1.5.

2 Review of previous studies

1.5.2.1 Review of journals and articles
Dhungana (2011) conducted a study on the impact of commercial banks on the
economic growth of Nepal from 1990 to 2010 AD. The study utilized secondary
data and employed statistical analysis to examine the relationship between bank
deposits and economic growth. The findings of the study indicated that a higher
level of deposit in financial institutions, particularly commercial banks, was
positively associated with an increase in GDP and economic growth. The study
also highlighted the dual role of the banking sector in mobilizing and allocating
limited resources to meet the needs of the people and promote economic
development. The study further revealed that individuals preferred to deposit
their funds in saving accounts due to the attractive features of this account.
Additionally, the total deposit of various financial institutions increased annually,
with commercial banks having the highest level of depository amount due to their
reputation as a secure and sound financial institution.
Maharajan's (2008) research aims to investigate the relationship between the
total deposit amount and the total credit granted by commercial banks in Nepal.
The study utilizes secondary data and focuses on four banks, namely Himalayan
Bank Ltd. (HBL), Siddhartha Bank Ltd. (SBL), Nabil Bank Ltd. (NBL), and Standard
Chartered Bank Nepal Ltd. (SCBNL), as a sample for comparative analysis during
the period of 2059/60 to 2063/64 BS. The research employs financial and
statistical tools, such as ratio analysis, mean, standard deviation, coefficient of
variation, and correlation analysis. The findings indicate that SBL has been
relatively successful in investing in the productive sector and mobilizing its
collected deposits to provide loans and advances for profit generation. On the
other hand, SCBNL appears to be more successful in earning profits on loans and
advances compared to the other three banks. The study recommends that
commercial banks should collect more deposits through a variety of deposit
schemes and facilities, such as cumulative deposit schemes, prize bond schemes,
recurring deposit schemes (life insurance), monthly interest schemes, house
building schemes, direct finance housing schemes, education loan schemes, and
others.
In her thesis entitled "Deposit Mobilization of Selected Commercial Banks of
Nepal," Shrestha (2014) conducted an analysis of the trend of deposit
mobilization among commercial banks in Nepal. The study focused on four
commercial banks, namely Standard Chartered Bank Nepal Ltd (SCBNL), Nepal
Investment Bank Ltd. (NIBL), Himalayan Bank Ltd (HBL), and Nabil Bank Ltd.
(NABIL), during the period from 2065 to 2069 BS. Secondary data were utilized for
the study, and various financial and statistical tools such as ratio analysis,
standard deviation, average mean, correlation coefficient, regression analysis, and
trend analysis were employed to analyze the data.
The findings of the study revealed that all the sample banks were in a better
position in terms of liquidity and profitability. NIBL maintained a good liquidity
position, while NABIL had a poor liquidity position among the sample banks.
SCBNL achieved a good return on loan and advances and had the lowest credit
risk ratio among the sample banks. The deposit and loan and advances of
commercial banks showed an increasing trend. However, the growth rate of loan
and advances was in a decreasing trend, and the growth ratio of deposit was in a
fluctuating trend during the observation period.

1.5.3 Research Gap

The term "research gap" refers to the disparity between existing research and the
present study. A multitude of studies have been conducted on the performance
of deposit and lending in both developed and developing countries. Various
factors have been identified as influencing bank deposit and lending practices,
and numerous studies have been conducted to measure these determinants.
Banks play a critical role in a country's economic development by mobilizing
deposits and providing capital, thereby stimulating economic growth. In Nepal,
the banking sector is a crucial contributor to the country's development and is
one of the highest profit-generating sectors. The identification of determinants
that significantly impact deposit mobilization is essential for commercial banks to
assess their current status and make necessary changes. Previous research studies
have primarily focused on the financial performance and fund mobilization of
commercial banks, the role of commercial banks, or comparative studies of
commercial banks. While there are numerous studies on deposit mobilization of
specific commercial banks or comparative studies, this research focuses on the
deposit mobilization of fifteen commercial banks in Nepal. The study covers the
period from 2015/2016 to 2019/2020 A.D. and will be beneficial to interested
parties, scholars, teachers, civil society, businessmen, and the government from
both academic and policy perspectives.

1.6 Research Methodology

The research methodology pertains to the methods and processes utilized in a
study. It provides a detailed explanation of the research design, which
encompasses the sampling techniques, sources and types of data, and data
collection and analysis methods. The tools and techniques employed to achieve
the research objectives are also expounded upon in detail.

1.6.1 Research Design

In this particular study, both descriptive and causal comparative research designs
were utilized to address the fundamental issues at hand. The descriptive research
design was employed to gather pertinent information on bank-specific variables
related to deposit mobilization in Nepalese commercial banks. On the other hand,
the causal comparative research design was utilized to analyze the cause-and-
effect relationship of these bank-specific variables on deposit mobilization. To
understand the directions, magnitudes, and forms of the observed relationship,
correlation analysis was employed under the causal comparative research design.

1.6.2 Nature and Sources of data

Data is collected by using secondary sources and the secondary data are of annual
nature. Cross sectional data are used in this study where 15 commercial banks out
of 27 in Nepal were included over the period of 2015/16-2019/20 covering the
period of 5 years. The variables used in the study are categorized into bank
specific variables (deposit and lending). The data of bank specific variables are
collected from official website of concern commercial banks. This research is
completely based on secondary data so this research does not require any of
survey for collection of primary data. Data are collected from different sources as
per need and requirement.
 1.6.3 Population and sample
Though there were 27 commercial banks in Nepal till March 2021, all of them did
not provided scope for the study. In order to represent the banking sector the
basis of sample selection is that banks established in different eras like public
bank of government, commercial bank established in 1980‟s, banks established in
collaboration with foreign banks, bank established between mid-1990‟s and
banks established in 2000‟s have been selected for the study. Fifteen commercial
banks have been taken. Therefore, out of 27 commercial banks, 15 are taken as
sample for the study for the period of 2015/16-2019/20. Table 3.1 presents the
list of sample banks selected for the study along with study period and number of
observations. For the purpose of data collection non-probability sampling method
has been used. The convenience sampling method has been used.

1.6.3.1 Table
Banks selected for the study along with the study period and number of
observation.
S.N Name of the company Established year Study period Observation
1 Agriculture Development 1965 2015/2016- 5
Bank Limited 2019/20
2 Nabil Bank Limited 1984 2015/2016- 5
2019/20
3 Nepal Investment Bank 1985 2015/2016- 5
Limited 2019/20
4 Standard Charter Bank 1986 2015/2016- 5
Limited 2019/20
5 Himalayan Bank Limited 1993 2015/2016- 5
2019/20
6 Everest Bank Limited 1994 2015/2016- 5
2019/20
7 Nepal Credit and 1996 2015/2016- 5
Commerce Bank Limited 2019/20
8 Machhapuchhre Bank 1999 2015/2016- 5
Limited 2019/20
9 Prabhu Bank Limited 2009 2015/2016- 5
2019/20
10 Kumari Bank Limited 2001 2015/2016- 5
2019/20
11 Laxmi Bank Limited 2002 2015/2016- 5
2019/20
12 Siddhartha Bank Limited 2003 2015/2016- 5
2019/20
13 NMB Bank Limited Global 2008 2015/2016- 5
2019/20
14 IME Bank Limited 2007 2015/2016- 5
2019/20
15 Mega Bank Limited 2010 2015/2016- 5
2019/20

1.6.4 Method of data analysis

Analysis and presentation of the data is the core of each and every research work.
Different financial tools like loan deposit ratio, growth ratio, trend analysis are
used to analyze the collected data to obtain results as per the objectives of the
study which are described below.
1.6.4.1 Percentage change ratio
Percentage is used to measure the changing position of different amount. The
following formula is used to find out the annual percent change.
Amount of this year −Amount of last year
Annual percentage change= Amount of last year

1.6.4.2 Loan Deposit Ratio

This loan deposit ratio (LD Ratio) describes relationship between deposit and loan.
Similarly, this ratio can be calculated dividing the loan by deposit.
Loan
LD Ratio= Deposit
1.6.4.3 Growth ratio
The growth ratio represents how well the commercial banks are maintaining
their economics and financial position. Higher the ratio batter performance of the
bank and vice-versa. For calculation of growth rate, the following formula is used.
Dn=D 0 ¿

Where, Dn= Total amount in nth year

D0= Total amount in initial year

g = Growth rate of amount

n = Total no. of years during the study period.
The following ratios are calculated by using the formula of growth rate:
i) Growth ratio of total deposits
ii) Growth ratio of loans and advances

1.6.4.4 Trend analysis

The general tendency of the time series data to increase or decrease or stagnate
during a long period of time is called simply trend. Under this, following subtopics
have been presented.
i. Trend analysis of total deposit and forecast for next three years.
ii. ii. Trend analysis of total lending (loan and advances) and forecast for next
three years.
Simple linear trend line of the form y = a + bx is used where x and y are
considering variables. Here X denotes time in years. „b‟ measures the increasing
and decreasing rate of Y. Y includes total deposit and total lending. Here, method
of least square is used for analyzing the trend of deposit and lending. It provides
basis for obtaining the line of best fit in the series.
1.6.4.5 Coefficient of correlation
 It describes and identifies the relationship between two or more variables. Karl
Pearson’s coefficient of correlation has been used to find out the relationship
between deposit and loan. To find the co-efficient of correlation between above
variables, this formula has been used.
∑ ( x−x ) ( y− y )
√ Σ ( x−x ) 2 2
Σ( y − y)

Where, x = x−x = Deviation taken from exact A.M. of X series.

y = y− y= Deviation taken from exact A.M. of Y series.
x = A.M. of X series

y = A.M. of Y series

The probable error (P.Er.) is calculated by using the formula.

1−r 2
P.Er. =0.6745×
√n
Dhungana, B. R. (2011). Impact of bank‟s deposit in economic growth of Nepal. Journal of Finance and
Management Review, 2(1): 186-195.

Maharajan, S. (2008). Deposit mobilization of commercial banks in Nepal. An Unpublished Masters

Level Thesis, submitted to Shanker Dev Campus, Tribhuvan University, Kathmandu

Shrestha, P. (2014). Liquidity and credit management practices of commercial banks in Nepal. An
Unpublished Masters Level Thesis, submitted to Shanker Dev Campus, Tribhuvan University,
Kathmandu.