Chapter III

Analysis and Review

3.1 Analysis of Data collected on Remittance Department of RBB

Remittance is the means of transferring funds from one place to another within a country or from
one country to another country .It is transferred by foreign worker to his or her home country.
Money sent home by migrants constitutes the second largest financial inflow in many developing
countries. Many people use the word “remittance” when they refer to send the money.
Remittance transfers are commonly known as “international Wires,” “international money
transfer,” or “remittances”.

Flow of fund from one place to another place plays vital role for the achievement of basic needs
of citizen in case of inland or domestic remittance. In the context of foreign remittance, it is
helpful to uplift the economy of the country .Through international foreign inward remittance
funds comes to the country.

RBB has tied up with renowned Money Transfer Companies setting up reliable time bound
Service enabling inflow of foreign exchange earnings to the country with high level of security.
In the inflow of remittance within a country bank and financial institutions plays vital role. The
customer can receive the remittances within few minutes of payment instruction made through in
alliance with these Money Transfer Companies from all branches of RBB.

This chapter deals with the analysis and review the data related to remittance service. The data
and information are collected through interview, observation and published and unpublished
sources. The collected data are analyzed and presented with the help of financial tools and
statistical tools like tables, bar-diagram and pie-chart.

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3.1.1 purpose of remittance.

There is various purpose of remittance. In our country Nepal the amount of money received are
used for the household expenses. Some people may use for business purpose, educational
expenses, savings etc. Following figure help us to know the purpose of remittance more clearly:

Figure 3.1
Purpose of Remittance

Others
7%
Saving
10% Household
30%

Educational Expenses
17%

Business
36%
Source: Interview with customers

In the above figure, out of total 36% respondent use the money received for their business
purpose. Similarly, 30% use money for household expenses,17% use for educational
expenses,10% use for saving and 7% use for others purpose.

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3.1.2 basic categories of remittance transfers.

On the basis of location of transfer there are two basic categories of remittance transfers:

I. Domestic Remittance
Domestic remittance transfers occur when an individual transfers funds from one location to
another within the same country. The predominant pattern within this category is that the
individuals sending the funds, i.e., the remitter, hails from a rural area and has relocated to an
urban center.

II. International Remittance

In contrast, 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 purpose of this report, a
remittance transfer will refer only to international remittances.

Remittance transfers help its customers to remit money from one place to another through
relatives through this service of bank. It is a reliable service which helps to send money from
place to another. Remittances contribute to economic growth and to the livelihoods of needy
people worldwide. Moreover, remittance transfers can also promote access to financial services
for the sender and recipient, thereby increasing financial and social inclusion.

3.1.3 types of remittance on the basis of flow of fund.

On the basis of flow of fund remittance can be categorized into two major types;

I. Inward Remittance
Inward remittance refers to the flow of fund towards the home country or place of migrant
works from host country where the migrant are working. Inward remittances consist of
receiving money. It is beneficial for the home country where there is flow of money towards
the economy.

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Inward Remittance Payout Partners of RBB
There are various modes of remittance and in this modern age, the facility had been proved to be
very important and popular. In the course of business work or for any purpose, one may have to
send and receive money from one place to another. Such function may be in both foreign and
inland. This function has facilitates by the bank with the help of different modes of remittance.
Some renowned Inward Remittance Payout Partners of RBB are:

 Prabhu Money Transfer

 IME
 CG money
 RBB remit

II. Outward Remittances

Outward remittance is that where there is transfer of money or outflow of fund from the home
country to the host country. It is concerned with the outflow of fund from the home country of
migrant workers to that country where they migrated or in case of domestic remittance, outflow
of fund from one region to another region. Outward remittance is not beneficial for the country as
inward remittance because there is outflow of fund from its domestic income.

While talking about RBB, Inaruwa branch provides outward remit service only on three cases;
 To the students who are out of nation for educational purpose.
 To the patient who are out of the home country for medical treatment.
 To the businessmen for the purchase of goods for business but the submission of tax
paid voucher and purchase bills are compulsory.
 Hence, the inflow of fund is much higher than the outflow of fund from RBB, Inaruwa
branch which is beneficial for the bank as well as to the nation’s economy as a whole.

Following table and diagram shows the flow of funds of Rastriya Banijya Bank, Inaruwa branch
on the basis of two months record (Poush and Magh 2074/2075)

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Table 3.1
Inflow and Outflow of remittance in the month of Poush and Magh 2074/75 (in Lakh)

Month Inward Outward

Poush 268.26 23

Magh 296.13 16

Total 564.39 39

Source: Remittance Department, RBB Inaruwa branch

Above table represents the data of inflow and outflow of remittance in RBB, Inaruwa branch for
the month of Poush and Magh 2073. Given data is total amount of remittance including both
domestic and foreign remittance in the form of inward and outward remittance.

Figure 3.2
Total Inward and outward flow of remittance of RBB, for the month of Poush and Magh 2073

Flow of Remittance

6%

Inward
Outward

94%

Source: Remittance Department, RBB Inaruwa branch

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From the above table and diagram shows the two major types of remittance on the basis of flow
of remittance i.e. inward and outward remittance. Data presented in the above table and diagram
shows the total inward and outward flow of funds through remittance of Rastriya Banijya Bank,
Inaruwa branch for the month of Poush and Magh 2073. Here the inward remittance is much
higher in comparison of outward remittance (inward=Rs. 5,64,39,000 and outward= Rs.
39,00,000). It is so because there is outward remit service only for students studying in another
country, for patient doing treatment in another country and for businessmen making purchase of
goods for business with the submission of necessary documents.

3.1.4 remittance process and parties involved in remittance.

Remittance process
Remittance processing or receiving is the process and payments associated with paying a bill
through a network. Functionally all remittance service provider operates in similar ways.
Remittance service provider must be networked firstly to send and receive funds. Firstly they
must have access point or physical location along with the "remittance chain". At one end of the
remittance chain, the "capturing agent" collects the fund from the sender or remitter and at the
other end one of the chain the "disbursing agent" disburses the fund to receiver. The access point
may be banks, wire transfer offices, money etc. but to give example ads are the most visible
component of the network. Apart from the physical access point, most of the remittance system
remains invisible to the public. Remittance service provider most provides a way for the
capturing agent to communicate information to disbursing agent with regard to transfer that is
occurring. This is referred as “messaging". A "settlement" comprised of some arrangement for the
actual transfer of the fund is required.

Parties involved in remittance

There are number of parties involved in remittance process. Generally, there are three parties in
the remittance process which are introduced as under;

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  Remitter
The person who request for remittance is known as remitter. Remitter can be both individual and
firm. To transfer money from one place to another place remitter has to pay certain may vary
from bank to bank and it depends on the modes and amount of remittance.

 Remitters Bank/Branch
The bank/branch that acts on the behalf of remitter to remit the amount is called remitters
bank/branch. It imposes some charges to remit the fund.

 Beneficiary
The person for whose benefit remittance is made is called beneficiary. Beneficiary may be
individuals or firm. If the beneficiary is an account holder of respective branch, the remittance
amount will be credited into his account and if the beneficiary do not have account with
respective branch; the amount will be paid to him/her on his/her demand.

3.1.5 agents of foreign remittance, rastriya banijya bank.

Rastriya Banijya Bank Inaruwa is providing remittance services through different mode of
remittance.
Different mode which is presented on below table is used to provide foreign remittance services.

Following table shows the inflow of foreign remittance through different mode at
International Money Transfer

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Table 3.2

Agents of inward foreign remittance (Amount in Lakh)

Agents Poush Magh

Prabhu money transfer 38.3 53.12

IME 54.24 61.43

CG money 47.62 41.7

RBB remit 128.1 139.88

Source: Remittance department of RBB, Inaruwa branch

Following table and figure shows the inflow of foreign remittance through different mode at
International Money Transfer. We can see that RBB remit has more transaction than prabhu,
IME. In the month poush RBB remit has done transaction of 138.1 lakh where as in the month
magh 139.88 lakh in comparison in the month of magh transaction has increases by 11.78 lakh.

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Figure 3.3

Agents of foreign remittance of Rastriya Banijya Bank

160

140

120

100
RBB REMIT
PRABHU MONEY
80
TRANSFER
CG
60 IME

40

20

0
POUSH MAGH

Source: Remittance Department, RBB Inaruwa Branch

The data presented on above table and diagram shows the various modes of inflow of foreign
remittance for the two consecutive months of Poush and Magh of fiscal year 2074/2075. The
various modes of inflow of foreign remittance are Prabhu Money Transfer, CG Money Remit,
IME and RBB remit. It shows that the inflow of fund from foreign remittance is highest through
RBB remit which is RS.1,28,10,000 and RS. 1,39,88,000 for the month of Poush and Magh
respectively. Similarly, IME hold the second position respectively in terms of the inflow of funds
from foreign remittance.

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Figure: 3.4

Percentage of the inward foreign remittance Of RBB, Inaruwa branch on Poush and Magh
2074/2075

Total Inward Remittance

poush
Magh 48%
52%

Source: Remittance department of RBB, Inauwa branch

The above figure shows the percentage of total inward foreign remittance for the Month of poush
and Magh 2074/2075. The total amount of inward foreign remittance from various modes of
remittance is on Poush is RS. 2,68,26,000 which covers 48% of the total amount of both the
month. Similarly the total amount of inward foreign remittance on Magh is Rs.. 2,96,13,000
which coves 52% of the total amount of both the months. The total amount of the inward foreign
remittance of Poush and magh is RS. 5,64,39,000 (i.e 100%). The amount of remittance on Magh
is Greater than Poush By 5%.

3.1.6 mean and variance of the inward and outward remittance.

Mean of Inward and Outward Remittance

The mean is the average of the number, a calculated central value of the set of numbers. The
simple mathematical average of the set of two or more number is known as mean

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From the data monthly data of inward and outward remittance mean between them can be
calculated. In the data of two consecutive months, inward remittance is supposed to be 'x' and
outward remittance is supposed to be 'y'

Table 3.3
Monthly Inward and Outward of Remittance (in lakh)
Month Inward (x) Outward (y) Xy x2 y2

Poush 268.26 23 6169.98 71963.43 529

Magh 296.13 16 4738.08 87692.98 256

Total 564.39 39 10908.06 159656.41 785

We have,

By Formula;

∑x
Mean (x ) =
n

Where, the number of month (n) = 2

Total amount of inward remittance (x) = Rs.. 564.39 lakh

Total amount of outward remittance (y )= Rs.. 39 lakh

564.39
The mean of inward remittance (x ) =
2

= Rs.. 282.195 lakh

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 39
The mean of outward remittance (y ) =
2

= RS. 19.5 lakh

Therefore the average amounts of inward and outward foreign remittance are Rs. 282.195 lakh
and Rs. 19.5 lakh respectively.

Variance of Inward and Outward Remittance

Variance is a statistical measure that tells us how the measured data vary from the average value
of set of data. Variance is the average of squared differences from mean.

The total amount of inward remittance is Rs.. 564.39 Lakh and outward remittance is Rs. 39 lakh.
So, the monthly variance can be calculated from both inward and outward remittance.

By formula,

( ∑nx )
2
∑x
Variance (σ 2) = − 2
n

Where,

n= 2

x= 564.39

y=39

x2=159656.41

y2=785

xy= 10908.06

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 ( )
2 2
564.39 564.39
The variance of inward remittance (σ 2x) = –
2 2

=79828.21 - (282.19)2

=RS. 197.02 Lakh

( )
2 2
39 39
The variance of outward remittance (σ 2y) = –
2 2

= 392.5 – (19.5)2

= Rs 12.25 Lakh

Therefore, difference between the variance of inward and outward is Rs 184.77 Lakh of Poush
and Magh of the fiscal year 2074/75 which show the fluctuating variance because there is no
constant position of inward and outward remittance.

3.2 Critical Analysis of the Theoretical Concepts Relating to Practical Experiences in

Remittance Department

Remittances are the flows of money between insdividuals living in different countries, most
typically a foreign worker sending money back to his or her home country. In the last few years
remittances have risen significantly throughout the world as a result of increased migration flows,
as well as reduced sending costs. Remittance flows to developing countries now account for a
large portion of external capital inflows well ahead of official development assistance. In many
smaller economies, large scale remittance flows account for more than a quarter of GDP

Theoretically we see and listen in various media that through the remittance the receiver will
immediately receive the money after the sender sends it and by saying so different agents take
money with the sender but it is far away from implementation in real practice. In most of the

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cases the receiver has to wait for long time to receive money. Only in exceptional cases they
immediately receive the money.
It is so because in one hand the various channels associated with remittance does delay in
transferring the money due to network and other problems and in other hand there is the provision
of doing the transaction of amount more than one lakh through the bank account, so the customer
who does not have account at the concerned bank has to open an account and receive money
through it which takes lots of time. Hence the customer cannot receive the money in immediately.

3.3 Knowledge Gained from the Work Assigned

Internee is assigned to different work responsibilities at the organization during the internship
gain lots of knowledge. During the short period of time it is impossible to gain depth knowledge
of every aspects of the organization but this period is very fruitful to gain surface knowledge
about various aspects of the organization. Knowledge gained from the work assigned in an
organization is as follows;

 Dealing with Customer:

For any organization customers are the crucial part which determines the success and failure of an
organization and satisfied customers are the reason for success of any organization. So, as an
internee one learns to deal with the customer very politely and to maintain courtesy

 Time management:
Time management and its importance were learnt. One has to deal with number of customer at
the same time, so everyone should treat equally.

 Proper Documentation:
As an internee one learned about the proper documentation and its importance for effective
means of reference.

 Remittance Process:

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 As an internee one has gained knowledge about various modes and procedure of
remittance.

 Verification:
Researcher has learned to verify the RI number given by customer before making
payment transaction in system.

 Operation of Machines:
Internee has learned to operate various machines used in organization like photocopy
machine, scanner, fax machine, fake note detector machine, cheque reader, cheque writer
machine,etc.

 Procedure of Domestic Remittance:

Researcher has learned about the procedure of transferring money from RBB remit with in
the country as there is no any for both inward and outward remittance within the country
and so on.

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