COLLEGE
Group: Account
Submitted to:
Lalitpur, Nepal
July, 2024
DECLARATION
I hereby declare that the project work entitled “CUSTOMER SATISFACTION AND
DIGITAL BANKING SECTOR OF AGRICULTURE DEVELOPMENT BANK
……………………….
Gurudev Shah
Date:2081-4-09
ii
SUPERVISOR’S RECOMMENDATION
………………………………
Jagdish joshi
Date:2081-4-09
iii
ENDORSEMENT
………………………
………………………….
Dr. Jaymangal Prasad Suman Prasad
Chaudhary
Chairman, Research Committee Campus Chief
Date: 2081-4-09 Date: 2081-4-09
iv
ACKNOWLEDGEMENT
LIMITED” prepared for the partial fulfillment of the requirement for the Degree of
Bachelor of Business Studies (BBS) is an outcome of continuous and immeasurable
cooperation and support of several hands .I would like to express my heartfelt
Gratitude to all for their support.
I would like to extend my sincere thanks to all of them who provided me with
information, which is important to make this report. I would like to extend my
gratitude and thanks to Tribhuvan University for giving me an opportunity to prepare
this report, which helped me to acquire a lot of knowledge on the particular topic.
Lastly, I would like to thank all those who were involved directly or indirectly, who
helped me in bringing up the project.
Gurudev Shah
Swoyambhu International College
BBS 4th year
v
TABLE OF CONTENTS
Title…………………………………………………………………………………………….i
Declaration………………………………………………………………….……………….ii
Supervisor’s Recommendation……………………………………………………………iii
Endorsement…………………………………………………………………….………….iv
Acknowledgement…………………………………………………………..………………v
Table of contents……………………………………………………………….………….vi
List of Tables………………………………………………………………………………viii
List of Figures…………………………………………………………………………….ix
Abbreviation……………………………………………………………………………….x
CHAPTER I: INTRODUCTION…………………………………………………..1
3.1 Summary………………………………………………………………………19
3.2 Conclusion…….……………………………………………………………….19
BIBLIOGRAPHY…………………………………………………………………20
APPENDIX…………………………………………………………………………21
LIST OF TABLE
Table Page No
Table No.1. Capital structure of Agriculture Development Bank Limited 3
Table No.2. Capital Plan of Agriculture Development Bank Limited 4
vii
Table No.3. Shareholder Structure of Agriculture Development Bank Limited 4
LIST OF FIGURE
Figure Page No
Figure No.1. Function of customer service department 10
Figure No.2. Digital Banking Benefits 13
ABBREVIATION
viii
ABBS Any Branch Banking Services
ix
1
CHAPTER I
INTRODUCTION
With the main objective of providing institutional credit for enhancing the production
and productivity of the agricultural sector in the country, the Agricultural Development
Bank, Nepal was established in 1968 under the ADBN Act 1967, as the successor to
the Cooperative Bank. The Land Reform Savings Corporation was merged with ADBN
in 1973. Subsequent amendments to the Act empowered the bank to extend credit to
small farmers under group liability and expand the scope of financing to promote
cottage industries. Mukharjee, A. K., (2003). The amendments also permitted the bank
to engage in commercial banking activities for the mobilization of domestic resources.
Agricultural Development Bank Limited (ADBL) is an autonomous organization
largely owned by the Government of Nepal. The bank has been working as a premier
rural credit institution since the last three decades, contributing a more than 67 percent
of institutional credit supply in the country. Hence, rural finance is the principal
operational area of ADBL. Furthermore, the bank has also been involved in
commercial banking operations since 1984.
In 1973, the Land Reform Savings Corporation was merged with ADBN and
subsequent amendments to the Act empowered the bank to extend credits to small
farmers under group liability and expand the scope of financing to promote cottage
industries. Moreover, the amendments also permitted the bank to engage in
commercial banking activities for the mobilization of domestic resources. D. R.
(2003).
The bank was established with the main objective of providing institutional credit for
enhancing the production and productivity of the agricultural sector in the country the
enactment of Bank and Financial Institution Act (BAFIA) abolished all Acts related to
financial institutions including the ADBN Act, 1967. Thus, ADBL operates as an "A"
2
category financial Institution under the legal framework of BAFIA and the Company Act,
(2063).
D. B & Shrestha, M. K., (2007). The history of banking began with the first
prototype banks which were the merchants of the world, who made grain loans
to farmers and traders who carried goods between cities. This was around 2000
BC in Araria, India, and Sumeria. Later, in ancient Greece and during the
Roman Empire, lenders based in temples made loans, while accepting deposits
and performing the change of money. Archaeology from this period in ancient
China and India also shows evidence of money lending.
Paisa.
Table 1
*
Authorized Capital:
• Equity Share Capital NRs.16,000,000,000
• Preference Share Capital NRs.9,000,000,000 Total
NRs.25,000,000,000
According to the Table 1.2, the authorized capital of ADBL is Rs.25,000,000,000 and
issued capital is Rs. 18,884,386,078 and paid-up capital is Rs. 18,884,386,078.
(Sources: www.adbl.np, 2023/5/26)
Table: 2
4
Capital Reserve
18,884,386,078.00 18,884,386,078.00
Table 3
5
Being based on the background stated above, the present study has the following problem:
.
1.5 Objectives of ADBL
This study generally focuses on customer service activities and loan activities of
Agriculture Development Bank ltd. However the specific objectives of this study are as
follows:
3. To know about the loan activities of the Bank and also obtain the knowledge of the
instituation.
6
1. To provide institutional credit for enhancing the production and productivity of the
agricultural sector in the country.
The eight weeks period of research helped me to maximize my knowledge about the
banking procedure with some practical aspects. However there had been some limitation
as identified below:
1. The time span for the study is short to conduct detailed study of organization.
2. Core information and some vital data were not shared due to privacy issue.
3. The study may not depict overall banking performance.
4. Huge amount of work load in the staff created obstacle.
5. The reliability of data depends upon the information provided by concerned
organization.
As the nature of the data required for the study will be both nature i.e. qualitative as well
as quantitative nature .So, the study has been designed both qualitatively as well as
quantitatively.
7
There are at present about 31 commercial banks in Nepal. As this study is case study
centered on ADBL. So, Agriculture Development Bank, main branch Biratnagar is
choosen for the study among branches all around Nepal. And no any population and
sample is used. And it is purely based on Agriculture Development Bank, main branch
Biratnagar.
The data required for the study are both primary and secondary data. Primary data are
obtained from primary sources and secondary data are obtained from secondary sources.
· Primary data. The data collected for the first time are said to be Primary data. Such data
provide accurate information. These types of data are obtained from different
departments of the bank.
· Secondary data. The primary data for one person can be the secondary data for some
others. So, data which are originally collected but obtained from either published
sources or unpublished sources are secondary data. These data are obtained from books
and internet.
8
• Official websites of ADBL and other different websites related to the topic.
• Books, annual progress report, official publication online and offline, newspaper,
brochures.
The data collection technique used for the study is through field visits which mean
visiting different department of the bank, through the use of internet, by studying
brochures of bank, newspaper, annual report etc.
Analysis of the study is based on content and is analyzed descriptically and some how
statistically by making tables.
9
CHAPTER-II
RESULT AND ANALYSIS
Customer satisfaction can’t be limited to short term strategy it’s a long term strategy of
any firm. It has been increasingly popular due to its helpful attribute towards judgment
of the customer preferences and choices. It simplifies the decision maker role and helps
to take any major or minor decision to cater customer. (Schnaars, 1991)
When expectation of customers is matched the resultant feeling is satisfaction and when
expectation does not match than the resultant feeling is dissatisfaction. Some of the
scholar believes that it can also be called as motivation. (Engel et al. 1990)
five times as costly as keeping existing customers. Therefore, it is very important for
firms to keep focusing on designing new and standard products to satisfy customers at
high level.
The factors that affect customer satisfaction are courteous employees, friendly
employees, billing timeliness, helpful employees, knowledgeable employees, billing
clarity and service quality, good value, service quality, accuracy in billing, competitive
pricing, good value, quick service and billing clarity (Hokanson, 1995, 16). The figure
below gives clear image about the factors that has direct effect on customer satisfaction.
2023/12/03).
From the Figure 1.3, it describes the functions of customer Service Department. There
are various functions which are given in the table such as Customer Counseling-sub
points are Product Counseling and Service Counseling, likewise another function is
Account Operation-sub points are Account Opening and Account Closing, and another
one is Distribution Activities-sub points are Cheque Book Distribution Account
Statement and ATM Distribution respectively. The major functions of concerned
department are to deal with the customer and handled their queries so the internee also
had to perform the similar activities.
Digital Banking is the automation of traditional banking that enables customers to access
banking services using online and electronic platforms. It is a digitized approach to
eliminate the foot visit inside a brick-and-mortar bank.
With the speeding information technology and innovation, traditional banking is shifting
towards a modern banking approach. Technology has become an integral part that
facilitates the banking structure, functionalities, customer-centric services, digital
payments, etc.
12
The Digital Banking transition took a long period in the context of Nepal. Banking in
Nepal started off with Nepal Bank Limited established in 1937, the first commercial
bank of Nepal. In 1990, modern banking started in Nepal with the introduction of credit
cards by Nabil Bank. Likewise, Himalayan Bank introduced ATM and credit cards in
1995. After that, Kumari bank incepted Internet Banking in 2001. In 2004, Laxmi bank
introduced SMS banking and launched the mobile banking platform “Mobile Khata” in
2012.
The total deposit account in banks and financial institutions is 3.46 crores excluding
deposits in Microfinance Institution, as of Poush end 2077. There are 27 Commercial
Banks, 18 Development Banks, 20 Finance Companies, 74 Microfinance, and 1
Infrastructure Development Bank operating as of Mid-April 2021. The total number of
Mobile Banking and Internet Banking customers as of Mid-Jan 2021 is 1.26 crores and
10.90 lakhs respectively.
Over the past two decades, the digital banking scenario elevated along with improvements
in information technology. Internet penetration expanded to 82.79 percent of the
population in mid-Jan 2021. With the internet penetration expansion and the rise of
smartphone users, digital banking in Nepal is gradually leaping over traditional banking.
This exhibits that Nepal is thriving towards a digital economy envisioned according to
Digital Nepal Framework.
Banks are pacing up with the new technologies to create a supreme customer experience.
With the implementation of Omnichannel Digital Banking, customers can achieve
seamless and consistent interaction with any BFIs. Fastbank is one of the comprehensive
Mobile and Internet Banking Solutions in Nepal. Fastbank – Omni Channel Digital
Banking Solution is already in operation in Global IME Bank. Developed jointly by
Smart Choice Technologies (SCT) and Swift technology Pvt. Ltd., Fast bank enables
customers to access banking services in real-time and banks to stand ahead in the
competition.
13
Benefit to BFIs
Banking customers are getting more prone to digital services. BFIs never settle to educate
and aware customers of the importance of Digital Banking.
14
Benefit to Customers
• Customers can bank from anywhere and anytime. 24/7 access to personal accounts.
• Control over your finances in real-time.
• Enjoy rich features offered by mobile and internet banking. (Fund Transfer, Bill Payment,
Online Cheque Deposit, Mobile Top Up, QR Payments, e-KYC, Consistent UI/UX, etc.)
We have explained each of these 5 ICT enabled banking delivery channels below:
1. E-Banking(Internet Banking)
2. Mobile Banking
15
3. Plastic Cards
This is another widely used electronic banking channel. Plastic cards are
available in the form of prepaid, debit and credit cards. Such cards can be used to
withdraw money, pay bills using ATM and POS machine, and make payment for
purchased goods online, among others. Plastics card as a credit card was first
introduced in
Nepal by Nabil bank in 1990. There are 7243153 subscribers of debit cards,
156749 subscribers of credit cards and 65530 subscribers of prepaid cards in
Nepal as in mid- April.
Digital wallets are synonymous to digital payments in Nepal. The era of digital
payment in Nepal started with the lunch of eSewa in 2009. Currently, a total of 9
payment service operators PSOs) and 14 payment service providers (PSPs) have
received licenses from Nepal Rastra Bank.
ADBL bank has been providing any branch banking services from all branches across
the country. Through this service a customer from our any branch can easily deposit
his/her in any branch and withdraw from any branch.
• Debit card
• Kishan Card
• Cash withdraw, Balance enquiry and statement from ADBL are of free
2.7.5 E-banking
• Balance enquiry
• Fund Transfer
• Account statement
• Tax statement
• Interest statement
2.7.6 SWIFT
Although there has been competition amongst Banks and Financial Institutions (BFIs) to
deliver modern banking services, the majority population in the country has no access to
such services. The reason for this is the concentration of BFIs in urban areas. Modern
18
banking services are available in urban areas only, with most people in rural areas being
deprived of even the basic banking services.
Banking fees, low literacy levels, and inaccessibility of bank services in rural areas due to
poor infrastructure are considered for the low adoption of digital banking services.
Likewise, underdeveloped digital financial services ecosystem with low credit and debit
card penetration, low use of digital payments, online and mobile banking, and restrictive
government policies (e.g., low maximum limit of digital payments) are thought to be
hindering the expected growth and adoption of digital banking and payments services in
Nepal
19
CHAPTER III
SUMMARYAND CONCLUSION
3.1 Summary
Today's banking industry has become very competitive; ADBL Bank Ltd seems as one
of the reputed and emerging development banks in Nepalese Banking Sector. The bank
is focus to provide efficient, customer focus and excellent financial services through
modern technology and professionalism, maximize return to the stakeholders, provide
equitable working environment to the employees with good corporate governance and
act as a responsible corporate citizen.
3.2 Conclusion
Although Agriculture Development Bank has a strong financial base and capital
structure as well as good market status and reputation in order to attract new customers
and increase deposit collection Agriculture Development Bank should introduce new
schemes.
The bank should aim towards increasing its customers but it must also provide the
quality services to the present customers. For this the bank must make plans and policies
keeping customers in mind. Bank should also pay attention towards the priority sector
and industrial sector for lending loans to develop the economic condition of the country.
Bank should provide more facilities to the staff, it has to provide job satisfaction ,
training and should encourage its staff.
BIBLIOGRAPHY
Baju, A. K. & Mukharjee, A. K., (2003). Fundamental of banking theory and practices.
New Delhi: A.K. Publisher & Distributors.
Bhandari, D. B & Shrestha, M. K., (2007). Financial markets and institution. Kathmandu:
Asmita Publication.
Khatiwada, B., (2013). Rastriya Banijya Bank Limited. Kathmandu: Ashish Book House
Pvt. Ltd.
Parajuli, B & Thapa, K., (2013). Financial institutions and markets. Kathmandu: Januka
Publication Pvt. Ltd.
APPENDIX
Group Bank
Particulars Note
Current Year Previous Year Current Year Previous Year
Assets
Cash and cash equivalent 4.1 9,463,050,416 6,560,530,091 9,462,421,092 6 ,559,900,767
Due from Nepal Rastra Bank 4.2 7,096,495,884 6,208,948,746 7,096,495,884 6 ,208,948,746
Placement with Bank and Financial 4.3 127,900,000 127,900,000
Institutions
Derivative financial instruments 4.4 17,588,448 103,880,000 17,588,448 103,880,000
Other trading assets 4.5 1,014,399,764 1,099,036,922 943,652,800 1 ,047,488,978
Loan and advances to B/FIs 4.6 4,134,543,000 4,123,680,396 4,134,543,000 4 ,123,680,396
Loans and advances to customers 4.7 176,303,568,128
173,314,972,381
176,303,568,128
173,314,972,381
Investment securities 4.8 57,621,340,111 45,953,605,307 57,411,015,165 45 ,922,116,89
9
Current tax assets 4.9 278,310,052 759,205,529 276,706,184 966,315,760
Investment in subsidiaries 4.10 28,840,000 28 ,840,000
Investment in associates 4.11 914,781,613 69 ,384,000
Investment properties 4.12 248,649,555 252,592,246 248,649,555 252,592,246
Property, Plant and Equipment 4.13 2,293,412,292 2,227,388,333 2,291,066,049 2 ,225,084,172
Goodwill and Intangible assets 4.14 138,590,074 229,766,704 138,590,074 229,766,704
Deferred tax assets 4.15 39,992,489 52 ,152,028
22
265,929,199,267 246,184,242,936
Liabilities
Due to Bank and Financial Institutions 4.17 2,095,919,987 7,998,742,407 2,095,919,987 7,998,742,407
Due to Nepal Rastra Bank 4.18 4,571,178 9,781,708,310 4,571,178 9 ,781,708,310
Derivative financial instruments 4.19
Deposits from customers 4.20 199,467,139,586
166,570,805,157
199,486,613,567
166,590,266,216
Borrowing 4.21 2,136,563,784 1,777,211,512 2,136,563,784 1 ,777,211,512
Current Tax Liabilities 4.9
Provisions 4.22
Deferred tax liabilities 4.15 545,463,797 484,358,492
Other liabilities 4.23 7,203,104,321 6,208,667,157 7,195,768,718 6 ,210,241,991
Debt securities issued 4.24 20,473,530,263 20,469,037,529 20 ,469,037,529
20,473,530,263
Subordinated Liabilities 4.25
Total liabilities
231,926,292,916 231,877,325,989
212,806,172,071 212,827,207,965
Equity
33,793,653,038
Total liabilities and equity
265,929,199,267 246,868,133,72 265,670,979,027 246,184,242,936
9
Contingent liabilities and commitments 4.28 122,052,905,073 109,133,395,99 109,133,395,999
9 122,052,905,073
23