STUDY ON DEPOSIT ANALYSIS OF NABIL BANK

A Project Proposal

Submitted by
RAKESH KUMAR YADAV
TU Registration No:7-2-25-935-2019

Submitted to
Research Department
Tribhuwan University
Kathmandu

In a Partial Fulfillment of the requirement for the degree of

BACHELOR OF BUSINESS STUDIES (BBS)

NEPAL COMMERCE CAMPUS

New Baneshwor, Minbhawan Kathmandu, Nepal

2024
INTRODUCTION
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.

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.”

2. Profile of Nabil Bank

A commercial bank is a financial institution which collects saving from many persons and
institutions and provides credit or loan facility to different industrial and commercial
business. Commercial banking business consists of changing cash into bank deposit and bank
deposit into cash, transferring bank deposit form one person or institution to other, giving
bank deposit in exchange for cheque, bills of exchange,
government securities etc.

Nepal Bank Limited established in 1994 BS is the first commercial bank in Nepal. Commercial
banks perform various functions.Among them, accepting various types of deposit is the main
function of commercial banks. Commercial banks are directly related with the people and
institution. The commercial bank is an important bank. Its function is very attractive for
people. In Nepal the commercial bank perform the following functions. Of the many function
of the commercial bank acceptance of deposits is one of them. The bank allows for opening
the three types of accounts to accept deposit for their customers. They are current, saving
and fixed deposit account. People can collect their money in one of the three as their need.
But the interest is given to the saving and fixed account. The commercial bank performs the
important function of accepting all sorts of deposits. It earns profit by investing that money
in another place.

Another function of the commercial bank is to provide loan. A commercial bank provide loan
to a person, company and institution etc. A bank can earn a lot of profit from it. A bank is
capable of gain benefit in its banking development by receiving the interest as per law and
its internal policies. It provides the loan by accepting the security of debtor. A bank flow the
loan against a third person guarantee or with the pledge of the third person. A bank
provides the loan on basis of agreement or deed of loan. It provides loan on basis of the
following deed securities:

 With the pledge of goods, .and pledge of gold and silver.

 With the security of immovable property
 With the security of other similar goods.

Nabil Bank Limited (Nabil) commenced its operation on 12 July, 1984 as the first joint
venture bank in Nepal, Dubai Bank Limited. Dubai (Later acquired by Emirates Bank
International Limited,Dubai) was the first joint venture partner of Nabil. Currently NB
(international) limited. Ireland is the foreign partner. Nabil Bank limited had the official
name Nepal Arab Bank Limited till 31st December 2001. Nabil is the pioneer in introducing
maims innovative products and marketing concept in banking sector of Nepal with 15
branches and 2 counters in all major cities. It is the only bank having its presence at
Tribhuvan International Airport of the country. Also, the number of outlets in the country is
the highest among the joint venture and private banks operating in Nepal. Success of Nabil is
a milestone in the banking history of Nepal as it paved the way for the establishment of
many commercial banks and financial institutions.

Nabil, as a pioneer in introducing many innovative products and marketing concepts in the
domestic banking sector, represents a milestone in the banking history of Nepal as it started
an era of modern banking with customer satisfaction measured as a focal objective while
doing business.Operations of the bank including day-to-day operation and risk management
are managed by highly qualified and experienced management team. Bank is fully equipped
with modern technology which includes ATMs, credit cards, state-of-art, world-renowned
software from Infernos Technologies System, Banglore, India, Internet banking system and
telebanking system. Nabil provides a full range of commercial banking services through its
outlets spread across the nation and reputed correspondent banks across the globe.
Moreover, Nabil has a good name in the market for its highly personalized services to the
customers. At the time of commencement it had Rs 100 million as Authorized Capital. The
range and scope of modern banking services the bank has been providing is an example to
its commitment towards customer satisfaction. It is this commitment that has helped the
bank register quantum growth every year. And the bank is confident and hopeful that it will
be able to retain this trust and move even future towards its mission of becoming one of the
leading banks of the industry.

Vision
Nabil Bank Limited run with a vision to be financially sound, operationally efficient and keep
abreast with technological developments.

Mission
The bank desire to be one of the leading banks fulfilling the interest of stakeholders and also
aims to provide total customer satisfaction by way of offering innovative products and by
developing and retaining highly motivated and committed staff. It directs all its efforts to
move ahead with increased profits. The following mission statement is a guide to meet the
vision of the bank:
 Be one of the leading banks in terms of deposit, profitability, productivity and
innovation.
 Aim at total customer satisfaction by rendering efficient and diversified financial
services through improved technology.
 Build a highly motivated and committed term of staff by nurturing a good work culture
to achieve superior individual performance aiming to enhance organizational
effectiveness.
 Be the place of pride to all its stakeholder.

Core Values of the Bank

 Customer Focus
 Shareholder prosperity
 Employee growth

2.1 Statement Of Problems

As we know that the main objective of any business organization e.g. Bank is profit
maximization. Deposit mobilization is the key factor to attain this objective: therefore, if the
bank fails to employ its funds suitably it is not possible to minimize profit. A bank has to
make decisions with a framework of statutory requirements of credit regulation by central
bank, as well as the national objectives that are determined in the matter of the provision of
credit from time to time. What is the trend of risk and return pattern along the studied time
horizon.

The problem of the Nabil Bank related to saving and deposits are as follows:
 What is the real and adjusted nature of EPS, BVPS etc?
 Is Nabil Bank common stock really suitable for investment?
 What is nature of ROE, EPS, P/E ratios growth is equity etc?

3 Objective of the study

The main objective of the study is to fulfill the partial requirement of T.U to complete BBS 4th
years project. The objective of this fieldwork is to analyses deposits collected in NABIL. The
study intends to present a brief and clear picture of deposit and its utilization. The objective
of the study includes.

 To find out deposit trend of NABIL bank.

 To analyses the cost of deposit
 To analyses whether the deposits are being properly utilized or not

4 Rational of the study

Deposit collection is the major function of all commercial banks, which help to carry out
almost all transaction of the bank. Mostly among the various deposit features provided by
commercial banks, fixed and saving deposit are considered to be more important In the case
of term deposit although the banker pay interest (longer the period higher the interest).

 To find out the position of Nabil Bank

 To find out the strength and weakness of Nabil Bank
 To find out the marketing style and public relation of the bank.

5. Review of Literature

Deposit collection is one of the main features of commercial bank. A commercial bank
receives deposit in different accounts namely current, fixed and saving. These are the direct
deposits. When a bank receives cash it grants a right to the depositors to withdraw it
whenever they like Nepal Banijya Bank Act has regulated all the deposit 2031. The act
specifies “Deposit” means amount deposited in current, fixed and saving deposit account of
bank or financial institutions.Among many functions of a commercial bank the main function
is deposit function, which all the commercial banks perform, in simple terms; deposit is a
function of collecting surplus from savers.

Conceptual Framework: Funds Allocation and Saving Deposit Mobilization.

Investment

Deposit Loan and Advances

Assets Purchased

6. Research Methodologies
A research methodology helps us to find out accuracy, validity, and suitability of any
particular study. The research methodology used in present study is briefly mentioned
below:

6.1 Research Design

The research methodology is the process of arriving to the solution of the problems through
planned and systematic dealing with the collection, analysis and interpretation of facts and
figures. As the research entirely considers about the about “Deposit Analysis of NABIL Bank
Pvt Ltd” The main purpose of this study is to show deposits and its utilization in NABIL with
its financial positions, collection and uses of funds, its prospects and its position in context of
Nepal as well as to recommended suggestions for its improvements. Those research
methodologies have been used which proves helpful to deposit analysis. For the purpose of
achieving the objective, the following methodology is used. The data has been collected by
acquiring various kinds or reports, bulletins and journals from the organization. Similarly
data has been acquired from NRB also.The study report is based mostly on secondary
information of NABIL. In addition to this, reference has been made in library consult, class
lectures, Related books of banking, financial management and accounting during the
preparation of this study.

6.2 Population and sample

The 28 commercial banks of the country Nabil Bank Ltd has been chosen and their
performances have been analyzed. Due to Lack of Penal access study mainly depends on the
balance sheet prepared by Nabil Bank Ltd, which is the secondary source. Nabil Bank Ltd has
been selected for the present study. Financial statement of this bank for the last five years
( 2075/76 to 79/80) has been taken as the sample for this purpose.

6.3 Type of Data

For the preparation of this report different kinds of books are followed. In this report, all the
data collected is secondary in nature. Almost all the data has been collected form published
annual reports, brochures etc. Mostly all the data are collected from the concerned bank.
Secondary Data Source: In this study, the main source of data is secondary which are
collected from pre-published data sources.The financial data from the published documents
and audited financial statements were manually extracted into the computer files of
Microsoft Excel program which acted as master database file. The data was refined further
into spreadsheets to carry out financial ratio calculation and graphical illustrations through
mathematical functions and Chart Program of the Excel program.

6.4 Data Processing Techniques

The data collected from the above stated sources has been classified tabulated and
interpreted for easier study. The data collected are classified, tabulated and arranged in
manner to make it easily understandable with the use of tables in chronological order. After
classification the data is tabulated.

6.5 Techniques of Analysis and Tools

Financial ratios are the major tools used for the descriptive analysis of the study. In addition
to the financial tools, simple statistical tools are also used. Financial Ratio Analysis tools are
used to determine the performance of the banks in the framework components. These
ratios are categorized in accordance of the components. Following category of key ratios are
used to analysis the relevant components in terms.
I. Tables
II. Bar Diagrams
III. Average
IV. Percentage
V. Financial Ratio

Financial Analysis is the process of identifying the financial strengths and weaknesses of the
firm by properly establishing relationship between the items of balance sheets, which
represents snapshot of the firm’s financial position at a momentin time and next, income
statement, the depicts a summary of the firm’s profitability overtime ( Van Horne and
wachowicz, 2003). In financial analysis, ratio is used as a benchmark for evaluating the
financial position and performance of a firm. Financial Analysis is a technique of answering
various questions regarding the performance of a firm in the past, present and future. As
financial analytical tools, following ratio will be used.

Return on Assets = Net Income

Total Assets

Return On Equity= Net Income after Tax available to shareholders

Total Equity Shareholders

Earning Per Share (EPS) = NPAT- Preference dividend (If any)

Total no. of Equity shares

Mean (X) = X
N
Where,
_
X = Mean of the Value

X = Summation of the Value

N = Number of Observations

7. Limitation of the study

The study does not present detailed analysis of deposit in NABIL due to lack of time relevant
data and resources. This study is limited to the information that was available from the bank
and other sources. It has different limitation and constraints which are presented as bellows:
 This study depends upon the management of deposit of Nabil Bank.
 This study has mainly been conducted on the basis of secondary data such as annual
report of Nabil Bank, Nepal Rastra Bank directives, BFI Act, Journals, Magazines and
books.
 The study has covered only the period of five years.
 This report result may not be applicable for other institutions.
 The report is based on the limited time and resource.
8. Report Structure

This report has found to be difficult to understand and create confusion if it has not
partition into various heads. For our convenience, the entire these has been
segregated into five parts. They are mentioned as bellow:

The whole study is divided into five different chapters.

Chapter- I: Introduction

This chapter describes the background of the study. It has served orientation for
readers to know about the basic information of the resources area, various problems
of the study, objectives of study, scope of the study, and limitation of the study and
chapter plan of the study. Review of Literature Research methods.

Chapter- II: Results and Findings

This chapter analyzes the data related with study and presents the findings of the
study and also commend briefly on them. Data processing, data analysis and
interpretation are given in the chapter and there is use of techniques relating to
analysis such as ratio, descriptive expression, diagrams and so fourth.

Chapter- III: Discussions, Conclusion

On the basis of the result from data analysis, the researcher concludes about the
performance of the concerned organization in terms of liquidity management. This
chapter is devoted to the summary of the research, conclusion derived on the basis
of data analyzed and the recommendations for improvement to the concerned
organization.