1

CHAPTER 1
INTRODUCTION

1.1 Background of the Study

Bank is a financial institution. Financial institution plays an important role in a

development of country. Mobilize saving and make investment in different
enterprises of the national economy that consequently help in reducing
poverty, rising employment opportunities and thereby developing the society
and country as a whole. Thus, the developments of commercial banks of
financial institutions has become one of the bases of measuring the level of
economic development of a nation

Commercial banks can play a vital role in giving the direction to economy’s
development over time by financing the requirements of trade and industry in
the country. They draw a community saving into organized sector that can
then be down by planning authorities in the country.

“Banks are among the most important financial institution in the economy and
essential business in thousands of local cities. Banks are those financial
institutions that after the wide range of financial services and functions of any
led to banks being labeled “Financial supermarket” and to such familiar
advertising slogans as your bank a full service financial institution.”
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1.1.1 An Introduction to Nabil bank

Nabil Bank Limited is the nation’s first private sector bank, commencing its
business since July 1984. Nabil was incorporated with the objective of
extending international standard modern banking services to various sectors of
the society. Pursuing its objective, Nabil provides a full range of commercial
banking services through its 52 points of representation. In addition to this,
Nabil has presence through over 1500 Nabil Remit agents throughout the
nation.

Nabil, as a pioneer in introducing many innovative products and marketing

concepts in the domestic banking sector, represents a milestone in the banking
history of Nepal as it started an era of modern banking with customer
satisfaction measured as a focal objective while doing business. Operations of
the bank including day-to-day operations and risk management are managed
by highly qualified and experienced management team. Bank is fully equipped
with modern technology which includes international standard banking
software that supports the E-channels and E-transactions.

Nabil is moving forward with a Mission to be “1st Choice Provider of

Complete Financial Solutions” for all its stakeholders; Customers,
Shareholders, Regulators, Communities and Staff. Nabil is determined in
delivering excellence to its stakeholders in an array of avenues, not just one
parameter like profitability or market share. It is reflected in its Brand Promise
“Together Ahead”.  The entire Nabil Team embraces a set of Values
“C.R.I.S.P”, representing the fact that Nabil consistently strives to be
Customer Focused, Result Oriented, Innovative, Synergistic and Professional.
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1.1.2 Capital structure of the bank

Subscription Percent
Holding
N.B. (International), Ltd., Ireland 50%
Nepalese Public 30%
NIDC 10%
Rastriya Beema Sansthan 9.67%
Nepal Stock Exchange Ltd. 0.33%
Total 100%
*source:WWW.nabilbank.com.np

Figure 1

Equity Ownership Structure

N.B. (International), Ltd.,
Ireland
Nepalese Public
9.67% 0.33%
10%
NIDC
50%
Rastriya Beema Sansthan
30%

Nepal Stock Exchange Ltd.

Nabil cordially invites you to visit its branches/counters to have the taste of
fledge banking services

Figure 2

Products &
Services

Deposits Credits cards Lending

 Safe Deposit
Tele- banking Transfer Fund
4
Locker

1.1.3 Introduction to Deposit

Deposit collection is one of the main features of commercial bank. A commercial

bank receives deposit in different accounts namely current, fixed and saving. These
are the direct deposits. When a bank receives cash it grants a right to the depositors to
withdraw it whenever they like Nepal Banijya Bank Act has regulated all the deposit
2031. The act specifies “Deposit” means amount deposited in current, fixed and
saving deposit account of bank or financial institutions.

Among many functions of a commercial bank the main function is deposit function,
which all the commercial banks perform, in simple terms; deposit is a function of
collecting surplus from savers. Bank accepts deposit from those that can save but
can’t utilize profitably. People know that by depositing in the bank they could avail
with many more facilities. By saving in the bank people have the opportunity of
earning interest, useful contingencies; avoid risk such as theft lost accidents, the
deposit of commercial banks is increasing because people know its importance. So
banks accept money on current saving and fixed deposit accounts. Deposits are the
main source of capital for the lending activities of the banks. Banks utilize efficiencies
to attract more deposits to increase credit activities. Deposits are withdraw able
according to the terms of contract with the depositors to attract the people. The bank
maintains different types of deposit accounts.

Main features
 Purpose: saving, fixed or call (short term)
 With maturity or without maturity
 Interest bearing and non-interest bearing
 It interest bearing:
 Calculation of interest on monthly minimum balance, or average balance
 Payment of interest quarterly or semi annually
 Special arrangement with any other deposit account
 Operate or non-operative
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If operative:
Limitation on frequency and amount of withdrawal: yes or no
 Time liabilities or demand liabilities.

1.1.3.1 Types of Deposits

Deposits of commercial banks can be categorized into following two categories

a. Interest bearing deposit
b. Non- interest bearing deposit

1.1.3.1.2 Interest Bearing Deposit

(A)Saving Deposit

The pm pose of saving deposit is to encourage the habit of saving among the common
people and institutions. Saving deposits attract interest which is normal less than that
of long-term deposit but more than that of short-term deposit. There is restriction in
this account to withdraw any amount. The customer is restricted to withdraw his
deposit to the maximum amount in each transaction by the bank regulation. In this
way as the withdrawal is limited in such account, in each transaction, the bank is
provided with more funds for the credit activities, interest is paid in this deposit
account.

According to Commercial Bank Act, the saving account means an account of amounts
deposited in a bank for savings purposes.
 6

Saving Account are generally opened for the savings of customers (individuals,
nonprofit organization, charitable trusts, clubs, associations and cooperative) who
want to save for meeting future needs, Savings accounts is suitable for the customers
who do not want to withdraw frequently or who do not want to keep certain amount
for fixed long period

The main features of such accounts are as follows:

i. Interest bearing
ii. Restriction or limitation in respect of both the amount of
withdrawal and frequency withdrawal.
iii. Purpose and period of such deposit is for savings purpose for the
individuals who do not want frequent withdrawals and who do not want to keep
money for fixed long period.

(b)Fixed Deposit! Term Deposit

Another source of deposit is the fixed deposit account. Money in this account is
deposited for a fixed period of time, which cannot be withdrawn before the maturity
of time. The rate of interest on this account is higher than other accounts. It is also
known as time deposit. General this is for three months to five years.

According to Commercial Bank Act, fixed account means the account of amount
deposit in a bank for a certain period of time.

The main features of such accounts are as follows:

i. Specific period
Normally the bank is not bound to repay the amount until the maturity of the fixed
deposit. However, on request of the depositor, a banker may liquidate the fixed
deposit and repay the amount; interest will be paid at the discretion of the banker.

ii. Non operative

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Fixed deposit account is non - operative i.e. depositing into or withdrawal from fixed
deposit account as in case of savings and current deposit account is not allowed.

( C) Call Deposit

The banks may accept deposit for short period of time to meet the short fall and such
deposits secured from money market and having element of overnight stay is called
call deposits. The rates of interest of such funds are not fixed hut are dependent on
demand and supply of funds in the money market. Such all deposits become payable
on demand and hence such deposits become payable demand and hence such deposits
are considered demand liabilities of the bank.

i. Non-operative
ii. Short term: overnight stay
iii. Interest rate not fixed
iv. Payable at demand

(D) Other Deposit

i. Bearer Certificate of Deposit

It is a scheme of special type of deposit where some specified amount of money for
specific period of note is accepted as deposit against a certificate given by the banker
to a customer. A bank issues such certificates without mentioning name address and
any other particulars of the customer. The bank receives the principal amount and will
issue the will issue the certificate for such amount which will include the interest
payable at maturity on the amount deposited. On maturity date any person presenting
the certificate at the bank can encase the same. Such types of deposits are considered
as time liabilities.

The major features of such deposit are as follow s:—

i. Negotiable with prepaid interest having fixed maturity.
ii. No particulars of the depositor contained in the certificate.
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iii. Opening of account is not required.

iv. It could be discontented before maturity.

1.1.3.1.2 Non- interest Bearing Deposit

(a)Current Deposit Account

Current deposit is also known as demand deposit as the deposit is with draw able on
demand. Current deposits are withdrawn able on the demand of the customers. Banks
have to make them ready to pay the depositors at hand to pay according to the wish of
the customer. If the bank cannot pay the customer according to the demand, the
reputation of the bank may fall of the banking activities may tail. The business people,
business institutions who have to withdraw at any time, normally open it. Since banks
have to maintain high liquidity to meet customers demand, no interest is paid on such
deposit.
According to Commercial Bank Act, the current account means an account of
amounts deposited in bank that may be drawn at any time on demand.

i. No yield

As the cost of providing the facilities of current account becomes considerable to the
banks do not pay any interest on the balance of current account.

ii. Highly liquid and no limitation

There is no limitation on withdrawal and deposit of any amount within banking hours

1.2 Objective of the study

The objective of this fieldwork is to analyses deposits collected in NABIL. The study
intends to present a brief and clear picture of deposit and its utilization. The objective
of the study includes.
- To find out deposit trend of NABIL bank.
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- To find out the deposit mix.

- To analyses whether the deposits are being properly utilized or not

1.3 Statement of Problems

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

Through the banking system is making much progress, the progress has been set up
with the problems and hindrances. Another pressing problem is under developed
country, lack of banking habit in people. Many people are under the poverty line.
Many people are not literate so people are not conscious about the banking system
and do not know the importance of bank. Bank concentrates only in the city so that
the villages have to take a loan from money Lander at a high rate of interest. Most of
the people keep their saving idle or give it to others to use it in greed of more interest.

Each and every organization needs cash in order to handle daily business activities , it
has to maintain liquidity position to run smoothly. Due to economic instability and
crises, Nepalese commercial Banks are facing lots of problem like liquidity problem,
fund crisis, interest rate volatility, and foreign exchange rate instability. So, to face
this kind of risk Banks have to do some precaution before its lay down.
The main area of the study is to analyses position of the Nabil banks as well as
whether they are financially healthy or not?

1.4 Significance/Rationale of the study

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Deposit collection is the major function of all commercial banks, which help to carry
out almost all transaction of the bank. Mostly among the various deposit features
provided by commercial banks, fixed and saving deposit are considered to be more
important In the case of term deposit although the banker pay interest (longer the
period higher the interest) the funds are committed for longer periods, which can
safely be lent for long-term project. But in the case of current deposits although no
interest is payable, these deposits are repayable at demand and therefore banker must
be cautious in lending such deposits. Fixed and saving deposits are considered to be
more suitable because this deposit can be invested in short term loans with higher rate
of return (interest) and hence it helps to earn high profits.

So the deposits in the commercial banks have a good contribution to the country
economy. If deposits are well collected and sell mobilized the person as well as
country can benefit from it. This study however intends to give general information
regarding banking, deposits and prospects of the deposit and its mobilization in the
country, which may give the general idea about banking, and deposit
1.5 Limitations of the study

The time limit allotted for this study is just some days. Therefore, it wouldn’t be
possible to carry out a comprehensive study of many different financial institutions
in such a short time period. Therefore concentration is focus on the NABIL bank,
which is premier institution in Nepal. While studying about Nabil bank, the focus is
given on only the saving deposit out of other different deposit schemes. Again the
trend of deposit during the last 5 years has been specially analyzed to measure the
performance of bank.

The study does not present detailed analysis of deposit in NABIL due to lack of time
relevant data and resources. This study is limited to the information that was available
from the bank and other sources.
- Annual reports of NABIL
- Annual reports of NRB
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- Articles in Newspapers, journals, booklets, issues published by financial

institution.

1.6 Structure of Study

The present study is organized in such a way that the stated objectives can easily be
fulfilled. The structure of the research will try to analyze the study in a systematic
way. The study report has presented systematic presentation and finding of the
research.

The study report is derived in five chapters which are as follows:-

Chapter - One:-Introductions

This chapter is the introductory framework that includes background of study,brief

profiles of bank under study statement of the problem, objectives of study , significant
of the study and limitation of the study.

Chapter - Two: - Review of Literature

This chapter reviews the existing literature in the relevant area, mainly includes the
fundamentals concept, NRB guidelines for Nepalese commercial Banks.

Chapter – Three: - Research Methodology

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This chapter deals with research methodology that’s include research design data
collections and methods of analysis and research variable.
Chapter – Four: - Presentation and Analysis of Data

This chapter deals with the presentations and analysis of relevant data and
information. For this purpose various financial and statistical tools have been used to
analyze and interpret the result. Major finding of this research are also presented in
this chapter.

Chapter – Five:- Summary, Conclusion, and Recommendation

This chapter is a final chapter of the study that’s including summary of the study,
conclusion and recommendation. Finally bibliography and appendix are presented at
the end of the study.

CHAPTER 2
REVIEW OF LITERATURE

From the literature review presented above, it has been learnt that, deposits
mobilization impacts on financial performance of banks. Many researchers have
worked on the impact of deposits mobilization on financial performance of banks.
There is literature concerning deposit mobilization. Sylvester (2010), deposits
mobilization is considered a key tool in financial performance of bank, particularly
for commercial banks. He argued also those evaluations of the role of deposits
mobilization in financial performance of banks generate mixed results. Though most
of them are supportive the role of deposits mobilization in financial performance of
banks, they are insufficient, on the side of appropriate ways of mobilizing more
savings , hence the researcher needs to apply it in the context of commercial banks
 13

and to analyze other strategies of deposits mobilization that are not considered in the
above literature.

2.1 Conceptual Framework

Below are indicated independent and depending variables included in the research
topic deposit mobilization and financial performance of commercial banks in
Rwanda. The conceptual framework interlinks independent and dependent variables
as depicted in the figure below:

Figure 2.1

The conceptual Framework

Independent Dependent

Investing strategy Financial Performance

Profitability

Change of interest rate

Return On Assets(ROA)

Money supply
Return on Equity(ROE)
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Like other institutions, bank’s financial performance depends on several elements

including working funds they use in day to day activities. Banks as institutions whose
main activities and functions are to accept deposit in forms of saving from their
customers, they have maintain the certain level of liquidity and advance the rest
wisely otherwise, the use of micro loans can bring totally poverty, if it is not used
without knowledge on it. Mobilization of deposits is one of the important functions of
banking business. It is an important source of working fund for the bank. Deposit
mobilization is an indispensable factor to increase the sources of the banks to serve
effectively. Mobilization of deposit plays an important role in providing satisfactory
service to different factors of the economy. 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. There are
different types of deposits, with different maturity pattern carrying different rates of
interests. Deposit mobilization is depending on the cost of deposits. Mobilization of
deposits for a bank is as essential as oxygen for human being. To enhance
profitability, banks take steps to minimize the expenditure and are forced to mobilize
low cost deposits.

2.1 Research gap

The researcher is interested in deposit mobilization and financial performance of
banks, the related research has not taken into consideration the deposit mobilization
factors together with the performance of commercial banks and how it can be
improved as means of increasing their financial performance. After having observed
the gap in this area of research, the researcher conducted the research on the effects of
deposits mobilization on the financial performance in commercial banks.
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CHAPTER THREE
METHODOLOGY OF THE STUDY

3.1 Research Design

The research methodology is the process of arriving to the solution of the problems
through planned and systematic dealing with the collection, analysis and
interpretation of facts and figures. As the research entirely considers about the about
“Deposit Mobilization of NABIL Bank” The main purpose of this study is to show
deposits and its utilization in NABIL with its financial positions, collection and uses
of funds, its prospects and its position in context of Nepal as well as to recommended
suggestions for its improvement. Those research methodologies have been used which
proves helpful to deposit analysis. For the purpose of achieving the objective, the
following methodology is used. The data has been collected by acquiring various
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kinds or reposts, bulletins and journals from the organization. Similarly data has been
acquired from NRB also.

The study report is based mostly on secondary information of NABIL. In addition to

this, reference has been made in library consult, class lectures,

Related books of banking, financial management and accounting during the

preparation of this study.

3.2 Sources of Data

For the preparation of this report different kinds of books are followed. In this report,
all the data collected is secondary in nature. Almost all the data has been collected
form published annual reports, brochures etc. Mostly all the data are collected from
the concerned bank.

3.2.1 Primary Data Source:

No primary data are used in this report.

3.2.2 Secondary Data Source:

In this study, the main source of data is secondary which are collected from pre-
published data sources. The secondary data sources used in this study are:

3.2.2.1 Internal source

 Annual reports of NABIL

 Interim performance report

3.2.2.2 External source

 Book publications

 Journals
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 Annual reports of NRB

3.3 Target Population and Sample

Grinnell and Williams, (1990) define population as totality of persons or objects,

which the study is concerned. The term population simply means possible people
from whom information can be obtained. The target population of a study constitutes
the group of persons, objects or institutions that defines the objects of the
investigation (Patton, 2002). The population of this study consists of equity bank
managers in charge of deposit mobilization namely the marketing team and the branch
management’s team. And the sample is defined as the specified detail which is
required for research. Related to deposit items are the sample of these report.

3.4 Data collection procedures

The researcher got secondary data from annual financial performance and desktop
results both published and unpublished documents relating to the present study. The
dependent variable relied notably on the secondary data generated from the financial
statements to be given from Equity bank. In this report most of the data are used is
secondary so the internet and Published reports mostly used.

3.5 Data Processing Techniques

The data collected from the above stated sources has been classified tabulated and
interpreted for easier study. 

3.5.1 Classification and Tabulation of Data

The data collected are classified, tabulated and arranged in manner to make it easily
understandable with the use of tables in chronological order. After classification the
data is tabulated.

3.5.2 Diagrammatic Representation of Data

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Various diagrams are used to present the data more clearly. The diagrams used are
follows:

 Bar Diagram
 Pie Chart
 Line Graph
 Bar Graph

3.5.3 Tools for Analysis of Data

Various Financial Accounting and statistical tools have been used of analyses the
collected data and interpret the result obtained. The various tools used are:

Deposit Mix

Deposit Categorization

Interest Expenses

Trend Analysis

Ration Saving Deposit to Total Deposit

Ratio of Current Deposit to Total Deposit

Ration of Fixed Deposit to Total Deposit

3.6 Limitations

The data of last 5 years only is concern. Most of the data are secondary of source.
Most of the data are taken from the annual report of the Bank.
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CHAPTER 4
PRESENTATION AND ANALYSIS OF DATA

4.1 Data Presentation

Data presentation can be presented as per the requirement of the topic. Such as
activity ratio, Cash reserve ratio, Total deposit ratio, liquid assets ratio etc.

Table 4.1

Total Deposit position of NABIL (Rs. in million)

Year Fixed Current Saving Others Call & Total Growth

Short %
Deposit
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2011/2012 14044 6572 17994 848 15565 55023 18

2012/2013 10786 7271 23336 21256 961 63610 15
2013/2014 11855 9545 32601 19844 1543 75388 18
2014/2015 15872 12848 42715 31015 1788 104238 38
2015/2016 8868 16237 53437 29302 2423 110267 5

* Source: NABIL Bank Ltd., Annual Financial Statement

This table shows the total deposit mix of NABIL during the period of five years.
During the last years the current, margin or other deposits have a fluctuating
collection in the deposit mix of NABIL

In below figure, it shows the total deposit and different types of deposit portion in

Figure 4.1
Total Deposit Position
Total Deposit Position ofof Nabil(in
Nabil(in millions)
millions)

120000

100000

80000

60000

40000

20000

0
2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

Fixed Current Saving Others

Call & Short Deposit Total Growth %

Here total deposit of Nabil on 2011/12 is 55023 million which more than 18% from
last year is. The total deposit in 2012/13, 2013/14, 2014/15, 2015/16 are 63610,
75388,104238 and 110267 respectively. And growth rate are 15%, 18% 38%, and 5%.
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From above analysis, we have found the increasing trend of total deposit. But, the
various accounts have a fluctuating collection of deposit. So, such trend should be
managed by implementing proper policies.

Table 4.2

Total deposits of Nabil

Year Fixed Current Saving

2011/2012 14044 6572 17994

2012/2013 10786 7271 23336

2013/2014 11855 9545 32601

2014/2015 15872 12848 42715

2015/2016 8868 16237 53437

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60000

50000

40000

Fixed
30000
Current
Saving
20000

10000

0
2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

In above table and figure, it presents a Fix, Current and Saving deposit Trend of Nabil
Saving and Current deposit is in increasing trend but Fix deposit is fluctuating. Saving
deposit increases rapidly over the period of five years and the fixed deposit kept on
fluctuating. Fixed deposit decreased in the fiscal year 2012/2013 and increased upto
the fiscal year 2014/2015 and again it declined in the fiscal year 2015\2016. Likewise,
current deposit is in increasing trend over the period of five years.

Year Interest on Total Deposit Ratio %

Deposit Rs.
2011/2012 3155 55023 5.73
2012/2013 2186 63610 3.44
2013/2014 1939 75388 2.57
2014/2015 2236 104238 2.15
2015/2016 1829 110267 1.66

Table 4.3
Interest Expenses on Deposit (Rs. in million)
*source; Annual report of Nabil

In above Table Interest expenses on total deposit are shown from 2011/12 to 2015/16.
Interest on deposit ratio is in decreasing trend over the period of five years. The result
is presented in the following bar graph:
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Figure 4.3

Interest Expenses on Deposit

 24

100%

90%

80%

70%

60%

50% Total Deposit Rs.

Interest on Deposit
40%

30%

20%

10%

0%

4.4 Total credit to Total deposit ratio:

This ratio give the deposit management of the bank is efficient of mobilizing total
deposit to total credit. It is calculated by dividing total credit by total deposit of the
bank in various.
Table 4.4: Total credit to total deposit ratio:
(RS in millions)
Fiscal year Investment Deposit Ratio (%)
2011/12 14.08 55.02 25.59
2012/13 16.35 63.61 25.70
2013/14 18.28 75.39 24.24
2014/15 30.98 104 29.78
2015/16 36.09 110.26 32.73
Average     27.608
 
  Source: - Annual report of Nabil Bank Lt

From the above table, we can observe the proportion of investment in various
securities out of total deposits. The bank investment is 25.59% of total deposit in
 25

2012and has increase to 25.70 in 2013 and has decrease to 24.24 in 2014. But, in the
following three years the proportion of investment to total deposit ratio has
increased. This ratio examines the efficiency of a bank’s investment policy. It
measures the percentage of investment out of total deposit. This ratio also indicates
the bank successful mobilization of its deposits in profitable investment areas.

4.5 Return on assets (profit to assets ratio):

Return on assets measures the profit from the investment in assets. Thus, higher
percent of profit in assets consider being better. The ratio is calculated by dividing net
profit by total assets.
ROA= Net Profit/Total Asset

Table 4.5: Return on assets ratio

(Rs in million)
Fiscal year Ratio%
2011/12 2.80
2012/2013 3.25
2013/14 2.65
2014/15 2.06
2015/16 2.32
Average 2.616

Figure 4.5: Return on assets ratio

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3.5

2.5

1.5

0.5

0
2011/12 2012/13 2013/14 2014/15 2015/16

Return on Assets Ratio

4.6 Return on shareholder’s equity:

This financial tool examines the ratio between net profit and shareholders’ equity.
Higher return on shareholder’s equity indicates the performance of shareholder’s
funds. This is calculated by dividing net profit by shareholder’s funds.

ROE=Net profit/Shareholders equity

Table 4.6: Net profit to shareholder’s equity ratio

 27

Fiscal year Net profit(Rs in Shareholder’s Ratio%

Billion) funds(Rs in Billion)
2011/12 1.69 5.44 31.06
2012/13 2.22 6.69 33.18
2013/14 2.32 7.64 29.21
2014/15 2.09 9.49 22.02
2015/16 2.81 10.34 27.17
Average 28.54

Table 4.6 Present the amount of net profit and shareholder’s equity of last 5 year.

This both are seems to increasing ratio.

Figure 4.6: Net profit to shareholder’s equity ratio

12

10

0
2011/12 2012/13 2013/14 2014/15 2015/16

Net profit Shareholder's equity

4.7 Trend of Profit or loss

Table 4.7 Net Profit or loss of Nabil

Fiscal year Net

profit(billions)
2011/12 1.69
2012/13 2.22
2013/14 2.32
2014/15 2.09
2015/16 2.81
 28

This table shows the different year’s profit or loss portion. The Bank is maintaining
its profit at positive level as well as constant level and Increasing trend as well as
constant level.
It can be shown as follows:-

Figure 4.7 Net Profit or loss of Nabil

Net profit(billions)
3

2.5

2
Net profit(billions)
1.5

0.5

0
2011/12 2012/13 2013/14 2014/15 2015/16

In the above figure it shows the trend of profit from 2011/12 to 2015/16. It shows the
little increasing trend except 2014/15, but it isn’t a loss. It’s a little decrease in profit
then last years.

Major Findings
a) The trend analysis shows that the deposit of NABIL is in increasing trend. In
addition to this, the bank is being able to satisfy its customers and in providing higher
quality and newer services to them.
 29

b) By the analysis of deposit landing we can conclude that the bank is able to
utilize its deposits a greater extent.

CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
 30

5.1Discussions

A bank is an institution, which deals in money. A bank is like a reservoir. It draws

surplus money from the people who save and lend them to the people who want to use
it for productive purpose. In this process the bank earns commission. The rate of
interest paid to the depositors is generally lower than the rate charged to the
borrowers. The difference between these two rates of interest is the profit of the bank.
Deposit collection is the main function of commercial bank.

The various data presented and analyzed in this fieldwork report reveals that the
performance of NBL is satisfactory. The financial position and condition of the bank
is very strong and praiseworthy. Observing the profit of last 5 years, it can be
concluded that the trend of profit of the bank is increasing every year

The present study has been undertaken to examine and evaluate the financial
performance of NABIL. The financial statements of five years that is from 2011/12 to
2015/16 have been examined for the purpose the study. The study has resorted mainly
to secondary data that has been first processed and analyzed comparatively. This
study is exploratory as well as analytical sometimes.

NABIL was established in 12th July 1984, which was the first joint venture bank in
Nepal. Among many joint venture banks, it is a leading one, which is always running
in profit due to its proper management and good policies. Data that I have presented is
all from the secondary sources, which are in the annual reports or other printed
matters.

A customer can be account holder when he opens account. There are the numbers of
rules and procedures regarding opening different types of accounts. The interest rates
on different accounts are different
 31

Conclusion

c) The deposit of NABIL is in increasing trend. The share of fixed deposit is

more than that of savings, current, margin and other deposits in the deposit mix of
NABIL.
d) The trend of interest bearing deposit has been gradually increasing but there
has been more fluctuation in non-interest bearing deposits, similarly, there is also
more fluctuation in interest expenses on total deposits.
e) The trend analysis shows that the deposit of NABIL is in increasing trend. In
addition to this, the bank is being able to satisfy its customers and in providing higher
quality and newer services to them.
f) By the analysis of deposit landing 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

Implication and Recommendations

1. Although NABIL has a strong financial base and capital structure as well as
good market status and reputation in order to attract new customers and increase
deposit collection NABIL should introduce new schemes.
2. Customer services should be diversified and should further be accommodated.
3. Interest rate on deposit should be competitive with other commercial banks.
4. The bank should aim towards increasing its customers but it must also provide
the quality services to the present customers. For this the bank must make plans and
policies keeping customers in mind.
5. Bank should also pay attention towards the priority sector and industrial sector
for lending loans to develop the economic condition of the country..
6. NABIL has to improve its investment policy otherwise it goes to weaker
conditions
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7. Banks should fulfill some social obligation by expending their resources to

rural area promoting the development of poor & disadvantages groups. In order to do
so, the bank should open some branches in remote areas with the objectives of
providing cheaper banking services like minimum cash balance to open account &
less interest on loan provided.
9 NABIL should try to maintain positive altitude of shareholders towards the
bank.

REFRENCES

 Banking Information and Data, Annual Report of Nabil Bank Ltd.

 Brigham, Eugene F., ‘Fundamental of Financial Management”, Holt Rincht

and Winston: The Dryden Press, 1998.
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 Khan, M. Y. and P.K., “Financial Management Policy: New Delhi: McGraw

Hill Publishing Co. Ltd., 1978.

 Khan, M.Y. and Jain P.K., “Management Accounting”, New Delhi: McGraw
Hill Publishing Co. Ltd.

 S.P. Gupta,”Statistical Method”.

 Van Horn James C.,”Financial Management band Policy”: New Delhi Prentice
Hall of India Pvt. Ltd., 1986.

 Van Horn James C.,”Fundamental Financial Management”: U.S.A. Prentice

Hall Inc. Engle Wood Cliff, 1983.

 Web Portal (www.Nabilbank.com/)

 Weston, J. Fred Copeland Thomas, “Managerial Finance”: Dryden Press,

1986.