1

CHAPTER-I
INTRODUCTION

1.1 Background of the study

Fieldwork is a work which is done in field. It is a work undertaken outside the school,
office or laboratory in order to gain knowledge through direct contact and observation.
Field work is a general descriptive term for the collection of raw data in the natural and
social sciences such biology, ecology, geography and sociology. It may be done in
various subject. The fieldwork is conducted at a place in a context or in a set of
circumstances. In this universe, human they are the subject of study. In the process of
acquiring knowledge of research form such method Tribhuvan University also has been
operating a programme of field work study. Fieldwork refers to face to face interviewing
or set of writing questionnaires or set of questionnaires or observation or telephone
interviewing.
Practical Knowledge or study is better than theoretical Knowledge. Practical knowledge
teach to the student that how to use the theoretical knowledge in practical life. Students
can spread their minds during fieldwork study emphasis to student to be more conscious
and sincere about problems. Fieldwork study emphasis to student to be more conscious
and sincere about problems. Fieldwork study increases the ability to analysis about
subject matter. Fieldwork study can make the student able to face the real study
problems. Study will be effective in that time when student can see such theoretical
position in practical life. Students cannot be anything perfectly until he comes in field.
Only practical knowledge makes man perfect.

1.2 Profile, Events and Activities of Rastriya Banijya Bank

Rastriya Banijya Bank (abbreviated as RBB) is fully government owned, and the largest
commercial bank in Nepal. RBB was established on January 23, 1966 (2022 Magh 10
BS) under the RBB Act. RBB provides various banking services to a wide range of
customers including banks, insurance companies, industrial trading house, airlines,
hotels, and many other sectors. RBB has Nepal's most extensive banking network with
161 branches. [citation needed]
 2

RBB Ltd. established on January 23, 1966 (2022 Magh 10) a synonymous of stable and
people's bank in Nepal - is one of the pioneer Bank in the country with the history of
nearly a half century. Earlier constituted under RBB act 2021 with the full ownership of
the government of Nepal, the Bank has been running under Bank and Financial Institute
Act (BAFIA) and company Act (CA) 2063 at present. The Bank licensed by NRB as a 'A'
class commercial Bank of the country, has grown up as an indispensable component of
the Nepalese economy. The bank is the highest profit earning bank for the F/Y 2014/15.
The bank has second highest paid up capital till the end of F/Y 2015/16 after agriculture
development bank. In terms of deposit, the bank has collected Rs. more than Rs. 130
Billion (F/Y 2014/15) which is the highest deposit of any commercial bank in Nepal.
Rastriya Banijya Bank is one of the pioneering bank in Nepalese Market that has carried
out Note kosh fund, Bharu koshfunf, NRB's Draft transaction, Government Transaction,
Pension fund of Nepal Government. Besides more than 2 dozens of bank's branches are
running in losses, they provides continue services to the general public because it is the
government bank. Profit is not only the solo motive of the bank. RBB provides service in
remote and undeveloped areas of Nepal.
RBBL- which has made glorious history of contributing for the monetization of the
economy, eliminating dual currency in the market, initiating preliminary financial
literacy, help flourish industrial, commercial and financial sector of the country has now
emerged as a modern and strong financial institution of the country. The Bank with 2600
hands has expanded its wings in the most part of the country through multiple distribution
outlets of 161 branches, 17 counters, 28 branch less banking (BLB) and 72 ATMS. The
Bank with the highest public confidence reflected in the highest deposit base and growing
demand for branch establishment in the various parts- has stood as a pyramid in the
financial arena of the country. The Bank with as many as 1.7 millions satisfied/ direct
customers ranging from poor to elite ones and millions of indirect ones, has drawn
important imprint in the picture of country's economy through its significant involvement
in the best use of its resources to enhance the production, income and employment
opportunities. The Bank is fully committed to contribute its best for the socio economic
development of the country and people in the days to come.
 3

1.2.1 Banks in Nepal

In the context of Nepal, like as in other country the goldsmiths and landlord was the
ancient banker. The Nepalese people were highly exploited by shahumahajan by charging
higher interest rate that is compound interest rate and even by manipulating the principle
amounts. If we try to see the history of banking transaction in depth then evidence of
money landing function are found in practice before 8th century in 780B.S. Gunakamdev
the ruler of Kathmandu reconstructed Kathmandu valley by borrowing dept from the
people. In 14th century Tankdari system had been running in the period of Ranodipshing
in Kathmandu established and office called Tejarathadda. From the office the government
distributed salary to their employees and provided loan to government employment @
5% of interest against the security gold, silver etc.
Because of the development of economy activities in Nepal the above institution could
not be fulfilled the need of people. So in Kartik 30, 1994 B.S. Nepal bank was established
as one of the semi government commercial bank which had 10 million authorized capital
and 842000 paid of capital. It has done the pioneering function in function spreading the
banking habits among the people. Having felt a need of central bank to control and direct
the commercial bank and help the government for making monitory polices Nepal Rastra
Bank was set up in 14 baishakh,2013 B.S.
To fulfill the growing credit requirement of the country. The commercial bank i.e,
Rastriya Banijya bank was establishes in 10th Bhadra 2022 B.S. this bank also provides
facility for the economy welfare of the general public. Nepal is an agricultural country to
develop agriculture system. Industry agriculture development bank and Nepal industrial
development corporation was established in 2024 B.S. 2016 B.S. respectively.
The initiation of the financial sector liberalization policy by Nepal Rastra Bank, a board
of joint venture banks entered with the view to accelerate the pace of development of
nation. At present there are many joint venture banks which are running successfully in a
competitive environment. His majesty government deliberates policy of allowing foreign
joint venture banks to operate in Nepal basically targeted, to encourage local tradition
commercial bank to enhance their capacity through competitor's efficiencies
mechanization modernization prompt customer service. Nepal Arab bank ltd was
established in 2041 as a first foreign joint venture bank.
 4

Now in our country there are 31 commercial bank, 87 development bank, 79 finance
company 21 micro credit development banks after mid July 2011 (licensed by NRB).

1.2.2 List of Commercial Bank in Nepal

The history of financial and economic development in Nepal is not very old. It has gone
through different stages, during the PM Ranadip shingh around 1972. A.D." TEJARATH
ADDA" was introduced, which brought a reform in economic and financial section. The
main purpose of "TEJARATH ADDA" was to provide credit facilities to the general
public at confessional rate. However the installment of "KHUSI KHANA" as a banking
agency during the king Prithivi Narayan Shah could also be regarded as the first step
towards banking in Nepal.
After that the first commercial bank of Nepal, Nepal bank Limited (NBL) was lunched
with the cooperation of imperial bank of India in November 1937 holding 51%
government equity. The second commercial bank, Rastriya Banijya bank come into
existence in 1996 A.D with 100% government ownership. In early 1980, to meet the need
of health completion in the financial system, Nepal allowed to entry of foreign banks as
joint ventures with up to maximum of 50% equity participation.
The list of commercial Banks are shows follows:
1. Agriculture Development Bank (ADBL)
2. Nepal Bank Limited (NBL)
3. Rastriya Banijya Bank (RBB)
4. Citizens Bank International Ltd. (Citizens)
5. Everest Bank Limited (EBL)
6. Global IME Bank Limited (Global)
7. Himalayan Bank Limited (HBL)
8. Kumari Bank Limited (Kumari)
9. Laxmi Sunrise Bank Ltd. (Laxmi)
10. Machhapuchhre Bank Ltd. (MBL)
11. Nabil Bank Limited (NBL)
12. Nepal Investment Mega Bank Ltd. (NIBL)
13. Nepal SBI Bank Ltd. (SBI)
 5

14. NIC Asia Bank Ltd. (NIC)

15. NMB Bank Limited (NMB)
16. Prabhu Bank Limited (Prabhu)
17. Prime Commercial Bank Ltd. (Prime)
18. Sanima Bank Limited (Sanima)
19. Siddhartha Bank Limited (SBL)
20. Standard Chartered Bank Ltd. (SCBNL)
Source: "[Link]"

Nepal Arab bank limited was the first joint venture bank which was established with the
joint venture of Arab bank emirates in 1984 in 1986. Nepal grind lays bank limited (now
chartered bank limited) entered in nepali financial market as a joint venture with ANZ-
Grind lays.

1.3 Statement of Problems

Liquidity is the status and part of the assets which can be used to meet the obligation.
Liquidity can be viewed in term of liquidity stored in the balance sheet and in term of
liquidity available through purchased fund. The degree of liquidity depends upon the
relationship between cash assets plus those assets which can be quickly turned into cash
and liability awaiting payments.
Bank needs to maintenance some seasonable level of liquidity to fulfill different
commitments such as provide money to depositors when they demand for administrative
expenses, for maintaining cash reserve ratio in the central bank etc. so, liquidity is
defined as the bank's capacity to pay cash in exchange of deposits. Liquidity is crucial in
the business like banking. Because if the bank has the high liquidity it can no on a desired
profit and if the bank has the shortfall of the liquidity it cannot satisfy its customers.
Inadequate liquidity may lead to collapse of the bank while excess liquidity is
determinant to bank's profitability in order to remove demerits associated with
maintaining inadequate and excess liquidity, bank should maintained and optimum level
of liquidity. This possible only when bank's liquidity needs is correctly predicted.
Prediction covers inflows and outflows of liquidity. If prediction shows more outflows,
 6

bank should be prepared to cover the shortfall by borrowing or by liquidating assets. If

inflow is greater than outflows, bank should plan long terms predictions. Prediction of
liquidity need should be in the form of primary and secondary reserve so that bank
generates income and at the same time does not compromise to liquidity. Banks got
failure because of wrongly analyzed liquidity position and wrongly predicated liquidity
requirement and management policy of liquidity. Thus to gain the trust of the customers
and be success on the operation, the bank should maintain and forecast the liquidity need
for the period and optimum level of liquidity based on the past liquidity position.
1. What is the liquidity position of RBB?
2. What is the profitability position of RBB?

1.4 Objectives of The Study

The main objective of the study is to analyze the Rastriya Banijya Bank's liquidity
position. Based on the analyzed liquidity position, the study will suggest the liquidity
need and its management for the current year.
Other objectives can be listed below:
 To excess the liquidity position of the RBB
 To excess the RBB's profitability
 To suggest the amount of the optimum level of liquidity

1.5 Significance of The Study

This report is prepared to analyze the liquidity position of Rastriya Banijya Bank. This
report comprises the date from 2010 to 2015. This would help the bank to observe the
trend of the liquidity position hold in those periods. Besides that, this study also evaluates
the role of short term obligation and the bank ability to pay the currently maturity
obligation. Moreover, the study will check the profitability of the bank. This will help the
bank to take the corrective actions if there are any errors on the past performance and the
study aims to recommend correcting the division if the standard has not been met.
 7

1.6 Review of Literature

This chapter deals with the theoretical aspects of the topic of financial analysis of
Rastriya Banijya Bank in more detail and descriptive manner. For this study, journals,
articles, and some research report related with this topic have been reviewed. This study
has to refer almost all books related with this topic published. Some of the prior reports
by students of BBS regarding this topic have also been reviewed.

1.6.1 Conceptual Framework

One of the sensitive factor or element in the bank is liquidity. Liquidity refers to the
convertibility assets into cash. It means how fast the assets can be change into cash.
There are many assets which are easily converted into cash by the bank. Such as cash in
hand, cash at bank, cash at central bank, investment in government securities. But some
assets are difficult to get converted into cash such as loan and fixed assets.
Liquidity is also defined as the position or capability of a bank to meet the current
obligation of customers such as payment of cheque. Payment of demand drafts,
disbursement of approved loan etc. Bank needs to maintain some reasonable level of
liquidity to fulfill different commitments such as provide money to depositors when they
demand for administrative expenses for maintaining cash bank's capacity to pay cash in
exchange of deposits. Liquidity is crucial in the business like banking. Because if the
bank has high liquidity, it can no earn a desire profit and if the bank has the shortfall of
the liquidity it cannot satisfy its customers. Inadequate liquidity may lead to collapse of
the banks while excess liquidity is detrimental to bank's profitability. In order to remove
demerits associated with maintaining inadequate and excess liquidity, banks should
maintain an optimum level of liquidity. This possible only when bank's liquidity needs is
correctly predicted. Prediction covers in present outflows of liquidity. If prediction shows
more outflows, bank should be prepared to cover the shortfall by borrowing or by
liquidating assets. If inflow greater than outflow, bank should plan where to invest so that
income can be increase. Banks attach great importance short term and long term
predictions. Prediction of liquidity need should be in the firm of primary and secondary
reserves so that bank generates income and at the same time does not compromise to
liquidity.
 8

1.7 Liquidity assets

The assets which can be converted into cash immediately without a nominal loss of
value. Liquidity can be in the firm of treasury bills, investment in government securities,
gold and silvers, inventories and marketable securities etc.

1.7.1 Cash reserve Ratio (CRR)

central bank the world over make banks maintains the certain level of liquidity to total
deposit liabilities in the form of the cash and bank balance. This ratio is known as the
cash reserve ratio or primary reserve.

1.7.2 Statutory liquidity ratio (SLR)

Central bank orders to the bank to maintain the certain level of liquidity to total deposit
liabilities in the form of the cash and bank balance and treasury bills and government
securities and bonds. Such liquidity requirement is called the statutory liquidity ratio.

1.7.3 Importance of liquidity for the bank :

The liquidity is important for the bank for the motives cited as follow:
 Transaction motive
 Speculative motive
 Precautionary motive

1.7.4 Need of liquidity for the bank:

 To meet the expenses for the bank's administrative works
 To pay all sorts of deposit on demand
 To repay the dept.
 To gain trust or faith
 To provide the security to the bank

1.7.5 Demand for the liquidity:

 Withdrawal of customer deposit
 Acceptable loan request
 9

 Repayment of non-deposit borrowing

 Payment of interest on deposit
 Payment of dividends
 Expansion and growth Miscellaneous liabilities

1.7.6 Supply of bank liquidity:

 Capital issue
 Retained earning
 Borrowings
 Bond issue
 Repayments of loans
 Other incomes

1.7.7 Criteria of the measuring the bank liquidity:

Criteria of measuring of the bank liquidity denotes
 attributes required being bank liquidity
 compliance test of liquidity requirement
 In words criteria area bank liquidity refers
 What conditions the assets have to meet to be bank liquidity?
 Whether CRR and SLR have been maintained as per instruction of the central
bank?

1.7.8 Liquidity to be maintained with the central bank :

Nepal Rastra Bank, as the central bank of Nepal had made it mandatory for commercial
bankers to maintain liquidity as under:
Balance at Nepal Rastra Bank - 7% current and saving deposit liabilities, 4.5% of fixed
deposit liabilities.
Cash in Vault - 2% of deposit liabilities
 10

1.7.9 Penalty for non-compliance:

Penalty will be levied for failing to maintain the adequate liability as above under any of
the following conditions:
 In the case of shortfall in maintenance of balance with Nepal Rastra bank but
maintenance of cash at vault more than 2%, then on such shortfall amount.
 In the case shortfall in maintenance of balance with Nepal Rastra bank but
maintenance of cash at vault more than 2%, up to 1% excess cash of total deposit
is added in the balance with NRB, than on such shortfall amount (after adding up
to 1% excess)
 In the case of shortfall in maintenance of cash in vault as well as shortfall in
balance held with Nepal Rastra bank, than on total shortfall amount.

1.8 Applicable penalty rates

1. first time shortfall Equivalent to bank rate/highest refinance (currently
5.5%)
2. For second time shortfall Equivalent to 2 times of bank rate
3. For third time shortfall and Equivalent to 3 times of bank rate.
subsequent shortfalls
The penalty is imposed on the shortfall amount on weekly basis.

1.8.1 Composition :
 Total deposit means current, saving and fixed deposit account as well as call
money deposit and certificate of deposit. For the purpose, deposits held in
convertible foreign currency, employees guarantee amount and margin account
will not be included.
 Fixed deposit means a deposit in local currency accepted under the condition to
repay on completion so stipulated time period.
 Current and Saving deposit means all deposit accounts other than the fixed
deposits.
 Cash in Vault shall include only the local currency and foreign currency (except
clearing cheque etc.)
 11

 Balance held with Nepal Rastra bank in ordinary account only will be eligible for
liability calculation. Special accounts opened with Nepal Rastra bank for specific
purpose and foreign currency designated account will not be included for the
purpose.
 For the purpose of liquidity examination, all branches of the bank shall constitute
one unit.

1.8.2 Basis for liquidity requirement prediction

 Maturity of deposits
 Seasonal need of liquidity
 Maturity of borrowing
 Capital purchases
 Maturity of placement
 Central banks requirement
 Maturity of bill payment
 Market situation
 Repayment of the debt.
 Bonus to the staffs
 Letter of credit outstanding
 Investment

1.9 Review from related studies

Bank needs to maintain some reasonable amount of liquidity to fulfill different
commitments. Such as provide money to depositors when they demand for administrative
expenses, for maintaining cash reserve ratio in the central bank etc. so, liquidity is define
bank's capacity to pay cash in exchange of deposits. Liquidity needs of commercial banks
are unique because in no other types of business there will be such large portion of
deposits payable on demand. Inadequate liquidity does damage credits standing of other
organization as well but a banks fails to pay the deposits on demands, the bank loose the
faith of the public. Bank may maintain the liquidity in the form of:
 Cash and bank balance
 12

 Placement money at short calls or short notice

 Investments in Gov. securities and other securities convertible into cash
International federation of accountants has recommended the measuring the liquidity of
bank by:
 Cash and liquid securities
 Interbank money deposit liability
Liquidity of the bank should be maintained according to standard; excel liquidity as well
as lack of the liquidity indicates that a bank is serious financial problems. The implication
of the financial problem results losing of deposits, which erodes its supply of cash and
forces the institutions to dispose of its safer and more liquid assets. On the other hand,
other banks that are strong in liquidity will be increasingly reluctant to lend the problem
bank liquid funds at higher interest rates. Thus, we can say that it is optimism necessity of
the bank to maintain a proper balance between high liquidity and low liquidity.
The tools used for analysis are:
 Cash and bank balance to total deposit ratio
 Current deposit to total deposit ratio
 Saving deposit to total deposit ratio
 Investment to total deposit ratio
 And fund fluctuation trend line.

1.9.1 Research Methodology

The method which is use in the research is called research methodology. How the data is
collected and which source the research use for getting the data is under the research
methodology. Research methodology covers the data analysis tools as well.

1.9.2 Research Design

A research design is the arrangement conditions, for the collection and analysis of data in
manner that aims to combined relevance to the research purpose with economy in
procedures.
This study aims on the financial analysis of the Rastriya Banijya Bank. This study will he
mainly bas on primary data and secondary data. The primary data, which are collected
 13

directly from the question answer, direct interview with customer and office staffs. The
secondary data will be collect from respective annual reports especially from the Rastriya
Baniya Bank's web sites and various other journals and from security bond Nepal
(SUBO) and Nepal stock exchange (NEPSE).

[Link] Data collection techniques

I will go to the Branch office of Rastriya Banijya Bank Madhi Bazaar, Sindhuli and get
the important information. I will be collect the main annual reports of this bank directly
from the web site. And other various articles and journals from various publication and
some others from the SEBO, NEPSE and previous field reports are also taken in to
accounts.

[Link] Data Analysis Tools

Data analysis tools means which tools the research used for present and analyzed the
data. The main tools of analysis are mathematical and statistical tools. In this reports
statistical and financial ratio tools is used for data analysis. Mean and correlation is
calculated for analysis the data as statistical tools.

[Link] Ratios:
An arithmetical relationship between two figures is called ratio. It is the most useful and
analytical tools to evaluate in respect to one variable over another. Here, for our purpose,
only the liquidity related ratios are calculated.
Liquidity ratio
 Cash and bank balance to current deposit ratio
 Saving deposit to total deposit ratio
 Cash and bank to total deposit ratio
 Fixed deposit to total deposit ratio
 Cash and bank balance to total deposit ratio(excluding fixed deposit)
 NRB balance to total deposit (excluding fixed deposit)
 NRB balance to fixed deposit ratio
 Deposit to investment ratio
 14

[Link] Statistical Tools

 Mean
 Standard deviation
 Coefficient of variance
 Correlation of coefficient
 Trend analysis

1.10 Limitation of the study

This study is simply conducted for the partial fulfillment of the requirement for the
degree of the bachelor in business studies (BBS). primary and the secondary data is used
and analyzed which could not disclose the actual result. And being the first endeavor, the
report can comprise some mistakes which may cause to misinterpretation of the results.
The other limitation of the study is listed below:
 Data contains mostly of the annuals reports of the bank through fiscal year
2016/2017 to 2020/2021.
 Only five years observation covering from fiscal year 2016/2017 to 2020/2021 is
analyzed.
 Analysis is based on the ratio and trend lines of the corresponding ratios only.
 For the forecast of the liquidity requirement, daily and monthly data is needed.
But due to time and cost constraints only the annual data is used for analysis.
 Only secondary data is used.
 The study is only fulfill the requirement for the degree of bachelor in business
studies, which can not cover all the dimension of the all subjects matter and
resource and time period is also limited.
 15

CHAPTER-II
RESULT AND ANALYSIS

2.0 DATA PRESENTATION AND ANALYSIS

Presentation means the presentation of the collected data through table, figure etc.
Presentation is the process of understanding the study or the report and calculating the
opinion. An analysis of a data means the process where the statement or the report gets
resolve by breaking them into simple statement. Analysis means to find out something
and give opinion about the presented data.

2.1 PARTCIPATION OF THE ALL THE DEPOSIT IN THE TOTAL

DEPOSIT LIABILITY:
2.2
Fiscal year Current Saving deposit Fixed deposit Total deposit
deposit
2018/19 16111639.8 68164630.05 39659421.12 123935691
2019/20 16082839.7 86262504.06 43862290.2 146207634
2020/21 16201766.5 97321001.11 48963175.5 162485943.1
2021/22 16133333 100009875.5 52883711.9 169026920.4
2022/23 16134896 110007401.5 52973431.2 174024910.8
Source:- "Annual report of Rastriya Banijya Bank ltd."
 16

The chart diagram:

Current Deposit Saving Deposit Fixed Deposit

120000000

100000000

80000000

60000000

40000000

20000000

0
2018/19 2019/20 2020/21 2021/22 2022/23

Fiscal Year
In the above table and chart, we see that, in fiscal year 2018/19, the current deposit
account occupied 13%, saving deposit account 50%, fixed deposit account 37%, in fiscal
year 2019/20 the current deposit account occupied 13%, saving deposit account 55%
fixed deposit account32% occupied. In fiscal year 2020/21 the current deposit account
occupied 11%, saving deposit account occupied 59%, fixed deposit account 30%
occupied. In fiscal year 2021/22 the current deposit account occupied 12% saving deposit
account 63%, fixed deposit account 32% occupied. In fiscal year 2022/23 the current
deposit account occupied 14%, saving deposit account 69%, fixed deposit account
occupied 34%.

2.2 SAVING DEPOSIT TO TOTAL DEPOSIT RATIO :

Fiscal year Saving deposit Total deposit Ratio

2018/19 53634971 107269942 0.5

2019/20 68164630.1 123935691 0.55
2020/21 86262504.1 146207634 0.59
2021/22 97321001.1 162485943 0.59895
2022/23 100009876 169026920 0.59168
Source:- " Annual report of Rastriya Banijya Bank ltd."
 17

The trend line chart

Ratio
0.62
0.6
0.58
0.56
0.54
0.52
0.5
0.48
0.46
0.44
2018/19 2019/20 2020/21 2021/22 2022/23

Ratio

Fiscal Year
From the above table and trend line chart, the ratio is fluctuating state. In the fiscal year
2018/19, the bank has the saving deposit of 0.5 times of total deposit liability. And 0.55,
0.59, 0.59895, 0.59168 times of total deposit liability in fiscal year 2019/20, 2020/21,
2021/22, 2022/23 respectively.

2.3 FIXED DEPOSIT TO TOTAL DEPOSIT RATIO:

Fiscal year Fixed deposit Total deposit Ratio

2018/19 39689878.5 107269942 0.37

2019/20 39659421.12 123935691 0.32

2020/21 43862290.2 146207634 0.3

2021/22 48963175.5 162485943 0.301338

2022/23 52883711.9 169026920 0.312872

Source:- "Annual report of Rastriya Banijya Bank ltd ".

 18

The pie chart

Ratio

2018/19 2019/20 2020/21 2021/22 2022/23

Fiscal year
From the above table and pie chart shows the ratio is fluctuating in increasing and
decreasing trend. The highest ratio is 0.37 times in year 2018/19 and the lowest ratio is 30
times in fiscal year 2020/21. And 0.32 times and 0.312872 times in year 2019/20,
2021/22 and 2022/2023 respectively.

2.4 CASH AND BANK BALANCE TO CURRENT DEPOSIT RATIO :

Fiscal year Cash and bank Current deposit Ratio
balance
2018/19 6693644.4 13945092.5 0.48

2019/20 7894703.5 16111639.8 0.49

2020/21 9971360.61 16082839.7 0.62

2021/22 15391678.2 16201766.5 0.95

2022/23 14035999.7 16133333 0.87

Source:-"Annual report of Rastriya Banijya Bank ltd ".

 19

The trend line chart

Ratio
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2018/19 2019/20 2020/21 2021/22 2022/23

Ratio

Fiscal year
From the above table and pie chart shows the ratio is fluctuating in increasing and
decreasing trend. The highest ratio is 0.95 times in year 2021/22 and lowest ratio is 0.48
times in fiscal year 2018/19. And 0.49 times, 0.62 times and 0.87 times in year 2019/20,
2020/21 and 2022/2023 respectively.

2.5 CASH AND BANK BALANCE TO TOTAL DEPOSIT RATIO :

Fiscal year Cash and bank Total deposit Ratio
balance
2018/19 6693644.4 107269942 0.062

2019/20 7894703.5 123935691 0.064

2020/21 9971360.61 146207634 0.070

2021/22 15391678.2 162485943 0.095

2022/23 14035999.7 169026920 0.083

Source:- "Annual report of Rastriya Banijya Bank ltd ".

The trend line chart
 20

0.1

0.09

0.08

0.07

0.06

0.05
Ratio
0.04

0.03

0.02

0.01

0
2018/19 2019/20 2020/21 2021/22 2022/23

Fiscal year
From the above table and trend line chart, the ratio is fluctuating. In fiscal year 2018/19,
the bank has the liquidity for total deposit in the ratio of 0.062 times And in fiscal year
2019/20, 2020/21, 2021/22 and 2022/23 the bank has the liquidity for the total deposit in
ratio of 0.064, 0.07, 0.095 and 0.083 times respectively.

2.6 CASH AND BANK BALANCE TO TOTAL DEPOSIT

(EXCLUDING FIXED DEPOSIT) RATIO:
Fiscal year Cash and bank Total deposit Ratio
balance
2018/19 6693644.4 67580063.5 0.100

2019/20 7894703.5 84276269.9 0.094

2020/21 9971360.61 102345344 0.100

2021/22 15391678.2 113522768 0.136

2022/23 14035999.7 116143209 0.121

Source:- "Annual report of Rastriya Banijya Bank ltd ".

The chart diagram
 21

Ratio
0.16

0.14

0.12

0.1

0.08

0.06

0.04

0.02

0
2018/19 2019/20 2020/21 2021/22 2022/23

Ratio

Fiscal year
From the above table and chart, the ratio is fluctuating in increasing state. In fiscal year
2018/19 the bank has the liquidity against current and saving deposit account deposit act
liability in the ratio of 0.1 times. And in fiscal year 2019/20, 2020/21, 2021/22 and
2022/2023 the bank has the liquidity against current and saving deposit account lity in the
ratio of 0.94 times, 0.1 times, 0.136 times and 0.121 times respectively.

2.7 BALANCE WITH NRB TO CURRENT AND SAVING

DEPOSIT RATIO :
Fiscal year Cash and bank Total deposit Ratio
balance
2018/19 10812810.16 67580063.5 0.16

2019/20 9270389.684 84276269.85 0.11

2020/21 11257987.81 102345343.8 0.11

2021/22 18163642.82 113522767.6 0.16

2022/23 20905777.53 116143208.5 0.18

Source:- "Annual report of Rastriya Banijya Bank ltd ".

The trend line chart
 22

Ratio
0.2
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
2018/19 2019/20 2020/21 2021/22 2022/23

Ratio

Fiscal year
From the above table and trend line chart, the ratio has been maintained in fiscal year
2018/19 by 0.16 times. And the bank has been maintained its ratio in fiscal year 2019/20,
2020/21, 2021/22 and 2022/23 by 0.11 times, 0.11 times 0.16 times and 0.18 times
respectively.

2.8 BALANCE WITH NRB TO FIXED DEPOSIT RATIO :

Fiscal year Fiscal Year Balance with Fixed deposit Ratio
NRB
2018/19 11113165.99 39689878.5 0.28

2019/20 7931884.224 39659421.1 0.2

2020/21 8333835.138 43862290.2 0.19

2021/22 16647479.67 48963175.5 0.34

2022/23 22211159 52883711.9 0.42

Source:- "Annual report of Rastriya Banijya Bank ltd".

The pie chart

 23

Ratio

2018/19 2019/20 2020/21 2021/22 2022/23

Fiscal year
From the above table and pie chart, the ratio is fluctuating. In fiscal year 2018/19, the
bank has the balance with NRB against fixed deposit liability in the ratio of 0.28 times.
And in fiscal year 2019/20, 2020/21, 2021/22 and 2022/23 the bank has the balance with
NRB against fixed deposit liability in the ratio of 0.20 times, 0.19 times, 0.34 times and
0.42 times respectively.

2.9 TOTAL INVESTMENT TO TOTAL DEPOSIT RATIO :

Fiscal year Total investment Total deposit Ratio

2018/19 27351908.86 73924078 0.37

2019/20 29150050.56 91093908 0.32

2020/21 30035583.76 107269942 0.28

2021/22 28505208.93 123935691 0.23

2022/23 36551908.5 146207634 0.25

Source:- "Annual report of Rastriya Banijya Bank ltd ".

The trend line chart
 24

Ratio
0.4

0.35

0.3

0.25

0.2

0.15

0.1

0.05

0
2018/19 2019/20 2020/21 2021/22 2022/23

Ratio

Fiscal Year
From the above table and trend line chart, the ratio is fluctuating. In fiscal year 2018/19,
the bank invested 37% of the deposit in investment. In fiscal years 2019/20, 2020/21,
2021/22 and 2022/23 the bank has invested 32%, 28%, 23% and 25% of the deposit in
investment respectively.

2.10 LIQUIDITY ASSETS TO TOTAL DEPOSIT RATIO :

Fiscal year Liquidity assets Total deposit Ratio

2018/19 19220260.3 73924078 0.26

2019/20 46457893.1 91093908 0.51

2020/21 54707670.4 107269942 0.51

2021/22 61967845.5 123935691 0.50

2022/23 70179664.3 146207634 0.48

Source: - "Annual report of Rastriya Banijya Bank ltd ".

The diagram chart

 25

Ratio
0.6

0.5

0.4

0.3

0.2

0.1

0
2018/19 2019/20 2020/21 2021/22 2022/23

Ratio

Fiscal year
From the above table and trend line chart, the ratio is fluctuating slightly except fiscal
year 2018/19, the bank has invested 26% of the deposit in the liquid assets. In fiscal year
2019/20, 2020/21, 2021/22 and 2022/23 the bank has invested 51%, 51%, 50% and 48%
of the deposit in the liquid assets respectively.

2.11 Analysis of Result

In general, Rastiya Banijya Bank is encouraging the commercial banking system in
Nepal which is bringing healthy competition and improving the works and efficiency
which is a doubtful work of the bank. Nevertheless, on the course of the studying there
are some deviations and recommended as follows:
 The overall results are satisfactory. But in some case the Rastriya Banijya Bank
should take certain steps to improve the bank current financial condition.
Therefore some recommendations are being put forward for its improvement
along with its development of the country.
 The proportion of the saving deposit account is high in total deposit liability. So,
it is recommended that the bank should utilize the amount collected from the
 26

saving deposit account carefully. It should be invested in the higher yielding

areas.
 The cash and bank balance in the Rastriya Banijya Bank is satisfactory. It is
higher a bit though. Bank should analyze the opportunities for short term
investment.
 Balance with NRB to current plus saving deposit should be maintained at the
below than 0.11 times.
 Investment to deposit ratio is fluctuating adversely. It may harm the operation of
the bank. So, the investment from the deposit source should always be aware of
liquidity need and keep in mind to maintain the optimum liquidity.
 Bank should not spend too much in the fixed assets because it yields only a
nominal portion, almost no yield.
 27

CHAPTER-III
SUMMARY AND CONCLUSION

3.1 SUMMARY
Nepal is one of the least developed countries of the world. For most of the developing
process, it is financially depending upon the foreign countries. It is economically too
weak. Thus, the economic condition of the people is weak. In Nepal 85% of the people
are depended upon agricultural sector which is unable to provide full employment to the
people. Nepal government has to activate people in the nation's development through
overall industrialization of nation. For this purpose, development of sound banking
system is essential.
In Nepalese banking sector, commercial banks including ventures banks are operating at
present. In the absences of modern banking any country cannot develop the economic
activity. Therefore, it is essential to find out whether or not the banks are serving an
important contribution to develop sectors of economy. Liquidity is said to be general
business of fund, which shows the bank ability to meet cash requirement. In this record,
this study has been based upon the objective to evaluate the liquidity position of Rastriya
Banijya Bank.

3.2 CONCLUSION
 The saving deposit account is nearly constant trend. The highest ratio is 0.55
times in fiscal year 2020/21 and the lowest ratio is 0.41 times in fiscal year
2022/23. But the ratio is not satisfactory due to the last year ratio was decline.
 Fixed deposit is fluctuated. The lowest ratio is 0.32 times and highest ratio is 0.48
times. It is decrease up to fiscal year 2019/20 and grows up then. And it is 0.48
times on 2022/23. It is satisfactory. Bank made good ratio after 2020/2021.
 From the cash and bank balance to current deposit liability is fluctuating. The
ratio is moving around between 0.48 times to 0.95 times. It is satisfactory.
 28

 Cash and bank balance to total deposit ratio is fluctuating. But the ratio is
somehow satisfactory even though the ratio is higher than the central banks
prescription. The ratio is moving around the between 0.05 times to 0.11 times.
 Cash and bank balance to total deposit (excluding fixed deposit) ratio is
fluctuating in increasing state. The ratio is satisfactory. It is moving around
between 0.08 times to 0.19 times.
 The ratio of balance with the NRB to current and saving deposit has been
fluctuating. The ratio is decline in year 2019/20 and constant in 2020/21 and then
it is grow up. So, the ratio is satisfactory.
 The balance with the NRB to fixed deposit ratio is fluctuating. It is moving
around between 0.18 times to 0.39 times.
 The investment to total deposit ratio is fluctuating adversely. Since the ratio is
fluctuating the bank has unsatisfactory result. However the investment from
source of deposit is higher.
 It will give a higher return without risk only if the ratio is stabilized.
 The liquid assets to total deposit ratio is fluctuating slightly except fiscal year
2018/19. However the ratio is higher and somehow may be considered
satisfactory.
 29

Bibliography

 Annual Report of Rastriya Banijya Bank LTD., Sindhuli

 Bajracharya, B.C. (2053), Business Statistics and Mathematics, M.K. publication
and distributions
 Gautam D K, Gautam P K, Adhikari R K (2072) Business Research Methods.
Kathmandu: Januka publication
 Rawal, D, Sapkota C.K., Timalsina N., (2074) Commercial Bank Management.
 Kathmandu: Samjhana publication
 [Link]
 [Link]
 [Link]