DEPOSIT POSITION OF NEPAL SBI BANK LIMITED

A Project Work Report

Submitted by
Priyanka Jha
T.U.Regd.No.: 7-2-122-17-2019
Exam Roll no.: 701220018
Campus Roll no.: 27/076
Universal Academy College, Janakpurdham

Submitted to
The Faculty of Management
Tribhuvan University
Kathmandu, Nepal

In Partial fulfillment of the requirements for the degree

of BACHELOR OF BUSINESS STUDIES (BBS)

Janakpur, Nepal
July, 2024
 ii

DECLARATION

I hereby declare that the project work entitled “DEPOSIT POSITION OF NEPAL SBI
BANK LIMITED” submitted to the Faculty of Management, Tribhuvan University,
Kathmandu is an original piece of work under the supervision of Mr. SANTOSH
THAKUR, faculty member, UNIVERSAL ACADEMY COLLEGE, JANAKPUR,
and is submitted in partial fulfillment of the requirements for the degree of Bachelor of
Business Studies (BBS). This project work report has not been submitted to any other
university or institution for the award of any degree or diploma.

Priyanka Jha

Universal Academy College

July, 2024
 iii

SUPERVISOR’S RECOMMENDATION

The project work report entitled “DEPOSIT POSITION OF NEPAL SBI BANK
LIMITED” submitted by PRIYANKA JHA of UNIVERSAL ACADEMY
COLLEGE, JANAKPURDHAM, is prepared under my supervision as per the
procedure and format requirements laid by the Faculty of Management, Tribhuvan
University, as partial fulfillment of the requirements for the degree of Bachelor of
Business Studies (BBS). I, therefore, recommend the project work report for evaluation.

Mr. Santosh Thakur

Universal Academy College,
Janakpurdham,
July, 2024
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ENDORSEMENT

We hereby endorse the project work report entitled “DEPOSIT POSITION OF NEPAL
SBI BANK LIMITED” submitted by PRIYANKA JHA of UNIVERSAL ACADEMY
COLLEGE, JANAKPURDHAM, in partial fulfillment of the requirements for the
degree of the Bachelor of Business Studies (BBS) for external evaluation.

Ambika Yadav Mr. Bimal Kishor Yadav

Research Committee Principal
July, 2024 July, 2024
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ACKNOWLEDGEMENTS

This report has been prepared to fulfill the partial requirements for the Degree of
Bachelor of Business Studies (B.B.S), Tribhuvan University, Nepal. In the process of
preparation for this Term Paper, I got a lot of inspiration, cooperation, and suggestions
from various people.

Firstly, I owe a debt of gratitude to my respected adviser Mr. Santosh Thakur, Lecturer of
Universal Academy College for his valuable support and suggestions in the process of
preparation of this thesis. I am extremely indebted to their efforts despite their busy
schedule.

I am also indebted to my respected Chairman, Principal, and all teachers of Lincoln

College, who have assisted from their respective sectors. I am also thankful to all the
administrative staff of Universal Academy College, Janakpurdham.

I would like to express hearty thanks to all the members of my family who provided
regular inspiration and continuous contributions to my success.

Thanking You

Priyanka Jha
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Table of Contents
Title page...................................................................................................................i
Declaration................................................................................................................ii
Supervisor Recommendation...................................................................................iii
Endorsement….........................................................................................................iv
Acknowledgement….................................................................................................v
Table of contents…...................................................................................................vi
List of Tables….......................................................................................................vii
List of Figures…....................................................................................................viii
Abbreviations…........................................................................................................ix

CHAPTER I INTRODUCTION...............................................................................1
1.1 Background..................................................................................................1
1.2 Profile of Nepal SBI Bank Ltd. (NSBL).......................................................4
1.3 Statement of the Problems...........................................................................5
1.4 Objectives.....................................................................................................5
1.5 Rationale......................................................................................................6
1.6 Review of Literature.....................................................................................6
1.7 Research Methods........................................................................................9
1.8 Limitation of the Study...............................................................................10
CHAPTER II RESULTS AND ANALYSIS.........................................................11
2.1 Data Presentation......................................................................................11
2.1.1 Deposit Position of Nepal SBI Bank Ltd................................................11
2.1.2 Growth in Deposit Fund of Various Years.............................................12
2.1.3 Current Deposit to Total Deposit Ratio:................................................13
2.1.4 Saving Deposit to Total Deposit Ratio...................................................14
2.1.5 Fixed Deposit to Total Deposit Ratio.....................................................15
2.2 Results of Case Study.................................................................................16
2.3 Major Findings..........................................................................................17
CHAPTER III SUMMARY & CONCLUSION......................................................11
3.1 Summary....................................................................................................18
3.2 Conclusion.................................................................................................18
BIBLIOGRAPHY
APPENDICES
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LIST OF TABLE

1. Deposit Position of NSBL of Various fiscal years 11

2. Growth on Deposit Collection 12

3. Current Deposit to Total Deposit Ratio 13

4. Saving Deposit to Total Deposit Ratio 14

5. Fixed Deposit to Total Deposit Ratio 15

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LIST OF FIGURE

1. Deposit position of Nepal SBI Bank Ltd. 12

2. Current Deposit to Total Deposit Position 13

3. Saving Deposit to Total Deposit Position 14

4. Fixed Deposit to Total Deposit Position 15

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ABBREVIATION

ABBS - Any Branch Banking System

ATM - Automatic Teller Machine

NSBL - Nepal SBI Bank Ltd.

SBI - State Bank of India

NRB - Nepal Rastra Bank

NBA - Nepal Banker’s Association

L.C - Letter of Credit

CDs - Certificates of Deposits

BBS - Bachelor of Business Studies

T.U - Tribhuvan University

Nrs. - Nepalese Rupees

FD - Fixed Deposit

Ltd. - Limited

CEO - Chief Executive Officer

COO - Chief Operating Officer

CFO - Chief Finance Officer

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CHAPTER I

1. INTRODUCTION
1.1 Background
Generally, bank is an institution which accepts deposits, makes business loans, and offers related
services. Commercial banks also allow for a variety of deposit accounts, such as checking,
saving, and time deposit. There institutions are run to make a profit and owned by a group of
individuals, yet some may be members of the Federal Reserve System.

According to Scholars, “The bank is defined as factory of money for credit where it does not
purchase goods and sells it rather produces credit inform of deposit and sells it inform of loans.”

According to C.R. Crowther, “A banks collects money from those who are saving it out of their
income and lends this money to those who required it.”

Thus in conclusion, we can say that bank is an organization which deals with the monetary
transactions for the mobilization of idle money in productive sectors, is essential for the
development of nation and this study will be equally useful to the other readers, students of
related subjects and other people who are concern with banking field.

1.1.1 History of Banking in Nepal

The history of banking in Nepal dates back to the year 1937 AD with the establishment of Nepal
Bank Limited as the first commercial bank in Nepal. It was established as a semi-government
bank with METALLIC COINS worth NRs 10 million as the authorized capital. Banknotes in
Nepal weren’t introduced up until the mid-1940s. It was in the year 1945 that the earliest
banknotes were issued by the treasury “Sadar Muluki Khana”. These notes were signed by a
“Khajanchi”, the head of the treasury who also was a high Hindu Priest.

Later in the year 1955, Nepal Rastra Bank Act was formulated for a better banking system and
Nepal Rastra Bank was established in 1956 as the Central Bank of Nepal accordingly. After
this date, the banknotes were issued by the Central Bank with the signatures of the governors of
the institution. Till the 1980s, the banking sector was wholly owned by the government, with
Agriculture Development Bank, Rastriya Banijya Bank, NBL and NRB being the pillars of
financial institution in Nepal.
 2

1984 saw the start of the private banking industry with the establishment of Nabil Bank and the
introduction of foreign banks such as the Nepal Arab Bank, Nepal Indosuez Bank and Nepal
Grindlays. The banking sector in Nepal has faced many hurdles and hindrances. It has
undergone various political conflicts and instability. But today, it stands more liberalized and
modernized. There are various types of banks working in the modern banking system in Nepal.
As per the list issued by NRB as of Mid-June 2018, the modern banking sector includes 28
Commercial Banks, 33 Development Banks, 25 Finance Companies, and 63 Micro Credit
Development Banks.

1.1.2 Commercial Bank in Nepal

The commercial banks are those banks which are established to accept deposit and grant loan to
the industries, individual and traders with a view to earn profit. Apart from financing them also
render services like collection of bills & cheque, safe keeping of valuables, financial advising
etc. to their customers.
According to the commercial bank act 2031,"Commercial banks are those which are established
for specific propose like development Bank, cooperative etc. hence commercial bank is that
financial institution which deals in accepting deposits of persons & institutions & administrative
assistance to traders' individuals & business". There are 28 commercial banks in Nepal on data of
mid July 2018 of NRB which is presented in Appendix 1.

1.1.3 Functions of Commercial Banks in Nepal

The following are the important functions of the commercial banks:
1) Accepting deposits
Commercial banks accept a deposit of money made by different persons and institutions
mainly three accounts. It operates following types of deposit accounts.
a) Current account: The account where the customers can withdraw and deposit money at any
time according to the requirement is called current account.
b) Saving account: The account having some features of current account as well as fixed
deposit account is called saving account. In this account, the customers can withdraw the
amount from saving account through issuing cheque.
c) Fixed deposit account: The account where the amount is deposited in a bank for fixed
period is known as fixed deposit and can’t be withdrawn maturity.
 3

2) Granting loan
A commercial bank provides a loan to persons and institution productive purposes against the
security of patents, shares, debentures, gold, silver and other fixed properties..
3) Serving with agency functions
A commercial bank performs a number of agency services like payment to the creditors,
water, and electricity bills, subscriptions, insurance premium, etc. and collection from
debtors receiving dividends, interest and commission, etc. on behalf of the clients as per
outstanding instructions.
4) Exchanging foreign currencies
Various business persons frequently demand foreign currencies to conduct their foreign
trade. General individuals may also need foreign currencies for their foreign tour and study
programs. A commercial bank provides the necessary foreign currencies on the permission of
Nepal Rastra Bank.
5) Transfer of money
Commercial banks transfer money from one place/person to another in a fast and safe means
of a different instrument of payment. Telegraphic transfer, travelers cheque, credit cards,
bank drafts, electronic transfer, etc. are the different instruments used by the banks to transfer
money.
6) Issuing capital
Commercial banks also help trading and industrial companies by issuing or providing capital
through the sale of shares, debentures, etc. by motivating the investors.
7) Creates credit
It is the most important function of the commercial bank. It can grant more amount of loan
than the deposits it gets. The process of granting more amount of loan by the bank than the
deposits it has on a given point of time is known as credit function of the commercial bank.
8) Collects credit instrument
The commercial bank accepts credit instruments such as cheques, bill of exchange and bank
drafts of its customer and makes payment against them. It facilitates the customers in settling
accounts.
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9) Opens letter of credit (L.C.)

Commercial banks provide a letter of credit facility to their clients. LC is a kind of guarantee
given to the supplier or exporter by the purchaser/importer as a deposit to provide such as
guarantee letter. This promotes the foreign trade dealing. Similarly, banks issue credit cards
to their clients at their request and assure the seller for the payment of what is purchased by
the customers.
10) Other functions
Commercial banks manage to keep gold, silver and other valuable property safely, avail
money by purchasing/accepting bills (specially of 90 days terms) and provide commercial
services like financing for transportation carriage, storage etc. These banks also activate all
the economic sectors by collecting savings and mobilizing capital for strengthening the
national economy.

1.2 Profile of Nepal SBI Bank Ltd. (NSBL)

Nepal SBI Bank Ltd (NSBL) is the first ever bank in Nepal rated “AA” by ICRA Nepal, and is a
subsidiary of State Bank of India (SBI). SBI holds 55% of ownership, Nepal Employee
Provident Fund (Karmachari Sanchaya Kosh) holds 15% and the balance 30% shares are held
with the general public. Established in July 1993, the Bank has completed 25 years of successful
operation in Nepal and has grown to a balance sheet size in excess of USD 1 billion.

NSBL, one of the largest overseas subsidiaries of SBI, is providing banking services in Nepal
from its 85 offices including 75 branches, 7 extension counter, and 3 regional offices. In terms of
the Technical Services Agreement between SBI and the NSBL, the former provides management
support to the bank through its expatriate officers including Managing Director who is also the
CEO of the Bank. Central Management Committee (CENMAC) consisting of the Managing
Director, Chief Operating Officer, Chief Financial Officer and Chief Credit Officer oversee the
overall banking operations in the Bank. The basic function of such bank is to accept deposits,
advancing loans, agency services, remittance and other several functions. Loan sectioning
procedure needs to be more & more precise and define in easy terms and condition. Nepal SBI
Bank Ltd provides the services to the different sector like entrepreneur, industries, weaker
section of society and several others who really need the services. It has accumulated large
number of clients due to its effective and balanced services.
 5

Nepal SBI Bank Ltd has earned glory of making available services to all top business houses and
tycoon of the country. As a result of that it has got one of the best positions in regard to joint
venture bank in Nepal exporter and importer of the country have created banking relationship
with bank which enhance the popularity prestige in international standards with the continues
support of our valued customers Nepal SBI Bank has made all round and quick progress in every
sphere of its operation.

1.3 Statement of the Problems

The concept of deposit collection is very essential for banking sectors as it is just like a
yardstick that determines its efficiency. Especially this bank is concentrating their business in
profitable area. Banks that fail to manage its deposit collection policy and its effective
mobilization turns out in its termination. The political environment of a country plays an
important role in the proper conduct of the Banks of the country. Political instability of our
country became the vital on influencing the major banking activities of commercial bank
nowadays. The study is carried out in order to look out comparative analysis of deposit trend of
Nepal SBI Bank Ltd as:
 What is the composition of the total deposits of Nepal SBI Bank during the past few
years?
 What is the trend and pattern of deposit of the bank during the past years?
 What is the growth rate of each deposit scheme of Nepal SBI Bank?
 What percentage of total deposit is invested in different sectors of Nepal SBI Bank as
loans and advances?

1.4 Objectives
The objective of the study is to find out the deposit collection resources, and mobilization of
collected fund of Nepal SBI Bank. I therefor list out objectives of case stud is following.
 To find out the deposit collection resources of NSBL.
 To analyzed the overall deposit position of NSBL.
 To analyze the deposit distribution of NSBL.
 To find out the changing situation of deposit offered by the bank.
 6

1.5 Rationale
This report is prepared to analyze the liquidity position of Nepal SBI bank. This report comprises
the date from 2007 to 2017. This would help the bank to observe the trend of the liquidity
position hold in those periods. Besides that, this study also evaluates the role of short term
obligation and the bank ability to pay the currently maturity obligation. Moreover, the study will
check the profitability of the bank. This will help the bank to take the corrective actions if there
are any errors on the past performance and the study aims to recommend correcting the division
if the standard has not been met.

1.6 Review of Literature

Literature Review is prepared in two parts, the theoretical part and the empirical part. The
theoretical part includes the major types of deposits, the cost of deposit mobilization,
Importance of deposit mobilization, the effects of poor deposit mobilization as well as factors
that affect deposit mobilization. The empirical part evaluates previous studies that were shown
on the area of factors determining commercial banks deposits.

1.6.1 Theoretical Review

For a nation economic development, banks have an important place. Banking institutions from
an important part of the money market and are vital in a modern developing society. Banking is
the life blood of modern economy. It may truly be said that modern commerce is so dependent
upon banking that any termination of banking activity, even for a day, would completely
paralyze the economic life of a nation.

Major Types of Deposit products

A deposit account is a current account, savings account, or other type of bank account, at a
banking institution that allows money to be deposited and withdrawn by the account holder.
These transactions are recorded on the bank's books, and the resulting balance is recorded as a
liability for the bank, and represent the amount owed by the bank to the customer. In the contest
of Nepalese financial institutions major types of deposits are:-

Savings accounts: - Accounts maintained by retail banks that pay interest but cannot be used
directly as money. Although not as convenient to use as checking accounts, these accounts let
customers keep liquid assets while still earning a monetary return.
 7

Term deposit/Fixed Deposit: - A money deposit at a banking institution that cannot be

withdrawn for a preset fixed 'term' or period of time. When the term is over it can be withdrawn
or it can be rolled over for another term. Generally speaking, the longer term the better the yield
on the money.

Call Deposit: - A call deposit account is a bank account for investment funds that offers the
advantages of both a savings and a checking account. Like a checking account, a call deposit
account has no fixed deposit period, provides instant access to funds and allows unlimited
withdrawals and deposits.

Recurring Deposit: - The concept of recurring deposit was developed to encourage the thrift
amount the people of fixed regular earning. In recurring deposit scheme, the depositor is
required to deposit the fixed amount in each installment and is repaid a fixed amount at
maturity.

The cost of Deposit Collection

Deposits constitute a vital source of funds required for banking business. The components of
deposit mix, such as fixed, current, and savings deposits, have their own risk-return profiles that
affect the profitability of banks. Average cost of deposits, which is a percentage of interest cost
to total deposits, can be used as an indicator for analyzing the cost or efficiency of deposits of
banks and the banks overall profitability. The higher the ratio, lower will be the productivity of
funds management and vice versa. A lower ratio has a positive impact on the banks
profitability.

Importance of Deposit in Banks

i. A source of investment
Intermediation function of banks plays a vital role in the efficient allocation of resources of
countries by mobilizing resources for productive activities. They transfer funds from those who
don't have productive use of it to those with productive venture. Savings are resources which
one decides to put aside for investment purposes and not for luxury. What people save,
avoiding consuming all their income, is called "personal savings". These savings can remain on
the bank accounts for future use or be actively invested in houses, real estate, bonds, shares and
other financial instruments.
 8

ii. Low cost

The success of the banking greatly lies on the deposit mobilization. Performances of the bank
depend on deposits, as the deposits are normally considered as a cost effective source of
working fund. Savings are a source of funds with low financial costs i.e., interest costs,
Compared to other commercial funds. With regard to financial costs, most of the institutions
apply a differentiated interest rate schedule, compensating for the higher administrative costs
with no or low interest rates on small savings and increasing them according to the size of the
deposit.

iii. A source of profit

According to (Varman, 2005) the ability of a bank‘s management and staff to attract checking
and saving accounts from business and individuals is an important measure of the bank‘s
acceptance by the public. Deposits provide most of the raw materials for bank loans and thus
represent the ultimate source of bank profits and growth.

iv. Economic Growth and Development

In addition to resource allocation good bank performance rewards the shareholders with
sufficient return for their investment. When there is return there shall be an investment which,
in turn, brings about economic growth. On the other hand, poor banking performance has a
negative repercussion on the economic growth and development. Poor performance can lead to
runs, failures and crises. Banking crisis could entail financial crisis which in turn brings the
economic meltdown.

Factors that affect deposit mobilization

The performance of commercial banks can be affected by internal and external factors these
factors can be classified into bank specific (internal) and macro- economic variables. The
internal factors are individual bank characteristics which affect the bank's performance. These
factors are basically influenced by the internal decisions of management and board. The
external factors are sector wide or country wide factors which are beyond the control of the
company. External and internal factors which affect in deposit mobilization are listed following.
 9

EXTERNAL FACTORS INTERNAL FACTORS

i. Inflation i. Information Technology
ii. Government laws ii. Competition among Banks
iii. Economic Development iii. Saving Interest Rate
iv. Individual Income iv. Number of Branches (Accessibility)
v. Money Supply v. Saving Mobilization strategy
vi. Investment

1.6.2 Reviews of Previous Studies

In last 3 years prior to this thesis, some students of B.B.S. programme have been found
conducting research about the Deposit Mobilization of Nepal SBI Bank. Some of them which are
supposed to be relevant have been reviewed and presented in this section.

Karki Barun, (2018) conducted a study in a topic of “Deposit Mobilization of Nepal SBI Bank”.
He collected the data of 5 year data in this bank. The study carried out with the following
objectives;
 To analyzed the overall deposit position of Nepal SBI Bank Ltd.
 To find out the general financial status of Nepal SBI Bank Ltd.
 To find out the changing situation of different deposit offered by Nepal SBI Bank.

Bhandari Shiva Hari, (2017) conducted a study in topic of “Deposit Position of Nepal SBI Bank
Ltd.” He studies on all the strength and threats on collection of deposit as well as deposit position
of Nepal SBI Bank Ltd and he carried out with some objectives which is list out following
 To analysis the deposit position of Nepal SBI Bank Ltd.
 To explain the changing position of deposit collection along with the interest rated in
last five years period of NSBL.
 To find out the deposit collection resources of NSBL.

1.7 Research Methods

This section illustrates the methodology that has been pursued to obtain the desired results as per
the stated general and specific objectives. Research methodology is the theoretical framework
that helps us to produce valid knowledge about the particular study that the researcher already
 10

proposed to engage, and shall be clearly presented the appropriate information on the basis of
understanding the existing reality of Challenges of deposit mobilization. Research methodology
covers the data analysis tools as well.

1.7.1 Research Design

A research design is the arrangement conditions, for the collection and analysis of data in a
manner that aims to combined relevance to the research purpose with economy in procedures. As
the research entirely consists about the deposit mobilization of Nepal SBI Bank Ltd., the main
purpose of this study are to show deposits and its utilizations in banks.
1.7.2 Data Collection Method
The study was mainly based on secondary data. These secondary sources of data were extracted
from annual reports of Nepal SBI Bank Ltd., of fiscal year 2070/71, 2071/72, 2072/73, 2073/74,
2074/75 and websites of NRB.
1.7.3 Data Analysis Tools
 Financial Tools
Financial analysis tools are one of the most efficient ways that can be used for ensuring
good profit from your investments. These financial analysis tools are useful for deciphering
both internal and external information related to a specific business organization.
 Statistical Tools
Mathematical concepts, formulas, models, techniques used in statistical analysis of random
data. In comparison, deterministic methods are used where the data is easily reproducible or
where its behavior is determined entirely by its initial stage and inputs.

1.8 Limitation of the Study

Although this study helps the students to gain knowledge by writing report practically it has
certain limitation. And only the secondary data is used and analyzed which could not disclose the
actual result. And being the first endeavor, the report can comprise some mistakes which may
cause to misinterpretation of the results. Limitation of the study is listed below:
 Analysis is based on the ratio and trend lines of the corresponding ratios only.
 Since the survey is of short period, the collections of data will not in detail.
 Reports basically depends on secondary data.
 It deals deposit position of Nepal SBI Bank Ltd only.
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CHAPTER II

RESULTS AND

ANALYSIS

2.1 Data Presentation

Presentation means the presentation of the collected data through table; figure etc. presentation is
the process of understanding the study or the report and calculating the opinion. Therefore, this
chapter focuses on presenting the data related to Nepal SBI Bank Ltd., deposit position and
utilization of fund. Likewise NSBL also as to collect the deposits and invest in different sectors
for the fulfillment of the company’s internal and external obligations and for the economic
development of country. The most essential factor is to gather and accept scattered savings of
people as deposit first and utilize it, the interest rate is another influence able factor.

2.1.1 Deposit Position of Nepal SBI Bank Ltd.

One of the main functions of commercial bank is to accept various deposits and make its
utilization in various other sources and gain profit from such utilization. The term “deposit”
represents the liability of the bank. Hence deposit may create either by customers or by bank
itself. It is created by the banks when the banks when the bank credits customers account in the
form of loans. Higher the volume of deposit, higher will be the volume of lending and
investment, which again generates higher volume of income.
Deposit position of Nepal SBI Bank Ltd., for the fiscal year 2075/76 to 2079/80
“Rs. In Million”
FY 2075/76 FY 2076/77 FY 2077/78 FY 2078/79 FY 2079/80
Total Deposits
42,658.58 51,628.22 65,213.52 81,664.55 95,216.42
1. Current 4,222.05 4,818.05 5,531.33 6,299.39 7,133.10
2. Saving 19,226.03 21,485.40 26,831.78 28,660.38 29,158.24
3. Fixed 15,256.30 19,129.48 23,019.30 41,776.67 44,444.60
4. Call Deposit 3,500.20 5,673.45 9,173.10 4,358.29 2,566.79
5. Margin Accounts 304 324.37 339.79 566.63 906.56
6. Overdue FD 150 197.47 318.22 3.20 7.13
Table No. 1 Deposit Position of NSBL of Various fiscal years
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In above table no. 1 shows the deposit rend of NSBL of various fiscal year in different deposit
scheme. There is increasing trend in deposit year by year. Total deposit position is Rs. 42,658.58
million at the end of Ashadh end 2076, Rs. 51,628.22 million at the end of Ashadh 2077, in FY
2076-77 it is increasing to Rs. 65,213.52 million, in FY 2077-78 it is increasing to Rs. 81,664.55
million and similarly in F 2078-79 its position is Rs. 84,216.42. We saw in FY 2079-80 is around
3 million is increasing which is less growth rate than previous year growth in deposit. We
express this figure of Total deposit in this line chart.

Total Deposits
100,000.00

80,000.00

60,000.00

40,000.00 Total Deposits

20,000.00

0.00
FY 2075/76FY 2076/77FY 2077/78FY 2078/79FY 2079/80

Fig No. 1 Deposit position of NSBL of various years

2.1.2 Growth in Deposit Fund of Various Years

Growth of deposit of NSBL presented in following table shows the deposit positions of Nepal
SBI Bank in good position.

FY 2075/76 FY 2076/77 FY 2077/78 FY 2078/79 FY 2079/80

Total Deposits 42,658.58 51,628.22 65,213.52 81,664.55 95,216.42
Growth
Amount - 8,969.64 13,585.30 16,451.03 13,551.87
Growth rate - 21.03% 26.31% 25.23% 16.59%
Table No. 2 Growth on Deposit Collection of NSBL

𝐺𝑟𝑜𝑤𝑡ℎ 𝑎𝑚𝑜𝑢𝑛𝑡
𝐺𝑟𝑜𝑤𝑡ℎ 𝑅𝑎𝑡𝑒 =
𝑃𝑎𝑠𝑡 𝑦𝑒𝑎𝑟 𝑡𝑜𝑡𝑎𝑙 𝑑𝑒𝑝𝑜𝑠i𝑡

Where Growth Amount = Present year total deposit- Past year total deposit
 13

2.1.3 Current Deposit to Total Deposit Ratio:

(Rs. in millions)
Fiscal Year wise Deposit position
Particular
FY 2076/77 FY 2077/78 FY 2078/79 FY 2079/80
Total Deposits 51,628.22 65,213.52 81,664.55 84,216.42
Total Current Deposit 4,818.05 5,531.33 6,299.39 7,133.10
Growth in Current Deposit - 713.28 768.06 833.71
Growth rate CD - 14.80% 13.89% 13.23%
Growth on Total Deposit - 26.31% 25.23% 3.12%
Ratio of Current Deposit on
0.093 0.085 0.077 0.085
Total Deposit
Table No. 3 Current Deposit to Total Deposit Ratio

From the table no.3 there is show the current deposit position and compare to total deposit of the
bank of various fiscal year. The trend of ratio of current deposit on Total deposit is in fluctuating
state. And growth rate of current deposit and total deposit also fluctuates. In the fiscal year
2076/77, the bank has the current deposit of 0.093 times of total deposit liability. In the year
2077/78 its 0.085 times, in 2078/79 its 0.077 times and in FY 2079/80 its 0.085 time.

100,000.00
90,000.00
80,000.00
70,000.00
60,000.00
50,000.00 Total Current Deposit
40,000.00 Total Deposits
30,000.00
20,000.00
10,000.00
FYFYFYFY
0.00
2076/77 2077/78 2078/79 2079/80
Fiscal Year wise Deposit position

Fig No. 2 Current Deposit to Total Deposit (Rs in Million)

From the above table and chart shows the current deposit status with total deposit position of the
bank. In this chart we conclude current deposit ratio is lower on all the year and there is need to
increasing current deposit ratio for the better performance in the financial performance, profit
earning.
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2.1.4 Saving Deposit to Total Deposit Ratio

(Rs. in millions)
Fiscal Year wise Deposit position with saving deposit
Particular
FY 2076/77 FY 2077/78 FY 2078/79 FY 2079/80
Total Deposits 51,628.22 65,213.52 81,664.55 84,216.42
Total Saving Deposit 21,485.40 26,831.78 28,660.38 29,158.24
Growth in Saving Deposit - 5,346.38 1,828.60 497.86
Growth rate - 24.88% 6.82% 1.74%
Saving deposit ratio 0.416 0.411 0.351 0.346
Table No. 4 Saving Deposit to Total Deposit Ratio

In above table no. 4 there’s show the saving deposit position and compare to total deposit of the
bank of various fiscal year. The trend of ratio of saving deposit on Total deposit is in fluctuating
state. And growth rate of saving deposit in decreasing rate. In the fiscal year 2076/77, the bank
has the Saving deposit of 0.416 times of total deposit liability. In the year 2077/78 its 0.411
times, in 2078/79 its 0.351 times and in FY 2079/80 its 0.346 time.

140,000.00
120,000.00
100,000.00
80,000.00
60,000.00
40,000.00

Total Saving Deposit

Total Deposits

20,000.00
0.00

FY FY FY FY
2076/77 2077/78 2078/792079/80
Fiscal Year wise Deposit position with
saving deposit

Fig No. 3 Saving Deposit to Total Deposit (Rs in Million)

In above figure we know, there is more deposit is deposit in saving deposit than other kind of
deposit. Saving deposit is interest bearing deposit skim, so that bank collects their deposit with
paying deposit.
 15

2.1.5 Fixed Deposit to Total Deposit Ratio

(Rs in Million)
Fiscal Year wise Deposit position with Fixed Deposit
Particular
FY 2076/77 FY 2077/78 FY 2078/79 FY 2079/80
Total Deposits 51,628.22 65,213.52 81,664.55 84,216.42
Total Fixed Deposit 19,129.48 23,019.30 41,776.67 44,444.60
Growth in FD - 3,889.83 18,757.36 2,667.93
Growth rate on FD - 20.33% 81.49% 6.39%
Fixed Deposi ratio 0.371 0.353 0.512 0.528
Table No. 5 Fixed Deposit to Total Deposit Ratio

In above table no. 5 there’s show the fixed deposit position and compare to total deposit of the
bank of various fiscal year. The trend of ratio of fixed deposit on Total deposit is in fluctuating
state. In the fiscal year 2071/72, the bank has the fixed deposit of 0.371 times of total deposit
liability. In the year 2072/73 its 0.353 times, in 2073/74 its 0.512 times and in FY 2074/75 its
0.528 time.

140,000.00
120,000.00
100,000.00
80,000.00
60,000.00
40,000.00

Total Fixed Deposit

Total Deposits

20,000.00
0.00

FYFYFYFY
2076/772077/782078/792079/80
Fiscal Year wise Deposit position with Fixed Deposit

Fig No. 4 Fixed Deposit to Total Deposit (Rs. In Million)

In above figure no. 5, we sows the fixed deposit ratio is higher on the ratio to total deposit. It is
increasing year by year continuously. Fixed deposit is 37.71%, 35.30%, 51.20% and 52.80% of
Total Deposit of the bank in FY 2076/77, FY 2077/78, FY 2078/79 and FY 2079/80
respectively.
 16

Fixed deposit are the higher interest rates deposit it means there is higher cost of fund on fixed
deposit and bank collets more funds from fixed deposit so that bank cost of fund is slide high.

2.2 Results of Case Study

From the information analyzed form above secondary data of NSBL, the bank has huge
fluctuation on its deposit position. Customers are willing to deposit on current deposit account
because of possibility in investment opportunities in comparison of other deposit account.
External environment analysis is involves in this identifying the present and future opportunities
and threats to from the forms principle constituents along with dimensions of the firms
economic, political legal, technological and social environment. Internal environment consists of
conducting financial areas of the firm to identify the strength and weakness of its operation.

Strength
 Established under joint venture and high level staffs are experienced in international market.
 Increasing branches network.
 Two Robert (Pari) is used on banking sectors first in Nepal.
 Well capital structure.
 Staffs are trained by parent company SBI Bank Ltd, Central office Mumbai.

Weakness
 Low deposit collection in Margin account then other deposit account
 Lack of sufficient working areas
 High cost of fund

Opportunities
 Employment opportunities due to increase of branches.
 Inward and outward remittance opportunities from India mainly and other country.

Threats
 Cut market competition.
 Small market size.
 17

2.3 Major Findings

 Total deposit on millions of NSBL is Rs. 42,658 in FY 2075/76, Rs. 51,628 in FY
2076/77, Rs. 65,213 in FY 2077/78, Rs. 81,6664 in FY 2078/79 and Rs. 95,216 in FY
2079/80. It shows that the total deposit of NSBL is increasing in every year.

 Total deposit is increasing by 19%, 21%, 26%, 25% and 17% in recent five fiscal years
FY 2075/76, FY 2076/77, FY 2077/78, FY 2078/79 and FY 2079/80respectively.

 Ratio of FD is 0.35, 0.37, 0.25, 0.51 and 0.53 times in last five fiscal years FY 2075/76,
FY 2076/77, FY 2077/78, FY 2078/79 and FY 2079/80 respectively it shows FD
collection is high and cost of fun is increasing but liquidity risk is decreasing cause FD is
more than one year time period.

 Saving Deposit Ratio is 0.42, 0.41, 0.40, 0.51 and 0.35 times in last five fiscal years FY
2075/76, FY 2076/77, FY 2077/78, FY 2078/79 and FY 2079/80 respectively it shows
saving account deposit ratio is medium level and it is in decreasing trend.

 The proportion of the saving deposit account is high in total deposit liability. So, it is
recommended that the bank should utilize the amount collected from the saving deposit
account carefully. It should be invested in the higher yielding areas.

 The key transaction costs affecting deposit collection is interest on saving deposits, rental
cost of branches and costs of stationary and printings.
 18

CHAPTER III

SUMMARY & CONCLUSION

The previous chapter presented the analysis of the findings, while this chapter deals with the
summary and conclusions based on the findings of the study. Accordingly this chapter is
organized into two subsections. The first section presents the summary while; the second
section presents the conclusions.

3.1 Summary
To get the more reliable and accurate information regarding the Nepal SBI Bank Limited. The
collection the various types of data such as annual report of various years, some websites of
banks, regulatory and other financial institutions. Saving/deposit amount and collection of fund
from various sources and it is clear from the information given that most of the saving /deposit
amount of cover. So, a deep study and analysis on the deposit position of Nepal SBI Bank
limited. It could be summarized that the deposit position of NSBL.

In this study has been based upon the objective to evaluate the Deposit position of Nepal SBI
Bank Ltd. also to study the trend of working progress of NSBL. The overall deposit of NSBL has
been capable for maintaining its short term solvency and overall efficiency.

3.2 Conclusion
Nepal is one of the least developed countries of the world. For most of the developing process, it
is financially depending upon the foreign countries. It is economically too weak. Thus, the
economic condition of the people is weak. In Nepal 85% of the people are depended upon
agricultural sector which is unable to provide full employment to the people. Nepal government
has to activate people in the nation’s development through overall industrialization of nation. For
this purpose, development of sound banking system is essential.

Ever, since the establishment of Nepal SBI Bank, it is playing a vital role to foster in the
economy of Nepal. Strong financial position of the organization is a must to survive, grow and
succeed in this world passing thought tumultuous changes. The crux of this fieldwork report is to
analyze the financial status of Nepal SBI Bank Ltd. with the help of ratio analysis.
 19

This study examined the challenges and prospects of deposit mobilization of Nepal SBI Bank
Ltd. Based on the result of descriptive and empirical analysis, the study had concluded the
following:
 The external factors such as Age Dependency Ratio, Money supply and Investment
and legal environment affects the operation and performance of financial institutions.
 The internal factors such as literacy about saving, quality customer service and
narrow scope of branch affects the total deposit.
 One of the main factors that affect the savings mobilization is the awareness of the
people. The more the people are conscious the higher will be the savings
mobilization.
 The key transaction costs affecting deposit mobilization is interest on saving deposits,
rental cost of branches and costs of stationary and printings.
 The difference in deposit mobilization among branches are convenience of bank
branches, quality customer services, and proximity of branches to job or home,
awareness of the society, convenient working hours, low cost /charges and General
appearance of office materials.
 20

BIBLIOGRAPHY

Adhikari Dev Raj and Pandey D.L, Business Reasearch Methods of Asmita’s Publication.

Bajracharya, B.C. (2053), Business statistics & mathematics, M.K. publishers and Distributors.

Brigham, Weston, Essentials of Managerial Finance”, Eleventh Edition, University Publishers,

USA.
Shekhar and Shekhar “Banking Theory & Practice”, Eighteenth Revised Edition, 1996.

Kothari, C.R., Research Methodology”, Mc. Grow Hill Company, second Edition.

Nepal Rastra Bank, Banking and Financial Statistics,

Karki, Barun (2018) A study on deposit mobilization of Nepal SBI Bank Limited.

Bhandari, Shiva Hari (2018) A study on deposit position of Nepal SBI Bank Limited.

Nepal Commercial Bank Act, 2031

Annual Reports of Nepal SBI Bank Ltd. FY 2076-77

Annual Reports of Nepal SBI Bank Ltd. FY 2077-78

Annual Reports of Nepal SBI Bank Ltd. FY 2078-79

Annual Reports of Nepal SBI Bank Ltd. FY 2079-80

Websites

Nepal Rastra Bank Websites, https://www.nrb.org.np/

Nepal SBI Bank Websites, https://nepalsbi.com.np/

Investopedia online e-sites https://www.investopedia.com/

Wikipedia websites https://en.wikipedia.org/wiki/Nepal_SBI_Bank

Blog Khalti websites http://blog.khalti.com/fintech-trends/brief-history-of-banking-in-nepal/

 21

APPENDICES
Appndix-1 List of Commercial Banks in Nepal
Operation Paid up
S. Date (A.D.) Capital
Name Head Office
N. (Rs.in Crore)
1 Nepal Bank Ltd. 1937/11/15 Dharmapath,Kathmandu 804.27
2 Agriculture Development Bank Ltd. 1968/01/21 Ramshahpath, Kathmandu 1393.79
3 Nabil Bank Ltd. 1984/07/12 Beena Marg, Kathmandu 804.32
4 Nepal Investment Mega Bank Ltd. 1986/03/09 Durbarmarg, Kathmandu 1064.56
5 Standard Chartered Bank Nepal Ltd. 1987/02/28 Nayabaneshwor, Kathmandu 801.14
6 Himalayan Bank Ltd. 1993/01/18 Kamaladi, Kathmandu 811.45
7 Nepal SBI Bank Ltd. 1993/07/07 Kesharmahal, Kathmandu 804.69
8 Everest Bank Ltd. 1994/10/18 Lazimpat , Kathmandu 810.69
9 Kumari Bank Ltd. 2001/04/03 Durbarmarg, Kathmandu 596.95
10 Laxmi Sunrise Bank Ltd. 2002/04/03 Hattisar, Kathmandu 822.17
11 Citizens Bank International Ltd. 2007/04/20 Narayanhitipath, Kathmandu 803.32
12 Prime Commercial Bank Ltd. 2007/09/24 Kamalpokhari, Kathmandu 803.33
13 Sanima Bank Ltd. 2012/02/15 Nagpokhari, Kathmandu 800.13
14 Machhapuchhre Bank Ltd. 2012/7/9 Lazimpat , Kathmandu 805.57
15 NIC Asia Bank Ltd. 2013/6/30 Thapathali, Kathmandu 803.11
16 Global IME Bank Ltd. 2014/4/9 Panipokhari, Kathmandu 888.84
17 NMB Bank Ltd. 2015/10/18 Babarmahal, Kathmandu 646.18
18 Prabhu Bank Ltd. 2016/2/12 Babarmahal, Kathmandu 800.13
19 Siddhartha Bank Ltd. 2016/7/21 Hattisar, Kathmandu 846.44
20 Rastriya Banijya Bank Ltd. 2018/05/02 Singhadurbarplaza, Ktm 900.48

Source: “https://www.nrb.org.np/bfr/bfi_list/List%20of%20BFIs_July2024.pdf”
 22

Appendix-2 Various Deposit Schemes of NSBL

Saving Deposit Scheme
1. NEPAL SBI PREMIUM SAVINGS SCHEME
2. NSBL CORPORATE SALARY PACKAGE
3. NSBL NARI BACHAT KHATA
4. SB-NATIONAL RECONSTRUCTION AUTHORITY
5. NSBL BAAL BACHAT KHATA
6. KARNADHAAR BACHAT KHATA
7. NSBL COMBO SAVINGS SCHEME
8. NORMAL SAVINGS ACCOUNT (SAVINGS BANK -PUBLIC)
9. NSBL BIDESHI NICHHEP KHATA
10. STUDENTS ACCOUNT
11. SCHEME FOR NEPAL ARMY SERVICE PERSONNEL SCHEME FOR NEPAL
POLICE & ARMED POLICE FORCE SERVICE PERSONNELINDRENI BACHAT
12. SWARNIM BACHAT
13. GOVERNMENT OF INDIA PENSIONERS' ACCOUNT
14. VARISTHA NAGARIK BACHAT KHATA
15. VISHESH BACHAT
Fixed Deposit Skim
1. UJJWAL BHAVISYA BACHAT YOJANA(RECURRING DEPOSIT)
2. DHANVRIDDHI BACHAT YOJANA
3. KARMACHARI BACHAT KHATA
4. PF ACCOUNT FOR PERMANENT STAFF OF ORGANIZATION
5. SHAREHOLDERS SAVINGS ACCOUNT
6. SAVINGS - NON RESIDENT NEPALESE (NRN)
7. SAVINGS INSTITUTIONS
8. SAVINGS-DIPLOMATS/EMBASSY
9. 101 DAYS FIXED DEPOSIT
10. 201 DAYS FIXED DEPOSIT
 23

Appendices-3 Five Years Financial Summary Balance Sheet

(Figures in Rs. Crore)
Particulars FY FY FY FY FY
2075/76 2076/77 2077/78 2078/79 2079/80
Assets:
Cash Balance & Bank Balance 771.34 665.50 843.57 1,038.98 1,322.97
Money at Call and Short Notice 13.89 0.00 0.00 0.00 0.00
Investment 2,590.61 1,772.24 931.97 1,929.13 2,104.32
Loans, Advances and Bills 2,878.81 3,527.96 3,997.92 4,697.55 6,302.48
Purchase
Fixed Assets 66.16 60.74 63.00 63.00 75.08
Other Assets 158.80 81.86 91.27 122.87 178.01
Total Assets (A) 6,479.61 6,108.30 5,927.73 7,851.53 9,982.86
Liabilities:
Borrowing 80.00 100.00 100.00 518.47 630.97
Deposits 5,892.05 5,449.30 5,162.82 6,521.35 8,166.45
Other Liabilities 127.67 105.42 100.32 119.67 145.65
Total Liabilities (B) 6,099.72 5,654.72 5,363.14 7,159.49 8,943.07
Shareholders' fund (A-B) 379.89 453.58 564.59 692.04 1,039.79
Paid-up Capital 235. 57 265.02 305.81 388.37 692.49
Proposed Bonus Share 29.45 39.89 82.57 108.93 107.51
Reserves 114.36 148.09 175.89 191.83 239.53

Retained Earnings 0.51 0.58 0.32 2.91 0.28

Total Shareholders' fund 379.89 453.58 564.59 692.04 1,039.81
 24

Appendices-4 Five Years Financial Summary Profit and Loss Account

(figures in Rs. Crore)

Particulars FY FY FY FY FY
2075/76 2076/77 2077/78 2078/79 2079/80
1. Interest Income 411.05 397.66 382.13 398.13 591.12
2. Interest Expenses 248.70 223.16 177.38 156.52 299.45
Net Interest Income 162.35 174.50 204.75 241.61 291.67
3. Commission and Discount 31.37 32.04 34.04 46.58 48.76
4. Other Operating Incomes 15.78 21.73 30.77 31.81 44.79
5. Exchange Fluctuation Income 10.19 10.78 11.95 13.64 22.09
Total Operating Income 219.69 239.05 281.51 333.64 407.31
6. Staff Expenses 41.66 44.31 55.22 54.90 79.05
7. Other Operating Expenses 47.72 50.60 51.58 61.68 75.47
8. Exchange Fluctuation Loss 0 0 0 0 0
Operating Profit before 130.31 144.14 174.71 217.06 252.79
Provision for Possible Loss
9. Provision for Possible Losses 12.80 8.30 11.66 11.13 18.79
Operating Profit 117.51 135.84 163.05 205.93 234.00
10. Non-Operating Income -0.03 0.87 1.07 1.00 0.56
11. Provision for Possible Loss 4.39 7.18 5.21 4.27 2.80

Profit from Regular Operations 121.87 143.89 169.33 211.20 237.36

12. Income Extra-ordinary 0.23 0.41 2.00 0.00 1.90
Activities
Net profit 122.10 144.30 171.33 211.20 239.26
13. Provision for Staff Bonus 11.10 13.12 15.57 19.20 21.75
14. Provision for Income Tax: 33.85 38.88 49.22 58.81 65.19
This Year's 36.35 40.59 50.41 57.95 68.67
Tax upto Previous Year 0.06 0.00 2.30 1.37 0.03
This year's Deferred Tax -2.56 -1.71 -3.49 -0.51 -3.51
Net Profit/(Loss) 77.15 92.30 106.54 133.19 152.32
Profit Per Employee (Rs. In lakh) 14.34 15.21 17.88 19.62 19.83