DEPOSIT MOBILIZATION OF

NABIL BANK LIMITED

A Project Report

Submitted by:
Monika Kumari Thapa
Pokhara Multimodal Campus
T.U. Registration No: 7-2-397-11-2018
Exam Roll No.: 703970006

Submitted to:
The Faculty of Management
Tribhuvan University
Kathmandu

In the partial fulfillment of the requirement for the degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Pokhara

April, 2023
 DECLARATION

I hereby declare that the project work entitled “DEPOSIT MOBILIZATION OF

NABIL BANK LIMITED” submitted to the Faculty of Management, Tribhuvan
University, Kathmandu is an original piece of work under the supervision of
Mr.NIRMAL PAHARI, faculty member of POKHARA MULTIMODAL CAMPUS,
Pokhara and is submitted in the partial fulfillment of the requirements for the degree
of Bachelor of Business Studies (BBS). This project work report has not been submitted
to any other university or institution for the award of any degree or diploma.

Signature:

Name of student: Monika Kumari Thapa

Date: April, 2023

ii
 SUPERVISOR’S RECOMMENDATION

The project work report entitled “DEPOSIT MOBILIZATION OF NABIL BANK

LIMITED” submitted by MONIKA KUMARI THAPA of Pokhara Multimodal
Campus, Pokhara 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 degree of Bachelor of Business Studies (BBS).
I, therefore, recommend the project work report for evaluation.

Signature:

Name of Supervisor: MR. NIRMAL PAHARI

Date: April, 2023

iii
 ENDORSEMENT

We hereby endorse the project work entitled “DEPOSIT MOBILIZATION OF NABIL

BANK LIMITED” submitted by MONIKA KUMARI THAPA of Pokhara Multimodal
Campus, Pokhara, in partial fulfillment of the requirements for the degree of the
Bachelor of Business Studies (BBS) for external evaluation.

Signature: Signature:

MR. BABURAM LAMICHHANE MR. KRISHNA K.C

Chairman, Research Committee Campus Chief/principal

Date: April,2023 Date:April,2023

iv
 ACKNOWLEDGEMENTS

This study attempts to examine the Deposit Mobilization of Nabil Bank limited with
available data and information. It also deals with problem identification besides this
field study to acquire the reality of banking operation of NABIL Bank. I express my
heartiest gratitude to NIRMAL PAHARI for guiding and inspiring me to do this project-
work. I would also like to thank Krishna K.C (Campus Chief), Baburam Lamichhane
(Head of Research Department) and the entire staff members for their kind co-operation
and supports providing valuable information required for the completion of the report.
Finally, I want to thank my colleagues for their continued moral support.

Thank You!

Monika Kumari Thapa

B.B.S 4th year

Pokhara Multimodal Campus

Srijanachowk, Pokhara

v
 TABLE OF CONTENTS

Title Page ... ... ... ...... ... ... ... ... ... ... ... … … … ... ... ... … ... . ... ... …i
Declaration .... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... … … … … ... ..ii
Supervisor’s Recommendation ... ... ... ... ... ... ... ... ... … … … … ... ..iii
Endorsement ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ....iv
Acknowledgements ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ..v
Table of Contents... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...... ... .... ..vi
List of Tables ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... … ... ... .... .. vii
List of Figures ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... viii
Abbreviations............................................................................................ ix

CHAPTER ONE: INTRODUCTION ... ... ... ... .. ... ... ... ... ... ... .. ... ..1
1.1 Background … … … … ... ... ... ... ... ... ... ... ... ... ... ... ... ... ..1
1.2 Profile of Nabil Bank Limited... … … ... ... ... ... ... ... ... ... ... ..2
1.3 Objectives of the Study ... ... ... ... ... ... ... ... ... ... .... ... .. ... … 4
1.4 Rationale of the Study... … .... .... .... ... ... ... ... ... ... ... .. … ...11
1.5 Review of Literature.. ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ....6
1.6 Research of Methodology ... ... ... ... ... ... ... ... ... ... .. .. … … 12
1.7 Limitations of the Study... ... ... ... ... ... ... ... ... ... ... ... ... ... ...12

CHAPTER TWO: RESULTS AND ANALYSIS ..................................14

2.1 Data Presentation ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .14
2.2 Findings… … … … … … .. ... ... ... ... ... .. ... ... ... ... ... ... ... 23

CHAPTER III: SUMMARY AND CONCLUSION... ... ... ... ... ... ... ..24
3.1 Summary... ... ... ... ... ... .... ... ... ... ... ... ... ... ... ... ... ... ... ... ..24
3.2 Conclusion... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .25
BIBLIOGRAPHY

vi
 LIST OF TABLES
Page no.

Table 1 : Total Loan Position of NBL..................................................................15

Table 2 : Restructure Loan Provision of NBL.....................................................16

Table 3 : Sub Standard Loan Position of NBL....................................................17

Table 4 : Doubtful Loan Position of NBL............................................................18

Table 5 : Loan Loss Position of NBL...................................................................20

Table 6 : Interest Expenses of NBL......................................................................21

Table 7 : Interest Income of NBL........................................................................22

vii
 LISTS OF FIGURES
Page no.

Figure 1 : Total Loan Position of NBL.................................................................15

Figure 2 : Restructure Loan Provision of NBL.....................................................17

Figure 3 : Sub Standard Loan Position of NBL....................................................18

Figure 4 : Doubtful Loan Position of NBL...........................................................19

Figure 5 : Loan Loss Position of NBL..................................................................20

Figure 6 : Interest Expenses of NBL.....................................................................21

Figure 7 : Interest Income of NBL........................................................................22

viii
 ABBREVIATIONS

ATM -Automatic Teller Machine

BBS -Bachelor of Business Studies

CDs -Certificate of Deposits

Fig -Figure

GNP -Gross National Product

L.C -Letter of Credit

HBL - Himalayan Bank Limited

NRB - Nepal Rastra Bank

OLS - Ordinary Least Square

ix
 1

CHAPTER ONE
INTRODUCTION

1.1.Background

A bank is financial institution that accepts deposit from the public and creates credit.

Leading activities can be performed either directly or indirectly through capital

markets. Due to their impotence in the financial stability of a country, banks are highly

regulated in most countries. Most nation have institutionalized a system known as

fractional reserve banking under which bank hold liquid assets equal to only a portion

of their current liabilities. In additional to their regulation intended to ensure liquidity

banks are generally subject to minimum capital requirement based on an international

of set capital standard known as the Basel accords.

The term 'bank' is derived from the Latin word ‘bancus’, Italian word ‘banca’ and

French word ‘banque’ all of which mean 'a bench'. At ancient times there used to be

some moneylenders who sat in the bench for keeping, lending and exchanging of money

in the market place. Bank is a financial intermediary accepting deposit and granting

loans. In fact, a modern bank performs variety of function that is difficult to precise and

general definition of a bank. his money to those who require it.(wikipedia,2022).

To mobilize enough deposits, banks should present various kind of deposit schemes to

attract customers. Normally customers have various kinds of needs and wants with

respect to their gender, age, profession, level of income, type of necessity, tenure, size

of business and so many other factors lead to make a discrepancy among customers

when they deposit their money in banks. There should be strategy requires as policy
 2

and procedural changes, development of innovative programs and improvement in the

quality of services provided to the depositors. Furthermore, the quality of banking

services depends on several factors as, interest rate, banking time, promotion,

branching policy. The expansion banking facilities is the key factor for deposit

mobilization and when providing facilities accessibility is the most important factor.

Innovative approaches, Interest rate policy, more incentives to depositors, more

incentives to bank employee when achieving targets on deposit mobilization, training

for bank employees and expansion of infrastructure plan important role for to raise

deposit from depositor (Khalily, 1987).

1.2. Profile of Nabil Bank Limited

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 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. Statement of the problem in this research work related to the

collection of fund and its Mobilization:

 3

• What is the relationship between total deposit mobilization, advances and Profitability

of Nabil bank?

• What is the trend of deposit mobilization in Nabil Bank Limited?

• Are the Nabil bank mobilizing their deposit efficiently?

1.3. Objectives of the Study

The main objective will to analyze the deposit mobilization of Nabil Bank Ltd. Other

specific objectives are;

• To examine the relationship between total deposit mobilization, loan & advances And

profitability of Nabil bank.

• To analyze the trend of deposit mobilization of Nabil Bank Ltd.

• To study the total deposit mobilization in Nabil bank.

1.4. Rationale of the study

Deposit is one of the basic sources of the bank to mobilize the fund, without deposit

bank Cannot operate its activities. Therefore, bank has to focus on in collecting scared

small Deposit and transfer these deposit into productive sector for the economic

development of Nation. Hence, the study is to examine the performance of Sanima bank

and NABIL bank In deposit mobilization. Analyzing growth of deposit, loan and

advances, investment, and Interlink of financial performance and deposit mobilization,

give the ideas of the banks Functioning, strength and weakness of the bank’s strategies.

Therefore, the policies and Programs can be made to improve the performance of the

bank. This study is significance To know the challenges in deposit mobilization for

commercial banks. The study deals with profitability in subject to total deposit, loan

and advances, investment, Net Profit, as an aid to economic development of the country
 4

by making research of deposit Mobilization of commercial bank and their utilization to

fulfill the need of the different Sector of the economy. It is helpful to investor,

customers and management team to know How BFIs are utilizing deposit gather from

general people and mobilizing into lending Activities either by loan or capital market

in order to generate profit.The other significance of this study is, to support further

investigation on the area. Since, There are no sufficient studies conducted on this area

of deposit mobilization in Nepal, it Will also help other researchers through revealing

issues for further research.

1.5. Review of Literature

A literature review is scholarly paper, which includes the current knowledge including

Substantive finding, as well as the theoretical and methodological contribution to a

Particular topic. Literature reviews are the secondary source, and do not report new or

Original experimental work. An effective research is based upon the past knowledge

and a of past literature. A review of previous related research includes review of various

Research /scholar journals and articles and dissertation and other related studies. It can

be Illustrated in the following manner (Larabee, 2007)

1.5.1 Conceptual Review

Commercial institution are those financial institutions, which deals in accepting the

deposit of people and institutions and giving loan against securities. They provide

working capital need of trade, industry and even to agricultural sector’s. Moreover,

Commercial bank also provide technical and administrative assistance to trade,

industries and business enterprises. Commercial bank is a corporation which accepts

demand deposits, subject to check and make short loans to business enterprises,
 5

regardless of the scope of its other services.Deposits are defined as funds placed in a

financial institution by economic surplus units such as householders, corporations,

investors and government. These funds can either be From cash, claims to money, like

checks placed in depositor’s accounts, bank loans or Money from investments

(Van,1995).

Deposit mobilization is the process of public cash or funds accumulation by the

financial Institutes via its different routes, for instance, savings, current, fixed deposit

accounts and other specialized schemes. It is an integral part of banking activity.

Mobilization of saving through intensive deposit collection has been regarded as the

major task of commercial bank. Acceptance of deposit is the primary function of

commercial banks. As such, deposit mobilization is one of the basic innovations in

current banking activity.

Banks utilized its funds in suitable area and right sector. Banks cannot achieve its goals

until and unless it mobilizes its deposit in right sectors and by performing different

activities. Much kind of activities and other things can origin for receiving invest from

the bank, but bank should separate the useful and profitable sector for mobilization its

deposit (Sahu & Rajasekhar, 2005).

Deposit Mobilization of Commercial Banks in the Context of Nepal Capital formation

is one of the important factors leads to increase in the size of national Output income

and employment, solving the problem of inflation and balance of payment And foreign

debts. According to classical economist, one of the main factors which helped Capital

formation was the accumulation of capital. Commercial banks are those institutions,

Which deals capital formation by mobilizing spread deposit from and lending in

productive Sector. These banks provide working capital needs of trade, industry and
 6

even to Agricultural sector. Commercial banks are the heart of financial system. Banks

make fund Available through their lending and investing activities to borrowers,

individuals, business Firms and services Nepali Banks and Financial Institutions (BFIs)

are hardly struggling with the ongoing shortage of deposit funds. Such problems have

become frequent since 2010 when BFIs for the first time found themselves between a

rock and hard place due to the acute shortage of deposit. The years following 2010 have

witnessed such recurrences in high and low magnitudes with a deepening of the crisis

particularly in the last two fiscal years. The reason behind this is the high demand of

credit and insufficient supply of money which is largely dependent on growth of

deposits. In its recently published Nepal Development Update, The World Bank has

stated that the growth of money supply in Nepal at present is at a record low level

(Shrestha, 2007).

1.5.2 Empirical Review

Adams (1978) argued in support of mobilizing voluntary saving from rural pro poor

households on various grounds. Adams recognized the potential of voluntary saving

mobilization for overall strengthening of the rural financial markets. According to

Adam the voluntary saving mobilization plays a significant role in strengthening local

service organizations.

Hellmann, Murdock, Stiglitz(1995) in his article “Saving Deposit through Financial

Restraint” noted that financial systems in developing countries were mostly

characterized by low levels of formal intermediation and a weak institutional structure.

Mobilizing deposits is crucial in many developing countries. Domestic funds provide a

cheap and reliable source of funds for development, which is great value developing
 7

countries, especially when the economy has difficulty raising capital in international

markets.

Varman (2005) stated that deposits are foundations upon which thrive and grow. They

are Unique items on a bank’s balance sheet that distinguish them from other types of

business Organizations. In otherwise deposits from public represent by far the most

powerful source Of fund to a bank, accounting for over 90 percent of the total. These

deposits are keys to a Banks potential growth. These funds are liabilities of the bank,

because these have to return To the owner on demand. Therefore, bank need to well

mobilize of deposit collected and Lending it to the deficit group to maintain the

economy of nation.

Venkateshan (2012) made a research entitled an empirical approach to deposit

Mobilization of commercial banks in Tamil Nadu. The researcher attempted to study

the Trend and growth in deposit mobilization of scheduled commercial banks in Tamil

Nadu During the period from 1999-2000 to 2008-2009. The Compound Growth Rate

(CGR) and Linear Growth Rate (LGR) were calculated from using simple regression

analysis. The Study found that, there has been a remarkable growth in mobilization of

all kinds of Deposits in scheduled commercial banks in Tamil Nadu overall.

1.6. Research of Methodology

This chapter discusses research methodology which the researcher used in the process

of Data collection. It includes the research design, the target population, sampling

method and Sample size, data collection procedures and data analysis method. Research

methodology Is a systematically way of solving the research problem. It may be

 8

understood as science Of studying that how research is done scientifically as well as

systematically (Kothari, 1989).

1.6.1 Research Design

A research design is a plan of action adopted by researcher in carrying out the research.

It Is the overall operational pattern of framework for the project that stipulates what

Information is to be collected, form which sources and by what procedures. In other

way, A research design is the plan, structure and strategy of investigations conceived

to obtain Answer to research question and to control variances. For this study, this

research is Designed in mostly descriptive and causal comparative research design

towards historical Last five years data. The study attempts to analyze the mobilization

of deposit and its uses by commercial banks particularly of NABIL Bank. The research

Designed follows the deposit structure and its mobilization in various sectors.

1.6.2 Population and sample

There are 23 commercial banks in Nepal. Out of them I analyzed the deposit of Nabil

Bank Ltd as a a sample. The research subject is about deposit analysis of citizen and in

consonance with all other deposit concerns and banks engaged in deposit analysis and

mobilization and various data related to deposit analysis of bank are included in the

population of study and among all of them Nabil Bank is taken for research purpose.

Among them, the sample banks are taken on the basis of Judgmental sampling method

of non-probability sampling. Though the sample is relatively Small, efforts are made to

make the more accurate and precise. Thus, finally this research is expected to give

possible outcome and Nabil Bank is chosen for the best result.
 9

1.6.3 Types and Sources of Data

Data have been obtained from secondary source. The use of same data by other parties

Would now be termed as secondary data. This study has used secondary source of data

collected from NABIL Bank limited. All the collected data and Information have been

properly arranged, synthesized, tabulated and calculated to arrive At the realistic

analytical steps.

1.6.4 Data Analysis Tools

Data are collected for analysis and presentation of research or any conclusive result.

Data Alone are not complete unless the data are related with activities to get some

output/result. The data can be analyzed by using financial and statistical tools. For the

analysis of the data, following two statistical tools have been used.

i) Financial tools

• Ratio analysis

• Total loan and advance to total deposit ratio

• Return on total deposit

• Return on total loan and advance

ii) Statistical Tools

• Mean

• Diagram

• Standard deviation

• Data table
 10

1.7. Limitation of the Study

Any research can’t be free from limitation; some major limitations faced during

Preparation the study are mentioned below:

• This study is based on secondary sources of data. This study does not consider

primary source of data.

• This study undertakes only deposit mobilization of commercial bank. This study Does

not consider other aspect such as size, interest rate, credit operation, bank Image,

promotion, branch expansion, awareness, services, technology etc.

• This study will be concerned primarily with only one i.e., Nabil Bank Limited.

• This study will be focused only on deposit mobilization of Nabil Bank Limited.

• This study undertakes only deposit mobilization of commercial bank. This study Does

not consider other aspect such as size, interest rate, credit operation, bank Image,

promotion, branch expansion, awareness, services, technology etc.

 11

CHAPTER TWO
RESULT AND ANALYSIS

2.1 Data Presentation

Presentation and data analysis of data is the main body of the study. Introduction,

review of literature and research methodology is presented in the previous chapter that

provide the basic inputs to analyze and interpret the data. In this chapter, data are

presented and analyzed.

2.1.1 Deposit Mobilization

Deposit mobilization is an integral part of any bank. It is the primary function of any

commercial banks. Bank cannot achieve its goal and objective without mobilizing the

deposit in the right sector in different activities. Banks will have to show an ascending

order if profit in order to ensure growth with stability. For this purpose, the bank will

have to allocate the resources to different sectors in such a way the bank can gain

adequate profitability.

Therefore, banks should mobilize their deposits in suitable and profitable banking

activities in the right sector. To examine the deposit mobilization of Nabil bank,,

different ratio have been computed, tabulated and analyzed as bellows.

A) Total Deposit Growth

Total deposits are the over all money including the primary deposits created by the

commercial banks as a process of credit creation through its primary deposit. It is

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡 – 𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑌𝑒𝑎𝑟 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡

calculated by TD:
𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑌𝑒𝑎𝑟 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡
 12

Table 1 : Total Deposit Growth of Nabil Bank (Rs in Billion)

Year Total Deposit Growth rate(%)

2074/75 135.98 11.51%

2075/76 164.37 20.88%

2076/77 193.04 17.44%

2077/78 223.98 18.10%

2078/79 329.58 44.57%

Source:Annual report of NABIL Bank Ltd

Total Deposit Growth

50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2074/75 2075/76 2076/77 2077/78 2078/79

F/Y

Fig 1: Trend line Showing Growth of Total Deposit

From above table and figure shows the growth of Total Deposit in Nabil Bank Limited.

The growth rate of Nabil Bank Ltd is increasing from the Fiscal Year 2074/75 to Fiscal

Year 2079/79 are 11.51%, 20.88%, 17.44%, 18.10% and 44.57% respectively. The

highest growth rate is in FY 2078/79 is 44.57% and the lowest growth in FY 2074/75

is 11.51%. By analyzing last five year growth rate, it may increase the growth rate of

total deposit in next year. So, the Growth rate of Total Deposit in Nabil Bank Ltd is in

increasing trend.
 13

B) Cash and Bank Balance to Total Deposit Ratios

To have sufficient liquidity to pay the current liabilities the bank needs to have adequate

cash and bank balance because cash and bank balance are the most liquid current assets

of a firm. This ratio is computed dividing the amount of cash and bank balance by the

𝐶𝑎𝑠ℎ 𝑎𝑛𝑑 𝐵𝑎𝑛𝑘 𝐵𝑎𝑙𝑎𝑛𝑐𝑒

total deposits. It is presented by CBB to TD : ∗ 100%
𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡

Table 2: Cash and Bank balance to Total Deposit ratio(Rs in Billion)

Year Cash & Bank Total Deposit Ratio(%)

Balance

2074/75 7.95 135.98 5.85

2075/76 10.67 164.37 6.49

2076/77 4.80 193.04 2.49

2077/78 7.29 223.98 3.20

2078/79 11.05 329.58 3.35

Source:Annual report of NABIL Bank Ltd

Cash and Bank Balance to Total Deposit

7

0
2074/75 2075/76 2076/77 2077/78 2078/79

F/Y

Fig 2 : Trend line Showing Cash and Bank balance to Total Deposit
 14

From above table and figure shows the mobilization of total deposit to maintain cash

and bank balance in order to have enough liquidity. The cash and bank balance in the

selected banks is in fluctuating trend, while the total deposit is in increasing trend. Nabil

Bank Limited maintained the higher ratio at 6.49 percent in FY 2075/76 and lowest is

2.49 percent in FY 2076/77 during the study period. The average ratio of Nabil Bank

Limited is 4.28 percent.

C) Cash Reserve Ratio

Under cash reserve ratio (CRR), the commercial banks have to hold a certain minimum

amount of deposit as reserves with the central bank. The percentage of cash required to

be kept in reserves as against the bank's total deposits, is called the Cash Reserve Ratio.

𝑁𝑅𝐵 𝐵𝑎𝑛𝑘 𝐵𝑎𝑙𝑎𝑛𝑐𝑒

It is presented by CRR: ∗ 100%
𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡

Table 3: Cash Reserve Ratio of Nabil Bank Ltd (Rs in Billion)

Year Amount Total Deposit Ratio(%)

2074/75 7.37 135.98 5.42

2075/76 8.00 164.37 4.87

2076/77 20.02 193.04 10.37

2077/78 8.02 223.98 3.52

2078/79 13.04 329.58 3.96

Source:Annual report of NABIL Bank Ltd

 15

Cash Reserve Ratio

12

10

0
2074/75 2075/76 2076/77 2077/78 2078/79

F/Y

Fig 3: Trend line Showing the Cash Reserve Ratio

From above table and figure shows NRB bank balance to total deposit ratio. The

highest CRR is 10.37 in FY2076/77 and the lowest CRR is 3.52 in FY 2077/78 during

the study period. And the average ratio of Nabil Bank Ltd is 5.63 percent. The NRB

bank balance to total deposit, it can be concluded that Nabil Bank Ltd has mobilized

medium portion of total deposit in maintaining NRB balance. The increase and

decrease of CRR will result in non-availability and availability of fund in the banks

denoting liquidity status of the banks.

D) Total Investment to Total Deposit Ratios

The bank mobilizes its deposit collection through investment in various sectors like

government securities, corporate shares and debentures and others like certificate of

deposit, mutual fund to earn interest, dividend and capital gain. The mobilization of

total deposit in investment is computed as follows:

𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
Investment to Total Deposit : ∗ 100%
𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡
 16

Table 4: Total Investment to Total Deposit Ratio (Rs in Billion)

Year Total Investment Total Deposit Ratio(%)

2074/75 28.67 135.98 21.08

2075/76 36.54 164.37 22.23

2076/77 44.02 193.04 22.80

2077/78 49.91 223.98 21.89

2078/79 71.70 329.58 21.75

Source:Annual report of NABIL Bank Ltd

Total Investment to Total Deposit

23

22.5

22

21.5

21

20.5

20
2074/75 2075/76 2076/77 2077/78 2078/79

F/Y

Fig 4: Trend line Showing the Total Investment to Total Deposit

From above table and figure shows the total investment to total deposit ratios of Nabil

Bank Ltd. The Total Investment to Total Deposit ratio of Nabil Bank Ltd is slightly

increasing and decreasing from FY 2074/75 to FY 2078/79. The highest ratio is 22.80

in FY 2076/77 and the lowest is 21.08 percent in FY2074/75 during the study period.

By analyzing, the ratio of Nabil bank Ltd is in fluctuating trend. Total Investment and

Total Deposit amount is increasing year by year but the ratio is slightly fluctuate in

every year.
 17

E) Investment on Government Securities to Total Deposit

This ratio is used to find the percentage of total deposit invested on government

securities treasury bills and development bonds. It can be mentioned as:

𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑜𝑛 𝐺𝑜𝑣𝑡.𝑆𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠
Investment on Govt. Securities on Total Deposit: ∗ 100%
𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡

Table 5: Investment on Government Securities to Total Deposit Ratio(Rs in Billion)

Year Inv. On Gov.Securities Total Deposit Ratio(%)

2074/75 18.39 135.98 13.52

2075/76 25.30 164.37 15.39

2076/77 33.63 193.04 17.42

2077/78 39.89 223.98 17.50

2078/79 62.46 329.58 18.95

Source:Annual report of NABIL Bank Ltd

Investment on Gov.Securities to Total Deposit

20

15

10

0
2074/75 2075/76 2076/77 2077/78 2078/79

F/Y

Fig 5: Trend line Showing the Investment on Gov.Securities to Total Deposit

From above table and figure shows the Investment on Government Securities to Total

Deposit ratios of Nabil Bank Ltd. The Investment on Govt.Securities to Total Deposit

ratio of Nabil bank is increasing trend from FY 2074/75 to FY 2078/79. The highest
 18

ratio is 18.95% and lowest ratio is 13.52%. And the average ratio of Nabil Bank is

16.56 percent.

F) Loan and Advance to Total Deposit

The loan-to-deposit ratio is used to assess a bank's liquidity by comparing a bank's

total loans to its total deposits for the same period. Increase in loan and Advance

results increase in profit of the banks. Higher ratio indicates better utilization of fund.

This ratio is calculated to find out how successfully the selected banks are utilizing

their total collections or deposits on loan and Advance. Greater ratio shows the better

utilization of total deposits. This ratio can be obtained dividing loan and Advance by

total deposits, which can be shown as follows:

𝑇𝑜𝑡𝑎𝑙 𝐿𝑜𝑎𝑛 𝑎𝑛𝑑 𝐴𝑑𝑣𝑎𝑛𝑐𝑒

Loan and Advance to total Deposit Ratio: ∗ 100%
𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡

Table 6: Loan and Advance to Total Deposit Ratios(Rs in Billion)

Year Loan & Advance Total Deposit Ratio(%)

2074/75 113.63 135.98 83.56

2075/76 133.56 164.37 81.26

2076/77 153.89 193.04 79.72

2077/78 206.62 223.98 90.63

2078/79 310.57 329.58 94.23

Source:Annual report of NABIL Bank Ltd

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Loan and Advance to Total Deposit

100

95

90

85

80

75

70
2074/75 2075/76 2076/77 2077/78 2078/79

F/Y

Fig 6: Trend line Showing the Loan snd Advance to Total Deposit

From above table and figure shows the mobilization of loan and advance to total deposit

ratios of Nabil Bank Ltd. The Loan and Advance to Total Deposit ratio is decreasing

from FY 2074/75 to FY 2076/77 are 83.56%, 81.26% and 79.72% respectively. And

again it continues increasing in FY 2077/78 an FY 2078/79 are 90.63% and 94.23%.

The highest ratio is 94.23% and lowest ratio is 79.72% during the study period. By

analyzing the ratio of five year, it concluded that the ratio of Nabil Bank Ltd is in

fluctuating trend.

2.2 Findings

Basically in this research work, all the data has been obtained from secondary sources.

Data has been analyzed by using financial as well as statistical tools. This topic focuses

on the major findings of the study, which are derived from the analysis of deposit

mobilization of Nabil Bank Ltd applying five years data from 2074/75 to 2078/79. The

major findings of the study derived from the analysis of financial tools of Nabil Bank

Ltd given below:

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• The growth rate of Nabil Bank Ltd is increasing from the Fiscal Year 2074/75

to Fiscal Year 2079/79 are 11.51%, 20.88%, 17.44%, 18.10% and 44.57%

respectively. The highest growth rate is in FY 2078/79 is 44.57% and the lowest

growth in FY 2074/75 is 11.51%.

• The cash and bank balance in the selected banks is in fluctuating trend, while

the total deposit is in increasing trend. Nabil Bank Limited maintained the

higher ratio at 6.49 percent in FY 2075/76 and lowest is 2.49 percent in FY

2076/77 during the study period. The average ratio of Nabil Bank Limited is

4.28 percent.

• The highest CRR is 10.37 in FY2076/77 and the lowest CRR is 3.52 in FY

2077/78 during the study period. And the average ratio of Nabil Bank Ltd is

5.63 percent.

• Total Investment to Total Deposit ratio of Nabil Bank Ltd is slightly increasing

and decreasing from FY 2074/75 to FY 2078/79. The highest ratio is 22.80 in

FY 2076/77 and the lowest is 21.08 percent in FY2074/75 during the study

period.

• The Investment on Govt.Securities to Total Deposit ratio of Nabil bank is

increasing trend from FY 2074/75 to FY 2078/79. The highest ratio is 18.95%

and lowest ratio is 13.52%. And the average ratio of Nabil Bank is 16.56

percent.

• The Loan and Advance to Total Deposit ratio is decreasing from FY 2074/75 to

FY 2076/77 are 83.56%, 81.26% and 79.72% respectively. And again it

continues increasing in FY 2077/78 an FY 2078/79 are 90.63% and 94.23%.

The highest ratio is 94.23% and lowest ratio is 79.72% during the study period.
 21

CHAPTER THREE

SUMMARY AND CONCLUSION

3.1 Summary

The Banks are the pillars of the financial system of a country. Specially, in developing

country Nepal, proper banking system is very important, because the capital market is

in progress in Nepal. Commercial bank has now emerged as renowned and reliable

financial institutions. The economic development of any nation depends on how well it

has been able to mobilize economic and financial resources. Bank has not just evolved

as an institution where public can deposit money or acquire loan. As deposits are the

source of any commercial banks as bank operates by collecting deposit from all over

the country and mobilizing it into lending activities either directly by loaning or

indirectly through capital market. Their major target is to gather deposit from all over

the country by attracting customer with their new and fascinated product.

However, in status deposit mobilization is critical issue for banks. Cognizant of this, in

depth analysis is done based on secondary data. The research is intended to address

challenges and prospects of deposit mobilization of commercial bank in Nepal.

Basically the entire research work focus on the study of deposit mobilization of Nabil

Bank Ltd. This banks data is studied as per their deposit mobilization activities by

taking five years data from the year 2074/75 to 2078/79.

The study is mainly based on secondary sources. All data are taken from concerned

banks annual report, literature publication, balance sheet, profit and loss account,
 22

previous thesis report, different website, related books and booklets, journals and

articles, After collecting data from different sources, it is analyzed by using financial

and statistical tools. In an attempt to fulfill the objectives of the research work, all

secondary data are compiled, processed and tabulated as per necessity and figures,

diagrams and different types of chart are also used.

This study suffers from different limitations, it considers Nabil bank only and time and

resource are the constraints of the study. Therefore the study may not be generalized in

all cases and accuracy depends upon the data collected and provided by the

organization.

3.2 Conclusion

From the study of five year data collected for deposit mobilization of Nabil Bank

Limited. It conclude that the growth of total deposit amount is increasing every year

but the growth rate is in fluctuating situation. The loan and advance has positive and

significant relationship with total deposit mobilization. Thus, they move in the same

direction. However, loan and advance also have positive effect on deposit mobilization

of commercial banks which indicates proper maintenance of loan and advance out of

total deposit mobilization would increase profitability of banks. The CRR of the bank

is in fluctuating trend due to its change of amount collected In NRB balance. The

investment on government securities to total deposit mobilization ratio is in increasing

every year because of the amount of both investment on govt.securities and total deposit

are increasing. Again, in total investment and total deposit are also increasing every

year and its ratio are slightly change in every year during the study period. Lastly,

Deposit mobilization of Nabil Bank is in good condition as their growth of total deposit.
 23

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