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By: Naresh Devkota Himalaya Higher Secondary School Koteshwor 35 Kathmandu HSEB Registration no:
A project Report Submitted to: Department of Marketing Higher Secondary Education Board
In the partial fulfillment of the requirement for the Practical Examination of HSEB Grade XII
RECOMMENDA
This is to certify that the project report submitted by: Naresh Devkota
Has been prepared as approved by Himalaya Higher Secondary School in the prescribed format of the HSEB. This report is for warded for examination.
Letter of Approval
The examination committee has approved this report Himalayan Bank Limited
Submitted by Naresh Devkota for the requirement of practical examination of HSEB grade XII Internal Examiner External Examiner Name: . Name: . Principal/Head of Department Name: .
Acknowledgement Chapter 1 Introduction.. 1.1.1 Background of store 1.1.2 Objectives of the store 1.1.3 Significance of the study 1.1.4Limitation of the study 4
1.2 Review of literature 1.3 Methodology 1.3.1Nature and source of data 1.3.2Population and Sample 1.3.3 Data collection Technique Chapter 2 Data Analysis and Major Findings 2.1 Data presentation, Analysis and Interpretation 2.2 Major finding of the report Chapter 3 3.1 Conclusions 3.2 Recommendations Bibliography
1.7
The study of LD has great significance. Loan plays a vital role in the development of the economic condition of nation & bank may also stand its reputation in competitive market by providing loan to good customers. Loan helps to various sectors for using new modern techniques to increment the productivity & quality of various sectors. For e.g. loan dispersing to farmer, industrialist & other needed person who is directly engaged in productive sector. So, ineffective loan back them to produce qualitative goods other products in low cost. Therefore the banks operational activities consists of business loan, industrial loan, consortium finance & social loan etc. Besides it has to be invested in deprived sector as an integral part of the total loan disbursement. So, study of loan disbursement has made me aware of things of great interest
1.6.
Every task has its own limitation. Beyond limitations or excess it won't be suitable, convenient or efficient. Limitation means not excess than required. If the study of any subject matter exceeds then its motive or the facts create improper scrutiny. Study of specific subject matter for scrutiny of both the positive & negative aspects without extending it should be done. I being the student related to this report have submitted strictly based on secondary data & it includes LD period of last five fiscal years from 2055/56 to 2059/60. The data has been collected from different source of publications, journal published in different data's, interview, conversing with the staff of the HBL. This report has been based only from the 'banking side' and is carried out as per the requirement of the course of study of BBS 3rd year under the faculty of management, Tribhuvan University. This study examines only the Loan Disbursement of HBL & much information was not available on the ground of privacy due to internal rules of the HBL, Thamel. And this study includes by far the latest data available to the general public i.e. 11 th Annual Report (1059/60)ss.
ii.
Discount & collection of bills Investments Letter of credit (L.C) Remittance of fund Bank guarantee Teller Machine (ATM) d. e. Any branch banking Credit cards
f. 24 hrs banking g. Safe deposit lockers etc Providing above services HBL has helped their customer to experience different banking services.
1.4
Study of the specific subject matter for scrutiny of both the positive and negative aspects without extending it should be done. I have tried my level best to survey on the report on the study of loan disbursement on the Himalayan Bank Limited. The various sources like interviewing, conversing about data's collection, journals published in different publication with staffs and members has helped me in their best way of performance with the supportive advice has lead me to complete this report and beside this my teacher guided me to complete me this report. It's a submission report of loan disbursement on the Himalayan Bank Limited which consists of strictly based on secondary data & includes the period of time for last five fiscal years from 2055/56 to 2059/60.
Chapter 2
DATA PRESENTATION AND ANALYSIS
Nepal is one of the least developed country under the rank of poverty line. The bank in Nepal plays a primitive role for the economic development of Nepal under which no other organizations are likely to be substituted at all. Himalayan Bank limited has vitalized its economic activities to help the people who are anguished in extreme pair of need. Himalayan Bank Limited and other commercial bank advances, loans & undertake investment against gold and silver, companys shares and debentures bills of exchange, promissory notes etc. Bank branches that have been brought under intensive banking programs can provide loans on group guarantee without any security while issuing loans. Commercial bank are requested to maintain a minimum of cash balance or liquid balance interest is charged according to fixed rates on loans provided be commercial to depositors and interest paid by borrowers constitute banks earnings.
Table No. 4 Year 2057 2058 2059 2060 2061 Total Consolidated 7224727 9015347 9557137 10844599 13081713 49723523 Percentage 14.53 18.13 19.22 21.81 26.31
Figure no. 1
The above table clearly reveals the growing contribution of the whole NBL. In the year 2057, NBL has forwarded loan up to 14.53% & this percentage rise to 18.13% in the year 2058. The year 2059 observed the growths up to 19.22%, 21.81% & 26.31% respectively of advances are made by NBL respectively. Thus, it is clear that the role of NBL in the country is very appreciable because there is increment in advance of loan every year. This growing trend is presented in graph above.
Table No. 5
Particular Overdrafts Long term loan Import loan Working capital Letter of credit Purchase & discount Short term loans Pre- export loans Higher purchase Below loans poverty 38.08 15.82 21.63 5.92 3.77 1.91 3.59 2.49 1.14 line 3.75 % In degrees 137.08 56.95 77.868 21.312 13.572 6.876 12.924 8.964 4.104 13.5
5.292
1.548
Relatively to 1st figure some in 2nd year of 2053/54 has ups & downs in some loan pays out or disbursement. The higher percent rate is of overdraft (38.08)% then of long term (15.82) %, the more than it is import loan (21.63) % then comes working capital (5.92)% letter of credit (3.77)% , below poverty line loan (3.75)%, short term loan (3.59)%, pre- export loan (2.49)%, purchase & discount (1.91)%, Fixed deposited receipt expenditure loan (1.47)%, higher purchase (1.14)% and credit card consist of (0.43)% out of total 100% It can be shown in pie chart as below. Figure no. 2
Overdrafts Long term loan Import loan Working capital Letter of credit Purchase & discount Short term loans Pre- export loans Higher purchase Below poverty line loans Fixed deposit receipt expenditure loan Credit card
3.75
1.47 0.43
38.08 15.82
Table No. 6
Particular Overdrafts Long term loan Import loan Working capital Letter of credit Purchase & discount Short term loans Pre- export loans Higher purchase Below loans poverty line 30.71 11.78 26.18 7.81 2.60 4.62 7.41 2.62 1.41 2.92 % In degrees 110.556 42.40 94.24 28.116 9.36 16.632 26.67 9.43 5.076 10.512
1.63
5.86
0.31
1.116
Loan disbursement having related to different aspects & fields will have certain fluctuation in them. Over this period of year 2056/57 has highest percentage rate of overdraft (30.71)% then of long term (11.78) %, the more than it is import loan (26.18) % then comes working capital (7.81)% letter of credit (2.60)% , below poverty line loan (2.92)%, short term loan (7.41)%, preexport loan (2.62)%, purchase & discount (4.62)%, Fixed deposited receipt expenditure loan (1.63)%, higher purchase (1.41)% and credit card consist of (0.31)% out of total 100%
Overdrafts
Figure no. 3
Import loan Working capital
Letter of credit
Higher purchase
Fig: 3
Fixed deposit receipt expenditure loan Credit card
2.62 Composition of loans in % of table form for the2.92 of 2057/58 year 2.6 7.81 26.18 11.78 4.62 7.41 1.63 0.31
1.41
30.71
Table
Particular Overdrafts Long term loan Import loan Working capital Letter of credit Purchase discount Short term loans Pre- export loans Higher purchase Below poverty line loans Fixed deposit receipt expenditure loan Credit card & 22.58 12.60 28.26 5.28 1.16 4.03 % In degrees 81.28 45.36 101.736 19.008 4.176 14.508
2.59
9.324
0.27
0.972
Loan disbursements consists of same aspects of fields of pays outs or disbursed or invest but the ups & downs always create. It doesnt become the monotonous increasing or decreasing.
The highest percentage rate in the year 2057/58 is of import loans 28.26% then that of overdraft 22.58% the least then it is long term loan 12.60% then comes short term loan 7.07%, working capital 5.28% purchase & discounts 4.03%, pre- export loans 3.15%, below poverty line loan 2.67%, fixed deposited receipt expenditure loan 2.59%, higher purchase 2.44%, letter of credit card 1.16% & credit card consist of 0.27% out of the total 100% .It can be shown in the Pie chart as below. Figure no.4
Overdrafts Long term loan Import loan Working capital Letter of credit Purchase & discount Short term loans Pre- export loans Higher purchase Below poverty line loans Fixed deposit receipt expenditure loan Credit card
28.26
12.6
Table No. 8
Particular Overdrafts Long term loan Import loan Working capital Letter of credit Purchase discount Short term loans Pre- export loans Higher purchase Below poverty line loans Fixed deposit receipt expenditure loan Credit card & 22.64 12.60 24.25 7.14 1.19 2.74 % In degrees 81.50 45.36 87.3 25.70 4.284 9.864
3.18
11.448
0.25
0.9
Loan disbursements having related to different aspects & fields have certain fluctuation in them. Like is the year 2057/58 the highest percentage rate is of Import loan 24.25% then that of Overdraft 22.64% then least is long term 12.60% & then comes after short term loan 9.74% working capital 7.14% fixed deposited receipt expenditure loan 3.18% Pre- export loan 3.06%, Purchase 7 discount 2.74% Below poverty line loan 2.16%, Higher purchase 2.01% letter of credit 1.19% & credit card consists of 0.25% out of the total 100%. Ups and downs is always created. It can be shown in the pie- chart below.
Figure no.5
Overdrafts Long term loan Import loan Working capital Letter of credit Purchase & discount Short term loans Pre- export loans Higher purchase Below poverty line loans Fixed deposit receipt expenditure loan Credit card
2.01
3.06 2.74 7.14 1.19 24.25 9.74 2.16 3.18 22.64 12.6 0.25
Fig: 5
Table No.9
Particular Overdrafts Long term loan Import loan Working capital Letter of credit Purchase discount Short term loans Pre- export loans Higher purchase Below poverty line loans Fixed deposit receipt expenditure loan Credit card & 24.61 12.99 24.76 8.45 2.83 2.81 % In degrees 88.6 46.76 89.14 30.42 10.19 10.12
1.94
6.98
0.32
1.15
As above Loan Disbursement consisting of different variables has fluctuation in different fields. Increase and decrease will always occur. Like in the year the highest percentage rate is of import loan i.e. (24.76)% then of overdraft (24.61)%, then it is long term loan (12.99)%, then comes working capital (8.45)%, short term loan (7.79)%, higher purchase (3.94)%, letter of credit (2.83)%, purchase & discount (2.81)%, below poverty line loans (2.42)%, pre- export loans (2.06)%, fixed deposit receipt expenses loan (1.94)% & credit card consists of (0.32)% of the total 100%. It can be shown in the pie chart as below.
Figure no. 6
Overdrafts Long term loan Import loan Working capital Letter of credit Purchase & discount Short term loans Pre- export loans Higher purchase Below poverty line loans Fixed deposit receipt expenditure loan Credit card
%
Table No. 10
Fiscal year Overdraft Long term loan Import loan Working capital Letter of credit Purchase discount bills 55/56 38.08 15.82 21.03 5.92 3.77 & 1.91 56/57 30.71 11.78 26.18 7.81 2.60 4.62 57/58 22.58 12.60 28.26 5.28 1.16 4.03 58/59 22.64 12.60 24.25 7.14 1.19 2.74 59/60 24.61 12.99 24.76 8.45 2.83 2.81
Below poverty 3.75 line loan Fixed deposited 1.47 expenditure loan Total credit card 0.43
1.63
2.59
3.18
1.94
0.31
0.27
0.25
0.32
In Overdraft section in HBL in first year 2055/56 it includes 38.08%then decrease to 30.71% in the year 2056/57 and again decreases to 22.58% in the year 2057/58. But, it slightly increases to 22.64% in the year 2058/59 and finally in the year 2059/60 it increases to 24.61% of total 100%. In long term loan segment fluctuation has been taken part i.e. at first it includes 15.82% in the year 2055/56 which means in decreasing percentage order then 11.78 % in the year 2056/57 and increases to 12.60% slightly in the year 2057/58 which remains constant in the fiscal year 2058/59 and slightly increases to 12.99% in the year 2059/60. Import loan includes 21.63% in the year 2055/56 then it started to increase or in a moving range to 26.18%, 28.26%, in the year 2056/57, 2057/58, respectively and decreases to 24.25% and recently it has reached to 24.76% in the year 2059/60. Working capital shows increment & decrement fluctuation in percentage out of 100% i.e. it has 5.92% in the year 2055/56 then it increases to 7.81% in the year 2056/57, then again decreases to 5.28% in the year 2057/58 and increases to the year 2058/59 to 7.14% and it has reached to 8.45% in the year 2059/60. The fluctuation in letter of credit has been found. 3.77% in the year 2055/56 and decreases to 2.60% & 1.16% in the year 2056/57 & 2057/58 respectively and increases to 1.19% slightly in the year 2058/59 and to 2.83% in the year 2059/60. Purchase & discount bills also sometimes fluctuate highly & sometimes slightly. It includes 1.91% in 2055/56, further increases to 4.62% in 2056/57 & slightly declines to 4.03% in 2057/58, declines at 2.74% in the year 2058/59 and increases to 2.81% in the year 2059/60. In another segment, short term loan has also got both orders i.e. increasing & decreasing. Sometimes slightly change has been occurred. In the year 2055/56 it has reached to 3.59% which again increases to 7.41% in the year 2056/57 with much difference. Then slightly decreases to 7.07% in the year 2057/58 and in the year 2057/58 it increases to 9.74% and has decreased to 7.79% in the year 2059/60 with much percentage out of total 100%. In pre export loan it has got alternate changes i.e. first in 2055/56 it is 2.49% and slightly decreases to 2.62% in the year 2056/57 and then increase to 3.15% in the year 2057/58, slightly decreases to 3.06% in the year 2058/59 and decreased to 2.06% in the year 2059/60 out of total 100%. Higher purchase segments include very least amount of percent in comparison to above mentioned segments. In the first year 2055/56 it is 1.14%, in 2056/57 1.41%, 2.44% in 2057/58, 2.01% in the year 2058/59 and at last 3.94% in the year 2059/60. The segment
below poverty line loan in the year 2055/56 includes 3.75% and then 2.92%, 2.67%, 2.16%& 2.42% in the year 2056/57, 2057/58, 2058/59 &2059/60 respectively out of total 100%. In the same way as above segments, fixed deposited receipt expenditure loan segment has included 1.47% in 2055/56, 1.63% in 2056/57, 2.59% in 2057/58, 3.18% in 2058/59 at last 1.94% in the year 2059/60 out of total 100% and the last the next segment total credit card includes 0.43% in the year 2055/56, 0.31% in the year 2056/57, 0.27% in the year 2057/58, 0.25% in the year 2058/59 and according to the recent data in the year 2059/60 it has reached up to 0.32% out of total 100%. Fluctuation has occurred in every segment as mentioned above.
Graphically,
Figure no.8
Increase/ Decrease
56
57
58
59
20 55 /
20 56 /
20 57 /
20 58 /
Description: From the study of above table thoroughly, it is found out that the loan disbursement has a much fluctuation in increasing and decreasing ratio. At first in 2056/57 it has got 13.50% of base year with an increment ratio and decreases to 1.65% in year 2057/58 but in year 2058/59 it sharply
20 59 /
60
increased to 91.50% and in 2059/60 it reaches to 96.36%. The result shows that the bank has reached to its target objective of increasing disbursement volume constantly during the following years to fulfil its policy assignment. Therefore it revealed from the scrutiny that LD is at first growing then declining and then sharply increasing. This type of result pulls to pay and concrete serious attention towards loan disbursement while making any new plans, policies & strategies. LD average has reached to 26,73,744.
Table No.14
S.N. Fiscal years Loan Amount In NRs 000 Increase/ Decrease 1 2 3 4 5 2055/56 2056/57 2057/58 2058/59 2059/60 5245975 7224727 9015347 9557137 10844599 37.72 71.85 82.18 106.72
Graphically,
Figure no. 9
Increase/ Decrease -
Description: While going through above table thoroughly, it is found out that the loan disbursement has got fluctuation slightly based on base year and haphazardly increasing in the trend line based on the base year. At first in 2056/57 it covers 37.72% then covers 71.85%,82.18% and 106.72% in the year 2057/58, 2058/59 and 2059/60 respectively. The trend line is based on the base year shows quite fast fluctuation of increment. The result shows that the bank has reached to its target objective of increasing disbursement volume constantly during the following years to fall it policy assignment but needs to overcome the shortcomings coming up to the bank related to its assignment. Some of the statistical tools has been used & might be effective to analysis it deeply. Even though the result is positive attention towards the more incensement then the above of the loan disbursement should be given to obtain new plans, policies & strategies. Loan Disbursement average has reached to 8377557.
20 56 /5 20 7 57 /5 20 8 58 /5 20 9 59 /6 0