3. project banking repaired)
TRANSCRIPT
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CHAPTERI
INTRODUCTION
1.1. Background of the study
Bank constitutes an important segment of the financial infrastructure of a country.
Economic development of a country depends upon the growth of financial
infrastructure of the country.
Generally, a bank does the business of money. It is a financial institution whose
principal operation is concerned with the accumulation of the temporary idle money
from the general public for the purpose of advancing to other expenditure. Bank
collects money from general public by attracting them with sound interest rate in their
deposit and utilizes those funds by providing loans to different sectors e.g. business
houses, industries, firms, agriculture and other needy people. For the economicdevelopment, capital formation, supply of money, business promotion, industrial andagricultural development, Bank plays a vital role in the economic history of any
country.
There are different types of banks and among them commercial bank is one of them
whose main objective is to mobilize the collected funds/resources in productive areas
and through this generates profit.
1.1.1. Introduction of HBL:
Himalayan Bank Ltd. is a joint venture commercial bank. It was establish\ed in Feb.
16th 1992 by distinguished business personalities of Nepal in partnership with
Employees Provident Fund and Habib Bank Ltd. is one of the largest commercial
banks of Pakistan. Himalayan Bank Ltd. is the first commercial bank of Nepal with
maximum share holding by the Nepalese private sector and financial institutions.
Apart from the commercial activities, the bank also provides facility of industrial and
merchant banking. The bank has currently five well-equipped commercial branches in
the Kathmandu valley under operation namely: Branches of HBL:
The Bank has five branches in Kathmandu Valley at the following locations: Thamel,
New Road, Maharajgunj, Pulchowk (Patan) and Suryavinayak (moved fromNagarkot). In addition, the bank also has nine other branches outside Kathmandu
Valley in Banepa, Tandi, Bharatpur, Birgunj, Hetauda, Bhairawa, Biratnagar,
Pokhara, Dharan and Butwal. The bank also operates a counter in the premises of the
Royal Palace. The Bank will be aggressively opening new branches at different parts
of the Kingdom to serve its customers better. A new Branch at Butwal will be
operational soon.
A banking counter has been established within the premises of Royal Palace. The
bank has a very aggressive future plan of establishing more branches in different parts
of the kingdom. Himalayan bank Ltd. policy is to maintain, extend more effective and
efficient quality and personalized service to its customers as promptly as possible.Himalayan Bank Ltd. has been will tailor the facilities to be extended to its clients
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taking into A/c their needs and requirements. Moreover, it treats all its customers with
utmost courtesy as valued clients. Himalayan bank Ltd. has been pioneer in
introducing new technology right from the commencement, which has made possible
to maintain its image of being leader in the financial sector. It has not only helped the
bank to constantly improvise its services but also kept it prepared for future adoption
of new technologies.
The Management Team:
The Promoters of HBL are as follows:
Mr. Himalayan Shamsher Rana
Late Sardar Bhim Bdr Pande
Late Mr. Mani Harsha Jyoti
Mr. Narsingha Bdr Shrestha
Mr. Ananda Bhakta Rajbhandari
Mr. Pritivi Bdr. Pande
Mr. Mohan Gopal Khetan
Board of Directors:
Name Designation
Mr. Manoj B. Shrestha Chairman
Mr. Aziz Rajkotwala First Vice Chairman
Mr. Prem P. Khetan Second Vice Chairman
Mr. Prachanda B. Shrestha Director
Mr. Ramesh K. Bhattarai Director
Mr. Bijaya B. Shrestha Director
Mr. Amar SJB Rana Director
Mrs. Ranjana Shrestha Alternate Director
Mr. Tulu Islam Alternate Director
Mr. Surendra Silwal Alternate Director
Mr. Kishore Bade Shrestha Alternate Director
Mr. Laxman Maskey Alternate Director
Mr. Himalaya SJB Rana Chief Advisor
Mr. Sushil Joshi Company Secretary.
The capital structure of HBLShare structure Rs.
Authorized capital 1,000,000,000
Issued capital 650,000,000
Paid-up capital (429,000shares@100each) 429,000,000
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The Capital Structure of HBL
Fig 1: The Capital Structure of HBL
Share subscribed by HBL
Subscription Holding%Promoter Shareholders 51%
Habib Bank Ltd, Pakistan 20%
Financial Institution (Employee Provident Fund) 14%
Nepalese Public Share Holder 15%
Total 100%
Fig2: Share Subscribed by HBL
1.1.2. Function and services of HBL:
Himalayan Bank Limited is one of the successful banks of Nepal. It has been serving
different services to its customers. HBL is operating in a smooth and systematically
way so as to address all its customers. HBL is providing different services to its
customer in an effective way. Due to more concentration on customers service HBL is
constantly improving its service level. To cover the more customers it has extended its
branch offices to different parts of the country. It has planned to open its branch office
in Pokhara in near future. The different functions operated by HBL are as follows:
Share Subscribed by HBL
51%
20%
14%
15% Promoter
Shareholders
Habib Bank Ltd,
Pakistan
Financial
Institution
Nepalese Public
Share Holder
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a) Automatic teller Machine (ATM):
HBL has introduced ATM service in Nepal through which it has enabled to
provide 24 hours services to its customers. Round the clock withdraw and deposit
services to its customers are provided by ATM services in all branches in
Kathmandu valley. It has planned to install more ATMs at different locations so
that it can provide better services to its customers.
b) Credit card:
HBL pioneered credit card in the Nepalese society HBL offers both domestic and
international VISA cards. HBL is striving to expand the credit card business so
that many more clients can avail the facilities of credit card.
c) Tele-banking:
HBL is first bank to offer Tele-banking to its customers enabling them to place
orders for cheque books, order their statement of account, ascertain the latest
balance in their account and get feedback on the ruling interest rate and foreign
exchange rates, on telephone.
d) Any Branch Banking Services (ABBS):
HBL has been providing ABBS to its customers. It means that its customers can
deposits or withdraw cash from any of its branches. There is no restriction to its
customers for deposits or withdrawal of cash from any of the branches of HBL.
e) Correspondent Network:
HBL has world-wide correspondent network which helps its customers for
international banking and fund transfer transactions.
1.1.3 Introduction of Fixed Deposit
Under the Commercial Bank Act 2031 (1974), Fixed account means an account of
amounts deposited in a bank for certain period of time. The customers opening such
account deposit their money in this account, for a fixed period. In another words, it is
called time deposited for a certain period. In fixed deposit the interest rate is even
higher but depositors are prohibited to withdraw their deposits before the maturity of
the deposit period, which is fixed beforehand. Hence depositor receives higher
income but lose liquidity on their assets.
Usually, only the person or institution that wants to gain more interest opens suchtype of account. More interest rate is payable in this deposit than other deposits. Both
parties, the bank and the customers, can take benefit from this deposit. The bank
invests this money on the productive sector and gains profit and the customer too can
be made his financial transaction stronger by getting more interest from this deposit.
The amount collected in the fixed deposit must be returned to the customer after date
is expired.
1.1.3.1 Features of Fixed Deposit
a) The amount (money) cant be withdrawn by check in this deposit like in other
current and saving deposits.b) Usually, the interest is awarded every 3 months in this deposit.
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c) The customer can renew the fixed period deposit after the expiry of the fixed time.
d) In the fixed period deposit, the interest is provided minimum 3.5% to maximum
13.5% according to the duration of time.
e) Though the fixed period deposit can be opened in a bank for a period of more than
five year, no more interest than 13.5% can be gained in it.
f) The bank can invest the money of the fixed period deposit in another sector.g) The fixed period deposit is opened for a certain time. Such duration of time may
be from 7 days to 5 years or more than that of other deposits.
h) The rate of interest in the fixed period deposit is higher than that of other deposits.
1.1.4. Organizational Structure
OrganizationManagement
Board ofdirector
ExecutiveDirector
Internal Audit
GeneralManager
DGM
System
AssistantGeneralManager
Treasury
Marketing
Credit
LoanAdministrative
L/C &Guarantee
Planning &New Product
Account Debt
Legal & ShareDeposit
OperationService
Branches
Reconciliation
Company
Secretary
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1.2. Objectives of the Study
The basic objective of the fieldwork is to understand basic concept of conducting a
fieldwork project. As being a commerce student, the knowledge might help in future.
The other objectives of the fieldwork with regards to the subject matter of Himalayan
Bank are listed below.
a) To examine how far the deposits of Himalayan bank have been efficiently
mobilized.
b) To analysis the trend of fixed deposits in HBL.
c) To analysis the share of fixed deposit out of total deposit in HBL.
d) To analysis the contribution of fixed deposit for investment.
e) To provide better information and activities of HBL to their investors and generalpublic.
f) To specify how the bank collects its funds through savings of the public.
1.3. Statement of Problem
We are facing money problem which are very coincide to be vital role in the financial
institution in the fixed deposit A/C. In this A/C money is to deposit till maturity
period of the time .Before expiry date money cannot with draw because it is fixed for
specified period of time which was write in the deposit form. This is one of the
biggest problems of fixed deposits A/C.
However, if we need money we can take loan from bank for that we have to pay
interest to the bank, which is very high than we get from bank in fixed deposit .This is
also one of the major problem of Fixed Deposit A/C. The market size of the fixed
deposit is very small and due to lean competition bank should have utilize their
money in proper way otherwise bank will be in solvent because they need money at
any time. If they opened fixed deposit A/C money cannot withdrawn at required time
because in fixed deposit money is to be deposit far fixed period of time.
1.4. Significance of the Study
Mostly among the various deposit features provided by commercial banks, fixed
deposit is considered to be more important .In the case of termdeposit although the
bankers pays interest (Longer the period , higher is the interest), the funds are
committed for longer periods which can safely be lent for long-term project. But in
the case of current deposit, although no interest is payable, these deposits are
repayable at demand and therefore bankers must be cautious in lending such deposits.
Fixed deposit is considered to be must suitable because this deposits can be invested
in long-term loans with higher rate of return (Interest) and hence and helps to earn
high profits. Moreover, the report itself keeps important for the bank. This help to
equity holders, Investor to get information about their bank. The study is also
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important for them who are related to management faculty like teachers, researcher
and students etc.
1.5. Limitation of the Study
There are many limitations which have to face while preparing report which are given
below:
a) The fieldwork is concentrated only to certain aspects of Fixed Deposits of HBL.
b) The report should be submitted within specific time.
Limited types of ratio analysis are adopted to fulfill the basic objectives of
fieldwork.
c) Prefect view of Fixed Deposit of HBL is difficult due to lack of required
information and enough data.
d) The study is mostly based on secondary data due to the lack of time to collectprimary data.
e) Based on statistical publication, annual reports, personal interviews and references
of various books and other available data.
f) Limited within the past 8-years trend. (Form Mid-July 2000 to mid January
2008)
g) Lack of budget.
1.6 RESEARCH METHODOLOGY
Research methodology is the main step that is carried out by the students regarding
their field visit. Our creativity leads us to make us our identity. Research methodology
evaluated the performance of the students. Research methodology deals with
collecting, presenting, and analyzing data. For my research work, the necessary
materials are collected from Nepal Himalayan Bank Ltd.
1.6.1. Research Design:
First of all, the researcher has identified the places where required information and
concerned data of the study could be collected. The researcher chose loan department,
Himalayan Bank Limited. For the purpose of contacted interviewed several
personnel's and collected the information and data available with them. Only the
useful information and data have been studied and analyzed carefully. Unnecessary
information and data have been omitted to make the report simple and straightly
concerned with its objective.
1.6.2. Sources of Data:
Generally, there are two sources of data: Primary and Secondary.
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1.6.2.1 Primary source of data:
The first hand data are the primary source of data. Primary source of data are
generally collected by direct interview, observations, and questionnaires. It is difficult
to get the primary source of data due to various problems that may arise whilecollecting it.
1.6.2.2 Secondary source of data:
Since it is very difficult and time consuming to get the primary data, secondary data
are also in practice. Secondary data are those data, which are derived from already
printed source.
1.6.3 Data Collection Methods:
Data collection is the process of obtaining valuable and reliable information for thepurpose of research. The following procedures or methods are followed for collecting
data for this study.
a) Field Visit
b) Interviews
c) Questionnaire
a) Field Visit:
This study is based on field visit of HBL. This is one of the methods used in the
process of data collection. From this I collect the data, which I see at the spot various
services provided by HBL such as ATM, Safe Deposit Locker, Visa Card, Any Bank
Branching, Tele-Banking etc were visited during this study period. This is felt
important because without this one cannot know actually how the bank deals with the
customers.
b) Interviews:
The branch manager and other concerned staff of HBL were interviewed during studyperiod. The interview includes structured question and a few unstructured questions
so as to clarify the content of the response. Unstructured question such as standard of
the bank, number of customers, various services provided by bank and so on were
included in interviews.
c) Questionnaire:
This is also another method of data collection. In this we prepare the questionnaire for
the manager of banks and other department. There are various questions in the
questionnaire for different department.
1.6.4 Financial Tools:
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These wide areas of financial tools that can be applied in order to analysis the
financial performance of HBL. But for this study following ratio analysis and tools
are used:
(A) Liquidity Ratio:a) Cash Reserve Ratio
b) Balance with NRB to Total Deposit Ratio
(B) Fixed to Other Ratio:
a) Fixed to total Deposit Ratio
b) Cash and Bank Balance to Fixed Deposit Ratio
c) Investment to fixed Deposit Ratio
d) Fixed Deposit to total Deposit Ratio of the country.
1.6.5 Statistical Tools:
Similarly, after collecting the numerical data for statistical inquiry it has to be
classified and tabulated and as well other different types of statistical tools can be
used to examine the economic data of HBL. But for this study following tools are
taken-
a) Mean ( A.M) e) Time Series
b) Standard deviation f) Percentage
c) Correlation Coefficient g) Deviation Bar Diagrams
d) Coefficient Variance h) Pie chart
1.7. Chapter Scheme:
The field study has been divided into four sequential chapters along with
bibliography and appendices.
a) The first chapter includes (Introduction):
This first chapter includes background of the study. The background consists of
establishment and introduction of the HBL, function of HBL, this chapter also
contains introduction of the topic, analysis of different ratios.
Research methodology explains types of procedures were used in order to collect
the necessary data for the report writing. It contains nature & sources of data, datacollecting procedure, data processing and financial tools used
b) The second chapter involves (Data Presentation & Analysis):
Data presentation and analysis is the third chapter. This chapter includes the
presentation of necessary data in tables and presentation of them in charts. This
chapter also includes the analysis of presented data. The data had been analyzed
with the help of tables and charts.
c) The third chapter implies (Summary, Conclusion & Recommendation):
The final chapter in the report writing involves summary, recommendation and
conclusion. The study and analysis of the topic has been summarized in the
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-4000
-2000
0
2000
4000
6000
8000
AxisTitle
Axis Title
Chart Title
Fixed Deposit
Change in Fixed Deposit
-4000
-2000
0
2000
4000
6000
8000
2061/62 2062/63 2063/64 2064/65 2065/66 2066/67
Fixed Deposit
Change in Fixed Deposit
summary. A recommendation to the HBL for its better performance has been
given. In conclusion the results of the study have been explained.
CHAPTER2
DATA PRESENTATION AND ANALYSIS
2.1 Data Presentation
2.1.1. Fixed Deposit of HBL
Table 1: Fixed Deposit of HBL
Year Fixed Deposit Change in Fixed Deposit
2061/62 4927.37 1010.23
2062/63 5480.84 553.47
2063/64 3205.37 -2275.47
2064/65 4717.17 1511.8
2065/66 6107.43 1390.26
2066/67 7369.22 1261.79
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Total Deposit
0
5000
10000
15000
20000
25000
30000
2061/62 2062/63 2063/64 2064/65 2065/66 2066/67
Total Deposit
Figure 3: Fixed Deposit of HBL
2.1.2. Total deposits of HBL and its trend:
The first and foremost important thing to know is the total deposit trend of HBL. Total
deposit trend refers to the total deposits of the public in various accounts of HBL during
specific period. Table No: 2
Total Deposits of HBL
Fiscal year Total Deposit
2061/62 17532.40
2062/63 18619.38
2063/64 21007.38
2064/65 22010.33
2065/66 24814.01
2066/67 23450.32
Table 2: Total Deposits of HBL
Source: Seventeenth Annual report of HBL & provisional data by NRB.
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2000
4000
6000
8000
10000
12000
14000
16000
18000
2061/62 2062/63 2063/64 2064/65 2065/66 2066/67
Saving
Fixed
Current
Figure 4: Total Deposits of HBL
Table No.2 along with Diagram no. 4 indicates the increasing trends of HBL on total
deposit. From the table we can see that the total deposit of the bank increased fromRs.17532.40 million in the period fiscal year 2061/62 to 2066/67.
2.1.3. Deposit mix of Himalayan Bank Limited:
After knowing the total deposit, it is necessary to known the composition of those deposits
of HBL such as fixed deposit, saving deposit, current deposit and other deposits. The total
deposit comprises of all these kinds of deposit.
Deposit mix of Himalayan Bank Limited
Table 3: Deposit mix of HBL
The above table shows that the amount of deposit position of HBL is in increasing trend
since fiscal year 2061/62 in current deposit, saving deposit and fixed deposit. So we can
say that the deposit trend of HBL is satisfactory except in year 2065/66 regarding fixed
deposit.
Fig: 5 Deposit mix of HBL
Year Saving Fixed Current
2061/62 9163.44 5480.8 3503.1
2062/63 10870.54 3041.5 3540.9
2063/64 11759.60 4710.2 4145.4
2064/65 12852.41 6107.4 5045.2
2065/66 14582.86 6350.2 5028.2
2066/67 16283.25 7032.6 6125.3
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From the above graphic presentation, we can clearly see that fixed deposit is in increasing
trend. It is increasing every year satisfactory since there is no drastic change.
2.1.4. Fixed Deposit Structure of HBL:
Fixed Deposit of HBL
Table 4: Fixed deposit of HBL
Year Fixed Deposit Change in Fixed Deposit
2061/62 4927.07 1010.23
2062/63 5480.84 553.47
2063/64 3205.37 -2275.47
2064/65 4717.17 1511.8
2065/66 6107.43 1390.26
2066/67 7369.22 1561.79
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Figure 6: Fixed Deposit of HBL
The above table no.4 along with diagram no 6 shows that the trend of fixed deposit isincreasing in Himalayan Bank Ltd. In fiscal year 2061/62 & has been increasing in the
year of 2062/63, decreased in the year 2063/64, then again increased in 2064/65, 2065/66
and 2066/67. It has fixed deposit of Rs. 5480.84 million on 2061/62, which is 7369.22
million on 2066/67. Increasing trend shows that the peoples are getting attracted to deposit
their surplus money for future.
3.1.6. Relation between Total Deposit and Fixed Deposit
Increment % of Total Deposit and Fixed deposit
(In Millions)
Year Total Deposit %Increment Fixed Deposit %Increment
2061/62 18619.38 6.20 % 5480.84 11.23%
2062/63 21007.38 12.83 % 3205.37 -41.52%
2063/64 22010.33 4.77% 4717.17 47.36%
2064/65 24814.01 12.74% 6107.43 29.47%
Fixed Deposit
0
1000
2000
3000
4000
5000
6000
7000
8000
2061/62 2062/63 2063/64 2064/65 2065/66 2066/67
Fixed Deposit
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2065/66 26490.85 6.76% 6350.2 3.97%
2066/67 28264.70 8.79% 7035.21 28.31%
Mean=9.17% Mean=13.51%
Table 5: Increment % of Total Deposit and Fixed Deposit
Figure 7: Total and Fixed Deposit of HBL
Table no. 7 along with diagram no.7. Shows the increasing trend of total deposit, the total
deposit was Rs. 18619.38 on 2061/62and in 2062/63, 2063/64, 2064/65, 2065/66 and
2066/67 is 21007.38, 22010.33, 24814.01, 26490.84 and 28264.70 respectively.
In 2061
61/62 fixed deposit is Rs. 5480.84 as well as total deposit is Rs. 18619.38. It has increased
by 11.23% in the year of 2063/624and has increased by 47.36%, 29.47% , 3.97%, 28.31%
respectively in the year of 2064/65, 2065/66, 2066/67 and 2062/63 decreased by 41.52%
in the year 2061/62.
2.1.7. NRB Balance to Fixed Deposit:
Year NRB BALANCE FIXED DEPOSIT
2061/62 695.38 5480.84
-5000
0
5000
10000
15000
20000
25000
30000
2061/62 2062/63 2063/64 2064/65 2065/66 2066/67
Total Deposit
%IncrementFixed Deposit
%Increment
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0
1000
2000
3000
4000
5000
6000
7000
8000
2061/62 2062/63 2063/64 2064/65 2065/66 2066/67
NRB BALANCE
FIXED DEPOSIT
2062/63 1153.14 3205.37
2063/64 1625.98 4717.17
2064/65 1604.15 6107.43
2065/66 1096.25 6350.20
2066/67 1234.60 7035.21
Table 6: NRB Balance to Fixed Deposit
Figure 8: NRB Balance to Fixed Deposit
The above table no.6 along with diagram no.8 shows the relation between the NRB
balances with the Fixed Deposit of the HBL.
2.2 DATA ANALYSIS:
2.2.1 Financial Analysis
2.2.1.1 Balance with NRB to total deposit ratio
Commercial banks have to hold a balance of certain percentage of the deposits at Nepal
Rastra Bank in order to satisfy the ledger requirements, where by the standard ratio must
be 7% of the total deposit. This ratio is calculated by dividing Total Balance with NRB byTotal Deposit.
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Balance with NRB to total Deposit Ratio = Balance with NRB Total deposit
The following table shows the balance with NRB to Total Deposit Ratio:
NRB Balance to Total Deposit Ratio
( In Million)
YEAR NRB Balance Total Deposit RATIO (%)
2061/62 695.38 18619.38 3.73
2062/63 1153.14 21007.38 5.49
2063/64 1625.98 22010.33 7.85
2064/65 1604.15 24814.01 6.96
2065/66 1096.25 26490.85 4.14
2066/67 1234.60 28814.50 5.23
Mean 5.50
S.D. 1.39
C.V. 23.17
Table 7: NRB Balance to Total Deposit Ratio
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2.2.1.2 Fixed deposit to total deposit ratio
This ratio measures the percentage of fixed deposit. This ratio is calculated by dividing
Fixed Deposit by Total Deposit.
The following table shows the Fixed Deposit to Total Deposit Ratio.
Year Fixed Deposit Total Deposit Ratio (%)
2061/62 5480.84 18619.38 29.44
2062/63 3205.37 21007.38 15.26
2063/64 4717.17 22010.33 21.43
2064/65 6107.43 24814.01 24.61
2065/66 6350.20 26490.85 23.98
2066/67 7035.21 28814.50 24.60
MEAN 23.22
S.D 6.02C.V. 21.93
Table 8: Fixed Deposits to Total Deposit Ratio
Fixed Deposit to Total Deposit Ratio=
2.2.2 STATISTICAL ANALYSIS:
Karl Pearson's Correlation Coefficient:
One of the widely used mathematical methods of calculating relationship between two
variables is Karl Pearson's Correlation Coefficient. It is denoted by 'r' and defined by:
r =
Value of 'r' always lies between (-1) and (+1), and (r=+1) denotes the perfect positive
correlation between the two variable and (r = - 1) denotes the negative correlation betweenthe two variables.
itTotalDepos
itFixedDepos
22yx
xy
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Probable error (PE)
PE of the coefficient of correlation is the measure of testing the reliability of the calculated
value of 'r'.
If the value of 'r' is less than PE, it is insignificant; perhaps there is no evidence of
correlation. And if 'r' is greater than 6 P.E. then it is significant.
n
rPE
21
6745.0
YEA
R
x)( xxx
2x )( yyy
y xy
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2062 5480.84
18619.3
8
593.204 351891 -2177.32 4740722 -1291595
2063 3205.37
21007.3
8
-1682.27 2830019 210.68 44386.06 -3544202064 4717.17
22010.3
3
-170.466
29058.6
6 1213.63 1472898 -206883
2065 6107.43
24814.01
1219.794 1487897 4017.31 16138780 4900291
2066 6350.2 26490.8
5
1177.998 1387680 3902.46 15229194
=25861.0
1
=112941.
95
=4700445
=33052440
=2917690
x y 2
x 2
y xy
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CORRELATION BETWEEN FIXED DEPOSIT AND TOTAL DEPOSIT
Table 9 Correlation between Fixed Deposit and Total Deposit
Here, is Fixed Deposits and is Total Deposits
=4887.636, =20796.7
Using the formula "r"
Now,
= 0.234082
r = 0.23
From the above table the coefficient of correlation r=+0.23 which is near to 1. It indicates
that the degree of positive correlation between fixed and total deposit is high. It can be
considered as high correlation. It shows that if the amount of fixed deposit increases theamount of total deposit also increases accordingly.
PE =0.6745
= 0.6745
= 0.6745
=
= 0.2846
PE 6 = 1.7076
Since r < 6PE
The test shows that the correlation coefficient is less than 6 times of its PE. It shows that
there is insignificant relationship between fixed deposits and total deposit.
TREND ANALYSIS (LEAST SQUARE METHOD):
x y
x y
22yx
xyr
n
r2
1
n
2)2341.0(1
5
0548.01
24.2
6375.0
330524404700445
2917690
125.57492168.051
2917690
12464396
2917690
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The statistical tool used in this study is least square method , which is used to describe the
trend of any variables weather it increase or decrease with the passage of time . The
formula of least square method is:
Yc = a+bx
Where, a= b=
Here Yc is used to designate the trend value of distinguish the actual value. 'a' = 'y'
intercept (the computed trend figure of the trend line)or the amount of change in 'y'
variable that is associated with a change of one unit on 'x' variable. The 'x' variable
represents the time.
Year(x) Fixed Deposit X= X-2061 x2 xy Yc
2062 5480.84 -2 4 -9854.74 4568.35
2063 3205.37 -1 1 -5480.84 4721.995
2064 4717.17 0 0 0 4887.64
2065 6107.43 1 1 4717.17 5047.2852066 6350.2 2 4 12214.86 5206.93
y=24438.18 x=0 x2=10 xy=1596.45
Table 10: Trend Analysis (Least Square Method)
Where,
y=Fixed Deposit (Amount)
x=Deviation from mid-year
Yc=Trend Values
Here, x=0, y=24438.18, x2 =10, xy=1596.45, n=5
So, a= b=
=24438.18/5 =1596.45/10
=4887.64 =159.645
The Equation of a straight-line trend is
Yc =a+bx............ (a)
Putting the value ofa and b in equation no. (a)
Yc =4887.64+159.645x
(a) Trend Values
For 2062 For 2063
Y1 =4887.64+159.645X (-2) Y2 =4887.64+159.645X (-1)
=4568.35 =4721.995
For 2064 For 2065
Y3 =4887.64+159.645X (0) Y4 = 4887.64+159.645X (+1)
=4887.64 = 5047.285
For 2066Y5 = 4887.64+159.645X (+2)
n
y
2x
xy
n
y2
x
xy
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= 5206.93
Now by plotting the above trend value in the graph, we get the straight line trend of the
listed 5 years
Since the growth rate 'b' is positive, the given figure shows a rising trend.
CHAPTER3
SUMMARY, CONCLUSION AND RECOMMENDATION
Summary
Modern banking system started in Nepal nearly 60 years ago, When HBL, a joint venture
with Habib Bank Limited; Pakistan was started ten years ago.
Though there are many institutions that mobilize resources, commercial Banks play a vitalrole for the rapid economic development of an under developed country by mobilizing the
collected deposit in proper channel. In Nepal's present situation bank deposit is the
dependable and permanent source of capital accumulation. The problems of HBL branches
are high rate of interest of Loans and advances, indifferent credit for productive and
priority features traditional thinking (Security minded) and long procedure of banking
services etc.
Bankers are attracting deposits to increase the assets for the purpose of loans or providing
loans. They increase rate to attract the customers to save and deposit at bank. It also
related with credit utilization of deposits and its mobilization.
We know that deposits are the obligation of the commercial banks. So the bank must
collect the funds in different investment. The purpose of my study is to see the trend of
Fixed Deposit of HBL, this study includes Deposit collection of Himalayan Bank Limited.
The credit of the commercial banks depends upon the deposit position of the banks. So far
as concerned with HBL, the Fixed Deposits and Total Deposit were Rs.49271.37 million
and Rs17532.40 million in 2061/62 when in 2064/65 Fixed Deposit and Total Deposit was
Rs. 6107.43 million and Rs. 24814.01. In short we can say that the fund of fixed deposit
and total deposit is increasing.
After analyzing the whole data given in this report, it is seen that although interest is low
but the collection of deposit is increasing. But people least bother the rate of interest, as
they are satisfied with the interest rate provided by commercial banks. Besides this we can
say that due to slow development of economy, it creates a situation of panic to utilize thefund, they keep their money in bank even if the rate of interest is decreasing.
MAJOR FINDINGS
2.3.1. SWOT Analysis:
Among the various tools, SWOT analysis can be used to find out the internal and external
change in the environment. SWOT analysis are conducted to find out the strength and
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weak point as well as the opportunity and treats of Himalayan Bank on the basis of the
information and data collected through primary and secondary services.
2.3.1.1. Strength:
a) Strong Financial Position i.e., increasing deposit, loan and advance.Increase in branch network.
b) Installation of latest technology and product like ATM machine.
c) Prompt service and co-operative human resources.
d) Increasing of foreign currency, which leads to surplus in over all balance of payment.
e) Any branch tele-banking service as well as credit card facilities.
2.3.1.2. Weakness:
a) Less profit earning capacity as compare to some other commercial bank.
b) Investment is declining in comparison to previous fiscal year.
c) Loan and advances could not make an effective result as well as interest rate is
declining in compare to previous year.
d) Less investment in secured securities such as government bonds and securities.
e) Long procedure for loan services.
2.3.1.3. Opportunities:
a) Employment opportunities through increase in branch network, Inwards remittance.
b) High motivation through different rewards.
c) Installation of ATM machine in year branches of HBL.
d) Introduction of Master card.
e) Commercial of homo-banking service.
f) Commercial of 24 hour Banking service.
g) HBL may bring foreign equity.
2.3.1.4. Threats:
a) Political Instability.
b) Increasing numbers of commercial banks and financial institution.
c) Comparative and small size market.
d) Bad loans.
e) Sluggish economic growth.
4.2 Conclusion:
a) The deposit collection of HBL banking office is satisfactory.
b) The fixed deposit of the branch is increasing.
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c) The interest rate has not so influenced the deposit collection as well as
lending section of the bank. People seem to be insensitive towards change in the rate of
interest.
d) The activities of the HBL banking for Fixed Deposits seem to be idle. The branch has
taken little trouble for collecting more deposits or advancing more loans except customers
themselves knock the door of the branch, to the branch is not successful to provide door todoor service in locality.
e) The bank staffs are not well trained as much as talked about
f) As it has a very promising development it is able to gain profit in four months.
4.3 Recommendation:
I have chosen Himalayan Bank Limited for my fieldwork, which is one of the prominentparts of Nepal by mobilizing the financial resources. Most of the people are interested to
deal with the bank because the bank has been given secured and beneficial facilities. The
staffs of the bank are very co-operative and friendly. The policy of HBL is to provide goal
quality services to its customers.. To provide more prompt and efficient services to the
customers HBL has been pioneering in instituting Tele-Banking services. Customers
prefer this bank because of ATM services. There is an accidental death insurance coverage
for individual account holders. HBL also provide the services of premium saving account
scheme (PSA). They are also given preference in providing safe deposits lockers to
encourage the demand of credit card system; the bank has also introduced Himalayan
Bank Gold Card. This bank issues all types of visa card and master card too. This bank is
providing convenient services to all the customers.
a) The bank should be serious about the management capability of proposed borrower
and the probability of good income and then by to motive the borrowers to repay the
installment and interest within assigned time schedule.
b) Considering the nature of loan, a certain minimum number of post loan visits (besides
these undertaken for the release of loan) might be useful to undertake to ensure the profit
utilization of flowed loan amount.
c) Continuation of workshop should be done to make the employer service oriented.
d) A fund should be excited to make the financial condition good even though the amount
of bad debt increases.e) New areas for investment should be researched.
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BIBLIOGRAPHY
Annual Report and Brochures from Himalayan Bank Limited, Tridevi-MargBusiness Magazines & other news papers.
Bajrachjarya B.C. "Business Statistics and Mathematics", M.K. Publishers and
Distributors, Bhotahity, Kathmandu.
"Commercial Banking Act. 2031 B.S. ", Ministry of Law and Justice, HMG
Data provided by HBL. Thamel Branch, Kathmandu
Dahal, Sarita and Dahal Bhuvan (1999) a hand book to Banking Kathmandu, Authors.
Hodgeman, D.R. Commercial Bank loan and Investment Policy
http//www.hbl.com.np and http//www.himalayanbank.com.
Khadka Sherjing, Singh Haridaya Bir, Banking Principles, Legislation and Practice
N. Chabbra, Trilok & Piyush K. Taneja (1990) Banking Theory and Practice
Delhi Dhanpat Rai & Sons.
N.R. Bank Annual Report.
Pant, P.R. (2000) Fieldwork assignment and Report writing Kathmandu Veena AcademicEnterprises.
Shrestha, Shyam K. (2002) Fundamentals of Marketing.