research report on deposit mix
TRANSCRIPT
A Field Visit Report on
Deposit Mix of Everest Bank Limited
Submitted By:
ISHWOR LAMICHHANE
P.U Regd No: 065-2-2-01341-2007
Exam Roll No: 250345
Submitted To:
KANTIPUR VALLEY COLLEGE
Faculty of Management
Purbanchal University
IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE
DEGREE OF
BACHELOR OF BUSINESS ADMINISTRATION (BBA)
June, 2010
Date: July, 2010
Approval Sheet
This is to certify that Field Visit
Submitted by:
Mr. Ishwor Lamichhane
Entitled:
“Deposit Mix of Everest Bank Limited”
has been prepared as approved by the college in the prescribed format of the
Faculty of Management, Purbanchal University. The report is forwarded for
evaluation.
……………………….. ……………………….. Satya Bdr. Shrestha Rudra Pd. Ghimire Supervisor Co-ordinator ……………………….. ……………………….. Jeetendra Man Amatya Pushpa Man Amatya Vice Principle Principal
COPYRIGHT
All rights reserved. No part of this report may be reproduced, stored or transmitted in any form, or
by any means, without the prior permission of the authors. No patent liability is
assumed with respect to the use of the information, contained herein. Although
every precaution has been taken in the preparation of this report, the authors
assume no responsibility for error or omission.
Date: June, 2010
Kantipur Valley College
PURBANCHAL UNIVERSITY
FACULTY OF MANAGEMENT
Kantipur Valley College
DECLARATION Me, the undersigned declare that this report entitled is a result of my own study/
research carried out in the year 2010. It has not been previously submitted to any
other University or any other examination(s).
……………………………… Signature
Ishwor Lamichhane
BBA Kantipur Valley College Redg. No.065-2-2-01341-2007
ACKNOWLEDGEMENT
My outmost gratitude goes to the Purbanchal University for including this field
work report program in the syllabus of BBA V semester, which I think is very
helpful in developing practical knowledge of the student. This report aims to
introduce a banking institution like Everest Bank Limited contributing to
enhance the commercial banking system in Nepal.
I have selected “Deposit Mix of Everest Bank” as a topic and Everest Bank
Limited as the organization for the assignment.
I have tried my best to present the subject matter in a most simple and easily
understandable form. The persons who remained source of inspiration and
encouragement to present this report deserve to be acknowledged in the right
earnest. I am very much indebted to my respectable teacher, Mr. Satya Bahadur
Shrestha, who has significantly contributed to my academic career and guided to
present this report.
I am also thankful to the staff of Everest Bank Limited who directly or indirectly
helped me in completion of the study.
Finally, my deepest appreciation goes to my friends, family members and
concerned people who supported me to accomplish this task.
Thanking You,
…………..
Ishwor Lamichhane
BBA 5th Semester
Kantipur Valley College
Table of Content
Title Page Recommendation from College Acknowledgement Copy Right Declaration Executive Summary Chapters Page No: PART 1: INTRODUCTION 1.1 Introduction to the Banking Industry
1.1.1 Background........................................................................................................................................1
1.1.2 Origin of Bank...................................................................................................................................2
1.1.3 Modern Banking in Nepal...............................................................................................................2-4
1.1.4 Types of Bank.................................................................................................................................4-5
1.2 Introduction of the Organization
1.2.1 Introduction & Historical Background...........................................................................................5-6
1.2.2 Vision, Mission & Objectives,……………………………………....................................................6
1.2.3 Corporate Social Responsibility, Values & Ethics.............................................................................7
1.2.4 Futures Plan, Awards & Achievement............................................................................................7-8
1.2.5 Capital Structure & Share Composition..........................................................................................8-9
1.2.6 Products & Services ....................................................................................................................11-12 1.3 Introduction to Deposit Mix
1.3.1 Meaning of Deposit………….........................................................................................................12
1.3.2 Types of Deposit...………….......................................................................................................12-13
1.3.3 Account Opening Procedures of Deposit………………...........................................................13-14 1.4 Statement of Problems 1.5 Objectives of the Study 1.6 Significance of the Study 1.7 Limitation of the Study
1.8 Organization of the Study PART 2: RESEARCH METHODOLOGY 2.1 Research Design 2.2 Data collection Procedures 2.3 Data Collection Technique
2.3.1 Primary Data …………………..……………..…............................................................................19
2.3.2 Secondary Data…………………..……………….…......................................................................19 2.4 Data Processing
2.4.1 Classification & Tabulation of Data ................................................................................................19
2.4.2 Presentation of Data…….………..……………….…......................................................................19 2.5 Different Tools Used for Data Analysis PART 3: DATA ANALYSIS & PRESENTATION 3.1 Total Deposit & It’s Trend 3.2 Deposit Composition 3.3 Comparison of saving with Fixed Deposit 3.4 Trend of Current Deposit with Total Deposit
3.5 Loan & Advance to Total Deposit
3.6 Investment to Total Deposit 3.7 Cash Balance to Total Deposit 3.8 Statistical Tools
3.8.1 Correlation Coefficient Analysis of Deposit between Total Deposit & Loan & Advance...............29
3.8.2 Total Deposit Forecasting………..……………….…......................................................................30
3.9 Major Finding PART 4: SUMMARY, CONCLUSION & RECOMMENDATION 4.1 Summary 4.2 Conclusion 4.3 Recommendation PART 5: BIBLOGRAPHY PART 6: ANNEXES PART 7: QUESTIONNAIRE
List of Tables TABLE 1.1: Capital Structure of EBL ..............................................................................................................8 TABLE 1.2: Share Composition of EBL...........................................................................................................9 TABLE 1.3: Board of Director of EBL ...........................................................................................................10 TABLE 1.4: Management Team of EBL.........................................................................................................10 TABLE 1.5: Major Branches of EBL...............................................................................................................11 TABLE 1.6: Other Branches of EBL................................................................................................................11 TABLE 1.7: Rate of Interest................................................................................................................................13 TABLE 3.1: Total Deposit of EBL.………………. ....................................................................................20 TABLE 3.2: Deposit Composition of EBL ....................................................................................................21 TABLE 3.3: Comparison between Saving & Fixed Deposit....................................................................23 TABLE 3.4: Trend of Current Deposit with Total Deposit........................................................................24 TABLE 3.5: Loan & Advance to Total Deposit Ratio................................................................................25 TABLE 3.6: Investment to Total Deposit Ratio............................................................................................26 TABLE 3.7: Cash Balance to Total Deposit Ratio.......................................................................................27 TABLE 3.8.1: Calculation of Correlation Coefficient.................................................................................29 TABLE 3.8.2: Total Deposit Forecasting........................................................................................................30
List of Figures FIGURE 1.1: Capital Structure of EBL..............................................................................................................8 FIGURE 1.2: Share Composition of EBL.......................................................................................................10 FIGURE 3.1: Trend line of Total Deposit.......................................................................................................21 FIGURE 3.2(a): Deposit Composition ............................................................................................................22 FIGURE 3.2(b): Position of different Deposit ..............................................................................................22 FIGURE 3.3: Comparison between Saving & Fixed Deposit...................................................................23 FIGURE 3.4: Relation between Current Deposits with Total Deposit...................................................24 FIGURE 3.5: Loan & Advance to Total Deposit Ratio.............................................................................25 FIGURE 3.6: Trend Line of Investment to Total Deposit Ratio.............................................................26 FIGURE 3.7(a): Trend Line of Cash Balance to Total Deposit Ratio...................................................28 FIGURE 3.7(b): Trend Line of Loan & Advance, Cash Balance to Total Deposit Ratio...............28 FIGURE 3.8: Trend Line of Total Deposit Forecasting.......…………………………....................28
Abbreviation:
A.D. Anno Domini
HMG Her (or His) Majesty’s Government
ATM Automated Teller Machine
B.S. Bikram Sambat
BBA Bachelors in Business Administration
NABIL Nepal Arab Bank Limited
NRB Nepal Rastriya Bank
PNB Punjab National Bank
FY Fiscal Year
UAE United Arab Emirates
UK United Kingdom
HIV Human Immunodeficiency Virus
IT Information Technology
NICCI Nepal Indian Chamber of Commerce
LC Letter of Credit
ABBS Anywhere Branch Banking System
Psh. Public Shareholders
FCA Finance Chartered Accountant
Dy. Deputy
Asst. Assistant
A/C Account
N/A Not Attained
Rs. Rupees
% Percentage
No. Number
EBL Everest Bank Limited
SWIFT Society for Worldwide Inter-bank Financial Telecommunication
P.U. Purbanchal University
1
EXECUTIVE SUMMARY
This fieldwork report on ”Deposit Mix” of the Everest Bank Limited, Pulchok is
submitted to Kantipur Valley College for the fulfillment of the requirement of
Bachelor in Business Administration. This report is mainly divided into three
sections: General description of the industry, general description of the organization
and specific study of function (Job done and lesson learned). The first section as
name suggests, i.e. General Description of the industry mainly describes about
origin of the bank and history of the bank, how banking system enter in Nepal. The
second section describes about the introduction and history of EBL, its mission and
objectives, social norms & ethics, achievement & awards, about branches of EBL.
The third section describes about what I have learned from EBL and the position of
different Deposit Mix along with cash balance, loan & advance, investment & its
thorough effects on financial position of EBL
The last section of the report describes about my recommendation and my personal
feedback towards EBL.
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Chapter – 1 INTRODUCTION
1.1 Introduction to Banking Industry
1.1.1 Background
The term bank derives from the Latin Bancus, which refers to the bench on
which the banker would keep its money and his records. Banks are among the
most important financial industries in the economy and essential business in
thousands of local towns and cities. In the local context, there is much
confusion about exactly what a bank is. Bank can be defined as the financial
intermediately between depositor and entrepreneurs. The intermediation takes
place when banks accept deposits from general public co-operate bodies and
private organization and deploys that deposit for profitable purposes in the
form of loans and advance. Thus, banks must identify by the function (service
and rules) they perform in the economy.
To know the precise meaning of bank, some definitions are given below.
"A banker or a bank is a person or company having a place of business
where credits are opened by deposits or collections or money or
currency or where money is advance or loaned"(Oxford Dictionary).
“A bank is a dealer in debt his own and other people’s. the banker’s
business is, then to take the depts. Of other people, to offer his own in
exchange and there by to ‘Create’ money.”(Crowther-……)
By these definitions bank can easily be defined as the custodian of deposits.
The transaction in the financial market heavily depends upon the banking
system of the country. Without bank it would be quite impossible for the
industrialist and entrepreneurs to go directly to the general public for getting
their savings for investments. So, the simplest definition is that, bank takes the
saving of the public by providing them certain rate of interest and earns some
profit by providing these saving to the industrialist and entrepreneurs who
need it by changing some interest. This is the broadest form of banking but in
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this cut throats age banking is such a vague terms it does a lot more than the
deposit and credits. Remitting of money, letter of the credit, guarantee, draft,
TC, Telex transfer etc.
The bank of Venice established in 1157 A.D. was the first bank in the world.
The second bank was bank of Barcelona of Spain establish in 1401 A.D. And
the first Central Bank was the bank of England established in 1844 A.D.
1.1.2 Origin of bank in Nepal
In context of Nepal, our history of banking sector is rather more slow
evolution. Even now, the banking system is still in the evolutionary phase. So
far as banking is concerned with debt, we may go back in the Nepalese
history, where a merchant namely “Sankhdhar” is recorded. He was the
person who alone paid all debts of the existing in the country at that time.
Since then he introduced a new era called “Nepal Sambat”. This is recorded
proves the existence of money lending function at that time.
During the course of development of borrowing, we further come across the
term “Tanka Dhari” at the end of the 14th century meaning moneylenders.
They are one of the 64 castes classified on the basis of occupation.
In 1877 AD ‘Tejarath Adda’ was established by the government. The main
purpose of this institution was to provide credit facilities to general public at
minimum interest rate of 5%. The establishment of this institution marked the
beginning of organized financial institution in Nepal.
1.1.3 Modern Banking in Nepal
Nepal Bank Ltd. is the first modern bank of Nepal. It is taken as the milestone
of modern bank of the country. This was established on 30th kartik, 1994 BS
(1937AD) until mid 1940s, only metallic coins were used as medium of
exchange. So the HMG felt need of separate institution or body to issue
national currencies and promote financial organization in the country. Hence
the Nepal Rastra bank act 2012 was formulated, which was approved by
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HMG. Accordingly, the Nepal Rastra bank was established in 2013 B.S. as the
central bank of Nepal. Similarly Nepal Industrial development Bank was
established to accelerate industrial development in 1st Magh, 2024 BS, which
eventually turned into agricultural Development bank in 7th Magh, 2024 B.S.
In 10th Magh, 2022 B.S. a fully government owned 2nd commercial bank
Rastria Banijya bank was established.
Two decades, after the establishment of 2nd bank government declares free
economy and privatization policy to encourage the foreign bank for join
venture in Nepal. As a result, Nepal Arab Bank Ltd. (NABIL) was established
in 2041 B.S. This is the modern bank with latest technology. Then 29
commercial banks have been opened in the country.
There are various no. of commercial banks operating in Nepal.
- Nepal Bank Ltd. (1994B.S.)
- Rastriya Banijya Bank (2022 B.S.)
- Nepal Arab Bank Ltd.(2041 B.S.
- Nepal Indsuez Bank (2042 B.S.)
- Nepal Grindlays Bank Ltd. (2043 B.S.)
- Himalayan bank Ltd.(2049 B.S.)
- Nepal SBI bank Ltd. (2050 B.S.)
- Nepal Bangladesh Bank Ltd. (2051 B.S.)
- Everest Bank Ltd. (2051 B.S.)
- Bank of Kathmandu (2051 B.S.)
These entire banks have their head office in Kathmandu with branches
spreading over various regions and areas. But after 2052 B.S. Nepal Rastra
Bank (NRB) allowed commercial banks to operate their main activities
outside the valley. Due to decentralization policy, NRB induced policy that
for new commercial bank, the head office must be outside of capital.
- Nepal Bank of Ceylon (2053 B.S. with Head Office in Siddhartha Nagar)
- Nepal Industrial & Commercial Bank (Head Office in Biratnagar)
- Lumbini Bank Ltd. (Head Office in Bharatpur)
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- Laxmi Bank Ltd. (Head Office in Narayangarh)
Bank can be categorized into different types on the basis of their functions,
objectives etc. The word "BANK" will always be synonymous with the
commercial banks and its functions. Basically, the functions of the
commercial bank all over the world are same and basic functions are
collecting various types of deposit facilities, namely; current, fixed and
savings, exchange of money, lending of money , remittance of money, letter
of credit, guarantee, loans, locker facility, foreign exchange, serving as an
agent of client, e-banking, mobile banking etc. The commercial Banks of
Nepal also do all these functions. Commercial Bank is a profit oriented
financial service institution having certain rate of interest given to the
depositors and also charged certain interest rate to the loan borrower.
The basic sources of fund for commercial banks are capital (Funds from
shareholders), reserve (Retained Earnings) and various types of deposits.
Basic uses of fund are loans, advances and investments.
1.1.4 Types of bank
a. Central Bank: A central bank is the banker of government and banker's bank. It is an
institution which entrusted with the duty of issuing and circulating currency
notes, controlling and supervising of commercial bank in the country.
Maintain stability of currency and formulating the government's monetary
policy,
b. Commercial Bank: Commercial banks are organized on joint stock company system which
exchanges money, accept deposits and grant loans. Commercial banks
preliminary function is to earn profits,
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c. Co-operative Bank: Co-operative bank is another component of banking organization. It collects
small deposits; mobilize small saving and provides short term and medium
term loan to their member.
d. Merchant Bank:
Merchant bank can be defined as a personal institution which engaged in
business of making arrangement for selling, buying or subscribing securities
and manage it on behalf of its customers. It also plays a vital role as a
consultant advisor or rendering cooperative advisory services in relation to
such services.
e. Development Bank:
Development bank is concerned with the economic development of a country
with adequate long term capital investment and technology for development
of infrastructures like agriculture, industry, electricity, transportation,
communication etc.
1.2 Introduction of the Organization
1.2.1 Introduction & Historical background of Everest’s bank
Massive changes and development have taken place during the past two
decades in the financial sector. Amidst all these changes, for economic growth
and development of new Nepal, Liberalization, Privatization and
Globalization in this sector has given birth to the largest commercial bank,
“Everest Bank Ltd.”. Everest Bank Limited (EBL) was established in 1994
and started its operations with a view and objective of extending
professionalized and efficient banking services to various segments of the
society. EBL joined hands with Punjab National Bank (PNB), India as its joint
venture partner in 1997. PNB is the largest Public Sector Bank of India having
112 years of banking history with more than 4400 offices allover India and is
known for its strong systems and procedures and a distinct work culture.
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Drawing its strength from its joint venture partner, EBL has been steadily
growing in its size and operations ever since its inception and today it has
established itself as a leading Private Sector Bank of the Nation, reckoned as
one of the fastest growing Commercial Bank of the Country.
With an aim to help Nepalese citizens working abroad, the bank has entered into
arrangements with banks and finance companies in different countries, which enable quick
remittance of funds by the Nepalese citizens in countries like UAE, Kuwait, Bahrain, Qatar,
Saudi Arabia, Malaysia, Singapore and U K.
1.2.2 Vision, Mission & Objectives
Vision
Evolve & position the bank as a progressive, cost effective & customer
friendly institution providing comprehensive financial and related services;
Integrating frontiers of technology & servicing various segments of society;
Committed to excellence in serving the public & also excelling in corporate
values.
Mission
Provide excellent professional services & improve its position as a leader in
the field of financial related services; Build & maintain a team motivated &
committed workforce with high work ethos; Use latest technology aided at
customer satisfaction & act as an effective catalyst for socio-economic
developments.
Objectives Extending professionalized and efficient Banking services to various segment
of the society. The bank has following objectives:
To become the bank of First Choice.
To become a leading bank by providing quality product and services.
To ensure and provide attractive return to the shareholders.
To provide higher expected returns on their investments.
To provide loans with very competitive rate of interest.
To bridge the gap between savers and users of the fund effectively and
efficiently.
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1.2.3 Corporate Social Responsibility, Value & Ethics
Corporate Social Responsibility EBL is a socially responsibly corporate and recognizes its responsibilities to
its staff and to the communities in which it operates. The bank concentrates on
projects that assist children, particularly in the areas of health and education
and it has taken up various initiates to benefit the community. Two major
initiatives in the area of health ‘Living with HIV’ and ‘Seeing is Believing’
have been undertaken by the bank.
Values and Ethics We at EBL believe that the long term development of an organization depends
on how we build trust among our stakeholders. Our values are focused on the
ethics at work place and outside. Thus we need to be as transparent as possible
through proper corporate governance. We have built a code of conduct where
by all employees working, needs to follow it stringently.
1.2.4 Future Plans, Awards & Achievement
Future Plans of EBL According to the annual report of EBL 2008/2009, the bank has been growing
on an average at per annum against of overall banking industry. And the bank
is focusing on different strategic plans to sustain this growth. The focus of the
bank is focusing on different strategic plans to sustain this growth. The focus
of the bank is in:
Increase in Branch network.
Increase in customer base by upgrading IT initiatives to reduce transaction time and
cost of transaction and providing alternatives delivery channels.
Increase customer base in low cost deposits with a view to reduce average cost of
deposits.
Increase average yield on advances by aggressive marketing of retail lending schemes.
Recruit ideally suitable man power and train them for movements of fast track to man
the position of responsibilities at branches and Head Office
Further improve internal control system.
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Awards and Achievements Despite the harsh economic and political scenario, the bank was able to grow on an average at
30% per annum in the year 2006/2007. This is the greatest achievements than any company
could achieve. For the effective services provided to the customer in the competitive market it
has been awarded
“BANK OF THE YEAR 2006.”
“NICCI EXCELLENCE AWARD”
Besides it, the bank has opened its representative office in New Delhi, India and successfully
achieved the goals of facilitating the opening of account of Nepali residing and working in
India and remitting their funds to any EBL branch of Nepal. All the branches of the bank are
connected through Anywhere Branch Banking System (ABBS), which enables customers for
operational transactions from any branches. It was also successful to liaise with and attract the
business relating to trade and finance emanating to and from India. Drawing its strengths from
its joint venture partner, EBL has been steadily growing in its size and operations and
established itself as a leading Private Sector Bank
1.2.5 Capital Structure & Share Composition
Capital Structure The Bank’s Paid-Up Capital has increased to 455 million against the Authorized Capital of
750 million whereas the Core Capital of the Bank is around 700 million.
Table 1.1
Capital Structure of EBL PARTICULARS AMOUNT Authorized Capital 1,000,000,000
Issued Capital 840,620,000 Paid Up Capital 838,821,000
Source: EBL’s Brochure
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Fig 1.1 Capital Structure of EBL
75000000
80000000
85000000
90000000
95000000
1E+09
1.05E+09
Authorized Capital
Issued Capital Paid Up Capital
Amount
Share Composition The local Nepalese promoters hold 50% stake in the Bank’s equity, while
20% of equity is contributed by joint venture partner PNB whereas remaining
30% is held by the public.
Table 1.2
Share Composition of EBL
PARTICULARS AMOUNT
Local Promoters Holds 50%
Panjab National Bank, India Holds 20%
Public Shareholders Holds Remaining 30%
Source: EBL’s Brochure
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Fig 1.2
Share Compositions of EBL
Table 1.3
Board of Directors of EBL
Table 1.4
Management team of EBL
NAME DESIGNATION
Mr. B.K. Shrestha Chairman Dr. Bal Gopal Baidhya Director Mr. Ved K Shrestha Director Mr. Arun Man Sherchan Director Mr. Jagat Ram Director(PNB) Mr. R.K Ummat Director(PNB) Mr. Shivasharana K.C Director(PSh.) Mr. Muskan Shrestha Director(PSh.) Mr. Ratna Sansar Shrestha Director (FCA)
NAME DESIGNATION DEPARTMENT Mr. R.K Ummat Chairman Mr. P.K Pradhan Dy. General Manager Mr. Jagdish Kumar Arora Dy. General Manager Mr. Hum Nath Gurung Asst. General Manager Mr. Pramod Raj Sharma Company Secretary Advocate Shambhu Thapa Legal Advisor
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Branches of EBL The bank has 12 branches within the Kathmandu valley. They are as follows:
Table 1.5
Major Branches of EBL
S.NO BRANCH S.NO BRANCH
1 Lazimpat 7 Chabahil 2 Baneshwor 8 Balaju
3 New Road 9 Galfutar
4 Teku 10 Gwarko
5 Pulchok 11 Suryavinayak
6 Satungal 12 Lagankhel
Source: EBL’s Brochure Besides these 12 Branches the EBL have other 18 Branches, they are as follows:
Table 1.6
Other Branches of EBL
Source: EBL’s Brochure
1.2.6 Everest Bank Has Offered the Following Products and Services
Deposits: Current deposit, Saving deposit, Fixed deposit Remittances: Draft, SWIFT and Telegraphic Transfer, Mail Major Lending Products: Fixed/Working Capital, Hire
Purchase, Overdraft, Construction, Consumer Loan,
S.NO BRANCH S.NO BRANCH S.NO BRANCH
13 Biratnagar 19 Pokhara 26 Baglunj
14 Birtamod 20 Butwal 27 Simara
15 Janakpur 21 Bhairahawa 28 Lagankhel
16 Duhabi 22 Dhangadi 29 Besi Sahar
17 Birgunj 23 Itahari 30 Lekhnath
18 ICD Dry Port
(Birgunj)
24 Nepalgunj 31 Narayangadh
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Securities, Consortium, Trade Finance, Trust Receipt, Inter bank lending, Merchant Banking
Issue Management Underwriting Security dealers (Primary Market) Refund Management Bank Guarantee Foreign Exchange Dealing
1.3 Introduction to Deposit Mix
1.3.1 Meaning of Deposits
Deposit is that amount which is deposits by savers in commercial banks or
others financial institution for keeping as well as for earning interest from it.
The existence of commercial banks basically depends upon the mobilization at
deposit. Higher the volume of deposit higher will be their volume at profit so
a commercial bank first of all tries to mobilize as much deposits as possible.
1.3.2 Types of Deposit
There are 3 major deposits:
A bank Current Deposit a/c can be defined as running account between
bankers and customers with the amount being deposited and withdrawn
continuously. It is also known as demand deposit with amount draw able on
demand. The main purpose of opening current accounts is for safety purpose
only and is normally opened by the business people business institutions that
have high transaction in bank cause. There is no restriction on withdraw of
amount deposited. Since the bank has to maintain high liquidity to customers
demand, no interest is paid on such deposit. So this is non interest bearing
deposit.
The Saving deposit a/c are usually opened and operated by lower and middle
class people so as to meet their feature contingencies. It can open by any body
on his behalf or on behalf of any other of whom s\he is a guardian. The main
aim of opening saving deposits accounts is to promote thrift among the lower
income class people. Saving deposit indicates the habit of Nepalese people to
deposit money in the Bank and help to accumulate the scattered resources and
invest them in needy & productive sector. In this deposit account, Bank give
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lower rate of interest as money can be withdrawn with minimum limit given
by the concerned Bank. Per-notice is needed when sums over of fixed
amounts are required to be withdrawn.
The Fixed Deposit a/c is also one of the types of a/c available in the bank.
When people want to deposit their money for certain period then they open
fixed a/c. In this a/c, money is deposited for certain time period such as one
month, three month, six month, and one year & even for several years. The
money cannot be withdrawn before the expiry time. Both banks & depositors
agree the terms & condition & follow it. The interest amt. is higher in this
account than in other accounts. Fixed deposit makes the funds available for
investment for longer period of time. People deposit their money in fixed a/c
for protection of their money & also earn more money in interest.
Table no. 1.7
Rate of Interest
Deposits %
Saving 3/Daily Balance
Fixed up to 6 months 8.25
Fixed above 6 months 10
Fixed 12 months or above 10.5
Current N\A
Source: Statistical Bulletin of Everest Bank 2067
1.3.3 Account Opening Procedure of Deposits (General Rules)
Everest bank has facilitated its customer three types of deposit accounts, i.e. current
deposit, saving and fixed deposit. Different deposit a\c has its own characteristics
from the banker’s point of view. In case of account opening procedure they have
own particular rules as well as rules in general. In this chapter we are going to
discuss about account opening procedure in Everest bank.
As we have discussed in former chapter s that the current a/c is non-interest
benefit account which is suitable for business firms, corporations, social
organizations schools etc. So, opening the current a/c first of all customer
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should fill up the account opening firm, signature specimen card & should be
recommended by the current a/c holder of the bank or other persons,
organization with whom the bank satisfy. Including the account opening firm
the above mentioned party should submit the photocopies of firm registration
certificate, tax certificate, citizenship certificate, partnership deeds (in case of
partnership firm), board resolution, articles & memorandum (in case of
limited company). After submitting those documents the bank opens an
account and made available a cheque book & a/c opening advice to its
concerned. The a/c holder must deposit certain amount as minimum balance at
the particular a/c.
In case of saving deposit first of all applicant should fill up the application
firm, signature specimen card & should recommend by the person who have
account with the bank. The applicant must submit the photocopy of his/her
citizenship certificate. The bank may open saving a/c on the basis of
citizenship certificate only. He/she should glue a photo on the application
firms as well as on the specimen card. While a/c is opened the a/c holder must
deposit the certain Amt. as minimum balance. The bank issues a cheque book
and ATM card for that a/c & handover to the a/c holder.
In case of fixed deposit, fixed deposit a/c opening procedure is simple. The
applicant should fill up the firm, signature specimen card & a deposit voucher
for the said amount. The bank issues a fixed deposit receipt where the
customers name & address, the time period & the interest rate are mentioned.
After the maturity date the depositor should present the receipt at the bank for
the payment of the deposited amt
1.4 Statement of the problem
Among external & internal problem, external problem effects badly because
internal problem can be solved by bank where as external problem may be
beyond the bank’s control, they are as follows.
• As the market size is small there is a right competition in between
commercial banks & financial companies. As financial companies
also perform banking activities it creates right competition in various
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banking activities such as collection of deposit. It mainly blocks
depositors.
• Sluggish economic growth is also a problem because it affects
business activities.
• Political instability is also another problem because government rule
changes as government change and it directly effects economic
liberalization that cause difficulty on performance of must business
mainly financial sector.
• Customer changing behavior can also be pointed out as a problem they always look for better services.
1.5 Objective of the study
The main objective of this study is:
• To find out the trend & position of current, saving, fixed & other
deposits.
• To find out the deposit mobilization in loan & advance, investments
sector.
• To find out the procedures of collecting money through various
deposits.
• To see the development of Everest bank Ltd. in this historical and in
general respective.
• To find out the effectiveness of Everest Bank in Banking Sector.
• To provide suggestion and possible guideline to improve the bank’s
problem regarding to the deposits.
1.6 Significance of the study
Everest bank is one of the fabulous banks of Nepal, it is public controlled
bank. This study mainly focuses the various deposits of Everest bank, which is
one of the main sources of liquidity. As well as this report will help the
student, to evaluate the various deposits of Everest bank & its utilization.
• Teachers and students also may obtain a lot of information regarding
the various deposits account for proper study about it.
17
• In the context of modern economy of Nepal, various deposits can
play a vital role to improve the living condition, sense of security
investment and modern out look of the people.
• Government can obtain the required information through it in order
to amend and improve the rules and regulation of deposit account to
meet the requirement of the country.
• And also to HMG for making plan and policies of the country.
1.7 Limitation of the study Every study has its limitations, some limiting factors are unfavorable
condition; situation and other may be the objectives of study. If objectives of
study are limited, fixed and specific, the study cannot go beyond that. In
general studies, such type of limitation used to being common. These studies
have its certain limitation.
• This study has covered only the three financial years from 2064 to
2066 (Due to the published latest Everest bank Statistical Bulletin
July 2066)
• This report is to be submitted within the time limitation.
• Among the various joint venture banks, the study focused only on
Everest bank.
• It focuses only on deposit schemes, therefore, overall position of
Everest bank cannot be judged by this report.
• Most of the data used are of secondary type, which is available from
bank and other sources of books.
1.8 Organization of the study / Scheme of the study
This study is organized into following schedule or part
1. - Introduction
2. - Research Methodology
3. - Data Analysis & presentation
4. - Summary Conclusion & Recommendation
18
The first chapter deals with various aspects of the present study, like
background of the study, which includes brief introduction of banks & Everest
Bank Pvt. ltd. It also includes current deposit, saving deposit, fixed deposit &
other deposits account. It also deals with the account opening procedure in
general rules, statement of the problems, objectives of the study, significance
of the study, limitations of the study and scheme of the study.
The second chapter deals with research methodology, which includes
introduction, research design, nature and sources of data, data processing
procedures and tools used for analysis.
The third chapter, which is the main aspect of the study deals with the data
presentation and analysis on the basis of the document received from the
related organization. This study used the statistical as well as financial tools in
order to fulfill the objectives and problems of the study.
The last or the fourth chapter presents the major summary on the findings,
issues and conclusions followed by the recommendations.
19
Chapter - 2
RESEARCH METHODOLOGY 2.1 Research Design
Research Design is the first step of the present case study. The Research
Design of the present case study is analytical, comparative & graphic study
approach. This design is less descriptive but more prescriptive because the
historical secondary data have been mainly employed for analysis. For the
analytical purpose some question have been asked to the concerned personnel,
which is considered as primary data and the secondary data includes the
annual report published by Everest Bank etc. Such data and information have
been processed through various processes like editors, tabulations,
calculations & results have been interpreted in the form of ratio and
percentage for clear vision.
2.2 Data collection procedure
As the study will also be based on primary data, information will be collected
through developing a scheduled questionnaires and distributing these to
employees of the banks. Question of open-end (i.e. Yes or No) will be
included in questionnaires. Besides this, junior employees and clients are also
being observed and responses have been drawn from them about relevant
questionnaires.
2.3 Data collection technique
There are two types of data collection procedure, which are:
2.3.1 Primary Data:
The primary data are those which are collected a fresh and for the first
time and thus happen to be original in character. During the survey
period we use questionnaire method for collection of primary data but it
could not make a strong result because of topics & time limitation.
20
2.3.2 Secondary Data:
During our study period, secondary data becomes a supportive source to
conduct the result and analyze them. Thus, in the process of report
writing, the annual balance sheet and profit/loss a/c was provided by
banks. Thorough magazine, bulletins and the annual reports, the
required data were collected. After sorting these data, various ratios
have been used to analyze and interpret the financial aspect of the bank.
Therefore, on overall context secondary data has been used in
maximum number.
2.4 Data Processing 2.4.1 Classification and tabulation of data:
After collecting the data, they are classified and arranged in
tables with columns and rows.
2.4.2 Presentation of Data:
In order to present the data clearly various diagrams such as bar
diagram, pie chart and trend line have been used.
2.5 Different tools used for analyzing data.
Financial Analysis
Trend Analysis
Statistical Analysis
21
Chapter - 3 DATA ANALYSIS & PRESENTATION
The purpose of this chapter is to analyze study and evaluate the major
liquidity position, which are mainly related to the strategy of liquidity position
or management of Everest bank. It is notable that all types of financial ratios
are not studied under this chapter. Only those ratios are calculated and
analyzed which are very important to evaluate current deposit of the Everest
bank.
3.1 Total Deposit of Everest bank and its Trends
The first and foremost important thing to know is the total deposit trend of Everest bank. Total deposit trend refers to the total deposits of the public in various accounts of Everest bank during certain period.
Table 3.1
Total Deposit (Rs. in Million)
Fiscal Year Total deposit of
Everest Bank Change in %
2064 18185 -
2065 23978 31.86
2066 33322 38.97
Source: Statistical Bulletin of Everest Bank,2066
22
Fig no. 3.1
Total deposit of everest bank
05000
100001500020000250003000035000
2064 2065 2066
Fiscal year
Rs
in m
illio
n
Deposit is the main source of funds for a commercial bank. It collects funds from different sources for various investment functions. From the above table, we can see that the total deposit of the bank in increasing order. In the mid of 2064 there was only Rs.18185 million. In 2065 the amount of total deposit is increased by 31.86%, which is Rs.23978 million. Similarly, the deposit in F/Y 2066 becomes Rs.33322 million which means an increase by 38.97%. This shows that though the total deposits are increasing, it is increasing at a comparatively increasing rate.
3.2 Deposit composition of Everest bank:
After knowing the total deposits, it is necessary to know the composition of that deposit of Everest bank. The total deposit of Everest bank consists of fixed deposit, saving deposit, current deposit and others. Here others refer to collect from other sources. The total deposits comprises of all these kinds of deposits.
Table no.3.2 Deposit composition of Everest bank
(Rs in million) Source: Stat Source: Statistical bulletin of Everest bank 2066
Fiscal year
Current Deposit
Saving Deposit
Fixed Deposit
Others Total Deposits
2064 613.74375 5523.69375 10001.75 2045.8125 18185
2065 629.4225 5664.8025 15585.70 2098.075 23978
2066 2424.48 8998.47 15400.75 6498.30 33322
Total 3667.64625 20186.96625 40988.20 10642.1875 75485
23
The above table reveals that the amount of deposit position of Everest bank was increasing in current deposit, saving deposit, and others deposits but in fixed deposit it was increase in F\Y(2065) and then decrease in F\Y (2066).
Figure no: 3.2(a)
02000400060008000
10000120001400016000
Dep
osit
(in m
illio
n)
2064 2065 2066Fiscal Year
Deposit composition of Everest bank
current deposit Saving deposit fixed deposit Others
Figure no: 3.2(b)
Position of different deposits of Everest bank
02000400060008000
1000012000140001600018000
2064 2065 2066Fiscal Year
Dep
osits
(in
mill
ion)
Current deposit Saving depositFixed deposit Others
From the above figures, we can clearly see that the current deposit, saving deposit and other deposit are in increasing form. But in the case of fixed deposit it is increasing in fiscal year 2065 and then decrease in fiscal year 2066. It is because people are more interested to invest their amount in highly
24
profitable sectors. They do not want to lock out their amount in fixed deposit for certain amount of interest rate. Now a day people are more interested to open saving deposits than fixed deposit. In saving deposit people can withdraw and deposit their money in any time but in fixed deposit they do not able to take the advantage of withdraw and deposit their amount before the maturity time is completed.
3.3 Comparison of Saving Deposit with fixed Deposit
The fixed and saving deposits are in good position. We can clear it with the following table, where the comparison between saving deposits with fixed deposit.
Table no: 3.3 Comparison between saving deposit with Fixed Deposit
(Rs. in million)
Year Saving Deposit
%change Fixed Deposit
%change
2064 5523.69375 - 10001.75 -
2065 5664.8025 2.56 15585.70 55.83
2066 8998.47 5885 15400.75 (1.19)
Source: Statistical bulletin of Everest bank 2066
Figure no: 3.3
Comaprison of Fixed Deposit With Saving Deposit
0
5000
10000
15000
20000
2064 2065 2066Fiscal Year
Am
ount
(in
mill
ion)
Saving Deposit Fixed deposit
the above table and diagram shows the clear composition between saving deposit
with fixed deposit. The saving deposits are in increasing trend from 2064 to till 2066
25
and change in percentages in this deposit is in increasing trend. The fixed deposits are
in also increasing trend from 2064 to 2065 but in fiscal year 2066 it is in decreasing
trend. The change in percentage in 2066 is negative that is 1.19%. This shows that
conditions of saving deposits are far better than fixed deposits.
3.4 Trend of Current Deposit with Total Deposit
Current Deposit to total deposit ratio is calculated to find out the proportion of current deposits with respect to total deposits. The ratio is calculated by using the following formulas,
Formula used = Current DepositTotal Deposit x 100
Table no: 3.4 Trend of Current deposit with Total deposit
(Rs. in million)
Year Current Deposit Total deposit Percentage (%)
2064 613.74375 18185
3.375
2065 629.4225 23978 2.625
2066 2424.48 33322 7.28
Source: Statistical bulletin of Everest bank 2066
Figure no: 3.4
05000
100001500020000250003000035000
Am
ount
(in
mill
ion)
2064 2065 2066
Fiscal year
Relation between Current deposit & Total deposit
Current Deposit Total Deposit
26
The above table shows that percentage change in current deposit amount in respect to
total deposit. According to table, in 2064, the percentage of current deposit to total
deposit of Everest bank was 3.375%. In 2065, the percentage was decrease to
2.625%. In 2066, the percentage of current deposit to total deposit of Everest bank is
increased, that is 7.28%.
3.5 Loan & Advance to Total Deposit Ratio
This ratio measures the earning capacity of a commercial bank on its mobilized fund based loan and advance. A high ratio indicates a high success to as loan and advance and vice-versa. This ratio of loans & advance to deposits is calculated in order to find out how many times the loans and advance are as compared to the deposit. This ratio is calculated by using the following formula.
Formula used = Loan & adv.Total Deposit x 100.
Table no: 3.5 Loan & Advance to Total Deposit Ratio (Rs in million)
Year Loan & Advance
Total Deposit Percentage
2064 14083 18185 77.44
2065 18340 23978 76.49
2066 24470 33322 73.43
Average 75.79
Source: Statistical bulletin of Everest bank 2066
Figure no: 3.5
0
5000
10000
15000
20000
25000
30000
35000
Am
ount
(in m
illio
n)
2064 2065 2066
Fiscal year
Loan & Advance to Total deposit
Loan & Advance Total deposit
27
3.6 Investment to Total deposit Ratio This ratio measures the total amount invested on the various sector on the basis of deposits. The ratio of investment to total deposit is calculated in order to find out how many times the investment is as compared to total deposit. This ratio is calculated by using the following formula.
Formula used = Investment
Total Deposit × 100
Table no: 3.6
Investment to Total Deposit Ratio (Rs in million) Year Investment Total Deposit Percentage
2064 4985 18185 27.41
2065 5060 23978 21.10
2066 5949 33322 17.85
Average 22.12
Source: Statistical bulletin of Everest bank 2066
Figure no: 3.6
Trend line of Investment with Total Deposit
05000
1000015000200002500030000350004000045000
2064 2065 2066
Fiscal year
Am
ount
(in
mill
ion)
Investment Total Deposit
The above table and diagram shows the percentage of total deposit mobilized in
investment. F\Y 2064, investment of Everest Bank in respect of total deposit is
28
27.41% and it decrease to 21.10% and 17.85% in 2065 and 2066. From this we can
conclude that the bank invested about 22.12% of total deposit on investment.
3.7 Cash Balance to Total Deposit Ratio
Cash and Bank Balance are assets that consists the bank’s line of and cash on hand,
foreign cash on hand, cheques and other cash item, balance with domestic bank and
balance held abroad. It represents the greater ability to meet their deposits where as
lower ratio represents the lower ability to meet its current obligation on their deposit.
Measurement of the banks ability to meet its immediate deposit higher rate moreover,
too high ratio is unfit as capital will be tied up and opportunity cost will be higher.
This ratio is calculated by using the following formula.
Formula used = Cash BalanceTotal Deposit x 100.
Table no: 3.7
Cash Balance to Total Deposit Ratio (Rs. in million) Year Cash Balance Total Deposit Percentage
2064 535 18185 2.94
2065 823 23978 3.43
2066 945 33322 2.84
Average 3.07
Source: Statistical Bulletin of Everest bank 2066
29
Figure no. 3.7(a)
0
5000
10000
15000
20000
25000
30000
35000
Rs.
in m
illio
n
2064 2065 2066
Fiscal year
Cash Balance to Total Deposit
Cash Balance Total Deposit
The above table and figure shows the capacity of bank to meet unanticipated calls on
deposits. In F\Y 2064 cash and balance is 2.94%, as on 2065 it reaches to 3.43%. Similarly
in F\Y 2066 it reaches to 2.84% of the total deposits. From the above analysis, it is
concluded that the cash and balance position of the Everest bank with respect to deposits is
not better against the readiness to serve its customer’s deposit. In contrast, a high ratio of
cash and bank balance may be unfit which indicates the banks inability. Thus Everest bank
may invest in more productive sectors like short term marketable security, treasury bills etc.
to improve its profitability.
Figure no: 3.7(b)
Trend line of investment, loan & Advance and Cash Balance with Total Deposit
05000
100001500020000250003000035000
2064 2065 2066Fiscal Year
Am
ount
(Rs.
in m
illio
n)
Total deposit InvestmentLoan and Advance Cash balance
30
Source: table no: 3.1, 3.5, 3.6, 3.7
3.8 Statistical Tools
Some important statistical tools are used to achieve the objective of this study. In this
study statistical tools such as coefficient of correlation analysis and least square lines
trend have been used. The basic analysis is written in points below.
3.8.1 Correlation coefficient analysis of deposit between total deposit and loan and Advance.
The statistical tool, coefficient of correlation has been studied to find out whether the
two available variables are inter-correlated or not. If the results falls with in the
correlated point, the two variables are inter-correlated, otherwise not, now to find out
the correlation coefficient of correlation has been adapted.
Correlation coefficient = NΣUV-(ΣU)(ΣV)
NΣU2-(ΣU)2 NΣV2-(ΣV)2
Here, N = Number of pairs of x and y observed.
x = Total Deposit
y = Loan & Advance
r = Karl Pearson's Coefficient of Correlation.
Table no. 3.8.1
Calculation of correlation coefficient between total deposit and Loan and Advance
(Rs. In million)
F\Y Total deposit (X) Loan and Advance (Y)
2064 18185 14083 2065 23978 18340 2066 33322 24470
Correlation coefficient (rx,y) 0.9995
Source: Appendix no.1 Here ‘r’ represents the correlation coefficient between total deposit and total loan and
advance which is positive (0.9995) which is nearer to 1.
31
3.8.2 Total Deposit Forecasting
On the basis of 3 years data (2064-2066)
Table no.3.8.2
Deposit forecasting (Rs. in million) Fiscal year Total deposit of Everest
bank 2067 40298.67 2068 47867.17 2069 55435.67 2070 63004.17 2071 70572.67
Source: Appendix no.2
Figure no: 3.8
Trend of Total deposit Forecasting of Everest bank
01000020000300004000050000600007000080000
2067 2068 2069 2070 2071Fiscal Year
Fore
cast
ed d
epos
it(R
s. in
m
illio
n)
Forcasted Deposit
32
3.9 Major findings
The major finding of the study, which covers a period of three years (2064-2066),
Everest bank has much efficient in collection from people. Deposit plays a vital role
in the mobilization of the amount to earn. Total Deposit is increasing over 3 years
which is increase gradually.
• Depositors more trusted the Everest bank with their strategy of service strategy, quick services & easiness to access to the services. The main attraction point is drawing limitation, which is comparatively higher than other financial institutions.
• Everest Bank increases its investment under different purposes over the year.
• The trends of general public to open saving deposit account with Everest Bank have been increasing every year. The current deposit account also in increasing trend in every year. But in the case of fixed deposit account it is increasing in first two years and then in decreasing order.
• From this we can conclude that the bank invested about 75.79% of total deposit on loan and advance which is quick remarkable and satisfactory on average calculation.
• The correlation coefficient between total deposit and advance is positive (0.9995) which is nearer to 1.
33
Chapter - IV
SUMMARY CONCLUSION & RECOMMENDATION
4.1 Summary
The report has been prepared in partial fulfillment of the requirement for the degree
of bachelor of business administration from Purbanchal University. I have chosen
Everest Bank branch office of Kumaripati to study deposits as a subject matter.
Banks are the most important institution for acceleration of economic growth in the
country. They accept deposits from public & in return advance loans by creating
credit.
Everest Bank Limited (EBL) was established in 1994 and started its operations with a
view and objective of extending professionalized and efficient banking services to
various segments of the society. EBL joined hands with Punjab National Bank
(PNB), India as its joint venture partner in 1997. PNB is the largest Public Sector
Bank of India having 112 years of banking history with more than 4400 offices
allover India and is known for its strong systems and procedures and a distinct work
culture. The financial position regarding the deposit of Everest bank shows a gradual
increment in each year. The deposit collection trends of each separate amount namely
fixed, saving, and current and other deposit account of Everest bank.
The fixed deposit is increasing in first two years and then in decreasing way. The
saving deposit is in increasing trend in every year. The bank invested about 22.11%
(table no.) of total deposit on investment which is in satisfactory on average
calculation. The bank invested about 75.79% (table no.) of total deposit on loan &
advance which is quick remarkable and satisfactory on average collection.
4.2 Conclusions
• In average 26.74% of total deposits are contributed by saving deposit. So it clearly shows that saving deposits are one of the major sources of funds for Everest bank which helps Everest bank to earn more profits.
• The trends of general public to open saving deposit account with Everest bank have been increasing every year. It shows that Everest bank had a good and sound representation among its customers towards saving deposits.
• They have collected deposits in sufficient amount and invested in priority sector more. The trend of deposit collection is increasing in every year. The large amount of deposits is in fixed a/c. Similarly, amount deposits in current a/c are in increasing basis.
34
4.3 Recommendations
After studying & analyzing the deposits a/c and the procedure of opening
saving deposit a/c in Everest bank, the following recommendations are made:
• The number of branches of the Everest bank has been increasing in each
year but the performance of such branches has not been evaluated. Prior
to establishing new branches, a proper study is needed and these
branches having their performance below the satisfaction have to be
closed down of need or requirement.
• The bank may increase its deposits (despite reducing the interest rates
on the deposit) to a substantial level by introducing a number of
attractive deposit mobilization schemes.
• The bank may generate profit only if the minimum ratio of the deposit
is invested in good parties. So while investing it should bear in mind
that at least 80% of the total deposit is to be utilized in proper way with
minimizing bad debts.
• Bank should invest deposits in various sectors and provide loan and
advances to its customers so as to increase deposits, as it is the major
sources of funds.
• It should provide more facilities like ‘Credit Card’, ‘24 hour banking’
etc.
Thus, bank should make positive attitude towards public of every society and
treat them well as it is said that “customers are god”. If bank succeed to make
positive attitude from public, even in the situation of providing less interest
rate also, deposits from clients will not decrease
35
BIBLIOGRAPHY
Book Source
Bajracharya B.C (2005), “Business Statistics & Mathematics”: Kathmandu,
M.K. Publisher & Distribution
Bhandri Dilli Raj (2056), “Principles and Practice of Banking and Insurance”
1st Edition, Kathmandu, Asia Publication.
Dr. Joshi Shyam, Dr.Shrestha Hari Prasad (2058), “Principles of Banking and
Insurance” 1st Edition, Taleju Publication, Bhotahiti, Kathmandu.
Upadhya G.B and Tiwari N.R (1982), “Principal of Money and Banking in
Nepal” Ratna Pustak Bhandar.
Pant, Prem Raj (1998), “Fieldwork Assignment and Report Writing”,
Kathmandu: Veena Academic
Statistical Bulletin of Everest’s Bank 2066
Internet Source
Available from www.everestbankltd.com [Accessed 29th June, 2010]
Available from www.nrb.org.np [Accessed 29th June, 2010]
Available from www.wikipedia.com [Accessed 29th June, 2010]
Other Source
Brochures of the Bank
36
Annexes
Appendix no. 1
Calculation of Correlation coefficient between Total deposit & Loan & Advance
(Rs. in Million) Fiscal Year (X)
Total deposit (x)
Loan & Advance
(y)
u=x-23978
v = y – 18340
u2 v2 uv
2064 18185 14083 (5793) (4257) 33558849 18122049 24660801 2065 23978 18340 0 0 0 0 0
2066 33322 24470 9344 6130 87310336 37576900 57278720 Total 3551 1873 120869185 55698949 81939521
Now,
n = 3, Σu = 3551, Σv = 1873, Σu2 = 120869185, Σv2 = 55698949, Σuv = 81939521 r = ?
Correlation coefficient = NΣUV-(ΣU)(ΣV)
NΣU2-(ΣU)2 NΣV2-(ΣV)2
= 3x81939521 - (3551) x (1873)
3 x 120869185 - (3551)2 3 x55698949 - (1873)2
= 245818563 - 6651023 349997954 163588718
= 239167540
18708.23 x 12790.19
= 239167540
239281816.26
= 0.9995
37
Appendix no. 2
Calculation of Total Deposit Forecasting (Rs. in Million)
Fiscal Year (X)
Total deposit (Y)
x=X-2065 x2 xy
2064 18185 -1 1 -18185
2065 23978 0 0 0
2066 33322 1 1 33322
Total 75485 = 0 = 2 = 15137
Where, Let the assumed mean be (A) = 2065 X = Fiscal year
Y = Total deposit
Let the regression equation of y on x be:
Y = a + bx ………………(i)
The parameters a & b of equation (i) can be obtained by solving the following two equation:
Σy = na + bΣx ………….(ii)
Σxy = aΣx + bΣx2 …………(iii)
Let,
Σx = 0, Σx2 = 2, Σxy =15137, Σy=75485, n= 3
Σy = na a = Σyn =
754853 = 25161.67
Σxy = bΣx2 b = ΣxyΣx2 =
151372 = 7568.5
Now,
Ŷ = a + bx
Ŷ = 25161.67+7568.5x
For 2067,
X=2067, x=2067-2065 = 2
38
Ŷ2067 = 25161.67+7568.5*2
= Rs. 40298.67
Ŷ2068 = 25161.67 + 7568.5*3 = 47867.17
Ŷ2069 = 25161.67+ 7568.5*4 = 55435.67
Ŷ2070 = 25161.67+ 7568.5*5 = 63004.17
Ŷ2071 = 25161.67+ 7568.5*6 = 70572.67
Questionnaire
1) What are the different kinds of deposits that Everest bank deals with?
2) How the different kinds of deposits constitute the whole deposit
amount?
3) What is the procedure of opening deposit in general rules?
4) What is the format of Board of Directors?
5) What is the structure of Management team?
5) What is the growth rate of different kind of Deposit per year?
6) How much is issued as loan and advance per year?
7) What is the range of per year Total Deposit?
8) What is the range of per year Current, Fixed and Saving Deposit?
9) How much is invested per year to public?
10) What is the range Cash Balance at each year end?