A STUDY ON DEPOSIT ANALYSIS OF

PRIME COMMERCIAL BANK LTD.

A project report proposal

BY

BINOD POUDEL

T.U. REGISTRATION NO: 7-2-0002-0333-2018

Mechi Multiple Campus,Bhadrapur,Jhapa

Group: Finance

Submitted To

Faculty of Management

Tribhuvan University,

Kathmandu,Nepal

In the Partial Fulfillment of the Requirements for the Degree of 

BACHELOR OF BUSINESS STUDIES (BBS)

Kathmandu,Nepal

Poush,2079
Background of the study

A bank is a financial institution that creates credit by lending money to a borrower, thereby
creating a corresponding deposit on the bank's balance sheet. A bank is a saving mobilization
institution, which is established under the law for dealing with monetary transactions. It accepts
deposits of money from those having saving and grant the loan to the needy person, businessman
and industrialist, against security deposits by charging interest at some fixed rate percent per
annum. Besides this, it is also involved in agency services, for instance remitting and collecting
cash on behalf of its clients, opening bank draft and letter of credit facilities and underwriting
shares.

Banks collect deposits from the public and lend it to the investors from which both
borrowers and depositors are benefited, i.e. depositors get return in the form of interest on their
deposit and borrowers can improve their business performance with the borrowed money while
the bank gets spread to earn profit.

Bank also supports the economic growth of the country. Bank can also be termed as "An
intermediary", which bridges the gap between the saver of the fund and the user of the fund.
Nowadays these banks provide financial as well as non-financial services. The bank is directly or
indirectly associated with all the people in day-to-day transaction. Some of the definitions of the
bank are quoted below for more clarity of its meaning.

According to the Oxford Dictionary, “Banks is an establishment for the custody of the
money received from or in behalf of its customers. It’s essential duty is to pay their drafts on it;
its profits arise from its use of the money left unemployed by them."

As far as the history of Bank is concerned, different opinions on the origin of the bank are
found to be existing. Some people trace its origin to the word ‘bank’ i.e. derived from the Italian
word ‘BANKO’ which means a counter tables or bench used by medieval money exchangers.
Oxford dictionary defines bank as "an establishment of the custody of money". A bank is one,
who is the ordinary course of his business, receives money, which he pays by honoring cheques
of person from whom or whose account he receives it.
 The origin of modern banking began to develop between 12th and 16th century in Italy. The
first bank was ‘Bank of Venice’, established in 1157 A.D. The second bank was ‘Bank of
Barcelona’ of Spain, established in 1401 A.D. After this ‘Bank of Genoa’ was established in
1407A.D. The first central bank was ‘Bank of England’ established in 1844 A.D. By the
beginning of the 19th century a bankers' clearing house was established in London to allow
multiple banks to clear transactions. The Rothschild pioneered international finance on a large
scale, financing the purchase of the Suez canal for the British government. History tells us that it
was the merchant banker who first evolved the system of banking by trading in commodities
than money. Their trading activities required the remittance of money from one place to another.
For this, they issued different documents as the near substitute of money, called drafts of Hundi
in modern days.

In a nutshell, a bank can be defined as any company, which transacts the business of banking for
the purpose of banking.

Profile of Organization

Prime Commercial Bank Ltd. was incorporated in September 2007 as the 21st commercial bank
in Nepal. It is ‘A’ class Financial Institution registered under the “Banks and Financial
Institutions Act” (BAFIA) of Nepal. It has been established by prominent business personnel and
professionals from diversified areas with a prime objective of providing 'Banking Services to
Everyone' in the country where still large number of population are deprived of Banking
Services. Mr. Narayan Das Manandhar is the Chief Executive Officer (CEO) of this Bank.

The bank has established itself as an emerging player in financial sector with focus in customer
service, excellence maintaining, and excellent relationship with valued customers. It is counted
among one of the top commercial banks in Nepal by independent raters and publications in the
country. The Bank has 50 branches inside Kathmandu valleys and 138 branches outside
Kathmandu valleys with total number of (188) branches of across Nepal with a network covering
all major financial centers of the country.

Prime Commercial Bank Ltd. provides personal and business banking products and services in
Nepal .It offers deposit products such as saving accounts, current accounts and fixed deposit. In
spite of this it provides consumers loans including home loans, auto loans, education loans, loans
against shares, mortgage loans, equipment loans, gold loans and small and medium enterprises
loans. The bank has been established with following capital: Authorized Capital NPR.300 Crore,
Issued Capital Rs. 231 Crore and Paid up Capital Rs. 224.57 Crore. Prime Commercial Bank
comprises well experienced management teams who have worked in different Commercial
Banks of Nepal for few decades. As per Nepal Rastra Bank (NRB) Mid Oct, 2022 the Paid up
Capital of this Bank is Rs. 1865.63 Crore.
Objectives of the study

The main objective of the study is to fulfill the partial requirement of T.U to complete BBS
project. The objective of this fieldwork is to analyze deposit collected in Prime Commercial
Bank Limited. The study intends to present a brief and clear picture of deposit and its utilization.
The objective of the study includes.

 To analyze different types of deposit

 To access the amount of deposit collection
 To find out the variations in deposit collection in different Fiscal Year
 To reach out the common ground of conclusion

Rationale of the Study

The study results decision maker of the bank to know the strength and weakness of their deposit
department. It will also be helpful for those who want to deposit to PCBL, as they will be quite
familiar with the procedure of the deposit. Some other importance are mentioned below:

 The required data and the information concerns to the financial aspects can be
acquired and studies by its stakeholders
 This study will be helpful to everyone for every aspect. The businessman,
taxpayers, donor parties and the central government can be beneficial from the
study
 The findings and the conclusions drawn from the study will be helpful for the
officials to take corrective measures
 The customer will be benefited by knowing the procedure of deposit
collection
Review of Literature
A literature survey is both summary and explanation of the complete and
current state of knowledge on deposit collection and loan distribution are
found in academic books and journal articles. Literature review refers to the
documentation of the comprehensive review of published works from
secondary sources of information. Review of the literature is an essential part
of research, it is a way to discover what other research in the area of our
problem has uncovered. Thus, the task in the literature review is to learn as
much as one can from the efforts and work of others. This activity however
cannot be haphazard if it is to be efficient. Like most aspect of research it
needs thought and planning.

Methods of the Study

A systematic approach and methodology is needed in order to do any type of

study and prepare report on that study. Methodology is the description of the
procedure followed while collection the necessary data and information
needed for research work and report preparation. This report has been
designed to give a clear picture of the operations performed in Prime
Commercial Bank Ltd. The research methodology includes, research design,
data collection procedures and research variables and tools use. The following
step provides useful procedural guidelines, so far as research methodology is
concerned.

Research Design
Research design is an overall framework, outline and plan for conducting the
research. Choosing appropriate research design is must to reach into
conclusion. The ultimate goal of this study is to analyze and evaluate deposit
transactions of different years, so it requires in-depth study. Thus, Descriptive
research design is to be followed. Descriptive research design would be
favorable in conducting this study as it provides detailed information of any
topic and describes all the relevant aspects of the study.

Population and Sample

The population refers to the organizing of the same nature on

its services and products. Altogether there are 44 banks running
in Nepal. Out of which 1 is Central bank, 26 Commercial
Banks, and 17 Development Banks, Similarly there are 17
Finance Companies, 64 Micro Finance Financial Institutions
and 15 other Institutions and 1 Infrastructure Development
Bank as per Nepal Rastra Bank (NRB) as of Mid Oct,2022. As
per umbrella act, Banks And Financial Institutions (BAFIA)
can be classified as A, B, C and D classes on the basis of
minimum paid up capital. Commercial Banks are class A and
they are labeled as Banks. Similarly, Development Banks,
Finance Companies and Micro Finance Financial Institutions
are categorized into B, C, and D respectively. The umbrella act
named (BAFIA) 2073, has been enacted effectively for the
proper and smooth operation of the Banks. The objective of the
study is to find the total deposit of the Prime Commercial Bank
LTD. I would like to select this Bank because it is the
Commercial Bank, earning high profit and providing loan to
the public with simple and easiest way without any difficulty
and it gives good interest rate to the depositors as well. To
organization, the population for the research works and
convenience sampling method is used.

Sources of data
Generally, there are two sources of data used to collect
information. Such as;
a. Primary Data:
The data collected for the first time is known as Primary Data.
These are original in nature. Primary Data are self-prepared by
site visit of company office and interviewing the concerned
personnel. Use of primary data is statistical investigation which
is not always practicable.

b. Secondary Data
The data collected from the published sources is known as
secondary Data. Secondary data are used for the purpose of
investigation. These data are divided into two parts. In first
part, the internal secondary data has been collected from
sources and materials of the company. Similarly, in second
part, the external secondary data has been collected from
essential books.

Data collection procedures

Collection and analyses of appropriate and accurate
information helps to take right decision. Thus, the required data
are collected from annual reports from Prime Commercial
Bank Limited’s website, Nepal Rastra Bank website and
various articles and journal of related study. After collection of
data available data and information were reviewed. These data
were edited, coded and classified into different groups
according to their nature, importance and characteristics. After
it classified data were presented and analyzed through tables
and chart.

Tools used for data analyses

 The collected and observed data is tabulated after
adjusting necessarily amounts of each overhead. However, the
analyses of data are as follows;
 Financial tools
 Statistical tools

 Financial tools:

There are different types of financial tools that can be applied to the analysis of financial
performance of Prime Commercial Bank for our fieldwork; following portfolios analysis tools
are used;

a.       Liquidity ratio
i. Cash reserve ratio
ii. Balance with NRB to total deposit
iii. Balance with NRB to fixed deposit
b. Fixed to other ratio
i. Fixed to total deposit ratio
ii. Cash and bank balance to fixed deposit
iii. PCBL fixed deposit to total deposit ratio
 Statistical tools
For our fieldwork study selected statistical tools are taken to examine the economics data of
Prime Commercial Bank.

a. Mean
b. Standard Deviation
c. Coefficient of Variation
d. Bar diagram
e. Pie-chart
Limitations

Every study has its own limitation. There are some of the limitations which the researcher may
face while reaching to the conclusion.

 The study is only concentrated with deposit collection

 Accuracy, reliability and validity of the study will be dependent upon the information
provided by concerned authorities
 Time and resources put constraints for the study
 The analysis of financial transactions and deposits will be incomplete as it provides data
of last three years only
 This study is based on qualitative data only

Bibliography
 Kothari, C.R. (2009) Research Methodology, Methods and Techniques, New
Delhi: New Age International Publishers
 Dhakal, A. (2015), A study on Deposit Collection of Siddhartha Bank Limited,
Tribhuwan University
 Bhattarai R. (2014), A case study on Deposit Collection of Nepal Investment
Bank Limited. (Unpublished B.B.S. Report)
 https://www.primebank.com.np/
 https://www.nrb.org.np/
 https://www.bankingsamachar.com/