A CASE STUDY ON LOAN MANAGEMENT SYSTEM

OF NMB BANK LIMITED

A Project Work Report Proposal

Submitted By: Submitted To:

Puskar Dahal The Faculty Of Management
St. Lawrence Collage Tribhuvan University
T. U Reg No. 7-2-788-109-2019 Kathamandu; Nepal

Project Requirement For The Degree of

Bachelor Of Business Studies (BBS)

December 12, 2023

 TABLE OF CONTENTS

Title Page I
Declaration II
Supervisor `s Recommendation III
Endorsement IV
Acknowledgement V
Table of Contents VI
List of tables VII
List of Figures VIII
List of Abbreviations IX

CHAPTER-1 INTRODUCTION 1
1.1 Background of the study 5
1.2 Profile of NMB Bank Ltd 3
1.3 Objectives of the study 4
1.4 Rationale of the study 5
1.5 Review of Literature 6
1.5.1 Conceptual Review 6
1.5.2 Review on Related Studies 7
1.6 Research Methodology
1.6.1 Research Design 15
1.6.2 Population and Sample 15
1.6.3 Nature and Sources Of Data 15
1.6.4 Instrument And Tools 18
1.6.5 Data Analysis Tools 18
1.7 Limitation Of Tools 20

CHAPTER-2 RESULTS AND ANALYSIS 21

2.1 Data Presentation 21

2.1.1 Various Types Of Loan Provided by the Bank 21
2.1.2 Loan Lending of NMB in Different Sector 24
2.1.3 Total Deposit Composition of NMB Bank Ltd 25
2.1.4 Correlation between Deposit and Loan of NMB Bank Ltd 26
2.1.5 Loan Approval Process Of NMB Bank Ltd 27
2.2 Analysis of Results 32
2.3 Major Findings 34

CHAPTER-3 SUMMARY AND CONCLUSION 34

3.1 Summary 34
3.2 Conclusion 34

REFRENCES
APPENDICES
APPENDIX - I
A PROPOSAL ON A STUDY ON LOAN MANAGEMENT
SYSTEM OF NMB BANK LIMITED
1.1 Background of the Study

As we know, loan is money given to someone for specific time on the basis of maturity
period the bank charges different interest rate for different sectors. The granting process of
loan is done after the study about the person that the loan will be repaid together with
interest or not. There are good as well as bad borrowers in the society. Thus, the bank or
institution always keeps some probability that the borrowers will not pay when a bank grants
credit.So,every institution in our country or in the world provides loan by studying some
stages. Loan approval is one of the major issues for research.

.Loan is money given to some people for a specific period of time on the basis of maturity
period the bank charges different interest rate for different store. The approving authority
approves loan only after being convinced that the loan will be repaid together with
interest.Structure of loan approval system is the system which includes all the steps from the
application for the loan to it's achievement by borrower. There are many processes to
approve the loan. Normally, a borrower required document. Through the document
submitted given various information. Normally such an interview takes place for the bank
purchase.

The price of loans and the interest rate spread in our country were relatively high for a long
period limiting thus the access to capital and inhibiting economic growth. Although there
has been a trend towards lower lending rates and narrower spreads in recent years, they are
still relatively high. Until now, the factors that determine lending rates and interest rate
spreads are usually analysed with economic intuition, through expert opinions and by
studying the dynamics of certain categories, which are usually considered to influence the
interest rate policy of the banks. These factors includes the low level of savings and
consequently the low supply of loans, insufficient competition in the domestic banking
system, the inefficiency and low profitability of banks, uncertainty in the economic
environment, the inherited low quality of loan portfolios, institutional limitations, etc.

NMB Bank Limited licensed as ‘A’ class financial institution by Nepal Rastra Bank in May
2008 has been operating in the Nepalese Financial market for over twenty years and in one
of the leading commercial banks in the banking industry. The alliance with FMO positions
the NMB Bank in becoming the market leader in managing environmental & social risks and
the leading player in renewable energy and agribusiness. To establish ourselves as a leader
 in banking by providing a range of financial services suitable to the needs of the market with
high priority on customer care while simultaneously embracing the interests of all
stakeholders and value of a good corporate citizen.

1.2 Statement of the Problem

All the above contents explain here the importance of loan management system of the bank.
The important of this analysis is equally even from every aspect shareholders analyze these
statements to have information about the bank. Similarly shareholder shows great concern
about the overall strength and weakness of the bank. The study tries to seek answer to the
following question:

 To analyze the loan management system of NMB Bank Limited.

 To identify the relationship between loan and deposit of NMB Bank Limited.

1.3 Theoretical Framework

Review of literature is a way to discover what the researcher in the area of our problems has
uncovered and also to avoid investigation problems that has been definitely answered. For
preparing this report, the researcher uses different books, reports and views of scholars,
which helps to present clear objectives of the study.

Van Horn (1976) states that investment may be defined as the purchase by an individual
institutional or investor of financial or real assets that risk assumed over some of investment
period.

Cheney and Moses (2001) states that an investment is commitment of found made in the
exception of some positive rates of return. If the investment is properly undertaken the
return will be commensurate with the risk the investors assumes..

Sharp and Bailey (2001) states that the initial steps, selling investment policy, involve
determining the investor's objectives and the amount of his or her invest able wealth,
because there is a positive relationship between risk and return for sensible investment
strategies, it is not appropriate for an investor to say that his or her objective is to make a lot
of money.

Agrawal (2005) states that field work assignment and report writing" provides practical
guidance to the field work and report writing. This is the basic guide book for this field
work. This book provides practical knowledge about how to write field work and report.
Fisher and Jordan (2006) states that, the investment is a commitments of funds made
in the expectation of some positive rate of return. If an investor is properly
undertakes the return will commensurate with the risk investor assumes..

1.4 Objectives of the Study

The general objective of this study was to examine the loan management system of NMB Bank
Limited, with an emphasis on performance of core business operations of banks. The main objective of
this project work report is to analysis the loan management system of the bank. The objective of the
study can be highlighted on the following points which are mentioned as below :

 To analyze the loan management system of NMB Bank Limited.

 To identify the relationship between loan and deposit of NMB Bank Limited.

1.5 Rationale/Significance of Study

If you are looking to finance your next deal with a traditional lender, you need an updated
pre-qualification letter to get things going. Most real estate agents will not even start the
process unless they have a letter in their possession. Sending a letter you got six months ago
does you no good. You need a lender or mortgage broker to verify updated information that
you provide them. This may seem like a burden on your end, but it is an essential part of the
lending process. If you are unsure of what you need to provide or how the initial stages of the
loan approval process works, there are the three main steps to keep in mind.

1.6 Limitations of the Study.

The study will base on the following limitations.

 The study will be concerned onlyloan approval

system.

 These studies will be used only simple statistical tools for data presentation and analysis..

 This study will covered only the five year data beginning from 2075/76 to 2080/81.

⚫ This study will be based on secondary data.

1.7 Methodologies of the Study

Research methodology reflects how the data are presented by using various tools and
techniques. It is also a main part of a report as it shows how clearly and effectively the
researcher has presented the report. The main methods that will be used for the study in
order to prepare this report will follow::

1.7.1 Research Variables

While preparing this report, many research variables will be used such as various types of
various types of loan, will be used to explore the bank entitled on loan management system
of NMB Bank Limited..

1.7.2 Research Design

Research Design is a master plan, regarding the method and procedure of investigation.

Analytical and descriptive research designs will be used to invest the research objectives.

1.7.3 Population and Sample

For the purpose of the study it would not possible to collect information and data from the
all organization during the short period. Therefore, the researchers will have chosen entitled
on loan management system of NMB Bank Limited. There are 20 commercial banks in
Nepal but the researcher will have done NMB Bank Limited.

1.7.4 Sources and Techniques of Data Collection

While preparing this report data will be collected from secondary sources. To analyze
profitability analysis, the researcher used quantitative data. Data collection techniques used
by secondary collection methods, which will presented below:

A. Secondary Data

The data which is not originally collected but rather obtained from other sources call

secondary data. They are ready made and collected by other already. They obtained from

following
sources.
 Annual report

 Balance sheet

 Provided data published from bank

 Websites

1.7.5 Data Presentation and Analysis Tools

The data are processed, tabulated and graphed to analyze and achieve objectives of the
study. Some of the tools used in this study are as follows:

 Table

 Figure

 Bar-diagram

 Co-relation

1.8 Report Structure

The present study has been organized into 3 chapters. They are whole report summarized by
listed below :

Chapter- I: Introduction

The first chapter includes background, profile of organization, objectives, rationale, review,
methods and limitations.
Chapter-II : Results and Analysis
The second chapter included data presentation, analysis and results and findings.
Chapter-III: Summary and Conclusion
The third chapter includes summary and conclusion.
Lastly, bibliography and appendices are added at the end of this report.

1.9 Time Frame and Work Schedule

Topic selection 3 days
Proposal writing 4 days
Data collection 5 days
Data presentation and analysis 7 days
Preparation of report 5 days
Proof-reading 4 days
Setting and printing 4 days
Review of literature 3 days
Total 35 days

REFERENCES

Van Horn, W. (1976). Fundamental of Corporate Finanace. New York: McGraw Hill

Charles J.P (1988) Business Statistics and Mathematics. New York : MC Graw Hill Publishers

https://www.nmbbank.com.np

https://www.nrb.org.np

https://www.wikipedia.com

Annual Report of NMB Bank Ltd 2018/19 to 2023/24 A.D