MANAGEMENT INFORMATION SYSTEM

(With reference to “NIC ASIA BANK LIMITED”)

A PROJECT REPORT

SUBMITTED BY:

SANDIP KUMAR GUPTA

(BBA 3rd semester)

SUBMITTED TO:
MR. BIRENDRA YADAV
THAKUR RAM MULTIPLE CAMPUS

Faculty of management

Tribhuvan University

In partial fulfillment of the internal requirement for Management Information System

subject as a course of study

Kathmandu
2021
 ACKNOWLEDGEMENT
This report is the result of continuous effort made and extended support of many
people. The preparation of this report needed a lot of effort and suggestions of many
people in order to get to its complete form. Firstly, I would like to thank Tribhuvan
University for designing a platform where we can gain not only theoretical knowledge
but also practical knowledge.

We express our thankfulness to our teacher Mr. BIRENDRA YADAV for nonstop
support and making us to know about the subject matter of the book in practical way.
We are also very grateful and would like to thank our college administration of
THAKUR RAM MULTIPLE CAMPUS, who gave us opportunity for the
organization field visit.

We would like to acknowledge with much appreciation the crucial role of the staffs
and manager of; “NIC ASIA Bank Limited”, who helped us by providing
information regarding organization changes and its development. It is our great
pleasure to submit this report as the partial fulfilment of the course materials for the
curriculum.

Finally, I would like to pay heartwarming thanks to my family and my dear friends for
their valuable support and assistance, without their support this report would not be
possible. I have tried my best to design a complete application that fulfill all the
requirements. Though I am not a professional or experienced in this field but I had
tried my level best to make this project according to the teachers’ guidelines.

Thank you!!!
 Table of Contents
CHAPTER ONE: INTRODUCTION
1.1. Introduction of organization......................................................................................1
1.2. Background of the Study...........................................................................................2
1.3. Significance of the Study..........................................................................................2
1.4. Statement of the Problem..........................................................................................2
1.5. Objective of the Study..............................................................................................3
1.6. Delimitation of the Study..........................................................................................3
1.7. Methodology of the Study.........................................................................................4
CHAPTER –TWO: REVIEW OF LITERATURES
2.1. Types of Information System....................................................................................5
2.2. Information system Department................................................................................7
2.3. Role of MIS..............................................................................................................7
2.4. Uses of IT facilities and services...............................................................................8
2.5. Communication.......................................................................................................10
2.6. Software as enterprise application...........................................................................13
2.7. IT for Firms’ operation............................................................................................14
2.8. IT Infrastructure......................................................................................................17
2.9. Security...................................................................................................................23
2.10. MIS in decision making......................................................................................25
2.11. Ethics..................................................................................................................27
2.12. Corporate social responsibility............................................................................27
2.13. Competitive advantage........................................................................................28
2.14. Outsourcing.........................................................................................................30
2.15. Organization change pattern................................................................................31
2.16. System changes and redesign..............................................................................33
CHAPTER - THREE
CONCLUSION, RECOMMENDATIONS And REFERENCE
3.1. Conclusion
3.2. Recommendations
3.3. Reference
 CHAPTER ONE: INTRODUCTION

1.1. INTRODUCTION OF ORGANIZATION

NIC ASIA Bank has its antecedents in NIC Bank which was established on 21st July
1998. The Bank was rechristened as NIC ASIA Bank after the merger of NIC Bank
with Bank of Asia Nepal on 30th June 2013. This was a historic merger in the annals
of the Nepalese financial landscape as the first of its kind merger between two
successful commercial banks in the country. Today, NIC ASIA has established itself as
one of the most successful commercial banks in Nepal.

During the post-merger integration phase, NIC ASIA managed the transition very
smoothly receiving accolades from the regulators as well as the stakeholders, paving
the way for other mergers and consolidation in the Nepalese financial sector. After the
merger, NIC ASIA was recognized as “Bank of the Year 2013-Nepal” by The Banker,
Financial Times, UK. This is the second time that the Bank was recognized with this
prestigious award, the previous occasion being in 2007.

NIC ASIA Bank is now, one of the largest private-sector commercial banks in the
country in terms of capital base, balance-sheet size, number of branches, ATM
network, and customer base. The Bank has 356 branches, 70 extensions counters
81 branchless banking, and 472 ATMs across Nepal with a network covering all major
financial centers of the country. The Bank strongly believes in Meritocracy,
Transparency, Professionalism, Team spirit, and Service Excellence. These core
values are internalized by all functions within the Bank and are reflected in all actions
the Bank takes during its business.

Corporate Vision:

“To ensure the creation of optimum values for all the stakeholders”

Mission Statement: BEST

 To be a bank of 1st choice for all the stakeholders.

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Objectives:
NIC Asia Bank Limited has the following objectives:

 Focus on building the positive net worth and meeting minimum capital
requirement over the coming five years.

 Focus on increasing the customer base and market share.

 Maximize the potential/efficiency of bank's staff.

 Focus on minimizing the risk associated with the business.

 Focus on providing the world class business solutions.

 Focus on increasing the sustainable profit.

1.2. Background of the Study

Being a student of BBA only the theoretical knowledge is not sufficient so skills
should be also developed to understand and solve the practical problem relatively. The
main purpose of the study is to know about how IT has helped the organization to
increase the effectiveness of the work and maintain best quality of services.

Study begins with setting our objectives of going into the organization.
Questionnaires strictly concerned with the objectives were also prepared. NIC being
one of the leading commercial banks of Nepal, was our choice. We arrived in the
organization with queries which were related to our subject of report.

Similarly, introduction, significance, statement objectives, limitations, conclusions,

references and methodology of the study has been included regarding Nepal Bank
Limited in this report.

1.3. Significance of the Study

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With the help of this research, we have been able to get knowledge and information
regarding various sectors of IT and its importance in the organization to run it
smoothly and effectively. Some of them are listed below: -

 This research has helps us to identify the types of information system used in
the organization.
 It has helps to find out the effectiveness of MIS in the organizations.
 It has help to locate the types of collaboration tools used in an organization.
 It has help to gather information regarding security threats and tools of an
organization.
 It has help us to analyze that how the use of IS/IT has benefitted the
organization.

1.4. Statement of the Problem

NIC ASIA Bank was established with the corporate vision and faith; When NIC ASIA
Bank with complete banking solution and faith; however, it was difficult for NIC to
sustain the technological developments with the implementation of Total Branch
Automation (TBA) in standalone mode. The main disadvantage of TBA was that no
data Centre was established and therefore, customers’ data were available only at the
branch where the customers have account. Moreover, each branch needed to take back
up of their data and send it to head office in storage device for safe keeping.

It has been providing various banking facilities it has to face cutthroat competition in
banking business. Especially, when the private banks were more focused on profitable
ventures and better customer service NIC had to provide services to the remote areas
all around the nation to serve the rural people and community as well. NIC should be
able to facilitate its customers with high-tech services. It also needs to re-imagine
tech-enabled services continuously and be ready to face innovative technological
challenges. More convenient international transactions a well-defined IT plan/policy
and audit plans.

NIC technology adaptation will definitely help to reshape itself in Nepalese banking
industry in recent future. NIC ASIA Bank is committed to take up technology trends
in safe and secure manner to deliver innovative, effective and efficient services to the
satisfaction of people of different demography.

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1.5. Objective of the Study

A study or investigation without any objectives becomes haphazard and cannot meet
its target. This study has been done taking certain objectives. The main objectives of
this study are as follows:

 To examine the profitability of management information system in banking.

 To evaluate the impact of management information system in banking
industry.
 To measure the impact of automated management information system in the
performance operation of commercial banks in banking.
 To know about the problem faced by organization to become successful.
 To study existing of information technology used in NIC.

1.6. Limitation of the Study

Every investigation has its own limitations. We have collected as much as information
as we could and per the requirement but still we are unable to collect full information
needed for our research due to some limitation we faced, listed below:

 Unable to collect complete information due to lack of time.

 Study is based on data collected from a single day field visit.
 Satisfactory research was not possible due to limited time to interact with
the manager

1.7. Methodology of the Study

For conducting the study, I have used both primary data and secondary. The sources
are given below:

Primary data sources:

Primary data have been collected through observation and interview.

 Face to face conservation with the bank officials

 Face to face conversation with clients
 Practical desk work

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Secondary data sources:

 Annual report of the NIC Asia Bank Ltd.

 File balance sheet and various documents
 Different textbooks & materials
 Website of the NIC Asia Bank Limited
 Reports submitted by several internship students

CHAPTER –TWO: REVIEW OF LITERATURES

2.1. Types of Information System

For the last twenty years, different kinds of information systems are developed for
different purposes, depending on the need of the business. In today’s business world,
there are varieties of information systems such as transaction processing systems
(TPS), office automation systems (OAS), management information systems (MIS),
decision support system (DSS), and executive information systems (EIS), Expert
System (ES) etc. Each plays a different role in organizational hierarchy and
management operations.

This study attempts to explain the role of each type of information systems in NIC
Asia Bank Limited.

1) Transaction Processing System (TPS):

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 Transaction Processing System (TPS) plays a vital role in financial
transactions in banking sector. When evaluating and managing the risks, it is
more anticipatory and effective way to analyzing the potential risks. It helps an
organization manage its risks, enhance its value and improves business
performance. On the other hand, Information system security is always a
necessity in order to deal with threats.

Transaction processing systems of banks and other financial institutions,

designed by the Risco Software Company, include:

 bank cash management,

 the management of seizures by a bailiff,

 check management,

 credit card transaction processing,

 money order management,

 the management of corporate clients’ cash payments,

 micro account management systems;

2) Management Information System:

Management Information System is very useful tools for the purpose of
reviewing and controlling company’s operations. The main goal of this system
is to organize all data collected from every level of the company, summarize it,
and present it in that facilitates and improve the quality of the decisions being
made to increase the company’s profitability and productivity.
These systems are typically are computer-based including either simple excel
sheet or more complex platforms. The information being collected and
gathered for the system normally comes from both inside and outside sources.
People deposit and borrow money from a bank every day. There are different
types of deposits having different tenures. So also, loans are given for short
term, medium term and long-term purposes. All this information is
consolidated on daily, weekly, fortnightly, monthly, quarterly, half yearly and
annual basis. The information is submitted by banks to RBI and stock
exchanges periodically where their stocks are listed. All these data are built

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 into an information system which provides insight to policy framers in a bank.
Collectively all these data are called Management Information System.

3) Decision Supporting System:

The use of DM and DSS is becoming increasingly common. Many banks are
upgrading from management instinctive decisions to mining of data and using
it to make decisions for business growth, not only because of the bad result
they get often from the instinctive decisions but from the fact that they need to
mine the daily increase in data, look at the trends and patterns, and look for in
accurate data to so as to make better decisions because of its wide support for
business convenience and ease of use. “Data mining can be considered as a
method that is used for a data warehouse which daily banks data are sourced
for use and new once are stored, while DSS is a tool that helps develop and
generate decisions based on the data mined. This includes the following
characteristics:

 A wide number of data is stored all over the banks departments and
branches across its coverage and it accessed concurrently.

 Heterogeneous execution environments composed of different

hardware, network connections, operating systems, data formats, and
data storage.

 An extremely heterogeneous nature that depends on the large variety of

data variables.

 The ability of viewing customer data variables at run time according to

user inputs and server status.

2.2. Information system Department

The IT department has enthusiastic and dedicated staffs responsible for providing backbone and suppo
for the functioning of the bank. The rapid expansion drive of the bank encompassing its network of
ATMs and branches has been made possible through the centralized system and dependable network

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infrastructure commissioned and maintained by the IT department. The department is actively engage
in trouble shooting and providing support in matters relating to banking software, connectivity and
hardware fault handing ensuring smooth operations which again is important for mainlining highest
quality of services.

The IT department has evolved and grown from its support responsibility into strategizing innovation
bringing out new products that offer customers added benefits by leveraging the technological advent

The department has been a mix of the youth and experience strongly led by Mr. Prakash Kumar
Adhikari, continuously providing with the learning opportunities and information sharing between the
employees with diverse competence level and skill set providing a strong career prospect.

2.3. Role of MIS

The role of MIS in NIC Asia Bank Limited are:
 MIS helps in strategic planning, management control, operational control and
transaction
 Processing of NIC Asia bank limited.
 MIS provides regular information to managers to allow them to make decision
based on data rather than guesses.
 MIS helps in taking management decisions related to management function
especially for top management.
 MIS satisfies the diverse needs through a variety of systems such as Query
Systems, Analysis systems, Modeling Systems and Decision Support Systems.
 MIS helps in short term planning, target setting and controlling of NIC Asia
Bank Limited.

2.4. Uses of IT facilities and services

Computers are getting more sophisticated. They have given banks a potential they
could only dream about and have given bank customers high expectations. The
changes that new technologies have brought to banking are enormous in their impact
on officers, employees, and customers of banks. Advances in technology are allowing
for delivery of banking products and services more conveniently and effectively than
ever before - thus creating new bases of competition. Rapid access to critical
information and the ability to act quickly and effectively will distinguish the

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successful banks of the future. The bank gains a vital competitive advantage by
having a direct marketing and accountable customer service environment and new,
streamlined business processes. Consistent management and decision support systems
provide the bank that competitive edge to forge ahead in the banking marketplace.

Major applications: The advantages accruing from computerization are three-

directional - to the customer, to the bank and to the employee.

Application
of IT in NBL

For For
For bank
customer employee

A) For the customer: NIC ASIA Bank Limited is aware of customer's need for
new services and plan to make them available. IT has increased the level of
competition and forced them to integrate the new technologies in order to
satisfy their customers. They have already developed and implemented a
certain number of solutions among them:

1. Self-inquiry facility: Facility for logging into specified self-inquiry terminals

at the branch to inquire and view the transactions in the account.
2. Remote banking Remote terminals at the customer site connected to the
respective branch through a modem, enabling the customer to make inquiries
regarding his accounts, on-line, without having to move from his office.
3. Anytime banking- Anywhere banking: Installation of ATMs which offer non-
stop cash withdrawal, remittances and inquiry facilities. Networking of
computerized branches inter-city and intra-city, will permit customers of these
branches, when interconnected, to transact from any of these branches.
4. Telebanking: A 24-hour service through which inquiries regarding balances
and transactions in the account can be made over the phone.
5. Electronic Banking: This enables the bank to provide corporate or high value
customers with a Graphical User Interface (GUI) software on a PC, to inquire
about their financial transactions and accounts, cash transfers, cheque book

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 issue and inquiry on rates without visiting the bank. Moreover, LC text and
details on bills can be sent by the customer, and the bank can download the
same. The technology used to provide this service is called electronic data
interchange (EDI). It is used to transmit business transactions in computer-
readable form between organizations and individuals in a standard format.

As information is centralized and updates are available simultaneously at all

places, single-window service becomes possible, leading to effective reduction
in waiting time.

B) For the bank. During the last decade, NIC ASIA bank Limited applied IT to a
wide range of back and front office tasks in addition to a great number of new
products. The major advantages for the NIC to implement IT are:

i. Availability of a wide range of inquiry facilities, assisting the bank in

business development and follow-up.
ii. Immediate replies to customer queries without reference to ledger-keeper as
terminals are provided to Managers and Chief Managers.
iii. Automatic and prompt carrying out of standing instructions on due date and
generation of reports.
iv. Generation of various MIS reports and periodical returns on due dates.
v. Fast and up-to-date information transfer enabling speedier decisions, by
interconnecting computerized branches and controlling offices.

C) For the employees. IT has increased their productivity through the

followings:

i. Accurate computing of cumbersome and time-consuming jobs such as

balancing and interest calculations on due dates.
ii. Automatic printing of covering schedules, deposit receipts, pass book /
pass sheet, freeing the staff from performing these time-consuming jobs,
and enabling them to give more attention to the needs of the customer.
iii. Signature retrieval facility, assisting in verification of transactions, sitting
at their own terminal.

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 iv. Avoidance of duplication of entries due to existence of single-point data
entry.

2.5. Communication

In this Field Study Report, we have discussed what is communication, channels of

communication, types of communication in an organization, interdepartmental
communication in an organization, policies regarding communication & decision-
making approach etc. For this purpose, we have visited and studied the functions
relating to our topic of “NIC ASIA Bank Limited”.

Communication may be defined as the transfer of information from sender to receiver,

with the information being understood by the receiver. The communication function is
the means to unify an organized activity, through transfer of information from one
individual to another, or from one system to another. According to NIC Asia Bank
Limited They define communication by focusing on three objectives:

 A = Attention
 B = Brief
 C = Clarity

Importance of communication

Communications is the means by which people are linked together in an organization

to achieve a common purpose. Indeed, group activity is impossible without
communication because coordination and change would not be affected. Sociologists
and psychologists have also realized the importance of communication in
interpersonal relationships, and have focused their study on communication networks.

Nepal Bank Limited give more importance to communication because they emphasize
On Attention, Brief & clarity of communication &NIC ASIA retain customers through
proper communication.

Purpose of Communication

The purpose of communication in an enterprise is to effect change. In an organization,

there can be two types of communication, i.e. internal and external. Internal

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communication means communication within the organization, whereas external
communication is the communication with the outside environment.

Internal communication

Inside communication means giving and receiving information by all hierarchical

levels. It includes vertical communication covering downward communication,
upward communication, horizontal communication and diagonal communication. It
includes communication flowing at any intermediate level as well as at operating
level, or top management level, because internal communication is indeed required by
all who work together in an organization to accomplish common goal.

Internal Communication in NIC

Internal communication of NIC ASIA Bank Limited is mainly downward, but upward
and crosswise communication is also encouraged.

a) Establish and disseminate goals of the organization.

b) To develop plans for achievement of these goals.
c) To organize human and other resources effectively and efficiently.
d) To select, develop, and appraise members of the organization.
e) To control all activities.

Means of Internal Communication

 E-mails
 Faxes
 Letters
 Reports
 Memo
 Telephones
 Conferencing
 Meetings

Following are the channels that NIC ASIA BANK uses to communication within the
organization. The most important channel they focus to communicate is “E-MAILS”.
All work is done through Email’s. This E-mail system is design by their IT
department who is responsible for controlling it & gives access to each & every

12
person within the organization. They communicate on daily basis internally &
externally both to Communication more clearly & correctly.

And the other work is done by using different channels that are letters, reports etc.
Different types of reports are prepared on suggestions or recommendations on
personnel, activity execution time and plans for overcoming the difficulties.

External communication

External communication is equally important as internal communication to provide a

link between the employees and the shareholders and other third parties. As a matter
of fact, external communication is considered as lifeblood of the modern business.
External communication can be arranged by oral or verbal communication as well as
through written media. Telex, television, telephone, tele‐printer, transmitters, STD,
ISD, and other modern sophisticated communication technologies can be used for
external communication. Written media like letters, circulars, notices, legal notices,
newspapers, magazines, manuals, periodical reports, pamphlets etc., are also used
towards external communication.

External Communication in NIC ASIA BANK LTD.

External communication helps the managers of IFL (Institute for Financial Literacy)
to become aware of:

a) The needs of customers.

b) The availability of suppliers.
c) The claims of stockholders.
d) The regulations of government
e) The concerns of the communities

Means of External Communication

 Toll free Number UAN

 Video Conferencing
 Audio Conferencing
 Web-site(static)
 Newspaper
 Marketing mobilization

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  Letters

These are the channels that NIC uses to communicate with external environment that
includes customer, suppliers, stockholders & government etc. NIC Communicate with
their customers in a better way & correctly to retain their customers. Their objective is
communicating clearly with customers. For this they provide facilities to their
customer such as a toll-free Number through this customer gets information regarding
their Accounts & services or anything they want to know. By communicating in that
way NIC gain the loyalty of customers. Even no little confusion occurs in
communication because while communicating with customer or making any contract
they confirm it many times. So, less chances of misunderstanding occurs. Letters are
written to the customers as well as to other external agencies like suppliers, taxation
authorities, governmental regulatory bodies etc.

2.6. Software as enterprise application

A typical firm uses various kind of information system software and application for
conducting, processing or evaluating their day-to-day activities. Considering NIC
Asia bank also uses various types of software/application for different department
according to its uses and need. Some of the information system used by NIC Asia
Bank is mentioned below:

1. Customer account application

This application is used by NIC ASIA bank where customer account is maintained
on the system and referenced by the account number in the general ledger. The
customer account number is the link for the customer with the online and offline
banking system applications. Customer account information is also the basis for
transaction exception reporting for various customer account issues.

2. Loan accounting application

This application is used in order to make decision regarding how much loan
should be provided by bank. Managers can access data to examine the bank loan
portfolio, generate compliance check for the auditors and track loan- loss reserve

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 account. Through this application bank (NIC bank) personnel is able to process
the forms and paperwork needed to make decision on customer’s credit standing.

3. General ledger systems

It is at the core of accounting process and information systems in banking. The

general ledger is the record accessed to perform account transactions. It records
every transaction, which interfaces with the designation of accounts. Banking
general ledger system operates on mid-range software which can be out of the box
software customized for banking industry applications.

4. Mortgage banking applications

For banks in the banking industry, mortgage bank application modules create and
maintain information according to the mortgage loans provided by banks to its
customers. NIC ASIA bank has been providing housing loans, hire purchase loans
(loan facilities to purchase new/used vehicles for commercial purpose).

5. Anytime and anywhere banking

Installation of ATM’s which offer non- stop cash withdrawal, remittances and
inquiry facilities. Networking of computerized branches, inter-city and intra-city
will permit customers of these branches, when interconnected, to transact from
any of these branches.

6. Electronic banking

This enables the bank to provide corporate or high value customers with a
graphical user interface (GUI) software on PC, to inquire about their financial
transactions and accounts, cash transfers, cheque book issue and inquiry on rates
without visiting the bank. NIC e-Banking provides secure communications using
128-bit encryption security that assures you of secure transactions made with the
Bank. NBL e-banking has dual factor authentication with the features of One
Time Password (OTP) for fund transfer.

7. Mobile banking

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 Mobile banking is 24 hour service through which inquiries regarding balance and
transaction in the account can be made over the mobile. NIC Mobile Banking is a
convenient and safe transaction banking application offered online. You can
manage and access your NIC Bank accounts quickly and securely either through
SMS, WIFI, 3G or Edge. With NIC Mobile Banking application, you can access
and manage your NIC Bank accounts to perform the following services.

2.7. IT for Firms’ operation

Banking Operations: Understanding Various Transactions & Activities NIC Bank
performs various types of transactions and activities to support their banking business.
These transactions may include making or accepting payments, trading, clearing and
settlement of accounts, and custody. Knowing the operational aspects of banking is
very important for understanding the value chain of the banking industry. Now, we
will discuss the most important supporting activities performed by NIC Asia Bank
Limited. The key operational activities are listed below:

1. Acceptance of Deposits
2. Lending of Funds
3. Clearing of Cheque
4. Remittance of Funds
5. Lockers & Safe Deposits
6. Bill Payment Services
7. Online Banking
8. Credit & Debit Cards
9. Overseas Banking Services
10. Wealth Management

1) Acceptance of Deposits: Deposits are the basis of the loan operations since
banks are both borrowers and lenders of money. As borrowers they pay interest
and as lenders, they grant loans and get interest. These deposits are generally
taken through current account, savings account and fixed deposits. Current
account deposits can be withdrawn to the extent of the balance at any time
without any prior notice. Savings accounts are for encouraging savings by
individuals. Banks pay rate of interest as decided by central banks on the

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 deposits. Withdrawal from these accounts has some restrictions in relation to the
amount as well as number of times in a given period. Fixed accounts are time
deposits with higher rate of interest as compared to the savings accounts. A
premature withdrawal is permissible with a percentage of interest being forfeited.
2) Lending of Funds: Second major activity of NIC banks is to provide loans and
advances out of the money received through deposits. These advances can be
made in the form of overdrafts, cash credits, discounting trade bills, term loans,
consumer credits and other miscellaneous advances. The funds lent out by banks
contribute a great deal to trade, industry, transport and other business activities.

3) Clearing of Cheques: Cheques books are issued to the holders of accounts in

banks. Cheque is a negotiable instrument and most convenient and widely used
credit instrument. Cheques are used to facilitate trade and business by
endorsements and withdrawal of deposits. NIC Bank render a very important
service to their customers by collecting their cheques drawn on other banks. It is
the most convenient and an inexpensive medium of exchange that does not
require actual movement of cash from one transacting party to another. Mainly,
two types of cheques are often used bearer and crossed. Bearer cheques can be
encased immediately at bank counters whereas crossed cheques can only be
deposited in the payees account.

4) Remittance of Funds: NIC also facilitate fund transfer from one place to
another, leveraging the vast network of branches that are interconnected to each
other. Many banking instruments are in usage for enabling transfer of funds from
one account to another like bank drafts, pay orders, wire or mail transfers. Bank
earns nominal commission by way of bank charges on some of the transfers. The
bank issues a draft for the amount at its own branch which can be credited to
another account which might be with different branch or different bank. Banks
collect the amount on behalf of the depositor which is known as clearing process.

5) Lockers & Safe Deposits: Bank safe deposit lockers are a good option for
safeguarding valuables and important documents. Each locker is operated by
combination of two sets of keys, one for the customer, and the other with the

17
 bank. The locker can only be operated if both the keys are used. NIC charge
nominal fees to provide the locker facility.

6) Bill Payment Services: Banks also provide services related to bill payments,
payment of insurance premium, collection of dividends etc. Recurring payments
can be automated for payment using the facilities extended by modern banks.
Account holders can directly pay from their account or using credit/debit cards
for their electricity, gas, landline and mobile phone billers and many more.

7) Online Banking: The growth of Internet and e-commerce has transformed

banking industry and customers are fast moving from branch banking to virtual
banking. Users with internet on PC or Mobile can get connected to the banks
website and avail a variety of banking services and functions. These services
lower the transaction costs and add to the ease and speed of the transaction flow.

8) Credit & Debit Cards: Credit cards issued by banks are another form of
lending, and they are not only good business for the bank, they help the economy.
Offering Credit Card is a profitable form of lending for banks that has greatly
expanded in the last few years. Banks compete fiercely for this business and offer
varying forms and types of credit-card accounts. Many banks change or negotiate
rates with consumers, and special low-rate promotions and various types of
discounts are being offered as an incentive to use card and do purchasing. People
buy things with credit, and keep merchandise moving and manufacturing
producing at a more rapid rate than if transactions had to take place in cash.
Although there is risk in the unwise use of credit cards by consumers, the
judicious use of credit stimulates the economy.

9) Overseas Banking Services: Banks offer financial services, such as payment

accounts and lending opportunities, to foreign clients. These foreign clients can
be individuals and companies, though every international bank has its own
policies, most of them offer various products and services to cater to the needs of
their international clientele. Banking products for this sector includes offshore
banking, savings, investments, and mortgages clubbed with a broad range of FX
services including forward and spot transactions.

18
UJK

10) Wealth Management: Wealth management services offered by banks include a

full range of financial services and products clubbed with advisory services from
expert professionals. Wealth management services are provided to an affluent
client and may relate to any financial product. The purpose of these services is to
grow the wealth of the client, secure the financial position and make most of the
money over the long term. Various investment avenues could be mutual funds,
international global trading, time deposits, foreign exchange solutions or dual
currency placement etc.

2.8. IT Infrastructure
IT infrastructure is increasingly seen as an important factor affecting a banks
competitive performance. IT infrastructure is the enabling base of shared IT
capabilities that provide the foundation for other business systems. Banking IT
infrastructure typically consists of IT components like common hardware, software,
communication technology, databases, standards, tools etc. These provide the base for
shared services between a large range of business application. IT infrastructure differs
from business application in that it serves a shared and common enabling foundation
for the future applications and services of all business units.

19
Organizational Structure

Figure: Organization structure of NIC Asia Bank

Since, NIC ASIA Bank has many branches that, it has divisional structure. A central
headquarters supports a number of its branches that makes their own decisions. It
allows line managers to maintain more control and accountability. Also, day to day
decision making is decentralized, so that the central team can focus in “big picture”
strategic plan. This allows ensuring that the necessary support structures are in place.

20
Organizational Structure concerning IT

Figure: IT Organizational Structure of NIC ASIA BANK

This organizational structure is concerned with IT. Card system is the IT department
that controls IS/IT resources, authorization and authentication into the system of other
departments. Core system is with Card System and other departments are simply
provided with tools to use the system of NIC ASIA Bank Limited. Card system
controls overall IT/IS resources used by other departments. Each department has a
department head including Card system. It keeps an eye on how the resources are
being used, controls how much resources can be used by each and every department
to ensure privacy of information, manages authorization and authentication of such
departments, and promotes fair use of IT/IS resources, but it acts as a department
itself. It interlinks other departments and provides them with tools to use the system
of NIC ASIA Bank Limited. It holds centralized control over the system and merely
provides other departments with tools to use the system to access information
concerned to the functional areas of such departments. For e.g.: Marketing department
is provided with tools to access information related to marketing only. Card system
strictly prohibits them to access information that is not concerned to them.

21
This is why, Card system has central control over core system and it interlinks other
departments by simply providing them with tools to access that part of information
concerned only to them.

2.9. Security

System Security Threats and Types

Security refers to the policies, procedure and technical measures used to prevent
unauthorized access, alternation, theft or physical damage to information system.

a) Malicious software: Malicious software are called malware includes threats

such as computer viruses, worms, and Trojan horses. Computer virus is a
greatest threat to the information system. A virus is a parasitic program that
infects another legitimate program, which is sometimes called host. It is
referred as the rogue software that attaches itself to other programs or data
files in order to be executed, and may be highly destructive to files, computer
memory, and hard drives. To infect the host program, the virus modifies the
host to store a copy of the virus. Malwares include virus, worm, spyware,
Trojan horse, key stroke loggers etc.

b) Internal threat of employees (social engineering): We usually think the

security threats to a business firm are from the outsiders but criminal attacks
are predominantly likely to happen from the inside of the company itself.
Unfortunately, primary sources of the security breaches are employees who
have the privilege to access the system and it data. Most breaches in security
occur when an employee accidentally compromises security because they have
no idea that their actions are potentially dangerous. Employees sometimes
become insensitive about the security standards of the organization and roam
through the company system. Employees may cause security breaches
forgetting the security standard or they may also do it for financial gain or just
to make fun of sloppy internal security procedures. So, to safeguard the
information system and its valuable data the executive body of a business firm
always need to aware of internal threats and apply safety measures. The most
effective way to reduce the internal security threat is to offer education and
22
 training programs to the respective employees about the security policies of
the organization and strictly inform the penalties for its violation.

c) Software vulnerability (bugs): Security refers to the policies, procedures,

tools and techniques, used to prevent unauthorized access, modification, theft,
or physical damage to information systems. Security protects the assets of the
organization from accidental input or output errors, thefts, physical damages
and illegal access. Threats to computerized information systems include
hardware and software failure: user errors: physical disasters such as fire or
power failure: theft of data, services, and equipment: unauthorized use of data:
and telecommunication disruptions. Nepal Bank is currently using PCIDSS
3.2 Certified for the system security. PCIDSS 3.2 is framework for a robust
payment card data security process. The Payment Card Industry Security
Standards Council (PCI SSC) has published a new version of the industry
standard that businesses use to safeguard payment data before, during and
after purchase. PCL Data Security Standard (PCL DSS) version 3.2 replaces
version 3.1 to address growing threats to customer payment information.
Companies that accept, process or receive payments should adopt it as soon as
possible to prevent, detect and respond to cyber-attacks that can lead to
breaches.

System Security Tools and Types

System security tools used in NIC ASIA Bank Limited are;

a) Penetration Test Tool: A penetration testing tool is a tool used for testing the
security of a Web application. Penetration testing (also called pen testing) is
the practice of testing a computer system, network or Web application to find
vulnerabilities that an attacker could exploit.
b) Card Discover Tool: Card discover tool helps to identify the location from
where the card is swapped and the transaction occurred using that smart cards.
It helps to preserve integrity of cards holders.
c) Database Firewall: Database firewalls are a type of web Application
Firewalls that monitor databases to identify and protect against database

23
 specific attacks that mostly seek to access sensitive information stored in the
database.
d) Network Firewall: A network firewall refers to a network device which
blocks certain kinds of network traffic, forming a barrier between a trusted and
an untrusted network. It is analogous to a physical firewall in the sense that
firewall security attempts to block the spread of computer attacks.
e) Intrusion Detection System (IDS) & Intrusion Prevention System (IPS):
An Intrusion Detection System (IDS) is a device or software application that
monitors a network or systems for malicious activity or policy violations. Any
malicious activity or violation is typically reported either to an administrator
or collected centrally using a security information and event management
(SIEM) system. A SIEM system combines outputs from multiple sources, and
uses filtering techniques to distinguish malicious activity from false alarms.
An Intrusion Prevention System (IPS) is a system that monitors a network for
malicious activities such as security threats or policy violations. The main
function of an IPS is to identify suspicious activity, and then log information,
attempt to block the activity, and then finally to report it. IDS (Intrusion
Detection System) and IPS (Intrusion Prevention System) both increase the
security level of networks, monitoring traffic and inspecting and scanning
packets for suspicious data. Detection in both systems is mainly based on
signatures already detected and recognized. The IDS only monitor traffic. The
IDS contain a database of known attack signatures. And it compares the
inbound traffic against to the database. The IPS monitors the inbound packets
and what they are really being used for before deciding to let the packets into
the network.
f) Security Information and Event Management (SIEM): Security
Information and Event Management (SIEM) tool for cyber threat analysis, IT
compliance maintenance, and provide suspicious activity alerts. A SIEM
system combines outputs from multiple sources, and uses filtering techniques
to distinguish malicious activity from false alarms. NIC Asia Bank uses SIEM
software of LogRhythm.
g) File Integrity Monitoring (FIM): File Integrity Monitoring refers to a
process for making sure that files have integrity; in other words that they have
not been damaged nor manipulated over a certain time period. File integrity
24
 monitoring tools are generally utilities for internal processes that check current
file integrity against a predetermined baseline. NIC Asia Bank uses FIM
software of LogRhythm.

2.10. MIS in decision making

For decision making in NIC Asia Bank Limited, first of all, problems are identified
and analyzed. Then, Card system generates necessary reports from collected data as
per the request of other departments. Data are analyzed and different alternative
solutions to the problems are generated and communicated to the head of Card Centre.
Department heads and head of Card center works together to select the best
alternative solutions to problems.

Card system interlinks all the departments. In other words, card system is the IT
department that acts as the head of all the other departments, but card system is also a
department itself. It acts as the head of other departments because its control IS and IT
resources, authorization and authentication of other departments. From collected data,
card system will generate necessary reports as per request of other departments.
Departments will use those reports to acquire necessary data and identify different
alternative solutions of problems and communicate it to the head. Finally, head and
department head will work together to select best alternative out of many alternatives
that is cost friendly as well as best for the organization. This is how decision flows in
NIC Card Centre.

1) Steps undertaken by NIC Asia Bank Limited to Make Decisions

2) 1. Identify problems
3) 2. Study and analyze identified problems
4) 3. Gather necessary data that are related to problems and generate reports
5) 4. Identify various alternatives to problems
6) 5. Analyze all the alternatives
7) 6. Report the result of analysis to department head who will in turn report to
head of Card Centre
7. Hold a meeting to discuss the analyzed alternatives
8. Select the best alternative

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 9. Implement the decision

How the decisions are implemented depends upon the problem. If the problems can be
immediately solved, decisions are implemented immediately. If the problems need to
be solved a part at a time, a master decision will be divided into parts and are
implemented one at a time by analyzing the effects. All in all, how the decisions are
implemented depends upon the type of decision i.e. whether the decisions are routine
or basic, programmed or non-programmed, tactical or operational, and formal or
informal.

2.11. Ethics

Core Values and Ethics in NIC Asia Bank Limited are:

a) Customer Focus: NIC prime focus is to perfect its customer service.

Customers are NIC Bank’s first priority and driving force. NIC Asia Bank
wishes to gain customer confidence and be their trusted partner.
b) Quality: NIC ASIA Bank Limited believes a quality service experience is a
paramount to its customers and is strongly committed in fulfilling this ideal.
c) Honesty and Integrity: NIC ASIA Bank ensures the highest level of integrity to
its customers, creating an ongoing relationship of trust and confidence. It
treats its customers with honesty, fairness and respect.
d) Belief in our people: NIC ASIA recognizes that employees are its most
valuable asset and competitive strength. NIC Bank respects the worth and
dignity of individual employees who devote their careers for the progress of
the bank.
e) Teamwork: NIC is a firm believer in team work and feel that loyal and
motivated teams can produce extraordinary results. NIC Bank is driven by a
performance culture where recognition and rewards are based on individual
merit and demonstrated track record.
f) Good Corporate Governance: Effective Corporate Governance procedures are
essential to achieve and maintain public trust and confidence in any company,
more so in a banking company. NIC Bank is committed in following best
practices resulting in good corporate governance.

26
2.12. Corporate social responsibility
Corporate social responsibility is the practice of integrating social and environmental
goals into business operations. Common roles of CSR include helping control costs,
improve a company's brand, attract top-quality talent and facilitate long-term financial
success. CSR is a thoughtful and practical way to give back to society. When
businesses are conscious of their social and environmental impact on the world, they
can benefit society by giving back and helping to find solutions to everyday issues.

Corporate social responsibility (CSR) is all about companies managing their business
process to produce the overall positive impact on the society. The interest for CSR has
grown rapidly the recent years and people started to demand corporate social
responsibility from the company. CSR is connected with corporate behaving ethically,
morally and socially responsible towards the society. This research focuses on
investigating why companies engage in CSR, how they apply CSR and how CSR can
affect financial performance. It was found that the employees and the people in
general do get motivated by their organization. All the respondents were very positive
and energized about being part of the CSR activities provided with the opportunities.
NIC has focused their CSR activities related with the health, education and
environment with the name as NIC health, NIC education and NIC environment
initiation. NIC has tried to cover the different aspect of essential factors in anyone’s
life. Majority of the respondents’ views that CSR activities has the positive relation
and can contribute on the financial performance of the company as it increases the
good image and goodwill of the organization. CSR needs planning and proper
implementation so that the society could actually have positive impact from CSR
activities. In Nepalese context, the organization don’t emphasize in CSR activities
rather they give priorities to earn more profit and flourish their business.

2.13. Competitive advantage

Management of information technology plays a strategic role in building a

competitive advantage, particularly in the banking sector which is based on reliability
and information. This paper investigates the impact of Management Information
Systems (MIS) effectiveness on task productivity. The Competing Value Model

27
(CVM) was adopted for the operationalization of MIS effectiveness, which defines
four archetypes labeled as: open system (OS), human relations (HR), internal process
(IP) and rational model (RM). The empirical findings from a survey of 186 employees
in Greece revealed that a) the externally focused MIS effectiveness archetypes (OS,
RM) reflecting innovation, creativity, goal setting and planning enhance task
productivity b) the IP model of MIS effectiveness influences negatively task
productivity.

Information technology, also known as IT, is a comprehensive term that includes all
types of technology used to exchange, store, use or create information. From basic
computer terminals to IP-based telephony systems, information technology is an
integral part of most modern business operations. Some of the business benefits that
Nepal Bank has got through use of technology are;

Automation:

Automation can be defined as the technology by which a process or procedure is

performed without human assistance. Automation has been achieved by various
means including mechanical, hydraulic, pneumatic, electrical, electronic devices and
computers, usually in combination. Complicated systems, such as modern factories,
airplanes and ships typically use all these combined techniques. The benefit of
automation that NIC ASIA Bank includes labor savings, savings in electricity costs,
savings in material costs, and improvements to quality, accuracy and precision.

Speed:

One of the business benefits with the use of technology is increase in the speed while
working. Before the use of technology every work done by the organizations used to
take a lot of time. There was no work done on time due to which organization used to
have less production which results less profit. Likewise, NIC bank also faced the
same but now with the use of technology most of the work is done by the machine
which results high qualitative productivity and increase in profits too. Every work is
performed within a minute. Increase in speed results costumer satisfactions.

Business Security:

Information security is a big issue every day. Hackers and thieves steal consumer
information and company proprietary information daily, but technology can protect

28
company information. If there is one key benefit to businesses that should be updated
and continuously monitored, it is digital security. Hackers can interrupt business
operations, cost companies thousands of dollars, and cause businesses to fall under
public scrutiny. Security goes well beyond firewalls and anti-virus software. Digitally
linked security systems protect businesses from vandalism and theft. Not only do
systems provide Realtime alerts, but they also provide diversion tactics such as
alarms. Some systems give business owners away to speak directly to vandals from a
remote location via phone, informing intruders that they are on camera and identified.

Employee Monitoring:

Businesses can better manage large teams using technology. Applications track
customer service call times, which helps managers understand where lag times exist
and provide opportunities for coaching. Speed and GSP tracking of drivers support a
positive public image of employees who realize they can't get away with poor
behavior. The right technology automatically tracks sales numbers and potential sales,
which gives managers control of leading indicators rather than lagging behind.

Overall Business Efficiency:

Businesses operate more efficiently when they use technology correctly. Digitizing
files makes it easy to customize documents such as user agreements and contract
templates. Communication is instant with email and the ability to send documents
back and forth during negotiations. Customers can get information on websites and
request information anytime of the day or night using online forms. Software
programs continue to improve and make data collection and interpretation more
powerful. Customer relationship management software records everything from client
information to follow-up calendars, buying history and propensity patterns. This
information makes it possible for a sales team to manage prospects and solidify client
relationships effectively.

2.14. Outsourcing

In IS, outsourcing means using eternal agencies to create, process, manage and
maintain information systems and to provide the company the wide range of
information-related services such as data processing, accessing external databases,

29
systems integration, global networking, content development, web design and
maintenance, logistics, technical & amp; customer support, legal outsourcing and
gathering business intelligence. The specialized company that handles the outsourced
work is often streamlined, and often has the world-class capabilities and access to new
technology that a company couldn’t afford to buy on their own.

NIC Bank Limited outsource for reasons that can be classified into broad categories.

1. Strategic force: NIC outsource for systems that are not in their direct line of
business so that they can have better focus on their primary line of business
and utilize its resources to meet strategic goals and achieve its mission &
quote; “Do what you do best and outsource the rest! & quote(Tom Peters)”.
2. Economics of Scale: NIC may also outsource for economic reasons. Since
most outsourcing agreements are fixed-price contracts, this helps eliminating
the escalating cost associated with the system development processes. A
carefully designed outsourcing contract decreases the overall cost of IS
operations.
3. Market force: Sometimes market force may make outsourcing an attractive
alternative. If an outside vendor can provide support function more efficiently,
outsourcing that function can reduce operating cost and give the company a
competitive advantage.
4. Technical consideration: Technical consideration such as lack of skilled
technical personnel compels organizations to consider outsourcing. Therefore,
many organizations outsource external vendors for handling IS related
functions so that they do not need to hire new employees, train them to build
software package for the company and then release them after the new system
is built.

Benefits

1. Burden of developing and delivering high quality information system is on the

outsourcing vendor, not on the organization.
2. Increase efficiency and competitiveness.
3. Quickly implement new technology.

30
Drawbacks

1. Risk of exposing sensitive and confidential data.

2. Losing management control of business functions mean that organization may no
longer be able to control operations and deliverables of activities that is
outsourced.

2.15. Organization change pattern

There are number of activities or processes that are associated with building
information system. The development of an information system for a large business
application must be carefully planned and monitored. Thus, the process of building a
new information system is one kind of planned organizational change. IS doesn’t only
rely on computer hardware or software; it also lays stress on changes in jobs, skills,
management and organization.
The four patterns or kinds of structural organizational change enabled by information
technology are:

1. Automation
2. Rationalization
3. Business process redesign
4. Paradigm shift

High

RISK Paradigm
Shift

Redesign

Rationalization

Low Automation

Low high

RETURN

31
six key steps to effective organizational change management are:

1. Clearly define the change and align it to business goals: It might seem obvious
but many organizations miss this first vital step. It’s one thing to articulate the
change required and entirely another to conduct a critical review against
organizational objectives and performance goals to ensure the change will carry
your business in the right direction strategically, financially, and ethically. This
step can also assist you to determine the value of the change, which will quantify
the effort and inputs you should invest.
2. Determine impacts and those affected: Once you know exactly what you wish to
achieve and why, you should then determine the impacts of the change at various
organizational levels. Review the effect on each business unit and how it cascades
through the organizational structure to the individual. This information will start
to form the blueprint for where training and support is needed the most to
mitigate the impacts.
3. Develop a communication strategy: Although all employees should be taken on
the change journey, the first two steps will have highlighted those employees you
absolutely must communicate the change to. Determine the most effective means
of communication for the group or individual that will bring them on board. The
communication strategy should include a timeline for how the change will be
incrementally communicated, key messages, and the communication channels
and mediums you plan to use.
4. Provide effective training: With the change message out in the open, it’s
important that your people know they will receive training, structured or informal,
to teach the skills and knowledge required to operate efficiently as the change is
rolled out. Training could include a suite of micro-learning online modules, or a
blended learning approach incorporating face- to-face training sessions or on-the-
job coaching and mentoring.
5. Implement a support structure: Providing a support structure is essential to assist
employees to emotionally and practically adjust to the change and to build
proficiency of behaviors and technical skills needed to achieve desired business
results. Some change can result in redundancies or restructures, so you could
consider providing support such as counseling services to help people navigate
the situation. To help employees adjust to changes to how a role is performed, a

32
 mentorship or an open-door policy with management to ask questions as they
arise could be set.
6. Measure the change process: Throughout the change management process, a
structure should be put in place to measure the business impact of the changes
and ensure that continued reinforcement opportunities exist to build proficiencies.
You should also evaluate your change management plan to determine its
effectiveness.

2.16. System changes and redesign

Technology is a business driver and is vital for the continuous success and to spur
growth of business. Technologies facilitate banks to introduce new products and
services, reach close to the customer, and narrow down the digital divide thereby
supporting financial inclusion. The emergence of self-service banking technologies
such as ATM, Online Banking and Mobile Banking has ushered the concept of
anytime and anywhere banking. With the advancement in these technologies new
products are gaining more attention amongst customers’ reasons being lower cost of
operation and easily accessible services. For example, Mobile banking, a symbiosis of
technology and financial services is the hottest area of development in the banking
sector. However, the rate of success of these new products will depend on the
suitability of the technology selected by banks. For a public sector bank like Nepal
Bank in order to achieve targeted goal with two mission statements & quot; Network
for inclusion & quot; and & quot; Enhancing the Value & quot; should be able to
facilitate its customers with high-tech services. It also needs to re-imagine tech-
enabled services continuously and be ready to face innovative technological
challenges such as, security and compliance to the security mandates of all forms of
electronic products, services and transactions.

 Implementation of open standards for banking functionalities.

 Growing customer awareness and need of transparency.
 Close integration of bank services with web-based e-commerce or even
disintermediation of services through direct electronic payments (e-Cash).
 More convenient international transactions.
 A well-defined IT plan/policy and audit plans.

33
NIC technology adaptation will definitely help to reshape itself in Nepalese banking
industry in recent future. NIC ASIA Bank is committed to take up technology trends
in safe and secure manner to deliver innovative, effective and efficient services to the
satisfaction of people of different demography.

34
 CHAPTER - THREE

CONCLUSION, RECOMMENDATIONS and

REFERENCE

3.1. Conclusion
Our aim to visit NIC ASIA is to collect some information and get knowledge about
information system in the bank. NIC bank has successfully utilized its MIS in
providing banking products to its customers and also in improving its organizational
efficiency. It is one of the few banks which adapts quickly to the changing
environment and keeps pace with the ever-changing technology. Management
information system has been a boon to NIC bank. The bank has gained tremendous
lead over its competitors who lagged behind in incorporating MIS in their
organizations. Today MIS has played a crucial role in giving it a competitive
advantage. Though the current MIS in the bank is highly beneficial, the bank is very
keen on researching new avenues to improve its MIS system for better efficiency in
its operations and to continue to serve its customers effectively.

3.2. Recommendations

MIS information system in NIC was very effective and efficient. It has been a boon to
NIC though we would like to recommend the bank on certain issues and flaws that we
could recognize during our visit and research. Following sources should be improved
in order to develop more fluency and efficiency in company’s MIS:
1. User training
2. System redesign
3. Time management
4. Innovation
5. System analysis etc.

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 REFERENCE
https://www.nicasiabank.com.np/

https://dotnepal.com/case-study-writing-a-case-study-for-b-ed-third-year-tu/

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37