COMPARATIVE LIQUIDITY ANALYSIS

OF NEPAL INVESTMENT BANK LIMITED

AND PRABHU BANK LIMITED

       A Project Work Report

By

                              

Tara Gawali

T.U. Registered Number: 9-2-381-13-2016

Bhairahawa Namuna Campus

Submitted to

The Faculty of Management

Tribhuvan University

Kathmandu

In Partial Fulfillment of the Requirements for the Degree of

BACHELORS OF BUSINESS STUDIES (BBS)

Bhairahawa

March, 2020

i
 Declaration

I hereby declare that the project work entitled COMPARATIVE LIQUIDITY ANALYSIS
OF NEPAL INVESTMENT BANK LIMITED AND PRABHU BANK LIMITED submitted
to Faculty of Management, Tribhuvan University, Kathmandu is an original piece of work and
has been composed solely by me; and that it has not been submitted in whole or in part, in any
previous application for a degree. Except where states otherwise by reference or
acknowledgment, the work presented is entirely my own. The work was done under the
supervision Assistant Lecturer Mr. RAKESH KUMAR YADAV faculty member BHAIRAHAWA
NAMUNA CAMPUS, BHAIRAHAWA and submitted in partial fulfillment of the requirement for
the award of the degree of Bachelor of Business Studies (BBS).

.......................................

TARA GAWALI

Date: ...............................

ii
 Supervisor’s recommendation

The project work report entitled COMPARATIVE LIQUIDITY ANALYSIS OF NEPAL

INVESTMENT BANK LIMITED AND PRABHU BANK LIMITED submitted by TARA
GAWALI OF BHAIRAHAWA NAMUNA CAMPUS, BHAIRAHAWA, is prepared under my
supervision as per the procedure and format requirements laid by the Faculty of
Management, Tribhuvan University, as partial fulfillment of the requirements for the award of
the degree of Bachelor of Business Studies (BBS). I, therefore, recommend the project work
report for evaluation.

.........................................

Mr. RAKESH KUMAR YADAV

BHAIRAHAWA NAMUNA CAMPUS

BHAIRAHAWA

Date: ..............................

iii
 Endorsement

We hereby endorse the project work report entitled COMPARATIVE LIQUIDITY ANALYSIS OF
NEPAL INVESTMENT BANK LIMITED AND PRABHU BANK LIMITED submitted by TARA
GAWALI OF BHAIRAHAWA NAMUNA CAMPUS, BHAIRAHAWA in partial fulfillment of the
requirements for award of the Bachelor of Business Studies (BBS) for external evaluation.

....................................... ........................................

MADHUSUDAN POKHREL TUMNATH ARYAL

Chairman, Research Committee Campus Chief

BHAIRAHAWA NAMUNA CAMPUS

Date: .............................

iv
 Acknowledgement

First of all I am thankful to Tribhuvan University and BHAIRAHAWA NAMUNA CAMPUS

which are provide the opportunity to conduct a project report which helps to increase my
knowledge. I would like to express my sincere gratitude to my supervisor, Assistant Lecturer Mr.
RAKESH KUMAR YADAV, for all his support, insights and valuable comments without which
this project report writing would not have been possible. I would like to thank my friend Badri
Maurya for his support; he creates the environment for me to conduct Project Report. I would
like to acknowledge the support I received from staff of Prabhu Bank LTD and Nepal
Investment Bank LTD; they provide the required information at the time of the preparing project
report.

I am also thankful to my friends and family; who are always been my additional source of moral
support and has encouraged me to proceed with this Project Report. I am very grateful to the
committee members for their valuable time in the evaluation of my Project Report and their
comments which was greatly benefited me to improve my project report.

At the time of preparing this study, I have consulted with various personalities. So I would like
to extend my sincere thanks to all whose works and ideas helped me in conducting the study.
Sincerely, I would like to pay my sincere gratitude Lecturers Mr. Madhusudan Pokhrel and
campus chief Tumnath Aryal who gave me idea about the conduct of report.

Thank you!

                                                                                              Tara Gawali

Bhairahawa Namuna Campus

Bhairahawa

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 Table of Contents
Title Page i
Declaration  ii
Supervisor’s Recommendation iii
Endorsement iv
Acknowledgement v
Table of Content    vi
List of Tables viii
List of Figures ix
List of Abbreviations  x

CHAPTER I: INTRODUCTION 1-3

1.1. Back ground of the study 1
1.2.  Statement of problem  2
1.3.  Objective of study  2
1.4. Rational of study 3
1.5. Report Structure 3
           
CHAPTER II: LITERATURE REVIEW 3 - 10
2.1  Conceptual Review 3
2.2  Review of Previous Works 5
2.3 Research Gap  10
                                   
CHAPTER III: METHODOS 11 - 14
3.1. Type of Research 11
3.2 Population and sample 11
3.3 Types of Data   12
3.4  Data collection procedure 12
3.5 Instruments 13
3.6 Techniques of Analysis 14
3.7 Limitations of the Study 14

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CHAPTER IV: RESULTS AND FINDINGS 15 - 26
4.1  Presentation of Data in Tables and Figures and their Analysis 15
4.2 Major Findings 26

CHAPTER V: DISCUSSIONS AND CONCLUSION 27 - 30

5.1  Discussion   27
5.2  Conclusion and Implementations 28

 REFERENCES 31 - 32
APPENDICES 33

vii
 List of Tables

Table 4.1 Comparative Current Ratio of NIBL and PBL 16

Table 4.2 Comparative Loan to Deposit Ratio of NIBL and PBL 17

Table 4.3 Comparative Cash and Bank Balance to Total Deposit Ratio of
NIBL and PBL 19

Table 4.4 Comparative Cash and Bank Balance to Current and Saving Ratio of
NIBL and PBL
20
Table 4.5 Comparative NRB Balance to Current & Saving Deposit Ratio of
NIBL and PBL
21

Table 4.6 Comparative NRB Balance to Fixed Deposit Ratio of NIBL and PBL 22

Table 4.7 Comparative Fixed Deposit to Total Deposit Ratio of NIBL and PBL 24

Table 4.8 Comparative Cash Reserve Ratio of NIBL and PBL 25

viii
 List of Figures

Figure 2.1. Theoretical Framework .4

Figure 4.1. Comparative Current Ratio of NIBL and PBL 16

Figure 4.2. Comparative Loan to Deposit Ratio of NIBL and PBL 18

Figure 4.3. Comparative Cash &Bank Balance to Total Deposit Ratio of

NIBL and PBL 19

Figure 4.4. Comparative Cash & Bank Balance to Current & Saving Deposit Ratio of
NIBL and PBL
20

Figure 4.5. Comparative NRB Balance to Current & Saving Deposit Ratio of
NIBL and PBL
22

Figure 4.6. Comparative NRB Balance to Fixed Deposit Ratio of NIBL and PBL 23

Figure 4.7. Comparative Fixed Deposit to Total Deposit Ratio of NIBL and PBL 24

Figure 4.8. Comparative Cash Reserve Ratio of NIBL and PBL 25

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 List of Abbreviations

& and

AHP Analytical Hierarchy Process

ANOVA Analysis of Variance

CAMEL Capital adequacy, Assets Quality, Management Quality, Earning Quality

and Liquidity Quality

CBBTDR Cash and Bank Balance to Total Deposit Ratio

CBBCSDR Cash and Bank Balance to Current and Saving Deposit Ratio

CHTDR Cash in hand to Total Deposit Ratio

CR Current Ratio

CRDB Cooperative Rural Development Bank

CRR Cash Reserve Ratio

EBL Everest Bank Limited

FCMB First City Monument

FTDR Fixed to Total Deposit Ratio

HBL Himalayan Bank Limited

i.e. that is

IBTC Investment Banking Trust Company

LDR Loan to Deposit Ratio

LFTDR Liquidity Fund to Total Deposit Ratio

LTD Limited

x
NIBL Nepal Investment Bank Limited

NIM Net Interest Margin

NRB Nepal Rastra Bank

SBT Prabhu Bank Limited

NRBBCSDR NRB Balance to Current and Saving Deposit Ratio

NRBBFDR NRB Balance Fund to Deposit Ratio

NSBIBL Nepal SBI Bank Limited

PBL Prabhu Bank Limited

ROA Return on Assets

ROE Return on Equity

SBH State Bank of Hyderabad

SBI State Bank of India

SBBJ State Bank of Bikaner and Jaipur

SBM State Bank of Mysore

SCBN Standard Chartered Bank Nepal

SBP State Bank of Patiala

SBT State Bank of Travancore

xi