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ACKNOWLEDGEMENTS

With profound privilege I would like to thank Apex College and Pokhara University for providing me opportunity to conduct this survey entitled, "A Case Study of Saving Deposit of Rastriya Banijya Bank. This kind of work is essential for BBA students that give us an opportunity to get exposed to practical knowledge on the subject of interest. I would like to extend my sincere thanks to my respected teacher P.R. Joshi, Diwakar Pandey, Ritesh Shah for their help and valuable guidance in writing this report. I also wish to express my thanks to Mr Chukta Budathoki of Rastriya Banijya Bank for his support and full co-operation in providing information that was required for the study. I am also grateful for his valuable suggestions. I wish to acknowledge my gratitude to my teachers and friends of Apex College who directly and indirectly help me with their valuable suggestions for completion of this work. Finally, I would like to disclose my sincere gratitude to my family for their co-operation, support and encouragement for the completion of this work.

Alisha Khadka

ABBREVIATION

% a/c B.S Govt. HMG NRB p.a. AND NO. BOD & R.B.B

Percentage Account Bikram Sambat Government His Majesty Government Nepal Rastriya Bank Per annum Agriculture Development Bank Number Board of Director And Rastriya Banijya Bank

List of Tables
Table 1.Total Deposit of RBB 13 Table 2.Composition of current, saving & fixed deposit 14 Table 3.Saving deposit of RBB 15 Table 4.Saving deposit to total deposit 16 Table 5.Loan & Advance to totals deposit 17

List of Figures
Figure 1.Total Deposit of RBB 19 Figure 2.Composition of current, saving & fixed deposit 20 Figure 3.Saving deposit of RBB 21 Figure 4.Saving deposit to total deposit 23 Figure 5.Loan & Advance to totals deposit 24

Table of content

ACKNOWLEDGEMENT LIST OF ABBREAVIATIONS LIST OF TABLES LIST OF FIGURES

CHAPTER 1. INTRODUCTION

1-5

1.1 BACKGROUND OF STUDY1


1.2 STATEMENT OF PROBLEMS3 1.3 OBJECTIVE OF THE STUDY.3 1.4 IMPORTACNE OF THE STUDY.4 1.5 LIMITATION OF THE STUDY4 1.6 RESEARCH METHODOLOGY4 1.7 ORGANIZATION STUDY........5

CHAPTER 2. REVIEW OF LITERATURE

6-16

2.1 BANKING IN NEPAL6 2.1.1 Commercial bank Nepal8 2.1.2 Functions of commercial bank9 2.2 INTRODUCTION OF RASTRIYA BANIJYA BANK......11 2.2.1 An overview of RBB11 2.2.2 Role of RBB..11 2.2.3 Services of RBB13 2.2.4 Saving of RBB..13 2.2.5 Document necessary to open saving deposit a/c...14 2.2.6 Procedures for opening current a\c in RBB..15 2.3 TOOLS AND TECHNIQUES OF ANALYSIS..15

2.3.1 Financial Tools..........16 2.3.2 Statistical Tools.16 CHAPTRE 3. DATA PRESENTATION AND ANALYSIS1 7-25

3.1 DATA PRESENTAION & ANALYSIS17 3.1.1 Financial Analysis.....17 3.1.2 Ratio Analysis...18 3.1.3 Total deposit of RBB18 3.1.4 Composition of current, saving & fixed deposit...19 3.1.5 Saving deposit of RBB.21 3.2 SAVING DEPOSIT WITH OTHER RATIO..22 3.2.1 Saving deposit to total deposit ratio..22 3.2.2 Loan advance to total deposit ratio...24 3.3 CORRELATION BETWEEN SAVING DEPOSIT & LOAN GRANTED...25

CHAPTER 4. SUMMARY AND CONCLUSION 4.2 RECOMMENDATIONS

26-27

4.1 SUMMARY & CONCLUSION..26

CHAPTER 1 INTRODUCTION

1.1 BACKGROUND OF STUDY Bank if defined in simple form it can be defined as the financial institution which deals with money or whose business is of money. In another word bank is the institution, which is established by law, which deals with money and credit. Band especially use to collect the deposit from general public, institution and from other and transfers it to the people, institution and others in form of loans. Basically this is the main function of bank. It changes certain percentage of interest on loan. In case of defining bank we can find different statement form different persons. Bank is an establishment for the custody of money received from or on behalf of its customer its

essential duty is to pay their draft on it, its profit arise from its use money from those who have it spare or who are saving it out of their money and lands this out to those who require it. By these definition bank can easily decided as the financial transaction in market deeply depends upon the bank. Bank works as the agent of transferring saving of general public and from others to industrialist and entrepreneurs it is quit impossible for them to go to the public and collect deposits so bank can even define as an agent. Thus banks especial definition can be the institution which deals with money having main function of collecting saving from the market given some percentage of interest and lending back the money to the needy customer changing some percentage of interest on loan provided and earns some percentage profit through these transactions. Besides these up written financial transaction bank also deals with various other transactions. Remitting of money letter of activities of country etc. is also the major function of bank.

The term Bank origin from Latin word Bancus which refers to the bench on which the bankers would keep its money and his records. Some believes it has been origin from French word Banque and the Italian word Banca which means a bench for keeping, lending and exchanging of money or coins in the market place by moneylenders and money chargers.

The bank of Venice was established in 1157, is supposed to be most ancient bank. Actually, it was not bank in bred sense but simply an office for the transfer of the public debt. Many of the early banks dealt primarily in coin and bullion, much of their business being money changing and the supplying of Foreign and domestic coin of the correct weight and fitness. The bank of England was established on 1697 A.D as a first central bank.

According to Chambers Twentieth Century Dictionary Bank is as institution for keeping, lending, and enhancing etc, of money. According to Kent A bank is an organization, whose principal operations are concerned with the accumulation of them temporarily idle many or the general public for the purpose of advancing to other for expenditure. According to crowther The bankers business is to take the debts of other people to offers his own in exchange & there by create money. According to U.S. law Any institution offering deposit subject to withdrawal on demand & making loans of a commercial or business nature is a bank. Indian Banking Regulation Act 1949 SEC 5(b) defines bank as accepting for the purpose of lending or investment of deposit is from the public repayable on demand or otherwise, and with draw able by cheque, draft, and order or otherwise.

1.2 STATEMENT OF PROBLEMS Now a day the main function of commercial bank is not only to do its usual functions but also do something for the development of the economy. The main objectives of commercial bank are to maximize its profit by mobilizing its resource in must efficient manner. But if the bank fails to collect adequate deposits then it losses profitable opportunities and hence fails to generate profit. If a bank is not able to collect sufficient deposits, then it should look forward for policy amendments otherwise in this highly competitive commercial sector. The bank should analyze its position in cash collection and the trend of deposits of their bank to attract sufficient number of depositors towards bank.

1.3 OBJECTIVE OF THE STUDY

The main objective to study saving a/c is to gain that how the bank operates its service and how the consumers get better services. By bank, what should be done to work with bank etc and main objective of study in Saving account and its procedure for opening account is to know more about saving account and to know its procedure for opening main objectives are as follows: i. ii. iii. iv. v. vi. To access the major sources of deposit for RBB which the major source for the deposit is. To find out the share of saving deposit out of the deposit of the RBB. To draw out the problem regarding saving deposit. To analyze the trend of saving deposit in RBB. To find out which a/c has the highest amount of money collection. To find out relationship between deposits and loan.

1.4 IMPORTANCE OF THE STUDY i. ii. iii. iv. v. The study constitutes its importance as explained under. The study would provide information to the management of the bank that would help there to take corrective action in the field of banking activities. The study would provide information to the customers about the procedure of withdrawal & deposits of saving deposit of RBB. The study would help other researcher. It would also help the student to get knowledge about the banking activities.

1.5 LIMITATION OF THE STUDY i. ii. As computer system for record keeping is not introduced in the branch office of RBB, it was a tedious task to get segregated data from the ledger in the bank. It focused on saving deposit only.

iii. iv. v. vi.

Only one bank is referred. Only 5 years trend is taken. The study concentrates only on the collection of deposit and to Some extent also other relevant aspects, which helps to make the study relevant and comprehensive.

1.6 RESEARCH METHODOLOGY

Research Methodology is defined as a systematic process that adopted by the researcher in studying problems with certain objective view. The objective of this study is to evaluate & asses the saving deposit of RBB. Research methodology refers to the various sequential steps to be adopted by a researcher in studying problems taking into consideration the objective of the institutions.

Procedures Employed The procedures employed for the preparation of this report is summarized below: a. First available literatures were collected from different sources viz. RBB branch office, different magazines etc. the collected materials were revised thoroughly. b. Useful data and information were selected and collected. c. The collected data were processed and arranged in tabular form. d. The descriptive analytical technique and statistical techniques are used for analysis.

1.7 ORGANIZATION OF STUDY

This report has been organized into four chapters. Each chapter describes about Rasriya Banijya Bank. The first chapter, introduction, includes general background, statement of problems, objectives, importance, limitation, research methodology & it ends with the organization of the study. The second chapter, Review of Literature, covers the theoretical aspect of the study. It tries to explain about banking in Nepal, commercial bank in Nepal & its function. It also introduces Rastriya Banijya Bank its role, services & other theoretical notions which are useful to understand this research best. The third chapter, Data Presentation & Analysis, presents the graphical & statistical analysis (data & figure) of current situation RBB. The last chapter, Summary, conclusions & Recommendations, includes summary of the study. The references are incorporated at the end of the study.

CHAPTER 2 REVIEW OF LITERATURE


2.1 BANKING IN NEPAL

As in other countries goldsmiths and landlords were the ancient bankers of Nepal. Though all the banking activities were not carried out by Tejarath Adda, Tejarath Adda established during the tenure if the Prime Minister Ranoddip Singh (1933) was the first step towards the institutional development of banking in Nepal. Tejarath Adda did not collect deposits from the public but gave loans to employees and public against the bullions. In order to fulfill the demand and need of a modern banking transaction and to remove all the inconveniences in past time Nepal Bank Limited was established on 30th Kartik

1994 B.S. as the first commercial band in the country. Before the establishment of NBL, there was hardly any source other than the unorganized money market to meet the financial needs of people. Nepal Rastra Bank was established in the year 2012 B.S. the Rastriya Banijya Bank (RBB) which fully state-owned came into existence on 22nd Magh 2022 B.S. under Banijya Bank Act 2021 with the explicit objectives of providing banking facilities to areas or region of the country not covered by Nepal Bank Ltd. And making RBBs activities more development oriented rather then oriented. In global perspectives, joint ventures are a mode of trading through partnership among nations and also form of negotiations between various group of industries and traders to achieve mutual exchange of goods and services for sharing comparative advance Nabil Bank, Nepals youngest and first private bank with foreign collaboration came to existence on 2041 B.S. Likewise

Commercial Bank Nepal Bank LTD

Year of Establishment 1994

Location Kathmandu

Rastriya Banijya Bank Nepal Arab Bank LTD Nepal Indo-Suez Bank LTD Nepal Grind lays Bank LTD

2022 2041 2042 2043

Kathmandu Kathmandu Kathmandu Kathmandu

Himalayan Bank LTD Nepal SBI Bank LTD Nepal Bangladesh Bank LTD Everest Bank Bank of Kathmandu Nepal bank of Ceylon

2049 2050 2051 2051 2051 2052

Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu Kathmandu

Many development banks were recently established. The 1st development bank established in Nepal was the Nepal Industrial Development Corporation (NIDC) in 1959 A.D with objectives providing financial assistance for the modernization and expansion of the old industrial unit and proceeding technical and financial assistance to new industrial unit in the private sector. Agriculture development was established in 1968 under the ADB Act 1967 to cater the pressing need of the agriculture sector.

2.1.1 Commercial bank in Nepal Although bank can be categorized into different types on the basis of its function, objectives etc, the word Bank will always be synonymous with the commercial band and its functions. Basically, the function of a commercial bank all over the world is the world are the same? Basic functions are: various types of deposit facilities namely, current, saving and fixed, safety of public money, remittance of money, guarantee, lockers facility, letter of credit. Loans, serving as agent of client, foreign exchange etc. The Commercial Bank of Nepal also does all these functions.

Mainstream function of commercial banks remains the mobilization of otherwise rigid and scattered of public for providing credit to needy firms, industries or people to get productive use. All other functions can be said as ancillary functions. Commercial bank is a profit oriented financial serve institution. Certain rate of interest is given to the depositors. Therefore certain rate or interest is charged by the bank in the loan facility. Banks play a predominant role in under developed economy in many ways as they promote capital formation by developing banking habit of people and collecting saving. People have and mobilize them in productive channels. Thus their role in the economic development is to remove the deficiency of capital by stimulating saving and investment. Commercial bank in current year presents anew picture-a picture of innovation in practice of wider horizon and of new enterprises. The most remarkable diversification of banking function in the banks increasing participation in medium and long term financing industries and other sector so they are more than financial institution in the sense that they help saving, create deposits and make the subsequent distribution of such accumulated funds.

In addition to the acceptance of deposits, lending and investing they provide a multiple of services including accepting travelers cheque and underwriting, purchase and sale of securities, Govt. bonds for customers, but sale of foreign exchange, the insurance of commercial letter of credit, supply of timely credit and market information, providing remittance facilities and so on. A commercial bank is that which exchange money, accepts deposits, grants loan and performs banking functions.

2.1.2 Functions of Commercial Bank

As commercial bank main objectives is to earn profit, so its main two functions are borrowing and lending money. Bank acts as intermediaries between those who have surplus money and those who need it. Commercial bank performs generally follow functions

i.

Accepting Deposits: it accepts the ideal saving under the accounts i.e. (current, saving and fixed) and provides certain rate of interest in these three a/cs.

ii.

Provide loan: Commercial Bank provides loan to the public and organization for specific purpose against the security deposit of gold, silver and other assets. It provides short term loan, mid-term and long term loan. It makes interest on loan which is higher than the interest provided by them.

iii.

Transfers money: Commercial Bank transfer the amount of Public and Organizations from one place to another place or one a/c another a/c with the help of T.T, Draft etc. it takes commission for this purpose.

iv.

Exchanging Foreign Currency: Commercial Bank exchanges foreign currency on the permission of Central Bank and considering to the directions provided by the Central Bank time and again. Now a day Central Bank fixes the rate of foreign currency as per market demand and commission.

v.

Perform agency function: it underwrites (purchase and sells) the share and debenture of company, collects the income and pays the expenditure opens L/C etc. it takes commission for this purpose.

vi.

Helps in issue of capital: On the request of Company Corporation and other organization it issues shares and debentures given guarantee and performs agency function for which it takes commission from that organization.

vii.

Opens letter of Credit (LC): It opens LC for the import and export of goods. It has got right to issues and accepts travelers cheque.

viii.

Reference: they provide reference about the financial positions of their customers when required. They supply this information confidentially. This is done where customers wants to establish bussions connections with some new firms within or outside the country.

ix.

Other functions: It manages locker to keep gold, silver and valuable items safety, collects and publishes the financial information, purchase and bells bill of exchange, provides over draft facility on the agreement etc.

2.2 INTRODUCTION TO RASTRIYA BANIJYA BANK (RBB)

2.2.1 An overview of RBB RBB is one of the oldest banks in Nepal. It is a government controlled bank that was established in Magh 10, 2022 B.S. with an authorized capital of RS.1 crore and paid-up capital of RS.25 Lakhs. At starting, there were only 208 staffs and 7 branch office. The total deposit collection at that time was around Rs.39 Lakhs and total loan of Rs.26 Lakhs was provided. But from the record of 2057 B.S., the bank has an authorized capital of RS.1 Arab 17 crore 23 Lakhs and same amount of paid-up capital. Now, there are about 5800 staffs and 201 branch office on 68 districts around the Country. The total deposit

collection of RBB now is RS. 38 Arab 41 Crore 9 Lakhs 10 thousand and total loan provided to commercial sector is R.s 27 Arab 57 Crore 4 Lakhs 32 thousands. At starting, there is no rules and regulation governing the activities of RBB but in 2031 B.S., Banijya Bank Act was made and since then, this Act is controlled the activities of the bank. It has to follow the provisions of company Act 2053 because it is established as a public limited company and hence, there is a group of Board of Directors.

2.2.2 Role of Rastriya Banijya Bank Nepal is underdeveloped country. So it has been facing the problem of accelerating the places of economic development. In this respect, RBB plays a vital role. The commercial banking system in Nepal is still in its inform stage as compared to other developed countries. However, the important rule of it in economic development as well as industrial development. In our country, only two commercial banks are operation and RBB is second one. It has been performing a leading role to the best of their capacity in collecting of capital and promotion of agriculture, industry, trade and commerce.

The bank has three types of deposit. They are: y y y Saving Current and Fixed For current deposit there is no interest. But for saving deposit there is 6.25% of interest rate, where for fixed deposit it has 7.25% per 1 year and for over 2 years has 7.50%.

In Nepal, more than 90% of population lives in rural areas where banking services, facilities are not within the reach of people. In one hand, people are not well aware of saving habit and poor people can not save on the other hand. Besides this some of the problems, the bank is facing other problems which are list below: 1. More than 90% of population lives in rural areas of Nepal, but due to unbalanced growth of banking in the country, most of the people living in that area are deprived of banking facilities. Hence, a major part of resources of monetary assets owned by them are remaining ideal which could have been utilized in other productive areas. 2. Lack of banking knowledge among the general public, bad social customs and habit for expanding in unproductive sector are others problem for collection the deposits. 3. Behavior of some of the bank staffs toward clients is not so smooth, and they do not respond to the client friendly. This has developed negative thought about RBB among the general public, as a result of which people are found being attracted toward other joint venture commercial banks. This problem is due to the lack of proper training and job satisfaction among the staffs.

2.2.3 Services of Rastriya Banijya Bank

i. ii. iii.

It accepts deposits, as current, saving, current and call deposits. It provides remittance service through, draft, mail transfer, tt and fax transfer. Lending is its major service and lending products are working capitals, overdraft, consumer loan consortium, trust receipt, hire purchase, construction, securities, trade finance, term loan, cash credit.

iv. v. vi. vii.

It facilities foreign trade transaction by issuance of documentary letter of credit. Provides the services of merchant banking by issue management, underwriting, refund management, security dealer. It provides the services of foreign exchanging transaction. It provides many other services.

2.2.4 Saving of Rastriya Banijya Bank The bulk of the resources employed by a bank consists of borrowed money i.e. deposits, which is lend out as profitably as is consists with safety. Increase in deposit provides a bank with additional cash, the increase in cash supplements its loan able resources and permits a more than proportionate increase in its loan. Therefore deposits collection is the important functions of the bank. Bank accents the deposits from the people in its current, saving and fixed account and provided its customer safety, maturity, liquidity and return. Saving a\c are such types of a\c in which the customer can deposit any amount of money, which should not less than RS.2000 according RBB rules. And cannot draw more than a limit fixed by the bank. The customer can only cash one cheque in one day and two times a week. At present the customer can only draw RS.1200000 in a week and if more money is need, the banks should be informed in return in advance otherwise the

bank will charge interest beyond limit. The customers get and interest rate of 5%. The bank maintains less amount of liquidity compared to current deposit. The bank therefore invests more money outside and earns more profit.

2.2.5 Document necessary to open Saving Deposit a/c: Required documents for firms and individual to open saving account.

a) For Individual Account: i. ii. iii. Passport, citizenship or Identify card Passport/Visa for foreigners Temporary citizenship certificates for Indian nationals

b) For sole Proprietorship firm: i. ii. iii. iv. Registration certificates Income tax certificates Citizenship of the proprietor Identification of mandate

c) For Partnership firm: i. ii. iii. iv. v. vi. Partnership deed Registration certificates Citizenship of the partners Income tax certificates Authorization of any of the partners is to operate the a/c Identification of mandate, if any

2.2.6 Procedures for opening current a/c in RBB: One who wishes to open saving a/c has to fill the application form and specimen card provided by bank. These documents should be submitted to the bank authority including the certificates of citizenship in case of individual and if it is an artificial person the certificate of registration decision of the board to open account and nomination of account holder also should be included together with the application form.

The applicant should be acquainted of any of the bank employees or regular a/c holder. When all the formalities are completed the applicant is asked to deposit money at the cash counter and after that an account is opened in his name, the a/c number provided and cheque pad and passbook is provided to draw money according to the limitations of saving account. In case the applicant is illiterate, he/she should stick a passport size photograph in the application form and have his initial replace by fingerprint.

2.3 TOOLS AND TECHNIQUES OF ANALYSIS

Tools and techniques of performance analysis covers the basic method or analyzing & evaluating the information collected with the help of balance sheet, profit & loss a/c & other related materials as required. Different chart diagram percentage ratio & other appropriate statistical tool have been considered. Two types of tool have been considered in this study. Data collected & observed are tabulated after adjusting necessary amounts of each overhead. However for the analysis of the data following two tools are used.

2.3.1 Financial Tools Financial tools are widely applicable method fir the analysis of financial statements. The ratio analysis being the major financial tool has been used for the study. Financial tools are widely applicable method for the analysis of financial statements. An analysis of financial statement with the help of those financial tools is very helpful. Tools used for the analysis of the financial statements are explained below: 1) Total Deposit of RBB 2) Saving Deposit of RBB 3) Saving Deposit with other ratio

a. Saving deposit to total deposit ratio b. Total saving deposit to loan & advance ratio c. Saving deposit to cash& bank balance 4) Loan & Advance to Total Deposit 5) Cash Reserve Ratio

2.3.2 Statistical Tools Following tools are taken a) Correlation Coefficient b) Bar-chart.

CHAPTER 3 DATA PRESENTATION AND ANALYSIS

3.1 DATA PRESENTATION & ANALYSIS Research design applied for this study is descriptive and analytical as it deals with the description and interpretation of the data. Statistical tools such as percentage, average and correlation are also applied.

3.1.1 Financial Analysis

The statement of the organization gives an idea about the actual profit it has made during a period & a particular period & its financial position as at the end of the period. These by themselves will not help to conclude whether the financial performance of the organization has been good or not, the statements give only the figure and further analysis & interpretation of these figure is required if one is to understand the organization performance better. It is the process of understanding whether the financial performance of the organization has been good & whether there is any scope for further improvement in the efficient management & in its financial performance. There are different stakeholders who are affected by the decision of the organization the internal stakeholder like managers, owners, employees, investors and external stakeholder like creditors, investor, custom office tax authorities and the society who is looking & directly & indirectly affected by the decision of the organization. Its financial status also affects its stakeholders. Bank is the most important intensive organization where a huge amount of the resource pooling & the number of the creditors, so the financial performance of the company.

3.1.2 Ratio Analysis Ratio analysis is a device by which the relative size & importance of the relationship between strategies of the items in the balance sheets & the income statements are examined & compared by calculation of ratios. It may be expressed in terms of proportion ratios, times or percentage. Some times the ratio is expressed as a pure ratio or a rate. Ratio computed from the single balance sheet will indicate structural relations between one item or group & other items or group in the same balance sheet. Similar

ratios when computer form a series of balance sheet will indicate the trend of such relationship. Ratio between two figures should be computed when such a computations will give some guidance in respect of the purpose of the analysis.

3.1.3 Total Deposit of RBB Total deposit refers to the total deposits of public that has been accepted in various accounts of RBB during certain period. While to know the financial position of the band one should have knowledge about total deposit.

Table 1 Total Deposit of RBB Fiscal year 2060/2061 2061/2062 2062/2063 2063/2064 2064/2065 Total Deposit 40867 43016 46195 50464 57971 RS.(000) % change -10.52 10.73 10.92 11.48

60000 50000 40000 30000 20000 10000 0 2060/2061 2061/2062 2062/2063 2063/2064 2064/2065
Total Deposit

Fig.1 Total Deposit of RBB Source: Rastriya Banijya Bank, Annual Report 2064/2065 The table 1 shows the deposit trends of Ashad 2061 to Ashad 2065. The table suggests that the amount in saving deposit is in increasing trend; however its percentage change is

not uniform throughout the five-year period. In the Ashad 2061 the total deposited amounted to RS. 40867 thousand and in the following year 2062 the total deposited amount up to RS. 43016 thousand with the record high 10.52% similarly in the following year 2063 the total deposit has increased up to RS. 46195 thousand with the10.73%.however for the last two year, though total deposit has increased rather in a diminishing rate with 10.92% and 11.48% respectively. Therefore above table shows that there is an increasing trend in Total Deposit amount, which indicates a positive impact of banking habit developed among people.

3.1.4 Composition of Current, Saving, and Fixed Deposit

It is necessary to know the contribution of current, saving and fixed deposit to total deposit. Without these deposit the total deposit would not exist, so it is necessary to find out the composition of current, saving, fixed deposit.

Table 2 Composition of current, saving & fixed deposit with total deposit Fiscal year (In 000)Current deposit 2060/2061 2061/2062 2062/2063 2063/2064 2064/2065 5648 7015 8304 10388 13278 23704 26979 29746 33046 40213 11515 9022 8145 7030 4480 40867 43016 46195 50464 57971 RS. (In RS. 000) Fixed deposit Total deposit saving deposit

60000 50000 40000 30000 20000 10000 0 2060/2061 2062/2063 2064/2065 Fig.2 Composition of current, saving & Fixed deposit. Source: Rastriya Banijya Bank, Annual Report 2064/2065

(In Rs 000)Current deposit (In Rs 000) saving deposit Fixed deposit Total deposit

The above table 2 & shows amount in all deposit is increasing every year except fixed deposit. The saving deposit has highest amount deposited in comparison to current and fixed deposit. The current deposit is also increasing its amount every while saving deposit too increasing its amount every year but the fixed deposit is decreasing its amount every year.

3.1.5 Saving Deposit of RBB As this report is about saving deposit facility of RBB, it is necessary to know the deposit trends of saving deposit taking 5 years as its source. Table 3 Saving deposit of RBB

Fiscal year 2060/2061 2061/2062 2062/2063 2063/2064 2064/2065


50000 40000 30000

Saving deposit (In RS. 000) 23704 26979 29746 33046 40213

% increase -11.38 11.02 11.11 12.17

Saving deposit (In Rs 000)

20000 10000 0 2060/2061 2061/2062 2062/2063 2063/2064 2064/2065

% increase

Fig.3 Saving deposit of RBB Source: Rastriya Banijya Bank, Annual Report 2064/2065 The table 3 shows the trend pattern of saving deposit for 5 years period time. Ashad 2061 is taken as the base year for analyzing purposes. Above table suggests that amount in saving deposit of RBB is in increasing trend however its percentage of increase is not uniform throughout the five year period. In the Ashad 2060/61 the saving deposit is RS. 23704 thousand and in the year 2061/62 the saving deposit has decreased in a diminishing rate with the 11.32% and in the year 2062/63 the saving deposit is RS. 29746 thousand with the 11.02% and in the year 2063/64 the saving deposit is RS. 33046 thousand with the 11.11% and in the year 2064/65 the saving deposit is RS. 40213 thousand with the rate 12.17% respectively. Therefore above table 3 shows that there is decreasing trend in the year 2063 and the year 2064 and in the year 2065 there is increasing trend in saving deposit. If the saving deposit is increasing then, the people have been motivated and encouraged to open saving a/c and deposit their money and earn interest on them which indicates a positive impact of banking habit develop among people.

However these five years show that there is decreasing trend in saving deposit but last five years there was increasing trend. So it still needs to increase saving deposit.

3.2 SAVING DEPOSIT WITH OTHER RATIO: This ratio indicates the efficiency of saving deposit. It also shows relation of saving deposits with others assets of banks. It is measured by analyzing following ratios.

3.2.1 Saving Deposit to Total Deposit Ratio: The ratio measures the percentage of saving deposit to total deposit. It shows the saving deposit collected out of total deposits. Saving deposit to total deposit ratio= saving deposit Total deposit

Table 4 Saving deposit to total deposit ratio Fiscal year 2060/2061 2061/2062 2062/2063 2063/2064 2064/2065 Saving deposit 23704 26979 29746 33046 40213 Total deposit 40867 43016 46195 50464 57971 Ratio% 58.00 62.72 64.39 65.48 69.36

60000 50000 40000 30000 20000 10000 0 2060/2061 2061/2062 2062/2063 2063/2064 2064/2065
Saving deposit Total deposit Ratio%

Fig.4 Saving deposit to Total deposit ratio Sources: Rastriya Banijya Bank, Annual Report 2064/2065 The above table shows the percentage of saving deposit to that of total deposit. In Ashad 2062 the saving deposit to total deposit increased from 58% to 62.72%. In the year 2063 Ashad the saving deposit to total deposit ratio had increased to 64.39% and in the year 2064 Ashad it increased to 65.48% and also in the year 2065 it has been increased it ratio to 69.39% with the mean 63.99.

3.2.2 Loan & Advance to total deposit Table 5 Loan & advance to total deposit ratio Fiscal year 2060/2061 2061/2062 2062/2063 2063/2064 Loan & advance 25106 27000 23247 24871 Total deposit 40867 43016 46195 50464 Ratio% 61.14 62.77 50.32 49.28

2064/2065

17525

57971

47.48

60000 50000 40000 30000 20000 10000 0 2060/2061 2061/2062 2062/2063 2063/2064 2064/2065
loan & advance Total deposit

Fig.5 Loan & Advance to Total Deposit Source: Rastriya Banijya Bank, Annual Report 2064/2065 The bank would make enough profit if it gives maximum credit from deposit. But it is possible because there is certain rule that bank has to follow such as it has to maintain certain rules that bank premises and a certain percentage has to maintain with NRB. The above table shows the loan and advance strategy of RBB. It has average 54.2% of total deposits are given as loan and advance. In year 2061 Ashad total credit to total deposit ratio 61.14% which has increased in year 2062 to 62.77% but in the year 2063 there is decreased to total deposit ratio to 50.32% and in the year 2064 there is slight decreased to total deposit ratio 49.28% and in the final year there is also decreased in total deposit ratio by 47.48% respectively. 3.3 Correlation between Saving Deposit and Loan granted.

Supposing the saving deposit to be x and Loan granted to be y, the data of both, expressed in percentage (round figure) can be shown as: Saving Deposit (x) 23 26 Loan Granted (y) 25 27 X=x-x -7.2 -4.2 Y=y-y -0.2 1.8 X^2 529 676 Y^2 625 729 XY 575 702

29 33 40 x=151 X= Ex n =30.2

23 24 27 y=126 Y=y n =25.2

-1.2 2.8 9.8

-2.2 -1.2 1.8

841 1089 1600 x^2=4735

529 576 729 y^2=3188

667 792 1080 xy=3816

(Correlation) r= xy X^2 y^2 r= 3816 47353188 r = 0.98

CHAPTER 4 SUMMARY AND CONCLUSION

4.1 SUMMARY AND CONCLUSION Its been more than 60 years of the inception of modern banking system in Nepal. The system of modern banking was founded only in 1994 kartik 30 with the establishment of Nepal Bank Ltd. Nepal Bank Ltd was established as a fully government owned commercial bank. R.B.B the second commercial bank was established to fulfill the

requirement of another commercial bank in Nepal R.B.B was established in 2022 Magh 20 B.S. Because of liberalized economic policy, introduced in Nepal, there are altogether 13 commercial banks operating in Nepal, where 9 of them are joint venture banks with international institutions. Saving deposit is one of the deposit facility provided by RBB. RBB collects saving deposit from various sector of economy. And invest it in productive sector and earn profit from it. In return it provides interest on deposit to its depositors. RBB provide 5% interest on saving deposit a/c.

Bank accepts deposit, make loans and earn profit. Rastriya Banijya Bank was established on 22nd Magh 2022 B.S. under the public sector with objective to provide banking services to the people and business all over the country. The analysis of data shows that the total deposit is increasing each year and saving deposit also. In average saving deposit hold 69.36 of total deposit. Collected deposits are given as a loan to the needy. From total deposit 47.48 are given as loan & advance.

4.2 RECOMMENDATIONS
i. RBB must increase its saving deposit by introducing a no. of attractive deposit scheme. ii. Due to fully own by the government, the bank has not bothered to publish its annual report along with balance sheet, profit and loss analyze its performance. Therefore RBB need to publish its annual report and other

related schedule of accounts to make aware its customers about its financial position. iii. In the course of Field visit found that the service to customer is slow. And the staffs are found too much overburdened.

BIBLOGRHAPHY
1. Indian Banking Companies Act 1949. 2. Http/www.RBB.com. 3. Rastriya Banijya Bank, Head office. 4. Chambers Twentieth century Dictionary. 5. Commercial Bank Act 2031 B.S., Ministry of Law and Justice, HMG. 6. Vaidya, Shakespeare, Banking Management, published by Monitor Nepal. 7. Radhaswamy & Bssudeva, A fundamental of Banking. 8. Shrestha, R. L, A study of Deposit of credit of commercial Bank in Nepal.