CHAPTER 1

INTRODUCTION
1.1 Background of the study:
As per three years course curriculum for Bachelors of Business Administration at Institute of
Technology & Management (ITM) Dehradun, India requirements students to undergo an
extensive internship program for a period of two months. During the course of internship,
students should work as an employee in the selected organization.
To build up a right track for challenging jobs and career, programs like internship is a great
exposure to real working conditions. Its offers practical approach rather then conventional
theories and concepts. It provides an opportunity for students to carve a way to achieve their
future goals and aspirations.
The study is aimed to provide students with a Varity of skills and ideas applied in a
corporate environment. It actually prepares them to face real organizational challenges before
hand. Internship program requires students to offer their fresh, innovative ideas to the selected
organization, there by working with an increased level of maturity and professionalism.
To fulfill these criteria, I, Manoj sharma, the author of this report choose to work with Nepal
Bank limited, a first joint venture bank in Nepal. I am very much interested to learn about a
service industry. I especially chose to learn about the emerging trend of Nepal bank limited. I
wanted to study about current service provided by Nepal bank limited, whether the customers,
are satisfied or not. And what additional service would be valued by the customers.

1.2 Bank:
A bank is an institution that deals in money and its substitutes and provides other financial
services. Banks accept deposits and provide loans as well as other services and facilities such as
SMS Banking, ABBS service, ATM card, drafts etc.
According to World Bank, Banks are the financial institutions that fund in form of
deposits repayable on demand or in short notice. There are 4 classes of bank which are
Commercial bank i.e. denoted by A, development bank i.e. B, Financial companies i.e. C, Micro
credit development banks i.e. D.

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 1.3 Commercial Bank
A commercial bank is a type of financial intermediary and a type of bank. It is a bank that
provides checking accounts, savings accounts, and money market accounts and that accepts time
deposits. It does the processing of payments by way of telegraphic transfer, EFTPOS, internet
banking, or other means, it issues bank drafts and bank cheque , it accepts money on term deposit
, it lends money by overdraft , it provides documentary and standbyletter of credit, guarantees,
performance of bonds, securities underwriting commitments and other forms of off balance sheet
exposures and it does the cash management and treasury services etc. There are 31 commercial
bank in Nepal.
Table no: 1 list of commercial bank in Nepal

SN Name of bank Estd. Year Location

1 Nepal Bank Ltd. 1937 Kathmandu
2 Rastriya Banijya Bank Ltd. 1966 Kathmandu
3 Agriculture Development Bank Ltd. 1968 Kathmandu
4 NBL Bank Ltd. 1984 Kathmandu
5 Nepal Investment Bank Ltd. 1986 Kathmandu
6 Standard Chartered Bank Nepal Ltd. 1987 Kathmandu
7 Himalayan Bank Ltd. 1993 Kathmandu
8 Nepal SBI Bank Ltd. 1993 Kathmandu
9 Nepal Bangladesh Bank Ltd. 1994 Kathmandu
10 Everest Bank Ltd. 1994 Kathmandu
11 Bank of Kathmandu Ltd. 1995 Kathmandu
12 Nepal Credit and Commerce Bank 1996 Siddharthanagar,
Ltd. Rupandehi
13 Lumbini Bank Ltd. 1998 Narayangadh,Chitawan
14 Nepal Industrial & Commercial Bank 1998 Biaratnagar,Morang
Ltd.

15 Machhapuchhre Bank Ltd. 2000 Pokhara, Kaski

16 Kumari Bank Ltd. 2001 Kathmandu
17 Laxmi Bank Ltd. 2002 Birgunj, Parsa
18 Siddhartha Bank Ltd. 2002 Kathmandu
19 Global Bank Ltd. 2007 Birgunj, Parsa

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 20 Citizens Bank International Ltd. 2007 Kathmandu
21 Prime Commercial Bank Ltd 2007 Kathmandu
22 Sunrise Bank Ltd. 2007 Kathmandu
23 Bank of Asia Nepal Ltd. 2007 Kathmandu
24 DCBL Bank Ltd. 2008 Kamaladi, Kathmandu
25 NMB Bank Ltd. 2008 Babarmahal, Kathmandu
26 Kist Bank Ltd. 2009 Anamnagar, Kathmandu
27 Janata Bank Nepal Ltd. 2010 New Baneshwor,
Kathmandu
28 Mega Bank Nepal Ltd. 2010 Kantipath, Kathmandu
29 Commerz & Trust Bank Nepal Ltd. 2010 Kamaladi, Kathmandu
30 Civil Bank Ltd. 2010 Kamaladi, Kathmandu
31 Century Commercial Bank Ltd. 2011 Putalisadak , Kathmandu

1.4 A brief history of Commercial Banks in Nepal

Nepal's first commercial bank, the Nepal Bank Limited, was established in 1937. The
government owned 51 percent of the shares in the bank and controlled its operations to a large
extent. Nepal Bank Limited was headquartered in Kathmandu and had branches in other parts of
the country. There were other government banking institutions. Rastriya Banijya Bank (National
Commercial Bank), a state-owned commercial bank, was established in 1966. In the mid-1980s,
three foreign commercial banks opened branches in Nepal. The Nepal Arab Bank was co-owned
by the Emirates Bank International
Limited (Dubai), the Nepalese government, and the Nepalese public. The Nepal Indosuez Bank
was jointly owned by the French Banque Indosuez, Rastriya Banijya Bank, Rastriya Beema
Sansthan (National Insurance Corporation), and the Nepalese public. Nepal Grindlays Bank was
co-owned by a British firm called Grind lays Bank, local financial interests, and the Nepalese
public. The economic liberalization policy adopted in the mid 1980s brought about a surge in the
banking industry. A large number of banks were established and the number continues to grow
even today

Investment in Loan
An arrangement in which a lender gives money to a borrower and the borrower agrees to
return the property or repay the money, usually along with interest at some future points in time
that is called loan. A bank or any financial institutions invest their money in giving loan that is
called investment in loan. In any business essentially, loan is taken for conducting business
activities and to earn profits by utilizing it properly in efficient and effective way.

3
Depository Management
Deposit refers to the all amount of money of public which is kept by the bank after opening
various types of accounts in bank. Depository management concern with the management of the
all deposits of the public. Deposit is the main sources of fund for bank because bank utilize that
all deposit fund in various activities such as investment in loan.

Types of deposit
The money which is saved by i.e. people, businessman, corporation etc. in saving a/c, fixed
a/c, current a/c is called deposit. Accepting deposit is the main source of the bank and bank
invest that amount to different productive sector. Among different function of bank accepting
deposit is the main function.
There are mainly two types of deposit which are:

a) Fixed deposit:
The other name of fixed deposit is time deposit. The money deposited for certain period of
time with a fixed rate of interest on deposit amount till the maturity date. Interest rate of fixed
deposit is higher than other deposit a/c. which encourage customer to strengthen their
deposit and get negotiated interest rate. Fixed deposit is the contract between and bankers.
In this a/c money is refunded to customer after the maturity period and interest rate is higher
with long time deposit. Fixed deposit a/c is opened like other current a/c and saving a/c but
there are some limitation that a customer and banker should contract.

b) Saving a/c:
This a/c is opened by general savers. This a/c promotes saving which is generally opened
by middle class people so they can collect money for future needs. This a/c has interest but
not as much as fixed a/c. There are some rules and regulation of Nepal Bank limited while
opening a/c. customer should fill up form and deposit minimum required balance, submit
two recent photos, photocopy of citizenship, signature for literate and thumbprint for illiterate
is required to verify cheque written by a/c holder in future. Bank provide voucher to a/c
holder for deposit. After accepting the necessary document bank open the a/c and then
cheque is provided to the a/c holder. After seven days ATM card is also provided to the a/c
holder.
There are different types of saving a/c of the NBL which are :

a) Nari Bachat :
NBL bank launched Nari Bachat for female which encourage saving money for future use.

4
Feature:
Minimum balance: - Rs.500
Interest rate: - 5% p.a. payable on monthly minimum balance
ATM charge: - Rs. 200
Cheque: - Free
Inward remittance :- Free
Facility:- 25% discount on travel Cheque, gift voucher of Rs. 500.

b) NBL Lok bachat:-

Lok bachat a/c is opened by general people who want to do transaction by ATM card.
Feature:
Minimum balance:- Rs. 0
Interest rate:- 2%
ATM charge :- Rs. 200

c) NBL Edusave :-
This a/c is only for student.
Minimum balance: - Rs.500
Interest rate: - 3.5% p.a.
ATM charge: - Rs. 200
Cheque: - Free
Inward remittance :- Free
d) NBL bachat (normal saving):-
Minimum balance: - Rs.5000
Interest rate: - 3.% p.a.
ATM charge: - Rs. 200
Cheque: - Free
Inward remittance :- Free
e) NBL Jestha bachat:-
This a/c is only for people who are above 50.
Minimum balance: - Rs.500
Interest rate: - 5% monthly.
ATM charge: - Rs. 200
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Cheque: - Free
Inward remittance :- Free
f) NBL bachat:-
This is special a/c of NBL bank.
Minimum balance: - Rs.50000
Interest rate: - 6.5% p.a.
ATM charge: - Free
Cheque: - Free
Inward remittance :- Free
Facility:- ABBS free
g) NBL bal bachat.
This a/c is for below 16 years.
Minimum balance: - Rs.500
Interest rate: - 3.5% p.a.

CHAPTER 2
Company Profile
Introduction To NBL

Nepal Bank Limited, The first bank of Nepal was established in November 15, 1937 A.D (Kartik,
30, 1994). It was formed under the principle of Joint venture (Joint venture between govt. &
general public). NBL's authorized capital was Rs. 10 million & issued capital Rs. 2.5 million of
which paid-up capital was Rs. 842 thousand with 10 shareholders. The bank has been providing
banking through its branch offices in the different geographical locations of the country.

Corporate Vision:
"Pioneer Bank with complete banking solution"

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 Mission Statement: New
Network for inclusion: Use bank's network to increase its reach all over the country from urban
areas to rural areas and help in improving the lifestyle of rural population and in turn become the
bank of choice of corporate, medium businesses and rural market

Enhancing the value: To employees, shareholders, government and customers

World class banking services: Provide world class banking services by achieving excellence in
customer service and adopting high level technology standards.

Values Statement: SPIRIT

Segmented business approach: For risk management and enhancement of efficiency

Partnership: With all stakeholders including the Government, employees, shareholders and
customer

Innovation: Of business areas and processes for providing Advanced banking services, and
enhance competitiveness

Responsiveness: responding to the changing need of the market/society/business on timely basis

Integrity: Uphold trustworthiness and business ethics in the business process

Total banking solutions: To cater the need of all sections of society

Objectives:
Nepal Bank Limited has the following objectives:

Focus on building the positive net worth and meeting minimum capital requirement over
the coming five years.
Focus on increasing the customer base and market share.
Maximize the potential/efficency of bank's staff.
Focus on minimizing the risk associated with the business.
Focus on providing the world class business solutions.
Focus on increasing the sustainable profit.

Shareholding Composition

S.N Ownership Percent

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 1 Government of Nepal 62.21

2 General Public 37.79

Total 100

NBL Network Overview

Region wise branches No of Branches

Kathmandu Region 29

Biratnagar Region 33

Birgunj Region 24

Pokhara Region 22

Nepalgunj Region 18

Total no of Branches* 126

No. of Staff: 2356 (As of May 3, 2016)

No. of computerized branches: 126

Branches under single computer network: 126

Services Provided By Nepal Bank Limited:

It accepts various types of deposits and securities of the private
Properties.
It provides loans to the individual for their personal purpose as well as to the industries,
trading sectors and others to finance their projects.
It is providing credit facilities in the form of master card, credit card, Diners club and visa cards.
Now a day it also provides loans to purchase automobiles, housing, education loan and others
which payment is made in installment.
Telephone banking is also provided by Nepal Bank Limited.
It provides all kinds of facilities in very low rate of service charges.

8
 It also issues all types of bank guarantees and stand by the letter of credits in favour of Nepalese
and foreign beneficiaries.
It handles both import and export documentary credits.
Nepal Bank Ltd also provide ATM (Automated Teller Machine) service to facilitate its
customers and help them with cash quick withdraw, checking their account balance etc.

Products of Nepal Bank Limited:

1. Working Capital Loan:

Working Capital Loan is Overdraft / Short term loans which are mainly used to finance the
day-to-day business activities. Basically, this loan will help the borrowers to build up their
inventory and receivables to a desired level, against which the loan will be desired.

2. Fixed Capital loan:

Fixed capital loan is such type of loan which is provided by the bank to acquire fixed assets.
Generally, this is a long term loan for acquiring or purchasing machinery, equipment, land and
building. The tenure of repayment is cash flow based.

3. Import loan:
The loan provided mainly for our international and local trade transactions through letter of
credit to import the goods in the form of trust receipt or time loan, banks acceptance etc. NBL
bank facilities us to import using our extensive banking network around the global.
.
4. Export Loan:
Nepal Bank Limited have different products to finance on the finding requirement for completion
of various stages of export processes such as pre-shipment loan, post-export loan (post-shipment
loan), negotiation / documentary bill purchase etc. Such credit facility can be availed in foreign
currency as well as local currency.

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 5. Hire Purchase
The bank can finance the purchase of vehicles, exclusively used for commercial purpose.
6. Project Finance:
For any feasible project, the bank are committed to take it up for funding from fixed capital to
working capital loan- right from the establishment stage which may include financial services
like letter of credit and guarantee.
7. Mortgage Loan:
The loan provided by the bank for any purpose by mortgaging land and building is known
as Mortgage Loan.
8. E-banking:
In keeping, with the commitment to be the bank of 1 choice Nepal Bank Limited is
constantly moving towards enhancing customer services by providing enchanced products and
services. Along the same live, NBLis pleased to provide with NBL net, their internet banking
system, NBLtele, and their telephone banking system.

11. Card products:

NBL started issuing credit cards since 1993.S Todays, NBL prides on being the service provider
with widest range of card services ranging from issuance of local currency visa credit cards, visa
debit cards, visa prepaid cards, master cards, credit cards in local currency and US dollars, US
dollar prepaid cards.

The Organization Structure of NPAL BANK LTD.

BRANCH MANAGER

ASSISTANT BRANCH MANAGER

Cash section Journal Section

Cashier

Cash Officer 10

Current/Saving Remittance
Gold / Assistants
Silver I.C.C. I.C Exchange
I.C.C.
1 5Guard
Security
Branch
Security 21 Assistants
In
1Loan
Peon
charge 1Administrati
1Sweeper
1Assistants
In
1Driver
Peon
charge 2Day
Assistants
Book 1 Current
Assistants
1In
2Peon
C.C.
charge Remittance
21 Assistants
In charge 12 Peon
C.C. 11 In
Assistant
Bills
charge 4 Assistants I.C.C.
charge I.C.C.
Saving 21Checker
2InPeon Fixed
From the above chart it is clear that the organizational structure is very simple. It
has board of director at top and after managing director it has two officers under
it.

Services Provided by NBL

NBL is providing the banking and various other services to its members. It provides banking
services for savings and credit under various headings as per the requirement of the members.
Apart from the banking services, it provides the facilities of short-term insurance and various
short-term trainings to the members. The various types of services provided by this co-operative
are characterized under the following motives.
Saving - For self dependency
Credit/Loan - For self employment
Short-term Insurance - For security
Short-term Trainings - For self confiden
This co-operative provides the banking services as savings and credit/ loan under various
headings. The rate of interest for these heads of savings and loan are different according to their

11
nature and time period. The below given tables show a clear view of the banking services
provided by this co-operative and current rate of interest on them.

Table 1.2
Types of Savings accepted by NBL with Interest Rate

S.N. Heads of Savings Interest Rate

1. Compulsory Saving 8%
2. Daily Saving 8%
3. Educational Saving 8%
4. General Saving 5%
5. Muddhati Saving 1 year 6%
6. 2 year 7%
7. 3 year 8%
8. Festival Saving 6%
9. Special Saving 4%
10. Provident Fund Saving 8%
11. Members Relief Fund Saving 8%
Source: Annual Report of NBL (2068)

Table 1.3
Types of Loans provided by NBL with Interest Rate

S.N. Heads of Loan Interest

Rate
1. Agricultural Loan 15 %
2. Business Loan 15 %
3. Housing Loan 15 %
4. Land Purchase Loan 15 %
5. Social Functions Loan 15 %
6. Medical and Emergency Loan 5%
7. Muddhati Loan Add 2 %
8. Mortgage Free Loan 15 %
9. Government Gas Plant Loan 15 %

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 10. Educational Loan 15 %
11. Abroad Employment Loan 15 %
Source: Annual Report of NBL

Objectives of the Study

This report is prepared through the direct visit of the field and analysis of the data and
information thereby received. The main objective of preparing this study is the fulfillment of
partial requirement for the degree of Bachelor of Business Administration. Beside this objective,
analyzing the financial status of the firm through various tools and techniques of ratio analysis
are also its objective. However, the major objectives of this study can be listed as follows.
To analyze the relationship between cash/bank balance and total deposit, liquid assets and
total deposit, total credit and total deposit, saving deposit and total deposit, cash/bank
balance and saving deposit, investment and saving deposit, net profit and total assets, net
profit and total deposit of the firm.
To analyze the profitability and liquidity of the firm.
To study the strength, weakness, opportunities and threats (SWOT) analysis on the basis
of the data of past five fiscal years.

Financial structure:

a) Total loan Granted to Total Deposit

Years Total Deposit Total Loan Ratio Per (%)
2012/13 382,796,399.46 178,960,268.48 0.4675 46.7508
2013/14 457,387,048.03 249,626,453.14 0.5458 54.5766
2014/15 384,195,551.83 344,458,872.05 0.8966 89.6572

Balance Sheet
As at 16 July 2015 (32 Ashadh 2067)
Amount in NPR

13
 Capital & Liabilities Current Year Previous Year
1. Share Capital 2,000,000,000 1,600,00,000
2. Reserves and Funds 1,439,205,130 1,519,880,537
3. Debentures and Bonds 500,000,000 500,000,000
4. Borrowings - -
5. Deposits 37,611,202,274 34,682,306,863
6. Bills Payables 216,158,879 31,847,391
7. Proposed Dividend 189,473,600 162,096,954
8. Income Tax Liabilities - 10,163,115
9. Other Liabilities 761,084,730 823,836,963
Total Capital & Liabilities 42,717,124,613 39,330,131,823

ASSETS Current Year Previous Year

1. Cash Balance 514,223,569 473,759,695
2. Balance with Nepal Rastra Bank 2,604,790,901 2,328,405,821
3. Balance with Banks / Financial 747,476,214 246,361,272
Institutions
4. Money at Call and Short Notice 308,840,000 1,170,793,650
5. Investments 8,444,910,165 8,710,690,646
6. Loan Advances and Bills Purchase 27,980,628,760 24,793,155,269
7. Fixed Assets 1,061,870,757 952,196,395
8. Non - Banking Assets - 22,694,688
9. Other Assets 1,054,384,247 632,074,387
Total Assets 42,717,124,613 39,330,131,823

Research Methodology
Research Design
This is an analytical case study of Nepal Bank Limited saving deposits. With regards to the data
gathering instrument, the two sources are used.

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Source of Data
Main source of data is the annual reports of Nepal Bank Limited which was taken as secondary
source of data and some other publications were also taken. Primary data were collected from
interviews with the officials of the organization wherever necessity were felt.

Tools and Techniques of Study

The data collected and observed from the study are tabulated after adjusting necessary amounts
of each to overhead. Different types of charts, diagrams, figures, tables as well as mathematical
formulae are used to analyze the results. Various calculated results are compared with each other
to interpret the result. However for the analysis of the data following financial tools are used:

I. Liquidity Ratio
A. Cash Reserve Ratio (CRR)
B. Liquid Assets to Total Deposit Ratio

II. Activity Ratio

A. Total Credit to Total Deposit Ratio

II. Saving with others Ratio

A. Total Deposits of NBL
B. Saving Deposits of NBL
C. Saving to Total Deposit Ratio
D. Investment to Saving Deposit Ratio
E. Cash and Bank Balance to Saving Deposit Ratio

IV. Profitability Ratio

A. Profit to Assets Ratio
B. Profit to Total Deposit Ratio

Limitation of the Study

This study is simply conducted for the fulfillment of partial requirement of BBA program. As
such, this study is not free from limitations. Some of them are explained as follows.

This study is mainly based on secondary data collected from newspaper, annual report
and other related sources. Research based on secondary data is not far from limitations
due to inherent characters.
This study is based on only a period of 5 years i.e. from 2059/60 to 2063/64 and hence
conclusion drawn confines only to the above period.

15
 This study is related only with solvency position, profitability position and capacity of the
firm in mobilizing its funds in investment and credit.
This study is related to only one co-operative ie NBL
All the required data are not available due to some technical reasons.

Chapter 3
Financial Statement Analysis
INTRODUCTON:-
Financial Statement Analysis will help business owners and other interested people to
analyse the data in financial statements to provide them with better information about
such key factors for decision making and ultimate business survival.

Financial Statement Analysis is the collective name for the tools and techniques that are
intended to provide relevant information to the decision makers. The purpose of the FSA
is to assess the financial health and performance of the company.

FSA consist of the comparisons for the same company over the period of time and
comparisons of different companies either in the same industry or in different industries.

Financial Statement Analysis

Purpose:

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 To use financial statements to evaluate an organisations

Financial performance

Financial position

Prediction of future performance

To have a means of comparative analysis across time in terms of:

Intercompany basis (within the company itself)

Intercompany basis (between companies)

Industry Averages (against that particular industrys averages)

To apply analytical tools and techniques to financial statements to obtain useful

information to aid decision making.

Financial statement analysis involves analysing the information provided in the

financial statements to:
Provide information about the organisations:

Past performance

Present condition

Future performance

Assess the organisations:

Earnings in terms of power, persistence, quality and growth

Solvency

Tools of Financial Statement Analysis

The commonly used tools for financial statement analysis are:
Financial Ratio Analysis

Comparative financial statements analysis:

Horizontal analysis/Trend analysis

Vertical analysis/Common size analysis/ Component Percentages

Financial Ratio Analysis

Financial ratio analysis involves calculating and analysing ratios that use data from one,
two or more financial statements.

17
 Ratio analysis also expresses relationships between different financial statements.

Financial Ratios can be classified into 5 main categories:

Profitability Ratios

Liquidity or Short-Term Solvency ratios

Asset Management or Activity Ratios

Financial Structure or Capitalisation Ratios

Market Test Ratios

Profitability Ratios
3 elements of the profitability analysis:
Analysing on sales and trading margin

focus on gross profit

Analysing on the control of expenses

focus on net profit

Assessing the return on assets and return on equity

Profitability Ratios
Gross Profit % = Gross Profit * 100

Net Sales
Net Profit % = Net Profit after tax * 100

Net Sales
Or in some cases, firms use the net profit before tax figure. Firms have no control
over tax expense as they would have over other expenses.
Net Profit % = Net Profit before tax *100

Net Sales
Return on Assets = Net Profit * 100

Average Total Assets

Return on Equity = Net Profit *100

Average Total Equity

Liquidity or Short-Term Solvency ratios

Working Capital = Current assets Current Liabilities

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 Current Ratio = Current Assets

Current Liabilities
Quick Ratio = Current Assets Inventory Prepayments
Current Liabilities Bank Overdraft

Financial Structure or Capitalisation Ratios

Debt/Equity ratio = Debt / Equity

Debt/Total Assets ratio = Debt *100

Total Assets
Equity ratio = Equity *100

Total Assets
Times Interest Earned = Earnings before Interest and Tax

Interest
Market Test Ratios
Based on the share market's perception of the company.

For example: Price/Earnings ratio

The higher the ratio, the higher the perceived quality of the earnings by the share market.

Earnings per share = Net Profit after tax

Number of issued ordinary shares

Dividends per share = Dividends

Number of issued ordinary shares

Dividend payout ratio = Dividends per share *100

Earnings per share

Price Earnings ratio = Market price per share

Earnings per share

Limitations of Financial Statement Analysis
We must be careful with financial statement analysis.

Strong financial statement analysis does not necessarily mean that the
organisation has a strong financial future.

Financial statement analysis might look good but there may be other factors that
can cause an organisation to collapse.

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 CHAPTER 4
DATA PRESENTATION AND ANALYSIS

2.1 Presentation and Data Analysis

Showing the data in a clear form is called presentation and description of such data is called data
analysis. Presentation and analysis of data in right way is necessary in research work to make the
report accepted and valid. It must be easy, simple and clear to understand.

Deposit
Deposits are the funds collected from account holders for the security and transaction motives by
bank or financial institutions. It is the amount of money or valuable item that is received into a
bank and financial institutions as security against possible loss. Deposit provides most of the raw

20
materials for lending loan. The volume of deposit funds will use for creating income. So that
deposit plays a vital role in the growth and operation of bank and financial institution. Deposit
may be grouped in several types but here we study about three types of deposit.

Fixed deposit
Fixed deposit is deposit on which the customer is required to keep a fixed amount of money for a
specific period. The money cannot be withdrawn without substantial penalty to the depositor
before a specific date. Depositor plays a higher interest on such deposit. Since the aware of the
repayment of such fixed deposits, the bank or financial institution is free to make the use of this
money for granting loan and advance or investment.

Saving Deposit
Saving Deposit have no specific maturity, date on which the funds need to be withdrawn or
reinvested. Any amount up to the amount deposited. The financial institution pays interest to
depositors against their deposit.

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 Cash Reserve Ratio (CRR)
This ratio measures the availability liquidity or immediate funs of the co-operative to meet its
unanticipated calls on deposit (i.e. current, saving, fixed, call deposit and other). Dividing cash
and Bank balance of the firm by total deposits of the firm gives the Cash Reserve Ratio which is
expressed in percentage.
I.e. CRR = Cash and Bank Balance / Total Deposit
.
Table 1.4
Position of Cash Reserve Ratio (CRR) of NBL
Fiscal Year Cash/Bank Balance Total Deposit Ratio
2059/60 6,383,638 25,990,740 24.56 %
2060/61 6,909,488 27,510,836 25.12 %
2061/62 8,626,384 41,141,740 20.97 %
2062/63 12,167,029 51,667,048 23.55 %
2063/64 13,055,970 65,959,800 19.79 %
Average 22.80 %
Source: Annual Report of NBL

Figure 1.2
Cash Reserve Ratio (CRR) of NBL

Cash Reserve Ratio (CRR) of NBL

70,000,000
60,000,000
50,000,000
40,000,000
Cash/Bank Balance
Amount (Rs) Total Deposit Ratio
30,000,000
20,000,000
10,000,000
0
059/60 060/61 061/62 062/63 063/64
Fiacal Year

Based on the above table and Figure, it can be found out that the cash reserve of the co-operative
has been extended up to 24.56 %,in the fiscal year 2059/60. The CRR is increased to 25.12 % in
the fiscal year 2060/61, but fell to 20.97 % in the fiscal year 2061/62. It again rose to 23.55 % in
the fiscal year 2062/63 with the total deposit of Rs. 51,667,048 and cash/bank of Rs. 12,167,029.
In the fiscal year 2063/64, the CRR again fell to 19.79 %, but the amount of total deposit is
increasing every year which signifies the low withdrawal operation of the customers. The

22
Average Cash Reserve Ratio of the co-operative for the last 5 years as shown by the table is
22.80.

Liquid Assets to Total Deposit Ratio

Liquid assets signifies the cash in hand, foreign currency on hand, balance with NRB, balance
with domestic banks, balance held abroad and call deposits. This ratio shows the percentage of
total deposit maintained as liquid assets divided by total deposit. Liquid assets to total deposit
ratio is expressed in percentage.
I.e. Liquid Assets to Total Deposit = Liquid Assets / Total Deposit

The following table shows the liquid assets deposit ratio of NBL for the last five fiscal years.

Table 1.5
Position of Liquid Assets to Total Deposit of NBL
Fiscal Year Liquid Assets Total Deposit Ratio
2059/60 6,383,638 25,990,740 24.56 %
2060/61 6,909,488 27,510,836 25.12 %
2061/62 8,626,384 41,141,740 20.97 %
2062/63 12,167,029 51,667,048 23.55 %
2063/64 13,055,970 65,959,800 19.79 %
Average 22.80 %
Source: Annual Report of NBL

Figure 1.3
Cash Reserve Ratio (CRR) of NBL

Position of Liquid Assets to Total Deposit of NBL

100,000,000
80,000,000
60,000,000
Amount (Rs) Total Deposit
40,000,000 Cash/Bank Balance

20,000,000
0
059/60 060/61 061/62 062/63 063/64
Fiscal Year

23
The above table and Figure shows the position of liquid assets and total deposit of NBL for the
last 5 years. In the light of the table, it is clear that the co-operative has raised the liquid assets up
to 25.12 % in the fiscal year 2060/61 with the liquid asset of Rs. 6,383,638 out of the total
deposit of Rs. 25,990,740. The table also shows the increasing trend of liquid assets as
6,383,638; 6,909,488; 8,626,384; 12,167,029; 13,055,970 with the total deposits of 25,990,740;
27,510,836; 41,141,740; 51,667,048; 65,959,800 in the fiscal years 2059/60, 2060/61, 2061/62, ,
2062/063 and 2063/064 respectively. The average of liquid assets to total deposit ratio for the last
5 fiscal year is shown as 22.80%.

Total Credit to Total Deposit Ratio

This ratio measures the extent to which co-operatives are successful to mobilize the total deposits
of the firm on the credits. This ratio can be calculated by dividing total credit by the total deposit
of the firm which is shown in percentage.
I.e. Total Credit Deposit = Total Credit / Total Deposit
Table 1.6
Total Credit to Total Deposit Ratio of NBL
Fiscal Year Total Credit Total Deposit Ratio
2059/60 26,978,143 25,990,740 103.80 %
2060/61 31,282,869 27,510,836 113.71 %
2061/62 40,732,197 41,141,740 99.00 %
2062/63 49,763,005 51,667,048 96.31 %
2063/64 65,908,588 65,959,800 99.92 %
Average 102.55 %
Source: Annual Report of NBL

Figure 1.4
Total Credit to Total Deposit Ratio of NBL

Total Credit to Total Deposit Ratio of NBL

80,000,000

60,000,000

40,000,000
Total Credit Total Deposit
Amount (Rs)
20,000,000

0
059/60 060/61 061/62 062/63 063/64
Fiscal Year

24
The table and figure shows 113.71 % as the highest total credit to total deposit ratio in the fiscal
year 2060/61 with the total credit amounting to Rs. 31,282,869 and total deposit Rs. 27,510,836.
On the other hand, 96.31 % is the lowest ratio in the fiscal year 2062/63 with total credit Rs.
49,763,005 and total deposit Rs. 51,667,048. The table also presents the total credit to total
deposit ratio as 103.80 %, 113.71 %, 99.00 %, 96.31 % and 99.92 % in the fiscal years 2059/60,
2060/61, 2061/62, , 2062/063 and 2063/064 respectively.. For these five fiscal years, the average
total credit to total deposit ratio is calculated as 102.55 %. Moreover, the amount of total credit is
shown higher than the amount of total deposit in the fiscal years 2059/60 and 2060/61. It is the
result of credit issued from the amount of share capital too.

Deposit of NBL
The position of the total deposit of the firm is one of the important topics to be analyzed. Total
deposit trend refers to the total deposits from the public or customers in various accounts during
a certain period of time. The table given below shows a clear view of the trend of total deposit of
NBL for the last 5 fiscal years from 2059/60 to 2063/64.
Table 1.7
Position of Total Deposits of NBL
Fiscal Year Total Deposit Amount Change % Change
2059/60 25,990,740 - -
2060/61 27,510,836 1,520,096 5.85 %
2061/62 41,141,740 13,630,904 49.55 %
2062/63 51,667,048 10,525,308 25.58 %
2063/64 65,959,800 14,292,752 27.66 %
Source : Annual Report of NBL

25
 Figure No. 1.6
Position of Saving Deposit of NBL

Saving Deposit of NBL

50,000,000
40,000,000
30,000,000
Amount (Rs) Saving Deposit
20,000,000
10,000,000
0
059/60 060/61 061/62 062/63 063/64
Fiscal Year

The above table and figure shows the trend of saving deposit of the firm for last five fiscal years.
On the basis of the table, the highest growth rate of saving deposit in the last five fiscal years is
69.03 % in the fiscal year 2063/62 whereas the lowest growth rate is in the fiscal year 2060/61
having the negative growth rate of 9.85 %. The trend of saving deposit of the firm for the last
five fiscal year are (9.85) %, 55.48 %, 19.83 % and 69.03 % in the fiscal years 2060/61
2061/062; 2062/063 and 2063/64 respectively.

Saving Deposit to Total Deposit Ratio

This ratio calculates the percentage of saving deposit to total deposits of the given period of time.
It can be calculated by dividing the saving deposit by total deposit of the firm for the given year.
This ratio is expressed in percentage.
I.e. saving deposit to total deposit ratio = Saving deposit / Total deposit.

The table given below shows the saving deposit to total deposit ratio of NBL for the last five
fiscal years from 2059/60 to 2063/64.

Table No. 1.9

26
 Saving Deposit to Total Deposit Ratio of NBL
Fiscal Year Saving Deposit Total Deposit Ratio in %
2059/60 15,718,000 25,990,740 60.48 %
2060/61 14,170,000 27,510,836 51.51 %
2061/62 22,031,918 41,141,740 53.55 %
2062/63 26,399,930 51,667,048 51.10 %
2063/64 44,624,606 65,959,800 67.65 %
Average 56.86 %
Source: Annual Report of NBL

Investment to Saving Deposit Ratio

The Investment to Saving Deposit Ratio measures the extent to which the financial institutions
are successful in mobilizing the saving deposit on investment in the productive and profitable
sector. This ratio can be calculated when investment is divided by the saving deposit of the firm.
It is expressed in percentage.
I.e. Investment to saving deposit ratio = Investment / saving deposit.
The following table shows the position of investment and saving deposit of NBL in the last five
fiscal years from 2059/60 to 2063/64.

Table 1.10
Investment to Saving Deposit Ratio of NBL
Fiscal Year Investment Saving Deposit Ratio in %
2059/60 187,741 15,718,000 1.19 %
2060/61 148,741 14,170,000 1.05 %
2061/62 151,141 22,031,918 0.69 %
2062/63 79,941 26,399,930 0.30 %
2063/64 88,767 44,624,606 0.20 %
Average 0.69 %
Source: Annual Report of NBL

Figure 1.8
Investment to Saving Deposit Ratio

27
 Investment to Saving Deposit Ratio of NBL
50,000,000
40,000,000
30,000,000
Amount (Rs) Investment Saving Deposit
20,000,000
10,000,000
0
059/60 060/61 061/62 062/63 063/64
Fiscal Year

The above table and figure gives a clear view on the position of investment out of the total
saving deposit of the firm in the last five fiscal year of observation. It shows the highest
investment to saving deposit ratio as 1.19 % in the fiscal year 2059/60 whereas the lowest ratio
as 0.20% in the fiscal year 2063/64. The ratio is continuously falling within these five fiscal year
being 1.19 %, 1.05 %, 0.69 %, 0.30 % and 0.20 % in the fiscal years 2059/60, 2060/61; 2061/62;
2062/063 and 2063/064 respectively. The average investment to saving deposit ratio as shown by
the table is 0.69 % which shows quite less amount of investment in comparison to the saving
deposit.

Profit to Total Deposit Ratio

The Profit to Total Deposit Ratio gives the relation between the net profit and total deposit of the
firm. It is better for a firm if this ratio is higher which means higher amount of profit in respect to
total deposit of the firm. This ratio is calculated by dividing the net profit by total deposit and it
is expressed in terms of percentage.
I.e. Profit to Total Deposit Ratio = Net Profit / Total Deposit

The table presented below gives a clear cut view on the relation between the net profit and total
deposit of NBL for the last five fiscal years from 2059/60 to 2063/64.

Table 1.11
Profit to Total Deposit Ratio of NBL

28
 Fiscal Year Net Profit Total Deposit Ratio in %
2059/60 514,757 25,990,740 1.98 %
2060/61 181,422 27,510,836 0.66 %
2061/62 (851,075) 41,141,740 (2.07) %
2062/63 74,832 51,667,048 0.14 %
2063/64 452,998 65,959,800 0.69 %
Average 0.28 %
Source: Annual Report of NBL

Figure 1.9
Profit to Total Deposit Ratio

Profit to Total Deposit Ratio of BISCOL

80,000,000
60,000,000
40,000,000
Amount (Rs) Net Profit
20,000,000 Total Deposit
0
-20,000,000
059/60 060/61 061/62 062/63 063/64
Fiscal Years

The above table and figure showing the position of net profit and total deposit for the last five
fiscal years of observation also gives the profit to total deposit ratio of the firm. With regard to
the table, 1.98 % is the highest ratio whereas (2.07) % is the lowest ratio of the period in the year
2061/62. In the fiscal year 2059/60, the ratio as shown by the table is 1.98 % which in turn fell to
0.66 % in the fiscal year 2060/62. Afterwards in the fiscal year 2061/060, the ratio fell to (2.07)
% which again rose to 0.14 % and 0.69 % in the fiscal years 2062/63 and 2063/64 respectively.
The table also shows the average profit to total deposit ratio of 0.28 % for the period of
observation.

2.1.1 Deposit Structure of NBL

29
Deposits are accepted by NBL under various headings from the customers as per the provision of
the firm and permitted by NRB. The firm had diversified the deposits to various acceptable
headings for the provision of optimum facilities to the customer and its members. Moreover, the
firm is being quite successful in collecting the deposits under such headings. The major headings
under which the firm collects the deposit and amounts collected under them in the last five fiscal
years of observation from 2059/60 to 2063/64 are presented in the below given table.

Table 1.12
Deposit Structure of NBL under various headings
Deposit Heads 059/60 060/61 061/62
General Saving 9,501,597 8,662,239 10,685,541
Muddhati Saving 5,844,301 5,059,500 7,594,000
Compulsory Saving 7,228,240 9,228,367 12,308,947
Educational Saving 463,623 731,952 1,120,581
Festival Saving 787,174 1,058,759 1,363,087
Special Saving 371,927 448,479 830,281
Others 1,793,878 2,321,540 7,239,303
Total 25,990,740 27,510,836 41,141,740

Contd
062/63 063/64 Total Per. (%) Degree
15082097 20,882,653 64,814,127 30.53 % 109.920
8534301 9,357,801 36,389,903 17.14 % 61.720
15266454 18,854,358 62,886,366 29.63 % 106.650
1743940 2491,676 6,551,772 3.09 % 11.110
2260394 2,778,844 8,248,258 3.89 % 13.990
1650720 2,676,440 5,977,847 2.82 % 10.140
7129142 8,918,028 27,401,891 12.91 % 46.470
51667048 65,959,800 212,270,164 100 % 360 0
Source : Annual Report of NBL
The information and data presented by the above table can be more clearly expressed in the form
of pie chart as follows.

Figure 1.10
Deposit Structure of NBL

30
In the light of above presented table and pie chart showing the total amount of collection in the
five fiscal years of observation from 2059/60 to 2063/64, the fact can be drawn out that the firm
has the highest amount of collection under the heading of General Saving with 30.53 % of the
total amount of collection. This percentage amounts to Rs. 64,814,127. On the other hand, the
firm has the lowest amount of collection under the heading of special saving with 2.82 % of total
collection which amounts to Rs. 5,977,847.In the same way, the firm has the amounts of
collection as 30.53 %, 29.63 %, 17.14 %, 12.91 %, 3.89 %, 3.09 % and 2.82 % under the saving
heads of General Saving, Compulsory Saving, Muddhati Saving, Others, Festival Saving,
Educational Saving and Special Saving respectively in descending order. From the observation,
the researcher had found that, the Educational Saving, Festival Saving and Special Saving are the
newer concept for the customers which had resulted in lower amount of collection in comparison
to other heads.

2.2 Results of the Study

With the objective of fulfilling the partial requirement for the degree of BBA and achieving the
practical experience in the field, the researcher had carried out the study of Nepal Bank Ltd.
located at Janakpur of Dhanusha district. Direct interview, questionnaire, field visit and various
other methods are used by the researcher during the study. After the completion of the study,
various facts and results are drawn out. Some of the major findings under the Strength,
Weakness, Opportunities and Threats (SWOT) analysis of the study are listed below.

Strength Points
The firm is successful in mobilizing its funds in optimum level which signifies the
success of the firm.

31
 The firm has the increasing trend of deposit collection in each year which shows the trust
of its members and public upon it.
It provides various types of trainings to its employees and members for the purpose of
financial, economic, intellectual and spiritual development.
It has established the regional banking inter-committee so that it can access to the
customers of each and every region with its services.
It provides the banking facilities to its members according to their requirements under the
direction of NRB.

Weakness Points
This co-operative is operated in a limited operation area in context with the national
level.
It charges higher rate of interest on the loan granted by it.
It lacks the modernization on its operation and some of its official procedures.
It has low trend of profit in comparison to other sorts of the study.
Its investment rate in the productive sector is quite low.
The cash and bank balance maintained by the firm is quite low in comparison to total
deposit and saving deposit which may prove to be harmful for its goodwill.

Opportunities
Extending the branches of the firm to various other regions would prove to be great
opportunity for the firm to earn more of goodwill and profit.
The further provision of short termed insurance in much more effective way may make
the firm an identical co-operative in the market.
The continuous providing its members and officers with different trainings would be a
plus point for its goodwill.
The higher level of goodwill earned by the firm up to now would be the path of success
for the newer products to be launched by the co-operative.

Threats
In case the firm fails to satisfy the needs and wants of the customers, it would lead the
firm to dissolution.
It has to effectively over watch the laws and provisions of the government in effect and
those going to be in effect to act in accordance to it.
The failure in modernizing the systems of its official performance may be proved a great
threat for it.

CHAPTER 5
32
 SUMMARY AND CONCLUSION

3.1 Conclusion: study of this is an essential because all the decisions are based on customer
services of NBL Janakur branch. I have tried to fulfill the objectives of the study as much as
possible. Although the internship period was only for 45 days it was a great experience to be part
of corporate world that is infinitely growing in our country. The internship period not only helps
students gain experience but it is also helping the organization to understand the upcoming
generation of human resources.
I have worked in customer services & Financial Analysis department it is noticed that the branch
has specialized its customer services activities in a respectable manner. Hence, overall
performance of the bank in customer services can be analyzed positively because branch has a
good numbers of clients. Therefore conclusion of the study can be presented that the branch is
fully engaged in attracting customers.

3.2 Summary:
NBL Bank is one of the commercial Bank that has to provide every banking service
that are expected and needed by the customers. This bank provide various facilities like
NBLl Net, NBL Bachat, Debit, Credit, ATM card facilities
NBL Bank also brings out various schemes of services from time to time to attract and
satisfy their valuable customers. NBL Bank is in good profit position financially and is
able to provide good incentives to its employees. Providing the international banking
standard, its service cost has become high for the customers

33
 Key Skill and Attitudes learnt:

-Learnt about different property documents like land ownership certificates, blue prints, four
boundary disclosures and others.
-As I started working with ROS, we learnt how to deal with clients, knowing their requirements,
their eligibility criteria followed by lending procedures and documentation. It becomes very
important to understand psychology of various clients and analyzing their ability to pay back the
loan.
-Importance of oral and communication skills.
-Writing skills were equally important to prepare credit financial reports and sanction letters for
loan disbursement.

3.3 Feedback for college / university/organization

a) Feedback to the organization:

Banking industry is the one of the high competitive industries. New banks are coming up in the
market in increasing number. And all banks are providing almost similar products and services.
To address to this crucial problem, NBL should opt for introducing new policies that is different
from what market is offering.

NBL is the most preferred bank when it comes to talking consumer loans. So, there is a greater
scope for business expansion in consumer lending. Also, the bank may introduce some novel
deposit schemes that will delight customers. NBL is more easy going on its marketing functions.
However, it should not over look that even the best product needs marketing. These are many
people who are unaware of numerous facilities provided by NBL bank.
Product: Focus on creating innovative products and schemes that will appeal to a wider
mass of audience.
Price: Deposit interest rates provided by NBL are the least. It should increase deposit
rates a little higher. And the loan interest rates be lowered; it should be brought closer to competitors.

34
 Place: Plan an expanding the branch network and the facilities. There are many untouched
markets which can be served profitably. That includes rural areas as well. They call for serious
development efforts.
Promotion: Promotion of services can further attract a pool of deposits and loan assets that will
be of much value to Nepal.
Expansion of locker facilities: This particular branch also provides locker facilities to its
customer, known as vault. Customer demand for locker is very high at the branch. In response to high
demand, they should plan to expand the facility as soon as possible.

Place: Plan an expanding the branch network and the facilities. There are many untouched
markets which can be served profitably. That includes rural areas as well. They call for serious
development efforts.
Promotion: Promotion of services can further attract a pool of deposits and loan assets that will
be of much value to Nepal.
Expansion of locker facilities: This particular branch also provides locker facilities to its
customer, known as vault. Customer demand for locker is very high at the branch. In response to high
demand, they should plan to expand the facility as soon as possible.

35
 Chapter 6
BIBLIOGRAPHY

Books
Agrawal, G.R., (2005).Project management in Nepal. Kathmandu: M.K. Publishers and
Distributors Pvt. Ltd.

Bhandari, D.R., (2003),Banking and Insurance, Kathmandu, Aayush Publication.

Dangol, R.M. and Prajapati, K.P., (2057 B.S.),Accountant for Financial Analysis and Planning,
Kathmandu, Taleju Publication.

Shrestha, K.P. and Lamichhane, L.P. (2061 B.S.),Project Management, Kathmandu, Asmita
Books Publishers and Distributors.

Reports
NBL
Annual Report (ASHAD-31-2070)

NBL
Annual Report(ASHAD -31-2071)

36