By: Naresh Devkota Himalaya Higher Secondary School Koteshwor 35 Kathmandu HSEB Registration No
By: Naresh Devkota Himalaya Higher Secondary School Koteshwor 35 Kathmandu HSEB Registration No
By: Naresh Devkota Himalaya Higher Secondary School Koteshwor 35 Kathmandu HSEB Registration No
Department of Marketing
Internal Examiner
Signature: ……………………
Name: …………………….
Letter of Approval
The examination committee has approved this report Himalayan Bank Limited
Chapter 1
Introduction……………………….. 4
1.3 Methodology
Chapter 2
Chapter 3
3.1 Conclusions
3.2 Recommendations
Bibliography
1.1 Background of the study
The study reports are done for various purposes that help ascertaining the facts through
proper scrutiny; therefore such study reports occupy importance of its own. In this study attempts
have been made to scrutinise the organisation development covering 5 fiscal years by using
various generally accepted and acknowledged statistical tools. Organisation development is one of
the main aspects for its existence. This study on such aspect therefore will play a significant role to
get through Knowledge.
Generally once a loan application received by the bank, entered into loan application
received by the bank, entered into loan application register than bank undertake a pre-loan ,
considering and enquiries of the pre-loan visit, loan visit, loan inspection . The appraisal report is
prepared by the concerned official and also discuss in the "Loan Committee” meeting headed by
the bank manager. Then the committee makes decision whether to approve or disapprove the loan
and what would be the terms and conditions for the disbursement of loan in the case of approval.
In the dictionary the term "bank" has been defined as “A place where money or other
valuable material is deposited until required or an institution for the keeping landing exchanging
etc of Money.”
Bank is a business establishment that safe-guards Peoples Money and uses it to make loan
and investment. Banks promote the wider range of sale of goods and services. Money is safer at
bank than in home. A current account (Cheque account) with a bank provides an easy way to pay
bills. Bank also provide large amount of joints loans, with other banks for projects all over the
world. As a result, banks can safely loan or invest a large percentage of the funds deposited with
them.
Chamber's Twentieth Century Dictionary defines a bank as on, “institution for keeping,
lending, exchanging etc of the money." According to Couther, "the banker’s business it to take the
debts of other people to offer his own in exchange and thereby create Money." According to
Kent," A bank is on organisation whose principal operations are concerned with the general
public for the purpose of advancing to other for expenditure."
Therefore, a bank is an institution which accepts deposits from the public and in turn
advances loans by creating credit. Therefore, it should be differentiate from other financial
institutions as they cannot create credit though they accept deposits.
Therefore, summarising the above, banks are those financial institution that offer the
widest range of financial services.
1.1 Objectives of the study
Each & every task has its own objectives. Therefore, the following are the main objectives
for this study.
Every task has its own limitation. Beyond limitations or excess it won't be suitable,
convenient or efficient. Limitation means not excess than required. If the study of any subject
matter exceeds then its motive or the facts create improper scrutiny. Study of specific subject
matter for scrutiny of both the positive & negative aspects without extending it should be done. I
being the student related to this report have submitted strictly based on secondary data & it
includes LD period of last five fiscal years from 2055/56 to 2059/60. The data has been collected
from different source of publications, journal published in different data's, interview, conversing
with the staff of the HBL. This report has been based only from the 'banking side' and is carried
out as per the requirement of the course of study of BBS 3rd year under the faculty of
management, Tribhuvan University. This study examines only the Loan Disbursement of HBL &
much information was not available on the ground of privacy due to internal rules of the HBL,
Thamel. And this study includes by far the latest data available to the general public i.e. 11 th
Annual Report (1059/60)ss.
1.1.1 Introduction of Himalayan Bank Limited
HBL a joint venture with Habib Bank Ltd, Pakistan started its business from 18th
January 1993. It was established with the authorized capital of 240 million divided into 1.2
million in shares of 100 each, out of which 60 million was paid from retained earning of the year
1994/1995. Share subscriptions of this company comprises of 51% by promotes shareholders,
20% by Habib Bank Ltd, Pakistan, 14% by finical Institutions ( Employees Provident Fund) &
15% by Nepalese public shareholders. HBL is the first commercial bank of Nepal with
maximum share holding by the Nepalese Private Sector. It is one of the joint venture banks
among nine joint ventures. The July 2003 edition of the book published in England named “The
Bankers’ Almanac” has declared HBL as Nepal’s no. 1 bank and it has also been awarded
“National Excellence Award”. Besides commercial activities, the bank also offers industrial &
merchant banking.
HBL has established 13 branches & they are in Thamel, New Road, Pulchowk,
Maharajgunj, Bharatpur, Birgunj, Hetauda, Banepa, Pokhara, Bhaairahawa, Biratnager (
Liaison office), Nagarkot (Rural Branch) & Tandi (Rural branch). Also a banking counter has
been established within the premises of the royal place. As a modern commercial bank, HBL has
offered following services to their customers
Nepal is one of the least developed country under the rank of poverty line. The bank in
Nepal plays a primitive role for the economic development of Nepal under which no other
organizations are likely to be substituted at all. Himalayan Bank limited has vitalized its economic
activities to help the people who are anguished in extreme pair of need.
Himalayan Bank Limited and other commercial bank advances, loans & undertake
investment against gold and silver, company’s shares and debentures bills of exchange,
promissory notes etc. Bank branches that have been brought under intensive banking programs
can provide loans on group guarantee without any security while issuing loans. Commercial bank
are requested to maintain a minimum of cash balance or liquid balance interest is charged
according to fixed rates on loan’s provided be commercial to depositors and interest paid by
borrowers constitute banks earnings.
`
2.1.1 Loans & Advance made by HBL in total figure
Table No. 4
Total 49723523
40
30
Year
20
Percentage
10
0
2057 2058 2059 2060 2061
The above table clearly reveals the growing contribution of the whole NBL. In the year 2057, NBL
has forwarded loan up to 14.53% & this percentage rise to 18.13% in the year 2058. The year
2059 observed the growths up to 19.22%, 21.81% & 26.31% respectively of advances are made by
NBL respectively. Thus, it is clear that the role of NBL in the country is very appreciable because
there is increment in advance of loan every year. This growing trend is presented in graph above.
Table No. 5
Particular % In degrees
disbursement. The higher percent rate is of overdraft (38.08)% then of long term (15.82) %, the
more than it is import loan (21.63) % then comes working capital (5.92)% letter of credit (3.77)%
, below poverty line loan (3.75)%, short term loan (3.59)%, pre- export loan (2.49)%, purchase &
discount (1.91)%, Fixed deposited receipt expenditure loan (1.47)%, higher purchase (1.14)% and
Figure no. 2
Overdrafts
Long term loan
Import loan
Working capital
Letter of credit
Purchase & discount
Short term loans
Pre- export loans
Higher purchase
Below poverty line loans
Fixed deposit receipt expenditure loan
Credit card
1.14
3.75
3.77 3.59 2.49
1.47
1.91 0.43
5.92
21.63 38.08
15.82
T
Table No. 6
Particular % In degrees
Loan disbursement having related to different aspects & fields will have certain fluctuation
in them. Over this period of year 2056/57 has highest percentage rate of overdraft (30.71)% then
of long term (11.78) %, the more than it is import loan (26.18) % then comes working capital
(7.81)% letter of credit (2.60)% , below poverty line loan (2.92)%, short term loan (7.41)%, pre-
export loan (2.62)%, purchase & discount (4.62)%, Fixed deposited receipt expenditure loan
(1.63)%, higher purchase (1.41)% and credit card consist of (0.31)% out of total 100%
It can be shown in the pie- chart as below.
Figure
Fig: 3
Fixed deposit receipt expenditure loan Credit card
2.62 1.41
` 2.92
Composition of loans
2.6 in % of table form for the year of 2057/58
1.63
7.81 4.62 7.41 0.31
26.18
30.71
11.78
Table
Particular % In degrees
Loan disbursements consists of same aspects of fields of pays outs or disbursed or invest
but the up’s & down’s always create. It doesn’t become the monotonous increasing or decreasing.
The highest percentage rate in the year 2057/58 is of import loans 28.26% then that of overdraft
22.58% the least then it is long term loan 12.60% then comes short term loan 7.07%, working
capital 5.28% purchase & discounts 4.03%, pre- export loans 3.15%, below poverty line loan
2.67%, fixed deposited receipt expenditure loan 2.59%, higher purchase 2.44%, letter of credit
card 1.16% & credit card consist of 0.27% out of the total 100% .It can be shown in the Pie chart
as below.
Figure no.4
Overdrafts
Long term loan
Import loan
Working capital
Letter of credit
Purchase & discount
Short term loans
Pre- export loans
Higher purchase
Below poverty line loans
Fixed deposit receipt expenditure loan
Credit card
2.44
1.16 2.67
4.03 7.07 3.15
5.28 2.59 0.27
22.58
28.26 12.6
Particular % In degrees
Loan disbursements having related to different aspects & fields have certain fluctuation in
them. Like is the year 2057/58 the highest percentage rate is of Import loan 24.25% then that of
Overdraft 22.64% then least is long term 12.60% & then comes after short term loan 9.74%
working capital 7.14% fixed deposited receipt expenditure loan 3.18% Pre- export loan 3.06%,
Purchase 7 discount 2.74% Below poverty line loan 2.16%, Higher purchase 2.01% letter of credit
1.19% & credit card consists of 0.25% out of the total 100%. Up’s and down’s is always created. It
can be shown in the pie- chart below.
Figure no.5
Overdrafts
Long term loan
Import loan
Working capital
Letter of credit
Purchase & discount
Short term loans
Pre- export loans
Higher purchase
Below poverty line loans
Fixed deposit receipt expenditure loan
Credit card
2.16
3.06 2.01
2.74 3.18
9.74 0.25
1.19
7.14
22.64
24.25 12.6
Fig: 5
Composition of loans in % of table form for the year of 2059/60
Table No.9
Particular % In degrees
Overdrafts
%
Long term loan
Import loan
Working capital
Letter of credit
Purchase & discount
Short term loans
0.32%
Pre- export loans
Higher purchase 1.94%
Below poverty line loans
Fixed deposit receipt expenditure loan
2.42%
Credit card
2.06%
7.79%
2.81% 3.94% 24.61%
2.83%
8.45% 12.99%
24.76%
Table No. 10
Fiscal year 55/56 56/57 57/58 58/59 59/60
Graphically,
Figure no.8
Increase/Decrease
120
100
80
60 Increase/
40 Decrease
20
0
/ 56 / 57 / 58 / 59 / 60
0 55 0 56 0 57 0 58 0 59
2 2 2 2 2
Description:
From the study of above table thoroughly, it is found out that the loan disbursement has a
much fluctuation in increasing and decreasing ratio. At first in 2056/57 it has got 13.50% of base
year with an increment ratio and decreases to 1.65% in year 2057/58 but in year 2058/59 it sharply
increased to 91.50% and in 2059/60 it reaches to 96.36%. The result shows that the bank has
reached to its target objective of increasing disbursement volume constantly during the following
years to fulfil its policy assignment. Therefore it revealed from the scrutiny that LD is at first
growing then declining and then sharply increasing. This type of result pulls to pay and concrete
serious attention towards loan disbursement while making any new plans, policies & strategies.
LD average has reached to 26,73,744.
Table No.14
1 2055/56 5245975 -
Average = 8377557
Graphically,
Figure no. 9
Increase/ Decrease -
120
100
80
Increase/
60
Decrease -
40
20
0
Description:
While going through above table thoroughly, it is found out that the loan disbursement has
got fluctuation slightly based on base year and haphazardly increasing in the trend line based on
the base year. At first in 2056/57 it covers 37.72% then covers 71.85%,82.18% and 106.72% in the
year 2057/58, 2058/59 and 2059/60 respectively. The trend line is based on the base year shows
quite fast fluctuation of increment. The result shows that the bank has reached to its target
objective of increasing disbursement volume constantly during the following years to fall it policy
assignment but needs to overcome the shortcomings coming up to the bank related to its
assignment. Some of the statistical tools has been used & might be effective to analysis it deeply.
Even though the result is positive attention towards the more incensement then the above of the
loan disbursement should be given to obtain new plans, policies & strategies. Loan Disbursement
average has reached to 8377557.