Deposit Analysis of NABIL Bank Ltd.

Kantipath

Submitted by:
Suman Babu Panta
Reg. No.:-7-2-31-1000-2005(2062)
Exam. Roll No.: 16004
Class Roll No: 1664
BBS III Year

Submitted to:
Public Youth Campus
Tribhuvan University
in the partial fulfillment of the requirements of the Degree
of Bachelors of Business Studies.

Dhobichour, Kathmandu

Page 1 of 45
 August 11, 2008

Faculty of Management
TRIBHUVAN UNIVERSITY

RECOMINDATION

This is to certify that the fieldwork assignment report.

Submitted By:
Suman Babu Panta
Reg. No.:7-2-31-1000-2005(2062)
Exam. Roll No.: 16004
Class Roll No: 1664
BBS III Year

Entitled:

Deposit Analysis of NABIL BANK LTD.

has been prepared as approved by this Department.

This fieldwork assignment report is forwarded for examination.

Date: August, 2008

...……………………
Head of Department
Public Youth Campus
Dhobichour, Kathmandu

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 ACKNOWLEDGEMENT

This case study has been designed for the partial fulfillment of the degree of
Bachelor of Business Studies (B.B.S.) prescribed in T.U. Syllabus for three
years course. It’s of Deposit Analysis of Nabil Bank Ltd., Kantipath.

Each chapter contains a number of important and interesting fact taken from
various banking fields .I have done my best to present the topic in easy, clear
and systematic manner. I hope this case of study will be much helpful for the
Nabil Bank and the new comer of B.B.S. 3rd year students.

I would like to express my heartly gratitude to Nabil Bank Ltd, Kantipath and
all the staff members of this bank who provide me the information for preparing
this fieldwork.

I would like to express my sincere gratitude to my all college teachers and

specially to Mr. Sagar Das Ranjit (Financial Institution & Market Teacher)
for their kind and humble support and encouragement in order to prepare this
project successfully.

Last but not the least; I would like to thank my dear friends for their continued
moral support.

Thank you !

Suman Babu Panta

Public Youth Campus
Dhobichour, Kathmandu

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 Table of Contents
S.N. Chapters Page
No.
1 Introduction 1-19
.
1. Background of the study 1
1
1.1. Origin of Bank 1
1
1.1. Meaning of Bank 1
2
1.1. History of bank in Nepal 2
3
1.1. Commercial Bank 3
4
1. Introduction of Nabil Bank Limited 3
2
1.2. Branches of Nabil Bank Ltd. 4
1
1. Introduction of Deposit 7
3
1.3. Types of Deposit and its Account Opening 8
1 Procedure
A. Types of Deposit 8
1.3.1. Interest Bearing Deposit 8
1
1.3.1. Non-interest Bearing Deposit 10
2
B. Account Opening Procedure 11
1. Statement of Problems 14
4
1. Objectives of the study 15
5
1. Limitations of the study 15
6
1. Significance of the study 15
7
1. Method of Research 17
8
1.8. Research Design 17
1

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 1.8. Sources of data 17
2
1.8. Data Processing Techniques 18
3
1.9 Organization of Report 19

2 Data Presentation and Analysis 20-36

.

3 Summary, Conclusion and 37-38

. Recommendation
3. Summary 37
1
3. Conclusion(Major Findings) 37
2
3. Recommendation 38
3
Bibliography
III

List of Tables

Table No. Headings Page No.

2.1 Total Deposit Position of NABIL 20
2.2 Current Deposit Position of NABIL 21
2.3 Saving Deposit Position of NABIL 22
2.4 Fixed Deposit Position of NABIL 23
2.5 Interest Bearing Deposit Trend of NABIL 24
2.6 Non-interest Bearing Deposit Trend of NABIL 25
2.7 Interest Expense on Deposit 26
2.8 Cost Position of NABIL 27
2.9 Deposit Lending Ratio 28
2.10 Ratio of Interest Bearing Deposit to Total Deposit 29
2.11 Ratio of Non-interest Bearing Deposit to Total 30
Deposit
2.12 Ratio of Current Deposit to Total Deposit 32
2.13 Ratio of Saving Deposit to Total Deposit 33
2.14 Ratio of Fixed Deposit to Total Deposit 34

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 IV

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 List of Figures

Figure No. Heading of Figures Page No.

1 Equity Ownership Structure 4
2 Product and Services 5
2.1 Total Deposit Position of NABIL 20
2.2 Current Deposit Position of NABIL 21
2.3 Saving Deposit Position of NABIL 22
2.4 Fixed Deposit Position of NABIL 23
2.5 Interest Bearing Deposit Trend of NABIL 24
2.6 Non-interest Bearing Deposit Trend of NABIL 25
2.7 Interest Expense on Deposit 26
2.8 Cost Position of NABIL 27
2.9 Deposit Lending Ratio 28
2.10 Ratio of Interest Bearing Deposit to Total Deposit 29
2.11 Ratio of Non-interest Bearing Deposit to Total 31
Deposit
2.12 Ratio of Current Deposit to Total Deposit 32
2.13 Ratio of Saving Deposit to Total Deposit 33
2.14 Ratio of Fixed Deposit to Total Deposit 34

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 ABBREVIATION

C.A. = Current Assets

C.L. = Current Liabilities

M.S. = Marketable Securities

LTD = Limited.

NIDC = Nepal Industrial Development Corporation

NRB = Nepal Rastra Bank

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 Chapter One
Introduction

1.1 Background of the study

1.1.1 Origin of Bank:

It is very hard to collect the correct information of the origin of bank. The word
“Bank” has derived from the Italian word “Banco” which means accumulation
of money of stock. It is believed that its origin is from the French word
“Banque” which means “beach” for keeping, lending and exchanging of money
or coin in the market place by money lenders or money changers. It is believed
that the ancestors of modern banking system were merchants, goldsmiths and
moneylenders. Modern banking sowed its seed in the medieval Italy despite
strong Christian prohibitions against charging interest.

The bank had started in Italy in 12th century as a public bank. The Bank of
Venice that was established in 1158 A.D. was the first bank in the history of
banking. Following its establishment various banks such as Bank of Barcelona,
which was established in 1401 A.D was the second bank of the world. Similarly,
Bank of Geneva (1407), Bank of Amsterdam (1609), Bank of Hindustan (1770)
were established. The first central bank was the “Bank of England” which was
established in 1844 AD.

1.1.2 Meaning of Bank

Bank is a financial institution, which is engaged in monitory transaction. Bank

has always been the most importance and largest financial intermediates. Banks
collect the scattered money from public providing those interests and services.
This collection becomes the capital for the bank to invest. “Banking means the
accepting of money for the view of lending or investment of deposit from the
public repayable on demand or otherwise and withdraw able by cheque, draft or
otherwise”, is according to Banking Regulation Act 1949 of India. World Bank
says “Banks or a financial institution that accepts funds in the forms of deposit
repayable on demand or at short notice.”

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Some important meanings of bank given by different scholars are as follows:

According to Walter leaf:-

"A bank is that institution or individual who is always ready to service money
on deposit to be returned against the cheque of their depositor.”

According to Harace White:-

“Bank is a manufactures of credit and machine for facilitating exchanges.”

According to G. Crowther:-
“A Bank is a dealer in debt in his own and other people are the bankers business
is them to take the debt of other people to otter his own in exchange and thereby
to credit money.”

Therefore, the bank is a financial institution which accepts deposits from the
general public and provides loans to different sectors at different interest rates.
Bank plays the vital role in the economical condition.
1.1.3 History of Bank in Nepal
In the context of Nepal, like as in the other countries the goldsmith
and landlords where the ancient banker. The Nepalese people were highly
exploited by ‘Sahu Mahajan’ by charging higher interest rate, compound interest
rate and even by manipulating the principal amount. The introducing of
‘Tejarath Adda’ during the tenure of the Prime Minister Ranoddip Sing
(1993B.S.) was the first step towards the institutional development of banking
in Nepal. The first commercial bank ‘Nepal Bank Limited’ was established on
30th Kartik 1994 B.S.and started to perform proper banking activities. With the
realization of central bank to develop monetary policy as well as to have proper
control over commercial banks and banking sectors Nepal Rastra Bank was
established on 14th Baishak 2014B.S. under Nepal Rastra Bank Act 2012 B.S.
Likewise, Rastra Banijya Bank under the full ownership of government was
established on Magh 2022 as per ‘Rastra Banijya Bank Act 2012 B.S.’. The
growths of the banks accelerated only after the adoption of liberal economic
policy by Nepalese Government .This has attracted many new investors and
encourage opening many new modern banks with joint venture of foreign
banks. Nepal Arab Bank was established on 29th Ashad 2041 B.S. as the first
modern bank with the joint venture of Dubai Bank Ltd. U.A.E. subsequently
following its established Nepal Indo Suez Bank France, Nepal Grinlands Bank
England on 16th Marg 2043B.S. with its joint venture of Grinlands Bank
England, Himalayan Bank Ltd on 5th Marg 2049B.S. with the joint venture of
Habib Bank of Pakistan, Nepal SBI Bank Ltd. in28th Ashad 2050 B.S.with joint
venture of State Bank of India Nepal Bangladesh Bank Ltd. on 28th Jestha,
2050B.s. with the joint venture of International Finance Investment and

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Commercial Bank, Everest Bank Ltd. on 1st Kartik 2051B.S. with joint venture
of Punjab National Bank Ltd of Kathmandu on 28th Falgun 2051B.S. with joint
venture of the Siam Commercial Bank, Thailand.

Now, there are 23 commercial banks with 483 bank branches and 318 rural
branches along with 45 financial companies and 5 Rural Development Banks.

1.1.4. Commercial Bank

A commercial bank is a financial institution which collects saving from many

persons and institutions and provides credit or loan facility to different industrial
and commercial business. Commercial banking business consists of changing
cash into hank deposit and bank deposit into cash, transferring bank deposit
form one person or institution to other, giving bank deposit in exchange for
cheques, bills of exchange, government securities etc.

Nepal Bank Limited established in 1994 BS is the first commercial bank in

Nepal. Commercial banks perform various functions. Among them, accepting
various types of deposit is the main function of commercial banks.

1.2 Introduction of Nabil Bank Limited

Nabil Bank Limited (Nabil) commenced its operation on 12 July, 1984 as the
first joint venture bank in Nepal, Dubai Bank Limited. Dubai (Later acquired by
Emirates Bank International Limited, Dubai) was the first joint venture partner
of Nabil. Currently NB (international) limited. Ireland is the foreign partner.

Nabil Bank limited had the official name Nepal Arab Bank Limited till 3lst
December 2001. Nabil is the pioneer in introducing maims innovative products
and marketing concept in banking sector of Nepal with 15 branches and 2
counters in all major cities. It is the only bank having its presence at Tribhuvan
International Airport of the country. Also, the number of outlets in the country is
the highest among the joint venture and private banks operating in Nepal.
Success of Nabil is a milestone in the banking history of Nepal as it paved the
way for the establishment of many commercial banks and financial institutions.

Nabil provides a full range of commercial banking services through its outlets
spread across the nation and reputed correspondent banks across the globe.
Moreover, Nabil has a good name in the market for its highly personalized
services to the customers. At the time of commencement it had Rs 100 million
as Authorized Capital. Now, the Authorized capital of the bank is Rs. 500
million while the issued and paid up capital is Rs. 49, 16, 54,400.

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The share holding of NABIL Bank Ltd. is as following:

Subscription Percent Holding

N.B. (International), Ltd., Ireland 50%
Nepalese Public 30%
NIDC 10%
Rastriya Beema Sansthan 9.67%
Nepal Stock Exchange Ltd. 0.33%
Total 100%
Figure 1
Equity Ownership Structure
N.B. (International), Ltd.,
Ireland
Nepalese Public
9.67% 0.33%
10%
NIDC
50%
Rastriya Beema Sansthan
30%

Nepal Stock Exchange Ltd.

Nabil cordially invites you to visit its branches/counters to have the taste of
fledge banking services
NABIL BANK LIMITED
HEAD OFFICE
Nabil House, Kamaladi,
Katmandu.

1.2.1. Branches Nabil Bank Ltd.

1. Kantipath Branch, Kantipath 9. Itahari Branch, Main Road, Itahari

2. Nabil House Corporate Banking,
Nabil House, Kamaladi, Ktm.
3. New Road Branch, New Road
4. Jorpati Branch, Jorpati
5. Lalitpur Branch, Kupondole
6. Airport Exchange Counter, TIA
7. Credit Card Counter, Thamel, Ktm
8. Biratnagar Branch, Goswara Raod
10. Butwal Branch, Main road, Butwal
11. Bhalwadi Branch, Bhalwadi, Rupandehi
12. Pokhara Branch, Chipledhunga, Pokhara
13. Bhairahawa Branch, Narayanpath
14. Credit Card Counter, Lakeside, Pokhara
15.Birgunj Branch, Adarshanagar, Birgunj
16. Alau Branch, Alau, Parsa

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The Board of Directors of Nabil consists of:-

Chairman Mr. Satyendra Pyara Shrestha, NB(International) Limited

Director Mr. Supriya Gupta , NB(International) Limited
Director Mr. Mukunda Nath Dhungel, Nepal Stock Exchange Limited
Director Mr. Mohiuddin Ahemd, NB(International) Limited
Alternate Director Mr. Manish Gupta, NB(International) Limited

Figure 2

 Deposits

Following types of accounts can he opened at any NABIL branches upon

completion of simple documentary requirement. All the accounts can he opened
in various currencies (against which rate are provided) subject to ruled of
opening and fulfilling the required documents.
 Savings
 Current
 Fixed
 Call

 Guarantees

NABIL Bank issues guarantees and Bonds on behalf of customers to the

beneficiaries in Nepal. Upon fulfillment of requirement, NABIL also arranges
issuance of guarantees in the name of foreign beneficiaries through reputed
international banks.

 Credit Cards

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NABIL is the first bank in Nepal to issue Rupee (valid in Nepal and India) and
international valid worldwide) Master card, cards in Nepal, a global prestigious
service to its esteemed clients NABIL is also expanding credit and facilities
issuing visa credit card very soon.

 Tele-banking

Telephone banking is another product provided by NABIL bank to its

customers. Under this arrangement customer can know the balance of his
account through telephone with out human assistance.

 Western Union Money Transfer

NABIL bank has established unique money remittance system with western
union financial service whereby money can be remitted anywhere in the world
within minutes, through online computer system funds can be transferred
instantly to about 55000 locations in 165 countries of the world. Nepali wage
earners abroad can send money to their near and dear ones in Nepal within a
very short time. By using the above services, you can now send and receive
money within minutes in 165 countries in the world.

 SWIFT (Society for Worldwide Inter Bank Financial Telecommunication)

NABIL has started worldwide transfer of fund by this fast and efficient funds
transfer and messaging system. Messaging and fund transfers are carried
through SWIFT with minimum time and cost.

 Safe Deposit Locker

NABIL provides safe deposit lockers to keep valuables safety at a minimum

cost. Presently, this facility is available at Kantipath and Kamaladi offices.

 Automated Teller Machines (ATM)

NABIL has launched the ATM facility to its account holders to enable fast
withdrawal of funds in account holder need not wait long hours for withdrawing
money and sign cheques anymore. A simple card with a unique PIN number
known only to the account holder will suffice.

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 Other facilities

The bank provides the facilities for the customer like deposit services, loans and
advances, consumer finance, cash management and remittance services etc.

1.3. Introduction to Deposit

Deposit collection is one of the main features of commercial bank. A
commercial bank receives deposit in different accounts namely current, fixed
and saving. These are the direct deposits. When a bank receives cash it grants a
right to the depositors to withdraw it whenever they like Nepal Banijya Bank
Act has regulated all the deposit 2031. The act specifies “Deposit” means
amount deposited in current, fixed and saving deposit account of bank or
financial institutions.
Among many functions of a commercial bank the main function is deposit
function, which all the commercial banks perform, in simple terms; deposit is a
function of collecting surplus from savers. Bank accepts deposit from those that
can save but can’t utilize profitably. People know that by depositing in the bank
they could avail with many more facilities. By saving in the bank people have
the opportunity of earning interest, useful contingencies; avoid risk such as theft
lost accidents, the deposit of commercial banks is increasing because people
know its importance. So banks accept money on current saving and fixed
deposit accounts. Deposits are the main source of capital for the lending
activities of the banks. Banks utilize efficiencies to attract more deposits to
increase credit activities. Deposits are withdraw able according to the terms of
contract with the depositors to attract the people. The bank maintains different
types of deposit accounts.

1.3.1 Types of Deposit and its Account opening Procedure

Deposit is the major source of fund of commercial bank, which is generated in

the hands of customers, government, corporate bodies, public enterprises,
individuals and others and a surplus.
Main features
• Purpose: saving, fixed or call (short term)
• With maturity or without maturity
• Interest bearing and non interest bearing
• It interest bearing:
• Calculation of interest on monthly minimum balance, or average balance
• Payment of interest quarterly or semi annually
• Special arrangement with any other deposit account
• Operate or non-operative

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If operative:
Limitation on frequency and amount of withdrawal: yes or no
• Time liabilities or demand liabilities.

A. Types of Deposits

Deposits of commercial banks can he categorized into following two categories

A. Interest bearing deposit
B. Non- interest bearing deposit

1.3.1.1. Interest Bearing Deposit

a. Saving Deposit

The pm pose of saving deposit is to encourage the habit of saving among the
common people and institutions. Saving deposits attract interest which is
normal less than that of long-term deposit but more than that of short-term
deposit. There is restriction in this account to withdraw any amount. The
customer is restricted to withdraw his deposit to the maximum amount in each
transaction by the bank regulation. In this way as the withdrawal is limited in
such account, in each transaction, the bank is provided with more funds for the
credit activities, interest is paid in this deposit account.

According to Commercial Bank Act, the saving account means an account of

amounts deposited in a bank for savings purposes.

Saving Account are generally opened for the savings of customers (individuals,
nonprofit organization, charitable trusts, clubs, associations and cooperative)
who want to save for meeting future needs, Savings accounts is suitable for the
customers who do not want to withdraw frequently or who do not want to keep
certain amount for fixed long period

The main features of such accounts are as follows:

i. Interest bearing
ii. Restriction or limitation in respect of both the amount of withdrawal and
frequency withdrawal.
iii. Purpose and period of such deposit is for savings purpose for the
individuals who do not want frequent withdrawals and who do not want
to keep money for fixed long period.

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Fixed Deposit! Term Deposit

Another source of deposit is the fixed deposit account. Money in this account is
deposited for a fixed period of time, which cannot be withdrawn before the
maturity of time. The rate of interest on this account is higher than other
accounts. It is also known as time deposit. General this is for three months to
five years.

According to Commercial Bank Act, fixed account means the account of

amount deposit in a bank for a certain period of time.

The main features of such accounts are as follows:

i. Specific period
Normally the bank is not bound to repay the amount until the maturity of the
fixed deposit. However, on request of the depositor, a banker may liquidate the
fixed deposit and repay the amount; interest will be paid at the discretion of the
banker.

ii. Non operative

Fixed deposit account is non - operative i.e. depositing into or withdrawal from
fixed deposit account as in case of savings and current deposit account is not
allowed.

b. Call Deposit

The banks may accept deposit for short period of time to meet the short fall and
such deposits secured from money market and having element of overnight stay
is called call deposits. The rates of interest of such funds are not fixed hut are
dependent on demand and supply of funds in the money market. Such all
deposits become payable on demand and hence such deposits become payable
demand and hence such deposits are considered demand liabilities of the bank.

i. Non-operative
ii. Short term: overnight stay
iii. Interest rate not fixed
iv. Payable at demand
c. Other Deposit

i. Bearer Certificate of Deposit

It is a scheme of special type of deposit where some specified amount of money
for specific period of note is accepted as deposit against a certificate given by
the banker to a customer. A bank issues such certificates without mentioning
name address and any other particulars of the customer. The bank receives the
principal amount and will issue the will issue the certificate for such amount

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which will include the interest payable at maturity on the amount deposited. On
maturity date any person presenting the certificate at the bank can encase the
same. Such types of deposits are considered as time liabilities.

The major features of such deposit are as follow s:—

i. Negotiable with prepaid interest having fixed maturity.
ii. No particulars of the depositor contained in the certificate.
iii. Opening of account is not required.
iv. It could be discontented before maturity.

1.3.1.2. Non- interest Bearing Deposit

a. Current Deposit Account.

Current deposit is also known as demand deposit as the deposit is with draw
able on demand. Current deposits are withdrawn able on the demand of the
customers. Banks have to make themselves ready to pay the depositors at hand
to pay according to the wish of the customer. If the bank cannot pay the
customer according to the demand, the reputation of the bank may fall of the
banking activities may tail. The business people, business institutions who have
to withdraw at any time, normally open it. Since banks have to maintain high
liquidity to meet customers demand, no interest is paid on such deposit.
According to Commercial Bank Act, the current account means an account of
amounts deposited in bank that may be drawn at any time on demand.

i. No yield

As the cost of providing the facilities of current account becomes considerable

to the banks do not pa any interest on the balance of current account.

ii. Highly liquid and no limitation

There is no limitation on withdrawal and deposit of any amount within banking

hours

Privileges
Overdraft facilities are provided to current account holder only. The banks
normally sanction the loans and advances through current accounts since they
are not given in cash.

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B. Account Opening Procedure

a) Application on the prescribed form

The customer who comes to hank with a desire to open an account in the bank
should complete the application from designed in prescribed format. NABIL
Bank also has its own standard format. The applicant is required to fill up the
name, address, occupation, nationality etc. about the customer. The form is
designed with a declaration that the applicant should accept that he should
comply with the banks rule on force from time to time for the operation of the
account.

b) Reference Introduction
The selection of the customer is regarded to be done by the customer very
carefully. After being satisfied about the identity of the account opening
individual or film, the banker should take further steps. It becomes essential to
present bank from opening of the accounts in the name of the fictitious person
incapable of making a valid contract. In such a case banker does not get any
protection under Negotiable Instrument Act and is considered guilty of
negligence.

c) Specimen Signature

The bank has its own specimen signature card that is provided to the customer
for putting one or more specimen signatures of him. These cards are indexed
and placed in a visa desk in numerical order. These signature specimens are
used by the bank bar issue and payment of cheques and for execution of
instructions given by customers such as stop payment of cheques, bills purchase
etc. These specimen signature cards require proper custody as to present them
from filing into hands of unauthorized persons and also to exclude the chance of
replacements of it by fraudulent card.

d) Account Opening Mandate

The customer may authorize the third person to operate tile account for which
clear instruction for operation of the account shall he noted on both account
opening form and specimen signature cards. The name and the signature of the
mandated must provide the copy of his/her citizenship certificate and must also
be presented in the bank.

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Procedure for Opening Saving and Current Account.

1. The account opening form and specimen signature cards are required to be
filled up mid submitted I he details in the form shall he checked by the
account opening official, signature in the specimen signature card shall he
verified. The proposed account opener must be percent at the time of
opening account in case of individual account and proprietorship account
and should put signature in specimen Signature ear in front of the account
opening official

2. After being satisfied with the document and account and account opening
from it is placed before the manager for approval. The document required for
current accounts are as follows.

They should provide a copy of:

i. For Proprietor business
a. Registration certificate
b. Income tax certificate
c. Citizenship certificate of the proprietor.

ii. For partnership business

a. Registration certificate
b. Income tax certificate
c. Partnership deed
d. Citizenship certificate of the partners

iii. Limited companies

a. Registration certificate
b. Income tax certificate
c. Board resolution for operation of account.
d. Memorandum and articles
e. Citizenship certificates of the directors

iv. NGO lobs school associations

a. Registration certification
b. Board resolution
c. By laws
d. Citizenship certification

(Those customers who fall under VAT payer should also provided a copy of
VAT Registration certificate)

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Note: Copy of citizenship certificate in case of individual saving (for opening
saving account in the name of associations, cooperatives, non-profit
organizations like NGOs, charitable trust all the documents are required are
required as in point (iv) above in case of current account is required).

3. Then the account opening official should allot an account no from basic
number register in both the form and specimen signature card.
4. Account is opened in the computer also.
5. The particulars of account opening form and the account number is entered
in the respective account opened and register.
6. Against the request for cheques book as mentioned in account number is
entered in the cheques leaves are printed, blinded at the end of business hour
and provided to the customer along with letter of banks next day. The
cheques book numbers shall be recorded in the cheque book issue register
and handed over to the part against his her acknowledgement.
7. The signature is scanned from the specimen signature card and placed fir
final approval to the manager.
8. After the final approval the account opening form is filed in numerical order
in the respective account type file.

Procedure for Opening Fixed Deposit Account

1. Separate account opening form for fixed deposit is designed. The customer
wishing to open a fixed deposit account shall till up such form and put the
signature in the specimen card, which is same as in the case of saving and
current account opening.
2. The form contains the rate of interest, period, amount and the nominee
account for crediting the interest and two witnesses along with nominee form
in the back.
3. The account opening official after being satisfied with the form allots a
number from the basic number register and puts in the form.
4. The accounts opened in the computer and details are entered.
5. The details such as name, date of opening, rate of interest, maturity date and
nominee a/c for interest should be recorded in fixed deposit register.
6. In case of fixed deposit being opened through the cheques, the official
looking after the fixed account does the transaction.
In case of fixed deposit account being opened through cash the customer is sent
to the taller along with the credit voucher. The taller will affix cash received
stamp on the voucher against the receipt of the cash and will sent it back to the
account opening official.
7. Then the account opening official shall issue the fixed deposit receipt.

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8. The account opening form, specimen signature card, fixed deposit receipt
and the voucher are placed before the manager for the final approval and
signature.
9. Upon completion of full formalities as above the fixed deposit receipt is
handed over to the customer against his/her acknowledgement on the
counterfoil of the fixed deposit receipt.
10.The account opening form is filed in the numerical order in a separate file.
The specimen signature card is placed is placed in the visa desk in numerical
order once its gats scanned and approved by the manager.

1.4. Statement of Problems

As we know that the main objective of any business organization e.g. Bank is
profit maximization. Deposit mobilization is the key factor to attain this
objective: therefore, if the bank fails to employ its funds suitably it is not
possible to maximize profit. A bank has to make decisions with a framework of
statutory requirements of credit regulation by center bank, as well as the
national objectives that are determined in the matter of the provision of credit
from time to time.

Through the banking system is making much progress, the progress has been set
up with the problems and hindrances. Another pressing problem is under
developed country, lack of banking habit in people. Many people are under the
poverty line. Many people are not literate so people are not conscious about the
banking system and do not know the importance of bank. Bank concentrates
only in the city so that the villages have to take a loan from money Lander at a
high rate of interest. Most of the people keep their saving idle or give it to
others to use it in greed of more interest.

1.5. Objective of the study

The objective of this fieldwork is to analyses deposits collected in NABIL. The
study intends to present a brief and clear picture of deposit and its utilization.
The objective of the study includes.
- To find out deposit trend of NABIL bank.
- To find out the deposit mix.
- To analyses the cost of deposit
- To analyses whether the deposits are being properly utilized or not

1.6. Limitation of the study

The study does not present detailed analysis of deposit in NABIL due to lack of
time relevant data and resources. This study is limited to the information that
was available from the bank and other sources.

Page 22 of 45
- Annual reports of NABIL
- Annual reports of NRB
- Articles in Newspapers, journals, booklets, issues published by financial
institution.

1.7. Significance of the study

Deposit collection is the major function of all commercial banks, which help to
carry out almost all transaction of the bank. Mostly among the various deposit
features provided by commercial banks, fixed and saving deposit are considered
to be more important In the case of term deposit although the banker pay
interest (longer the period higher the interest) the funds are committed for
longer periods, which can safely be lent for long-term project. But in the case of
current deposits although no interest is payable, these deposits are repayable at
demand and therefore banker must be cautious in lending such deposits. Fixed
and saving deposits are considered to be more suitable because this deposit can
be invested in short term loans with higher rate of return (interest) and hence it
helps to earn high profits.

So the deposits in the commercial banks have a good contribution to the country
economy. If deposits are well collected and sell mobilized the person as well as
country can benefit from it. This study however intends to give general
information regarding banking, deposits and prospects of the deposit and its
mobilization in the country, which may give the general idea about banking, and
deposits

1.8 Methodology of Research

1.8.1. Research Design

The research methodology is the process of arriving to the solution of the

problems through planned and systematic dealing with the collection, analysis
and interpretation of facts and figures. As the research entirely considers about
the about “Deposit Analysis of NABIL Bank” The main purpose of this study is
to show deposits and its utilization in NABIL with its financial positions,
collection and uses of funds, its prospects and its position in context of Nepal as
well as to recommended suggestions for its improvement. Those research
methodologies have been used which proves helpful to deposit analysis. For the
purpose of achieving the objective, the following methodology is used. The data
has been collected by acquiring various kinds or reposts, bulletins and journals
from the organization. Similarly data has been acquired from NRB also.

Page 23 of 45
The study report is based mostly on secondary information of NABIL. In
addition to this, reference has been made in library consult, class lectures,
Related books of banking, financial management and accounting during the
preparation of this study.

1.8.2. Sources of Data

For the preparation of this report different kinds of books are followed. In this
report, all the data collected is secondary in nature. Almost all the data has been
collected form published annual reports, brochures etc. Mostly all the data are
collected from the concerned bank.

 Primary Data Source:

Primary source of data is questionnaires, observation, interviewing personally in

the site. The data regarding the organization, its feature and structures were
received primary through the officer of NABIL.

 Secondary Data Source:

In this study, the main source of data is secondary which are collected from pre-
published data sources. The secondary data sources used in this study are:

Internal source
 Annual reports of NABIL
 Interim performance report
External source
 Book publications
 Journals
 Articles from newspapers
 Annual reports of NRB

1.8.3. Data Processing Techniques

The data collected from the above stated sources has been classified tabulated
and interpreted for easier study.

Page 24 of 45
Classification and Tabulation of Data

The data collected are classified, tabulated and arranged in manner to make it
easily understandable with the use of tables in chronological order. After
classification the data is tabulated.

Diagrammatic Representation of Data

Various diagrams are used to present the data more clearly. The diagrams used
are follows:
 Bar Diagram
 Pie Chart
 Line Graph
 Bar Graph

Tools for Analysis of Data

Various Financial Accounting and statistical tools have been used of analyses
the collected data and interpret the result obtained. The various tools used are:
Deposit Trend Deposit Lending Ratio
Deposit Mix Ratio of Interest Bearing Deposit to Total Deposit
Deposit Categorization Ration of Non interest Bearing Deposit to Total
Deposit
Interest Expenses Ration of Fixed Deposit to Total Deposit
Cost of Deposit Ratio of Current Deposit to Total Deposit
Correlation Coefficient Ration Saving Deposit to Total Deposit
Trend Analysis

1.9 Organization of Report:

The report consists of three chapters. The first chapter is the introduction
chapter that contains the background of the study, information of Nabil Bank
Ltd. introduction to deposit, statement of problems, significance of the study,
objectives of the study, limitations of the study, methodology of research and
finally organization of the report. The second chapter contains data presentation
and analysis of the Nabil Bank Ltd. and third chapter is regarding the summary,
conclusion and recommendation regarding the study.

Page 25 of 45
 Chapter 2
Data Presentation and Analysis

Table 2.1
Total Deposit position of NABIL (Rs. in million)
Year Fixe Current Saving Others Call & Total Growth
d Short %
Deposit
2001/2002 3719 2851 4917 403 3948 1583 -0.006
9
2002/2003 2446 2704 4972 439 4945 1550 -2
6
2003/2004 2252 3034 5230 390 2541 1344 -13
8
2004/2005 2310 2688 5994 326 2801 14119 5
2005/2006 2079 2799 7026 342 2341 1458 3
7
2006/2007 3449 2910 8771 365 3851 19347 33
Source: NABIL Bank Ltd., Annual Financial Statement

Figure 2.1

This table shows the total deposit mix of NABIL during the period of six years.
During the last years the current, margin or other deposits have a fluctuating

Page 26 of 45
collection in the deposit mix of NABIL. Here, total deposit on NABIL in
2001/2002 was 15839 million which were 0.006% less than that of year 2000,
in

2002/2003 by 2%. In the year 2003/2004 the deposit decreased by 13%. But in
the year 2004/2005 the total deposit increased by 5% to Rs.14119 million. In the
year 2005/2006 the deposit increased by 3% which reached to Rs.14587 million
.In the year 2006/2007, the deposit increased by 33% which reached to
Rs.19347 million.

From above analysis, we have found the increasing trend of total deposit. But,
the various accounts have a fluctuating collection of deposit. So, such trend
should be managed by implementing proper policies.

Table 2.2
Current Deposit Position of NABIL ( Rs. In Million)
Year Current Deposit Growth (Rs.) Growth %
2001/2002 2851 -30 -1
2002/2003 2704 -148 -5
2003/2004 3034 331 11
2004/2005 2688 -346 -13
2005/2006 2799 111 4
2006/2007 2911 112 4
Source: NABIL Bank Ltd., Annual Financial Statement

Figure 2.2

Page 27 of 45
Above table shows that the current deposit of NABIL. In the year 2001/2002
was Rs.2851 million, which was decreased by 1% than the previous year. There
had been great decreased in current deposit during the year 2001/2002 by 1%
corresponding to Rs. 30 million. But there was a decrease in the year 2002/2003
by 5% and the current deposit reached Rs. 2704 million during year 2002/2003.
In the year 2003/2004 current deposit was Rs. 3034 million n which is Rs. 331
million more than that of year 2003/2004.But in the year 2004/2005 current
deposit collection decreased by 15% corresponding to Rs.346 million increases.
In the year 2005/2006 current deposit collection increased by 4% corresponding
to Rs.111 million increased. Now, in the recent year 2006/2007, the current
deposit is increased by 4% i.e.Rs.112 million and has reached to Rs.2911
million.

From the above table it is seen that current deposit has an increasing trend but
the increment is not consistent. Sometimes it increases largely while it increases
with a low rate.

Table 2.3
Saving Deposit Position of NABIL (Rs. in million)
Year Saving Deposit Growth Rs. Growth %
2001/200 4917 767 18
2
2002/200 4972 55 1
3
2003/200 5230 257 5
4
2004/200 5994 765 13
5
2005/200 7026 1032 15
6
2006/200 8771 1745 25
7
Source: NABIL Bank Ltd., Annual financial Statement

Figure 2.3

Page 28 of 45
Here is the figure of saving deposit of NABIL. In the year 2001/2002 was Rs.
4917 million, which was increased by 18% than in the year 2000/2001
corresponding to Rs.767 million. In 2002/2003 it was increased by 1% and in
the year 2003/2004 it was increased by 5%. In the year 2003/2004 saving
deposit was Rs.5230 million which is Rs.257 million less than of year
2002/2003. In the year 2004/2005 it again increased by 13% and reached Rs.
5994 million. In the year 2005/2006 it again increases by 15% and reached Rs.
7026 million. In the year 2006/2007, it continues to increase and reaches to
Rs.8771 million which is the increase by 25% i.e. Rs.1745 million.

From the above table, saving deposit trend is seemed to be increasing. Most of
the people deposit their fund in saving deposit account. So, NABIL should
attract people towards saving deposit and manage its incremental trend.

Table 2.4
Fixed Deposit Position of NABIL (Rs. in million)
Year Fixed Deposit Growth (Rs.) Growth (%)
2001/2002 3719 -3949 -106
2002/2003 2446 -1273 -2
2003/2004 2252 -195 -9
2004/2005 2310 58 3
2005/2006 2079 -231 -11
2006/2007 3449 1370 67
Source: NABIL Bank Ltd., Annual Financial Statement

Page 29 of 45
 Figure 2.4

Here
fixed

deposit of NABIL. In the year 2001/2002, 1999 it was increased by 31% to

Rs.3719 million. Similarly, in the year 2002/2003it again decreased by 2% to
Rs.2446. But there was decrease in fixed deposit during the year 2003/2004. It
decreased by 9% to Rs.2252. In the year 2004/2005 it was increased by 3% and
reached Rs.2310 million. In the year 2005/2006 it was increased by 11% and
reached to Rs.2079.In the year 2006/2007, it has again decreased by 67% and
reached to Rs. 3449 million.

Above table shows that the growth in fixed deposits it is rather fluctuating.
Since the fund of fixed deposit can be utilized for long-term investment, it
should be made consistent. So, such increase and drastic decrease affects the
profitability of the company.

Table 2.5
Interest Bearing Deposit Trend of NABIL (Rs. in million)
Year Interest Bearing Growth (Rs.) Growth (%)
Deposit
2001/2002 12585 3337 25
2002/2003 12363 -222 -2
2003/2004 10022 -2341 -23
2004/2005 11106 1084 10
2005/2006 11446 340 3
2006/2007 16071 4625 29
Source: NABIL Bank Ltd., Annual Financial Statements

Page 30 of 45
 Figure 2.5

Here Interest bearing deposit of NABIL .In the year 2001/2002 it was increased
by 25% to Rs.12585. Similarly, in the year 2002/2003 it again decreased by 2%
to Rs. 12363. But there was decrease in interest bearing deposit during the year
2003/2004 it decreased by 23% to Rs.10022. In the year 2004/2005 it was
increased by 10% and reached to Rs.11106 million. But there was increase in
interest bearing deposit by 3% in year 2005/2006 and reached to Rs. 11446.In
the year 2006/2007, it has increased to 29% and has reached to Rs.16071
million.

The interest bearing deposit sometimes increases hugely and while sometimes
decreases in low rate. But with an increase trend of interest bearing Deposit
Company can collect fund regularly and increasingly but in decreasing Time
Company cannot fulfill their target fund.
Table 2.6
Non Interest Bearing Deposit Trend of NABIL (Rs. in million)
Year Non Interest Growth (Rs.) Growth (%)
bearing deposit
2001/2002 3254 -97 -2
2002/2003 3142 -112 -3
2003/2004 3424 282 8
2004/2005 3012 -412 -14
2005/2006 3140 128 4
2006/2007 3276 136 4
Source: NABIL Bank Ltd, Annual Financial Statement

Page 31 of 45
 Figure 2.6

In above figure, the non-interest bearing deposit of NABIL In the year

2001/2002 was Rs. 3254 corresponding to 2% decreased in comparison to in the
year 2001. Similarly during the year 2002/2003 it was decreased by 3% and
reached to Rs.3142. In the year 2003/2004 it increased by 8% Rs. reached
Rs.3424 million. In the year 2004/2005 the non-interest bearing deposit
decreased by 14% million which is corresponding to Rs.3012. And in the year
2006 the interest bearing deposit increased by 4% and reached Rs.3140. Now, in
the recent year 20066/2007, the non interest bearing deposit has increased by
4% and reached to Rs.3276 million.

The non-interest bearing deposit is in increasing and decreasing trend.

Table 2.7
Interest Expenses on Deposit (Rs. in million)
Year Interest on Total Deposit Rs. Ratio %
Deposit
2001/2002 565 15839 3.57
2002/2003 457 15506 2.94
2003/2004 307 13448 2.28
2004/2005 265 14119 1.88
2005/2006 244 14587 1.67
2006/2007 359 19347 1.86
Average 14.2
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.7

Page 32 of 45
Here, the interest expenses on deposit are presented. In the year 2001/2003 and
Rs. 565 which was 3.5% of total deposit collected in the years. In the year
2002/2003 the total collection of deposit was Rs.15506 while interest on deposit
was Rs. 457 of the total deposit, which is 2.29% ratio. In the year 2003/2004
total deposit and interest of rate on deposit are Rs. 12448 and Rs. 307, which is
2.28% of total deposit. In the year 2004/2005 the total collection of deposit was
14119 while interest on deposit was 265, which is only 1.88% of total deposit.
In current year 2005/2006 the collection of deposit was 14587 while interest on
deposit was 244 which is 1.67%. In the year 2006/2007 the collection of deposit
was 19347 and interest on deposit was 359 which is 1.86. This shows that
NABIL has average 14.2% of interest expenses in total deposit.
So with similar policies adopted NABIL should manage to reduce the interest
expenses in the future. Reduction in interest expenses increases the company's
profitability.

Table 2.8
Cost of Deposit of NABIL (Rs. in million)
Year Total Total Deposit Interest Cost of
Deposit Expenses bearing Deposit %
Deposit
2001/200 15839 565 12585 4.5
2
2002/200 15506 457 12363 3.7
3
2003/200 13448 307 10022 3.06
4
2004/200 14119 265 11106 2.4

Page 33 of 45
 5
2005/200 14587 244 11446 2.13
6
2006/200 19347 359 16071 2.23
7
Average 3
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.8

Formula:
Cost of Deposit =

Here, cost of NABIL in the year 2001/2002 was 4.5% corresponding to Rs.401.
During the year 2002/2003 the cost of deposit was Rs.457, which is 3.7% of
total interest bearing deposit of Rs. 12363. In the year 2003/2004 the cost of
deposit decrease slightly with decrease in deposit was 3.06% i.e. Rs.307 million
when the total interest bearing deposit is Rs.10022 million. In the year
2004/2005 the cost of deposit decreased in deposit and it was 2.4% i.e. Rs.265
million when the total interest bearing deposit is Rs.14119 million. In current
year 2005/2006 total deposit is 14587 while a total deposit expense is 244 and
interesting bearing deposit is 11446. In the year 2006/2007 total deposit is
19347 while a total deposit expense is359 and interest bearing deposit is 16071
and the ratio is 2.23% Therefore, cost of deposit reached at 3%.

The above analysis shows the cost of deposit if 100% of the deposits are
utilized. Of the cost of deposit is reduced, he company can earn more profit. So
by implementing good plans, company should reduce the cost of deposit.

Page 34 of 45
 Table 2.9
Deposit Lending Ratio (Rs. million)
Year Total Deposit Total Loans And Deposit Lending
(Rs.) Advance (Rs.) %
2001/2002 15839 8324 52.55
2002/2003 15506 7438 47.96
2003/2004 13448 7756 57.67
2004/2005 14119 8189 57.99
2005/2006 14587 10586 72.57
2006/2007 19347 12922 66.79
Average 59.26
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.9

Formula:
Deposit Lending Ratio =
The above analysis shows the ratio of total loans and advances to total deposits
if 100% deposits are being utilized. Here, deposit-lending ratio of NABIL in the
year 2001 was 57.39%. Similarly during the year 2002 the deposit-lending ratio
was 52.55% of total deposit. The ratio decreased by 47.96% of total deposit in
the year 2003 and reached Rs. 7438.In the year 2004 the total deposit decreased
but the loans and advances could be increased. Total loans and advances in the
year 2005 were 57.99% of total deposit corresponding to Rs.8189.In the year
2006, both total deposit and loan and advances has been increased .Therefore,
the deposit-lending ratio has reached to 72.57% of total deposit.
The above analysis shows that the deposit-lending ratio of NABIL is average of
57.69%. The deposit lending ratio should be maintained properly so that it
would not affect organization's performance.

Page 35 of 45
 Table 2.10
Ratio of Interest Bearing Deposit to Total Deposits (Rs. in million)
Year Interest bearing Total deposit Ratio %
deposit
2001/2002 12585 15839 79.45
2002/2003 12363 15506 79.73
2003/2004 10022 13448 74.52
2004/2005 11106 14119 78.65
2005/2006 11446 14587 78.47
2006/2007 16071 19347 83.07
Average 79.98
Source: NABIL Bank Ltd, Annual Financial Statement.

Figure 2.10

Formula:
Ratio of Interest Bearing Deposit to total deposit = Interest Bearing Deposit
Total Deposit
In the above table, ratio of interest bearing deposit to total deposits of NABIL,
in the year 2001/2002 was 79.45% of total deposits. But in the year 2002/2003
it was 79.73% corresponding to Rs.15506. In the year 2003/2004 both the
interest bearing deposit and total deposit decreased and the interest bearing
deposit shared 74.52% of total deposit of Rs. 10022. It again decreased in year
2004/2005 and the ratio was 78.65% of total deposit. In the year 2005/2006
interest-bearing deposit is Rs.11446 corresponding to Rs. 14587 by
78.47%.Now, in the year 2006/2007, both the interest bearing deposit and total
deposit has increased. But the ratio reached to 83.07% of total deposit.

Page 36 of 45
The above table shows that the interest bearing deposit of NABIL, contributes
by an average of 79.98% of total deposit.
Table 2.11
Ratio of non-interest bearing deposit to total deposit (Rs. in million)
Year Non Interest Total Deposit Ratio%
bearing deposit
2001/2002 3254 15839 20.54
2002/2003 3142 15506 20.26
2003/2004 3424 13448 25.46
2004/2005 3012 14119 21.33
2005/2006 3140 14587 21.53
2006/2007 3276 19347 16.93
Average 21
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.11

Formula:
Ratio of non-interest bearing deposit = Non-Interest Bearing Deposit
Total Deposit

In the above table, ratio of non-interest bearing deposit to total deposits of

NABIL, in the year 2001/2002 the ratio is 20.54 % of total deposits
corresponding to non-interest bearing deposit Rs.3254.But in the year
2002/2003 it was 20.26% corresponding to Rs.3142. Similarly in the year
2003/2004 non-interest bearing deposit shared 25.46% of total deposit Rs.
13448. In year 2004/2005 non-interest bearing deposit shared only 21.33% of
total deposit as only Rs.3012 million was collected. In the year 2005/2006 non-
interest-bearing deposit is shared only 21.53% of total deposit corresponding to
Rs.3140.Now, in the current year 2006/2007, it shared to 16.93% of total

Page 37 of 45
deposit where non-interest bearing deposit and total deposit are Rs.3276 and
Rs.19347 million respectively.

The above table show that the non-interest bearing deposit of NABIL,
contributes by an average of 21 % of total deposit.

Table 2.12
Ratio of current deposit to total deposit (Rs. in million)
Year Current deposit Total Deposit Ratio%
2001/2002 2851 15839 18
2002/2003 2704 15506 17.44
2003/2004 3034 13448 22.56
2004/2005 2688 14119 19.04
2005/2006 2799 14587 19.19
2006/2007 2911 19347 15.04
Average 18.54
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.12

Formula: Ratio of Current deposit =

From the above table, in the year 2001/2002 current deposit contributed total
deposit by 22.5%. In the year 2002/2003 current deposit was Rs.2851, which is
17.43%. The current deposit collection was Rs.2704 million in 2003/2004. In
the year 2004/2005 current deposit increased and shared total deposit by
22.56%. The current deposit collection was Rs.3034 million this year. In the
year 2005/2006 current deposit decreased to 19.19% the amount of
Rs.2688.Now, in the year 2006/2007 current deposit increased to 15.04% where
current deposit and total deposit are Rs. 2799 and Rs. 19587 million
respectively.
Therefore it is seen that current deposit shares an average of 18.54% of total
deposit collected in NABIL.

Page 38 of 45
 Table 2.13
Ratio of saving deposit to total deposit (Rs. in million)
Year Saving deposit Total Deposit Ratio%
2001/2002 4917 15839 31.04
2002/2003 4972 15506 32.07
2003/2004 5230 13448 38.89
2004/2005 5994 14119 42.45
2005/2006 7026 14587 48.17
2006/2007 8771 19347 61.13
Average 42.3
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.13

Formula:
Ratio of Saving Deposit = saving deposit
Total deposit
From the above table, in the year 2001 saving deposit contributed total deposit
by 31.04%. The saving deposit collection was Rs.4917 when total deposit
collection was Rs.15839. In 2002, saving deposit Rs.4972 million which was
32.07% of total deposit of Rs.15506 million. In the year 2003 saving deposit
Rs.5230 million which was 38.89% of total deposit of Rs.13448 million. In the
year 2004 the saving deposit Rs.5994 million which was 42.45% of total
deposit of Rs.14119 million .Similarly, in the year 2005 saving deposit Rs.7026
million which was 48.17% of total deposit of Rs.14587 million. And in the year
2006, saving deposit has increased to 61.13% of total deposit. Here, saving
deposit and total deposit amounted to Rs.8771 and Rs.14347 million
respectively.

Page 39 of 45
Therefore it is seen that saving deposit shares an average of 42.3% of total
deposit collected in NABIL.
Table 2.14
Ratio of Fixed deposit to total deposit (Rs. in million)
Year Fixed deposit Total Deposit Ratio%
2001/2002 3719 15839 23.48
2002/2003 2446 15506 15.77
2003/2004 2252 13448 16.75
2004/2005 2310 14119 16.36
2005/2006 2079 14587 14.25
2006/2007 3449 19347 17.82
Average 21.56
Source: NABIL Bank Ltd, Annual Financial Statement
Figure 2.14

Formula:-
Ratio of fixed deposit = Fixed Deposit
Total Deposit
From the above table, in the year 2001/2002 fixed deposit contributed total
deposit by 48.41% where fixed deposit was Rs.7668. It had reached to15.77 %
in the year 2002/2003. In the year 2003/2004, the fixed deposit collection was
Rs.2252 when total deposit collection was Rs.13448 and its ratio was
16.75%.Similarly, in 2004/2005 fixed deposit contributed total deposit of
Rs.14119 million by Rs.2310 million which is 16.36% of total deposit. In the
year 2005/2006 fixed deposit contributed total deposit of Rs.14587 million by
Rs.2079 which is 14.25% of total deposit .Now, in the current year 2006/2007;
fixed deposit contributed total deposit by 17.82%. Here, the fixed deposit and
total deposit amounted to Rs.3449 and Rs.19347 million respectively.
Therefore it is seen that fixed deposit shares an average 21.56% of total deposit
collected in NABIL.

Page 40 of 45
Therefore from the above calculation we can say that the total deposit collection
of NABIL is in increasing trend. It is gradually increasing year by year. From
the calculation we can say that in the year 2007 the collection of deposit would
increase more than that of 2006.
SWOT Analysis
None of the organizations is perfect in each and every way. I here are some
weaknesses and threats, which affect the organization’s performance. It may
have lots of strength to be proud of but besides with some weakness and threats
as well. And the organization does not remain same forever there will be lots of
opportunities in order to expand the transactions. So NABIL has also its
strength to be proud, some weakness to be recovered and threats to be faced
patiently.
Strength
a. NABIL has 250 correspondent relationships besides numerous drawing
arrangements with 75 banks in 40 countries of the world. Nabil has also
drawing arrangement with the exchange companies and bank besides many
others like Habib Qatar International Exchange Limited, Doha, Qatar.
b. To add its strength NABIL has vast network system in the nation thus
helping customer to transact through bank from place to place. It has 17
branches nationwide which is the highest number of any joint venture bank
in Nepal. It is the only bank to operate inside international airport of arrival
and departure lounges.
c. Nabil is well known for providing highly personalized services to its
customers. It provides different services like ATM, credit cards, Tele banking
service, safe deposit locker etc. It has also introduced a number of attractive
deposit skills.
d. Human resources in NABIL are well trained and they are dedicated to the
bank too. NABIL is providing high remuneration and other benefits as well
to its staff.
e. NABIL is well supplied with latest technology. Computer does most of
banking services. Thus the services of the bank are prompt and accurate. The
bank is capable to maintain the standard.
Weaknesses
a. The Increase in the number of branches increases the cost operation.
Administration expenses for personnel etc. are increased.
b. The political instability in the country can he considered another weakness
of the bank.
c. Too much dependency in computers is not considered to be reliable.
d. NABIL pays high interest rates on deposits. For this reason the bank also
charges high interest rates on credit, which has bad impact in investment
situation in nation.

Page 41 of 45
e. Staff is unwilling to give even required information. It seems that they don’t
want to cooperate with once who are not really its customers.
Opportunities
a. A lot of people deposit their fund in this bank due to its skill in
attracting people by adopting attractive policies like high interest rate,
prompt services, credit card service, ATM etc.
b. Staff can perform their work more efficiently with the help of
computers. The environment of the bank is sound which helps to
enhance its stall bar its better profitability.
c. People in various sectors get employed through this bank, which has
highest number of branches among joint venture banks in the nation.
d. Citizens of underdeveloped country like Nepal get the favorable
chance to show their inner skills and talent.
e. The policies of the HMG and NRB rules and regulation always give
confidence to the banking sector to uplift the economy of the nation.
Threats
a) Banks must land and invest its fund to parties having good reputation.
Otherwise the bank will have to regret later on.
b) Excess government pressure may create irregular banking transaction, which
leads to bad reputation of the bank.
c) The economic condition of country is deteriorating.
d) There is increasing number of competitions. Now there are 13 commercial
banks, which include 9 joint venture and 45 finance companies.
e) The bank should be discouraged to open account for the individuals or firms
having bad reputation. It may be a threat, which can ruin the bank.

Page 42 of 45
 Chapter 3
Summary, Conclusion and Recommendation

3.1. Summary

A bank is an institution, which deals in money. A bank is like a reservoir. It

draws surplus money from the people who save and lend them to the people
who want to use it for productive purpose. In this process the bank earns
commission. The rate of interest paid to the depositors is generally lower than
the rate charged to the borrowers. The difference between these two rates of
interest is the profit of the bank. Deposit collection is the main function of
commercial bank.

The present study has been undertaken to examine and evaluate the financial
performance of NABIL. The financial statements of five years that is from
2000/01 to 2004/05 have been examined for the purpose the study. The study
has resorted mainly to secondary data that has been first processed and analyzed
comparatively. Individual interview with the management personnel has been
taken whenever necessary. This study is exploratory as well as analytical
sometimes.

NABIL was established in 12th July 1984, which was the first joint venture bank
in Nepal. Among many joint venture banks, it is a leading one, which is always
running in profit due to its proper management and good policies. Data that I
have presented is all from the secondary sources, which are in the annual reports
or other printed matters.

A customer can be account holder when he opens account. There are the
numbers of rules and procedures regarding opening different types of accounts.
The interest rates on different accounts are different.

3.2. Conclusion (Major Findings)

a) The deposit of NABIL is in increasing trend. The share of fixed deposit is

more than that of savings, current, margin and other deposits in the deposit
mix of NABIL.
b) The trend of interest bearing deposit has been gradually increasing but there
has been more fluctuation in non-interest bearing deposits, similarly, there is
also more fluctuation in interest expenses on total deposits.

Page 43 of 45
c) The trend analysis shows that the deposit of NABIL is in increasing trend. In
addition to this, the bank is being able to satisfy its customers and in
providing higher quality and newer services to them.
d) Interest expenses on deposit of NABIL during the year 2000 are also quite
high but there has been a decreasing trend of interest expenses till the year
2005.
e) Similarly, the cost of deposit during the year 2000 is also quite high but there
has been decreasing trend in the later year. So, it helps to increase the
efficiency to bank.
f) By the analysis of deposit landing we can conclude that the bank is able to
utilize its deposits a greater extent.
g) Thus, the bank’s performance is effective in profitability and towards the
customers and may attract more customers.

3.3. Recommendations

1. Although NABIL has a strong financial base and capital structure as well as
good market status and reputation in order to attract new customers and
increase deposit collection NABIL should introduce new schemes.
2. Customer services should be diversified and should further be
accommodated.
3. Interest rate on deposit should be competitive with other commercial banks.
4. The bank should aim towards increasing its customers but it must also
provide the quality services to the present customers. For this the bank must
make plans and policies keeping customers in mind.
5. Bank should also pay attention towards the priority sector and industrial
sector for lending loans to develop the economic condition of the country.
6. Bank should provide more facilities to the staff, it has to provide job
satisfaction, training and should encourage its staff.

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 BIBLIOGRAPHY

• Banking Information and Data, Annual Report of Nabil Bank Ltd.

• Weston, J. Fred Copeland Thomas, “Managerial Finance”: Dryden Press,

1986.

• Brigham, Eugene F., ‘Fundamental of Financial Management”, Holt

Rincht and Winston: The Dryden Press, 1998.

• Khan, M. Y. and P.K., “Financial Management Policy: New Delhi:

McGraw Hill Publishing Co. Ltd., 1978.

• Khan, M.Y. and Jain P.K., “Management Accounting”, New Delhi:

McGraw Hill Publishing Co. Ltd.

• S.P. Gupta,”Statistical Method”.

• Van Horn James C.,”Financial Management band Policy”: New Delhi

Prentice Hall of India Pvt. Ltd., 1986.

• Van Horn James C.,”Fundamental Financial Management”: U.S.A.

Prentice Hall Inc. Engle Wood Cliff, 1983.

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