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1.1 Background of the study

Bank is a financial institutions, which is engaged in monetary transactions which has
always been the most important and largest financial intermediaries. Banks collects
the scattered money from the public providing those interest and services. This
collection becomes the capital for the bank to invest. The bank operates its
performance after receiving deposit from the public. Banking services for customers
such as collection of deposits, distribution of credits and provision of financial
services are of particular importance. Various thinker and economists have forwarded
different ideas regarding the origin of banks.

According to Journal of monetary economics, “Banks are financial intermediaries

that issue deposits and use the proceeds to purchase securities.” (Fama, 1980)

1.1.1 Concept of Deposit

Deposit is the main source of commercial banks. A commercial bank receives deposit
in different accounts namely current, saving, fixed and call account which are also
known as direct deposit. Deposit are the main source of capital for the lending
activities of financial institutions. The existence of commercial banks basically
depends upon the mobilization of deposits.

These banks cannot longer function in the absence of adequate deposits. In other
words, the strength and weakness of the bank largely depends upon the ability to
attract more people to deposit their savings on various deposit accounts of the bank
itself.

In the case of Prabhu Bank There are mainly four types of deposits i.e. current
deposit, fixed deposit, saving deposit and other deposit.
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1.1.2 Profile of Prabhu Bank

The bank has gone through the various phases of its growth trajectory over a short
period of its existence. Growth of Prabhu Bank was phenomenal, especially after
merger of Grand Bank Nepal limited, Kist Bank Ltd, Prabhu Bikash Bank Ltd,
Gaurishankar Development Bank Ltd and Zenith Finance Ltd in 2016, attaining the
status of “A” class financial institutions licensed and regulated by the Central bank of
Nepal, Nepal Rastra Bank.(www.google.com)

The bank has completed years of journey since the inception and has accommodated
seven different financial institutions in its making.

1.2 Statement of the problem

Nepal has stepped up in developing country from the list of under developed
countries. Financial development is crucial to economic growth and banks are the
most important elements of the financial system. Development of banks is only
possible from the deposit collected from public for extending credit facility.
Commercial bank increases on their ability to generate income through their
lending activities. The lending activity is made possible only if the banks can
collects, utilize and mobilize enough funds from their customers.
1. What types of deposits are interpreted by the PBL?
2. What is the current position of deposit of PBL?
3. What is the current position of deposit mix of PBL?

1.3 Objectives of the study

The general objective of this study is to analyze deposits collected in Prabhu
Bank. The study intends to present a brief and clear picture of deposit collection
and its utilization. The major objectives of the study includes,
1. To analyze the deposit position of Prabhu Bank.
2. To find out the deposit mix.
3. To analyze whether the deposits are being properly utilized or not.
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1.4 Limitations of the study

1. Prabhu bank do the different functions.The study is analyzing only the
collection of deposit.
2. This study depends upon secondary data of concerned bank.
3. This study analyzed the data of five years trend i.e.2018/19 to 2022/23.
4. Some qualitative factors are not included due to unavailability of the
facts their study.
5. It only focus in commercial bank i.e.Prabhu Bank limited.
6. This report is based on the format provided by the Tribhuwan University.
7. Due to wide range of data deficiencies,only simple techniques have been
used in analysis.

1.5 Significance of the study

Development of banking system plays an important role in the growth of any
economy. Deposit collection is one of the main problems of developing country
like Nepal. Due to various difficulties or even ignorance of the people of
developing countries such resources have not been utilized. The study helps to
observe the trend of the deposits.
Deposit collection is the major function of all commercial banks, which help to
carry out almost all transactions of the bank. So, the deposits in the commercial
banks have a good contribution to the country economy. If deposits are well
collected and sell mobilized the person as well as country can benefit from it.
This study however intends to give general information regarding banking,
deposits and prospects of the deposit and its mobilization in the country, which
may give the general idea about banking and deposits.
In this study researcher have found some significance,the main advantage and
important of the framework study are as follos:
1. It explains about the deposit condition of this bank.
2. One can have practical knowledge about concerned topic.
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3. Fieldwork study help to know about problem and different concernrd

helps to find out solutions.
4. We can develop self confidence in over concerned topic of field work
study can have important secondary data from this report.

1.6. Theoretical Framework

The aim of this study is to provide systematic and empirical analysis of the
deposit collection position of Prabhu Bank. The following conceptual framework
is adopted for this study:

Product &
Services

Tele- Safe deposit Transfer

Deposits Credit Cards Lending
Banking locker fund

 Deposits
Following types of accounts can be opened at any Prabhu branches upon
completion of simple document requirement.
1. Savings
2. Current
3. Fixed
4. Other
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1.7 Theoretical Review

A literature review is a summary and analysis of current knowledge about a popular topic
or areas of inquiry. It is the process of learning and understanding the concept of the
related topic. It helps to develop ideas, which later serve as a ground of comparing
finding and finally concluding the aims of the study.

The purposes of literature review are as follows:

1. Identifying variables relevant for research

2. Synthesis of prior works
3. Avoidance of repetition
4. Determining meaning and relationship among variables

1.7.1 Review from previous work

“A theory based on the limited recall of retail depositors is proposed. The propensity for
integer rates increases with the level of wholesale interest rates and deposit market
concentration.” (Charles Kahn, 1999)

(Khadka, 2017) also has conducted a study of deposit analysis of Prime Commercial
Bank Limited with objectives to analyze how the deposit lends by Prime Commercial
Bank, to ascertain the contribution of interest bearing and non interest bearing deposit
and find out the relation between total deposit and loan. Its deposit is in increasing trends.
It represents the consumers are confident in the bank.

It executed a comparative analysis of deposit products in banking industry and identified

opportunities for Eastern bank limited and concluded that EBL should offer term deposit
products as well as saving products with existing products. (Islam, 2014)
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1.8 Research Methodology

The research methodology is the process used to collect information and data.the
methodology may include interviews,surveys,publications research and other research
techniques.

1.8.1 Research Design

In this research, uses the information and concerned data of the study could be collected.
Only the useful information and data have been studied and analyzed carefully.
Unnecessary information and data have been omitted to make the proposal simple and
straightly concern with its objectives.

1.8.2. Sources of data

The study is based on the secondary data. Data are collected from published annual
reports of Prabhu Bank Ltd and also collected through the websites. Other important
information are collected from internet, journals, articles etc.

1.8.3. Population and Sample

The study is mainly incorporated with the annual reports of the bank. It uses secondary
sources of data collection method. In case of many commercial banks, Prabhu Bank is the
only sample used. It uses a sample of five years annual report of the bank for the study.

1.8.4. Tools and Techniques of Analysis

The collected and observed data are tabulated after adjusting necessary amount of each

overheads; however for the analysis of data the following two tools are used.

1. Financial Tools

These wide areas of financial tools that can be applied in order to analysis the financial
performance of Prabhu Bank LTD. But for this following ratio analysis tools are used.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠
a.Current ratio =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑙iabilities

𝐶𝑎𝑠- 𝑎𝑛𝑑 𝑏𝑎𝑛𝑘 𝑏𝑎𝑙𝑎𝑛𝑐𝑒

b.Cash and bank balance to total current deposit =
𝑇𝑜𝑡𝑎𝑙 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑑𝑒𝑝𝑜𝑠+𝑡
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𝐶𝑎𝑠- 𝑎𝑛𝑑 𝑏𝑎𝑛𝑘 𝑏𝑎𝑙𝑎𝑛𝑐𝑒

c.Cash and bank balance to total deposit =
𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑝𝑜𝑠+𝑡

𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡
d.Debt to equity ratio =
𝑇𝑜𝑡𝑎𝑙 𝑠-𝑎𝑟𝑒-𝑜𝑙𝑑𝑒𝑟𝑠 𝑒𝑞𝑢+𝑡𝑦

𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡
f.Debt to total capital ratio =
𝑇𝑜𝑡𝑎𝑙 𝑐𝑎𝑝+𝑡𝑎𝑙

𝑁𝑒𝑡 𝑝𝑟𝑜7+𝑡 𝑎7𝑡𝑒𝑟 𝑡𝑎𝑥

g.Return on equity = 𝑆-𝑎𝑟𝑒-𝑜𝑙𝑑𝑒𝑟𝑠 𝑒𝑞𝑢+𝑡𝑦

𝑁𝑒𝑡 𝑝𝑟𝑜7+𝑡 𝑎7𝑡𝑒𝑟 𝑡𝑎𝑥

h.Return on net worth =
𝑁𝑒𝑡 :𝑜𝑟𝑡-

2. Statistical Tools
Similarly after collecting the numerical data for statistical enquiry, it has to be
classified and tabulated and as well as, other different types of statistical tools can
be used to examine the economic data of Prabhu Bank Ltd. Bu for this study
following tools are taken :
i. Mean
ii. Standard deviation
iii. Coefficient of variation
iv. Bar diagram

1.9 Organization of the study

The first step in preparation of this report is to design the framework of the
research.the task begin with the collection of necessary data and information
connecting the study.the data and information collected has been studied carefully
and presented them systematically and get them analyzed so as to meet the
objrctive of the report.all data provided has been thoroughly studied and then
search design was planned.
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Chapter I
The first chapter deals with the subject matter consisting
introduction,identification of the problem,objective,rationale of the study, review
of literature,limitation and chapter scheme of the study.

Chapter II
The second chapter concerns with the analysis of financial indicators,analysis of
data and major findings using different financial and statistical tools.

Chapter III
The third chapter is concerned with the suggestive framework that consists with
the supplement section.Bibliography and appendices,summary and conclusion of
the study.
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References
Charles Kahn, G. P. (1999). Bank deposit rate clustering: Thory and empirical evidence. The
Journal of Finance, 2185-2214.

Fama, E. F. (1980). Banking in the theory of finance . Journal of monetary economics , 39-57.

Islam, G. (2014). A Comparative analysis of deposit products in banking industry ; An opportunity

for eastern bank limited . Journal of investment and management , 7-20.

Khadka, K. (2017). A field work report on deposit of prime commercial bank .

Websites

www.google.com

www.prabhubank .com.np

www.nrb.com

www.nepalstock.com
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