SAVING AND DEPOSIT ANALYSIS OF RASTRIYA BANIJYA BANK

A Project Work Report

By

Laxmi Shrestha

TU Registered No. : 7-2-0580-0039-2018

Symbol No: 705800020

Kasturi College of Management

Submitted to

The Faculty of Management

Tribhuvan University

Kathmandu

In partial fulfillment of the requirements for the degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Itahari, Sunsari

April, 2023
 Declaration

I hereby declare that the project work entitled ‘SAVING AND DEPOSIT ANALYSIS OF
RASTRIYA BANIJYA BANK’, submitted to the Faculty of Management, Tribhuvan University
Kathmandu is an original piece of work under the supervision of Mr. Chandra Prasad Adhikari
faculty member, Kasturi College of Management Itahari, Sunsari and is submitted in partial
fulfillment of the requirements for the award of the degree of Bachelor of Business Studied
(BBS). This project work report has not been submitted to any other university or institution for
the award of any degree or diploma.

…………...

Laxmi Shrestha

Date:

ii
 Supervisor’s Recommendation

The project work report entitled SAVING AND DEPOSIT ANALYSIS OF RASTRIYA
BANIJYA BANK submitted by Laxmi Shrestha of Kasturi College of Management , Itahari, 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

Chandra Prasad Adhikari

Date:
 Endorsement

We hereby endorse the project work report entitled SAVING AND DEPOSIT ANALYSIS OF
RASTRIYA BANIJYA BANK submitted by Laxmi Shrestha of Kasturi College of
Management, Itahari, in partial fulfillment of the requirements for the degree of the Bachelor of
Business Studies (BBS) for external evaluation.

………………………. ……………………….
Signature Signature
Prof. Dr. Kedar Prasad Poudel Kamlesh Sharma Poudel
Chairman, Research Committee Principal
Date: Date:
 Acknowledgement

This project work report entitled SAVING AND DEPOSIT ANALYSIS OF RASTRIYA
BANIJYA BANK has been prepared as partial fulfillment of the requirement for the degree of
Bachelor of Business Studies (BBS).

Foremost, I would like to express my sincere gratitude to Tribhuvan University for

providing us an opportunity to develop our creativity, practicability and skill through the
preparation of this project report.

I am grateful to my project supervisor Mr. Chandra Prasad Adhikari, my supervisor for

his proper guidance, supervision and intellectual direction. This project would not have
completed without his enormous help and worthy experience.

My sincere thank also goes to Prof. Dr. Kedar Prasad Paudel Chairman of Research
Committee for introducing this project work report as a part of our academic course. I would like
to thank all the respected teachers and library staff of Kasturi College of Management who have
enriched my knowledge and encouraged me by providing valuable suggestion which have
contributed to the areas of my project work report.

Finally, I would like to thank my family, friends and all of those who helped me directly
and indirectly by sharing their ideas, giving suggestions and encouraging me writing project
work report.

Thank You

Laxmi Shrestha

v
 Table of Content

Title Page i
Declaration ii
Supervisor’s recommendation iii
Endorsement iv
Acknowledgement v
Table of Contents vi
List of Tables vii
Abbreviations viii
CHAPTER I: INTRODUCTION
1.1 Background of the study 1

1.2 Profile of Rastriya Banijya Bank Limited 3

1.3 Objective of the Study 5

1.4 Rationale of the Study 5

1.5 Review of Literature 5

1.6 Methods of Study 8

1.7 Limitation of the Study 10

CHAPTER II: RESULTS AND ANALYSIS

2.1 Presentation of Data 11
2.2 Analysis of Data 11
2.3 Major Findings 15

CHAPTER III: SUMMARY AND CONCLUSION

3.1 Summary 16
3.2 Conclusion 17
BIBLIOGRAPHY 18
APPENDICES 19

vi
 List of Tables

Table 1 Total deposit of RBB ........................................................................................... 16

Table 2 Cash reserve ratio of RBB .................................................................................... 17
Table 3 Total investment to total deposit ratio of RBB ..................................................... 18
Table 4 Loans and advances to total deposit ratio of RBB................................................. 19
Table 5 Net profit to total deposit of RBB........................................................................ 20

vii
 Abbreviations

AD Anno Domino

BS Bikram Sambat

BFIs Bank and financial institutions

CEO Chief Executive Officer

Dr. Doctor

F/Y Fiscal Year

Fig. Figure

NRB Nepal Rastra Bank

Prof. Professor

RBB Rastriya Banijya Bank

Redg. Registration Number

TU Tribhuvan University

viii
ix
 1

CHAPTER I: INTRODUCTION

1.1 Background of the Study

The business world is growing even more complex and competitive and financial institutions are
always on the lookout for people who can give their establishment an extra edge. Now-a-days,
banking sector acts as the backbone of modern business. Development of any country mainly
depends upon the banking system

Bank if defined in simple form is the financial institution which deals with money or whose
business is of money. In other words, bank is the institution, which is established by law, which
deals with money and credit. Bank especially use to collect the deposits from general public,
institution and from other and transfer it to people, institution and others in form of loans.

As per Section 5(b) of the Banking Regulation Act, 1949, “banking” means the accepting, for
the purpose of lending or investment, of deposits of money from the public, repayable on
demand or otherwise, and withdraw-able by cheque, draft, order or otherwise.

The banker’s business is to take the debts of other people to offer his own in exchange and
thereby create money. (Mithani, 2002)

Nepal Rastra Bank (NRB) regulates all the banks and financial institutions (BFIs) of Nepal.
NRB has grouped the BFIs into four major categories. There are currently 21 'A' class
commercial banks in Nepal as per Nepal Rastra Bank report of the Mid July 2022. All
commercial Banks in Nepal provide deposit facility, various loan facilities, advanced ABBS
services, IPS, Internet Banking with ATM facilities through their networks. Financial Institutions
are slowly moving from Brick and Mortar (physical branches) to click and Brick (E-banking).
Satisfaction is dynamic and changing, so does the customers expectation. The present customers
want easy way for banking facilities. Thus, they are moving forward to access the Internet
banking and ATM facilities more than to visit bank itself. The central bank stated that number of
mobile banking users in the country has reached 17,676,259 as of May 14, 2022.
 2

Commercial bank plays very important role by removing the habit of hoarding, developing
the banking habit among the people, by collecting the small scattered resources in bulk.
Nowadays, there are different commercial banks emerging to contribute in national economy by
mobilizing resources. The commercial banks utilize the collected resources by financing in
productive sector. One of the important sources of collecting resources is deposits from
customers. Customers deposit funds in their own accounts. Customers make deposits in the bank
into different deposit accounts such as demand deposits (saving accounts, current accounts), term
deposit accounts, and call deposit accounts. Customers deposit fund in the bank to get different
facilities. By saving in the bank people can have opportunity of earning interest, avoid the risk of
theft and lost etc. Nowadays deposits are increasing day by day in commercial banks because
people are being aware about its importance. Deposits are also main source of capital for lending
to other customers. Domestic deposits provides reliable source of funds for development. The
deposited amount if not withdrawn by depositors then it is utilized as an investments or loans to
other customers. This process is related to money supply and has several ramifications. The
amount of deposits can be increased by offering types of customer services. Bank deposits are
highly affected by the banking facilities rate of interest on deposit, national income, bank credit,
deficit financing etc.

Deposits are the funds, the customers collect in the bank for the purpose of softy and interest
income for which the bank gives or takes interest in accordance with its nature. Deposits are also
referred as liability for the bank as the customers are provided with a right of withdrawing their
fund whenever they like. Deposits play vital role in the development and prosperity of any
commercial banks. Thus, the bank’s policy governing deposits must be appropriate which can
accelerate the growth of a bank. The policy differs whether the bank is serving in a selective
clientele or in mass clientele. However, the bank should attract new depositors and sustain the
decline in periods of recession. Thus, the bank has to apply various corrective actions that attract
more deposits as per the need and capacity of bank to mobilize them. Deposits are the main
sources of main capital to issue loan. Deposits are of different types and nature. They are:

 Time deposit
-Time deposits are the deposits that have fixed maturity period and banks restrict the
depositors to withdraw the cash prior to their maturity.
 3

 Saving deposit
-Saving deposits have some features of checking accounts and some of time deposit
account.

 Demand deposit
-Demand deposit is that deposit which is withdrawn on demand. In other words, banks
are subject to give the cash on demand deposit.

Therefore, bank is a financial institution, which accepts deposits from the public and
provides loans to different sectors at different interest rates. Bank plays the vital role in the
economical condition. Banking has come to occupy a pivotal position in a nation’s economy.
The essentials of banking are:

- There should be acceptance of deposits.

- Deposits should be from the public.
- Deposits should be repayable on demand or expiry of a term or after a specified period.
- The purpose of deposits should be lending and investment.

“Bank” is an institution that deals with money and credit. It buys money from depositors and
sells to the borrowers. It is a body of persons whether incorporated or not who carry on the
business of banking. A bank may be defined as a corporation or person which collects
deposits from the public, repayable on demand and which supplies and facilitates all kinds of
exchanges.

1.1.1 Origin and historical growth of banking. The term ‘Bank’ is derived from the
Latin word ‘Bancus’ which refers to the bench on which the banker’s world keep their money
and records. Some people trace its origin to the French word ‘Banqui’ and the Italian word
‘Banco’ which referred to bench for keeping, lending and exchanging of money changers. So,
‘Banco’ was used to denote monetary transactions.
The word ‘bank’ itself is derived from the Italian word ‘Benca’ which means bench and
later became the word bank. If we move towards the birth of the first bank, then the Bank of
 4

Venice is said to be the ancient bank, which was established in year 1157 A.D. It is used to
exchange money, receive deposits and discount bills.

History tells us that it was the merchant banker who first evolved the system of banking by
trading in commodities than money. With the growth of trade and commerce in Northern Europe,
the Netherland became an international financial centre. The bank of Amsterdam was organized
in 1609. A charted public bank was opened in Sweden in 1656. It was probably the first financial
institution in the world to issue standard-size payable-on-demand bank bills, which eliminated
the handling of copper coins. Until the founding of the bank of England in 1964, England’s gold
smiths were its bankers. They kept money and other valuables in safe custody for their
customers. They also dealt in good bullion and foreign exchange. The goldsmith notice that
deposits remained as a fairly steady level over long periods of time. Deposits and withdrawals
tended to balance each other because customer only wanted enough money. This allowed smith
to loan out at interest cash that would otherwise be idle. From this practice emerged the modern
face of banking; keeping deposits, making loan and maintaining reserves.

1.1.2 History of banking development in Nepal. Going with the historical evidences we
can find some crude banking activities in the earlier time in Nepal. From times immemorial,
money business existed before the establishment of a modern bank. Some crude banks operations
were known to have been practiced in the ancient time. A notable example of old banking
activities can be found historically in 18801897 A.D. That time of the year had a famous
merchant in Nepal by the name of Shan Khadara who was successful in paying clearly all the
outstanding debts in the country and he introduced one new year by name of ‘Nepal Sambat’ on
that happy occasion. Available information indicates that in 1723 A.D. Guna Kama Dev
Borrowed money to rebuild Kathmandu. Towards the close of 11th century Jayasthithi Malla
ruler of Kantipur classified the list included ‘Tankadhari’ meaning money dealers. Tankadhari
were authorized to deal in money business. These all early facts are considered to be on adequate
basic for a logical inference that the money lending operations were in practice on an extensive
scale in the ancient period.

Another historical example of pre-modern banking system is found when Rana Prime
Minister Rana Deep was administering Nepal. During his regime one financial institution by the
name of ‘Tejaratha’ was established to give loan facilities to the government staff and afford
 5

loan facilities to the public of Kathmandu in general interns of 5% interest against gold, silver
and other ornaments.

Though ‘Tejaratha Adda’ did not accept deposits from the people but only granted loans
against collateral. Thus, it can be regarded as father of modern banking in Nepal because it
granted loan to the public against strong security as commercial bank and solved the problem of
financial needs of the country. Tejaratha Adda was not able to play required role, since, the Rana
were ruling autocratically, their attitude towards the trade and commerce was negative. Hence
Nepal’s trade and commerce industry was in backward position as compared to other nation.
Some ‘Sahuji’ did most of the money lending business. Even the exchange of money was done
by the survey because there was no other alternative.

1.2 Profile of the Organization

Rastriya Banijya Bank (RBB) has a history of serving its customers far and wide across the
nation for more than half a century. The bank then fully owned by Government of Nepal, was
established on 10 Magh 2022B.S (23 January 1966 A.D) under the special statute "Rastriya
Banijya Bank Act, 2021" and had operated under "Commercial Bank Act,2031” until it was re-
registered as public limited company on 6 Baisakh 2063 (19 May 2006). At present, the Bank
operates as "A" class financial institution licensed by Nepal Rastra Bank and carries out
commercial banking activities as per the provisions of the "Bank and Financial institutions Act
2073," (2017).After the merger if NIDC Development Bank Limited on 19 Baisakh 2075 BS in
this bank, which is fully owned by the Government of Nepal, 99.97% of the shares of the
Government of Nepal and 0.03% of the general public have come to be owned in the bank.
(Annual report of RBB 2078/79)

RBB endured many stressful years of business and faced existential questions at some
point of time in the past. But learning the lessons from the events and craving towards the
brighter future, the Bank successfully implemented a restructuring plan; and now it stands as one
of the most preferred bank with the highest number of customers from all 77 districts and 7
provinces of the country. Until today, this has been providing banking services to around 40 lakh
customers through its 264 branches including all the headquarters across the country. The Bank
 6

has been able to imprint its presence in national economy through efficient allocation of
resources in all sectors of economy thereby enhancing production and generating employment
opportunities within the country. The unflinching faith and goodwill bestowed by our customers
continued support from the Government, well wishers and general public has been the reason for
us to stand as the most trusted bank in the country.

Bank has many correspondent arrangements with major international bank all over the
world which helps in facilitating trade, finance; inter-bank fund transfer and bank originate
personal fund transfer via SWIFT. RBB works with western union and money express two
lending persons to perform funds transfer.

The head office of Rastriya Banijya Bank is located at Singhadurbar Plaza, Kathmandu.
The CEO of the bank is Kiran Kumar Shrestha. The core value of the bank is to respect people
and their community. The bank is always responsible and accountable for their deliveries. It
shows its honesty, integrity and credibility in each of their action.

The objectives of the bank are:

 Focus on providing innovative financial services.

 Increase in capital base of the Bank by meeting the minimum capital requirement.

 Business growth and increase in market share.

 Enhance operational efficiency.

 Sustainable increase in profits.

 Focus on empowerment of deprived class.

1.3 Objective of the Study

Every work has a certain objectives. Work is done with the motive to achieve certain objectives.
Thus, the specific objectives of the study are listed below:

- To analyze the trend of saving in RBB.

- To find out deposit between saving and loan.
- To draw out the problem regarding saving deposit.
 7

1.4 Rationale of the Study

This project report is based on the topic ‘Saving Deposit’. This report will be useful to know
overall picture of Rastriya Banijya Bank Ltd. It helps to analyze the saving pattern in different
sectors and provides the practical importance to commercial bank to make their financial
decision. This study will help the research group, academicians as well as banking personnel to
acquire the required information regarding saving and deposit trends of RBB. So anyone who
wants information regarding the condition and trend of ‘Saving deposit’ of Rastriya Banijya
Bank Ltd they will be facilitated from this research to obtain the valuable information. It would
also work as a reference to the student in coming years. This will again guide the banking
personnel to make the required changes in the banking services.

1.5 Review of literature

A relevant study has been made to analyze the opinion of other researchers and authors related to
saving deposit mobilization of commercial banks in Nepal. Only the relevant literature has been
reviewed. Every possible effort has been made to grasp knowledge and information that is
available from the concerned commercial banks. It helps to take adequate feedback to broader
the information base and inputs to my study. In this chapter inputs are reviewed as follows:

1.5.1 Conceptual review. Bank is an institution which deals in money and credit. Banks
are the institution which acts as an intermediary between different kinds of people and
institutions who are in need of money and who can supply money at certain rate of interest. A
bank simply carries out the exchanging money, providing loan, accepting deposits and
transferring the money. Several studies had been carried out regarding the funds allocation and
deposit mobilization which depicts that the commercial banks mobilizes its deposit on various
sectors by making investment, providing loans and advances and purchase of assets (Paudel,
2010). Based on the same this study has depicted the following conceptual framework.
 8

Investments

Deposits Loans and Advances

Assets Purchased

Figure 1

Funds Allocation and Saving Deposit Mobilization

Banks are majorly determined by the conceptual framework namely investment, loans and
advances and the asset purchased. This variable has the significant impact on the deposit
mobilization mechanism and practices of the banks which in turn influences the performance.
This study is based upon above mentioned deposit variable in order to explain the relationship
between the variables and the performance of the banks under the study.

1.5.2 Concept of investment. We may define investment as a commitment of current

resources in the expectation of deriving greater resources in the future. (Paudel B. Rajan, 2016).
Commercial banks are those which collect the immobilized capital from public, organizations etc
as deposits and invest these capitals in different sectors like business, industries and services etc
which fulfill the demands of capital in these sectors. Banks invest its funds in different activities
and different fields. Many types of fields are shown in market for investment. But banks invest
its funds in profitable and safety activities.

Bank invests its funds in the various possible sectors such as share and debenture,
government securities and joint venture. Share represents equity ownership in a corporation or
financial assets, owned by investors who exchange capital in return for these units. The two main
types of shares are common shares and preferred shares. Likewise, a debenture is an unsecured
loan one offers to a company. The company does not give any collateral for the debenture but
pays a higher rate of interest to its creditors. In case of bankruptcy or financial difficulties, the
 9

debenture holders are paid later than bondholders. Debentures are different from stocks and
bonds, although all three are the types of investment. Government securities are the securities
issued by the government bonds, and the governments saving bonds are an example of
government securities.

1.5.3 Loans and advances. While at any given moment some depositors need their
money, most do not. That enables banks to use shorter-term deposits to make longer-term loans.
The process involves maturity transformation- converting short term liabilities to long term
assets. Banks pay depositors less than they receive from borrowers, and that difference accounts
for the bulks of banks income in most countries. Banks can compliment traditional deposits as
sources of funding by directly borrowing in the money and capital markets. They can issue
securities such as commercial paper or bonds; or they can temporarily lend securities they
already own to others institutions for cash-a transaction often called a repurchase agreement.
Banks can also package the loans they have on their books into a security and sell this to the
market (a process called liquidity transformation and securitization) to obtain funds they can
relend. (Abraham, 2011).

A bank’s most important role may be matching up creditors and borrowers, but banks are
also essential to the domestic and international payments system and they create money. Not
only do individuals, businesses and government need somewhere to deposit and borrow money;
they need to move funds around- for example, from buyers to sellers or employers to employees
to governments. Here too a bank plays a central role. The process system forms the tiniest of
personal checks to large value electronic payments between banks. The payment system is
complex network of local, national and international banks and often involves government
central banks and private clearing facilities that matchup what banks owe each other. In many
cases payments are processed nearly instantaneously. The payment system also includes credit
and debit cards. A well-operating payment system is a prerequisite for an efficiently performing
economy, and breakdowns in the payment system are likely to disrupt trade and therefore,
economic growth significantly.

1.5.4 Asset purchased. A long-term tangible asset is piece of property that a firm owns
and uses in the production of its income and is not expected to be consumed or converted in to a
cash any sooner than at least one year’s time. Banks purchase fixed assets such as a land and
 10

building, furniture and fixture, computer software etc for the commencement of the business.
Likewise, banks keep on increasing its assets volume or bases during for the branch expansions.

1.5.5 Review of previous work. Effort has been made to examine and review of some
related articles in different economic journals. World bank discussion papers, magazines,
newspapers and other related books.

(Bajracharya, 1990) has mentioned, mobilization of domestic savings is one of the prime
objectives of the monetary policy in Nepal. For this purpose CBs stood as the active and vital
financial intermediary for generating resource in the form of deposit of the private sector. So far
providing credit to the investors is different aspect of the money.

(Raut, 2022), conducted a fieldwork on saving and deposit analysis of Everest Bank Limited
on the year 2022 and made the following conclusions.

 The deposit of Everest bank has gradually increased from the year 2017/18 to the year
2018/19. Therefore, it is most favorable trend for the Everest Bank in the increment of
the total deposit. The average deposit over the period of three years is 11.12%.
 Liquidity position of the bank from cash reserve ratio is satisfactory. It averaged 24.09%
for the last three years. Bank has only reserved 24.09% of total deposit in cash.
 The total deposit has been also mobilized by the bank in productive investment sectors.
In average only 19% of the total deposit is mobilized as investment.
 The credit facility has covered the major portion of the bank total deposit. This fact is
supported by the average of loans and advances to total deposit ratio of 84.59%.
 Net profit to total deposit is in increasing trend in the period of three years. In average,
net profit to total deposit ratio is 1.74%

1.6 Methods
Research methodology refers to the various sequential steps to be adopted by a researcher in the
studying a problem with certain objectives in view. In other word research methodology
describes the method and process applied in the entire subject of the study. This topic deals with
the research design, nature of data collection, and process of data analysis and statistical tools
 11

used. The collected data will be simplified by using numbers of statistical tools and technique.
Mainly, various ratios will be used to compare the deposit performance of RBB under study.

The present study uses both financial as well as statistical tools and techniques for the
analysis of data and to draw valid conclusion. Report writer methodology means process, tools
and techniques which are used in any research or investigation till the purpose is accomplished
and the aim is achieved.

1.6.1 Types of research. The project report design focuses on systematic planning
structure of the study in order to achieve the objective of the study. In this study, the required
data were collected through various methods. The proposed study is based on two types of
research design namely descriptive and analytical. Descriptive research design describes the
general attitude of the Nepalese depositors, business environment, problems regarding the
deposits mobilization aspects etc.

1.6.2 Population and sampling. A population is a complete enumeration of each and

every unit of the universe as a whole. It is related to the total study of the material in detail.
Descriptive research is used to describe characteristics of a population or phenomenon being
studied.

Sampling is a process used in statistical analysis in which a predetermined number of

observations are taken from larger population. There are 21commercial bank in Nepal. So,
among them Rastriya Banijya Bank is taken into consideration in sample using judgment
sampling.

1.6.3 Types of data. The major research tool in this study is survey which is developed
and used to collect the overall information, to know the activities and to make recommendations
for the management.

Primary Data

Primary data is original data gathered by the researcher for the research project at hand. They are
firsthand testimony or direct evidence concerning a topic under consideration. They present
information in its original form, neither interpreted nor condensed nor evaluated by other writers.
 12

Secondary Data

Secondary data refer to those data that was already gathered by others. Where the data have
been subjected to interpretation, they are referred to as coming from secondary data. Secondary
data are collected by someone else for some other purpose (but being utilized by the investigator
for another purpose). In this research, supplementary data and information are collected from the
head office of RBB and authoritative sources like NRB, NEPSE, SEBON, websites etc.
Secondary data were used to test the ability of the RBB on the utilization and mobilization of the
deposits available and the effect of various elements such as Loans and advances, Investments
and the Assets purchased on the profitability of the bank.

1.6.4 Data collection procedure. Both primary and secondary data have been used for
this study. Primary data has been used in order to assess the opinions of the bank managers on
funds allocation and deposit mobilization of RBB. In addition, the primary data attempts to
reveal other facets regarding funds allocation and deposit mobilization situation in RBB. At the
same time, secondary data has been employed in order to analyze the relationship between
deposit and its explanatory variables.

1.6.5 Data analysis tools. In order to achieve the objective of the study, two types of
tools are used. They are financial tools and statistical tools.

A. Financial tools

Financial tools are widely applicable method for the analysis of financial statements. The ratio
analysis being the major financial tool has been used for the study. An analysis of financial
statement with help of those financial tools is very helpful. Tools used for the analysis of the
financial statements are explained below:

Cash reserve ratio

Cash reserve shows the liquidity position of the bank. Cash reserve ratio is the ratio that
measures the bank’s most liquid funds, which instantly available to meet the demand in the
deposit. The ratio is calculated by following formula:

Cash Reserve Ratio = Cash and bank balance

Total Deposit
 13

Investment to total deposit ratio

This ratio measures the extent to which the bank is able to mobilize the capital the deposit in
profitable investment sectors. This ratio is calculated by following formula:

Investment to total deposit ratio = Investment

Total Deposit

Total credit to total deposit ratio

This measures the extent to which the bank is efficient in mobilizing the total deposit in
providing credit, like loans and advances. This ratio is calculated by using following formula:

Total credit to total deposit ratio = Total credit

Total Deposit

Net income to total deposit ratio

This ratio shows the total profit in terms of percentage in each year based on total deposit. We
can calculate this ratio by using the following formula:

Net profit to total deposit ratio = Net Profit

Total Deposit

B. Statistical tools
There are different types of statistical tools to examine the data. The statistical tools that are used
to analyze our data are:

 Table
 Ratio
 Percentage
 Mean
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1.7 Limitations of the Study

The field study is related to the analysis of saving and deposit of RBB. The conclusion derived
from the study may or may not be applicable to other commercial banks. While collecting data
and gathering information from RBB the report writer has faced many unfavorable situations.
This study has been carried out within certain assumption and limitations.

 The report mainly concentrates on saving deposit aspects of RBB.

 Data of five years are used to analyze the saving and deposit of the bank from the fiscal
year 2074/75 to 2078/79.
 The report is based on the format provided by Tribhuvan University.
 The report is mainly based on the secondary source of data.
 Sampling is done only on the basis of quota and convenience.
 It focuses only on saving schemes, therefore overall position of RBB can’t be judged by
this report.
 15

CHAPTER II: RESULT AND ANALYSIS

2.1 Presentation of Data

The presentation, analysis and interpretation of data in this field report have been done during the
study period from the year 2076/77 to 2078/79. Presentation gives the data a suitable form that
can be clearly understood as wee as the attractiveness and effectiveness of report increases.
Analysis and interpretation of data involves an attempt to determine the significance and
meaning of financial data.

In this report, the report writer has presented and analyzed the data that has been
collected during project work period and data collected from various secondary sources are
presented and analyzed for the purpose of study.

2.2 Analysis of Data

Analysis and interpretation of data means determination of significance and meaning of financial
data. It helps to determine the relationship with other data to facilitate the comparison with other
data. In this report presentation, analysis of data has been conducted on the basis of work
experiences, research question and objectives. Therefore, data collected from various sources are
presented as following types:

Total Deposit of Rastriya Banijya Bank Limited

Total deposit refers to the total deposit of the public that has been accepted in various accounts
of RBB during certain period. While to know the financial position of the bank one should have
knowledge about total deposit.
 16

Table 1
Total deposit of Rastriya Banijya Bank

Year Total Deposit ‘in million’ Increment (P.Y) Increment (%)

2074/75 164,210 17623 13.52%

2075/76 189,255 25045 15.25%

2076/77 230,902 41647 22%

2077/78 263,836 32934 14.26%

2078/79 258,144 (5692) -2.15%

Mean 62.88%

Sources: Appendix B

Above table shows the total deposit collection from F/Y 2074/75 to F/Y 2078/79. The total
deposit has increased in increasing rate for four years but has decreased in fifth year. The
percentage change is not uniform throughout the three year period. The percentage deposit in
F/Y 2074/75 is 13.52 and in F/Y 2075/76 is 15.25 in F/Y 2076/77 is 22% then it decreased to
14.26% and (2.15%) in the F/Y 2077/78 and F/Y 2078/79 respectively. Therefore, it shows the
overall performance of Rastriya Banijya Bank in terms of total deposit is not satisfactory.

Cash Reserve Ratio

It shows the simple liquidity position of the bank. This ratio measure the bank’s most liquid
funds, which are instantly available to meet the demand in the deposit. It includes cad in hand,
bank balance. This ratio is calculated by the following formula:

Cash Reserve Ratio = Cash and Bank Balance

Total deposit
 17

Table 2
Cash reserve ratio

Year cash and bank balance Total Deposit Ratio (%)

‘in million’ ‘in million’

2074/75 37,978 164,210 23.12 %

2075/76 20,928 189,255 11.06%

2076/77 25,076 230,902 10.86 %

2077/78 35,863 263,836 13.59%

2078/79 24,303 258,144 9.41%

Mean 13.60%

Sources: Appendix C

The above table illustrates the cash and the bank balance of different year in terms of proportion.
The cash and bank balance and deposit of RBB is fluctuating. The cash and bank balance to
deposit ratio is 23.12%, 11.06%, 10.86%, 13.59% and 9.41% in F/Y 74/75, 75/76, 76/77, 77/78
and F/Y 78/79 respectively. In average bank keeps `cash and bank ratio of 13.60% of the deposit
in each year.

Total investment to total deposit ratio

This ratio measures the extent to which the bank is able to mobilize the total deposit in profitable
investment sectors. This ratio is calculated by:

Investment to total deposit ratio = Investment

Total deposit
 18

Table 3
Total investment to total deposit ratio

Year total investment Total Deposit Ratio (%)

‘in million’ ‘in million’

2074/75 24957 37978 65.69%

2075/76 40594 189255 21.45%

2076/77 75,176 230,902 32.55%

2077/78 71,591 263,836 27.13%

2078/79 65,960 258,144 25.55%

Mean 34.41%

Sources: Appendix D

According to above ratio analysis, 65.69% of the total deposit was invested in profitable sectors
in F/Y 2074/75 and this figure has decreased to 21.45% in the F/Y 2075/76 and again increased
to 32.55% in the F/Y 2076/77 and it went on decreasing rate of 27.13% and 25.55% in F/Y
2077/78 and F/Y 2078/79 respectively. It shows that the investment in profitable sector decreases
from F/Y 76/77 to F/Y 78/79 which is not good. This situation might have arisen due to
Epidemic disease ‘Corona viruses. The bank has invested 34.41% in average throughout the
period of three years.

Loans and advances to total deposit ratio

This ratio measures the extent to which the bank is efficient in mobilizing the total deposit in
providing credits like loans and advances. The total credit includes loans and advances to
government sectors and other private sectors. We can calculate this ratio by:

Total credit to total deposit ratio = Total credit

Total deposit
 19

Table 4
Loans and advances to total deposit

Year loans & advances Total Deposit Ratio (%)

‘in million’ ‘in million’

2074/7 121460 164210 73.96%

2077/78 146560 189255 77.44%

2076/77 155,254 230,902 67.23%

2077/78 193,305 263,836 73.26%

2078/79 226,717 258,144 87.82%

Mean 75.94%

Sources: Appendix E

The bank would make enough profit if it gives maximum credit from its deposit. But there are a
certain rules that bank has to follow such as it has to maintain certain rules that bank premises
and a certain percentage has to be maintained with NRB. The above table shows the loans &
advances strategy of RBB. In the table the ratio was 73.96% in the fiscal year 2074/75. This ratio
has increased to 77.44% in fiscal year 2075/76 and decreased to 67.23% in F/y 2076/77 and
went on increasing rate of 73.26% and 87.82% in F/Y 2077/78 and F/Y 2078/79. Therefore, it
was found that the bank is maintaining quite satisfactory lending policies. In average, the bank is
75.94% is lending and borrowing services throughout the period of five years.

Net profit to total deposit ratio

The net profit to total deposit ratio shows the total profit in terms of percentage in each year
based on total deposit. This ratio is calculated by:

Net profit to total deposit ratio = Net profit

Total deposit
 20

Table 5
Net profit to total deposit ratio

Year Net Profit Total Deposit Ratio (%)

‘in million’ ‘in million’

2074/75 3659 164,210 2.22%

2075/76 5046 189,255 2.66%

2076/77 4377 230,902 1.89%

2077/78 3423 263,836 1.29%

2078/79 4292 258,144 1.66%

Mean 1.94%

Sources: Appendix F

From the above table it seems that net profit of RBB is fluctuating. It might be the effect of
Covid-19. The net profit to total deposit ratio is 2.22% in the fiscal year 2074/75 then it
increased to 2.66% in F/Y 2075/76 and it decreased to1.89% in F/Y 2076/77 and to 1.29% in the
fiscal year 2077/78. However, it increased to1.66% in the fiscal year 2078/79. In average the net
profit to total deposit ratio is 1.94%

2.3 Major Findings

 The bank is able to maintain its deposit collection with an average of 62.88% p.a. but the
figure is quite fluctuating.
 The bank maintains an average of 13.60% of total deposit as the cash reserve to meet the
liquidity needs.
 The bank invests an average of 34.41% of the total deposit as the investment in various
sectors of the economy.
 The bank is providing loans & advances to the ratio of 75.94% of total deposit. It seems
the huge portion of total deposit is used to provide the loan and advances and only some
portion is invested in other sectors.
 The bank maintains net profit an average of 1.94% of the total deposit. The net profit of
the bank is fluctuating. It might be the effect of recent epidemic disease covid-19.
 21

CHAPTER III: SUMMARY AND CONCLUSION

3.1 Summary

It has 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 30with the establishment of Nepal Bank
Limited. Nepal bank limited was established as a fully government owned commercial bank.
Rastriya Banijya Bank the second commercial bank was established to fulfill the requirement of
another commercial bank in Nepal. Because of liberalized economic policy, introduced in Nepal,
there are altogether 21 commercial banks operating in Nepal, where 7 of them are joint venture
banks with international institutions.

Bank is an institution, which deals with money. A bank is like a reservoir. It draws
surplus money from the people who save and lend them to the people, who want to use it for
productive purpose. In this process the bank earns commission. The rate of interest paid to the
depositor is generally lower than the rate charged to the borrowers. The difference between these
two rates of interest is the profit of the bank. Deposit collection is the main function of
commercial bank.

Rastriya Banijya Bank is one of the leading commercial bank in Nepal. The ownership of
total capital of bank is 99.97% of the Government of Nepal and 0.03% of general public of
Nepal.

Saving deposit is one of the deposit facility provided by Rastriya Banijya Bank. 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.

From the above analysis researcher can say that RBB has good strength in market.
According to the analysis from the fiscal year 2076/77 to fiscal year 2078/79 the average ratio of
collecting deposit is 11.37%. The above analysis also shows that the bank has mobilized the
deposits in better way.

Rastriya Banijya Bank contributes to the process of capital formation by converting

dispersed saving into meaningful capital investment in order to aid industry, trade, commerce
 22

and agriculture for the economic development of a nation. Saving deposits are the obligation of
RBB. So, RBB must allocate the funds in different loans and advances and investment and
purchase of assets. Deposit mobilization plays a vital role for the economic development of an
underdeveloped and developing country rather than developed one.

3.2 Conclusion

For the development of the economy, banks play a significant role. Rastriya Banijya Bank has a
big hand in development of the economy of our country. It is helping the economic growth and
standard of people. RBB provides various financial services to customer i.e. accepting deposits,
issuing loans and advances, agency services, locker facility etc. They also give appropriate
interest rate on customer saving.

 The saving deposit of Rastriya Banijya Bank is fluctuating. The position is quite good
and contributed saving to generate more income for the bank by making investment in
various productive sectors.
 Liquidity position of the bank from the cash reserve ratio is satisfactory. It averaged
11.28% for the last three year fiscal year. Bank has only reserved 11.28% of total deposit
as cash.
 The credit facility has covered the major portion of the bank total deposit. This fact is
supported by the average of loans and advances to total deposit ratio of 76.10%.
 Net profit on total deposit is in fluctuating trend in the period of three years. In average,
net profit to total deposit ratio is 1.61%.
 Rastriya Banijya Bank should conduct a market research on a periodic basis to identify
and attract the potential borrowers by using various promotional tools. RBB should come
up with newer products to compete in the cut throat competition and to stand the
challenge rising from mew upcoming bank.
 23

BIBLIOGRAPHY

Abraham, R. & Harrington, W. C. (2011). Forecasting bank solvency: An emphasis on loans

quality. Advances in business and management forecasting. 8(3), 67-75

Mithani, D. M. (2002). Money banking, international trade and public finance. Mumbai:
Himalaya Publishing House.

Paudel R. B., Baral J. K & others 2016: Fundamental of investment. Kathmandu: Asmita Book
Publishers and Distributors.

Paudel, N.P. (2010). Nepalese financial system and investment environment. Kathmandu: Ratna
Pustak Bhandar.

Raut, M. (2022). Saving and deposit analysis of Everest bank Limited: A project work report
submitted to Kasturi College of management, Itahari.

Retrieved from Annual Report of RBB from the Fiscal Year 2076/77 to 2078/2079

Retrieved from https://www.fiscalnepal.com

Retrieved from https://www.investopaper.com/news/list-of-a-class-commercial-banks-in-nepal

Retrieved from https://www.rbb.com.np/content/introduction-rastriya-banijya-bank-limited-rbbl

Retrieved from https://www.scribd.com/doc/57998484/Savings-Deposits-of-RBB

Retrieved from https://www.indiacode.nic.in/bitstream/123456789/1885/1/A194910.pdf

 24

Appendix-A

Financial Report of Rastriya Banijya Bank

‘In million’

Fiscal Year 2074/75 2075/76 2076/77 2077/78 2078/79

Total investment 24,957 40,594 75,176 71,591 65960

Loans & advances 121,460 146,560 155,254 193,305 226,717

Total deposit 164210 189255 230,902 263,836 258,144

Cash & bank balance 37978 20928 7,093 15,735 7,880

Net profit 3659 5046 4377 342 4292

Sources: Annual report of Rastriya Banijya Bank

Appendix-B

Total deposit of Rastriya Banijya Bank Limited

Year Total Deposit ‘in million’ Increment (P.Y) Increment (%)

2074/75 164,210 17623 13.52%

2075/76 189,255 25045 15.25%

2076/77 230,902 41647 22%

2077/78 263,836 32934 14.26%

2078/79 258,144 (5692) -2.15%

Mean 62.88%

(Sources: Appendix A)
 25

Appendix-C

Cash Reserve Ratio

Year cash and bank balance Total Deposit Ratio (%)

‘in million’ ‘in million’

2074/75 37,978 164,210 23.12 %

2075/76 20,928 189,255 11.06%

2076/77 25,076 230,902 10.86 %

2077/78 35,863 263,836 13.59%

2078/79 24,303 258,144 9.41%

Mean 13.60%

(Sources: Appendix A)

Appendix-D

Total Investment to Total Deposit Ratio

Year total investment Total Deposit Ratio (%)

‘in million’ ‘in million’

2074/75 24957 37978 65.69%

2075/76 40594 189255 21.45%

2076/77 75,176 230,902 32.55%

2077/78 71,591 263,836 27.13%

2078/79 65,960 258,144 25.55%

Mean 34.41%

(Sources: Appendix A)
 26

Appendix-E

Loans and Advances to Total Deposit Ratio

Year loans & advances Total Deposit Ratio (%)

‘in million’ ‘in million’

2074/7 121460 164210 73.96%

2077/78 146560 189255 77.44%

2076/77 155,254 230,902 67.23%

2077/78 193,305 263,836 73.26%

2078/79 226,717 258,144 87.82%

Mean 75.94%

(Sources: Appendix A)

Appendix-F

Net Profit to Total Deposit Ratio

Year Net Profit Total Deposit Ratio (%)

‘in million’ ‘in million’

2074/75 3659 164,210 2.22%

2075/76 5046 189,255 2.66%

2076/77 4377 230,902 1.89%

2077/78 3423 263,836 1.29%

2078/79 4292 258,144 1.66%

Mean 1.94%

(Sources: Appendix A)
27