Mobilization of Saving Deposit of Everest Bank Limited
A Project Work Report (MGT 401)
Submitted by;
Sandesh Khatiwada
TU Reg. No: 7-2-0266-0115-2013
TU Symbol No: 2660102
Submitted to;
The Faculty of Management
Tribhuvan University (TU), Kathmandu
In Partial Fulfillment of the Requirements for the Degree of
Bachelor of Business Studies (BBS)
Faculty of Management, Nepal Mega College, Babarmahal, Kathmandu, Nepal
May, 2017
Declaration
I hereby declare that the project work entitled "Mobilization of Saving Deposit of Everest Bank Limited" submitted to the faculty of Management, Tribhuvan University, Kathmandu is an original piece of work carried out under the supervision of Mr.Ishwori Prasad Banjade, faculty member, of Nepal Mega College, Babarmahal, Kathmandu, and is submitted in partial fulfillment of the requirements for the award of the degree of Bachelor of Business Studies (BBS). The Project work Report hasn't been submitted to any other university of institution for the award of any degree.
………………………
Sandesh Khatiwada
Nepal Mega College
Babarmahal, Kathmandu
20thMay, 2017
Recommendation
The work report entitled 'Mobilization of Saving Deposit of Everest Bank Limited' submitted by Sandesh Khatiwada of Nepal Mega College, Babarmahal, Kathmandu, is prepared under my supervision as per the procedure and format requirements laid by the Faculty of Management, Tribhuvan University, as partial he project. The work has been prepared for completion of BBS course of TU. The study is original and carries useful information in the concerned area.
I, therefore, recommend the project work report for evaluation.
………………………….
Mr. Ishwori Prasad Banjade
Nepal Mega College
Babarmahal, Kathmandu, Nepal
20thMay, 2017
Endorsement
We hereby endorse the project work report entitled Mobilization of Saving Deposit of Everest Bank Limited submitted by Sandesh Khatiwada of Nepal Mega College, Babarmahal, Kathmandu, in partial fulfillment of the requirements for award of the Bachelor of Business Studies (BBS) Approved by
______________________
Mr. Ishwori Prasad Banjade Date: 20thMay, 2017
Supervisor
__________________________
Mr. Madhukar Pandey Date: 20thMay, 2017
Program Director, Bachelor
____________________________
Mr. Dinesh Khanal Date: 20thMay, 2017
Academic Director
____________________________
Mr. ……………………………… Date: 20thMay, 2017
External Examiner I understand that my thesis will become part of the permanent collection of Nepal Mega College Library. My signature below authorizes release of my thesis to any reader upon request.
_________________________
Sandesh Khatiwada, Author Date: 20thMay, 2017
ACKNOWLEDGEMENTS
The author would like to extend his sincere gratitude to Faculty of Management, Tribhuvan University, Kathmandu for designing the final report project program as requirement for the partial fulfillment of Bachelor of Business Studies (BBS). This report is prepared, on the topic of "Mobilization of Saving Deposit of Everest Bank Limited".
The author would like to thank all the staff of EBL of head office including branch manager Mr. Satish Pratap Singh.
The author is also grateful to Mr. Madhukar Pandey, the coordinator of Nepal Mega College as well as Mr. Ishwori Prasad Banjade for providing necessary guidelines for preparation of report. The author would also thankful to all the teachers and friends for their support during the period of report preparation.
Finally, the author would like to thank all whom the author has forgotten to mention.
__________________
Sandesh Khatiwada, Author Date: 20th May, 2017
ABBREVIATION
AGM - Annual General Meeting
ATM - Automated Teller Machine
B.S. - Bikram Sambat
BBS - Bachelor of Business Studies
CB - Central Bank
CBS - Central Bureau of Statistics
EBL - Everest Bank Limited
i.e. - that is
LTD. - Limited
MOF - Ministry of Finance
NABIL - Nepal Arab Bank Limited
NG - Government of Nepal
NRB - Nepal Rastra Bank
PNB - Punjab National Bank
LIST OF TABLES
LIST OF FIGURES
TABLE OF CONTENTS
CHAPTER I
INTRODUCTION
Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector acts as the backbone of modern business. Development of any country mainly depends upon the banking system. A bank is a financial institution which deals with deposits and advances and other related services. It receives money from those who want to save in the form of deposits and it lends money to those who need it. In most countries, banks are regulated by the national government or central bank.
Brief Study of Everest Bank Limited (EBL)
Everest Bank Limited is a commercial bank in Nepal. The company offers deposit accounts; import, term, demand, contract, housing, education and gold loans, as well as export finance, working capital, and loans against FDR and bonds/guarantees; and mobile/SMS banking, E-banking, debit card, utility payment, remittance, branchless banking, and locker services. It provides banking services to the different sectors, such as industries, traders, businessmen, priority sector, small entrepreneurs, and weaker section of the society and other people who need banking services. At the present there are about 28 commercial banks operating in Nepal. Some of these are new entries and are likely to be very aggressive in their marketing approach. Bank of the year in Nepal 2006 A.D., Everest Bank Limited was established on 1st Oct. 1994 A.D. as per company act of Nepal. Everest Bank Limited is a joint venture with Punjab National Bank (PNB) one of the largest commercial bank in India. The bank started with an authorized share capital 12 crores its issued capital was 12 crores with a paid up capital of 9 crores of the total issued share capital. Punjab National Bank has hold 20% of total number of shares by general public of Nepal for Everest Bank Limited More than 306 employees are EBL employed. It's in order to accomplish faster recruited this bank is providing tale-banking, ATM, Credit card facilities forward dealing swift telex facilities. The head office of Everest Bank Limited is located at Lazimpat in the central of Kathmandu at opposite of Shangrila Hotel. It has good parking facilities. Similar to other bank, the board of direction is the top policy of Everest Bank Limited and gives proper directions to guide the direction to the activities of bank.
Deposits are the funds, the customers collect in the bank for the purpose of softy and interest income for which the bank gives or takes interest in accordance with its nature. Purposes the bank requires adequate funds. Deposits plays vital role in the development and prosperity of any commercial banks. Thus, the bank's policy governing deposits must be appropriate which can accelerate the growth of a bank. The policy differs whether the bank is serving in a selective clientele or in mass clientele. However, the bank should attract new depositors and sustain the decline in periods of recession. Thus the bank have to apply various corrective actions are attracting more deposits as per the need and capacity of bank to mobilize them. Deposits are the main sources of main capital to issue loan. Deposits are of different nature and types. They can be classified in accordance with different basis. They are:
According to the duration of Time
Time deposit
According to the Interest
Interest Bearing
Current
Saving
Noninterest bearing
According to the Ownership
Public Deposit
Private Deposit
Inter-Bank Deposit
Saving Deposit
Saving deposit is one where deposit is collected by the bank usually from small depositors and depositors having low income level. Usually the people working low middle level earning occupation, farmers, small retailers etc. Deposit their income in saving deposit little and little money from time to time they can also withdraw beyond the prescribed amount by bank any time they using cheques and ATM. However, the bank usually pays small interest to the saving depositors against their deposit in accordance with the prescribed rate of interest.
However, the bank should attract new depositors and sustain the decline in periods of recession. Thus the bank have to apply various corrective actions are attracting more deposits as per the need and capacity of bank to mobilize them. Usually saving accounts have low transaction; saving accounts have not given overdraft facility. Usually saving accounts need minimum balance in the bank to keep account active.
Statement of Problems
Capital plays an important role in the banking sector. It is a requisite from the promotional stage up to the end of a banking sector. No banking transactions can be operated without capital. So, capital is labeled as 'life blood' of banking sector. The capital can be collected from the various sources such as shares, debentures, public deposits, bank loan etc. Generally, there are various sources of accumulating capital internal and external.
The negligence and corruption made by management level, over-staffing, lack of social obligation, lack of proper control and directions are the reasons that are facing by the Nepalese commercial banks. The problems specially related to deposit mobilization of EBL has been presented below: -
Impact of saving deposit mobilization on profitability of bank.
Unsafe and risky investment sector.
Ideal deposit and its impact.
Objective of the Study
To evaluate the share of saving deposit out of total deposit of EBL.
To generalize whether the mobilization of saving deposit in EBL are in increasing or decreasing trends.
To explore the weight of ideal deposit out of saving deposit
Rationale of the Study
This report will be useful to know overall picture of Everest Bank Ltd. However, it is mainly concentrated in 'Saving deposit' of Everest Bank Ltd. So anyone who wants information regarding the condition and trend of 'Saving deposit' of Everest Bank Ltd they will be facilitated from this research to obtain the valuable information . The procedure of opening saving account will be helped by this field report. Also the student in coming years will as a reference.
Limitations of the Study
This fieldwork report is prepared in the partial fulfillment of requirement for the degree of 'Bachelor of Business Studies'.
The study mainly concentrates on saving deposit aspects of EBL.
The study on saving deposit uses the trend of past five years only.
It focuses only on saving schemes, therefore. Overall position of EBL can't be judged by this report.
Most of the data used are of secondary type, which is available from bank and other sources of books.
Report Structure
The first chapter includes general background of the study, overview of sample bank, statements of the problem, objectives of the study, rationale of the study and limitations of the study.
The second chapter, Review of Literature contains the conceptual review of bank, review of related books, journals, and past research works.
Similarly, the third chapter expresses the way and the technique of the studying applied in the research process. It includes research design, population and sample, data collection procedure and processing, tools and methods of analysis and findings of the study.
The fourth chapter is the important chapter in which collected and processed data are presented, analyzed and interpreted with using financial tools as well as statistical tools.
Finally, the fifth and the last chapter provide the summary of the study, conclusion and recommendations which are forwarded to the related banking industry for utilization and mobilization of their deposits.
CHAPTER II
LITERATURE REVIEW
In this chapter, a relevant study has been made to analyze the opinion of other researchers and authors related to saving deposit mobilization of commercial banks in Nepal. Only the relevant literatures have been reviewed. Every possible effort has been made to grasp knowledge and information that is available from the concerned commercial banks. This chapter helps to take adequate feedback to broaden the information base and inputs to my study. In this chapter inputs are reviewed as follows.
Conceptual Review
Under this heading the concept of the bank and banking transactions are described after reading thoroughly the available books.
Modern Banking in Nepal
Nepal Bank Ltd. is the first modern bank of Nepal. It is taken as the milestone of modern banking of the country and was established in 1937 A.D. From the beginning, it has rendered the following services to the customers: -
Accept deposit.
Extend loan.
Render customer-related service i.e. issue of bill of exchange.
Invest in government bonds and securities.
Perform agency function.
Act as banker to the government.
Until mid-1940s, only metallic coins were used as medium of exchange. So the Government of Nepal felt the need of separate institution or body to issue national currencies and promote financial organization in the country. Hence, the NRB Act 1955 was formulated. Accordingly, Nepal Rastra Bank was established in 1957 A.D. as a central bank of Nepal.RastriyaBanijya Bank was established in 1966 A.D., as the second commercial bank of Nepal. The financial shapes of these two commercial banks have a tremendous impact on the economy. That is the reason why these banks still exist in spite of their bad position.
After that for more than two decades, no more banks have been established in the country. Only after declaring free economy and privatization policy, Government of Nepal encouraged the foreign banks for joint venture in Nepal. As a result, Nepal Arab Bank Ltd. (NABIL) was established in 1985 A.D. This is the first modern bank with latest banking technology.
Concepts of Commercial Bank
The Encyclopedia America; 1985 A.D. defines "A bank is a business organization that receives and holds deposits of funds from others make loan or extents credits and transfer funds by written order of deposits".
In the Nepalese context, Commercial Bank Act, 1974 A.D. defines "A commercial bank is one which exchanges money, deposits money, accepts deposits, grants loans and performs commercial banking functions".
Commercial banks are those banks that pool together the savings of the community and arrange for their productive use. They supply the financial needs of modern business by various means. They accept deposits from the public on the condition that they are repayable on demand of short notice. Commercial banks are restricted to invest their funds in corporate securities. Their business is confined to financing the short term needs of trade and industry such as working capital financing. They cannot finance in fixed assets. They grant loans in the form of cash credits and overdrafts. Apart from financing they also render services like collection of bills and cheque, safe keeping of valuables, financial advertising etc. to their customers (Vaidya, S.; 2001)
Conceptual Framework
Bank is an institution which deals in money and credit. Banks are the institution which acts as an intermediary between different kinds of people and institutions who are in need of money and who can supply money at certain rate of interest. A bank simply carries out the work of exchanging money, providing loan, accepting deposits and transferring the money. several studies had been carried out regarding the funds allocation and deposit mobilization which depicts that the commercial banks mobilizes its deposit on various sectors by making investment, providing loans advances and purchase of assets (Paudel,2010). Based on the same this study has depicted the following conceptual framework.
Conceptual Framework: Funds Allocation and Saving Deposit Mobilization
Investment
Investment
Loans and AdvancesDeposit
Loans and Advances
Deposit
Assets Purchased
Assets Purchased
Banks are majorly determined by the conceptual framework namely investment, loans &advances and the asset purchased. This variable has the significant impact on the deposit mobilization mechanism and practices of the banks which in turn influences the performance. This study is based upon above mentioned deposit variable in order to explain the relationship between the variables and the performance of the banks under study.
Investment
Commercial banks are those which collect the immobilized capital from public, organizations etc as deposits and invest these capitals in different sectors like business, industries, and services etc, which fulfill the demands of capital in these sectors. Banks invests its fund in different banking activities and different fields. Many types of fields are shown in market for investment (Smith, 1993). But banks invest its funds in profitable and safety activities. Bank invests its funds in the various possible sectors such as share and debenture, government securities and joint venture. Share a unit of ownership interest in a corporation or financial asset. While owning shares in a business does not mean that the shareholder has direct control over the business's day-to-day operations, being a shareholder does entitle the possessor to an equal distribution in any profits, if any are declared in the form of dividends (Brennan et al., 2011). The two main types of shares are common shares and preferred shares. Likewise, a debenture is an unsecured loan one offer to a company. The company does not give any collateral for the debenture, but pays a higher rate of interest to its creditors. In case of bankruptcy or financial difficulties, the debenture holders are paid later than bondholders. Debentures are different from stocks and bonds, although all three are types of investment. Government securities are the securities issued by the government to raise the funds necessary to pay for its expenses. Treasury bills, debt restructuring bills, government bonds, and government saving bonds are an example of government securities.
Loans & Advances
While at any given moment some depositors need their money, most do not. That enables banks to use shorter-term deposits to make longer-term loans. The process involves maturity transformation- converting short-term liabilities (deposits) to longterm assets (loans). Banks pay depositors less than they receive from borrowers, and that difference accounts for the bulk of banks' income in most countries. Banks can complement traditional deposits as a source of funding by directly borrowing in the money and capital markets. They can issues securities such as commercial paper or bonds; or they can temporarily lend securities they already own to other institutions for cash- a transaction often called a repurchase agreement (repo). Banks can also package the loans they have on their books into a security and sell this to the market (a process called liquidity transformation and securitization) to obtain funds they can relend (Abraham and Harrington, 2011). A bank's most important role may be matching up creditors and borrowers, but banks are also essential to the domestic and international payments system and they create money. Not only do Individuals, businesses, and governments need somewhere to deposit and borrow money; they need to move funds around- for example, from buyers to sellers or employers to employees or taxpayers to governments. Here too a bank plays a central role. They process payments, from the tiniest of personal checks to large-value electronic payments between banks. The payment system is a complex network of local, national and international banks and often involves government central banks and private clearing facilities that match up what banks owe each other. In many cases payments are processed nearly instantaneously. The payments system also includes credit and debit cards. A well-operating payments system is a prerequisite for an efficiently performing economy, and breakdowns in the payments system are likely to disrupt trade- and therefore, economic growth- significantly (Bhandari, 2010).
Asset Purchased
A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be consumed or converted in to cash any sooner than at least one year's time. Banks purchases fixed assets such a land & building, furniture and fixtures, computer software etc for the commencement of the business. Likewise, banks keep on increasing its assets volume or bases during for the branch expansions.
Review of Articles/Journals
In this section effort has been made to examine and review of some related articles in different economic journals. World Bank discussion papers, magazines, newspapers and other related books.
Kafle(1990) .states that, consideration and liberalization of interest rate reform measure are initiated with a view to provide more option to commercial banks in the mobilization of savings and portfolio management through market determined interest and lending rates.
Bajracharya (1990) has mentioned, mobilization of domestic savings is one of the prime objectives of the monetary policy in Nepal. For this purpose CBs stood as the active and vital financial intermediary for generating resource in form of deposit of the private sector. So far providing credit to the investors is a different aspect of the money.
Morris (1980) concluded that, most of the banks concentrated on compliance with central bank rules on resources requirement, credit collection and interest rates. While analyzing loan portfolio quality, operating efficiency and soundless of bank investment management has largely been overlooked. The huge losses now find in the bank's portfolio in many developing countries and testimony to the poor quality of this ever sight investment function.
The writer adds that mismanagement in financial institution has involved inadequate and over optimistic loan appraisal, tax recovery, high risk diversification of lending and investments, high risk concentration, connected and insider lending, loan mismatching. This has led many banks of developing countries to the failure of 1980s A.D. (Morris; 1990).
Review of Related Unpublished Thesis
Under this segment, it has tried to find out the major conclusion and recommendations of the previous study made by the T.U. student. The unpublished thesis which is found relevant to the study is as follows: -
Karmacharya (2004) concluded that commercial banks play a crucial role in accelerating growth of a country. The bank mobilizes the savings of the people and diverts them into productive channels. The expansion of branches as more as possible to encourage the savings i.e. to increase the savings habits of people and thereby to mobilize the available financial resources efficiently and effectively in a productive way and concluded that the branch expansion helps to collect more deposits and utilize the available resources. The conclusion is derived from the analysis of seven years data from 1970 A.D. to 1977 A.D. using Karl's Pearson's formula, percentage and ratio to meet the objective; the writer has analyzed how far the bank is able to utilize the collected deposits.
Rayamajhi (2009) concluded that commercial banks play a crucial accelerating the growth in the country. The bank mobilizes the savings of the people and diverts them into productive channels. The expansion of branches as more as possible to encourage the savings i.e. to increase the savings habits of people and thereby to mobilize the available financial resources efficiently and effectively in a productive way and concluded that the branch expansion helps to collect more deposits and utilize the available resources. The conclusion is derived from this analysis.
Joshi (2011), the objectives of finding the comparative financial strengths and weakness of various commercial banks, return rate and expected return to the shareholders, systematic and unsystematic risk of the banks and providing recommendation on the basis of research findings, by using financial ratios, it is calculated that lending condition of banks are in decreasing trend. Banks in strong condition are holding good customers and discouraging low rated and less amounted loans. Instead of that, they are initiated towards remittance, bank guarantees and other commission generating activities, while other banks are showing aggressive and are spontaneously increasing loan loss provision. Deposits in the banks are also decreasing while some banks are holding enough funds.
Venkatesan (2012) carried out a study on an empirical approach to deposit mobilization of commercial banks in the context of Tamilnadu. The data are first subjected to descriptive statistics, namely mean, standard deviation and coefficient of variation in order to know the central tendency, dispersion and volatility in the data. Next simple linear regression technique was used and the variables were current deposit, fixed deposit and term deposit. The study is based on secondary data for the span of ten years from 1990-00 to 2008- 09. The data were obtained from statistical handbooks and broachers published by Reserve Bank of India (RBI). The major findings of the study were that there was a significant trend and growth in current deposits in terms of value despite there was a significant decline in number current deposits accounts in scheduled commercial banks in Tamil Nadu during the period from 1990-00 to 2008-09. Regarding saving deposits, there was a significant trend and growth in it both in terms of number of accounts and in value (amount). But the scenario was different in the case of term deposits in scheduled commercial banks. The number of term deposits exhibited a significant growth and trend but there was neither decrease nor increase in it when evaluated by value. Hence, it was concluded that the scheduled commercial banks in Tamil Nadu performed well in deposit mobilization in ten years from 1999-00 to 2008-09.
Research Gap
There are many research study conducted entitled "Saving Deposit Mobilization", mainly research have selected various commercial bank and development bank as well for the research. As the research gap is concerned there are many changes takes place in the deposit mobilization environment and investment habits of banks as compared to last few years. So fresh study related to deposit mobilization of Everest Bank Limited has been done with secondary data which is obtained from the annual report of the concerned bank in this research. On review of the unpublished thesis, researchers has manly focused on the financial and statistical data analysis such as financial ratio, standard deviation, correlation, coefficient of variation, probable error etc. but our objectives is to analyze the trend for the future in all these financial and statistical tool used for the forecasting of deposit and its investment. Some of the financial ratios and the trend value formula with the trend chart have been applied to cover the analytical part and fulfill the objectives of this study. Various empirical contradictions were presented by several researchers on funds allocation and deposit mobilization. The comparison of the mobilization and use of savings across types of financial intermediaries study found that in a developing country context, if financial institutions could not effectively and efficiently perform the fundamental role intermediation between savers and borrowers, market failure would exist, which may have adverse impact on the productivity of the economy. Likewise, access to credit may be an important determinant in the selection of deposit institutions by savers, and especially by no wealthy households, in developing countries. It was found that there is highly positively correlation between total deposit and total investment the researcher concluded that finance Company has been found profit oriented, ignoring the social responsibility which is not a fair strategy to sustain in long run. The related literatures with funds allocation and deposit mobilization taking the investment, loans & advances and asset purchased as independent variables and deposit as dependent variables are rarely found in context of Nepal.
CHAPTER III
RESEARCH METHODOLOGY
. "Research methodology refers to the various sequential steps to be adopted by a researcher in studying a problem with certain objectives in view". In other word research methodology describes the method and process applied in the entire subject of the study. This topic deals with the research design, nature of data collection, process of data analysis and statistical tools used.In other words, research methodology describes the methods and process applied in the entire subject of the study.
Research Design
To achieve the objectives of the study, descriptive as well as analytical research design have been used. This study is based on secondary data. Some samples such as statistical tools such as Mean, S.D, Trend line, Bar diagram and Pie-chart has been applied to examine the facts of data. Not only data but also recommendations and suggestions are also derived from the study by taking the EBL as a sample. So that all concerned can be achieved something from the study.
Basically, the proposed study is mainly based on two types of research design namely descriptive and analytical. Descriptive research design describes the general attitude of the Nepalese depositors, business environment, problems regarding the deposits mobilization aspects etc. Similarly, the analytical research design makes a thorough analysis of gathered facts and information and critically evaluates it as well.
Quantitative Research method
In this research quantitative method of data collection is used.
Types of Data
Both primary and secondary data have been used for this study. Primary data has been used in order to assess the opinions of bank managers on funds allocation and deposit mobilization of EBL. In addition, the primary data attempts to reveal other facets regarding funds allocation and deposit mobilization situation in EBL. At the same time, secondary data has been employed in order to analyze the relationship between deposit and its explanatory variables.
Primary Data
Primary data refers to those data collected by the investigator himself/herself for a specific purpose. In this research the primary data have been collected through the help of staffs of bank.
Secondary Data
Data collected by someone else for some other purpose (but being utilized by the investigator for another purpose). In this research, Supplementary data and information are collected from the head office of EBL and authoritative sources like NRB, NEPSE, SEBON, web sites etc. Secondary data were used to test the ability of the EBL on the utilization and mobilization of the deposits available and the effect of various elements such as Loans and advances, Investments and the Assets purchased on the profitability of the bank.
Method of Data Analysis
To achieve the objectives of the study various statistical tools have been used. The analysis of the study will be done according to the pattern of data available and to make the analysis more effective, convenience, reliable and authentic. The different calculated results obtained through statistical tools are tabulated under different headings. Then they are compared with each other to interpret the results.
Statistical Tools
Statistical methods are the mathematical techniques used to facilitate the analysis and interpretation of numerical data secured from groups of individuals or groups of observation from a single individual. The figures provide detail descriptions and tabulate as well as analyze data without subjectivity but only objectivity (Joshi; 2002).
Arithmetic Mean
Standard Deviation (S.D.)
Trend Analysis
Bar diagram
Pie-chart
CHAPTER IV
Data Presentation and Discussion
Statistical Analysis
Arithmetic Mean
Table 4.1.1
(Rs.Inlacs)
Fiscal Year
Total Deposit(X)
2068/69
500061
2069/70
577205
2070/71
621081
2071/72
830937
2072/73
937355
X
3466639
Source: Annual Report of EBL
N
5
Arithmetic Mean (A.M.) =
X/n
=
RS.693327.8
The above table shows that the trend of total deposit is increasing. The average total deposit of last five years is Rs. 693327.8 (lacs) which shows that bank is in good condition. It shows that the perception of customer is positive towards the bank.
Standard Deviation (S.D.)
Table 4.1.2
(Rs. In lacs)
Fiscal Year
Total Deposit (X)
( X-A.M.)2
2068/69
500061
37352055982
2069/70
577205
13484504680
2070/71
621081
5219600110
2071/72
830937
18936291925
2072/73
937355
59549274340
Source: Annual Report of EBL
Standard Deviation (S.D.) = 122516939.2
Percentage Change in Total Deposit
The percentage increase/decrease in total deposits from fiscal year 2068/69 to 2072/73 is given below.
Table 4.1.3
(Rs. In lacs)
Fiscal Year
Total Deposit of EBL
% Change
2068/69
500061
-
2069/70
577205
15.43
2070/71
621081
7.6
2071/72
830937
33.79
2072/73
937355
12.81
Source: Annual Report of EBL
Figure 4.1.1 Percentage Change in Total Deposit
The above figure shows the deposit trends from the fiscal year 2069/70 to 2072/73. Form the table we can see the total deposits of EBL are at increasing trend. This increasing trend in total deposit of EBL shows the general public attitude is going positively.
Position of investment ratio to total loan and advances
Table 4.1.4
(Rs. In lacs)
Fiscal Year
Total loan & advances
Investment
Ratio %
2068/69
366168
78636
21.47538835
2069/70
441978
92638
20.95986678
2070/71
484503
65042
13.42447828
2071/72
553635
151026
27.27898345
2072/73
689115
181987
26.40879969
(Source: Annual report of EBL)
Figure4.1.2 Investment to total loan ratio
The above figure shows that deposit mobilization of EBL is more fluctuate. The deposit collected in bank is mainly use in issue loan and advances than investment in real assets.
In fiscal year 2068/69 the ratio of investment to loan and advances is 21.41%. Similarly in year 2069/70 is 20.95%, in year 2070/71, 2071/72, 2072/73 is 13.42%, 27.27%, and 26.40% respectively. Which shows that the bank have consistency to use the collected deposits.
Percentage change in Saving Deposit
Table 4.1.5 (Rs. in lacs)
Fiscal Year
Total Saving Deposit
% Change
2068/69
172692
2069/70
210674
22%
2070/71
264894
25.74%
2071/72
326042
23.08%
2072/73
386496
18.54%
Figure 4.1.3 Percentage change in Saving Deposit
The above figure shows that the saving deposit is in increasing trend in amount. But the saving deposit ratio is in decreasing in percentage. In fiscal year 2069/70 the percentage of saving deposit is increased to 22%, similarly in year 2070/71, 2071/72, 2072/73 is 25.74%, 23.08% and 18.54% respectively. The above figure reflect the people are aware that they are not collecting their money in saving because saving deposit have less interest than other deposit.
Share of saving deposit out of total deposit
Table 4.1.6
(Rs. In lacs)
Fiscal year
Saving deposit
Total deposit
Saving to total deposit ratio
2068/69
172692
500061
34.53%
2069/70
210674
577205
36.5%
2070/71
264894
621081
42.65%
2071/72
326042
830937
39.24%
2072/73
386496
937355
41.23%
(Source: Annual report of EBL)
Figure 4.1.4
The above figure shows that in fiscal year 2068/69 saving deposit to total deposit ratio is 34.53%, in fiscal year 2069/70 is 36.50%, in 2070/71 is 42.65% which is in increasing trend. But in year 2071/72 the ratio of saving deposit to total deposit is decreased to 39.24%. In coming year 2071/72 bank makes up their saving deposit than previous year. Bank successes to grow their saving deposit from 39.24% to 41.23%.
Table 4.1.7
Fiscal year
Saving to total deposit ratio
2068/69
34.53%
2069/70
36.50%
2070/71
42.65%
2071/72
39.42%
2072/73
41.23%
Total
194.33%
(Source: Annual report of EBL)
Average of saving deposit to total deposit ratio is 38.87%.
Major Findings
From the data presented and analysis done the following are the major findings:
There is increasing trend in collection of total deposits.
Saving deposit is also increasing Ratio compare with total deposits.
The portion covered by saving deposit is quite better i.e. 38.87% in average.
The position of investment in total loans and advances has increased each year.
Saving deposit has more uniformity as its standard deviation is more consistent or increasing trend.
Saving deposit has estimated for coming year.
The average of total deposit for last five year is Rs.693327.8.
CHAPTER V
DISCUSSIONS AND CONCLUSION
Discussions
Everest Bank Limited is one of the best commercial bank in Nepal. The owner ship of total capital of bank is 20% of Punjab National Bank (PNB), 50% share by Nepalese promoters and 30% of shares by general public of Nepal. Everest Bank Limited is Bank of the year 2006 in Nepal.
From the above analysis researcher can say that EBL has good strength in market. Every year the deposit amount of bank is in increasing trend but in year 2071/72 and 2072/73 the ratio of collecting deposit is decreasing by less percentage. The above analysis also shows that the bank has mobilized their deposits in better way.
In fiscal year 2068/69 saving deposit to total deposit ratio is 34.53%, in fiscal year 2069/70 is 36.50%, in 2070/71 is 42.65% which is in increasing trend. But in year 2071/72 the ratio of saving deposit to total deposit is decreased to 39.24%. In coming year 2071/72 bank makes up their saving deposit than previous year. Bank successes to grow their saving deposit from 39.24% to 41.23%.
The saving deposit is in increasing trend in amount. But the saving deposit ratio is in decreasing in percentage. In fiscal year 2069/70 the percentage of saving deposit is increased to 22%, similarly in year 2070/71, 2071/72, 2072/73 is 25.74%, 23.08% and 18.54% respectively. The above figure reflect the people are aware that they are not putting their money in saving because saving deposit have less interest than other deposit.
EBL contributes to the process of capital formation by converting dispersed saving into meaningful capital investment in order to aid industry, trade, commerce and agriculture for the economic development of a nation. Saving deposits are the obligation of EBL. So, EBL must allocate the funds in different loans and advances and investments and purchase of assets. Deposit mobilization plays a vital role for the economic development of an underdeveloped and developing country rather than developed one.
Conclusion and Recommendation
For the development of the economy banks play a significant role, Everest Bank Limited. EBL has big hand in development of the economy of our country. It is helping the economic growth and standard of people. EBL provides various financial services to customer i.e. accepting deposits, issuing loan and advances, agency services, locker facility etc. They also give appropriate interest rate on customer savings.
The saving deposit of Everest Bank Limited is in increasing trend. The position is quite good and contributed saving to generate more income for the bank by making investment in various productive sectors. In Nepalese context it has best performance in comparison to other banks.
It has increasing ratio total deposit, saving deposit, loans and profit.
EBL should conduct a market research on a periodic basis to identify and attract the potential borrowers by using various promotional tools. EBL should come up with newer products to compete in the cut throat competition and to stand the challenged rising from new upcoming bank.
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www.nrb.org.np
http://www.everestbankltd.com/
