Mobilization of Saving Deposit of Everest Bank Limited

A PROPOSAL

Submitted By:
Nabin Bahadur Rawat
Exam Roll No: ________
T.U. Registration No.: 7-2-1010-012-2016
Group : Finance
Of
Kapan Multiple Campus
Kapan, Kathmandu

Submitted to:
Head of Research Department
Faculty of Management
Tribhuvan University

In Partial Fulfillment of the Requirements for the Degree of

Bachelors of Business Studies (BBS)
Kathmandu, Nepal
March, 2020
 1.1 Background of the Study:

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

A bank is a financial institution and a financial intermediary that accepts deposits and channels
those deposits into lending activities, either directly by loaning or indirectly through capital
markets. 
A bank may be defined as an institution that accepts deposits, makes loans, pays checks, and
provides financial services. A bank is a financial intermediary for the safeguarding, transferring,
exchanging, or lending of money. A primary role of banks is connecting those with funds, such
as investors and depositors, to those seeking funds, such as individuals or businesses needing
loans. A bank is the connection between customers that have capital deficits and customers with
capital surpluses. 
Banks distribute the medium of exchange. Banking is a business. Banks sell their services to earn
money, and they must market and manage those services in a competitive field. Banks are
financial intermediaries that safeguard, transfer, exchange, and lend money and like other
businesses that must earn a profit to survive. Understanding this fundamental idea helps you to
understand how banking systems work, and helps you understand many modern trends in
banking and finance 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.”
Some important meanings of bank given by different scholars are as follows:

‘from the certainty that accepting bank debt as payment is to acquire a right on the existing as
well as future output that will be created by the agents who have been granted bank credit’
(Parguez and Seccareccia, 2000, p. 101).
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 Horace 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.”

According to online encyclopedia (Wikipedia):“Banking is a business which not only deals

with borrowings, lending and remittance of funds, but also an important
instrument for fostering economic growth.”

1.2 Profile Of Organization

Everest Bank Limited is a commercial bank in Nepal. The company offers deposit accounts;
import, term, demand, contract, housing, education and gold loans, as well as export finance,
working capital, and loans against FDR and bonds/guarantees; and mobile/SMS banking, E-
banking, debit card, utility payment, remittance, branchless banking, and locker services. It
provides banking services to the different sectors, such as industries, traders, businessmen,
priority sector, small entrepreneurs, and weaker section of the society and other people who need
banking services. At the present there are about 28 commercial banks operating in Nepal. Some
of these are new entries and are likely to be very aggressive in their marketing approach. Bank of
the year in Nepal 2006 A.D., Everest Bank Limited was established on 1 st Oct. 1994 A.D. as per
company act of Nepal. Everest Bank Limited is a joint venture with Punjab National Bank (PNB)
one of the largest commercial bank in India. The bank started with an authorized share capital 12
crores its issued capital was 12 crores with a paid up capital of 9 crores of the total issued share
capital. Punjab National Bank has hold 20% of total number of shares by general public of Nepal
for Everest Bank Limited More than 306 employees are EBL employed. It’s in order to
accomplish faster recruited this bank is providing tale-banking, ATM, Credit card facilities
forward dealing swift telex facilities. The head office of Everest Bank Limited is located at
Lazimpat in the central of Kathmandu at opposite of Shangri-La Hotel. It has good parking
facilities. Similar to other bank, the board of direction is the top policy of Everest Bank Limited
and gives proper directions to guide the direction to the activities of bank.
 Deposits are the funds, the customers collect in the bank for the purpose of softy

and interest income for which the bank gives or takes interest in accordance with

its nature. Purposes the bank requires adequate funds. Deposits plays vital role in

the development and prosperity of any commercial banks. Thus, the bank's policy

governing deposits must be appropriate which can accelerate the growth of a

bank. The policy differs whether the bank is serving in a selective clientele or in

mass clientele. However, the bank should attract new depositors and sustain the

decline in periods of recession. Thus, the bank have to apply various corrective

actions are attracting more deposits as per the need and capacity of bank to

mobilize them. Deposits are the main sources of main capital to issue loan.

Deposits are of different nature and types

1.3 Statement of problem:

The negligence and corruption made by management level, over-staffing, lack of social

obligation, lack of proper control and directions are the reasons that are facing by the

Nepalese commercial banks. The problems specially related to deposit mobilization of

EBL has been presented below: -

- Impact of saving deposit mobilization on profitability of bank.

Unsafe and risky investment sector.

- Ideal deposit and its impact.

 1.4 Objective of the Study:

- To evaluate the share of saving deposit out of total deposit of EBL.

- To generalize whether the mobilization of saving deposit in EBL are in

increasing or decreasing trends.

- To explore the weight of ideal deposit out of saving deposit

1.5 Rationale of the Study:

This Proposal will be useful to know overall picture of Everest Bank Ltd. However, it is mainly
concentrated in 'Saving deposit' of Everest Bank Ltd. So anyone who wants information
regarding the condition and trend of 'Saving deposit' of Everest Bank Ltd they will be facilitated
from this research to obtain the valuable information. The procedure of opening saving account
will be helped by this field report. Also the student in coming years will as a reference.

1.6 LITERATURE REVIEW

Until mid-1940s, only metallic coins were used as medium of exchange. So the

Government of Nepal felt the need of separate institution or body to issue national

currencies and promote financial organization in the country. Hence, the NRB Act

1955 was formulated. Accordingly, Nepal Rastra Bank was established in 1957

A.D. as a central bank of Nepal Rastriya Banijya Bank was established in 1966

A.D., as the second commercial bank of Nepal. The financial shapes of these two

commercial banks have a tremendous impact on the economy. That is the reason

why these banks still exist in spite of their bad position.

The expected response of rural deposits to rural income, access to banking facilities and
interest rates paid on deposits. The supply of rural deposits will increase as the agricultural GDP
rises but there is little that can be done in the short term to accelerate deposits by raising income.

The mobilization of savings is important for economic growth. It is considered to be a

precondition for many developing countries. Many of the periodic plans in Nepal have also
emphasized the need for accelerating the growth and mobilization of domestic saving. Increasing
growth means needs for capital accumulation which requires savings. “The central problem in
the theory of economic development is to understand the process by which a community which
was previously saving and investing 4 or 5 percent of its national income converts itself into an
economy where voluntary saving is running about 12 to 15 percent of the national income or
more” (Lewis, 1954:416). The growth of domestic savings, by facilitating the process of capital
accumulation, ensures the realization of economic growth.

1.6 Limitations of the Study

This fieldwork report is prepared in the partial fulfillment of requirement for the degree

of 'Bachelor of Business Studies'.

The study mainly concentrates on saving deposit aspects of EBL.

The study on saving deposit uses the trend of past five years only.

It focuses only on saving schemes, therefore. Overall position of EBL can't be

judged by this report.

Most of the data used are of secondary type, which is available from bank and

other sources of books.

1.7 Research Methodology

Proposal Structure

Reference
Rossi, S. (2001). The meaning of bank deposits. Centro di studi bancari Villa Negroni-RME LAB
Research Laboratory of Monetary Economics.

Seccareccia, P. A. M.(2000),“The credit theory of Money: the monetary circuit approach”. J. Smithin,
What is money, 101-123.

Srinivasan, A., & Meyer, R. L. (1986). A Mpirical Analysis Of Rural Deposit Mobilization In South
Asia (No. 2142-2018-6110).

Shrestha, R. P. (2010). Private savings behaviour in Nepal: long-term determinants and short-run
dynamics. Democracy, 353507(2.07), 11-71.