1

CHAPTER I
INTRODUCTION

1.1 Background
Saving is income not spent, or deferred consumption. Methods of saving include
putting money aside in, for example, a deposit account, a pension account, an
investment fund, or as cash. Saving also involves reducing expenditures, such as
recurring costs. In terms of personal finance, saving generally specifies low-risk
preservation of money, as in a deposit account, versus investment, wherein risk is a
lot higher; in economics more broadly, it refers to any income not used for immediate
consumption (Pradhan, 2004).

Deposits consist of money placed into banking institutions for safekeeping. These
deposits are made to deposit accounts such as savings accounts, checking accounts
and money market accounts. The account holder has the right to withdraw deposited
funds, as set forth in the terms and conditions governing the account agreement (Van
Horne, 1997).

Saving deposits are the accounts that pay interest and can be withdrawn on upon
demand offered by banks, credit unions, and savings and loans. They hold the
deposits of individuals, government establishments and business units. They make
funds available through their lending and investing activities to borrowers,
individuals, business firms and government establishments. In doing so, they assist
both the flow of goods and services from the producers to consumers and the financial
activities of the government. They provide a large portion of medium of exchange and
they are the media through which monetary policy is affected. These facts show that
the commercial banking system of a nation is very important to the functioning of its
economy. Financial institutions in the economy play a crucial role in the process of
economic growth of the country. Financial institution refers to a business concern,
which is mainly confined to finance for the development of the trade, commerce and
industry. Trade, commerce and industry are the prime factors of the economic
development. Bank is a financial institution, which primarily deals in borrowing and
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lending. Banking is a vital part of national economy and a vehicle for the mobilization
of economy's financial resources and extension of credit to the business and service
enterprises (Weston, & Brigham, 1995).

1.2 Introduction of the Nabil Bank Limited

Nabil Bank Limited, the first foreign joint venture bank of Nepal, started operation in
July 1984 A.D. Nabil was in corporate with the objective of extending international
standard modern banking services to various sectors of the society. Pursuing its
objective, Nabil provides a full range of commercial banking services through its 47
points of representation across the kingdom, 74 branches and 2 exchange counters in
all Nepal and over 170 reputed correspondent banks across the globe. Nabil as a
pioneer in introducing many innovative products and marketing concepts in the
domestic banking sector represents a milestone in the banking history of Nepal as it
started an era of modern banking with customer satisfaction measured as a focal
objective while doing business. Highly qualified and experienced management team
manages operation of the bank including day-to-day operations and risk management.
Bank is fully equipped with modern technologies, which include ATMs, credit cards,
state of art, world-renowned software from Infosys Technology System, Banglore,

India, internet banking system and tele-banking system.

the bank has branches across the nation and its head office in Kathmandu. It began
as the first bank in Nepal incepted by multinational investors on 12 thJuly
1984 .Nabil bank Limited (erstwhile Nepal Arab Bank Limited) commenced on
12thJuly 1984 after begging registered on 11th May 1984 with a paid up capital of
NPR 30 million, is the first private commercial bank opened in the country . The
Bank comes into existence through a joint venture with 50% share of Dubai Bank
Ltd. Undera Technical service Agreement (TSA) 20% share of Nepalese public.
After a few years of commencing operation, Nabil also worked in joint venture
with Emirates Bank International Limited Dubai and National Bank Limited
Bangladesh (NBB) respectively. Current ly the foreign joint venture partner of the
Bank is NbiI international Led. Ireland. It has been helping business communities
and the government in different ways since .its establishment . It has been
providing modern services to customer. Its service is of international standard,
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which has attracted people. It has helped general people to know about the
banking system and the benefits that they provided. It has been playing significant
role in the development of Nepalese economy. NABIL bank is highly successful
to create banking habit among the Nepalese people the bank not only holds its
capital but also holds the deposits of millions of people, which make responsible
to the society

As in the case with every commercial bank ,NABIL Bank’s activities are basically
associated with deposit mobilization, advancement of various credits, international
banking including trade financing, inward and outward remitted and fund and
portfolio management. NABIL Bank is committed to provide banking services of
highest possible standards that suits the customer requirements as well as the
market needs.

1.3 Objectives
The major objective of the study is to develop an overall strategy for managing the
deposit of NABIL. Further the study also studied the relationship between total
deposit amount and total credit granted by NABIL.

To fulfill these primary objectives, the following secondary objectives also had been
considered:
 To analyze saving deposit of Nabil Bank.
 To examine and analyze different types of deposit of Nabil Bank.
 To explore the trend of deposits and lending of Nabil Bank.

1.4 Rationale
Banks and other financial institutions play important role to increaseeconomic
standard for the development of the country. Economicdevelopment becomes slow if
there are incomplete and unfair bankingfacilities. Especially commercial banks
provide different economic andtechnical facilities to the people who involve in
business activities. Commercial banks plays major role in collection of scattered small
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savingsfrom depositors and transfer these funds into productive sectors for
theeconomic development.As the research done in any field there are several key
factors thatcannot be avoided, in which significance of study also occurs. Mainly
thisstudy covers the deposit and credit position of NABIL, so ithelps to reveal the
financial position of bank and study occupies animportant role in the series of the
studies on commercial banks. Thesignificances of the study are:

Importancue to know how well the bank is utilizing its deposits. Importance to policy
formulator and also be useful for academicprofessionals, students particularly those
involves in commerce, CA and financial institutions to formulate policies and plans
on thebasis of the performance of the bank. Importance to the management party of
selected bank for theevaluation of the performance of their bank and compare
withother banks.Important for the investors, customers (depositors, loan takers)and
personnel of bank to take various decisions regarding depositsand loan advances.This
study has been equally important to the others who areinterested to know about the
area. It may encourage researcherto research further.

1.5 Review
This chapter is concerned with review of literature relevant to the topic 'Saving
Deposit'. The purpose of reviewing of literature is to develop some expertise in one's
area, to see what new contribution has made and to receive some ideas for developing
a research design. Thus, previous studies cannot be ignored as they provide the
foundation for the present study. This chapter highlights the literature that is available
in concerned subject as to my knowledge, research work, and relevant study on this
topic, review of journals and articles and review of thesis work performed previously.

1.5.1 Conceptual Review

Commercial institutions are those financial institutions, which deals in acceptingthe
deposits of people and institutions and giving loan against securities. Theyprovide
working capital needs of trade, industry and even to agricultural sectors. Moreover
commercial banks also provide technical and administrative assistanceto trade,
industries and business enterprises. Commercial bank is a corporation which accepts
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demand deposits, subject to check and make short term loans tobusiness enterprises,
regardless of the scope of its other services. Commercial banks are the heart of
financial system. They hold the deposits ofmany persons, government establishments
and business units. They make fundavailable through their lending and investing
activities to borrowers, individual, business firms and government establishment
units.

Meaning & Definition of Deposit

Crowther in his book 'An outline of Money' has defined Commercial Banks as the
institutions, which receive the saving from the people in different accountsby paying
certain rate of interest. Therefore, commercial bank draws surplusmoney from the
people who don't use it at the time and lend it to those who are inthe position to use it
for the productive purpose. The primary function of anycommercial bank in Nepal is
to accept deposits in order to provide loans andadvances.

Deposit Collection
For a commercial banks deposit is the most important source of the liquidity. For,
banks financial strength is treated as a barometer. In the word of Eugene, Abank's
deposits are the amount that it owes to its customers. Deposit is the lifeblood of the
commercial bank. The success of a bank greatly depends upon the extent to which it
mayattract more and more deposits. The volume of funds that management will use
forcreating income through loans and investment is determined largely by the
bank'spolicy governing deposits. In other words when the policy is restrictive,
thegrowth of bank is retarded or accelerated with the liberalization in the
depositpolicy. In banking business, the volume of credit extension much depends
uponthe deposit base of a bank. The deposit creating powers of commercial bank's
forces to raise the assets along with the liability side of the balance sheet. In other
words, assets give rise to liabilities. Traditionally, the deposit structure of a
commercial bank was thought to be determined by the depositors and not by
bankmanagement. There are regular changes on this view in the modern
bankingindustry. Thus banks have evolved from relatively passive acceptors of
deposits toactive bidders for funds. Deposits are one of the aspects of the bank
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liabilities thatmanagement has been influencing through deliberate action (Crosse,

2009).

For accounting and analyzing purpose, deposits are categorized mainly in three
heading.

Deposit
Saving Deposit
Saving Deposit is the most popular among all types of deposits. Saving
Depositenables general public to deposit surplus money, thereby earning certainrate
of interest. The Saving Deposit can be withdrawn at anytime with thelimitation of
amount that can be withdrawn at a time, but at some banks there areno such
limitations. Saving deposit Account can be opened individually or can beoperated by
more than one. This account is suitable and appropriate for the peopleof middle class,
farmers and the labors who have low income, officials and smallbusinessmen. This
type of account can be opened either in local currency orconvertible foreign currency
as approved by Nepal Rastra Bank. Mainly many ofthe banks calculate and credit the
interest to the account on minimum monthlybalances biannually. Thebank allows
withdrawing the amount limited to Rs. 500, 000. 00 within a week but the depositor
can withdraw the excess or wholedeposit with the prior formal notice of 7-30 days.
The Bank mostly mobilizesthese deposits by investing on Treasury Bills for the
period of about three months. Saving Deposit bears the features of both of the current
and fixed period deposits. Generally, most accounts are opened as Saving Deposit
account in a bank. The saving account is given a preference on the payment of interest
to other deposits.

Current Deposit
Current Deposit Account is mainly for business houses, but individual can alsooperate
the account. It is also known as Demand Depositbecause of its nature, enabling one to
deposit or withdraw the amount at any time, without limitation. Though there is no
withdrawing limitation in this account. Its transaction iscontinual and such deposit
can't be invested in the productive sector, so such typeof amount remains as stock in
the bank. Though the bank can't gain profit byinvesting it in new sector after taking
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from the customer, this facility is given tothe customer. Therefore the banks do not
provide any interest on it. From suchdeposit the merchants and traders are benefited
more than the individuals. The bankshould pay as many times as the cheque is sent
until there is deposit in his account. The firms with the large volume of daily
transaction operate this type of account.

Fixed Deposits
Fixed deposits are the most rigid in terms of withdrawal. The deposit remainswith the
bank for the fixed period of time and can't be withdrawn unless the timematures. The
primary feature being time in this type of deposit, the deposit is alsoknown as 'Time
Deposit'. The rate of interest in Fixed Deposit is comparativelyhigher and differs
according to the duration of the deposit. Bank can not changethe interest rate of Fixed
Deposit Account before maturity period butat the renewal, new interest rate as well as
other terms and conditions could bealtered.The money which is paid to depositors for
their deposit and charged from customer for their loan is called interest. It is very
much important factor for deposit and loan. The difference between the interest rates
of deposit and loan is the main earning for the bank. Loan is the money provided to
persons or businessperson by the bank for meeting their different expenses. It is
provided by the bank out of the deposit collected. Therefore, deposit is the major
source of the loan. The bank charges certain percentage of interest based on nature of
loan. There are different kinds of loans like short-term loan, medium term loan or
long term loan. Profit is not a reward of bearing risk but it is a reward of bearing
uncertainty. Banks provides loan to different people and businessman. It is not certain
that all the loans will be recovered or not. If the loans are recovered, the bank will
charge a certain percentage of interest from them, which becomes the profit for the
bank. Whenever the amount of expenditure exceeds the amount of income, a loss
arises there. It may happen to bank due to the irrecoverable loan, high administrative
expenses etc. Such loss should be controlled by the bank.

Need for deposit

The following are some reasons for why deposit is needed in adeveloping country like
Nepal. Workshop report, "saving deposit why andhow" Group "A" states the
followingpoints as the need for Saving Deposit. The need of deposit is felt to control
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unnecessary expenditure. Ifthere is no saving, the extra money that the people have,
can flow forwardsbuying unnecessary and luxury goods. So, the government also
should help tocollect more deposit, steeping legal procedures to control
unnecessaryexpenditures.

Importance of Deposit:
Circulation of Idle Money
Deposit helps to circulate idle money. The meaning of deposit is to convert idle
saving into active saving. Deposit helps the depositor's habit of saving on one side and
it also help to circulate the idle saving in productive sector on the other. This helps to
create incentives to the depositors. Again, investment in productive sector helps
directly in country's economic development and also increases investors' income.

To Support Fiscal and Monetary Policy

Deposit can support fiscal policy of the government and monetary policy of the
central bank for economic development of a country. Deposit helps to channelize idle
money in productive sectors. Again, it helps in money supply, which saves the
country from deflation and helps central bank's objective of monetary policy.

To promote cottage industries

Deposit is needed to facilitate cottage industries located in rural and urban areas. If
the bank utilizes the collected deposit in the same rural or urban sector for the
development of cottage industries, it helps not only to promote cottage industries in
the area, but also support in the development of the locality as a whole by increasing
employment and income of the local people.

Capital formation
Capital plays a vital role for the development of industries. However, in an
underdeveloped country, where there is always lack of capital to support such
industries, capital formation and industrialization is possible through Saving Deposit.

Development of banking habit

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One important side of economic development of a country is to increase banking habit

of the people. Deposit helps in this aspect. If there is proper Saving Deposit, people
believe on the bank and banking habit of the people develops.
To check-up misutilization of money
Mostly our customs and habits are supported by social and religious beliefs. There is
also tendency of copying others and show the superiority in the society by buying
unnecessary and luxury items. In such society, Deposit proves itself as a tool to
check-up misutilization of money.

To support government development projects

Every underdeveloped country's government needs a huge amount of money for
development projects. The deposit collected by commercial banks, can fulfill, to some
extent, the need of money to the government for this purpose.

Co-ordination between different sectors

Deposit helps to collect capital from surplus and capital hoarding sectors. The fund
can be invested for the needy sectors i.e. priority sectors. Thus, it helps to fulfill the
gap between these two benefited by earning interest in the deposit and the needy
sectors by receiving loans and advances. Thus, deposit helps to keep good co-
ordination between different sectors.

Others
Deposit supports small savers by giving interests, helps to the development of rural
economy, protects villagers from being exploited by indigenous bankers, increases
investment incentives, provides facilities to the small farmers to purchase tools and
fertilizers etc.

1.5.2 Review of Previous Works

Shrestha (2012), in his article, "A study on deposit and credit of commercial banks in
Nepal" conclude that the credit deposit ratio would be 51. 30, other things remaining
the same. In Nepal, this was the lowest under the period of review. Therefore, he had
strongly recommended that the joint venture banks should try to give more credit
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entering new field as far as possible, otherwise they might not be able to absorb even
the total expenses.

Katuwal (2012), has carried out a research work on the topic "Mobilization of
Deposit and Investment of Nabil Bank Limited". The purpose of the study will be to
examine the relationship between the amountof total deposit and amount of total
credit granted by Nabil. The main objectives are to examine how far the interest rates
of deposits have positive relationshipwith the deposit collection of Nabil Bank, it see
the impact of interest rate of loan on the credit extended by NabilBank, study the
increasing and decreasing trend of saving deposit of Nabil Bank and compare the
performance of deposit and investment of Nabil. The analysis reveals that the banks
attraction toward saving deposit seems tobe satisfactory. But it is not stable increasing
in percentage during the studyperiod. It is continuous to increasing in the last of the
study period. The changes in percentage in all deposits are in increasing trend. But
last ofthe study period it is little fluctuate. The analysis reveals that the banks
attraction towards total deposit seems tobe satisfactory. The growth ratio of total
deposit of Nabil by analysis of 15 years period is13.48times. It means the bank is able
to maintain 13.48times growth rate. Since the growth ratio of total deposit is
13.48times, the bank must improve itsdeposit collection in high growth ratio.

Bajracharya (2013), in his article, "Monetary policy and saving deposit in Nepal"
concludes that the mobilization of domestic saving is one of the prime objectives of
the monetary policy in Nepal and for this purpose commercial banks are the vital
active financial intermediary for generating resources in the form of deposit of the
private sector and providing credit to the investors in different sectors of the economy.

Sharma (2014), in his article and journal entitled, "A Comparative Study to study the
analysis of Retail Banking" Retail banking requires a moderate level of customer
relation. While most of the banks offer the same range of service with similar
technology, the level of customer service matters the most in bringing in more
business. Dedicated, highly professional junior and middle management supported by
senior management could contribute to the success of retail banking. In retail banking,
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each product to be offered to the customer needs to be well defined, easily serviceable
and potentially profitable.

K.C. (2015), in his article and journal entitled, "A Study of Commercial Banks
Deposit and its Utilization" While a few banks specialize in wholesale banking or
retail banking, there is no longer a complete separate wholesale or retail banking in
Nepal. Most of the banks combine retail and wholesale banking operation. Some of
the banks have separate division or unit dealing corporate customers. The skill and
knowledge required carrying out the wholesale and retail banking business are
different. However, there are some common critical success factors such as customer
orientation, investment in technology etc. In the competitive environment the banks
needs to reorient and equip themselves with modern techniques of banking to face the
increasing competition.

Gautam (2016), in his article and journal entitled, "Deposit and Lending Policy of
Commercial Banks in Nepal" Consumer financing encompasses extension of loans for
customer durable goods, education loans, finance for travel, medical expenses etc.
Demand for loans for acquisition of TV, fridge, washing machines, air conditioners
etc. is on the rise. Banks also offer loans through tie ups with manufacture or
distributors of such products. Some of the factors that contribute to the growth of auto
finance are lower interest rates, poor public transport system, increasing income level
of the people, and availability of finance for even second hand cars. In fact account of
liberal financing by banks, import of passenger cars, motorcycles and scooters, has
registered good growth. (Sources: Lending Operation of Commercial Banks of Nepal
and its Impact on GDP.

Joshi (2017), in the article "Rural saving mobilization in Nepal" states that the ability
to save and the incentive to save are the two major determinants of saving. The
incentive to save as reflected in NABIL real interest rate policy can be stretched for
with profit. It is highly probable that the further increase in the growth rate of
financial saving can be materialized if a flexible policy is pursued to keep real interest
rate at a positive level.
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Shrestha (2018) has given a short glimpse on the, "Portfolio Management in

Commercial Banks, Theory and Practice". Shrestha emphasis issue in the article. The
portfolio management becomes very important for both the individual and
theinstitutional investors. Invest would like to select a best mix of invests
assetssubject to following aspects. Economic efficient and effective investment mix,
Higher return which is comparable with alternative opportunities availableaccording
to the risk class investors. In the view of above aspects following strategies are
adopted. Do not hold any single security; try to have a portfolio of differentsecurities,
To find out the risk of securities depending upon the attitude of investortoward risk,
Do not put all the eggs in the one basket to have diversified investment, To find out
the invisible assets(generally securities) having scope for betterreturns depending
upon individual characteristic like age, need, health, deposition, tax liabilities and
other liabilities. To identify of securities for investment to refuse volatility of return
andrisk.

Upadhyaya (2018) has conducted a study on "Investment Analysis of Commercial

Banks in Nepal, NSBL and EBL." The main objectives of the study are analyze the
trend of deposit, investment, loan and advance and net profit, it is analyze the
composition of investment, it is analyze the relationship between investment and net
profit, deposit and investment, assets and net profit, net profit and equity and deposit
and loan and advance and to evaluate the liquidity, efficiency, risk position and
profitability of selected banks. The major findings of this study are the overall
analysis of liquidity ratio has found that Everest Bank is more consistent to maintain
liquidity position than that of other selected bank whereas Everest bank doesn't give
priority to increase investment than to maintain liquidity. The overall study of
Activity ratio reveals that NIBL, EBL and BOK are in better position to grant loan
and advances but in terms of investment purposed Nepal SBI bank is more capable
to make investment out of total deposit. Capital adequacy ratio of BOK is higher than
other selected banks.

1.6 Methods
A systematic study needs to follow a proper methodology to achieve pre determine
objective. Research methodology may be defined as “a systematic process that is
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adopted by the researcher in studying problem with certain objective and view”. In
other word, research methodology describes the methods and process applied in the
entire aspect of the study focus of data, data gathering instrument and procedure, data
tabulating and processing and methods of analysis. It is really a method of critical
thinking by defined and redefining the problems, formulating hypothesis or suggested
solution and collecting and organizing and evaluating data, making deduction and
making conclusions.

Types of Research
This study is carried out by using both quantitative and qualitative analysis methods.
Mostly, secondary data has been used for analysis, but the discussion and personal
interview with the concerned employees of the selected bank is also used for
qualitative analysis. Hence, research design of this study is based on descriptive and
analytical method.

Population and Sample

There are 28 commercial banks in Nepal according to NRB. Out of these, NABIL is
selected to analyze working capital management. The annual financial report is the
population of the study. It is quite difficult to adopt the whole population in this study,
sample of the 5 years financial statements are taken for the study. The sample of the
study comprises financial statement, balance sheet and profit & loss a/c of NABIL.

Types of Data
For the purpose of this study, data are collected mainly from the secondary source.
 Secondary data:
The secondary data are based on the second hand information. Secondary data were
gathered much more quickly than primary. Secondary source are bulletins, websites
and newspapers of selected banks, annual reports, official document, reference
material collected from library.

Data Collection Procedure

It indicates the sources of data and how they collected. In this study data are collected
through published sources. They were collected from the correspondent offices and
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their respective websites. The annual reports of NABIL, publications, the data
regarding the profile of ABIL and other related documents were collected from
internet websites.

Data tools Analysis

The collected data will be analyzed with the help of different financial and statistical
tools.
Financial tools
Financial tools are those which are used for the analysis and interpretation of financial
data. Here in this study, the financial tools will include:
 Participation of all the deposits in the total deposit liability

Statistical tools
Statistical tools such as mean, standard deviation and coefficient are used to find out
the interpretation of data.
1.7 Limitations
 This study focuses on the analysis of deposit analysis of Nabil bank.
 The study is based on secondary data.
 The report covers the data from fiscal year 2012/13 to 2016/17.
 This study is based on the financial statements like balance sheet, profit and loss
account and cash flow statement, which provided the quantitative information.
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CHAPTER II
RESULTS AND ANALYSIS

2.1 Data Presentation

This section of the research includes the collected data of the deposit and interest rate
and rational analysis and interpretation of these data helps us in reaching a sound
conclusion. In this chapter, the analysis parts have been presented in detail. Different
financial and statistical analysis which are related to deposit are studied to evaluate
and to analyze the performance of NABIL. A heading wise presentation of the data
and analyzing and interpreting those with the help of the charts, percentage changes
etc. have been done accordingly. Different financial and statistical analysis related to
deposit is carried out and their results are presented in this chapter.

Deposit Position of NABIL

Table: 2.1 Participation of the All the Deposits in the Total Deposit Liability
(Amount in NRs)
Fiscal Year Current Saving Fixed Total Deposits
Deposits Deposits Deposits
2014/15 2850971642 4917138334 7667540778 15435650754
2015/16 2703818737 4972056618 2446845914 10122721269
2016/17 3034002537 5229723260 2252544590 10516270387
2017/18 2688966557 5994121405 2310571784 10993659746
2018/19 2799184977 7026334402 2078535135 11904054514
Note: Annual report of Nabil 2014/15 to 2018/19
Figure: 2.1 Participation of the All the Deposits in the Total Deposit Liability
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Note: Annual report of Nabil 2014/15 to 2018/19

In the above table and chart, we see that, in fiscal year 2014/015, the current deposit
account occupied 18.47 times, saving deposit account occupied 31.86 times and the
fixed deposit occupied 49.67 times in the total deposit liability. Similarly, in fiscal
year 2015/016, the current deposit account occupied 26.71 times, saving deposit
account occupied 49.12 times and the fixed deposit occupied 24.17times in the total
deposit liability.
Likewise in fiscal year 2016/017, the current deposit account occupied 28.85times,
saving deposit account occupied 49.73 times and the fixed deposit occupied
21.42times in the total deposit liability. In fiscal year 2017/018, the current deposit
account occupied 24.46 times, saving deposit account occupied 54.52 times and the
fixed deposit account occupied 21.02 times, in fiscal year 2018/019, the current
deposit account occupied 23.51times, saving deposit account occupied 59.02times and
the fixed deposit occupied 17.46 times in the total deposit liability. Remaining
percentage was occupied by the call deposit, margin deposit and deposit of certificate
etc.
Table: 2.2 Saving Deposit to Total Deposit Ratio (Amount in NRs)
F.Y. Saving deposit Total deposit Ratio
2014/15 4917138334 15435650754 0.31
2015/16 4972056618 10122721269 0.49
2016/17 5229723260 10516270387 0.50
2017/18 5994121405 10993659746 0.55
2018/19 7026334402 11904054514 0.59
Note: Annual report of Nabil 2014/15 to 2018/19
Figure: 2.2 Saving Deposit to Total Deposit Ratio
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Note: Annual report of Nabil 2014/15 to 2018/19

From the above table and trend line chart, the ratio is in the increasing ratio. In fiscal
year 2014/015, the bank has the Saving Deposit liability of 0.31-times of the total
deposit liability. In fiscal year 2014/015, the bank has saving deposit liability of 0.49-
times of the total deposit liability. In fiscal year 2016/017, the bank has saving deposit
liability of 0.50-times of the total deposit liability. In fiscal year 2017/018, the bank
has saving deposit liability of 0.55-times of the total deposit liability. In fiscal year
2018/0119, the bank has saving deposit liability of 0.59-times of the total deposit
liability.
Table: 2.3 Fixed Deposit to Total Deposit Ratio (Amount in NRs)
Fiscal Year Fixed deposit Total deposit Ratio
2014/15 7667540778 15435650754 0.50
2015/16 2446845914 10122721269 0.24
2016/17 2252544590 10516270387 0.21
2017/18 2310571784 10993659746 0.21
2018/19 2078535135 11904054514 0.17
Note: Annual report of Nabil 2014/15 to 2018/19
Figure 2.3 Fixed Deposit to Total Deposit Ratio

Note: Annual report of Nabil 2014/15 to 2018/19

Form the above table and trend line chart, the ratio is fluctuating in decreasing ratio
and by the end of the year 2014/015. In fiscal year 2014/015, the bank has the fixed
deposit of 0.50-times of the total deposit liability. In fiscal year 2015/016, the bank
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has the fixed deposit of 0.24-times of the total deposit liability. In fiscal year
20016/017, the bank has the fixed deposit of 0.21-times of the total deposit liability.
In fiscal year 2017/018, the bank has the fixed deposit of 0.21-times of the total
deposit liability. In fiscal year 2018/019, the bank has the fixed deposit of 0.17-times
of the total deposit liability.

Table: 2.4 Cash and Bank Balance to Current Deposit Ratio (Amount in NRs)
Fiscal Year Cash and Bank balance Current deposits Ratio
2014/15 812906338 2850971642 0.29
2015/16 1051819849 2703818737 0.39
2016/17 1144767483 3034002537 0.38
2017/18 970486543 2688966557 0.36
2018/19 559380614 2799184977 0.20
Note: Annual report of Nabil 2014/15 to 2018/19
Figure: 2.4 Cash and Bank Balance to Current Deposit Ratio

Note: Annual report of Nabil 2014/15 to 2018/19

From the above table and trend line chart, the ratio is fluctuating. In fiscal year
2014/015, the bank has the liquidity against current deposit is 0.29-times. In fiscal
year 2015/016, the bank has the liquidity against current deposit is 0.39-times. In
fiscal year 2016/017, the bank has the liquidity against current deposit is 0.38-times.
In fiscal year 2017/018, the bank has the liquidity against current deposit is 0.3times.
In fiscal year 2018/019, the bank has the liquidity against current deposit is 0.20-
times.
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Table: 2.5 Cash and Bank Balance to Total Deposit Ratio (Amount in NRs)
Fiscal Year Cash and Bank balance Total deposit Ratio
2014/15 812906338 15435650754 0.05
2015/16 1051819849 10122721269 0.10
2016/17 1144767483 10516270387 0.10
2017/18 970486543 10993659746 0.08
2018/19 559380614 11904054514 0.04
Note: Annual report of Nabil 2014/15 to 2018/19
Figure: 2.5 Cash and Bank Balance to Total Deposit Ratio

Note: Annual report of Nabil 2014/15 to 2018/19

From the above table and trend line chart, the ratio is fluctuating. In fiscal year
2014/015, the bank has the liquidity for total deposit in the ratio of 0.05-times. In
fiscal year 2015/016, the bank has the liquidity for total deposit in the ratio of 0.10-
times. In fiscal year 2016/017, the bank has the liquidity for total deposit in the ratio
of 0.10-times. In fiscal year 2017/018 the bank has the liquidity for total deposit in the
ratio of 0.08-times. In fiscal year 2018/019, the bank has the liquidity for total deposit
in the ratio of 0.04-times against total deposit liability.
 20

2.2 Analysis of Results

Table: 2.6 Balance with NRB to Current and Saving Deposit (Amount in NRs)
Fiscal Year Balance with NABIL Current + Saving Deposit Ratio
2014/15 512066310 7768109976 0.07
2015/16 506674844 7675875355 0.07
2016/17 892746559 8263725797 0.11
2017/18 606694594 8683087962 0.07
2018/19 389705047 18930388916 0.02
Note: Annual report of Nabil 2014/15 to 2018/19

Figure: 2.6 Balance with NRB to Current and Saving Deposit

Note: Annual report of Nabil 2014/15 to 2018/19

From the above table and trend line chart, the ratio has been maintained the same
except in fiscal year 2014/015 the balance has been increased by 0.07-times. In fiscal
year 2015/016, the bank has maintained the balance with NRB against current and
saving account deposit account liabilities in the ratio of 0.07-times.
 21

In fiscal year 2016/017, the bank has maintained the balance with NRB against
current and saving account deposit account liabilities in the ratio of 0.07-times. In
fiscal year 2017/018, the bank has maintained the balance with NRB against current
and saving account deposit account liabilities in the ratio of 0.11-times. In fiscal year
2018/019, the bank has maintained the balance with NRB against current and saving
account deposit account liabilities in the ratio of 0.07-times.

Table: 2.7 Saving Deposit to Fixed Deposit Ratio (Amount in NRs)

Year Saving Deposit Fixed Deposit Ratio
2014/015 4917138334 7667540778 0.643
2015/016 4972056618 2446845914 0.043
2016/017 5229723260 2252544590 0.232
2017/018 5994121405 2310571784 0.095
2018/019 7026334402 2078535135 0.038
Note: Annual Reports of 2014/15 to 2018/19

Figure: 2.7 Saving Deposit to Fixed Deposit Ratio (in NRs)

Note: Annual Reports of Nabil 2014/15 to 2018/19

From the above table and figure it interprets the relationship between the saving
deposit and fixed deposit. The ratio is fluctuating in order. In the fiscal year 2014/15
the ratio of saving deposit to fixed deposit is 0.643 times. In the fiscal year 2014/15
the saving deposit to fixed deposit is 0.0.32 times. Similarly, the saving deposit to
fixed deposit of the fiscal year 2016/17, 2017/18 and 2018/19 are 0.232 times 0.495
 22

times and 0.038 times respectively. The figure shows that the ratios are fluctuating
year by year and they aren’t constant over any year.

Table: 2.8 Saving Deposit to Current Deposit (Amount in NRs)

Year Saving Deposit Current Deposit Ratio
2014/15 4917138334 2850971642 1.72
2015/16 4972056618 2703818737 1.84
2016/17 5229723260 3034002537 1.94
2017/18 5994121405 2688966557 2.23
2018/19 7026334402 2799184977 2.51
Note: Annual Reports of Nabil 2014/15 to 2018/19

Figure: 2.8 Saving Deposit to Current Deposit (in NRs)

Note: Annual Reports of Nabil 2014/15 to 2018/19

From the above table and trend line chart, the ratio is in the increasing ratio. In fiscal
year 2014/15, the bank has the saving deposit liability of 1.72-times of the total fixed
deposit. In fiscal year 2015/16, the bank has saving deposit liability of 1.84 times of
the total fixed deposit. In fiscal year 2016/17, the bank has saving deposit liability of
1.94 times of the total fixed deposit. In fiscal year 2017/18, the bank has saving
deposit liability of 2.23 times of the total fixed deposit. In fiscal year 2018/19, the
bank has saving deposit liability of 2.51 times of the total fixed deposit.
 23

Table: 2.9: Current deposit to Fixed Deposit (Amount in NRs)

Year Current deposit Fixed deposit Ratio
2014/15 2850971642 7667540778 3.72
2015/16 2703818737 2446845914 1.11
2016/17 3034002537 2252544590 1.35
2017/18 2688966557 2310571784 1.16
2018/19 2799184977 2078535135 1.35
Note: Annual Reports of 2014/15 to 2018/19

Figure: 2.9 Current Deposits to Fixed Deposit

Note: Annual reports of Nabil 2014/15 to 2018/19

From the above table and trend line chart, the ratio is in the fluctuating order. In
fiscal year 2014/15, the bank has the current deposit of 3.72-times of the total fixed
deposit. In fiscal year 2015/16, the bank has current deposit of 1.11 times of the total
fixed deposit. In fiscal year 2016/17, the bank has current deposit of 1.35 times of the
total fixed deposit. In fiscal year 2017/18, the bank has current deposit of 1.16 times
of the total fixed deposit. In fiscal year 2018/19, the bank has current deposit of 1.35
times of the total fixed deposit.
 24

2.3 Findings
For the study of saving deposit of NABIL, the thirteen years data have been
considered. The analysis has been done according to the nature and quality of the
available data. Some simple financial as well as statistical tools have been used to
reveal the entire position of deposit and credit of NABIL.
 In the analysis of deposit position of NABIL, it is observed that deposit
position percentage change is normal except in the financial year 2014/15. In that
year, the percentage change was in negative i.e. the total deposit was decreased by
4.37 times in that year.
 The analysis revealed the poor condition of the bank in the credit position. The
percentage change in the credit position was in fluctuating trend during the period
of study. In the year 2016/17, the total credit was decreased by 14.44 times where
as in 2017/18, the total credit increased by 9.92 times. Similarly, the total credit
was increased by 12.54 times in the year 2018/19.
 The analysis revealed that the bank’s position towards the current deposit
account is not satisfactory. The rate of increment is not uniform during the period
study. Even the percentage change was negative in the year 2014/15 and 2016/17
i.e. -0.83 times and -6.41 times respectively. The highest percentage change was
in the year of 2018/19. In this year, the current deposit was increased by 37.26
times. In the analysis of saving deposit, the trend was increasing throughout the
period of study except in one year i.e. in 2016/17. But the increasing rate was not
uniform. The rate was highest in the year 2017/18 i.e. 22.19 times and lowest in
the year 2016/17 i.e. -0.09 times. In case of percentage change in fixed deposit,
the percentage was increasing from the beginning of the period of study till
2014/15. However, from onward till the end of the period of study, the percentage
was decreasing. The highest percentage change was in 2014/15 i.e. 28.39 times
and the negative highest percentage change were -35.98 times in 2017/18. The
deposit was less increasing and more decreasing. Therefore, the banks attraction
towards fixed deposit was seemed unsatisfied.
 25

CHAPTER III
SUMMARY AND CONCLUSION

3.1 Summary
In this chapter, summary and conclusion of the research as well as presented
separately. After summarizing and concluding the research, are suggested for the
effective Saving Deposit of Nepalese Commercial Banks. Commercial banks
contribute to the process of capital formation by converting dispersed saving into
meaningful capital investments in order to aid industry, trade, and other sectors for
the economic development of anation. It should not be forgotten that a country could
hardly achieve its goal of economic development with a strong capital base.
Commercial banks play apivotal role in performing such base for financial and
economic development by way of Saving Deposit. Deposits are the obligation of the
commercial banks. So commercial banks must allocate the funds in different loan and
advances and investment. Here proper efficiency in mobilizing the deposits has to be
maintained. So the purpose of this study is to know the efficient utilization of the
accumulated deposits.

Besides this, to fulfill the primary objectives, the following secondary objectives also
have been considered: An attempt has been made to fulfill the objectives of the
research work in chapter second. In this chapter all the secondary data are compiled,
processed and tabulated as per the necessity and figures; diagrams are also used to
present it clearly. In the chapter three, the summary and conclusion are included. The
summary of the study, conclusion drawn from the study are presented and necessary
suggestions are given to the concern authorities, sample bans as well as Nepalese
commercial banks for the betterment of Saving Deposit. This study suffers from
different limitations; it considers one bank for the sample of total commercial banks
in Nepal. Time and resources are the constraints of the study. Therefore, the study
 26

may not be generalized in all cases and accuracy depends upon the data collected and
provided by the organizations.

3.2 Conclusion
It can be concluded from the observance and analysis of above data thecommercial
bank should move as per the direction given by the central bank. Bankshould have
optimum policy to collect the deposit in various accounts. Deposit isthe major organ
of commercial banks to live in the industry. Higher the deposithigher will be the
chance of the mobilization of working fund and profit there to.Bank should invest in
different sector very carefully, while advancing loanbecause loan is the blood of
commercial banks for survival. If commercial banksdo not apply sound saving deposit
it will be in great trouble in future to collectit in time. Hence the possibility of
bankruptcy there too. Bank should invest theirfund in various portfolios after the deep
study of the project to be safe from beingbankruptcy. If banks concentrate the
investment in few organizations, there is highchance of default risk. Diversifications
are indeed need to all the business housesbut it has seen immense importance to
commercial banks. Diversification ofinvestment of collected deposit is very much
important to commercial bank than other business housesbecause banks use the
money to other people for the benefit of its own. And lastlyis can be said that
banks are important for the nation. It helps in the capitalformation to the
nations, which is the most important element for the economicgrowth of the country.

Capital helps to solve the various problems arising in the country. And
fixeddeposit controls the measure economic activity of the nation. Therefore, it is
veryimportant for the policymakers to adopt appropriate policy with calculated
interestrate so that large capital can be mustered at very low capital cost encouraging
theindustrial and commercial activity eventually leading to better economic
growth,socio-economic development, employment opportunity, etc. In overall it can
beconcluded that the role of NABIL in saving deposit of commercial banks
haspositive impact and NABIL bank also helps in this process for countries growth.
 27

Based on analysis, findings, issue and gaps of the study, following suggestions or
recommendations can be advanced to overcome weakness, inefficiency and to
improve present fund mobilization of NABIL. The bank should initiate a good step
for maintaining the increasing trend of deposit collection as well as mobilization of it.
The bank should launch several customer-oriented programs to raise the deposits in
satisfied rate. For this purpose, the foremost step to be take is the bank can increase
the interest rate on deposit and further it can launch several latest technologies in the
banking field like Credit Cards, e-banking etc. The bank should increase the total
deposit in further more rate than that of current to maintain its current growth rate of
9.42 times. For this purpose, the bank should be committed towards the satisfaction of
the valued customers by providing modern banking facilities. To increase the credit
distribution in satisfied rate, the bank should launch various credit programs under the
priority sector credit programs.
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www.nabilbank.com
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