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FIXED DEPOSIT COLLECTION OF RASTRIYA BANAJYA,BANK

DHANGADHI KAILALI
A Project work Report

Submitted by:- Khem Raj Pandeya


Kailali Multiple Campus, Dhangadhi kailali
T.U. Regd.no:-7-2-0327-0781-2013
Examination Roll No.:-3270139
Group: finance

A Report Submitted to
Office of the Dean
Faculty of management
Tribhuvan University
In partial fulfillment of the requirement for the Degree of Bachelor of
Business Studies (B.B.S.)

Dhangadhi , kailali

Baisakh 2074(B.S)
RECOMMENDATION

This is to certify that the report

Submitted by

KhemRaj Pandeya

Entitled

FIXED DEPOSIT COLLECTION OF RASTRIYA BANAJYA, BANK


DHANGADHI KAILALI

Has been presented and approved by this campus in the prescribed Format of the faculty of
management. This report is forwarded for examination

………………………… …………………………………
………………………………….
(Thesis supervisor) (Head research department) (Campus chief)
Kailali multiple campus Kailali multiple campus Kailali multiple
campus
Supervisor Recommendation

The project work report entitled “FIXED DEPOSIT COLLECTION OF RASTRIYA


BANAJYA, BANK” submitted by Khem Raj Pandeya of Kailali Multiple Campus,
Dhangadi, kailali, is prepared under my supervision as per the procedure and format
requirement laid by the Faculty of Management, Tribhuvan University, as partial fulfillment of
the requirement for the reward of the degree of Bachelor of Business Studies (BBS). I, therefore,
recommend the project work report for evaluation.

Signature
NAME OF SUPERVISOR:-
NAME OF CAMPUS: - Kailali Multiple campus, Dhanghadi
Date:-
VIVA-VOCE SHEET
We have conducted the viva-voce examination of the report

Submitted by

Khem Raj Pandeya

Entitled

FIXED DEPOSIT COLLECTION OF RASTRIYA BANAJYA, BANK


DHANGADHI KAILALI

And found the thesis to be the original work of the student and written according to the
prescribed format. We recommend the thesis to be accepted as partial fulfillment of the
requirements for the degree of bachelor in business studies (B.B.S.)

Viva-voce committee

Head, Research Department ……………………………………………………….

Member, thesis supervisor ………………………………………………………..

Member, external expert ………………………………………………………..


DECLARATION

I hereby declare that the project work entitled “Fixed deposit collection of Rastriya
Banajya,Bank”Dhangadhi kailali submitted to the Faculty of Management, Tribhuvan
University, Kathmandu is original peace of work under the supervision of Associated Prof.
Mr.Keshav Raj Bhatta, Mr.Dinesh paudel & Mr.Tek Bahadur Madai faculty members of
Kailali Multiple Campus Dhangadhi Kailali, and is submitted in partial fulfillment of
requirements for the award of 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.

KHEM RAJ PANDEYA

Date-
Abstract

The student of BBS program of Tribhuvan University (TU) must carry out a fieldwork study of
two weeks by visiting the organization or project. The results of past year show that student is
not able to follow the requirement of Faculty of Management in writing the report of their
fieldwork. So this study attempts to uncover the common mistakes and their causes while writing
the fieldwork report. Students were found moderate in writing the fieldwork report. They lack
the habit of reading related books; do not get appropriate, effective and intensive orientation to
equip themselves with research skills.
ACKNOWLEDGEMENT

This report entitled “Fixed deposit collection of Rastriya Banajya,Bank”dhangadi kailali has
been prepared in partial fulfillment for the degree of Bachelors of Business Studies (BBS)
under the course designed by the Faculty of Management, T.U. This study is based on the
prescribed research format involving the deposit collection made in fixed account and current
account.

At the time of preparing this study, I have consulted with various personalities. So I would like
to extend my sincere thanks to all whose works and ideas helped me in conducting the study.
Sincerely, I would like to pay my sincere gratitude to my report advisor Mr.Keshav Raj Bhatta

of Kailali Multiple Campus who guided through research work with providing valuable
suggestions, supports and supervision.

Finally, I would like to offer my profound gratitude to my family members, my friend,


colleagues, and well wishers for their encouragement and support during the entire period of my
study.

Khem Raj Pandeya


DEDICATION

Dedicated to my parents who have shown me the way of

knowledge and life.

***
TABEL OF CONTENTS

Title page

Declaration

Recommendation

Abstract

Acknowledgement

Table of Contents

List of Tables

List of Figures

Abbreviations

CHAPTER -1 INTRODUCTION

1.1 Background of Study

1.2 Statement of the Problem

1.3 Objective of the Study

1.4 Rationale

1.5 Report structure

CHAPTER – 2 REVIEW OF LITERATURE

2.1 Conceptual Review

2.2 Review of Previous works


2.3 Research Gap

CHAPTER -3 RESEARCH METHODOLOGY

3.1 Type of Research

3.2 Populations and Sample

3.3 Types of Data

3.3 Data Collection Procedure

3.4 Instruments

3.5 Techniques of Analysis

3.6 Limitation

CHAPTER 4: RESULTS AND FINDINGS

4.1 Presentation of Data in Tables and Figures and Their Analysis

4.2Major Findings

CHAPTER 5: DISCUSSION AND CONCLUSION

Discussions

Conclusion and Implication

REFERENCES

APPENDICES
List of tables

1. CAPITAL ADEQUACY RATIO:


2. Core capital (tier I) fund and breakdown of its components
3. Core capital (tier I) fund and breakdown of its components:
4. Supplementary (Tier 2 ) Capital and break down of its components
5. Total capital fund (as per new format prescribed by NRB
6. Risk weighted exposure for credit risk, operational risk and market risk
7. Amount increased in the fixed deposit account
8. No. of Account holders of RBB bank

List of figures
ABBREVIATIONS

ABBS - Any branch banking service system

BBS - Bachelor of Business studies

Fig - Figure Number

ATM-Automated Teller Machines

No - Number

TU - Tribhuvan University

RBB- Rastriya Banjya Bank

CHAPTER-I
1.0Introduction

1.1Background:-
Bank is kind of formal financial intuition. Our financial system is dominated by bank. The
banking system in Nepal is a recent phenomenon which began only in 1996 B.S. as Nepal Bank
Ltd. Was incorporated under NBL act 2012 after transferring 51percent of share to government.
The term “Bank” is derived from Italian word “Banko” which means a counter table or bench
used by medieval money exchange. According to Oxford Dictionary bank means “an
establishment for keeping and valuable safety of the money being paid out on the customer order
by means of cheque.
RBB Ltd. – established on January 23, 1966 (2022 magh 10) – a synonymous of stable and
people’s bank in Nepal – is one of the pioneer Bank in the country with the history of nearly a
half century. Earlier constituted under RBB act 2021 with the full ownership of the Government
of Nepal, the bank has been running under Bank and financial institute Act (BAFIA) and
company Act (CA) 2063 at present. The Bank license by NRB as a “A” class commercial bank
of the country, has grown up as an indispensable component of the Nepalese economy. The bank
is the highest profit earning bank for the FY 2014/015. The bank has second highest paid up
capital till the end of FY 2015/16 after Agriculture Development Bank.

RBBL which has made the glorious history of the contributing for the monetization of the
economy, eliminating dual century in the market, initiating, preliminary, financial literacy, help
flourish industrial, commercial and financial sector of the country has now emerged as a modern
and strong financial institute of the country. The bank has 26000 hands has expanded its wings in
most of part of the country through multiple distribution outlets of 160 branches, 17 countries, 28
branch less banking and 72 ATMs. The bank has the highest public confidence reflected in the
highest deposit based base and growing demand for branch establishment in the various parts has
stood as a pyramid in the financial arena of the country. The bank has as many as 1.7 millions
satisfied / direct customer ranging from poor to elite ones and million of the indirect ones has
drawn important imprint in the picture of the country economy through significant involvement
in the best use of its resources to enhance the production, income and employment opportunity.
The bank is fully committed to contribute its best for the socio economic development of the
country and the days to come.

Vision:- “ To provide innovative banking service to everyone, every time and everywhere
for the economic development of the nation”.

Mission:-“ To provide easy and innovation banking product and services for our customer
by implementing one stop service concept from wide network using our modern
technology qualified human resource in competitive environment. We always look for the
benefit of the local communities supporting entrepreneurship, social responsibility and
economic prosperity of nation”.

A bank is an intuition where customers can save or borrow money. Banks also invest money to
build up their reserve of money. What they do is regulated by laws. Those laws differ in different
countries.

In simple words, Banking can be defined as business activity of accepting and safeguarding
money. Owned by other individuals and entities, and then lending out this money in order to earn
a profit. However, with the passage of time, the activities covered by banking business have
widened and now various other services are also offered by banks. The bank services these days
include issuance of debit and credit cards, providing safe custody of variable items, lockers,
ATM services and online transfer of funds across the country/world.

Generally, bank is an institution which accepts deposits, makes business loans, and offers related
services. Commercial banks also allow for a variety of deposit accounts, such as checking,
saving, and time deposit. There institutions are run to make a profit and owned by a group of
individuals, yet some may be members of the Federal Reserve System. While commercial banks
offer services to individuals, they are primary concerned with receiving deposits and lending to
businesses.
In an economy the bank is regarded as one
of the economic backbone of the country for its development. Bank is a financial institution that
deals in money. The basic function of bank is collecting deposit and granting the loans. It
involves in credit creation that in related to creation of deposit and loan. In the economy, the
banks collects small saving of general people, accumulative it and lends the productive sectors of
the society for the overall economic development.

Various writers have been defined the word “bank” in different ways.

According to Scholars, “The bank is defined as factory of money for credit where it does not
purchase goods and sells it rather produces credit inform of deposit and sells it inform of loans.”

According to C.R. Crowther,”A banks collects money from those who have it to spare or who
are saving it out of their income and lends this money to those who required it.”

Thus in conclusion, we can say that bank is an organization which deals with the monetary
transactions for the mobilization of idle money or deposits in productive sectors, is essentially
essential for the development of the whole net.

THE BANKING IN NEPAL

In the context of Nepal, like as in other country the goldsmiths and landlord was the
ancient banker. The Nepalese people were highly exploited by shahu mahajan by charging higher
interest rate that is compound interest rate and even by manipulating the principle amounts. If we
try to see the history of banking transaction in depth then evidence of money landing function are
found in practice before 8th century in 780 B.S. gunakamdev the ruler of Kathmandu
reconstructed Kathmandu valley by borrowing dept from the people. In 14th century tankdhari
system had been running in the period of ranodip shing in Kathmandu established and office
called tejarath adda. From the office the government distributed salary to their employees and
provided loan to government employment @5% of interest against the security gold, silver etc.

Because of the development of economy activities in Nepal the above institutions


could not be fulfilled the need of people. So in kartik 30, 1994 B.S. Nepal bank was established
as one of the semi government commercial bank which had 10 million authorized capital and
842000 paid of capital. it has done the pioneering function in function spreading the banking
habits among the people. Having felt a need of central bank to control and direct the commercial
bank and help the government for making monitory polices Nepal Rastra bank was set up in 14
Baishakh, 2013 B.S.
To fulfill the growing credit requirement of the country. The commercial bank i.e. Rastriya
Banijya bank was establishes in 10th Bhadra 2022 B.S. this bank also provides facility for the
economy welfare of the general public. Nepal is an agricultural country to develop agriculture
system. Industry agriculture development bank and Nepal industrial development corporation
was established in 2024 B.S. 2016 B.S. respectively.

The initiation of the financial sector; liberalization policy by Nepal RastraBbank, a


board of joint venture banks entered with the view to accelerate the race of development of
nation. At present, there are many joint venture banks which are running successfully in a
competitive environment. His majesty government deliberates policy of allowing foreign joint
venture banks to operate in Nepal basically targeted, to encourage local tradition commercial
bank to enhance their capacity through competitor’s efficiencies mechanization modernization
prompt customer service. Nepal Arab bank ltd was established in 2041 as a first foreign joint
venture bank.

FUNCTIONS OF COMMERCIAL BANKS:

Although profit maximization is a major objective of commercial bank, to achieve this objectives
commercial bank performs various functions under the mandatory rules and registrations and
directives of NRB and commercial Bank Act 2031(1974) which are:
Primary functions
a) Accepting Deposits:
Accepting deposits is the main function of commercial banks. Commercial banks collects money
from those who want to deposit in different types of deposits accounts such as:
Fixed deposit account
Current deposit account
Saving deposit account

b) Advancing of Loans:
Commercial banks provide the required loan or credit to various sectors of economy such as
industry, trade, agriculture, business deprived sector etc. in this way bank creates facilities. It
provides loans from various procedures in different form such as:
Overdraft
Cash credit
Direct loan with collateral
Discounting bill of exchange
Loans of money at call and notice

General Utility functions


Commercial banks also form general utility functions such

 Issuing of letters of credit to customers


 Issuing of bank draft and travels cheque etc for transfer of funds from one place to another.
 Dealing in foreign exchange and financial foreign trade by accepting or collecting foreign bill of
exchange.
 Underwriting loans to be raised public bodied and corporations.
 Providing safety vaults or lock for the safe custody of valuables and securities of the customers.
 Remittance of money

Agency Functions
Apart from the above function, commercial banks also perform agency functions for which they
act as agent and claim commission on some facilities such as:

 Collection of customer’s money from other banks.


 Receipt and payment of dividend and interest.
 Security brokerage service
 Financial advisory services
 To underwrite the government and private securities.

STATEMENT OF PROBLEM:-

Deposits are the major financial part of the bank. It is directly related to profibility of the bank.
The bank deposit are the major investment sources of the bank. A financial institution has made
the life of a human, easier and comfortable by providing facility of deposit. Fixed Deposit is one
of the factors that attracts customer towards the bank as it helps to fulfill the growing desire of a
person as per the modernization. Rastriya Banajya Bank has brought this opportunity in front of
its customer with availability of different options. The deposit practice of Rastriya Banajya Bank
specially focuses on current deposit, fixed deposit and both because of the growing business
activity and their needs.

Fixed deposit is one of the most important tools that banks to increase banks income by investing
to the needed parties. There are many specific reasons for providing deposit facility. The reason
can be the providing deposit facility is to expand banks market through deposit facility.
Therefore the deposit plays a crucial role in development of business activity. Today many banks
are deposit service facility their integral part. The role of fixed deposit is very important for the
building of nation.

In today’s word popularity of deposit is growing day by day. It is very useful for banks to
generate income. Different types of deposit facility are available in now day’s commercial banks.
 What are the sources of fixed deposit?
 How much interest is paid on Fixed Deposit account?

OBJECTIVES:- The objectives of this study is to examine the related factors of the Rastriya
Banajya Bank .

 To identify the source of fixed deposit.


 To examine the interest on fixed deposit.

RATIONAL (SIGNIFICANCE):-
The study is based on the various provision of fixed deposit facility provided by Rastriya
Banajya Bankto the customer this study includes the interest rate charged by the bank on
deposit,no. of depositors or money suppliers. Today’s modern business world the need of deposit
is indispensable for money suppliers to investors. Every step of business activity needs a fund.
Deposit increase the productivity growth in business sector it helps the worker to get their
necessary goods in low cost. Deposit helps the development of nation as well as regional
development. RBB helps those investors who want to adopted new technology with innovative
idea.

After the studying aboutfixed depodit of RBB bank.This study will provide necessary
information of performance capability of the bank to the management it also provide how much
fund of banks invested from deposit of fixed deposit. By identifying all these objectives this
study will help the research group, academicians, customers as well as the banking personnel to
acquire the required information regarding the provision interest provided to loan demander and
money supplier.

The present study deserves some significant of its own kind in this field. The study will be
concise practically usable and valuable to the major parties interested in the performance of
RBB’s share holders management of bank, brokers, financial instructions, general public
depositors, prospective customers, creditors, etc.

LIMITATION OF THE STUDY


This study is simply conducted for the partial fulfillment of the requirement for the
degree of the bachelor in business studies (BBS). And only the secondary data is used and
analyzed which could not disclose the actual result. And being the first endeavor, the report can
comprise some mistakes which may cause to misinterpretation of the results.

The other limitation of the study is listed below:


1. Data contains mostly of the annuals reports of the bank through fiscal
2. Analysis is based on the ratio and trend lines of the corresponding ratios only.
3. For the forecast of the liquidity requirement, daily and monthly data is needed. But due to
time and cost constraints, only the annual data is used for analysis.
4. Only the secondary data is used.
5. The study is only fulfill the requirement for the degree of bachelor in business studies,
which can not cover all the dimension of the all subjects matter and resource and time
period is also limited.

SCOPE AND IMPORTANCE OF THE STUDY:


This study will be useable and valuable to the various parties, which can be mentioned
as follow:
a) To the investors
b) To the creditors
c) To management of the bank
d) To the customers
e) To the other parties
f) And this study will be equally useful to the other readers, students of related subjects and
other people who are concern with banking field.

1.5 Structure of the study

There are five chapters in this study, which are introduction, review of literature, research
Methodology, result and findings, Discussion and conclusion.

Chapter 1: Introduction:- The first chapter includes various aspects of present study like
background, statement of problem, objectives of study, rational of study and limitations of study.

Chapter 2:- Review of Literature: In the second chapter it includes conceptual review, review
of previous works, research gap are included.

Chapter 3: Methods:-The third chapter deals with research methodology which consists of
types of research, types of data, data collection procedure, instruments, technique of analysis and
limitations

Chapter 4:- Result and findings: The fourth chapter introduces the main aspect of the study. It
deals with presentation of data, and main findings.

Chapter 5: Discussion and Conclusion: the fifth chapter includes discussion and conclusion.

CHAPTER- II
REVIEW OF LITERATURE
2.1 Conceptual Review
The review of literature is a crucial aspect because it denotes planning of the study. A researcher
work involves the use of reference materials. The concept of review of literature involves
reviewing research studies or other proposals in the related area of the study so that all the past
studies, their conclusions and efficiencies can be known and further researcher can be conducted.
In reality, review of literature provides knowledge about the past research studies in one’s
chosen area of study and suggests ideas to investigate the problem more effectively. Review of
literature is the process by which the researcher learns and understands the concept of related
literature.

The modern financial evaluation has greatly affected the role and importance of financial
performance. Nowadays, finance is best characterized as ever changing with new ideas and
techniques. Only efficient manager of the company can achieve the set up goals. If a bank does
not maintain adequate equity capital, it makes the bank more risky. If a bank has inadequate
equity capital, it must be used more debt that has high fixed cost. So any firm must have
adequate equity capital in their capital structure.

The main objectives of the bank are to collect deposits as much as possible from the customers
and to mobilize into the most profitable sector. If a bank fails to utilize it‟s collected resources
than it can not generate revenue. Resource mobilization management of bank includes resource
collection, investment portfolio, loans and advances, working capital, fixed assets management
etc. It measures the extent to which bank is successful to utilize its resources. To measure the
bank performance in many aspects, we should analyze its financial indicator with the help of
financial statements.

For the all types of study, review of literature is essential, which helps to find out the research
studies have been conducted ones chosen field of the study and what remains to do. In fact,
review of literature begins with search for suitable topic and continues throughout the duration of
research work. It is path of find out the other research in this area has uncovered. It is the process
of locating, obtaining reading and evaluating the research literature in the area of student interest.
It is also a means to avoid investing problems that are already been positively answered. The
main reason for a full review of research in past is to know the outcomes of those investigations
in areas where similar concepts and methodologies had use successfully. This chapter is basically
divided in two parts, one is conceptual review and the other is review of related studies.

Review of literature means reviewing research studies or other, relevant propositions in related
area of the study so that all the past studies, their conclusion and deficiencies may be know and
further research can be conducted. The most important reason of literature review is to learn not
to collect. It helps to know many things to researcher such as, what research has been done in the
subject? What theories have been developing? Methods, approaches used by other researchers,
area of agreement or disagreement etc.
Composition:

a. Total deposit means current, saving and fixed deposit account as well as call money
deposit and certificate of deposit. For the purpose, deposits held in convertible foreign
currency, employees guarantee amount and margin account will not be included.
b. Fixed deposit means a deposit in local currency accepted under the condition to repay on
completion so stipulated time period.
c. Current and saving deposit means all deposit accounts other than the fixed deposits.
d. Cash in vault shall include only the local currency and foreign currency (except clearing
cheque etc.)
e. Balance held with Nepal rastra bank in ordinary account only will be eligible for liquidity
calculation. Special accounts opened with Nepal rastra bank for specific purpose and
foreign currency designated accounts will not be included for the purpose.
f. For the purpose of liquidity examination, all branches of the bank shall constitute one
unit.

2.2 Review of Report

An institution which accepts deposits, makes business loans, and offers related services.
Commercial banks also allow for a variety of deposit accounts, such as checking, savings, and
time deposit. These institutions are run to make a profit and owned by a group of individuals, yet
some may be members of the Federal Reserve System. While commercial banks offer services to
individuals, they are primarily concerned with receiving deposits and lending to businesses.

The Nepalese organized financial sector is composed of banking sector and non-banking sector.
Besides commercial banks, there are sizeable numbers of development banks, finance
companies, micro-credit development banks, co-operative, NGOs and postal saving offices that
undertake limited banking and near banking financial services. Nonbank financial sector
comprises saving funds and trusts like Employee Provident Fund, Citizen Investment Trusts, and
Mutual fund.
The main objectives of the bank are to collect deposits as much as possible from the customers
and to mobilize into the most profitable sector. If a bank fails to utilize its collected resources
than it can not generate revenue. Resource mobilization management of bank includes resource
collection, investment portfolio, loans and advances, working capital, fixed assets management
etc. It measures the extent to which bank is successful to utilize its resources. To measure the
bank performance in many aspects, we should analyze its financial indicator with the help of
financial statements.

Financial analysis is the process of identifying the financial strength and weakness of the
concerned bank. It is the process of finding strength and weakness of the concerned bank. It is
the process of finding details accounting information given in the financial statement. It is
performed to determine the liquidity, solvency, efficiency and profitability position of an
organization. The function or the performance of finance can be broken down into three major
decisions i.e. the investment decision, the financing decision, and the dividend decisions. An
optional combination of the three decisions will be maximum value. Nepal's first commercial
bank, the Nepal Bank Limited, was established in 1937. The government owned 51 percent of
the shares in the bank and controlled its operations to a large extent. Nepal Bank Limited was
headquartered in Kathmandu and had branches in other parts of the country. There were other
government banking institutions. Rastriya Banijya Bank (National Commercial Bank), a state-
owned commercial bank, was established in 1966. The Land Reform Savings Corporation was
established in 1966 to deal with finances related to land reforms.

There were two other specialized financial institutions. Nepal Industrial Development
Corporation, a state-owned development finance organization headquartered in Kathmandu, was
established in 1959 with United States assistance to offer financial and technical assistance to
private industry. Although the government invested in the

In the mid-1980s, three foreign commercial banks opened branches in Nepal. The Nepal Arab
Bank was co-owned by the Emirates Bank International Limited (Dubai), the Nepalese
government, and the Nepalese public. The Nepal Indosuez Bank was jointly owned by the
French Banque Indosuez, Rastriya Banijya Bank, Rastriya Beema Sansthan (National Insurance
Corporation), and the Nepalese public. Nepal Grindlays Bankwascoowned by a British firm
called Grindlays Bank, local financial interests, and the Nepalese public.

Nepal Rastra Bank was created in 1956 as the central bank. Its function was to supervise
commercial banks and to guide the basic monetary policy of the nation. Its major aims were to
regulate the issue of paper money; secure countrywide circulation of Nepalese currency and
achieve stability in its exchange rates; mobilize capital for economic development and for trade
and industry growth; develop the banking system in the country, thereby ensuring the existence
of banking facilities; and maintain the economic interests of the general public. Nepal Rastra
Bank also was to oversee foreign exchange rates and foreign exchange reserves.
There is a significant growth in the number of banks in Nepal in the last two decades. At the
beginning of the 1980s when the financial sector was not liberalized, there were only two
commercial banks. During 1980s, there were only few banks. After the liberalization in the
1990s, financial sector has made a progress both in term of the number of banks and financial
institutions and their branches. As on Mid July 2009, the number of commercial banks is 27
based on the applications for establishment of new banks as well as for the up gradation of other
financial institution, the number is likely to grow in the near future as well.

Banking system occupies an important role in the economic development of a country. A


banking institution is indispensable in a modern society. It plays a pivotal role in the economic
development of a country and focus the core of the money market in an advance country. The
pivotal function of the bank is to collect deposits as much as possible from customers and
mobilize it into the most preferable and profitable sector like industry, commerce, agriculture,
entertainment etc

The main purpose of literature review is to find what works have been done in the area of the
research problem under study and what has not been done in the field of books, reports, journals
and research studies published by various institution unpublished dissertation submitted by
bachelor level student have been reviewed. The review of textbook and other reference materials
such as: newspaper, magazines, Research articles, journals and past thesis have been included in
this topic.

The modern financial evaluation has greatly affected the role and importance of financial
performance. Nowadays, finance is best characterized as ever changing with new ideas and
techniques. Only efficient manager of the company can achieve the set up goals. If a bank does
not maintain adequate equity capital, it makes the bank more risky. If a bank has inadequate
equity capital, it must be used more debt that has high fixed cost. So any firm must have
adequate equity capital in their capital structure.

The main objectives of the bank are to collect deposits as much as possible from the customers
and to mobilize into the most profitable sector. If a bank fails to utilize it‟s collected resources
than it can not generate revenue. Resource mobilization management of bank includes resource
collection, investment portfolio, loans and advances, working capital, fixed assets management
etc. It measures the extent to which bank is successful to utilize its resources. To measure the
bank performance in many aspects, we should analyze its financial indicator with the help of
financial statements.

Financial analysis is the process of identifying the financial strength and weakness of the
concerned bank. It is the process of finding strength and weakness of the concerned bank. It is
the process of finding details accounting information given in the financial statement. It is
performed to determine the liquidity, solvency, efficiency and profitability position of an
organization. The function or the performance of finance can be broken down into three major
decisions i.e. the investment decision, the financing decision, and the dividend decisions. An
optional combination of the three decisions will maximize the value of the firm.

When looking to improve their performance, banks compare the performance of their peers and
evaluate the trend of their financial performance over time. Tarawneh (2006) in his study
measured the performance of Oman commercial banks using financial ratios and ranked the
banks based on their performance. The study utilized FRA to investigate the impact of asset
management, operational efficiency and bank size on the performance

2.3 Research gap

A research Gap is the missing element in the existing research literature, and you have to fill
with your research approach to make your manuscript publishable. In another words, it indicates
a finding from a research in which a key question has not been answered.

The present research is focused of on the fixed deposit facility provided by RBB in field of fixed
deposit planning. Above studies has provide us a little but more knowledge for our research
proposal. Similarly, reviewing various books, journals, thesis and other independent studies by
different authors related to the topic, it could be conduct that all those works performed are
related to the studies of fixed deposit. The review of above relevant literature has contributed
enhance the fundamental understandings and knowledge, which is required to make study
management of RBB bank. There are various researcher conducts on fixed deposit and policy of
RBB bank. So, this study will be fruitful to those interested person, parties, scholars, professor,
student, business man and government for academically as well as policy perspective. Based on
review of literature, vehicle loan is done in different venture banks. Hope this study will help to
others in future in the related field.

Previous studies of bank loan are basically researched total area of fixed deposit facility by bank.
In previous research they are focused on business loan, home loan, auto loan, focused in vehicle
loan but not on fixed deposit of RBB bank. Some researcher are research on fixed deposit facility
provided by RBB Bank but they are focused on only how much fund mobilized in this sector
.They are no more focused on interest rate and no of customer. Previous researcher are mostly
use fabricated data in their report due to bank secrete reason.

But this research is mostly focused on fixed deposit facility provided by RBB bank. This
research is not only focused on fund mobilized by bank it also covers the interest rate, and no. of
fixed depositors of this bank. In this research secondary data are used and use original data of
bank .Data are not fabricated.
CHAPTER-III

RESEARCH METHODS

Research simply means to search again and again. It is a systematic activity to achieve
truth or finding solution to a problem. It is a process of a systematic and in-depth study or
research of any particular topic, subject or area of investigation backed by the collection,
compilation, presentation and interpretation of relevant details or data. Methodology is
the research method used to test the hypothesis. So the research methodology refers to the
overall research process, which a researcher conducts during the study.

According to Karlinger “Research methodology; means how the research objective will
be reached and how the problem encountered in the research will be tackled “. This
chapter has discussed about the concept red background of the study and builds a
concrete methodology for research study a practical one. Appropriate research
methodology has to be followed t achieve aspired objective. The research methodology
adopted for the present study has been outline in this chapter which deals with research
design sources of data tools and technique of analysis of data and variables of the data

3.1 Types of Research

We can use different types of research design. Research design is a plan to obtain the
answer of research questions through analysis of data. It refers that research design is a
set of work for researching a particular problem. In fact, research design is the conceptual
structure with in which research is conducted: it constitutes the blue print for the
collection, measurement and analysis of data. This study is meanly related to quantitative
aspects such as various accounting statement and actual result of annual report. As per
the requirement of the study, both descriptive and analytical approaches are used.

This study based on recent historical data. Mostly secondary data and information were
collected, verified and evaluated to reach a conclusion. To achieve the objective of the
study descriptive data different journals and articles relevant with the study, annual report
of different fiscal year of Nepal bank, banking and financial report published by NRB
and other related material collected and studied. For the research on vehicle loan of Nepal
bank descriptive research design is used. We can use different types of research design.
Research design is a plan to obtain the answer of research questions through analysis of
data. It refers that research design is a set of work for researching a particular problem. In
fact, research design is the conceptual structure with in which research is conducted: it
constitutes the blue print for the collection, measurement and analysis of data.

Research Design:

A research design is the arrangement conditions, for the collection and analysis of data in a
manner that aims to combined relevance to the research purpose with economy in procedures.
This study aims on the financial analysis of the RBB bank . This study is mainly
based on secondary data. The secondary data are collected from respective annual reports
especially from the RBB bank’s web sites and various other journals and from security bond
Nepal (SUBO) and Nepal stock exchange (NEPSE).

3.2 Population and sample


This study is based on a fixed deposit facility provided by RBB bank dhangadhi. For this
topic we take data of all fixed deposit taken of this bank so there is no sample is taken.

A population is a collection of people, item or events about which we want make


inferences. It is not is not always convenient or possible to examine every member of an
entire population. For example, it is not practical to count the bruises on all apples picked
at an orchard. It is possible, however, to count the bruises on a set of apples taken from
that population..

If the sample is random and large enough, we can use the information collect from the
sample to make inferences about the population. For example, we could count the no of
apple with bruises in a random sample and then use a hypotheses test to estimate the
percentage of all the apples that have bruises.

A sample is a subset of people, items, or events from a large population that we collect
and analyze to make inferences. To represent the population well, a sample should be
randomly collected and adequately large.

To understand basic foundation for hypothesis testing and other types of inferential
statistics, it is important to how a sample and a people differ.

Although there are many commercial banks which are involved in fixed deposit in our
country , it is not possible to study all of them regarding the research topic. Therefore,
among these one reputed commercial bank i.e RBB bank dhangadhi branch is taken as a
sample commercial bank from population of this research.

3.3 Types of Data


While writing this report to get the information the secondary sources of data collection
methods have been used. Those data, which are already, collected by other are secondary
data .The study based on secondary data. Secondary data are extracted from published
annual report of the bank, published articles, journal, report, books, document newspaper,
thesis, computerized data base, previous related studies etc.

3.4 Data collection procedure

I went to the branch office of RBB bank dhangadi branch, and get the important information.
I collected the main annual reports of this bank directly from the web site. And other various
articles and journals from various publication and some others from the SEBO, NEPSE and
previous field reports are also taken in to accounts.

Data collection is the gathering and measuring information on targeted variables in an


established systematic, which then enables one to answer relevant question and evaluate
comes. Data collection is a component of research in all fields of study including physical
and social sciences, humanities and business.

While methods vary by discipline, the emphasis on ensuring accurate and honest
collection remains the same. The goal for all data collection is to capture quality evidence
that allows analysis to lead to the formulation of convincing and credible answers to the
questions that have been posed.

The necessary, important and relative information data concerning the study of RBB
bank Dhnangadi are collected by contacting the concerned staff of RBB bank and related
and know person about it. The data is carefully studied and analyzed systemically under
RBB bank specific major heading shown as to meet the objective of study. For the data
researcher use all the steps to get data from bank.

3.5 Instrument
Data instrument are main tools for data analysis. Researcher used annual report and
financial statement of RBB bank . Data obtained from the, various sources cannot be
directly used in their original form further they need to be verified and simplified for the
purpose of analysis. Data information, figure and facts so obtained need to be checked,
rechecked edited and tabulated for computation. According to the nature of data, they
have been inserted in meaningful tables, which have been shown in annexes.
Homogenous data have been sorted in one table and similarly various tables have been
prepared in understandable

Instrument means tools that the researcher used to collect the secondary data. The
research work is based on the secondary data which are collected through published
annual report of the bank and financial institution every in fiscal years and previous work
studies. To finding the business loan provided by RBB bank.
3.6 Techniques of analysis
We have to use different method to find out the solution of the given problems. In this
study various financial tools use:

Data will be presented in table, pie chart, bar diagram and calculation of different
statistical tools whatever necessary. Proportional area chart used almost exclusively in
showing relative size of the components of a date –set, in comparison to one another and
to the whole set. A diagram so that the logic of an electrical circuit or system using
standard symbol. Also known as a ladder diagram because the diagram appears as
individual interest running connected between two vertical lines.

A bar graph displays data visually and is sometimes called a bar chart or a bar graph.
Date is displayed either horizontally or vertically and allows viewers to compare items
displayed. Data displayed will relate to thing like amounts, characteristics, times and
frequency etc. A bar graph display

The table provides exist meaning in short time period so the in this research also tables
are used.

DATA ANALYSIS TOOLS:

Data analysis tools means which tools the research used for present and analyzed the data.
The main tools of analysis are mathematical and statistical tools. In this reports statistical and
financial ratio tools is used for data analysis.

Ratios:

An arithmetical relationship between two figures is called ratio. It is the most useful and
analytical tools to evaluate in respect to one variable over another. Here, for our purpose, only
the liquidity related ratios are calculated.
1. Cash and bank balance to current deposit ratio
2. Saving deposit to total deposit ratio
3. Cash and bank to total deposit ratio
4. Fixed deposit to total deposit ratio
5. Cash and bank balance to total deposit ratio(excluding fixed deposit)
6. NRB balance to total deposit(excluding fixed deposit)
7. NRB balance to fixed deposit ratio
8. Deposit to investment ratio

3.7 Limitations

The study totally based on secondary source of data the major limitations of study as
follows.

• The study covers only the fixed deposit facility provided by RBB bank as well as other
bank also provides different types of accounts in the bank.

• The bank not provides actual data due to the banks internal decisions. In the study
fabricated data are used but they are near to the actual data.

• Due to the limitation of the time, the study could not cover other services provided by
RBB bank.

• Due to the lack of financial source the study cannot covers the primary sources of data.

• This study based on branch office only.


CHAPTER 4

RESULT AND FINDING

4.1 Presentation and analysis of data:

Presentation and analysis of data is very important stage of research study. Its main
purpose is to change the unprocessed data into understandable form it is the process of
organizing the data bye tabulating and then placing that data in presentable form by using
various tables, figures and source.

Fixed deposit is one of the most important factors that have been development to
facilitate effective performance of bank. Fixed deposit is the very basic indicator for
determining profit. The main purpose of the objective is to assess the fixed deposit
amount collected by RBB bank Dhangadi branch.

Following Data, information, tables and diagram related to the fixed deposit collected by
RBB branch office Dhangadhi has been presented in order to study clear and
understandable.

CAPITAL ADEQUACY RATIO:

As per prevailing calculation prescribed by Nepal Rastra Bank:

CAPITAL ADEQUACYRATIOS Ratio in %


Core capital (Tier 1) to total risk weighted exposures (after bank’s 9.96
adjustments of pillar II)
Total capital fund (tier 1 and tier 2) to total risk weighted exposures (after 11.21
bank’s adjustments of pillar II)
12.00%

10.00%

8.00%

6.00% old ratio


new ratio

4.00%

2.00%

0.00%
Tier I TierII

As per new calculation prescribe by Nepal Rastra bank (parallel run from 2072 push);

SN CAPITAL ADEQUACY RATIOS RATIO (%)


a Common Equity Tier I (CET I) capital Fund Ratio 9.95
b Additional Tier I (AT I) capital fund ratio -
c Total core capital fund ( tier I ) ratio 9.95
d Supplementary capital fund (tier II) Ratio 1.25
e Total capital fund to total risk weighted exposures 11.20

Core capital (tier I) fund and breakdown of its components:

CORE CAPITAL (TIER I) FUND 8,588,972,300.00


Paid-up equity share capital -
Irredeemable non-cumulative preference shares -
Share premium -
Proposed equity bonus shares 4,984,370,968.96
Stationery general reserves (6,256,168,802.65)
Retained earnings
Un-audited current year cumulative profit/(loss) 2118,777,375.34
Capital redemption reserves -
Capital adjustment reserves 481,195,652.93
Dividend equalization reserves -
Other free reserves (693,077,418.32)
Less: goodwill -
Less: deferred tax assets 381,201,074.60
Less: fictitious assets -
Less: investment in equity of licensed financial institutions -
Less: investment equity of institutions with financial interests 144,005,600.00
Less: investment in equity of institutions in excess of the limits -
Less: investment arising out underwriting commitments -
Less: reciprocal crossholdings -
Less: purchase of land and building in excess of limit and unutilized -
Less: other deductions -
Adjustment under pillar II -
Less: shortfall in provision (7.4a 1) -
Less: loans and facilities extended to related parties and restricted landings 100,000.00
(6.4a 2)
Total 8,698,763,401.66

Supplementary (Tier 2) Capital and breakdown of its Components:

SUPPLIMENTARY (TIER II) CAPITAL FUND AMOUNT NRs.


Cumulative and/or redeemable preference shares -
Subordinated term debts -
Hybrid capital instruments -
General loan loss provisions 991,595,025.84
Exchange equalization reserve 97,319,665.62
Investment adjustment reserve 1,625,211.63
Asset revaluation reserve -
Other reserves -
Total 1,090,539,903.09

Core capital (tier I) fund and breakdown of its components:

SN COMMON EQUITY THER I (CET I) CAPITAL FUND AMOUNT NRs


a) Paid up equity share capital 8,588,972,300.00
b) Equity share premium -
c) Proposed bonus equity shares -
d) Statutory general reserves 4,984,370,968.96
e) Retained earnings (6,256,168,802.65)
f) Un-audited current year cumulative profit/(loss) 2,118,777,375.34
g) Capital redemption reserves -
h) Capital adjustment reserves (capital reserve fund created as per 481,195,652.93
direction of finance ministry in connection with condition related to
loan waiver and reimbursement as per small and industries loan waiver
guidelines 2065)
i) Dividend equalization reserves -
j) Other free reserves (693,077,418.32)
k) Less :Goodwill -
l) Less: Intangible Asset 7,029,647.95
m) Less: Deferred tax Assets 381,201,074.60
n) Less: Factious assets -
o) Less: Investment in equity of licensed financial intuition -
p) Less : Investment in equity of intuitions with financial interest 144,005,600
q) Less: investment equity of intuitions in excess of limit of the limit -
r) Less: Investment arising out of under writing commitments -
s) Less: reciprocals cross holdings -
t) Less: Purchase of land and building in excess of limit and unutilized -
u) Less: Cash flow hedge -
v) Less: Defined benefit Pension Asset -
w) Lees: Unrecognized Defined Benefit Pension Liabilities -
X) Less: Other Deduction -
Adjustment under pillar II
Less: short fall in provision -
Less: loans and facilities extended to related parties and Restricted 100,000
Lending
TOTAL COMMON EQUITY TIER I CAPITAL FUND 8,691,733,753.71

Supplementary (Tier 2 ) Capital and break down of its components


S.N SUPPLEMENTARY TIER II CAPITAL FUND AMOUNT (RS)
a) Cumulative and / or Redeemable Preference Share -
b) Sub-ordinate term debt -
c) Hybrid capital instrument -
d) Stock premium -
e) General loan loss provision 991,595,025.84
f) Exchange Equalization Reserve 97,319,665.62
g) Investment adjustment reserve 1,625,211.63
h) Asset Revaluation Reserve -
i) Other Reserves -
TOTAL SUPPLEMENTARY TIER II CAPITAL FUND 1,090,539,903.09

Total capital fund (as per new format prescribed by NRB)

S.N CAPITAL FUNDS AMOUNT(RS)


a) Common equity tier I capital fund 8,691,733,753.71
b) Additional tier I capital fund -
c) Total core capital fund (tier I) 8,691,733,753.71
d) Supplementary capital fund 1,090,539,903.09
Total capital fund (Tier II+ Tier I) 9,782,273,656.80

Risk weighted exposure for credit risk, operational risk and market risk

S.N RISK WEIGHTED EXPOSURES AMOUNT(RS) PREVIOUS PREIOD (RS)


a) Credit risk 73,218,345,267.82 69,734,945,259
b) Operational Risk 7,970,457,878.88 7,970,457,879
c) Market risk 145,143,235.28 198,829,108
Adjustment under pillar II
Add: 4% of the total risk Weighted 3,253,357,855.28 3,116,169,290
exposures for unsatisfactory overall risk
management policies and procedures
Add …..% of total deposit RWE due to - -
insufficient liquid assets
Add: 4% of gross total income of previous 2,754,316,336.10 2,754,316,336
financial year for inadequate operational
risk management process
Total risk weighted exposures (after banks 87,341,620,573.35 83,774,717,872.11
adjustment of pillar II)

Rate of Interest

S.N Types of saving % per annum


1. Normal saving 1.5
2. RBB special saving 2.5
3. RBB golden saving 2.5
4. Karma yogi Bachat khata 2.5
5. Maha laxmi bachat khata 2.5
6. Chuna Muna bachat khata 3
7. Teacher’s bachat khata 2.5
8. Call Deposit
9. A) Normal 1
10. B)Intuitional 1-1.5
Fixed
Normal Fixed Deposit
11. 3 Month 3
12. 6 Month 3.5
13. 1Year 4
14. 2 Year 4.25
15. 3 Year 4.5
RBB special Fixed Deposit
16. 1 Year 4
17. 2 Year 4.5
18. 3 Year 4.5
RBB Corporate Fixed Deposit
19. 1Year 4
20. 2 Year 4.5
21. 3 Year 4.5
22. Corporate Bulk Deposit 4
27. Diamond Fixed Deposit 4
No. of Account holders of RBB bank

Fiscal Year 2068/69 2069/70 2070/71 2071/72 2072/73


Current Account 1200 1600 1750 2000 2500
Saving Account 23000 28000 31000 35000 37000
Fixed Account 200 1200 700 400 200
Total 24400 30800 33450 37400 39700

no. of account holders

2068/69
2069/70
2070/71
2071/72
2072/73

The above diagram explains about the account holders of fixed account that RBB bank have.
The data’s are presented in table which explains clearly.
Amount increased in the fixed deposit account

Fiscal year 2068/69 2069/70 2070/71 2071/72 2072/73


Fixed account 5% 10% 17% 19% 22%

The below chart represent the above information

20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%
2068/69 2069/70 2070/71 2071/72

4.2 Major findings

This study is based on fixes deposit provided by RBB bank in dhangadhi branch. The
major finding are this study is to find out the about fixed deposit, interest rate and no of
customers taken having fixed deposit account on RBB bank at dhanghadi branch.
CHAPTER:- Five

Summary, Conclusion
5.1. SUMMARY

Nepal is one of the least developed countries of the world. For most of the developing
process, it is financially depending upon the foreign countries. It is economically too weak. Thus,
the economic condition of the people is weak. In Nepal 85% of the people are depended upon
agricultural sector which is unable to provide full employment to the people. Nepal government
has to activate people in the nation’s development through overall industrialization of nation. For
this purpose, development of sound banking system is essential.

In Nepalese banking sector, commercial banks including ventures banks are operating at
present. In the absences of modern banking any country cannot develop the economic activity.
Therefore, it is essential to find out whether or not the banks are serving an important
contribution to develop sectors of economy. Liquidity is said to be general business of fund,
which shows the bank ability to meet cash requirement. In this record, this study has been based
upon the objective to evaluate the liquidity position of Nepal investment bank ltd.
5.2. CONCLUSION

a. The saving deposit account is nearly constant trend. Fixed deposit ration is increasing in the
trend.
b. Fixed deposit is fluctuated.
c. From the cash and bank balance to fixed deposit liability is fluctuating.
d. Cash and bank balance to total deposit ratio is fluctuating. But the ratio is somehow
satisfactory even though the ratio is higher than the central banks prescription.
e. Cash and bank balance to total deposit (excluding fixed deposit) ratio is fluctuating in
increasing state. The ratio is satisfactory.

The overall results are satisfactory. But in some case the Nepal investment Bank should take
certain steps to improve the bank current financial condition. Therefore some recommendations
are being put forward for its improvement along with its development of the country.
The proportion of the saving deposit account is high in total deposit liability. So, it is
recommended that the bank should utilize the amount collected from the saving deposit account
carefully. It should be invested in the higher yielding areas.
The cash and bank balance in the Nepal investment bank is satisfactory.
It is higher a bit though. Bank should analyze the opportunities for short term investment.
Balance with NRB to current plus saving deposit should be maintained at the below than 0.11
times.
Investment to deposit ratio is fluctuating adversely. It may harm the operation of the bank. So,
the investment from the deposit source should always be aware of liquidity need and keep in
mind to maintain the optimum liquidity.
Bank should not spend too much in the fixed assets because it yields only a nominal portion,
almost no yield.

This chapter focuses on summarizing the study held with the research's conclusion. The
next attempt in this chapter will be made for the recommendations on the basis of
findings.

Following conclusion can be drawn from the study.

1. The bank has sufficient deposit collection and has invested the funds.
2. An organization able to provide contribution in deposit sector and investment.
3. It greatly helps to develop in fixed and investment sector.
DISCUSSION

After the analysis of different data and other information about fixed deposit service
provided by RBB bank dhangadhi branch. It's known that fixed deposit played a great
role to develop in investment sector. It provides a widest range of help investors.

It was found that the total fund mobilized in deposit an investment sector has
continuously been increasing in the fiscal year the interest rate charge on fixed deposit
has also fluctuate during last fiscal years. The overall performance in fixed deposit
provided by RBB bank is good according to fund mobilize and no. of customer taking
loan. Both funds mobilize in investment sector and no. of customer taken investment
sector from RBB bank is increasing.

The main objective of this study is to evaluate the fund mobilized in investment
sector and deposit sector, interest rate charge in deposit account and number of customer
taken loan from this bank. The necessary data for this study are collected through
secondary sources. The data are presented in tables and various diagrams and analyze
through various tools.

Implication

1. The bank should provide high rate on fixed deposit sector.


2. The bank must accept short term deposit.
3. The bank should increase fund mobilize and more collection of fund from its
depositors in fixed account.
4. New different schemes should be provided by bank to increase in no of
customers.
REFERENCES

Adhikari ,DR. Pandey, DL (2073). Business Research method.Kathmandu: Asmita


publication

Joshi, Padamraj.(2012). Fundamentals of financial management. Kathmandu:Asmita


publisher and distributer.

Nepal Rastra Bank Samachar, Yearly publication 2073

Bhandari . M (2014). A comparative financial performance analysis of Himalayan bank


and everest bank limited

Bajracharya, B.C. (2053), Business statistics & mathematics, M.K. publishers and Wistributors.

Brigham, Weston, Essentials of Managerial Finance”, Eleventh Edition, University Publishers,


USA.

Kothari, C.R., Research Methodology”, Mc. Grow Hill Company, second Edition.

Shekhar and Shekhar “Banking Theory & Practice”, Eighteenth Revised Edition, 1996.

Nepal Rastra Bank, Banking and Financial Statistics,

Annual report of RBB bank

www.rbb.com/np
Appendix