COMPARATIVE LIQUIDITY AND DEPOSIT ANALYSIS OF NEPAL

INVESTMENT BANK LIMITED AND PRABHU BANK LIMITED

A Project Work Report

By:
Simran Agarwal
th
B.B.S 4 year
T.U. Registered Number: 7-2-396-95-2017
Symbol Number: 703960049
MERRYLAND COLLEGE, BIRATNAGAR

Submitted to:
The Faculty of Management
Tribhuvan University
Kathmandu

In Partial Fulfillment of the Requirements for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Biratnagar, Nepal
February, 2022
 DECLARATION

I hereby declare that the project work entitled “COMPARATIVE LIQUIDITY AND
DEPOSIT ANALYSIS OF NEPAL INVESTMENT BANK LIMITED AND PRABHU
BANK LIMITED” submitted to the Faculty of Management, Tribhuvan University,
Kathmandu is an original piece of work under the supervision of Mr. Pankaj Kumar Jain,
faculty member, Merryland College, Biratnagar, and is submitted in partial fulfillment of the
requirements for the degree of Bachelor of Business Studies (BBS). This project report work
has not been submitted to any other university or institution for the award of any degree or
diploma.

------------------------
Simran Agrawal
Date:

ii
 SUPERVISOR’S RECOMMENDATION

The project report work entitled “COMPARATIVE LIQUIDITY AND DEPOSIT

ANALYSIS OF NEPAL INVESTMENT BANK LIMITED AND PRABHU BANK
LIMITED” submitted by Simran Agrawal of Merryland College, Biratnagar, is prepared
under my supervision as per the procedure and format requirements laid by the Faculty of
Management, Tribhuvan University, as partial fulfillment of the requirements for the degree
of Bachelor of Business Studies (BBS). I, therefore, recommend the project work for
evaluation.

------------------------------------
Mr. Pankaj Kumar Jain
Merryland College, Biratnagar
Date:

iii
 ENDORSEMENT

We hereby endorse the project work entitle “COMPARATIVE LIQUIDITY AND DEPOSIT
ANALYSIS OF NEPAL INVESTMENT BANK LIMITED AND PRABHU BANK
LIMITED” submitted by Simran Agrawal of Merryland College, Biratnagar, in the partial
fulfillment of the requirements for the degree of Bachelor of Business Studies for external
evaluation.

Signature: …………………… Signature: ……………………

Gunaraj Dhungel Laxman Dhakal
Chairman, Research Committee Principal
Date: Date:

iv
 ABSTRACT

In this context, taking a view as rapid development of the country this project work has been
prepared in the format as required by the faculty of management entitled with Comparative
liquidity and deposit analysis of Nepal Investment Bank Limited and Prabhu Bank Limited.
This report has been prepared in three main chapters i.e. introduction, result and analysis and
discussion, conclusion& implication. Liquidity analysis is the one of the major tool to
analyze liquidity position of the bank. Liquidity is crucial in the business like banking sector.
Banks have to maintain liquidity, if the bank has high liquidity it cannot gain desired profit
and if bank has the shortfall of the liquidity it cannot satisfy its customers and inadequate
liquidity may lead to collapse of the bank.

This study attempts to know the liquidity and deposit position of NIBL and PBL; which
banks performance is best and which bank’s liquidity position is better. This study is related
with comparative liquidity analysis of NIBL and PBL for the period of 2075/76 to 2077/78
B.S. Necessary data are taken from the annual reports of these two banks: NIBL and PBL.
This study is based on secondary data. For the study, liquidity analysis of NIBL and PBL has
been done. In this study liquidity ratio is calculated to find out the liquidity position of these
two banks. This study is useful to investors, creditors, banks, customers and other parties
who are related to these two banks.

v
 ACKNOWLEDGEMENT

First of all, I would like to thanks to Tribhuvan University to provide me this opportunity to
prepare this project work report. This writing is fully based on practical. So I can learn a lot
of practical knowledge from it for our career development.

I would like to express my heartily thanks to our Chairperson Mr. Gunaraj Dhungel and
Laxman Dhakal (Campus Chief) of Merryland College. In the preparation of this report, I
have received help from different Sources. I would like to express heartily thanks to my
supervisor Mr. Pankaj Kumar Jain for giving valuable guidance to prepare this report.

I would like to express my gratitude to my parents, my entire family and my friends for
helping and supporting me. I would like to thank all the staffs and board of directors of this
organization for providing essential data information.

_________________
Simran Agrawal
Date:

vi
 TABLE OF CONTENTS
Title page………………………………………………………………………………………………….i
Declaration……………………………………………………………….……………..……………….ii
Supervisor’s Recommendation……………….…………………….………………….……………..iii
Endorsement……………………………………………………….……….…………….……………..iv
Abstract……………………………………………………………...……….…………………………...v
Acknowledgement……………………………………………………………………………………….vi
Table of Contents………………………………………………………………………………………vii
List of Tables………………………………………………………………………..………………....viii
List of Figures…………………………………………………………………………………………...ix
Abbreviations…………………………………………………………………………………………….x

CHAPTER–I INTRODUCTION……………………………………………..1
1.1 Background of the Study………………………………………………………………1
1.2 Profile of the Organization…………………………………………………………….2
1.3 Statement of the Problem...............................................................................................5
1.4 Objectives of the Study…………………………………………………...…………...6
1.5 Rationale of the Study………………………………………………………………....6
1.6 Review of Literature ……………………………………………………………..........6
1.7 Research Method/ Methodology………………………………………………………9
1.8 Limitation of the Study………………………………………………………………12

CHAPTER – II RESULTS AND FINDINGS………………………………13

2.1 Presentation of Data in Tables and Figures and their Analysis……….…...……........13
2.2 Liquidity Position…………………………………………………………………….13
2.3 Major Findings…………………………………………………...………….....…….21

CHAPTER-III SUMMARY AND CONCLUSION………………………..23

3.1 Summary……………………………………………………………………………..23
3.2 Conclusion …………………………………………………………………………...24

BIBLIOGRAPHY……………………………………………………………………………25
APPENDICES………………………………………………………………………………..26

vii
 LIST OF TABLES

Table No. Title Page No.

2.1 Comparative Current Ratio of NIBL and PBL 14
2.2 Comparative Loan to Deposit Ratio of NIBL and PBL 15
2.3 Comparative Cash &Bank Balance to Total Deposit Ratio of NIBL 17
& PBL
2.4 Comparative Cash & Bank Balance to Current & Saving Deposit 18
Ratio of NIBL and PBL
2.5 Comparative Fixed Deposit to Total Deposit Ratio of NIBL and 19
PBL
2.6 Comparative Cash Reserve Ratio of NIBL and PBL 21

viii
 LIST OF FIGURES

Figure No. Title Page No.

1.1 Theoretical Framework 7
2.1 Comparative Current Ratio of NIBL and PBL 14
2.2 Comparative Loan to Deposit Ratio of NIBL and PBL 16
2.3 Comparative Cash &Bank Balance to Total Deposit Ratio of NIBL 17
& PBL
2.4 Comparative Cash & Bank Balance to Current & Saving Deposit 18
Ratio of NIBL and PBL
2.5 Comparative Fixed Deposit to Total Deposit Ratio of NIBL and 20
PBL
2.6 Comparative Cash Reserve Ratio of NIBL and PBL 21

ix
 ABBREVIATIONS

& and
ANOVA Analysis of Variance
CA Current Assets
CAMEL Capital adequacy, Assets Quality, Management Quality,
CBBCSDR Cash and Bank Balance to Current and Saving Deposit
Ratio
CBBTDR Cash and Bank Balance to Total Deposit Ratio
CL Current Liabilities
CR Current Ratio
CRR Cash Reserve Ratio
Earning Quality and Liquidity Quality
EBL Everest Bank Limited
FTDR Fixed to Total Deposit Ratio
HBL Himalayan Bank Limited
i.e. that is
LDR Loan to Deposit Ratio
LTD Limited
NIBL Nepal Investment Bank Limited
NRB Nepal Rastra Bank
NSBI Nepal SBI Bank Limited
PBL Prabhu Bank Limited
SLR Statutory Liquidity Ratio

x
 1

CHAPTER-I
INTRODUCTION

1.1 Background of the Study

Bank is the most important financial institution for economy development. Bank collects
funds from surplus unit and scatters the fund to deficit unit. Bank plays a vital role to
formulate capital. Bank provides many more services to its customer like collection and
transfer of the fund, credit information guarantee remittance facilities customer services etc.
In the long run bank uses the balance sheet and profit and loss account for showing their
financial position. Financial position shows the detail information of business organization.
Financial position also shows the liquidity position. Liquidity position of the bank can be
known by calculating various ratios. Liquidity position may be helpful for manager, creditor,
shareholders, potential investors and regulatory agencies.

When where and how the modern banking actually came in existence can not be pointed out.
But from the different historical facts it reveals that some banking activities have been carried
out since the time immemorial. At that time merchants, money lenders, goldsmiths, etc
performed the banking transactions. Later the transactions started increasing and they become
the activities of money exchange securing the valuable goods. Deposit money, lending money
and so on. Banking has a long history. The origin of bank is not a new phenomenon. The
terms in Banking such as pledges, deposits, rate of interest loans etc can be found in the
ancient Hindi Epic Manu Smriti. Even in 300 B.C It was in exercise in India , china , Arabia ,
Greece, Persia and Egypt even though the procedures of banking were not organized on the
span of time it has been expanding . For all these types of activities written receipts began to
be used and the modern banking started. In the historic age sources say that goldsmiths and
money lenders contributed to large extent in the growth of banking system. They used to
store peoples gold charging nominal charges issued receipts to the depositors, which was
good for payments. Later, they started advancing money changing interest on it. So the
goldsmith and money lenders started performing the functions of modern banking i.e.
accepting deposits and advancing loans. However, the modern banking originated in Italy.

The word "bank" was derived from the Italian word "Banco" which means accumulation of
money or stock Bank as a formal institution was originated from Italy. The bank of Venice
 2

which was established in 1157 A.D. was the first bank in the history of banking and it was
established to finance the monarch in the war. The Bank of Barcelona, Spain which was
established in 1404 A.D. was the second bank in the world and then The Bank of Genoa was
set up in 1407 A.D.

Liquidity analysis determines the ability of an organization to pay its bills in a timely
manner. They are used to ascertain the short term solvency of a firm. Liquidity analysis
mainly helps in analyzing the liquidity position in an organization.

Better liquidity position shows the better financial position of the bank and better financial
position shows the goodwill of the bank. Liquidity analysis helps to analyze whether the
bankers sufficient to meet its short term obligation in timely manner or not liquidity of a bank
can be tested by using the two primary ratios. They are current ratio and net working capital
ratio. Current ratio is the quantitative relationship between current assets and current
liabilities. Net working capital ratio shows the amount of short term liquidity available to a
bank.

Harsh, (2014) stated that the banking sector was always deemed to be one of the most vital
sectors for the economy to be able to function. Its importance as the “lifeblood” of economic
activity, in collecting deposits and providing credits to states and people, households and
businesses is undisputable. The researcher chooses this topic because numerous researchers
have conducted the research in related field and also for the partial fulfillment of
requirement for degree of BBS.

1.2 Profile of the Organization

Nepal Investment Bank Limited
Nepal Investment Bank Ltd. (NIBL), previously Nepal Indosuez Bank Ltd., was established
in 1986 as a joint venture between Nepalese and French partners. The French partner
(holding 50% of the capital of NIBL) was Credit Agricole Indosuez, a subsidiary of one of
the largest banking group in the world.

Later in 2002, a group of Nepalese companies comprising of bankers, professionals,

industrialists and businessmen acquired the 50% shareholding of Credit Agricole Indosuez in
 3

Nepal Indosuez Bank Ltd., and accordingly the name of the Bank also changed to Nepal
Investment Bank Ltd.

At present, the Bank's shareholding pattern is as follows: Promoters - 69% and General
Public - 31%. With the team of experienced bankers and professionals with proven track
record, NIBL believe in offering the best of what their customers look for.

Vision
"To be the most preferred provider of Financial Services in Nepal"

Mission
To be the leading Nepali bank, delivering world class service through the blending of state-
of-the-art technology and visionary management in partnership with competent and
committed staff, to achieve sound financial health with sustainable value addition to all our
stakeholders. We are committed to do this mission while ensuring the highest levels of ethical
standards, professional integrity, corporate governance and regulatory compliance.

STRATEGIC OBJECTIVES
• To develop a customer-oriented service culture with special emphasis on
customer care and convenience
• To increase the market share by following a disciplined growth strategy
• To leverage their technology platform and pen scalable systems to achieve cost-
effective operations, efficient MIS, improved delivery capability and high service
standards
• To develop innovative products and services that attracts targeted customers and
market segments
• To continue to develop products and services that reduce cost of funds
• To maintain a high-quality asset portfolio to achieve strong and sustainable
returns and to continuously build shareholders’ value
• To explore new avenues for growth and profitability

Prabhu Bank Limited

The Bank has gone through the various phases of its growth trajectory over a short period of
its existence. Growth of Prabhu Bank was phenomenal, especially after merger of Grand
 4

Bank Nepal Limited, Kist Bank Ltd, Prabhu Bikash Bank Ltd, Gaurishankar Development
Bank Ltd and Zenith Finance Ltd in, 2016, attaining the status of “A” class financial
institution licensed and regulated by the central bank of Nepal, Nepal Rastra Bank.

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

As the leading banking and financial services group in Nepal, the Bank will be there where
growth is, connecting customers to the opportunities, enabling business to thrive and
economies to prosper and ultimately helping people to fulfill their hopes and realize their
ambitions. The Bank offers the full range of banking and investment services for personal
and corporate customers, backed by the team of highly motivated, young and dynamic
professionals.

One of the bank’s primary objectives is to reach out to the common people with a host of
helpful products and services that will assure their future prosperity. Over a very short period
of time, the bank has achieved a significant degree of success in executing this objective there
by creating a substantial base of loyal customers.

Personalized service, prompt transactions, wide networks, mobile Banking and real-time
account credit are few of the core strength of the bank. It has been undertaking activities such
as variety of deposit schemes, loans and advances, Foreign exchange facilities, Trade
financing, Inward/outward remittances, market maker for government securities, Non-Fund
based service like issuing guarantees, letter of credits etc.

While ensuring adequate finance is a vital part in the setting up and running of any business,
it alone does not guarantee success. Success depends on the other factors such as quality
consultation and counseling. So the bank has given due priority in developing human
resources capable enough to understand the need of customer and meet their requirements.
The bank keeps its customer at the center of all it does. Prabhu Bank believes that a bank is
only successful when its customers are successful.

Vision
“To support individuals, families and businesses to attain financial independence and
improve their financial wellbeing”
 5

Mission
To become the leading commercial bank in Nepal by providing the finest quality financial
products and services to our customer; enhance our shareholders’ value, contribute to the
economic prosperity of the country and to create continuous learning and growth
opportunities for our people.

1.3 Statement of the Problem

Previous researchers have conducted research on comparative financial performance of EBL
and HBL, comparative analysis of commercial banks liquidity position, financial
performance of NSBI and EBL. Research on comparative liquidity and deposit analysis of
NIBL and PBL is rarely found that’s why researcher chose this topic.

Previous researchers have used the various models to test the hypothesis like CAMEL model,
ANOVA Test and so on. Researchers conducted research by taking sample of EBL, HBL,
NSBI among the population of commercial banks in past. Previous studies reveals that banks
have somehow maintain the moderate liquidity.

Researcher has conducted the research by taking sample of NIBL and PBL among population
of Nepalese commercial banks. This study uses the data of 3 years and it uses the balance
sheet, profit and loss account, profit and loss appropriate account, cash flow of NIBL and
PBL to calculate the ratio for the purpose of analysis of liquidity position of these two banks.
This study uses the simply table, trend line to analyze the liquidity position of these two
banks through the different ratios because of time and cost constraints. Liquidity plays the
significant role in banking sector. Banks have to maintain adequate liquidity. Inadequate
liquidity may lead to collapse of the bank. The research gap is arising from the time variation;
previous study did not cover the comparative analysis of liquidity position of these two
banks: NIBL and PBL. Thus, this research is conduct to fulfill the research gaps. So, this
study addressed the investigation the following issues;

• What is the liquidity and deposit position of NIBL and PBL?

• Which banks do have the better liquidity and deposit position NIBL or PBL?
 6

1.4 Objectives of the Study

The general objective of this study is to make comparative liquidity and deposit analysis
between NIBL and PBL.

The specific objectives of this study are as follows:

• To examine liquidity and deposit position of NIBL and PBL.

• To analyze the comparative liquidity and deposit position of NIBL and PBL.

1.5 Rationale of the Study

This study is conducted for comparative analysis of liquidity position of these two banks
NIBL and PBL. The findings of this study will contribute to existing literature on banks
liquidity analysis. Furthermore there is clearly enormous scope for more research work in the
present study.

• To the management: The finding of this study will facilitate the management
team to amend the rules and policies of the bank.
• To the shareholders: The study will be helpful to acquire required information
related to liquidity position of the two banks.
• To the outsiders: The study will also be helpful to the outsiders such as investors,
creditors, customers and other stakeholders of the two banks.

1.6 Review of Literature

Literature review comprises of the existing literature and research related to the present study
with a view to find out what had already been studied. Literature review is a process of
systematic way of accumulation, analysis and evaluation of facts or knowledge of selected
topic or problem. It provides direction for doing something new with appropriate variables,
and methodology. It is both summary and explanation of current state of knowledge of
intended research questions.

1.6.1 Conceptual review

Banks play an important role in an economy of the country. Banks’ performance is greatly
affected by the liquidity position of the banks. Liquidity is crucial in the business like
banking sector. Banks have to maintain liquidity, if the bank has high liquidity it cannot gain
 7

desired profit and if bank has the shortfall of the liquidity it cannot satisfy its customers.
Inadequate liquidity may lead to collapse of the bank while excess liquidity is determinant to
banks’ profitability. In order to remove demerits associated with maintaining inadequate and
excess liquidity, bank should maintained and optimum level of liquidity. Banks have to
maintain adequate liquidity to smooth running of firm.

Theoretical framework is the structure that can hold or support a theory of a research study.
The theoretical framework is one of the more infamous components of a dissertation. A good
theoretical framework gives a strong research base and provides support for the rest of the
research. Theoretical framework of this study is as follows:

CR

LDR

Comparative Liquidity and CBBTDR

Deposit Analysis of NIBL and PBL
CBBCSDR

FDTDR

CRR

Figure 1.1 Theoretical Framework

This study is conducted to analyze comparative liquidity position of NIBL and PBL.
Theoretical framework helps to conduct good report writing. So that researcher prepared
theoretical framework which includes different ratios which helps to analyze liquidity
position of these two banks.

Liquidity Ratio reflects the short-term obligation of the firm. This ratio shows that if firm
need cash amount in short period without any notice, can firm fulfill its need or how it
manage the need. Commercial banks need liquidity to meet loan demand and deposit
withdrawals. Liquidity is also needed for the purpose of meeting Cash Reserve Ratio (CRR)
and Statutory Liquidity Ratio (SLR) requirements prescribed by the central Bank. The
following ratios are calculated under the liquidity ratios.
 8

• Current ratio
• Loan to deposit ratio
• Cash and bank balance to total deposit ratio
• Cash and bank balance to current & saving deposit ratio
• Fixed deposit to total deposit ratio
• NRB balance to total deposit/Cash Reserve Ratio(CRR)

1.6.2 Review of previous works

Many researchers have conducted various research on related topic in past there are some
previous works which are related to present study.

Pradhan (2003) had done a research entitled “A comparative liquidity and deposit analysis
study on “Nepal Investment Bank Limited and Prabhu Bank Limited” states that the liquidity
position of both the bank was satisfactory however Prabhu Bank had a better liquidity
position than Nepal Investment Bank Limited.

• To identify major strength and weakness of both the banks.

• To find out past and present challenges undergone by both the banks.
• To analyze the liquidity and deposit position of both the banks taking relevant
variables.

Khan (2001) had done a research entitled “An evaluation of liquidity and deposit position of
Prabhu Bank” pointed out the financial strength and weakness of Prabhu Bank based on
liquidity ratio.

Kumbirai & Webb (2010) investigated the performance of South Africa’s commercial
banking sector for the period 2005- 2009. Financial ratios are employed to measure the
profitability, liquidity, and deposit condition and credit quality performance of five large
South African based commercial banks. The study found that overall bank performance
increased considerably in the first two years of the analysis. A significant change in trend is
noticed at the onset of the global financial crisis in 2007, reaching its peak during 2008-
2009. This resulted in falling profitability, low liquidity, low deposit condition and
deteriorating credit quality in the South African Banking sector.
 9

Shakya (2010) analyzed different ratio of NSBI and EBL for the period five years till fiscal
year 2008. In his study, the liquidity position of EBL is slightly stronger than the NSBI
where NSBI‘s ratio is higher. It concludes that liquidity position of these banks is sound.
NSBI has better utilization of available resource in income generating process than EBL. In
the overall, this study concluded that EBL is better than the NSBI and both banks are highly
leveraged.

1.6.3 Research gap

In this study, the major area is to disclose the liquidity analysis related to Nepalese
commercial banks. This study shows the unique feature of findings. Previous researchers
have conducted research on the basis of financial performance, liquidity analysis of
commercial banks in Nepal. But this research is about comparative liquidity analysis of
Nepalese commercial with sample of Nepal Investment Bank Limited and Prabhu Bank
Limited. In the previous research, there is not taken NIBL and PBL for sample. The research
can help the people who wanted to know about the liquidity position of these two banks.

1.7 Research Methods/Methodology

The method which is being used in the research to plan how the data is collected and which
source is used for getting data are under the research methodology. It includes the Research
design, Population and Sample, Types and Sources of Data, Data collection Procedure and
Analysis techniques which are as follows:

1.7.1 Research design

To fulfill the objectives of the study, certain research type is essential; so the research type of
this study is based on the nature and tools for analysis. To put the objectives stated above into
effect a descriptive analytical research design is employed. Descriptive analytical means
discuss the problem and objectives of the study and analyze the data.

1.7.2 Population and Sample

For this research all 27 commercial banks are regarded as population and out of these two
banks NIBL and PBL are taken as sample.
 10

1.7.3 Sources of data

There are mainly two method of collecting the data i.e. primary and secondary method to
collect the data.

(a) Primary data

Primary data is that data which is collected by direct personal interview, Indirect oral
interview and information from correspondence and so on.

(b) Secondary data

It refers to those types of data obtained from any published sources such as magazine,
newspaper report etc. The data used in this research are of secondary nature but
required information has been collected through related person of the banks.

1.7.4 Data collection procedure and analysis techniques

This study is conducted to compare liquidity analysis of NIBL and PBL. So, it needs various
data to analyze liquidity position of such banks. For the purpose of data collection researcher
visit at head office of both banks and collect the data. Researcher also collects the data by
using website of banks, annual report of both banks and so on.

1.7.5 Analysis techniques

Analysis of the liquidity position of these two banks through the financial tools. Findings are
present in the table, trend line and so on.

1.7.5.1 Financial tools

Financial tools are those, which are used for the analysis and interpretation of financial data.
These tools can be used to get the precise knowledge of a business, which in turn, are fruitful
in exploring the strengths and weaknesses of the financial policies and strategies. For the
sake of comparative liquidity analysis of NIBL and PBL ratio analysis have been used in
order to meet the purpose of the study.

1.7.5.1.1 Ratio analysis

Ratio analysis is very much powerful & widely used tool of financial analysis. It is define as
the systematic use of ratio to interpret the financial statements so that the strength and
weakness of a firm as well as its historical performance and current financial condition can
be determined. It helps the analysis to make qualitative judgment in about the financial
 11

position and performance of the firm. Therefore, it helps to establish relationship among
various ratios and interpret thereon specially, based on comparison between two or more
firms or inter firm comparison and comparison between present and past ratios for the same
firm give enormous and fruitful results to examine the liquidity position of the banks.

1.7.5.1.1.1 Liquidity ratio analysis

Ratio analysis is very much powerful & widely used tool of liquidity analysis. It is define as
the systematic use of ratio to interpret the financial statements so that the strength and
weakness of a firm as well as its historical performance and current financial condition can
be determined. It helps the analysis to make qualitative judgment in about the financial
position, performance and liquidity position of the firm. Therefore, it helps to establish
relationship among various ratios and interpret thereon specially, based on comparison
between two or more firms or inter firm comparison and comparison between present and
past ratios for the same firm give enormous and fruitful results to examine the comparative
liquidity position of the banks. Liquidity ratio includes the following ratio.

1.7.5.1.1.1.1 Current Ratio

It measures the degree to which current assets cover current liabilities.
Symbolically,
Current Assets
Current Ratio =
Current Liabilities

1.7.5.1.1.1.2 Loan to Deposit Ratio

Loan to deposit ratio, also known as the LTD ratio or LDR, is a ratio between the banks total
loan and advances and total deposit.
Symbolically,
Loan & Advances
Loan to Deposit Ratio =
Total Deposit

1.7.5.1.1.1.3 Cash and Bank Balance to Total Deposit Ratio

The ratio shows the ability of banks immediate fund to cover their deposit.
Symbolically,
Cash and Bank Balance
Cash and Bank Balance to Total Deposit Ratio =
Total Deposit
 12

1.7.5.1.1.1.4 Cash and Bank Balance to Current and Saving Ratio

The ratio shows the ability of banks immediate funds to cover their (current, margin call and
saving deposit).
Symbolically,
Cash and Bank Balance
Cash and Bank Balance to Current and Saving Ratio =
Current and Saving Deposit

1.7.5.1.1.1.5 Fixed to Total Deposit Ratio

The ratio shows that percentage of fixed to total deposit has been collected in form of
deposit.
Symbolically,
Fixed Deposit
Fixed to Total Deposit Ratio =
Total Deposit

1.7.5.1.1.1.6 Cash Reserve Ratio (CRR) /NRB Balance to Total Deposit Ratio
The reserve requirement (or CRR) is a bank, regulation that sets the minimum reserve so that
each bank must hold to customer deposits and notes.
Symbolically,
NRB Balance
Cash Reserve Ratio =
Total Deposit

1.8 Limitations of the Study

This report is held within the following limitations and constraints, they are:

• The study is limited only in the liquidity and deposit analysis of the two banks.
• Due to the shortage of the time volume and budget, new method may not be
developed.
• Report is based on the data of NIBL and PBL.
• Certain period’s data (3years.) has been taken for the analysis; result is based on this
data.
• Because of the bank's secrecy they don't provide adequate information. Due to
availability of limited information this study will not cover every part of the
performance aspect.
 13

CHAPTER-II
RESULTS AND FINDINGS

This chapter deals with the analysis and interpretation of data following the research
methodology dealt in the chapter. In the course of analysis, data gathered from the various
sources have been inserted in the tabular form according to their homogeneous nature. Using
financial and statistical tools, the data have been analyzed the result of the analysis has been
interpreted keeping in mind the conventional standard with respect to ratio analysis directives
of NRB and other factors while using other tools.

2.1 Presentation of Data in Tables and Figures and their Analysis

Relevant data has been collected from the financial statement of the concerned bank. Data are
analyzed by using ratio analysis and are presented in the table. Ratio analysis is one of the
most commonly used techniques in the analysis of liquidity position of the bank. Ratio
analysis points out the problem in any operational areas and provides a basis to recommend
corrective actions.

2.2 Liquidity position

Liquidity analysis is the one of the major tool to analyze liquidity position of the banks
through liquidity ratio. Liquidity ratio reflects the short term obligation of the firm. This ratio
shows that if firm need cash amount in short period without any notice, can firm fulfill its
need or how it manage the need. Commercial banks need liquidity to meet loan demand and
deposit withdrawals. Liquidity is also needed for the purposes of meeting cash reserve ratio
(CRR) and statutory liquidity ratio (SLR) requirements prescribed by the central banks. The
following ratios are calculated under the liquidity ratios which show the liquidity position of
the bank.

2.2.1 Current ratio

It measures the degree to which current assets cover current liabilities. A high ratio indicates
greater assurance of ability to pay current liabilities. A current ratio of 2:1 is generally
considered to be an acceptable standard though it is only a rule of thumb standard. A low
ratio indicates that the corporation may not be able to meet short-term obligations.
Symbolically,
 14

Current Assets
Current Ratio =
Current Liabilities
Where,
Current Assets = Cash and Cash Equivalent + Due from NRB + Placement with Bank
and Financial Institution + Derivative Financial Instrument
Current Liabilities = Due to Bank and Financial Institution + Due to NRB +
Derivative Financial Instrument + Deposit from Customers (Only Current Part) +
Borrowing + Current Tax Liabilities + Provision + Deferred Tax Liabilities + Other
Liabilities

Table 2.1
Comparative Current Ratio of NIBL and PBL
Year CR of NIBL CR of PBL
2075/76 0.4236 0.3329
2076/77 0.3294 0.3527
2077/78 0.1873 0.2577
Average 0.3134 0.3144
Note. From Financial Statement of NIBL and PBL

Table 2.1 shows the comparative current ratio of NIBL and PBL. NIBL has the minimum
0.1873 over three years where as PBL has 0.2577. From the results of this table study
concluded that both banks have weak liquidity position but in comparison, PBL has better
liquidity rather than NIBL.

Figure 2.1 Comparative Current Ratio of NIBL and PBL

 15

Figure 2.1 shows the comparative current ratio of NIBL and PBL. NIBL has the decreasing
trend of liquidity where as PBL has fluctuating trend over three years. However, NIBL has
weaker liquidity position rather than PBL.

2.2.2 Loan to deposit ratio

Loan to deposit ratio, also known as the LTD ratio or LDR, is a ratio between the banks total
loan and advances and total deposit. NRB prescribed 0.8 LDR for every commercial bank. If
the ratio is lower than one, the bank relied on its own deposit to make loan to its customer,
without any outside borrowing. If on the other hand, the Ratio is greater than one the bank
borrowed money which is re-loaned at higher rates, rather than relying entirely on its own
deposits. Banks may not be earning an optimal return if the ratio is too low. If the ratio too
high, the banks might not have enough liquidity to cover any unforseen funding requirement
or economic crises. It is a commonly used static for assessing a bank’s liquidity.
Symbolically,
Loan & Advances
Loan to Deposit Ratio =
Total Deposit
Where,
Loan and Advances = Loan and Advance to Bank and Financial Institution + Loan
and Advance to Customers
Total Deposit = Due to Bank and Financial Institution + Due to NRB + Derivative
Financial Instrument + Deposit from Customers

Table 2.2
Comparative Loan to Deposit Ratio of NIBL and PBL
Year LDR of NIBL LDR of PBL
2075/76 0.8303 0.7562
2076/77 0.8293 0.7045
2077/78 0.8849 0.7587
Average 0.8482 0.7398
Note. From Financial Statement of NIBL and PBL

Table 2.2 shows the comparative loan to deposit ratio of NIBL and PBL. NIBL has the minimum
0.8293 loan to deposit ratio over the three years where as PBL has 0.7045. From the result of this
table study concluded that both banks has moderate liquidity position but in comparison, NIBL
has better liquidity than PBL which is 0.8482.
 16

Figure 2.2 Comparative Loans to Deposit Ratio of NIBL and PBL

Figure 2.2 shows the comparative loan to deposit ratio of NIBL and PBL. Both the banks
have fluctuating to deposit ratio. However, NIBL has better liquidity position than PBL.

2.2.3 Cash and bank balance to total deposit ratio

The ratio shows the ability of banks immediate fund to cover their deposit. Higher the ratio
shows higher liquidity position and ability to cover the deposit and vice-versa. The ratio
computes by dividing cash and bank balance by total deposit. Cash and bank balance
comprises cash in hand, foreign cash in hand, cheques and other cash items, balance with
domestic bank and balance held in foreign banks. Current and saving deposit consists of all
type of deposit excluding fixed deposit. The ratio measures the ability of banks to meet its
immediate up to total deposit legations.
Symbolically,
Cash and Bank Balance
Cash and Bank Balance to Total Deposit Ratio =
Total Deposit
Where,
Cash and Bank Balance = Cash and Cash equivalent + Due from NRB
Total Deposit = Due to Bank and Financial Institution + Due to NRB + Derivative
Financial Instrument + Deposit from Customers
 17

Table 2.3
Comparative Cash and Bank Balance to Total Deposit Ratio of NIBL and PBL
Year CBBTDR of NIBL CBBTDR of PBL
2075/76 0.1592 0.1839
2076/77 0.1295 0.1942
2077/78 0.0788 0.1326
Average 0.1225 0.1702
Note. From Financial Statement of NIBL and PBL

Table 2.3 shows the comparative cash and bank balance to total deposit ratio of NIBL and
PBL. NIBL has lower rate in year 2077/78 which is 0.0788 over the three year period where
as PBL also has lower rate in the year 2077/78 which is 0.1326 over the three years. Both
banks have low liquidity position but NIBL has lower liquidity in comparison to PBL.

Figure 2.3 Comparative Cash and Bank Balance to Total Deposit ratio of NIBL and PBL

Figure 2.3 shows the comparative cash and bank balance to total deposit of NIBL and PBL.
NIBL has decreasing trend of cash and bank balance to total deposit ratio but PBL has
fluctuating trend. This study shows the better liquidity position of PBL in comparison to
NIBL.

2.2.4 Cash and Bank Balance to Current and Saving Ratio

The ratio shows the ability of the bank immediate funds to cover their current, margin call
and saving deposit. Higher the ratio shows higher liquidity position and ability to cover the
deposits and vice-versa. The ratio is computed as cash and bank balance by current and
saving deposits.
 18

Symbolically,
Cash and Bank Balance
Cash and Bank Balance to Current and Saving Ratio =
Current and Saving Deposit
Where,
Cash and Bank Balance = Cash and Cash Equivalent + Due from NRB

Table 2.4
Comparative Cash and Bank Balance to Current and Saving Ratio of NIBL and PBL
Year CBBCSR of NIBL CBBCSR of PBL
2075/76 0.3036 0.3583
2076/77 0.2580 0.3874
2077/78 0.1357 0.2601
Average 0.2324 0.3353
Note. From Financial Statement of NIBL and PBL

Table 2.4 shows the comparative cash and bank balance to current and saving deposit ratio
of NIBL and PBL which find out the ratio 0.1357 of NIBL in the year 2077/78 is the lowest
over the three years period. PBL has minimum ratio of 0.2601 in the year 2077/78. PBL
somehow manages liquidity position where as NIBL has weaker liquidity position. The
average rates of two banks (NIBL & PBL) are 0.2324 and 0.3353 respectively. This shows
that PBL has higher liquidity than NIBL.

Figure 2.4 Comparative Cash and Bank Balance to Current and Saving Deposit of NIBL and
PBL
 19

Figure 2.4 shows the comparative cash and bank balance to current and saving ratio of NIBL
and PBL. NIBL has decreasing trend where as PBL has fluctuating trend over the three years
period. PBL shows better liquidity position than NIBL.

2.2.5 Fixed to Total Deposit Ratio

The ratio shows that percentage of fixed to total deposit has been collected in form of
deposit. High ratio indicates better opportunity available to the bank to invest in sufficient
profit generating long-term loans. Low ratio means bank should invest the fund of low cost in
short–term loans.
Symbolically,
Fixed Deposit
Fixed to Total Deposit Ratio =
Total Deposit
Where,
Fixed Deposit = Term Deposit (Institutional + Individual)
Total Deposit = Due to Bank and Financial Institution + Due to NRB + Derivative
Financial Instrument + Deposit from Customers

Table 2.5
Comparative Fixed to Total Deposit Ratio of NIBL and PBL
Year FTDR of NIBL FTDR of PBL
2075/76 0.4512 0.3756
2076/77 0.4836 0.3767
2077/78 0.3728 0.3677
Average 0.4359 0.3733
Note. From Financial Statement of NIBL and PBL

Table 2.5 shows the comparative fixed to total deposit ratio of NIBL and PBL. This study
concludes that NIBL has minimum ratio 0.3728 in the year 2077/78 and PBL also has minimum
ratio 0.3677 in the year 2077/78. In an average, NIBL has higher ratio than PBL.
 20

Figure 2.5 Comparative Fixed to Total Deposit Ratio of NIBL and PBL

Figure 2.5 shows the comparative fixed to total deposit ratio of NIBL and PBL. Both the
bank has fluctuating liquidity. However, NIBL shows better liquidity position than PBL.

2.2.6 Cash Reserve Ratio (CRR) /NRB Balance to Total Deposit Ratio
The reserve requirement (or CRR) is a bank, regulation that sets the minimum reserve so that
each bank must hold to customer deposits and notes. These reserve are designed to satisfy
withdrawal demand, and would normally be in the form of fiat currency stored in a bank
vault (cash vault), or with potential of the banking to create deposits. CRR is the percentage
of banks reserves to deposits and notes. Every commercial banks need to deposit 10% fund in
NRB as the form of CRR.
Symbolically,
NRB Balance
Cash Reserve Ratio =
Total Deposit
Where,
NRB Balance = Due from NRB
Total Deposit = Due to Bank and Financial Institution + Due to NRB + Derivative
Financial Instrument + Deposit from Customers
 21

Table 2.6
Comparative Cash Reserve Ratio of NIBL and PBL
Year CRR of NIBL CRR of PBL
2075/76 0.0709 0.0677
2076/77 0.0848 0.1366
2077/78 0.0405 0.0881
Average 0.0654 0.0975
Note. From Financial Statement of NIBL and PBL

Table 2.6 shows the comparative CRR of NIBL and PBL over three years period. NIBL and
PBL both have the fluctuating rate. However in comparison, PBL has the higher cash reserve
ratio than NIBL which shows PBL has higher liquid than NIBL.

Figure 2.6 Comparative Cash Reserve Ratio of NIBL and PBL

Figure 2.6 shows the comparative cash reserve ratio of NIBL and PBL. In the figure, NIBL
and PBL both have fluctuating CRR. But, in comparison, PBL has higher balance reserve in
NRB which shows the better liquidity position of PBL than NIBL.

2.3 Major Findings

The following findings have been derived from the analysis and interpretation of data.
• The liquidity position of the banks in term of current ratios show that the ratios of both
banks NIBL and PBL are always below the normal standard (i.e. 2:1) where as NIBL
average ratio is lower than PBL. It shows that the liquidity position in term of current
 22

assets to current liabilities of PBL is better than NIBL. So, it is concluded that PBL has
better liquidity position as compared to NIBL.
• Loan and advances to total deposit ratio of NIBL and PBL are 0.8482 and 0.7398
respectively. From the analysis; it is concluded that PBL has been successfully utilized
their deposits in term of loan and advances for profit generating purpose compared to
NIBL.

• Cash and bank balance to total deposit ratio of NIBL and PBL are 0.1225 and 0.1702
respectively which shows the PBL has higher liquidity than NIBL.

• Cash & bank balance to current & saving deposit ratio of NIBL and PBL are 0.2324 &
0.3353 respectively which shows PBL has better liquidity than NIBL.

• Fixed to total deposit ratio of NIBL and PPL are 0.4359 and 0.3733 respectively which
indicates that NIBL has more fixed deposit than PBL.

• Cash reserve ratio of NIBL and PBL are 0.0654 and 0.0975 which shows PBL has higher
balance in NRB account.
 23

CHAPTER–III
SUMMARY AND CONCLUSION

This chapter presents a discussion of findings presented in the previous chapter and dedicated
to provide conclusions after comparatively analysis the liquidity and deposit position of two
banks named NIBL and PBL. It also tries to provide some implications to the concerned
banks from the conclusion derived from the study.

3.1 Summary
This research is conducted comparative liquidity and deposit analysis of NIBL and PBL.
Liquidity analysis is one of the major tools to analyse financial performance of the banks.
This study is taking NIBL and PBL as sample among 27 commercial bank over 3 years
period i.e. 2075/76 to 2077/78. The liquidity ratio measures the ability of a firm to meet its
short-term obligations and the short-term financial solvency of a firm.

On the basis of analysis and presentation of data, the researcher extracted some major
findings. The liquidity position of the banks in terms of current ratios shows that the ratios
of both banks NIBL and PBL are below the normal standard (i.e. 2:1) whereas NIBL
average ratio is lower than PBL. It shows that the liquidity position in term of current assets
to current liabilities of PBL is better than NIBL. So, it is concluded that PBL has better
liquidity position as compared to NIBL

Loan and advances to total deposit ratio of NIBL and PBL are 0.8482 and 0.7398
respectively. From the above analysis, it is concluded that NIBL has been successful in
utilizing their deposits in term of loan and advances for profit generating purpose compared
to NIBL. Cash and bank balance to total deposit ratio of NIBL and PBL are 0.1225 and
0.1702 respectively which shows the PBL has higher liquidity than NIBL.

Cash & bank balance to current & saving deposit ratio of NIBL and PBL are 0.2324 &
0.3353 respectively which shows PBL has better liquidity than NIBL.
 24

Fixed to total deposit ratio of NIBL and PPL are 0.4359 and 0.3733 respectively which
indicates that NIBL has more fixed deposit than PBL. Cash reserve ratio of NIBL and PBL
are 0.0654 and 0.0975 respectively which shows PBL has higher balance in NRB account.

This analysis shows that both banks have to increase their liquidity position but in
comparison PBL has higher liquidity than NIBL. In the same way, fixed deposit to total
deposit ratio of NIBL is better than that of PBL.

So, on the basis of major findings the researcher reached to the conclusion keeping
previously set objectives in mind. Ultimately, the researcher will recommend on the research
problem to its stakeholders. To know the actual liquidity position of the banks, the researcher
observed and analysed the comparative liquidity analysis of two commercial banks. It is
hoped that the comparative liquidity analysis of the commercial banks will give a rational
result and represent the overall banking scenario in terms of liquidity analysis.

3.2 Conclusion
Establishment of commercial banks have continued in response to the economic
liberalization policies of the government. Nowadays, under the new monetary policy banks
have to increase their paid-up capital so that many banks are going for merger and
acquisition. So, now in Nepal there are 27 commercial banks competing with each other in
their business. These commercial banks are mainly concentrated t on deposit collection and
mobilization, provide banking services for customer satisfaction, financing in different
project and areas.

The researcher has analysed the data by using financial tools like ratio analysis.

The liquidity ratio measures the ability of a firm to meet its short-term obligations and the
short-term financial solvency of a firm. The liquidity position of the banks in terms of current
ratios shows that the ratios of both banks NIBL and PBL are below the normal standard (i.e.
2:1) whereas NIBL average ratio is lower than PBL. It shows that the liquidity position in
term of current assets to current liabilities of PBL is better than NIBL. So, it is concluded that
PBL has better liquidity position as compared to NIBLLoan and advances to total deposit
ratio of NIBL and PBL are 0.8482 and 0.7398 respectively. From the above analysis, it is
 25

concluded that NIBL has been successful in utilizing their deposits in term of loan and
advances for profit generating purpose compared to NIBL. Cash and bank balance to total
deposit ratio of NIBL and PBL are 0.1225 and 0.1702 respectively which shows the PBL has
higher liquidity than NIBL.

Cash & bank balance to current & saving deposit ratio of NIBL and PBL are 0.2324
& 0.3353 respectively which shows PBL has better liquidity than NIBL.

This study is conducted for comparative analysis of liquidity position of these two banks
NIBL and PBL Based on the conclusion, the following suggestions and implications are
forwarded.

1. The findings of this study will contribute to existing literature on banks liquidity
analysis.

2. This study will also useful to investors for getting information about the liquidity
position of these banks before investment; creditors to know the payable trend of the
banks.

3. This is also useful to relate banks to know actual liquidity position of bank
comparative to others.

4. This study facilitates to customers to know the credit worthiness; and other parties
who are related to these two banks to acquire required information related to liquidity
position of banks.

5. Findings of this study facilitate to management team to amend the rules and policies
of the banks.

6. NRB also will be using this study for different purposes.

7. This study will also useful to the future researcher for conduct new project work on
related topics because this study will provide guidelines to new researchers.
 25

BIBLIOGRAPHY

Ally, Z. (2013). Comparative Analysis of Financial Performance of Commercial Banks in

Tanzania. Salaam: The Institution of Finance Management.

Harsh. (2014). Retrieved from liakos-speech-1.doc

Kumbirai, M., & Webb, R. (2010). A Financial Ratio Analysis of Commercial Bank
Performance in South Africa. Grahmstown: Print Services, Rhodes University.

Mishra, S. K. (2012). A CAMEL Model Analysis of State Bank Group. Jalandhar: World
Journal of Social Sciences.

Nepal Investment Bank, l. (2012). Liquidity Analysis of Nepal Investment Bank LTD. Nepal
Investment Bank Limited, Share Department. Kathmandu: Nepal Investment Bank Limited.
Retrieved from http://www.nibl.com.np

Nepal Investment Bank, l. (2012). Liquidity Analysis of Nepal Investment Bank LTD.
Kathmandu: Nepal Investment Bank Limited. Retrieved from http://www.nibl.com.np.

Shakya, S. (2010). Financial Performance of Nepal SBI Bank Limited and Everest Bank
limited. Kathmandu.

Xuezhi Qin and Dickson, P. (2012). Comparative Analysis of Commercial Bank Liquidity
Position. 134. Retrieved from http://dx.doi.org/ijbm.v7i0p134
 26

APPENDICES

1. Current Ratio
Current Assets
Current Ratio =
Current Liabilities
Where,
Current Assets = Cash and Cash Equivalent + Due from NRB + Placement with Bank
and Financial Institution + Derivative Financial Instrument
Current Liabilities = Due to Bank and Financial Institution + Due to NRB +
Derivative Financial Instrument + Deposit from Customers (Only Current Part) +
Borrowing + Current Tax Liabilities + Provision + Deferred Tax Liabilities + Other
Liabilities

Calculation of Current Ratio of NIBL

Year Current Assets Current Liabilities CR
2075/76 37,249,358,758 87,917,134,387 0.4236
2076/77 29,958,968,271 90,954,112,569 0.3294
2077/78 22,603,503,453 120,735,427,059 0.1873

Calculation of Current Ratio of PBL

Year Current Assets Current Liabilities CR
2075/76 26,299,958,506 78,991,100,464 0.3329
2076/77 33,828,206,920 95,899,586,398 0.3527
2077/78 31,620,975,502 122,716,671,282 0.2577

2. Loan to deposit ratio

Loan & Advances
Loan to Deposit Ratio =
Total Deposit
Where,
Loan and Advances = Loan and Advance to Bank and Financial Institution + Loan
and Advance to Customers
Total Deposit = Due to Bank and Financial Institution + Due to NRB + Derivative
Financial Instrument + Deposit from Customers
 27

Calculation of Loan to deposit ratio of NIBL

Year Loans & Advances Total Deposit LDR
2075/76 127,140,970,015 153,123,511,295 0.8303
2076/77 140,002,160,763 168,827,066,158 0.8293
2077/78 161,911,528,389 182,973,616,291 0.8849

Calculation of Loan to deposit ratio of PBL

Year Loans & Advances Total Deposit LDR
2075/76 89,753,102,413 118,684,199,117 0.7562
2076/77 103,295,383,550 146,632,184,030 0.7045
2077/78 142,480,223,648 187,785,611,816 0.7587

3. Cash and Bank Balance to Total Deposit Ratio

Cash and Bank Balance
Cash and Bank Balance to Total Deposit Ratio =
Total Deposit
Where,
Cash and Bank Balance = Cash and Cash equivalent + Due from NRB
Total Deposit = Due to Bank and Financial Institution + Due to NRB + Derivative
Financial Instrument + Deposit from Customers

Calculation of Cash and Bank Balance to Total Deposit ratio of NIBL

Year Cash and Bank Balance Total Deposit CBBTDR
2075/76 24,381,496,719 153,123,511,295 0.1592
2076/77 21,859,999,410 168,827,066,158 0.1295
2077/78 14,429,976,808 182,973,616,291 0.0788

Calculation of Cash and Bank Balance to Total Deposit ratio of PBL

Year Cash and Bank Balance Total Deposit CBBTDR
2075/76 21,823,606,151 118,684,199,117 0.1839
2076/77 28,474,447,280 146,632,184,030 0.1942
2077/78 24,909,081,270 187,785,611,816 0.1326
 28

4. Cash and Bank Balance to Current and Saving Ratio

Cash and Bank Balance
Cash and Bank Balance to Current and Saving Ratio =
Current and Saving Deposit
Where,
Cash and Bank Balance = Cash and Cash Equivalent + Due from NRB
Current and Saving Deposit = Institutional (call+current+others) + Individual
(current) +Individual (saving+others)

Calculation of Cash and Bank Balance to Saving and Deposit Ratio of NIBL
Year Cash and Bank Balance Current & Saving Deposit CBBCSR
2075/76 24,381,496,719 80,296,624,097 0.3036
2076/77 21,859,999,410 84,715,505,453 0.2580
2077/78 14,429,976,808 106,347,916,248 0.1357

Calculation of Cash and Bank Balance to Saving and Deposit Ratio of PBL
Year Cash and Bank Balance Current & Saving Deposit CBBCSR
2075/76 21,823,606,151 60,913,936,991 0.3583
2076/77 28,474,447,280 73,506,156,072 0.3874
2077/78 24,909,081,270 95,777,719,701 0.2601

5. Fixed to Total Deposit Ratio

Fixed Deposit
Fixed to Total Deposit Ratio =
Total Deposit
Where,
Fixed Deposit = Term Deposit (Institutional + Individual)
Total Deposit = Due to Bank and Financial Institution + Due to NRB + Derivative
Financial Instrument + Deposit from Customers

Calculation of Fixed to Total Deposit Ratio of NIBL

Year Fixed Deposit Total Deposit FTDR
2075/76 69,095,657,807 153,123,511,295 0.4512
2076/77 81,646,620,840 168,827,066,158 0.4836
2077/78 68,209,788,235 182,973,616,291 0.3728
 29

Calculation of Fixed to Total Deposit Ratio of PBL

Year Fixed Deposit Total Deposit FTDR
2075/76 44,574,568,803 118,684,199,117 0.3756
2076/77 55,234,615,277 146,632,184,030 0.3767
2077/78 69,045,780,611 187,785,611,816 0.3677

6. Cash Reserve Ratio/NRB Balance to Total Deposit Ratio

NRB Balance
Cash Reserve Ratio =
Total Deposit
Where,
NRB Balance = Due from NRB
Total Deposit = Due to Bank and Financial Institution + Due to NRB + Derivative
Financial Instrument + Deposit from Customers

Calculation of Cash Reserve Ratio of NIBL

Year NRB Balance Total Deposit CRR
2075/76 10,860,922,267 153,123,511,295 0.0709
2076/77 14,321,970,764 168,827,066,158 0.0848
2077/78 7,417,253,539 182,973,616,291 0.0405

Calculation of Cash Reserve Ratio of PBL

Year NRB Balance Total Deposit CRR
2075/76 8,031,269,133 118,684,199,117 0.0677
2076/77 20,028,379,155 146,632,184,030 0.1366
2077/78 16,537,178,598 187,785,611,816 0.0881
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