1

CHAPTER I
INTRODUCTION

1.1 Background of the Study

Bank is an institution that deals in money and its substitute and provides other
financial services. Bank accepts and makes iron and drive a profit from different in
interest rate paid charged respectively. ‘BANK’ is origin from Latin word ‘BANQUE’
which refers to the bench on which the banker would keep is money record. Some
Believers it has been origin from French word ‘BENCA’ which means a beach for
keeping leading and exchanging of money charges. Modern banking was originated in
medieval Italy despite prohibition against usury (The Charging of Interest) according
to canon law (Kunitz, 1984)

According to Goldthwaite- “Bank is a manufacture of credit and machine for facilities

exchange.”According to Crowther (2016)“The Bankers business to take debars of
other people to offer his exchange and there by create money.”According to chambers
20th century dictionary- “Banking is an institution of the keeping lending and
exchanging etc.”

A transaction involving a transfer of funds to another party for safekeeping is called

deposit.A portion of funds that is used as security or collateral for the delivery of a
good is called deposit. A deposit is identical to the money an investor transfers into a
bank's savings or checking accounts. Often, a person must deposit a certain amount of
money in order to open a new bank account, which is known as a minimum deposit.
This amount covers the costs associated with opening and maintaining the
[Link] system plays a very important role in the economic life of the nation.
The health of the economy is closely related to the soundness of its banking system.
In a developing country like Nepal the banking system as a whole plays a vital role in
the progress of economic development. A bank as a matter of fact is just like a heart
in the economic structure and the Capital provided by it is like blood in it. As long as
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blood is in circulation the organs will remain sound and healthy if the blood is not
supplied to any Organ then that part would become useless So if the finance is not
provided to agriculture sector or industrial sector, it will be destroyed. Loan facility
provided by banks works as an incentive to the producer to increase the production.
Banking is now an Incentive to the producer to increase the production. Modern
trade and commerce would almost be impossible without the availability of suitable
banking services. First of all, banking promotes savings. All manner of people, from
the ordinary laborers and workers to the rich

and owners and businessmen saving centers can keep their money safely in bank.
Commercial banks play an important role in the economic development of the nation.
Hence, the performance of commercial banks can have a marked influence on the
development of an economy(Diamond, 1983).

1.2 Profile of the Organization

NIC ASIA Bank has its antecedents in NIC Bank which was established on 21st July
1998. The Bank was rechristened as NIC ASIA Bank after the merger of NIC Bank
with Bank of Asia Nepal on 30th June 2013. This was a historic merger in the annals
of the Nepalese financial landscape as the first of its kind merger between two
successful commercial banks in the country. Today, NIC ASIA has established itself
as one of the most successful commercial banks in Nepal.

During the post-merger integration phase, NIC ASIA managed the transition very
smoothly receiving accolades from the regulators as well as the stakeholders, paving
the way for other mergers and consolidation in the Nepalese financial sector. After the
merger, NIC ASIA was recognized as ”Bank of the Year 2013-Nepal” by The Banker,
Financial Times, UK. This is the second time that the Bank was recognized with this
prestigious award, the previous occasion being in 2007.

NIC ASIA Bank is now, one of the largest private-sector commercial banks in the
country in terms of capital base, balance-sheet size, number of branches, ATM
network, and customer base. The Bank has 356 branches, 70 extension counters
81 branchless banking, and 472 ATMs across Nepal with a network covering all
major financial centers of the country. The Bank strongly believes in Meritocracy,
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Transparency, Professionalism, Team spirit, and Service Excellence. These core

values are internalized by all functions within the Bank and are reflected in all actions
the Bank takes during its business.

1.3 Statement of Problem

The problem arises during the study are as follows:

 What are the different types of deposit collection account?
 What is the trend of deposit collection?
 What amount of deposit collection on different deposit account?

1.4 Objectives of the Study

Each and every student has their own objective . The main object of this Fieldwork
report is to find out the deposit position of Bank limited. So following objectives has
beenconsidered for doing the study.
 To study the types of deposit collection account.
 To study the trend of deposit collection.
 To study the amount of deposit collection on different deposit account.

1.5 Significance of the Study

The study results decision maker of the bank to know the strength and weakness of
their deposit department. It was also helpful for those who want to deposit to Everest
bank, as they were quite familiar with the procedure of the deposit. There are other
some importance's of research which are mentioned below:
 The required data and information concerns to the financial aspects can be
acquired and studies by its shareholders.
 This study will be helpful to everyone from every aspect. The businessmen,
taxpayers, donor parties and central government can be beneficial from the
study.
 The findings and the conclusions drawn from the study was helpful for the
officials to take corrective measures.
 The customer was benefited by knowing the procedure of deposit collection.
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1.6 Review of Literature

A literature survey is both summary and explanation of the complete and current state
of knowledge on deposit collection and loan distribution as found in academic books
and journals articles. Literature review refers to the documentation of the
comprehensive review of published works from secondary sources of information.
Review of the literature is an essential part of research it is a way to discover what
other research in the area of our problem has uncovered. Thus, the task in the
literature review is to learn as much as one can from the efforts and work of others.
This activity however cannot be haphazard if it is to be efficient. Like most aspect of
research it needs thought and planning.

1.6.1 Conceptual Review

This section comprises general concept of Bank, function of Bank and its
development in Nepal, concept of deposit collection.

Meaning and Definition of Commercial Bank

The name bank derives from the Italian word banco "desk/bench", used during the
Renaissance era by Florentine bankers, who used to carry out their transactions on a
desk covered by a green tablecloth(Martim,1855).

A bank is a type of financial institution that provides services such as accepting

deposits, making business loans, and offering basic investment products. Commercial
bank can also refer to a bank, or a division of a large bank, which more specifically
deals with deposit and loan services provided to corporations or large/middle-sized
business - as opposed to individual members of the public/small business - retail
banking, or merchant [Link] general role of commercial banks is to provide
financial services to general public and business, ensuring economic and social
stability and sustainable growth of the [Link] this respect, "credit creation" is the
most significant function of commercial banks. While sanctioning a loan to a
customer, they do not provide cash to the borrower. Instead, they open a deposit
account from which the borrower can withdraw. In other words, while sanctioning a
loan, they automatically create deposits, known as a "credit creation from commercial
banks".
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Commercial banks accept various types of deposits from public especially from its
clients, including saving account deposits, recurring account deposits, and fixed
deposits. These deposits are returned whenever the customer demands it or after a
certain time period
Commercial banks provide loans and advances of various forms, including an
overdraft facility, cash credit, bill discounting, money at call etc. They also give
demand and term loans to all types of clients against proper [Link] reserves or
"central bank reserves" are banks' holdings of deposits in accounts with their central
bank (for instance the European Central Bank or the Federal Reserve, in the latter
case including federal funds), plus currency that is physically held in the bank's vault
("vault cash"). Some central banks set minimum reserve requirements, which require
banks to hold deposits at the central bank equivalent to at least a specified percentage
of their liabilities such as customer deposits. Even when there are no reserve
requirements, banks often opt to hold some reserves called desired reserves against
unexpected events such as unusually large net withdrawals by customers or bank runs
(Demirguc Kunt, 1999).

Functions of Commercial Bank

Commercial banks play a significant role in fulfilling the short-term and medium-
term financial requirements of industries. They do not provide, long-term credit, so
that liquidity of assets should be maintained. The funds of commercial banks belong
to the general public and are withdrawn at a short notice; therefore, commercial banks
prefers to provide credit for a short period of time backed by tangible and easily
marketable securities. Commercial banks, while providing loans to businesses,
consider various factors, such as nature and size of business, financial status and
profitability of the business, and its ability to repay loans.

Accepting Deposits: The principal function of Commercial banks are obtaining

deposits from depositors and savers by offering the high degree of liquidity, less risks,
high denomination and interest rates. Now days banks accepts different kinds of
deposit account from the customers. The main types of deposit offered by
Commercial banks are saving, fixed, call deposit. The deposit in which the bank pays
interest relatively at low rate to the depositors is called saving deposits. Here the
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depositors are allowed to withdraw their money by cheque up to limited amount a

week or a year. Current account is mostly opened by businessman. In this types of
deposit, depositors can withdraw any amount available in the current account by
cheque without notice. A call deposit account has no fixed deposit period. It provides
instant access to funds and allows unlimited withdrawal and deposits.

Advance and Loans: One of the most primary functions of Commercial bank is to
provide loan and advances to its customers. In these days bank provides the loan that
is legally permissible and for long period of time to its customers. The bank provides
loan in the following ways: cash credit, term loan, overdraft and discounting bill of
exchange. A bank lends a certain percentage of cash idle in deposits at higher interest
rate than it pays on such deposits. The most important function of bank is credit
creation. When a banks grants loan, it opens an account in the name of its customers
and allows him to withdraw the money by cheque according to his needs. but it does
not pay its customer in cash.

Agency Services: A bank is a financial intermediary which acts as an agent for its
customer while collecting and paying cheque, bills of exchange, drafts, dividend etc.
It also provide a brokerage service by buying and selling securities for its customers.
It also act as a securities for its customers dealer and further more pays subscriptions,
insurance premium, utilities bills and other similar charges on behalf of its clients. It
also acts as a trustee and executor of bank and also performs the role of consultants to
its clients. For these services, the bank charges a normal fee.

Overdraft Facility: It refers to a facility in which a customer is allowed to overdraw

his current account upto an agreed limit. This facility is generally given to respectable
and reliable customers for a short period. Customers have to pay interest to the bank
on the amount overdrawn by them.

Discounting Bills of Exchange: It refers to a facility in which holder of a bill of

exchange can get the bill discounted with bank before the maturity. After deducting
the commission, bank pays the balance to the holder. On maturity, bank gets its
payment from the party which had accepted the bill.
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Transfer of Funds: Banks provide the facility of economical and easy remittance of
funds from place-to-place with the help of instruments like demand drafts, mail
transfers, etc.

Collection and Payment of Various Items:Commercial banks collect cheques,

bills,’ interest, dividends, subscriptions, rents and other periodical receipts on behalf
of their customers and also make payments of taxes, insurance premium, etc. on
standing instructions of their clients.

Purchase and Sale of Foreign Exchange:Some commercial banks are authorized by

the central bank to deal in foreign exchange. They buy and sell foreign exchange on
behalf of their customers and help in promoting international trade.

Purchase and Sale of Securities:Commercial banks buy and sell stocks and shares of
private companies as well as government securities on behalf of their customers.

Concept of Deposit
A deposit is a financial term that means money held at a bank. A deposit is a
transaction involving a transfer of money to another party for safekeeping. However,
a deposit can refer to a portion of money used as security or collateral for the delivery
of a good.

Types of deposits
There are different types of saving account provided by Bank they are: Interest
bearing account and Non interest bearing account. Under them there are different
types they are Normal saving account, Current Deposit, Fixed Deposit, Bidhharthi
bachat, pewa bachat, Bal Bhabisya, jestha Nagarik,Salary account, Samajik
Surakchya Bachat, Premium Bachat account, Shareholder Saving, Among them only
Saving Deposit Account, current deposit, fixed deposit, Call deposit are presented in
the study whereas other deposited are included in others deposit.

1) Current Deposit
In this account any amount can be deposited and withdrawn any time. No interest is
given by the bank to accountholder under this account. So, this account is noninterest
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bearing account. NIC Asia bank offers various flexible payment methods to allow
customers to distribute money directly to others. It also provide internet user login for
this account in case of single signatory. All branches of NIC Asia Bank are connected
through ABBS which enables to withdraw and deposit cash from any of the branches

2) Saving Deposit
This account can be opened with nominal amount. Limited amount can be deposited
and withdrawn from the bank in the specified time. This account is held at the bank
maintained by a customer for the purpose of accumulating funds over a period of time
while earning an interest. Interest rate is calculated on Daily Closing balance and
payable on quarterly basis. It provides nominal rate of interest.

3) Fixed Deposit
This account is managed to accept the deposit for fixed period of time providing
higher rate of interest. The amount can be withdrawn from bank only after the expiry
of time. If account holder needs amount before expiry of time, s/he can take loan
against security deposit.

4) Call Deposit
A call deposit account is a bank account for investment funds that offers the
advantages of both a savings and a checking account. Like a checking account, a call
deposit account has no fixed deposit period, provides instant access to funds and
allows unlimited withdrawals and deposits. The call deposit also provides the benefits
of a savings account through the accrual of interest.

Bank and Financial Institution Act 2078

Bank and financial activities are governed by rules and regulations which are
reviewed from time to time to reflect the changing economic environment. Bank and
financial institutions ordinance came into existence in February 4, 2004 governs rules
and regulations of all types of financial institutions. The ordinance is reviewed in
every six months. It aims to ensure reliable and quality banking and financial
intermediation services through healthy competition among bank and financial
institution, safeguards and promotes the interest of depositors and people at large in
the overall banking and financial system of the country. The ordinance repeals and
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replaces all existing acts relating to commercial banks, Nepal Industrial development
bank, other development bank and finance companies and brings all such institution
under one single act which is known as umbrella act. As per umbrella act, bank and
financial institutions can be classified as A, B, C and D classes on the basis of
minimum paid of capital. Accordingly, commercial banks are class A and they are
labeled as banks. Out of which 1 is central Bank, 27 commercial banks, 17 are
Development Banks, 17 are Finance Companies and 67 are Micro Finance companies.
To fulfill the objectives of the study (As per the fact, if the financial institution met
capital requirement and has been in profit for the last 5 years in a row(NRB, 2078).

Total nonperforming assets has remained within the NRB prescribed limit and all the
prescribed conditions have met then well performing bank or financial institution can
be upgraded. Similarly NRB can downgrade any banks or financial institutions from
'A' to 'B', 'B' to 'C' class if its status performance is found to have turned totally other
way against as prescribed. Subject to this act, class 'A' licensed institution may
conduct the following types of financial transactions.
 Subject to the limit prescribed by the Rastra Bank, accepting deposit with or
without interest and refund such deposit.
 Supplying credit, other than hypothecation credit as prescribed.
 Dealing in foreign exchange, subject to the laws in force and the directives
given by Rastra Bank.
 Supplying credit for hire purchase, leasing, housing and service business.
 Engaging in Merchant Banking Business, subjective to the directives given by
the Rastra Bank.
 Making arrangement for jointly supplying credit on the basis of co-financing
in collaboration with other licensed institutions in accord once with mutual
agreement entered into for the division by the collateral.
 Supplying credit against the guarantee of any native banks or financial
institution.
 Issuing, accepting, paying, discounting or purchasing and selling bills of
exchange, promissory notes, cheques, traveler's cheque drafts.
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 Accepting deposits making payments and supplying credit through automated

teller machine and cash dispensing machine.
 Providing overdraft to person whom it trusts.
 Obtaining credit against the security of its movable and immovable property.
 To issue and accept letter of credit subject to the conditions prescribed by the
Rastra Bank.
 Acting as a commission agent of its customer taking custody of and arranging
for the sale or purchase of shares, debenture or securities, collecting interests,
dividends, profit etc accruing from shares, debentures or security.
 Purchasing, selling or accepting bond issued by the government of Nepal or
the Rastra Bank.
 Arranging for safe deposits vault.
 Carrying on off balance sheet transaction on such condition as may be
prescribed by Rastra Bank.
 Providing guarantee for the supply of credit to its customers by any other
licensed institutions.
 Mobilizing capital through shares, debentures, bond, saving bond other
financial instrument within the limit prescribed by the Rastra Bank.
 Obtaining refinance credit from Rastra Bank as per necessarily or obtaining or
supplying credits to or from other licensed institutions.
 Supplying fund received from the government of Nepal or other native or
other foreign agencies as credit for the promoting of protects or managing
such credits.

Supervisory and Monitoring System of the Nepal Rastra Bank

Principally, the central bank has liability and obligating to maintain fair and healthy
environment of the economic activities of the nation. For this the necessary act,rules
and regulations are enacted. Thus, the act of checking whether the related officials
and banks honestly complied with the policy, regulations and supervisions enacted by
controlled financial system, itself is called inspection. As a central bank, the Nepal
Rastra Bank has been discharging such a serious and sensitive [Link] the
establishment of Nepal Rastra Bank, the function of inspection and supervision used
 11

to be carried out by officials of His Majesty of the Government of auditor general.

This practice was contributing until the enactment of the commercial bank act 2020
BS. After the introduction of this act ,the the function of inspection and supervision
for the commercial bank was given to Nepal Rastra Bank and this right was more
strengthened by Nepal Rastra Bank act and introducing of the Commercial Bank act
[Link] Nepal Rastra Bank has been discharging the task of inspection from the
F.Y.2025/26BS.

1.6.2 Review of Previous Works

Bhattarai (2014) has conducted study on "A Case Study on deposit collection of
Nepal Investment Bank Limited" (Unpublished B.B.S. Report). The organization
should make a deep and effective market research to raise its deposit collection rate.
The company should also involve in various social activities in order to have
recognition. The bank must develop good personal relations with the people in order
to survive in competitive business environment. Training must be given to the
employees for developing their skill and efficiency.

Adhikari (2015) has done the research on "Deposit Analysis of Nabil Bank Limited".
His major objectives is to find the types of deposit and total amount of deposit
collected in different accounts. The major findings of the study were the deposit of
NABIL is in increasing trend. The share fixed deposit is more than thatof saving
current, margin and other deposits in the deposits mix of NABIL. The deposit of NBL
is in increasing trend. In addition to this, the bank is being able to satisfy its
customer's and in providing higher quality and newer services to them.

Dhewaju (2015) has done research on “A Study on Lending Practices of OM Finance

Limited” with the objectives of the sources of fund, to analyze the lending portfolio,
the classification of loan and advances and to evaluate the position of assets
management, profitability, activity and liquidity of OFL for lending. His findings
were; (a) the major sources of fund are net worth and deposit, (b) OFL has maintained
the loan loss provision according to the need and rules of NRB during the study
period and the ratios are highly variable. The mean ratio is 1.46% and (c) OFL is not
facing with such major problem in the lending process.
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Baral (2017) has conducted project report on "Deposit Collection of OM

Development Bank with the objective of studying the entire banking procedures and
to view the financial status of development bank. She used secondary source of data
collection method. The secondary data collection from bank, website, annual report of
the bank. She used different table and figure to present data. She find out the amount
of deposit and withdraws seemed quite acceptable at and she suggested that the bank
could mobilize deposit amount on the most profitable and productive sector.

Acharya (2018) has conducted the study on “Financial Checkup of Pokhara Royal Co-
operative Society Limited”. His finding were Pokhara Royal Co-operative Society
Limited has made sufficient loan loss provision for bad debt loan but it has not made
adequate provision to cover the possible loan losses from doubtful and sub-standard
loan. It has invested most of its funds in more productive assets and less in non-
earning and less productive assets and managed the source of funds effectively from
saving deposit. But it has a weak institutional capital base as a second line of defiance
against non-performing assets. The highly fluctuating growth rates in key financial
variables imply that Pokhara Royal Co-operative Society Limited does not have
sound strategy for sustainable growth in its business. But the sign of growth of key
variable except to institutional capital show that it has achieved desirable growth
during the study period.

Poudel (2019) has conducted a study on deposit collection and loan distribution of
Machhapuchchhre Bank Limited. The major objective of the study is to analyze the
types of deposit collection and the increasing or decreasing trend of deposit collection
and loan distribution during five fiscal year. The data were collected to annual report,
newspaper, journals, articles, websites etc. The major findings of the study are that the
bank invests deposited funds maximum in the long term maturity bucket rather than
short term maturity [Link] has more long term deposit than short term deposit,
and due to competitive market MBL has to incur higher cost on their deposits.

Bhandari (2020) has conducted a study on deposit collection and loan distribution of
Gaurishankar Saving and Co-operative Society Limited. The major objective of the
study is to analyze the types of deposit, trend of deposit collection and types of loan
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provided by the co-operative. The data were collected through the secondary sources.
The major findings of the study were that the amount of deposit collection in total
deposit is increases in increasing rate year by year. Analyzing the amount of total
yearly deposit collection it is in sound position. The co-operative can meet its target
as it predict. The amount of deposit collection is higher than other co-operative. The
co-operative provides highest interest rate in fixed deposit which is 11.5 %. The
cooperative provides less interest rate in normal saving i.e. 7.5%. The co-operative
invest less amounts of loan then its deposit collection from the customer or
shareholders in each fiscal year. It means the loan investment of the co-operative is
depending upon the total deposit collection. Both the loan distribution and deposit
collection is increasing year by year. The co-operative take loan from other co-
operative and other bank to invest in agriculture and productive sector. The co-
operative collect high amount of deposit from the customer with compare to loan
investment. It shows in coming years the trend will increase in same ratio if the co-
operative does change its strategies.

Pokhrel (2020) has conducted a study on deposit collection and loan distribution of
Muktinath Bikas Bank Limited. The major objective of the study is to analyze the
total deposit collection in different account and loan distribution in different head.
The major findings of the study were that the bank invests deposited funds maximum
in the long term maturity bucket rather than short term maturity [Link] has
more long term deposit than short term deposit, and due to competitive market MBL
has to incur higher cost on their [Link] has lack of manpower to serve the
growing customer demand. So they not are being able to provide service to the
customer in efficient [Link] ratio of personal loan is nearest to similar in each
and every year. In some year, the loan invested by the bank in personal loan is
fluctuated. The loan invested by the bank in other sector loan is also increases
continuously with small increment. Regarding Hire purchase loan it is also is in
increasing position. The bank invest continuously in hire purchase like bike, bus,
motor, machinery etc. In some FY the personal loan is higher and in some year the
business loan is higher and in some years the personal loan is also higher than other
 14

types of loan. Analyzing the total loan of the bank the position of total loan is also is
in increasing position.

Tamang (2020) has conducted a study on deposit collection and loan distribution of
Aastha Saving and Credit Co-operative Limited. The major objectives of the study
was to analyze the trend of deposit collection, to examine the trend of loan
distribution, and to examine the relationship of deposit collection and loan
mobilization. The major findings of the study were: The amount in other deposit is
increasing year by year with the increasing rate. The amount of deposit collection in
saving deposit very less than other types of deposit account because the co-operative
have less interest rate in this type of account. The deposit amount of saving deposit is
increasing year by year as the year increases. Similarly the amount of deposit
collection in fixed deposit is in fluctuating situation. In some year it increases and in
some year it falls downward. The amount of deposit collection in Recurring deposit
account is higher than saving deposit and fixed deposit account. It is also increasing
year by year. The cooperative provides less interest rate in normal saving i.e. 7.5%.
The loan distribution in different account the loan amount is normally increasing in
each and every year. The co-operative collect high amount of deposit from the
customer with compare to loan investment. It shows in coming years the trend will
increase in same ratio if the co-operative does change its strategies.

Garbuja (2020) has conducted a study on loan and deposit collection and loan
distribution of Shangrila Bank Limited. The major objectives of the study were: to
analyze the types of deposit, to examine the trend of deposit collection, to analyze the
types of loan provided by the bank, to examine the trend of loan distribution. The
major findings of the study were that SDBL has vast network system in the nation thus
helping customer to transact through bank from place to place. It has large number of
branches nation wide which is the highest number of any joint venture bank in Nepal.
This bank invests deposited funds maximum in the long term maturity bucket rather
than short term maturity [Link] has more long term deposit than short term
deposit, and due to competitive market SDBL has to incur higher cost on their
deposits. The bank has lack of manpower to serve the growing customer demand. So
they not are being able to provide service to the customer in efficient manner.
 15

1.7Research Methods
A systematic approach and methodology is needed in order to do any type of study
and prepare report on that study. Methodology is the description of the procedure
followed while collection the necessary data and information needed for research
work and report preparation. This report has been designed to give a clear picture of
the operations performed in NIC Asia Bank Limited. The research methodology
includes, research design, data collection procedures and research variables and tools
use. The following step provides useful procedural guidelines, So far as research
methodology is concerned.

1.7.1 Research Design

A research design is a framework or plan for the activities to be undertaken during the
course of study. The study is concerned single unit thus has been followed the case
study research design. Under the case study descriptive and analytical research
approach has been applied.

1.7.2 Sources and Nature of Data

This research is quantitative in nature and based on secondary sources. The secondary
data has been gathered from annual reports, published documents, meeting minute of
the board and website. Moreover, other necessary data and information were collected
from newspaper, related publications and websites.

1.7.3 Population and Sample

There are 27 commercial banks in Nepal. Out of them only NIC Asia Bank is taken as
sample. This bank is selected because this bank is the commercial bank and one of the
reputed banks which is earning high profit and providing services to traders. The bank
will be the population for the research works and convenience sampling method has
been used.

1.7.4 Data Collection Procedure

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Data collection is the main part to complete these report. Without data a report cannot
be completed. Under data collection Pre-project work procedure, Project work
procedure and post -project procedure were applied to complete these report.

1.7.5 Data Analysis Tools

The presentation and analysis of the collected and managed data has been analyzed
and interpreted through analytical approaches. The overall presentation and analysis is
in descriptive form.

1.8 Limitation of the Study

This study particularly involves the financial aspects of NIC Asia Bank limited. It was
also trying to examine overall performance in terms of revenue collections, allocation
and utilization. So the limitations of the study are:
a. This study was concentrate to the deposit mobilization of the organization.
b. The accuracy and reliability of findings was based on the accuracy of the figures
and information in annual budget, reports and published documents.
c. This study analyze the data of five years from fiscal year 2073/074 to 2077/078
B.S. which does not shows the accurate performance of the bank.
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CHAPTER II
RESULTS AND ANALYSIS

This chapter deals with presentation and analysis of data collected from different
sources and component. The main purpose of this chapter is to convert all the raw
data into understandable form. It is process of collecting, organizing, summarizing,
tabulating and presenting data into various charts, table and other forms. Here the data
collected from various sources have been analyzed to meet the various dimensions of
the problems of study and major findings of the study are presented systematically.

2.1 Data Presentation

Mainly, the data for this research study is based on the annual report, websites of the
Bank. The data collected from different sources has been refined and documented in
excel tables which are further processed to analyze and draw a conclusion at the
findings on financial condition of Everest bank.

2.1.1 Types of deposit Account

a. Interest Bearing Account
Saving Account
It is the main and most wanted saving a/c ofNIC AsiaBank limited. Above 1000 saves
their deposit in this [Link] Special Saving different types of deposit account
are included i.e. Niyamit Bachat, Optional Saving, Daily Saving, Jestha Nagarik
Bachat, Bal Bachat and other saving.
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Table 2.1
Deposit Collection in Saving Deposits
Fiscal Year SavingDeposit Amount Percentage Increased
In (000)

2073/074 35555930 -

2074/075 38539468 8.39

2075/076 40891258 6.10

2076/077 47391279 15.90

2077/078 58710384 23.88

Source: Annual Report, NIC Asia Bank limited

Table 2.1 shows the amount of deposit collected NIC Asia Bank from FY 2073/074 to
2077/078. In FY 2073/074 the amount of deposit collected in saving deposit is
Rs.35555930. It slightly increased in FY 2074/075 and the amount of deposit
collected is [Link], the amount of deposit is slightly increased in FY
2075/076 and become Rs.40891258. The deposit trend is again increased in FY
2076/077 and become Rs.47391279. Similarly, the deposit is again slightly increased
in FY 2077/078 and rise to amount Rs.58710384. The increasing rate of deposit
collection amount of deposit collection is increased each and every year.
70000000

60000000

50000000

40000000

30000000

20000000

10000000

0
2073/074 2074/075 2075/076 2076/077 2077/078

Figure 2.1:Bar diagram showing deposit collected in Saving deposit

 19

Figure 2.1 shows the trend of saving deposit. The amount of deposit collection is
tends to increased in each and every year.

20

18

16

14

12

10

0
2073/074 2074/075 2075/076 2076/077 2077/078

Figure 2.2 shows percentage changed in deposit collection. Analyzing the trend of
deposit collection the amount of deposit is highly increased in fourth fiscal year with
the 23.88% but the amount of deposit collection is decreased in FY 2075/076. The
trend of deposit collection in current is again increased in FY 2076/077 but the
increasing rate of deposit collection is shortly decreased in FY 2077/078 even the
deposit amount is increased.

Term Deposit Account

A fixed deposit (FD) is a financial instrument provided by banks which provides
investors with a higher rate of interest than a regular savings account, until the given
maturity date. It may or may not require the creation of a separate account. It is
known as a term deposit or time deposit. They are considered to be very safe
investments. The defining criteria for a fixed deposit are that the money cannot be
withdrawn from the FD as compared to a recurring deposit or a demand deposit
before maturity.
 20

Table 2.2
Deposit Collection in Term Deposit Account
Fiscal Year TermDeposit in (000) Percentage Increased

2073/074 36311501 -

2074/075 54063677 48.88

2075/076 64455066 19.22
2076/077 72873379 13.06
2077/078 68723074 -5.69

Source: Annual Report,NIC Asia Bank limited

Table 2.2 2.3 shows the amount of term deposit collected by the bank during five
fiscal from 2073/074 to 2077/078. The amount of Term deposit collection fiscal year
2073/074 Rs 36311501 amount of term deposit is increase In FY 2074/075 the
amount of term deposit is Rs.54063677. In FY 2075/076 the amount of fixed deposit
collection is highly increased and reached up to Rs. 64455066. The amount of deposit
is highly increased in FY 2075/076 and term deposit of next year increased again and
decreased last year.

80000000

70000000

60000000

50000000

40000000

30000000

20000000

10000000

0
2073/074 2074/075 2075/076 2076/077 2077/078

Figure 2.3:Bar diagram showing deposit collected in Term deposit account

The amount of deposit collection in term deposit account in fluctuating situation. It

highly increased upto FY 2076/077 and slightly decreased in FY 2077/078
 21

60

50

40

30

20

10

0
2073/074 2074/075 2075/076 2076/077 2077/078
-10

Figure 2.4: Line graph showing percentage change in Term deposit.

Figure 2.4 shows the percentage change in Term deposit from FY 2073/074 to
2077/078. The trend of Term deposit collection is increase in FY 2074/075 and then
after decreasedin FY 2075/076. The increasing rate of deposit collection is increased
by 48.88% from FY2074/075 then 19.22 to FY 2075/076. The rate of Term deposit is
decrease in last two year.

Call Deposit Account

A call deposit account is a bank account for investment funds that offers the
advantages of both a savings and a checking account. Like a checking account, a call
deposit account has no fixed deposit period, provides instant access to funds and
allows unlimited withdrawals and deposits.

Table 2.3
Deposit Collection in Call Deposit Account
Fiscal Year Call Deposit (000) % Increased
2073/074 11278677 -
2074/075 11461206 1.62
2075/076 13040385 13.78
2076/077 10431558 -20.01
2077/078 16052151 53.88
Source: Annual Report,NIC Asia Bank limited
 22

Table 2.3 shows the amount collected in call deposit account. Here the amount of
deposit is also increased in some fiscal year and decreased in some fiscal year. The
amount of deposit collection in call deposit is Rs.11278677 in FY 2073/074. Similarly
the amount of deposit collection is Rs. 11461206 in FY 2074/075. The amount of
deposit collection is highly increased in FY 2077/078. The amount of deposit
collection is highly decreased in FY 2076/077 which is Rs 10431558. The amount of
deposit collection is increase FY 2075/076 which is Rs. 13043155 again increase in
FY 2077/078 which is Rs. 9938961. Highly increasing in FY 2077/078 which is Rs.
16052151.

18000000
16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
2073/074 2074/075 2075/076 2076/077 2077/078

Figure 2.5: Bar diagram showing deposit collected in call deposit account
Figure 2.5 shows the deposit collection in call deposit. The data of call deposit is in
fluctuating situation as the fiscal year increased.
60

50

40

30

20

10

0
2073/074 2074/075 2075/076 2076/077 2077/078
-10

-20

-30

Figure 2.6: Line graph showing % change in call deposit.

 23

Figure 2.6 shows the percent change in call deposit during five fiscal year from FY
2073/074 to 2077/078. The deposit amount is increased and decrease with the
increasing rate from FY 2073/074 to 2077/078 but the increasing rate of the deposit
amount is highly decreased in FY 2076/077. The amount collected in call deposit is
increased with increasing rate in first fiscal year and decreased in fourth fiscal year
then increase in last fiscal year. The amount of deposit collection in call deposit is in
fluctuating situation.

b. NonInterest Bearing Account

Current Account
A saving account is a deposit account, current account or any other type of bank
account that allows money to be deposited and withdrawn by the account holder.
These transactions are recorded on the bank's books, and the resulting balance is
recorded as a liability for the bank and represents the amount owed by the bank to the
customer. Some banks may charge a fee for this service, while others may pay the
customer interest on the funds deposited.
Table 2.4
Deposit Collection in Current Deposits
Fiscal Year Current Deposit Amount Percentage Increased
In (000)

2073/074 8679591 -

2074/075 9394125 8.23

2075/076 9492808 1.05

2076/077 11121783 17.16

2077/078 12949725 16.44

Source: Annual Report, NIC Asia Bank limited

Table 2.4 and figure 2.7 show the amount of deposit collected NIC Asia Bank from
FY 2073/074 to 2077/078. In FY 2073/074 the amount of deposit collected in current
deposit is Rs.8679591. It slightly increases in FY 2074/075 and the amount of deposit
collected is [Link], the amount of deposit is slightly increased in FY
2075/076 and become Rs.9492808. The deposit trend is again increases in FY
 24

2076/077 and become Rs.11121783. Similarly the deposit is again slightly increased
in FY 2077/078 and rise to amount Rs.12949725. The increasing rate of deposit
collection amount of deposit collection is increases each and every year.
14000000

12000000

10000000

8000000

6000000

4000000

2000000

0
2073/074 2074/075 2075/076 2076/077 2077/078

Figure 2.7:Bar diagram showing deposit collected in Current deposit

The amount of deposit collection in current deposit is in increasing trend in each and
every fiscal year. The amount of deposit in very high in FY 2077/078.

20

18

16

14

12

10

0
2073/074 2074/075 2075/076 2076/077 2077/078

Figure 2.8:Trend line showing percentage change in deposit collection in Current

deposit a/c
 25

Figure 2.8 shows percentage changed in deposit collection. Analyzing the trend of
deposit collection the amount of deposit is highly increased in fourth fiscal year with
the 17.16% but the amount of deposit collection is decreased in FY 2075/076. The
trend of deposit collection in current is again increased in FY 2076/077 but the
increasing rate of deposit collection is shortly increased in FY 2077/078 even the
deposit amount is increased.

Table 2.5
Deposit Collection in others Deposits
Fiscal Year Others Deposit Amount Percentage Increased
In (000)

2073/074 2266188 -
2074/075 2053226 -9.40

2075/076 1688631 -17.76

2076/077 1727473 2.30

2077/078 3784918 119.10

Source: Annual Report, NIC Asia Bank limited

Table 2.5 and figure 2.8 show the amount of deposit collected NIC Asia Bank from
FY 2073/074 to 2077/078. In FY 2073/074 the amount of deposit collected in other
deposit is Rs.2266188. It slightly decreases in FY 2074/075 and the amount of deposit
collected is Rs.2053226. Similarly the amount of deposit is slightly decreased in FY
2075/076 and become Rs.1688631. The deposit trend is shortly increasing in FY
2076/077 and become Rs.1727473. Similarly the deposit is again highly increased in
FY 2077/078 and rise to amount Rs.3784918.
 26

4000000

3500000

3000000

2500000

2000000

1500000

1000000

500000

0
2073/074 2074/075 2075/076 2076/077 2077/078

Figure 2.8:Bar diagram showing deposit collected in others deposit

The increasing rate of deposit collection amount of deposit collection is increases and
decreasing each and every year.

Total Deposit
Table 2.6
Deposit Collection in Different Account (in thousands)
Fiscal Saving Term Deposit Call Deposit Current other Total
Year Deposit Deposit Deposit Deposit

2073/074 35555930 36311501 11278677 8679591

2266188 94091892
2074/075 38539468 54063677 9394125 2053226 115511705
11461206

2075/076 40891258 64455066 9492808 1688631 129568152

13040385

2076/077 47391279 72873379 11121783 1727473 143545475

10431558

2077/078 58710384 68723074 12949725 3784918 160220256

16052151

Source: Annual Report of NIC Asia Bank limited

Table 2.6 and Figure 2.9 shows that the amount of deposit collection is more in saving
account than other types of account. People deposit fewer amounts in current deposit
account in response to other types of account. The total deposit amount collected in
different account in different fiscal year. The trend of deposit collection is increased
in increasing rate. There is fluctuation in deposit amount between FY 2073/074 to
2074/075. From the figure we can analyze that the bank deposit amount will also
increases in increasing rate in coming fiscal year. The total deposit collection is
increasing in each and every year. The deposit collection is increased with increasing
 27

rate in some fiscal year and increased with decreasing rate even the amount of deposit
collection is increased.
180000000
160000000
140000000
120000000
100000000
80000000
60000000
40000000
20000000
0
2073/074 2074/075 2075/076 2076/077 2077/078

Figure 2.9: Bar graph showing total deposit collected in different account
The amount of total deposit collection is increased in each and every fiscal year.
There is continuous increased in total deposit during the study period.

2.2 Analysis of the Results

The has vast network system in the nation thus helping customer to transact through
bank from place to place. It has large number of branches nationwide which is the
highest number of any joint venture bank in Nepal. It is the only bank to operate
inside international airport of arrival and departure [Link] increasing rate of
deposit collection is decreases even the amount of deposit collection in saving deposit
is increases each and every year. The trend of deposit collection in saving account is
again increased in FY 2074/075 but the increasing rate of deposit collection is
increased in FY 2075/076 even the deposit amount is increased

The increasing rate of deposit collection in fixed deposit is increased even the deposit
collection amount is not found fixed deposit each and every fiscal year only two year
data are found. The amount of deposit collection in call deposit is in fluctuating
situation. Seeing the past record of the deposit amount the deposit amount of current
deposit will be continuously increased in coming fiscal year. There are fewer amounts
collected under margin account in FY 2073/074. The amount collected in margin
deposit is also increased year by year. But the rate of increasing is in decreasing
situation. The total deposit collection is increasing in each and every year. The deposit
 28

collection is increased with increasing rate in some fiscal year and increased with
decreasing rate even the amount of deposit collection is increased.

2.3 Findings
The main part of this report is Presentation and Analysis of Data. The major findings
of the study are as follows:
 In FY 2073/074 the amount of deposit collected in saving deposit is Rs.
35555930. It slightly increases in FY 2074/075 and the amount of deposit
collected is Rs. 38539468. Similarly the amount of deposit is slightly
increased in FY 2075/076 and become Rs. 40891258. The deposit trend is
again increases in FY 2076/077 and become Rs. 47391279. Similarly the
deposit is again slightly increased in FY 2077/078 and rise to amount Rs.
58710384. The increasing rate of deposit collection amount of deposit
collection is increases each and every year.
 Analyzing the trend of deposit collection the amount of deposit is highly
increased in fourth fiscal year with the 23.88% but the amount of deposit
collection is decreased in FY 2075/076. The trend of deposit collection in
current is again increased in FY 2076/077 but the increasing rate of deposit
collection is shortly decreased in FY 2077/078 even the deposit amount is
increased.
 The amount of Term deposit collection fiscal year 2073/074 Rs 36311501
amount of term deposit is increase In FY 2074/075 the amount of term deposit
is Rs. 54063677. In FY 2075/076 the amount of fixed deposit collection is
highly increases and reached up to Rs. 64455066. The amount of deposit is
highly increases in FY 2075/076 and term deposit of next year increased again
and decreased last year.
 The trend of Term deposit collection is increase in FY 2074/075 year and then
after decrease 2075/076. The increasing rate of deposit collection is increased
by 48.88% from FY 2074/075 then 19.22 to FY 2075/076. The rate of Term
deposit is decreased in last two year.
 29

 The amount of deposit is also increased in some fiscal year and decreased in
some fiscal year. The amount of deposit collection in call deposit is
Rs.11278677 in FY 2073/074. Similarly the amount of deposit collection is
Rs. 11461206 in FY 2074/075. The amount of deposit collection is highly
increased in FY 2077/078. The amount of deposit collection is highly
decreased in FY 2076/077 which is Rs 10431558. The amount of deposit
collection is increase FY 2075/076 which is Rs. 13043155 again increase in
FY 2077/078 which is Rs. 9938961. Highly increasing in FY 2077/078 which
is Rs. 16052151. The data of call deposit is decreased in one year then after
increase other year.
 In FY 2073/074 the amount of deposit collected in current deposit is Rs.
8679591. It slightly increases in FY 2074/075 and the amount of deposit
collected is Rs. 9394125. Similarly the amount of deposit is slightly increased
in FY 2075/076 and become Rs. 9492808. The deposit trend is again
increases in FY 2076/077 and become Rs. 11121783. Similarly the deposit is
again slightly increased in FY 2077/078 and rise to amount Rs. 12949725. The
increasing rate of deposit collection amount of deposit collection is increased
each and every year.
 Analyzing the trend of deposit collection the amount of deposit is highly
increased in fourth fiscal year with the 17.16% but the amount of deposit
collection is decreased in FY 2075/076. The trend of deposit collection in
current is again increased in FY 2076/077 but the increasing rate of deposit
collection is shortly increased in FY 2077/078 even the deposit amount is
increased.
 In FY 2073/074 the amount of deposit collected in other deposit is Rs.
2266188. It slightly decreased in FY 2074/075 and the amount of deposit
collected is Rs. 2053226. Similarly the amount of deposit is slightly decreased
in FY 2075/076 and become Rs. 1688631. The deposit trend is shortly
increasing in FY 2076/077 and become Rs. 1727473. Similarly the deposit is
again highly increased in FY 2077/078 and rise to amount Rs. 3784918. The
increasing rate of deposit collection amount of deposit collection is increased
and decreasing each and every year.
 30

 People deposit fewer amounts in current deposit account in response to other

types of account. The total deposit amount collected in different account in
different fiscal year. The trend of deposit collection is increases in increasing
rate. There is fluctuation in deposit amount between FY 2073/074 to
2074/075. From the figure we can analyze that the bank deposit amount will
also increased in increasing rate in coming fiscal year. The total deposit
collection is increasing in each and every year. The deposit collection is
increased with increasing rate in some fiscal year and increased with
decreasing rate even the amount of deposit collection is increased.
 31

CHAPTER III
SUMMARY AND CONCLUSION

3.1 Summary
NIC Asia Bank is committed to provide one window financial solutions to the
different customer segments and to achieve healthy growth in profitability consistent
with the bank's risk appetite. The Bank has been dedicated to maintain the highest
level of ethical standards, professional integrity, corporate governance and regulatory
compliance. As a result, NIC Asia is perceived as a Strong and Reliable player in the
banking [Link] Asiahas been committed to meet customer expectations in all
areas of its business through continuous improvement for overall benefit of the
economy.

The main objective of the study is to find the trend of deposit collection, types of
deposit, and types of loan disbursement. The data were collected through secondary
sources and descriptive research design has been used. The bank is taken as the
sample for the research work among 27commercial bank. The increasing rate of
deposit collection is decreased even the amount of deposit collection is increased each
and every year.

The increasing rate of deposit collection is decreased even the amount of deposit
collection in saving deposit is increased each and every year. The trend of deposit
collection in saving account is again increased in FY 2074/075 but the increasing rate
of deposit collection is increased in FY 2075/076 even the deposit amount is
increased. The amount of deposit collection in call deposit is in fluctuating situation.
Seeing the past record of the deposit amount the deposit amount of current deposit
will be continuously increased in coming fiscal year. There are fewer amounts
collected under margin account in FY 2073/074. The amount collected in margin
deposit is also increased year by year. But the rate of increasing is in decreasing
situation. The total deposit collection is increasing in each and every year. The deposit
 32

collection is increased with increasing rate in some fiscal year and increased with
decreasing rate even the amount of deposit collection is increased.

3.2 Conclusion
The conclusion drawn from the study are:
 The increasing rate of deposit collection is decreased even the amount of
deposit collection is increases each and every year.
 The trend of deposit collection in saving account is again increased in FY
2074/075 but the increasing rate of deposit collection is increased in FY
2075/076 even the deposit amount is increased.
 The trend of deposit collection in Term deposit account isincreasing four fiscal
and decreased in last year.
 The amount collected in call deposit is increased with increasing rate in first
fiscal year and decreased in current fiscal year. The amount of deposit
collection in call deposit is in fluctuating situation.
 The deposit amount in current deposit is very less in first fiscal year 2073/074
with respect to four fiscal years. The amount of deposit is increasing year by
year with small increment. But the amount is highly increases in FY 2077/078
than other fiscal year. Seeing the past record of the deposit amount the deposit
amount of current deposit will be continuously increases in coming fiscal year.
 People deposit fewer amounts in current deposit account in response to other
types of account. The total deposit amount collected in different account in
different fiscal year. The trend of deposit collection is increased in increasing
rate. There is no any data of fixed deposit in FY 2073/074. From the figure we
can analyze that the bank deposit amount will also increased in increasing rate
in coming fiscal year. The total deposit collection is increasing in each and
every year. The deposit collection is increased with increasing rate in some
fiscal year and increased with decreasing rate even the amount of deposit
collection is increased.
 33

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