RBB Assistant Manager cheat sheet

Nepal's banking structure is tiered: Class A commercial banks, Class B development banks, Class C finance companies, and Class D microfinance institutions, each licensed under the BAFIA framework and supervised by Nepal Rastra Bank.

Core operational ratios: Credit-Deposit Ratio = total loans and advances ÷ total deposits × 100; Net Interest Margin = (interest income − interest expense) ÷ average earning assets × 100.

CRR is the share of deposits held with NRB and earns no interest; SLR is the share held in approved liquid assets such as government securities and NRB bonds.

The daily balance sheet identity: Assets = Liabilities + Equity, where deposits and borrowings are liabilities and loans, investments and fixed assets are assets.

Branch expansion requires NRB approval; Class A banks face minimum paid-up capital thresholds set by NRB and must maintain capital adequacy under Basel-based norms.

CAMEL-type supervision rates Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk; weak ratings trigger corrective action.

Double-entry bookkeeping applies to every transaction: each debit has an equal credit, and trial balance totals must always agree before financial statements are prepared.

Reconciliation is a control, not a formality: nostro/vostro accounts, ATM cash, and interbranch accounts must be reconciled and differences cleared within prescribed timelines.

The five Cs of credit: Character, Capacity, Capital, Collateral and Conditions; capacity (repayment from cash flow) is the primary test, collateral is secondary security.

Debt Service Coverage Ratio = net operating income ÷ total debt service; a DSCR of 1.25 or higher is generally treated as acceptable for term lending.

Loan-to-Value ratio = loan amount ÷ appraised value of collateral × 100; lower LTV means greater collateral cushion for the bank.

Working capital assessment commonly uses the turnover method: permissible bank finance = current assets − current liabilities other than bank borrowings, adjusted for the operating cycle.

Agriculture lending is seasonal: crop loans follow the production cycle with repayment aligned to harvest; NRB directs a minimum share of lending to the agriculture sector as directed lending.

Retail loans (home, auto, personal, education) are assessed mainly on income, obligation ratio and credit history; total EMIs should generally not exceed about half of net monthly income.

Loan classification under NRB norms runs from Pass through Substandard, Doubtful and Bad, with higher loan loss provisioning required as classification deteriorates.

Security documentation must be complete and enforceable: hypothecation, mortgage, pledge, personal guarantee and insurance of collateral all require proper registration and renewal.

Digital channels include mobile banking, internet banking, wallets, QR payments, agent banking and card-not-present e-commerce; each carries distinct authentication and limit rules.

Two-factor authentication combines something the customer knows (PIN/password) with something they possess (device, OTP token); OTP must never be shared with anyone, including bank staff.

Transaction limits are set per channel and per customer tier; limit breaches are blocked at the system level and require branch or documented approval to raise.

Interoperability in Nepal is enabled through the national retail payment switch, allowing transfers between banks and wallets via a unified address or QR standard.

Real-time gross settlement handles high-value, time-critical interbank payments individually; retail instant payment systems net or process small-value transfers continuously.

Digital onboarding still requires Customer Due Diligence: identity verification, liveness checks, and risk screening must occur before an account becomes fully operational.

Fraud controls include device binding, velocity checks, geo-location flags, session timeouts, and real-time alerts to customers for unusual transactions.

Business continuity for digital banking requires fallback channels, incident reporting to NRB, and customer notification obligations when service disruption occurs.

Card types: debit draws directly on the customer's deposit account; credit extends a revolving limit; prepaid is loaded in advance and is not linked to a deposit account.

Chargeback is a formal dispute where the issuer reverses a card transaction and the acquirer or merchant must respond with evidence within scheme deadlines.

Card-not-present fraud is mitigated by CVV verification, 3-D Secure authentication, and merchant risk scoring; the CVV must never be stored by merchants.

Remittance channels include banks, licensed remittance companies, money transfer operators and digital wallets; only NRB-licensed entities may legally conduct remittance business.

Inward remittance is a key source of foreign exchange for Nepal; the beneficiary receives local currency at the prevailing rate, and the sender pays fees plus the exchange margin.

Anti-money-laundering rules apply fully to remittances: sender and beneficiary identification, purpose of payment, and screening against sanctions and watch lists.

Prepaid and gift cards carry stored value and expiry rules; unutilized balances and refunds are governed by the issuer's published terms and consumer protection norms.

Card issuance requires KYC of the holder; supplementary cards are issued on the primary holder's account with the primary holder remaining liable.

Nepal Rastra Bank is the central bank and primary regulator; BAFIA provides the legal basis for licensing, inspection, and enforcement of banks and financial institutions.

Compliance is a control function independent of business lines; the compliance officer reports to the board or a board-level committee, not to the business head.

Statutory reserves and prudential limits are mandatory, not discretionary: CRR, SLR, single-borrower exposure limits and sectoral lending caps must be met at all times.

Know Your Customer, AML/CFT, and reporting obligations include suspicious transaction reports and threshold-based cash transaction reports filed with the Financial Information Unit.

Corporate governance requirements include an independent board, audit committee, risk management committee, and fit-and-proper criteria for directors and senior management.

Consumer protection rules require transparent disclosure of fees, interest rates, and penalties, plus a defined grievance redressal mechanism with response timelines.

Regulatory reporting is periodic: monthly, quarterly and annual returns to NRB must be accurate and timely; misreporting attracts penalties and supervisory action.

Compliance risk assessment maps each business process to applicable laws and internal policies, then rates inherent risk, control effectiveness and residual risk.

KYC requires identifying the customer, verifying identity with reliable documents, understanding the purpose of the relationship, and conducting ongoing due diligence.

Risk-based approach: customers are classified low, medium or high risk, and enhanced due diligence applies to high-risk categories such as politically exposed persons.

Politically exposed persons and their close associates require senior management approval, source-of-funds verification, and enhanced ongoing monitoring.

Customer Due Diligence is refreshed periodically, and records must be retained for the period prescribed by NRB directives after the relationship ends.

Suspicious Transaction Reports are filed confidentially with the Financial Information Unit; tipping off the customer that a report has been filed is prohibited.

Sanctions and watch-list screening must occur at onboarding and on every transaction; a confirmed match requires freezing and immediate reporting.

NRB directives specify that accounts with incomplete KYC must be frozen or restricted until documentation is completed, with defined escalation steps.

AML red flags include structuring below reporting thresholds, unusual transaction patterns inconsistent with the customer's profile, and reluctance to provide documentation.

Management functions: planning, organizing, staffing, directing and controlling; controlling closes the loop by comparing actual performance against standards.

Span of control is the number of subordinates reporting to one manager; wider spans flatten the structure but reduce supervisory depth.

SMART objectives are Specific, Measurable, Achievable, Relevant and Time-bound, and provide the basis for performance appraisal.

Maslow's hierarchy runs physiological, safety, social, esteem and self-actualization needs; lower needs generally must be met before higher ones motivate.

SWOT analysis maps internal Strengths and Weaknesses against external Opportunities and Threats to inform strategy.

Delegation transfers authority, not accountability; the manager who delegates remains answerable for the outcome.

Key performance indicators should be few, measurable and aligned to strategy; balanced scorecard perspectives are financial, customer, internal process, and learning and growth.

Conflict resolution styles are competing, collaborating, compromising, avoiding and accommodating; collaborating seeks a win-win outcome and is preferred for important, complex issues.

Grievance handling steps: receive and log the complaint, acknowledge, investigate, resolve, communicate the outcome, and close with root-cause analysis.

Service quality is measured with the SERVQUAL dimensions: reliability, responsiveness, assurance, empathy and tangibles; reliability is the most important to customers.

Complaint response timelines should be defined and disclosed; unresolved complaints escalate to the next level and ultimately to the regulator's grievance mechanism.

Root-cause analysis prevents recurrence: distinguish the symptom reported by the customer from the process failure that produced it.

Front-line staff must protect customer confidentiality; account information is shared only with verified account holders or authorized persons.

Service recovery paradox: a well-handled complaint can leave the customer more loyal than before the failure, provided the resolution is fast and fair.

Accessibility and fairness require service in the customer's language where feasible, clear fee disclosure, and no discriminatory treatment of any customer group.

Customer feedback loops (surveys, complaint trends, mystery shopping) feed process improvement and are reported to management for action.