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CHAPTER I
INTRODUCTION
1.1 Background of the study
A bank is a financial institution that accepts deposit from the public and creates
a demand deposit while simultaneously making loan Lending activities can be directly
performed by the bank or indirectly through capital markets. Banking occupies one of
the most important positions in the modern economic world. It is necessary for trade
in industry. Hence, it is one of the great agencies of Commerce. Although banking in
one form or another has been in existence from very early times, modern banking is of
recent origin. It is one of the results of the Industrial revolution and the child of
economics necessity. Its presence is very helpful to the economics activity and
industrial progress of a country. According to RP Kent , "Bank is an institution which
collects idle money temporarily from the public and lends to other people as per
need."
[Source:- www.wikipedia.com www.google.com ]
Other than traditional functions like accepting deposits and lending, institutions doing
credit creation, remittance, guarantee, agency functions and other financial business
entity is called bank. The bank acts as the backbone of the economy by mobilizing the
overall economy. In particular, central banks (monetary bodies) and banks established
for various other purposes exist in every economy. A bank is an institution, which
deals with money and credit. It accepts deposits from public and mobilizes the fund to
productive sectors. It also provides remittance facility to transfer money from one
place to another. Generally, bank accepts deposits from the business institution and
individuals, which is mobilized into productive sectors mainly business and consumer
lending. Bank is, therefore, known as a dealer of money. At present context, bank is
not confined to accepting deposit and disbursing loan. In addition to this, a bank may
be engaged in different types of functions such as remittance, exchange of currency,
joint venture, underwriting, bank guarantee, discounting bill etc. In short, the term
‘modern bank’ refers to an institution having the following features:

 It deals with money; it accepts deposits and advances loan.

 It also deals with credit; it has the ability to create credit by expanding its
liabilities.
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 It is commercial institution; it aims at earning profit.

Banks can be classified into central bank, commercial banks and development bank.
Central holds the top most position in the banking sector and slowly increases the
rights of issuing notes, managing cash and credit system, controlling foreign enchant
and formulating banking policy for the development of banking sector in the interest
and welfare of the public. Commercial bank refers to that banks which accepts
deposits of the public and organization, grants loans to them against securities,
providing financial and technical assistance to the traders and commercial parties. The
Bank which is established for the development of industrial sector by providing
financial, technical and administrative and other necessary assistance as development
bank.
Loan management is especially focused on the management of loan disbursement and
collection procedure, handling and monitoring. All the activities followed by a bank
for the disbursement and collection of loan are known as loan management. So, we
can say that loan management is a backbone of any bank. If a bank show loan
management properly and according, a bank can earn more profit. Every bank’s
success of failure heavily depends on effective loans management (Baral, 2011).
Nepal bank limited is the first bank of Nepal was established in November 15, 1937
A.D (Kartik, 30, 1994). It was formed under the principle of Joint venture (Joint
venture between govt. & general public). The bank was established with an authorized
capital of Rs .10 million and ,issued capital of Rs. 2.5million and paid up capital of
Rs. 0.842 million .The share held by government and private sector was 60% and
40% respectively. It has done pioneering function in spreading banking habits among
the people. Having felt a need of central bank to control and direct the commercial
bank and help the government making monitory policies, Nepal Rastra Bank was
established in 1956 A.D. to regulate and systematized domestic financial sector . NRB
makes various guidelines for the banking sector of the country .In 1957 A.D.
Industrial Development Bank was established to promote the industrialization in
Nepal , which was later converted into Nepal Industrial Development corporation
( NIDC ) in 1959 A.D. NIDC has worked to expand Nepalese Industries and services,
including hotels , industrial districts, and the Nepal stock Exchange . To fulfill the
growing credit requirement of the country, Rastriya Banijya Bank was established in
1965 A.D. as the second commercial bank of Nepal. As agriculture is the basic
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occupation of major Nepalese, the development of this sector plays a prime roll in the
economy. so, separate Agricultural Development Bank Was established in 1968
A.D. This is the first institution in agricultural financing. For more than two decades,
no more banks have been established in the country. After declaring free economy
and privatization policy, the government of Nepal encouraged the foreign banks for
joint venture in Nepal . Today the banking sector is more liberalized and
modernized .there are various types of bank working in modern banking system in
Nepal . Banking software , ATM , E-banking, Mobile Banking , Debit Card , Credit
Card , Prepaid Cars etc. services are available in banking system in Nepal . It helps
both the customers and bank to operate and conduct activities more efficiently and
effectively.
1.2 Profile of the Organization

Shangri-la Development Bank Limited (SDBL) is a renowned name in Nepalese

Banking sector. Established on 2007/08/26 A.D., Shangri-La Development Bank
limited has obtained permission from Nepal Rastra Bank to operate as a “B” class
National level financial institution. At present the bank has been upgraded as National
level Development Bank from regional level by way of acquisition to Bageswari
Development Bank Limited.
Shangri-La Development bank limited is a dream project of few innovative and
motivated entrepreneurial minds rather than being just another bank in crowd of
financial institutions promoted by respected professional banker, charter accountants,
doctors, engineers, businessman, entrepreneurs, social workers and other renewed
personality of other fields will very good inter integrity and social standings it is
formed after merged of two local development bank named Bageswori Development
Bank based in Nepaljung and Shangri-La Development Bank based in Pokhara at
present Shangri-La Development Bank Ltd. Is one of the largest National level
Development bank with its central office at Baluwatar, Kathmandu and Regional
office in Pokhara and Nepalgunj. Shangri-La Development Bank Ltd has acquired
cosmos Development Bank and started joint operation from 30 Ashad, 2070.
The central office of the Bank is situated at Baluwatar Kathmandu. It has a special
wing for Micro-Credit finance which is a model for micro banking activities
throughout the development banks in Nepal. The bank is committed for good
corporate governance practices and banking activities with prudent banking culture. It
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has been offering various products and service for its customer with competitive rate
in market. It has been able to provide diversified service (Modern Banking, and
Microfinance) backed by the latest technology.
At present SDBL is one of the largest National Level Development Bank with Branch
Network of 91 modern banking branches and 6 microfinance desks with depositor’s
base of more than 3 lakh customers. We are in the process of opening more branches
in this fiscal year. Shangri-La team is always determined to provide services which
are supreme in the industry.
Objectives of Organization
 To provide sustainable and quality financial service to the public upholding
and enhancing the interest of depositors and shareholders of the bank.
 To help in development of industrial, commercial and agricultural sectors of
the nation by collecting and mobilizing financial resources from internal and
external sources so as to establish, develop and increase the overall
productivity of the nation.
 To promote in establishment, operation and expansion of employment
generating businesses in rural and urban areas by proper mobilization of
available capital and labor. And to support and help alleviate poverty by
providing financial, technical and managerial supports to the needy people.
1.3 Objectives of the Study
Bank accepts deposit from the public and provides the necessary amount to the
investors as a loan from which the bank earns the profits. Bank cannot achieve it's
predetermine goal and objectives without effective and proper loan management. The
specific objectives of the study are as follows:
 To study about sector wise loan.

 To analyze the relation between loan and advances, and total deposit.
1.4 Rationale of the study
It is indisputable that loans and advances are major source for profit generation of
banks. Therefore the banks are carefully allocating their fund under loans and
advances cum heads. This under taken venture is supportive factor to know the true
affairs and position of the bank regarding the management of loans. Similarly this
study becomes a guideline for improving the performances of the bank to achieve
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their objectives. This study is also help to identify the hidden weakness related to the
loan management of the concerned bank.
1.5 Review of Literature
The main purpose of review of literature is to find out what research studies have
been conducted in one’s chosen field of the study and what has been remained to be
done. In literature Review, review of books, review of bulletins, journals and annual
reports published by banks and others related authorities, review of related articles
and study of previous thesis, independent studies have been taken into account. This
chapter has been divided into three headings: Theoretical Reviews, review of previous
studies and research Methods.
1.5.1 Theoretical Reviews
Conceptual review provides knowledge about some theoretical aspects related to the
subject matter of the research this study discusses differences in financial
management and goals between the Investor-oriented firms and banks. It briefly
reviews what bankers look for when appraising potential borrowers. A summary of
Loan and advance to deposit ratios used to analyze a variety of business structures is
included, along with other modified ratios to address deficiencies evident in standard
ratios.
Meaning and Definition of Development Bank
Development Bank is composed of two words “development” and bank these
institutions are under the obligation to play promotional role and to encourage new
entrepreneurship development role. The modern development banks are focused
towards achieving all rounds economic development of under divestment through
which development can be promoted and financed.

Development banks mobilizes the scattered saving into production channel in

order to maximize their wealth. The collected find of development banks are
mobilized in various sectors like hire purchase, housing, finance and lease finance,
overdraft education etc. They are also used to invest in securities and issue guarantee.
The demand of the customer for the development banks are increasing day by day. As
a result 18 development bank are established till mid 2021. (NRB, 2077)

Development bank act 1995 there was a rush to establish development bank
and this lead to establishment of many development and regional banks. The main
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motive was to up lift the standard of people by providing load to poor and small
entrepreneurs the bank and financial institution act 2063 has categorized the
development banks into class B Category licensed institution. A development bank is
a type of financial institution that provides services such as accepting deposits,
making business loans, and offering basic investment products.

Development banks provide loans and advances of various forms, including an

overdraft facility, cash credit, bill discounting, money at call etc. They also give
demand and term loans to all types of clients against proper security. Bank reserves or
"central bank reserves" are banks' holdings of deposits in accounts with their central
bank (for instance the European Central Bank or the Federal Reserve, in the latter
case including federal funds), plus currency that is physically held in the bank's vault
("vault cash"). Some central banks set minimum reserve requirements, which require
banks to hold deposits at the central bank equivalent to at least a specified percentage
of their liabilities such as customer deposits. Even when there are no reserve
requirements, banks often opt to hold some reserves which called desired reserves
against unexpected events such as unusually large net withdrawals by customers or
bank runs.
Functions of Development Bank
Development banks play a significant role in fulfilling the short-term and
medium- term financial requirements of industries. They do not provide, long-term
credit, so that liquidity of assets should be maintained. The funds of development
banks belong to the general public and are withdrawn at a short notice; therefore,
development banks prefers to provide credit for a short period of time backed by
tangible and easily marketable securities. Development banks, while providing loans
to businesses, consider various factors, such as nature and size of business, financial
status and profitability of the business, and its ability to repay loans.
i) Accepting Deposits:
The principal function of development banks are obtaining deposits from depositors
and savers by offering the high degree of liquidity, less risks, high denomination and
interest rates. Now days banks accepts different kinds of deposit account from the
customers. The main types of deposit offered by development banks are saving, fixed,
call deposit. The deposit in which the bank pays interest relatively at low rate to the
depositors is called saving deposits. Here the depositors are allowed to withdraw their
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money by cheque up to limited amount a week or a year. Current account is mostly

opened by businessman. In this types of deposit, depositors can withdraw any amount
available in the current account by cheque without notice. A call deposit account has
no fixed deposit period. It provides instant access to funds and allows unlimited
withdrawal and deposits.
ii) Advance and Loans
One of the most primary functions of development bank is to provide loan and
advances to its customers. In these days bank provides the loan that is legally
permissible and for long period of time to its customers. The bank provides loan in the
following ways: cash credit, term loan, overdraft and discounting bill of exchange. A
bank lends a certain percentage of cash idle in deposits at higher interest rate than it
pays on such deposits. The most important function of bank is credit creation. When a
banks grants loan, it opens an account in the name of its customers and allows him to
withdraw the money by cheque according to his needs. but it does not pay its
customer in cash.
iii) Agency Services :
A bank is a financial intermediary which acts as an agent for its customer while
collecting and paying cheque, bills of exchange, drafts, dividend etc. It also provide a
brokerage service by buying and selling securities for its customers. It also act as a
securities for its customers dealer and further more pays subscriptions, insurance
premium, utilities bills and other similar charges on behalf of its clients. It also acts as
a trustee and executor of bank and also performs the role of consultants to its clients.
For these services, the bank charges a normal fee.
iv) Overdraft Facility:
It refers to a facility in which a customer is allowed to overdraw his current account
up to an agreed limit. This facility is generally given to respectable and reliable
customers for a short period. Customers have to pay interest to the bank on the
amount overdrawn by them.
v) Discounting Bills of Exchange:
It refers to a facility in which holder of a bill of exchange can get the bill discounted
with bank before the maturity. After deducting the commission, bank pays the balance
to the holder. On maturity, bank gets its payment from the party which had accepted
the bill.
vi) Transfer of Funds:
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Banks provide the facility of economical and easy remittance of funds from place-to-
place with the help of instruments like demand drafts, mail transfers, etc.
vii) Collection and Payment of Various Items:
Development banks collect cheques, bills,’ interest, dividends, subscriptions, rents
and other periodical receipts on behalf of their customers and also make payments of
taxes, insurance premium, etc. on standing instructions of their clients.
viii) Purchase and Sale of Foreign Exchange:
Some development banks are authorized by the central bank to deal in foreign
exchange. They buy and sell foreign exchange on behalf of their customers and help
in promoting international trade.
ix) Purchase and Sale of Securities:
Development banks buy and sell stocks and shares of private companies as well as
government securities on behalf of their customers.
x) Miscellaneous Services:
Bank issues various form of credit instrument such as cheque, draft and
traveler cheque etc which facilitate transactions. It also acts as an custodian of
valuables of the customers by providing locker facility where they can keep their
jewellery and valuable documents. It also provides statistics on money market and
business trends of the economy. Last but not least it renders underwriting services to
companies and helps in the collection of funds from the public. For the growth and
stability of the economy, financial intermediation between depositors and borrower is
crucial. Economic growth of any country depends on a large volume of savings and
the effective allocation of the saving to the productive and profitable sectors.
Bank and Financial Institution Act 2063
Bank and financial activities are governed by rules and regulations which are
reviewed from time to time to reflect the changing economic environment. Bank and
financial institutions ordinance came into existence in February 4, 2004 governs rules
and regulations of all types of financial institutions. The ordinance is reviewed in
every six months. It aims to ensure reliable and quality banking and financial
intermediation services through healthy competition among bank and financial
institution, safeguards and promotes the interest of depositors and people at large in
the overall banking and financial system of the country. The ordinance repeals and
replaces all existing acts relating to commercial banks, Nepal Industrial development
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bank, other development bank and finance companies and brings all such institution
under one single act which is known as umbrella act. As per umbrella act, bank and
financial institutions can be classified as A, B, C and D classes on the basis of
minimum paid of capital. Accordingly, commercial banks are class A and they are
labeled as banks. Similarly development banks, finance company & microfinance are
categorized into 'B', 'C' and 'D' class respectively. By mid 2021 there are 28
commercial banks of class A, 24 development banks of B, 79 finance companies of
class 'C'. The umbrella act named as bank and financial institution act, 2063 has been
enacted effectively for the proper and smooth operation of the banks.
(NRB, 2021 AD)
As per the fact, if the financial institution net capital requirement and has
been in profit for the last 5 years in a row, total nonperforming assets has remained
within the NRB prescribed limit and all the prescribed conditions have met then well
performing bank or financial institution can be upgraded. Similarly NRB can
downgrade any banks or financial institutions from 'A' to 'B', 'B' to 'C' class if its
status performance is found to have turned totally other way against as prescribed.
Subject to this act, class 'B' licensed institution may conduct the following types of
financial transactions.
 Subject to the limit prescribed by the Rastra Bank, accepting deposit with or
without interest and refund such deposit.
 Supplying credit, other than hypothecation credit as prescribed.
 Dealing in foreign exchange, subject to the laws in force and the directives
given by Rastra Bank.
 Supplying credit for hire purchase, leasing, housing and service business.
 Engaging in Merchant Banking Business, subjective to the directives given by
the Rastra Bank.
 Making arrangement for jointly supplying credit on the basis of co-financing
in collaboration with other licensed institutions in accord once with mutual
agreement entered into for the division by the collateral.
 Supplying credit against the guarantee of any native banks or financial
institution.
 Issuing, accepting, paying, discounting or purchasing and selling bills of
exchange, promissory notes, cheques, traveler's cheque drafts.
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 Accepting deposits making payments and supplying credit through automated

teller machine and cash dispensing machine.
 Providing overdraft to person whom it trusts.
 Obtaining credit against the security of its movable and immovable property.
 To issue and accept letter of credit subject to the conditions prescribed by the
Rastra Bank.
 Acting as a commission agent of its customer taking custody of and arranging
for the sale or purchase of shares, debenture or securities, collecting interests,
dividends, profit etc accruing from shares, debentures or security.
 Arranging for safe deposits vault.
 Carrying on off balance sheet transaction on such condition as may be
prescribed by Rastra Bank.
 Providing guarantee for the supply of credit to its customers by any other
licensed institutions.
 Functioning to turn household saving into profitable industry investments.
Business Investment makes profit. Banks generate their revenue from the
difference of the interest the business pay them and the interest they pay to
depositors.
1.5.2 Review of Previous Studies
Shrestha(1998) in his article “ A Study on Deposit and Credit of commercial Bank
in Nepal” concluded that the credit deposit ratio would be 51.30%, other things
remaining the same. In Nepal that was the lowest under the period of review.
Therefore, she has strongly recommended that the joint venture banks should try to
give more credit entering new fields as far as possible; otherwise, they might not be
able to absorb even the total expenses as a separate part of the management.
Hossain,(2009). has conducted study report on the loan disbursement and recovery
system of Janata Bank Ltd. The general objective of this research was to study the
loan distribution and recovery system of Janata Bank Ltd. He has used questionnaire,
interview method using both primary and secondary data. From his study he
concluded that the book in performing well. It has giving services of loan distribution
efficiently to the needy people. And the loan investment is in increasing trend and
high investment was on real estate loan.
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Kunwar,(2009) conducted a study on “Credit Management (A Comparative Study of

Himalayan Bank Ltd. and Nabil Bank Ltd.)”. the major research objectives of the
study are to analyze the volume of contribution made by sample banks in credit and
advances, to analyze the deposit collection and utilization trend of sample banks and
to study the relationship of deposit loan and advances and net profit of sample banks.
She finds Nabil is able to mobilize its resources in lending as loan and advances than
HBL. HBL is able to invest its resources more in other company’s shares, debentures,
bond as well as government treasury bill than Nabil. Nabil has high return on loan
&advances ratio as well as return on total assets ratio than that HBL that means Nabil
is able to earn more interest from total credit granting. HBL has kept high loan
provision than Nabil because of high non performing to total lending ratio. Nabil and
HBL has positive with significant relationship between total deposit collection and
total lending. Nabil and HBL both has positive with significant relationship between
total loan & advances and net profits.
Shrestha,(2011). “non-performing loans and stock prices (A case of Nepali
commercial banks)” has presented with the objective to examine the effect of the non-
performing loan on market price of share. The study has analyzed trend of NPLs and
ratio related to credit analysis of the 18 sampled commercial banks of Nepal. The
study has found improvements in the commercial bank’s loan recovery endeavors,
making positive impact on their profits and stock prices. The study also conducted
that NPL affects the stock prices of the commercial banks to an extent of 35.50
percent, whereas it also hints at the existence of other factors that would also make
their impact on the stock prices. In particular, the study found that the real stock price
of the commercial banks has a negative association with the levels of their NPLs.
Ranabhat,(2012) has concluded his study entitled “Credit Management in Nepalese
commercial Bank (A Case Study of Bank of Kathmandu Ltd.)”. The research main
objectives arte to analyze the composition of loan and advances, to analyze the trend
of loan and advances, to analyze the composition and trend of deposit, to analyze the
loan & advance and non performing loan, to analyze the relationship between loan &
NPL, to analyze the relationship between loan and deposit, to analyze the
performance of BOK in terms of liquidity and profitability. To analyze the adequacy
of BOK and to analyze the credit management procedure. He finds large portion of
loan was disbursed in manufacturing products & lowest loan disbursed in agriculture
sector. Loan & advance was in increasing trends in spite of tough competition.
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Savings deposits have the highest contribution on in total deposit but decreased and
fixed increased in final year of the study. NPL was in decreasing trend during the
study period. High quality of lending was the reason behind it. Correlation coefficient
between loan & advance to non performing loan is positive. Net interest to total asset
ratio showed increasing trend.
Khadgi,(2014) concluded a study on “Loan management of Shangri-La Development
Bank.” The major objectives of the study are to identify the areas of the loan
disbursement, to measure amount of loan out of total deposit, to evaluate the
performance of bank in terms of liquidity and profitability and to evaluate the
relationship between deposits collection and loan disbursement. He finds SDBL
disbursed highest loan in consumable and private sector and lowest loan in finance.
Overdraft loan product has the highest loan and advances provided and margin loan
product has the lowest loan and advance is in collateral of movable/immovable assets.
Deposit collection of the SDBL is significantly in increasing trend although banking
sector has high competition. Correlation between deposit collection and loan
disbursement is significant.
Kunwar,(2015) conducted a study on “Credit Management of Finance Company (A
case study of Kaski Finance Limited)”.The major objective, to analyze quality of
assets of KAFIL ,to analyze the trend in deposit and lending of KAFIL. She finds
lending portfolio of KAFIL is dominated by term financing which indicates that the
company is focusing on long terms loan whereas deposit is dominate by saving
deposit which has to be paid in short demand. Hence in case of liquidity crisis, it may
be difficult for KAFIL to meet short term liquidity. The ratio of credit to deposit (As
per NRB requirement) of KAFIL is below 80 percent which is good standard as per
finance needs to maintain of CDC ratio as per directives circular by NRB below
80%.Further CDC ratio is at the average of 75.36 in last five years which shows that
ability of KAFIL in utilize its maximum revenue generation. The ratio of non-
performing assets of KAFIL was good enough in whole study period. It is slightly
increasing beyond the figure of decimals accordingly year after year, but KAFIL has
succeeded to maintain NPA standard as per NRB standard (i.e. less or up to 5%),
which featured the quality of assets KAFIL to be in healthier state All in all lending
composition between 2066/67 to 2070/71, the business loan portion is gradually rising
throughout the five fiscal years. Deposit mobilization of KAFIL is satisfactory as
there is positive increment in deposit and lending year by year.
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Basnet,(2017) has conducted study report on the loan distribution of Prabhu Bank Ltd.
The general objective of this research was to analysis the loan distribution and to
determine the stability in fund mobilization of Prabhu Bank Ltd. She has used
interview method to collect primary data add for secondary data relative bank
website, books etc. She concluded that bank is performing well than past year. She
suggests investment in different sector of economy removing poverty, bringing
prosperity and creating an egalitarian society, bank need to adopt an appropriate credit
policy.
1.6 Research Methods
This study has intense relation with the financial achievement Loan Distribution of
Shangri-La Development Bank. The research methodology includes, research design,
data collection procedures and research variables and tools use. The following step
provides useful procedural guidelines, So far as research methodology is concerned.
1.6.1 Research Design
A research design is a framework or plan for the activities to be undertaken during the
course of study. The study is concerned single unit thus will be followed the case
study research design. Under the case study research design, descriptive research
approach will be applied.
Thus research design serves as a framework for the study, guiding the collection and
analysis of data, deciding the research instrument to be utilized, the sampling plan to
be followed, evaluating the data etc. It is integrated system that guides to the
researcher in formulating, implementing and controlling the study. It helps to search
the answer of research questions. The study based on descriptive and case study
research design.
1.6.2 Nature and Sources of Data
While writing this report to get the information, the primary and secondary sources of
data collection methods have been used. So, this research will be based on primary as
well as secondary sources.
1. Primary Data
2. Secondary Data
1. Primary data
Primary data is a type of data that is collected by researchers directly from main
sources through interviews, surveys, experiments etc. Primary data are usually
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collected from the source where the data originally originates from and are regarded
as the best kind of data in research, which will be obtained as research requirement.
Primary data are taken by interview and questionnaire method.
2. Secondary data
This research is based on secondary data as well which is gathered from annual
reports, published documents, meeting minute of the board and website. Moreover,
other necessary data and information can be collected from newspaper, related
publications and websites.
1.6.3 Population and Sample
The objective of the study is to find the capital Structure of the organization. There
are 18 Development Bank in Nepal. Out of them Shangri-La Development Bank is
taken as sample. I would like to select this Bank because this is development bank, a
reputed bank of the country, having good management system and earning high profit.
The Shangri-La Development Bank is the population for the research works and
convenience sampling method will be used.
1.6.4 Data collection procedure
Data collection is the main part to complete these report. Without data a report cannot
be completed. Under data collection Pre-project work procedure, Project work
procedure and post -project procedure are applied to complete these report.
1.6.5 Data Analysis Tools
In order to meet the objectives of the study, the sources of secondary data of SDBL
have been analyzed by using financial and statistical tools. Selection of suitable tools
and proper analysis make data more effective. The researcher has used two types of
tools. They are financial tools and statistical tools.
Financial ratios are customarily expressed in the form of times, proportion and
percentage. They may also be depicted in the form of graphs. Ratios make the related
information comparable. A single figure by itself has no meaning. But when
expressed in terms of related figure, it yields significant inferences. Their use as tools
of financial analysis involves their comparison as single ratios, like absolute figures,
are not much use.
1.6.6 Instruments
For the purpose of the study, required data and information were extracted from the
annual report and will entered into the master sheet of data using Microsoft Excel.
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From the master sheet, required Tables were prepared for the analysis. For the
analysis of the data, both financial tools and statistical tools were used. Among the
financial tools, different types of ratios, which were discussed in the research report?
1.7 Limitation of the Study
This study particularly involves the financial aspects of Shangri-La Development
Bank limited. It is also trying to examine overall performance in terms of Loan
Distribution, allocation and utilization. The limitations of the study are as follows:
 The study was carrying out to fulfill the requirement of Bachelor’s Degree of
Business Studies under the Tribhuvan University.
 The study was concern only with the loan distribution of SDBL.
 The study covers the relevant data information only for five fiscal years from
2073/74 to 2077/78.
 The study was used only the selected financial and statistical tools and
techniques.
 The study was based on secondary data and information.