CHAPTER-I

INTRODUCTION

1.1 Background of the Study:

The word Bank has been derived from Italian word 'Banco' meaning bench. Earlier barter system
used to be the medium of exchange. With growing difficulty in exchange the need for monetary
exchange system was felt and money in form of comes and paper notes were used to facility
commercial transaction. Similarly an institution to facilitate and regulate money was needed
which later on evolved to be the bank. Bank now means organization dealing in money and
credit transactions. In past, ancestors of modern banking system e merchants, money lender and
goldsmith used to perform the monetary task sitting in a bench. So this way the term 'Bank' was
introduced.

Generally, the bank refers to those institutions which are established under the law for dealing
with the monetary transaction. It means those institutions are treated as banks which accept the
deposit of public and advances loan in productive sectors against security deposits. A bank can
generate revenue in various forms including interest on loan advanced, transaction fees financial
advices etc. However, banks major part (3/4)th of income is from interest income on loan. The
bank profits from the difference between interest received on loan advanced and interest paid on
deposits. Beside this bank is also engaged in different types of activities such as currency
exchange, bank guarantee, bills discounting etc.

1.2 Banking History in Nepal

A closer look at the banking history of Nepal reveals that before the advent of the modern
banking system, various moneylenders (Gold Smiths) used to transact loans and the coins minted
by the kings in their ruled time were introduced.

 Introduction of Institutional Banking System, Tejarath Adda was established in 1933 B.S.
(Rana Prime Minister Ranoddeep Singh) and its basic purpose was to provide credit
facilities to the general public and government employees at an affordable interest rate of
6 per cent per annum.

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 In 1989 B.S. Taksar / Sadar Muluki Khana was established and Rs.1,5,10 and 100 rupees
four types of paper notes were published first time in Nepal on 2002/06/01 B.S. which
are now called an old print.
 Introduction of Modern Banking System in Nepal According to the Nepal Bank Act,
1993, Nepal Bank was formally established on 30th Kartik, 1994 B.S. It played the role
of both Central Bank and Commercial Bank in the banking system of Nepal at that time
but it could not issue notes.
 As required by the Central Bank in the banking system of Nepal. In 2013 Baishak 14 B.S.
Nepal Rastra Bank was established as the Central Bank of Nepal in accordance with the
Nepal Rastra Bank Act, 2012.
 Nepal Industrial Development Corporation was established on Ashad 1st, 2016 B.S. to
develop Nepal's industrial sector.
 According to the Cooperative Banks Act, 2019, the Cooperative Bank was established on
Bhadra 28, 2019 B.S.
 RBB Bank was established in magh 10 2022 B.S. Under the Commercial Banks Act,
2021 with full ownership of the Government of Nepal.
 For the development and expansion of the agricultural sector, the Agriculture
Development Bank was established on 7th Magh, 2024 B.S. as per the Agriculture
Development Bank Act, 2024 B.S. and when it was established, the cooperative bank was
merged in it. And in the fiscal year 2032/33 B.S. Saana Kishan Bikash Aayojana was
started from Tupche (Nuwakot) and Mahendranagar (Dhanusha) in which the Agriculture
Development Bank assisted by providing the loan.
 In the Fiscal Year, 2040/41 B.S. the era of economic liberalization in the banking sector
of Nepal began with the opening of various private and joint-venture banks in which
consequences the then Nepal Arab Bank Limited and now Nabil Bank Limited was
established on 29th Ashad, 2041 BS.
 On Falgun 16, 2041 B.S. the then Nepal Indosuez Bank Limited was established as the
current Nepal Investment Bank Limited.
 Similarly, various banks were set up with private and joint ventures, which led to a
quantitative rather than a qualitative increase in the banking system of Nepal. In order to
develop the banks qualitatively rather than numerically, Nepal Rastra Bank adopted the
merger policy in the year 2068 B.S. The acquisition policy was adopted in 2070 B.S and

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 these two policies were reformed as Merger and Acquisition bylaw in 2073 B.S. As a
result, various banks and financial institutions have merged.

Therefore, it will play an important role in economic stability and development if we can make
Nepal's banking system stable and efficient by combining qualitative development rather than
numerical growth of banks

1.3 List of Commercial bank Nepal with Paid of Capital

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1.4 Introduction of Machhapuchchhre Bank Limited:

Machhapuchchhre Bank Limited was registered in 1998 as the first regional commercial bank
from the western region of Nepal and started its banking operations from Pokhara since year
2000.

The Bank facilitates it's customers' need by delivering the best of services in combination with
the latest state of the art technologies and prudent international practices. The bank provides
modern banking facilities such as Any Branch Banking, Internet Banking, Mobile Banking, Safe
Deposit Locker facilities, Utility Bill payment (Telephone & Mobile), ATM (VISA Debit Cards)
to its valued customers. Besides these, the Bank is providing 365 Days Banking and Evening
Counter services to the customers through many of its offices.

The Bank has been promoted by highly renowned Non-Residential Nepalese, prominent
businessman and industrialists with a vision and dedication to provide the best financial products
and services in the most efficient and professional manner.

Now with a paid up capital of over 11.62 billion rupees, 165 Branch Offices,119 Branchless
Banking Units, 12 Extension Counters and 201 ATMs spread all across the country, it is one of
the full-fledged national level commercial banks operating in Nepal. It takes pride in having its
own buildings for its Head and Corporate Office in Lazimpat, and Branch offices in Naya Bazar,
Pokhara, Jomsom, Baglung, Damauli and Bhairahawa.

Vision

To become the bank of the first choice of the people.

Mission

To be one of the most preferred banks in Nepal, easily recognized as the bank which satisfies and
cares for its customers through quality service, innovative products, professionalism and wide
branch network, offering full array of financial services using modern technology and with good
corporate governance practices.

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1.2.1 Deposit collection policy of Machhapuchchhre bank limited

A deposit refers to an amount of money in cash, cheque or electronic transfer placed in a bank
a/c. It is the main source for bank to meet its growing financing needs. A bank is entrusted with
the responsibility of collecting scattered money from nook and corners in the form of deposit.
Bank mobilizes those savings in productive sectors. Bank accepts deposits in various accounts as
per the duration (fixed or current) and nature of depositor (institutions or individual). Banks are
innovating and ring new deposit plans and pricing schemes to win the competition in challenging
banking market. Each plan has different features to match business & household needs. Higher
the deposit, higher will be the volume of investment which enables bank to achieve higher profit.
The existence of commercial bank mainly depends upon mobilization of deposit. Similarly,
Rastriya banijya bank ltd. Also accepts deposit in various accounts under 3 major deposit
schemes which are as follows:

I. Current account (demand deposits)

These are the deposits under which depositor can withdraw money on demand. In this account
any amount of money (up to the full amount) can be withdrawn anytime no interest is provided
by bank under this account as bank can't invest such deposit and just has to maintain as a reserve.
The main purpose of current a/c is a safety of money and transparency in accounting
transactions. Also bank helps to collect the payment and make a payment on behalf of bank,
recordkeeping. Etc. Large merchants, businessmen and big organizations get benefitted as they
can have unlimited withdrawal and deposit of money. Bank also provides internet user login for
this a/c in case of single signatory.

Machhapuchchhre bank's current a/c offers the following features.

A. No restriction on the quantum of funds withdrawn by a/c-holder at any time.

B. Bank has to maintain enough liquidity to honor the demand & no interest is payable on this
deposit.

C. Bank can also provide overdraft facility on this ac on the basis of agreement between bank
and account-holder. However higher rate of interest is charged on overdraft.

5
D. Bank provides the facility of collection of notes and cheque on behalf of its customer and also
can charge (deduct) the handling charge from the a/c in case there is only the minimum
balance on a/c

E. All branches of Machhapuchchhre bank are connected through ABBS which enables to
withdraw and deposit from any branches.

Ii. Saving account (saving deposits)

Bank can also form its capital by way of saving deposits. This ac is mainly opened in banks for
saving purposes. Saving ac forms the highest numbers of a c in a bank. This account has the
combined features of current a/c & fixed deposit a/c. This account is very popular. It
accommodates the savings from small farmer up to the wealthiest person. This account can be
opened at nominal amount that is based upon the policy of the bank limited amount can be
deposited & withdrawn from the bank in the specified time this account is held for the purpose of
accumulating fund and also for earning interest. Rastnya banijya bank also provides saving
account facility and interest a 3% p a on savings.

Machhapuchchhre bank's saving a/c offers the following features:

A. A/c can be opened at nominal amount.

B. There is restriction on the amount that can be withdrawn from the a/c as well as withdrawal
frequency. In case of large sum, bank requires pre-notice.

C. Bank provides statement of transaction (bank-statement) for free when demanded from
accountholder.

D. Bank provides nominal rate of interest on the savings.

Iii. Fixed-deposit account (time deposits)

Time deposits are deposits on which the depositor and the bank agree that the money will not be
withdrawn before a specific date. These are also called certificate of deposits (cds). The maturity
date is already specified and can range from three month to over the years. These accounts
provides higher rate of interest than the saving a/c and current a/c. Money accumulated under
this a/c is utilized in productive sector by the bank and higher return can be earned.

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Accountholder can take a loan against the fixed deposit if he/she requires money before the
expiry date. No cheque-books are issued under this a/c.

Machhapuchchhre bank's fixed-deposit a/c offers the following features:

A. Fixed deposit a/c can be renewed after the expiry of maturity date.

B. Attractive interest rate usually 2% higher than deposit rate.

1.3 statement of problem

This analysis of loan is important part of financial analysis. Therefore, this project work has been
undertaken to seek the answers of following questions:

A. How much fund mobilization is during study period?

B. What is the total deposit of bank?

1.4 objectives of the study:

The main purpose of the study is to analyze, examine and interpret the deposit mix of
Machhapuchchhre bank limited with the help of various financial and non-financial indicators.
Some of the major objectives are as follows:

A. To find out the composition of deposit in Machhapuchchhre bank.

B. To identify the uses of fund.

1.5 Significance of the study:

The deposits collection of banking system in an economy analogous to the heart in the human
body structure and the capital it provides can be likened to blood that circulates in it. As long as
blood remains in circulation, all the organs in the body will remain sound and healthy. If blood is
not adequately supplied to any organ or part of the body, then that part will be starved of
nutrients and oxygen and will become useless. Similarly if finance is not provided to any
economic sector, it will suffer and that sector, it will suffer and that sector will eventually fail.
However, the ability to provide the relevant financing is dependent on the ability of the banks to
mobilize adequate amount of deposits in the economy and other foreign sources of funding.

7
Deposits collection is therefore a key first step in the financing intermediation process. Banks
simply cannot function without deposits from savers in the economy. Many developing countries
suffer from low domestic saving rates. This is especially pronounced in countries like zimbabwe,
where there is no domestic currency. It is important to keep in mind that every time one makes a
deposit with the bank, they are providing part of the lifeblood for the economy as it is deficit
units of the economy that benefit from the actions of depositors. Putting the little resources that
you have under the pillow implies that you are depriving a struggling household or a firm
somewhere in the economy of a vital lifeline.

1.6 limitation of the study:

Every task is carried out with certain objectives. If the work is done in the planned way.
Objectives are achieved. This field work report is based upon the deposit collection policy of
Machhapuchchhre bank limited, branch office: Dadeldhura. However, a field work suffers from
various constraints. The limitations on the study of deposit collection policy of
Machhapuchchhre bank can be stated as below:

A. The study mainly focuses on the study of deposit of Machhapuchchhre bank limited.
Therefore, overall position of machhapuchchhr bank can't be judged by the report.

B. The study has covered only 5 financial years from 2076/77 to 2079/80 BS.

C. Data is also adopted from secondary sources so the validity depends upon the correctness of
gathered data.

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1.7 Report structure:

It has carried out a number of tasks to complete the proposed research study because this study
concerned with the profitability analysis of the both cooperative organization. According to
objectives of this study, the study has been classified into five chapters and chapters are as
follows.

Chapter-i: introduction

Chapter -i is the introductory part of the report which deals with background of the study,
statement of problem, objective of study, significance of the study, limitation of the study and
organization of the study.

Chapter-ii: review of literature

Chapter two deals with review of related literature which consists of conceptual framework of
profitability analysis, review of related previous work and research gap studies conducted on the
same topic.

Chapter-iii: research methodology

Research methodology section comprises of research design, population and sample, nature and
sources of data, data collection procedure, research variables, tools and techniques used in this
study.

Chapter-iv: data presentation and analysis

Chapter four deals with the presentation and analysis of collected data. To fulfill the objectives
of the study, data have been collected, arranged, tabulated and calculated using various financial
and statistical tools.

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Chapter -v: summary conclusion and recommendation

Chapter five deals is the finding part of the thesis which consists of summary of the study,
conclusion and suitable recommendations of the basis of the study at the end of the chapters,
bibliography and appendices have been incorporate.

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 CHAPTER-II:

REVIEW OF LITERATURE

A literature review is a critical analysis of a segment of a published body of knowledge through

summary, classification and comparison of prior research studies, review of literature, and
theoretical articles. Literature reviews are secondary sources, and as such, do not report any new
or original experiment work also, a literature review can be interpreted as a review of and
abstract accomplishment the review of literature is crucial aspect of planning of the study the
main purpose of literature review is to find out what works have been done in the area of the
research problem. Under study and what has not been done in the field of research study being
undertaken with reference to the study, total deposit of Machhapuchchhre bank this unit of study
tries to describe about the deposit position of Machhapuchchhre bank. Besides these this chapter
highlights the literature that is available in concerned subject as to may as knowledge, research
work, relevant study on this topic to review of thesis work performed previously.

This chapter is divided into following three sections; the first section is conceptual review, which
covers the topics such as concept of deposit, the second section is related about the books articles
and the pre done thesis related to the subject matter. This chapter highlights upon the literature
that have been already conducted by some thesis researchers in this particular topic of joint
venture bank. Some of them, as are supposed to be relevant for this research purpose and third
section deals about research gap.

2.1 Conceptual Review

The review of text books and other references materials such as: newspaper, magazines, research
articles, journals and past thesis have been included in this topic. Deposit is the various types
from public especially from its clients. It includes saving account deposit, current account
deposit, fixed account deposit etc. These deposits are payable after a certain time period. Banks
pays interest on saving and fixed account deposits but does not pay interest on current accounts.
In the addition, many Nepalese banks offer deposit scheme called "call deposit" which is popular
among the business house.

2.2. Review of previous work

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The main purpose of literature review is to find what works have been done in the area of the
research problem under study and what has not been done in the field of books, reports, journals
and research studies published by various institutions unpublished dissertation submitted by
bachelor level student have been reviewed. The review of text book and other reference materials
such as: newspaper, magazines, research articles, journals and past project have included in this
topic chopra(2013) in his article. "role of foreign banks in nepal" had conducted that the joint
venture banks playing an

Increasingly dynamic and vital role in the economic development of the country that will
undoubtedly increase with time. (world bank report; 1996:232) for the development of any
country first, it is required to have enough capital. It is the backbone for the development of the
nation. Nepal lacks the adequate capital for its development planning. Due to this reason so
many development planning are in pending. If there is enough capital available, it can invest into
the profitable project and contributes to a nation's wealth. When people deposit money in a
saving account in a bank for e.g. the bank must invest by lending the funds for carious business
companies. These firms in return, may invest the money in new factories and equipments to
increase their production. In addition borrowing from the bank, bank must issue stocks and
bonds that they sell to investors to raise capital needed for business expansion. Government also
issues bonds to obtain funds to invest in capital incentive project, as the construction of dams,
road and schools. All such investments by individuals, business and government involves a
presto sacrifice of income to get an expected future benefits. As a result, investment raises a
nation's standard of living. Shrestha, (2011) has analyzed in her article, "financial performance of
commercial banks using both descriptive and diagnostic approach." shrestha, s.(2011). Shrestha,
(1988) "a study on deposit and credits of commercial banks in nepal", nepal rastra bank
samachar, nrb - 1988) concluded that the credit deposit ratio would be 51.30%, other things
remaining the same in nepal, which was the lowest under the period of review. Therefore, he had
strongly recommended that the joint venture banks should try to give more credit entering new
field as far as possible, otherwise, they might not be able to absorb even the total expenses.

2.3 Research Gap

It is clear from the above literature review that studies made on total deposit of different firms
offer limited finding in the context to Nepal. No special and core studies have been conducted on
the deposit mobilization of the bank the carrier few studies conducted is unable to assess the
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recent total deposit so, more extensive testing and adjustment of necessary variables are needed
to be done. This study will evaluate the impact of total of the bank more precisely and
accurately.

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 CHAPTER-III

RESEARCH METHODOLOGY

There is a need for a systematic methodology for any result to be carried out for any kinds of
study research is the constant search for the knowledge whereas methodology refers to the
various sequential steps use to ascertain the study for the fulfillment of the objective of the study
necessary data and information have been collected and hence the methodology has been
classified into types of research design. Population and sample. Types of data, data collection
procedure, instruments, techniques of analysis and limitation.

3.1 Research Design

The researcher will use descriptive research design. According to Gnocchi (2004). Descriptive
studies are more formalized and typically structure with clearly stated hypotheses or
investigative questions, this method will help to fulfill the objective of the study as it requires
thorough descriptive study on the basis of available data.

3.2 population and sample

Among the many branches of Machhapuchchhre bank, this project is based on the
Machhapuchchhre bank Dadeldhura branch only.

3.3 Types of Data

Data are raw fact and figures having separate meaning it can be any alphabetical, numerical, or
symbolic value data can be primary and secondary

A. Primary data: the first hand or originally. Collected data by researcher is called primary
data. Interview, questionnaire, scheduled questionnaire and observation are common sources of
primary data.

B. Secondary data: data, which are already collected, by other researcher or organization is
called secondary data. Government reports and publication, publications of private organization,
news bulletins, periodicals, research journals, etc are common sources of secondary data. Under
this study secondary data are used only.

3.4 Nature and sources of data

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There are many types of data and sources of gathering them but mainly there are two types of
data and they are primary and secondary data. In this field work report the data's have been used
are completely secondary the main sources of data have been the five year annual report ie
2076/77 to 2079/80. Others have been the informal talks with the staff of the Machhapuchchhre
bank. Information given by them, articles and bulletins are the various reference books relating
to the study

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3.5 Collection of data

All the data used in the fieldwork is secondary and have been collected from the published data's
and the official records of the Machhapuchchhre bank i.e annual report, bulletins and reference
relating to the study. No particular tool has used to collect data's and information.

Data will be collected through the use of simple data collection forms which will administer to
the banks and their branch offices. The researcher use secondary data taken from authorized site
of concern bank. The study is mainly based in secondary data. Secondary data are those data that
are collected by someone else or used already & made available to other in the form of published
statistics such as annual reports, periodicals, newspapers, magazines etc. The relevant secondary
data has been collected mainly through the annual report of selected commercial banks. The
study is confined only to the specific areas such as deposits mobilized by these banks, loans and
advances, investments, liquidity, assets management, profitability for the five years period
starting from the year 2076/77 to the year 2079/80.

3.6 Data Analysis

Analysis of data is the one of the major component for the accurate and true finding for research.
Researcher will take task as an important one and will be done very carefully. For the analysis of
the collected data some useful statistical tools like standard deviation, mean, co- efficient of
variation are used for the analysis of the data to get true result. Some other statistical and
mathematical tools also be used as per as requirement.

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3.7 Techniques of analysis and instruments

Techniques:

For the concrete result out of the study various analytical tools and techniques have been used
i.e. growth rate of deposit and loan, percentage change in deposit and loan. The collected data
have been properly grouped and shown by using various graphs and charts as the fulfillment of
the objective.

Instruments:

Data instruments are the main tools for data analysis; researchers used annual report of
Machhapuchchhre bank, website of NRB and other websites and visit the Machhapuchchhre
bank Dadeldhura. And the report will be analyzed using following tools and techniques.

 Ratio.
 Percentage
 Average

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 CHAPTER-IV

RESULTS AND ANALYSIS

4.1 Data presentation and analysis:

Presentation and analysis of the data is the core of each and every research work. This study
requires some financial and statistical tools to accomplish the objective of the study. The various
results obtained with the help of financial, accounting and statistical tools are tabulated under
different headings. As the main objective of the study is to analyze the deposit mobilization of
selected banks; the necessary financial facts and figures as well as descriptive information are
gathered through the financial statement the major variables for the study are deposit balance,
total investment, investment on loan & advance, business loan and fixed deposit in commercial
banks.

4.1.1 Bank Deposits.

Bank deposits consist of money placed into banking institutions for safekeeping. These deposits
are made to deposit accounts such as savings accounts, checking accounts, and money market
accounts. The account holder has the right to withdraw deposited funds, as set forth in the terms
and conditions governing the account agreement. Savings account how bank deposits work the
deposit itself is a liability owed by the bank to the depositor. Bank deposits refer to this liability
rather than to the actual funds that have been deposited. When someone opens a bank account
and makes cash deposit, he surrenders the legal title to the cash, and it becomes an asset of the
bank. In turn, the account is a liability to the bank. In Machhapuchchhre bank there are many
types of saving account such as normal saving, fixed saving account, salary saving account,
Nepal army saving account, Nepal police saving account, pension saving account and so on.
Researcher manly focus on saving deposit, current deposit and fixed deposit.

A) Deposit structure of bank:

Table 1

Total Deposit, current deposit and fix deposit (rs lakh)

Fiscal year Current deposit Fix deposit Saving deposit Total deposit
2075/076 4827 542 5634 11003

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 2076/077 4015 454 5804 10273
2077/078 2827 566 5400 8793
2078/079 2879 527 6073 9479
2079/080 2350 477 6083 8910
Source: Machhapuchchhre Bank Ltd.

Figure No. : 1

Total Deposit, current deposit and fix deposit (rs lakh)

12000

10000

8000

Current Deposit
6000 Fix Deposit
Saving Deposit
Total Deposit
4000

2000

0
2075/076 2076/077 2077/078 2078/079 2079/080

In the above table and figure show the ratio of Machhapuchchhre bank are obtained from
annexure 1, 2. Through this table it is analyzed the bank has more obligations such as: saving
deposit, current deposit and fixed deposit from the table, we can see fluctuating deposit position
of the selected banks. From the above table it has found that Machhapuchchhre bank has
maintained the highest total deposit rs 11003 lakh at the year 2075/76 over the observation
period. It is clear from the above table that the selected banks have efficient fund to utilize
different sectors. This can be shown with the help of bar-diagram follows:

B) Analysis of Growth of Deposit:

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Trend analysis of deposit analyzes the deposit trend of Machhapuchchhre bank following figure
will be helpful for identifying the trend of deposit of Machhapuchchhre bank over the study
period.

Table No. 2
Analysis of Growth of Deposit:

Fiscal year Total deposit

2075/076 11003
2076/077 10273
2077/078 8793
2078/079 9479
2079/080 8910

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 Figure 2: Analysis of growth of deposit

Total Deposit
12000

10000

8000

Total Deposit
6000

4000

2000

0
Fiscal year 2075/076 2076/077 2077/078 2078/079

In above figure, it is clear that the total deposit of Machhapuchchhre bank is in fluctuating trend.
In fiscal year 2075/76 total deposit is rs 8357 lakh, 2076/77 is rs 11003 lakh but it is decreased in
2079/80 and became rs 8910 lakh.

4.1.2 Assets management position:

The asset management ratios, measures how effectively the firm is managing its assets. Assets
management ratio measures the efficiency of the bank to manage its asset in profitable and
satisfactory manner. A commercial bank must manage its asset properly to earn high profit.
Under in this research study, deposit collection and investment procedure of the selected bank is
also explained with the help of activity ratio.

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 Table No. 3 Current Deposit

Fiscal year Current deposit

2075/076 4827
2076/077 4015
2077/078 2827
2078/079 2879
2079/080 2350
Figure 3: current deposit.

Current Deposit
6000

5000

4000
Current Deposit
3000

2000

1000

0
2075/076 2076/077 2077/078 2078/079 2079/080

In above figure, it is clear that the current deposit of Machhapuchchhre bank is in fluctuating
trend. In fiscal year 2075/76 current deposit is rs 4827 lakh, 2076/77 is rs 4015 lakh but it is
decreased in 2079/80 and became Rs. 2350 lakh.

Table No. 4: Saving Deposit

Fiscal year Saving deposit

2075/076 5634
2076/077 5804
2077/078 5400
2078/079 6073
2079/080 6083

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 Figure 4: Saving Deposit

Saving Deposit
6200

6000

5800

Saving deposit
5600

5400

5200

5000
2075/076 2076/077 2077/078 2078/079 2079/080

In above figure, it is clear that the saving deposit of Machhapuchchhre bank is in fluctuating
trend. In fiscal year 2075/76 saving deposit is rs 5634 lakh, 2076/77 is rs 5804 lakh, 2077/78
saving deposit is rs. 5400 it is decreased and increased in 2079/80 saving deposit is rs. 6083.

Table No. 5 : Fix Deposit

Fiscal year Fix deposit

2075/076 542
2076/077 454
2077/078 566
2078/079 527
2079/080 477

Figure: 5 Fix Deposit

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 Fix deposit
600

500

400

Fix deposit
300

200

100

0
2075/076 2076/077 2077/078 2078/079 2079/080

In above figure, it is clear that the fix deposit of Machhapuchchhre bank is in fluctuating trend.
In fiscal year 2075/76 fix deposit is rs 542 lakh, 2076/77 is rs 454 lakh, 2077/78 fix deposit 566.
It is increased in 2077/78 and became rs 566 lakh and decrease in 2079/80 fix deposit 477 lakh.

Table: 6 Ratio of current deposit to total deposit (rs in lakh)

Year Current deposit Total deposit Ratio %

2075/076 4827 11003 43.86
2076/077 4015 10273 39.08
2077/078 2827 8793 32.15
2078/079 2879 9479 30.37
2079/080 2350 8910 26.37

Figure: 6: Ratio of Current Deposit to Total Deposit figure

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 50

45

40

35

30

25
Ratio %
20

15

10

0
2075/076 2076/077 2077/078 2078/079

From the above table and figure 6, in the year current deposit contributed. In the year 2075/76
current deposit to total deposit ratio 43.86%. The current deposit collection was 4827 lakh this
year. In the year 2076/77 current deposit decrease to 39.08% the amount of rs. 4015. In the year
2077/78 again current deposit decrease to 32.15% where current deposit and total deposit of rs.
2827 and in the year 2078/79 current deposit ratio was decreased by 30.37% and reached to rs.
2879 lakh where total deposit was rs. 9479 lakh. Now, in the year 2079/80 current deposit
decrease by 26.37% and reached to rs. 2350 lakh where total deposit of rs. 8910 lakh.

Table: 4.1.7 Ratio of saving deposit to total deposit(rs. in lakh)

Fiscal year Saving deposit Total deposit Ratio%

2075/076 5634 11003 51.20
2076/077 5804 10273 56.49
2077/078 5400 8793 61.41
2078/079 6073 9479 64.06
2079/080 6083 8910 68.27

Figure: 7 Ratio of saving deposit to total deposit

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 50

45

40

35

30

25
Ratio %
20

15

10

0
2075/076 2076/077 2077/078 2078/079

From the above table and figure 7, in the year saving deposit contributed. In the year 2075/76
saving deposit to total deposit ratio 51.20%. The saving deposit collection was 5634 lakh this
year. In the year 2076/77 saving deposit inecrease to 56.49% the amount of rs. 5804. In the year
2077/78 saving deposit increase to 61.41% where saving deposit and total deposit of rs. 5400 and
in the year 2078/79 saving deposit ratio was increased by 64.06% and reached to rs. 6073 lakh
where total deposit was rs. 9479 lakh. Now, in the year 2079/80 saving deposit increase by
68.027% and reached to rs. 6083 lakh where deposit of rs total. 8910 lakh.

4.2 Major Findings:

This research study has been conducted to find out the deposit, loan and investment trends,
deposit mobilization sectors. Machhapuchchhre bank has been taken for the study out of 20
commercial banks in Nepal. Bellow's findings are helpful to identify the liquidity position,
profitability position, and assets management position of the selected commercial bank.

 Total deposit of Machhapuchchhre bank is also quite high but there has been a decreasing
trend of total deposit till the year 2079/80.
 Similarly, the current deposit during the year 2077/78 is also quite high but there has
been decreasing trend in the year 2079/80.

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 So, it helps to increase the efficiency to bank. By the analysis deposit we can conclude
that the bank is able to utilize its deposits a greater extent.
 Thus, the bank's performance is effective in profitability and towards the customers and
may attract more customers.

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 CHAPTER-V

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary

A bank is a financial institution and a financial intermediary that accepts deposits and channels
those deposits into lending activities. Deposit collection is the core part of banking. Banks
collection its deposits in suitable and profitable banking activities. The history of modern
financial system of Nepal begun in 1937 with the establishment of the Nepal bank ltd. (NBL)
then after banking started booming in Nepal. In Nepal there are all together 20 commercial banks
operating under regulation of Nepal Rastra Bank. NRB being central bank of Nepal directs,
supervise, controls and guides banks and financial institution. This research study has been
conducted to find out the relationship between deposit, loan and advances and investment trends,
to identify level of liquidity. Assets management and profitability position of Machhapuchchhre
bank out of 20 commercial banks in Nepal. From the study we can illustrate that
Machhapuchchhre bank have sound ability to meet quick payment of costumer's demand.
Machhapuchchhre bank has provided loan and advances in many to earn profit and it is also
more capable to grab the investment opportunities and it has higher investment to total deposit
ratio. The trend of deposit is increasing but the growth rate of increase in deposit is in fluctuating
trend. The trend of investment of the sample bank is in increasing trend. From the study we can
illustrate that the deposit collection of commercial banks is in increasing trend.

5.2 Conclusion

Under this research study, different financial and statistical tools are used to identify the deposit
collection of the selected bank. It is found that selected bank have strong financial performance.
In the context of Nepal remittance plays vital role in deposit collection. Increased in remittance
has also increased deposit collection as we can find that trend of deposit and loan and advances
is in increasing trend.

The study concludes that, Machhapuchchhre bank is in better total deposit position because of its
higher mean ratio of cash and bank balance to total deposit.

Banks should have optimum policy to collect the deposit in various accounts. Deposit is the
major organ of commercial bank to live in the industry and the proper collection of deposit helps

28
the organ to live and to sustain for longer term. It should be careful while advancing loan and
advances. It should analyze market scenario, customer's demand, competitor's moves, and
political condition, investment sectors. Level of risk associated with the investment sectors to
maximize its profit and to system for longer term. If banks do not have proper deposit collection
policy, it will be in great trouble in future, as banks cannot afford only to pay interest in the
deposits collected. It has to have proper planning and policy to mobilize the fund in secured way
and to gain the maximum return.

5.3 Recommendation

The overall results are satisfactory. But in some case the bank should take certain steps to
improve the bank current credit policy. Therefore, some recommendations are being put forward
for its improvement along with its development. The recommendations are as follows:

 It is recommended that the bank should be aware of credit due diligence (CD) ratio.
 The overall services provided by bank are satisfactory but 21st" century bank should be
attentive for providing too much qualitative service to customer as compared other bank,
which may increase the public faith towards the bank.
 The bank all policies are good but implementation part is weak. So bank should improve
this part.
 Bank should aware of its credit policy.

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Bibliography

Bank and financial institution act, nepal

Bank and financial institution act, 2074

Bajracharya, b. B..(2011), "monitory policy and deposit mobilization in

nepal".rajatjayantismarika, rastriyabanjiya bank, kathmandu

Chopra, s.,(2013), " role of foreign banks in nepal", nepal rastra bank ngechu,(2014) "a study on
research design" asia publication pvt. Ltd.

Pradhan s. B.(2010) " deposit mobilization, its problem and prospects" shrestha, (2011)
"financial performance of commercial banks," asmita publication pvt. Ltd, kathmandu.

World bank report 1996:232

Machhapuchchhre bank itd. Dadaeldhura branch "annual repot 2074/75 to 2078/79"

Website:

Https://www.mbl.com.np

Https://www.nrb.org.np

Https://www.google.com

Www.wikipedia.com

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