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1.1 Background of the study

Normally, an institution established by law, which deals with money and credit, is called bank.
On the other side an institution involved in monetary transactions is also called bank. The
business providing financial services to consumers and financial institution is also known as
bank. It also provides loan, accept deposits, exchange money, transfer the money and checks
account, which can be used like, money to make payments and purchases and give services.
Without the growth of financial field, there is no chance to develop business and without the
growth of business, the country cannot develop at any costs. So that bank is very necessary all
over the country. So banking sector plays vital role in the economic development of the country.
Bank came into existence mainly with the objective of collecting the idle funds, mobilizing them
into productive sector causing an overall economic development. The bankers have the
responsibility of safeguarding the interest of the depositors, the shareholders and the society they
are serving.
Meaning of the Bank
The functions of modern banking system are multifarious in nature and owing to the shift in
emphasis of the functions of bank a different stage of development; different economists have
defined banking in different ways.
"Bank is an institution whose debts are widely accepted in settlement of other people's debts to
each other."
"A banker is one who is the ordinary course of this business, receives money which he pays by
honoring cheques of persons from whom account he receives."
Evolution of Banking Industry
There is no unanimity among the economists about the origin of the world banking. The
evolution of banking industry had started a long time back, during ancient times. The term bank
was derived from the Latin word "Bancus" which means the bench on which the banker would
keep its money and records. In ancient Greece the famous temples of Delphi and Olympia served
as the great depositories of people's surplus funds and these were the centers of money lending
transaction. As a public enterprise, banking made its first beginning around the middle of the
twelfth century in Italy and the "Bank of Venice", founded in 1157 was the first public banking
institution. Following it were established the "Bank of Barcelona" and the "Bank of Genoa" in
1401 and 1407 respectively. The Bank of Venice and the Bank of Genoa continued to operate
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until the eighteenth century. With the expansion of commercial activities in Northern Europe
there sprang up a number of private banking houses in Europe and slowly it spread throughout
the world. In Nepal, modern banking starts from the establishment of Nepal Bank Limited.
Concept of the Commercial Bank

Banking sector plays an important role in the economic development of the country.
Commercials banks are one of the vital aspects of this sector which, deals in the process of the
available resources in the needed sector. It is the intermediary between the deficit and surplus of
financial resources. Financial system contains two components viz; depository and non-
depository financial institutions and Commercial Banks come under financial institutions. These
institutions act as an intermediary between the individuals who lend and who borrow.

Commercial banks are the major component in the financial system. They work as the
intermediary between depositors and lenders and facilitate in overall development of the
economy, with major thrust in industrial development.

Commercial banks came into existence mainly with the objectives of collecting the idle funds,
mobilizing them into productive sector and causing and overall economic development. The
banks have the responsibility of safeguarding the interest of the depositors, the shareholders and
the society they are serving. A sound banking system is important because of the key roles it
plays in the economy; intermediation, maturity transformation, facilitating payments flows,
credit allocation and maintaining financial discipline among borrowers. Banks are the gathers of
saving, allocates of resources providers of liquidity and payment services.

Functions of Commercial Bank

The main functions of commercial banks are to lend and borrow money form and to the people.
It is oldest main function. Although, in the previous years banks were viewed as acceptor of
deposits than provider of loan, but modern commercial banks have to perform for overall
development of trade, commerce, industry, agriculture including priority and deprived sector.
The growing need and habits of people made the banking sector challenging.

The main functions of commercial banks are as follow:

a) Acceptance of Deposits
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Current account.
Saving account.
Fixed deposit account.

b) Advancing Loans
Cash Credit.
Loan.
Bank Overdraft.
Discounting bill of exchange.

c) Agency Function
Collection and payment of cheque, draft, dividend etc.
Payment of subscription, electricity, water bill, insurance premium.

d) Miscellaneous Functions
Collecting of cheques, bills and other instruments.
Furnishing of guarantee on behalf of customer etc.
Underwriting of capital issues.
Insurance of traveler cheques.
Opening letter of credit.
Custodian of valuables.
Issue of Letter of Credit.
Dealing with foreign exchanges.
Supply of information of trade and commerce.

1.2 Profile of Nepal Bangladesh Bank Ltd.

Nepal Bangladesh
Bank Ltd. is a commercial bank established in Nepal, on 6 th June 1994, as a joint venture bank in
private sector with International Finance Investment and Commerce (IFIC) Bank Limited of
Bangladesh. NBB was established with an authorized capital of Rs.240 million divided into
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shares of Rs.100 each out of which Rs.120 million issued capital and Rs.60 million paid up
capital.
Its capital structure is divided as:
50% of share - IFIC, Bangladesh.
20% of share - Nepalese promoters.
30% of share - Public shareholders.
Now, at present its authorized capital has been increased to Rs.1000 millions divided into share
of Rs.100 each, out of which Rs.500 million issued and paid up capital of Rs. 359924500.
NBB’s Board of Directors, the policy making body, constitutes of ten members of which three
are nominated from IFIC Bank Ltd. Two from Nepalese promoters, one from Nepal Government
according to commercial bank act 1974 and two from public shareholders. But now the new
management team according to Nepal Rastra Bank is listed below:

1.3 Objectives of the study

The main objectives behind analyzing the deposit procedures of NB bank limited are as follows:

 To examine far the deposits of the NBB bank has been mobilized.
 To evaluate the ratio of saving deposit, fixed deposit and current deposit with total
deposit.
 To examine the ratio of investment out of total deposi

1.4 Rationale of the study

 This study is imposed to be the helpful to the bank for formulating new plans and
policies as well as revising the existing ones based on the conclusion and
recommendations made.
 This study is also believed to assist the researchers who want to know the
depository position of NBB bank.
 This study attempts to provide information on total deposit and procedures of
opening the account in the NBB bank.
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1.5 Research Methodology

Methodology is the system of ways of doing or studying something. Hence fundamental to the
success of any field/project work is obtaining and following the good methodology. I have
adopted various methods or procedures in order to prepare this report.

Source of Data

Secondary Data Source:

In this study, the main sources of data are secondary data which are collected from pre-published
sources.

Financial Tools

There are wide areas of financial tools that can be applied in order to analyze the total deposit
of NB bank. But for our fieldwork, following ratio analysis tools are used.
 Saving Deposit to Total Deposit
 Saving deposit to Cash and Bank Balance ratio
 Investment to Total Deposit Ratio
 Cash Reserve Ratio
 Total credit to Total Deposit Ratio

1.6 Limitation of the study

 This study is concerned primarily with only one bank i.e. NBB bank. This study is
focused only on total deposit.
 The authenticity of the report depends on the authenticity of the data provided and
collected.
 Unavailability of the sufficient data's references and resources also limit the study.
 This study includes the data of five years only.
 Amounts are rounded nearly in millions.
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