AN INTEREST RATE ON INVESTMENT MOBILIZATION

OF MACCHAPUCHCHHRE BANK LIMITED

1.1 Background of the Study

Commercial banks are those banks who pool together the saving of the community and arrange for
their productive due. They supply the financial needs of modern business by various means. They
accept deposit from the public on the condition that they are repayable on demand or on short
notice. Commercial banks are restricted to invest their funds in corporate securities. Their business
is confined to financing the short term needs of trade and industry such as working capital,
financing. They can't finance in fixed assets. They grant loans in the form of cash credit and
overdrafts. Apart from financing. thev also render services like collection of bills and cheques, safe
keeping of valuables financing advising etc to their customers (Catorelli, 2001).

An Investment is a collection of financial assets, such as stocks, bonds, and cash equivalents, held
by an individual or organization. The purpose of an investment portfolio is to maximize returm and
minimize risk by diversifying holdings among different types of financial instruments and
industries. Investment portfolios can be managed by professional portfolio managers or
selfmanaged by the individual or organization holding the portfolio. The specific mix of financial
assets in a portfolio will depend on the investor's goals, risk tolerance and time horizon (Pandey.
2010).

Interest rate in finance refers to the percentage at which a lender charges a borrower for the use of
money or the return that a lender receives on an investment. It represents the cost of borrowing or
the reward for saving investing money. In the context of investments, interest rates refer to the
retum that an investor receives on their investment, such as the interest earned on a savings account
or a bond. Higher interest rates generally indicate a greater potential returm, but also carry higher
risk. Interest rates play a critical role in the economy and financial markets. They influence
borrowing and lending banks and other monetary authorities use interest rate policies to manage
economic conditions and achieve policy goals such as price stability, full employment, and
economic grow (Sharma, 2018).
1.2 Statement of the Problem

A problem statement is a short description of the issues that need to be addressed by a problem
solving team and should be presented to them before they try to solve a problem.

The statement of the problem should briefly address the questions:

• What will be the interest rate on investment of MBL?

• What will be the relationship between interest income and investment of MBL?

1.3 Objectives of the study

The objective of the study is to find out the interest rate on investment mobilization of the
Machhapuchhchhre Bank Limited over the five fiscal year period. The specific objectives of the
study are as follows:

• To analyze the interest rate on investment of the bank

• To examine the relationship between interest income and investment of the
Machhapuchchhre Bank Limited.

1.4 Rationale of the study

This research will focus on interest rate on investment of the Machhapuchchhre Bank Limited.
This report examine the relationship between two variable interest income and investment of the
MBL. This report will extremely important to multiple persons such as management further
researcher, investor, and so on as it provides adequate insight about investment. These studies also
provide information to those who are wanted to know about an analysis of interest rate on
investment of the bank. With the help of the report of this study, the management may apply
corrective measures for the improvement at the bank performance. After the completion, this
report will kept in the library, which plays the role of reference to the researchers making the
similar study in future. This report writing shows the investment mobilization of the
Machhapuchchhre Bank Limited.

1.5 Research methodology

Research methodology is the research method used to test the hypothesis. It sequentially refers to
the various steps to be adopted by a researcher in studying a problem with in certain objectives in
review. Generally, it refers to the numerous processes adopted by the researchers during the
research period. The purpose of the research methodology section is to describe the nature of the
research design, sampling, gathering and procedure and data collection and analysis procedures.
This section includes the following information.

Research Design

This research will follow the descriptive and correlational research design. Research design that is
developed with the aim of studying the subject of details and explain the facts and characteristics
related to research problem is known as descriptive design.

Population and Sample

There are 20 commercial banks in Nepal. Out of total 20 commercial bank of Nenal
Machhapuchchhre Bank Limited is selected as a sample for this study

Nature and sources of Data

While preparing this report, data are collected from secondary sources. The researchers have used
quantitative data. Data collection techniques used by secondary data collection methods, which are
presented below

A. Secondary Data

• Annual report
• Books
• Websites

Method of data presentation and analysis

In this report, the researchers have used the following presentation and analysis toos

• Tables

• Trend Line
• Bar Diagram
 • Correlation

1.6 Limitations of the Study

The limitations of the study are as follows:

• The study will covers the period of five financial year starting from 2075/76 BS to
2079/780 BS.
• The information data and facts regarding the financial performance will be based on
secondary data.
• Limited Financial and statistical tools will be used to analyzed and present the data.
• Only one bank will be taken a sample for this study.

1.7 Organization of the study

The report will consists of three chapters.

Chapter-I: Introduction

The introduction chapter consists of general background, profile of the organization, objectives of
Study, rationale methodology (methods of data collection, methods of data presentation and
methods of data analysis) and limitation of the study.

Chapter-I1: Results and Analysis

Second chapter consists of tabulation of data, Figure and bar diagram.

Chapter-Il: Summary and conclusion

The third chapter includes summary and conclusion.

Lastly, Bibliography and appendices are added at the end of this report.

1.8 Time Allotment

Topic Selection 2 days

Proposal writing 4 days

Data collection 5 days

Data presentation and analysis 8 days

Preparation of report 6 days

Profile reading 4 days

Setting and Printing 3 days

Review of literature 3 days

Total 35 days

Submitted by
…………………
BBS 4th year
Aims College, Butwal