research report on deposit mix

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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

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Page 1: Research Report on Deposit Mix

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

Page 2: Research Report on Deposit Mix

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

Page 3: Research Report on Deposit Mix

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

Page 4: Research Report on Deposit Mix

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

Page 5: Research Report on Deposit Mix

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

Page 6: Research Report on Deposit Mix

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

Page 7: Research Report on Deposit Mix

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

Page 8: Research Report on Deposit Mix

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

Page 9: Research Report on Deposit Mix

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

Page 10: Research Report on Deposit Mix

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

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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

Page 12: Research Report on Deposit Mix

EBL Everest Bank Limited

SWIFT Society for Worldwide Inter-bank Financial Telecommunication

P.U. Purbanchal University

Page 13: Research Report on Deposit Mix

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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

Page 16: Research Report on Deposit Mix

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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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16

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.

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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

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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.

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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.

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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

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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

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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

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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

Page 36: Research Report on Deposit Mix

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

Page 37: Research Report on Deposit Mix

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

Page 38: Research Report on Deposit Mix

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

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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

Page 40: Research Report on Deposit Mix

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

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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

Page 42: Research Report on Deposit Mix

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.

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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

Page 44: Research Report on Deposit Mix

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.

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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.

Page 46: Research Report on Deposit Mix

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

Page 47: Research Report on Deposit Mix

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

Page 48: Research Report on Deposit Mix

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

Page 49: Research Report on Deposit Mix

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

Page 50: Research Report on Deposit Mix

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?