A STUDY ON CASH MANAGEMENT ANALYSIS

OF

NMB BANK

A Research proposal

Submitted By
RAKSHYA DANGOL
TU Regd No.7-2-1130-0019-2015
Bagmati College

Submitted To
The Faculty of Management
Tribhuvan University
Kathmandu

In Partial Fulfilment of Requirement for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Kathmandu, Nepal

August 2018
 DECLARATION

I hereby declare the proposal entitled “A Study on Cash Management Analysis of NMB
Bank” submitted to Tribhuvan University, is a record of original work done by me under
the guidance of Mr. Suresh Bhandari, Faculty Member, Bagmati College,Kathmandu. The
report is submitted in the partial fulfilment of the requirement of Degree of Bachelors in
Business Studies (BBS). The results embodied in this proposal have not been submitted to
any other University or Institute for the award of any degree or diploma.

………………………..

Rakshya Dangol

BBS 4th year

Bagmati College

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INTRODUCTION
Background of the Study

Cash management is the corporate process of collecting and managing cash, as well as
using it for short-term investing. It is a key component of a company's financial
stability and solvency. Corporate treasurers or business managers are frequently
responsible for overall cash management and related responsibilities to remain
solvent.

Cash management involves not only avoiding insolvency, but also reducing the
average length account receivables (AR) are outstanding, increasing collection rates,
selecting appropriate short-term investment vehicles, and increasing cash on hand to
improve a company's cash position and profitability.

Wisely managing cash enables a company to meet unexpected expenses, and to

handle regularly occurring events such as payroll. There are two types of the cash
management are:

1) Receivables Cash Management

Cash management is the treasury function of a business, responsible for achieving

optimal efficiency in two key areas: receivables, which is cash coming in, and
payables, which is cash going out.

When a business issues an invoice it is reported as a receivable, which is cash earned,

but not yet to be received. Depending on the terms of the invoice, the business may
have to wait 30, 60 or 90 days for the cash to be received. It is common for a business
to report increasing sales, yet still run into a cash crunch because of slow or poorly
managed receivables. There are a number of things a business can do to accelerate its
receivables and reduce payment float, including clarifying billing terms with
customers, using an automated billing service to bill customers immediately, using
electronic payment processing through a bank to collect payments, and staying on top
of collections with a receivables aging report.

2) Payables Cash Management

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When a business controls its payables, it can better control its cash flow. By
improving the overall efficiency of the payables process, a business can reduce costs
and keep more cash working in the business. Payables management solutions, such as
electronic payment processing, direct payroll deposit and controlled disbursement,
can streamline and automate the payable functions.

Most of the receivables and payables management functions can be automated using
business banking solutions. The digital age has opened up opportunities for smaller
businesses to access the same large-scale cash management technologies used by
bigger companies. The cost savings generated from more efficient cash management
techniques easily offsets the costs. More important, management will be able to
reallocate precious resources to growing the business.

Statement of the Problem

A description of the issue that is addressed or need to improve is refer is the statement
of the proposal. The research will help out to answer the overall cash outflow and the
cash inflow of the NMB Bank and system of the cash management as well as the
other issues are as follows:

 What are the major factors affecting cash management policy?

 How the Bank is operating its cash management in this competitive market?
 What is the status of credit administration and credit recovery process of the
bank?
 How the non-performing asset is affecting cash management? Is writing off of
non-performing assets satisfactory?

Objectives of the Study

The financial institution play very vital role in the economic development of the
nation. The efficient performance of the banks and financial institution give shape to
economic indicators of the nation. The main purpose of this study is to examine the
way and techniques used by NMB Bank in Cash Management. Study will cover the
areas where cash are managed by bank.
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The major objectives of the study are to examine the management of cash of NMB
Bank. Therefore, the basic objective is as follows:

 To examine the cash management of NMB Bank

 To analyse the relationship between the deposits collected and loan
distributed by the bank
 To analyse the impact of non-performing assets on cash management

Significance of the Study

Banking sector plays an important role in the economic development of the country.
Cash management is a most important and crucial part of business. Business could not
run without having enough cash. Proper management in cash is needed for smooth
flow of business. The expected significance of this study is as follows:

 The finding of the study helps to know the ways of cash management of NMB
 Study will be useful and provide guideline for further researches in similar
area
 It is expected that the study will help the people to get information about cash
management strategy in NMB

Research Methodology

There are two types of data: a) Primary data & b) Secondary data. Primary data means
the original data that has been collected specially for the pre-purposed. Secondary
data are the data which has already been collected and is usually available in
published or electronic form. The study is based on the secondary data so the data is
collected from the data published by the NMB Bank itself and by using the report
made by the other researchers. The study will include gather the information about the
cash management through the internet network means.
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Research Design

The research design is the pathway or blueprint for the research, dealing with at least
four problems: what questions to study, what data are relevant, what data to collect,
and how to analyse the results? Descriptive Research Design is used for the study as it
includes the collection of the secondary data in order to meet the objectives of the
research Different websites, proposal, report as well as the financial statement
published by the NMB Bank are used for the collection of the data. Moreover, various
statistical tools as well as financial tools are used to interpret the data.

Instruments

Different tools are required for the collection of the data. As the the study includes the
cash management analysis of the NMB Bank so the observation and the data review is
the way of the collection of the data.

Types of Data

The data or the information initially published by the NMB Bank on different media
is the key data sources for the study. The study includes the research on the secondary
data provided by the bank itself.

Source of Data

As the study includes the secondary data of the NMB Bank, the source for the data is
published articles or the financial information. Internet, newspaper, articles are the
sources of the data carried for the research purpose.

Data Collecting Strategy

In-between the direct-contact data collection strategy and the indirect data collection
strategy, the research includes the second strategy (indirect data collection
strategy).As the study collects the data through paper survey, web survey, existing
reports, etc.
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Data Analysis

Data do not give the information as it is not organised and summarized and
interpreted .So, the different statistical as well financial tools are used for the analysis
of the data about NMB Bank

Limitation of the Study

The study tries to find out the strategy and techniques of cash management of NMB.
The researcher will try to cover most of the information regarding the topic, but still
there are certain limitations. The limitation of the study is as follows:

 Report covers a period of five fiscal years data due to the time constraint.
 The study is based to know the techniques of cash management of NMB bank
did not disclose much.
 Study is based on secondary data
 .Time constraints are one of the main limitations of the study because it must
be submitted within stipulated period of time

Organization of the Study

In three categories report is organised. They are:

CHAPTER I: INTRODUCTION

The introduction part of the report includes the background, statement of the problem,
objectives of the study, significance of the study, limitation of the study, organisation
of the study.

CHAPTER II: RESULT AND ANALYSIS

The data collected of NMB Bank are classified and presented on the different tables
and the graph with the help of the financial and statistical tools and the major finding
of the study are the subject matter of the second chapter.

CHAPTER III: SUMMARY AND CONCLUSION

The third chapter includes the over view of the whole study as conclusion and
implication of the study.
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 REFERENCES

Bhandari, D.R. & Adhikari, P.R. (2014).Research Methodology, Kathmandu:

Dhaulagiri Books & Stationery.

Koirala, M.R., Chalisea, D.R. &Mishra, S. (2012).Fundamentals of Financial

Management, Kathmandu: KEC Books Publishers & Distributors (P) Ltd.