Deposit Mobilization Essay

INTRODUCTION1.1 discipline BackgroundFor the victimisation of any country, the pecuniary vault of heaven of that country is responsible and must be strong. The fiscal sector is vast field, which comprises of lays, cooperatives, insurance companies, monetary companies, stock exchange, orthogonal exchange markets, mutual funds etc. These institutions collect idle and bewildered money from the general worldly concern and finally invest in different enterprises of national economy that consequently help in reducing poverty, gain in life style of mass, increase employment opportunities and in that respectby growth the society and country as a whole. Thus, todays concept, the fiscal institutions and commercial fixs has become one of the bases for the measuring level of economic increment of nation.Commercial vernaculars be the principal(prenominal) source which motivates volume to save their earnings. assert deals in accepting the saving of people in the form of bea t collection and invest it in the productive area. They give the loan to the people against real and fiscal assets. They vary monetary sources from savers to users. In early(a) words, they are intermediate between lender and receiver of fund they mobilize the relyor fund. Whereas in Nepal the constituent of joint venture depository financial institutions are still to be realise as an essentials machine of mobilizing internal saving finished various canting schemes in the economy. Hence, to uplift the backward economic condition of the country, the process of capital accumulation, among other prerequisites should be expedited.This project report has been prepared as an output of the detectives internship experience in Nepal doctrine and Commerce deposit Limited. Nepal Credit and Commerce Bank Ltd. (NCC Bank) formally registered as Nepal- Bank of Ceylon Ltd. Commenced its operation on 14th October, 1996 as a Joint Venture with Bank of Ceylon, Srilanka. It was the for the first quantify private sector bank with the largest authorized capital of NRS. 1000 million. The point in time Office of the Bank is located at Siddhartha Nagar, Rupandehi, the birthplace of LORD BUDDHA, temporary hookup its corporate office is placed at Bagbazar, capital of Nepal.1.2 Statement of the ProblemNepal is develop country and rapid economic knowledge is the basic deal of the country. phylogeny by its means is non possible within a unawares period and it supports a long time for the proper development of a country, it has to build up infrastructure. In Nepal, the process of development started only aft(prenominal) 1956 A. D. when the first five year plan came into practice.Capital in fact, plays the conduct role for the economic development of a country. But in Nepal, on that point is shortage of capital. There are various sources of accumulating capital internal and foreign sources. Under external sources aid, grants and loans are the main sources. In intern al sources accumulating capital, taxes, public enterprises, public debt are the popular in our country. But due to underdevelopment, poverty, wishing of banking knowledge the desired capital for the development of the country cannot be hoard from those internal sources. So, it can be said that in Nepals yield situation bank deposit is dependable and permanent sources of capital accumulation. The need of deposit militarization for economic development of a country is no more to question. But we are facing an acute problem of resources mobilization. We founder 32 commercial banks in Nepal which are very much considered to be vital financial institution to mobilize domestic resources.1.3 Objective of the take apartThe objective of the drive is to examine relationship between the amount of aggregate deposit and amount of total faith granted by the bank. The main objectives of the necessitate are* To discerp the relationship between deposits and loans and advances. * To analyz e the say-so of deposit mobilization of the bank. * To examine how far the intimacy place of deposits subscribe to positive relationship with the deposit collection of the bank. * To measure the impact of interest rates of loan on the credit extended by the bank. * To take a crap suggestions and recommendations to the refer bank for the further improvement.1.4 Significance of the StudyBanks and other financial institutions play all eventful(predicate) role to increase economic standard for the development of the country. Economic development becomes slow if there are incomplete and down the stairs the belt banking facilities. Especially commercial banks provide different economic and technical facilities to the people who involve in business activities. Commercial banks play major role in collection of scared small savings form depositors and transfer these funds into productive sectors for the economic development.Mainly this submit covers the deposit and credit go unde r of commercial bank (NCC), so it helps to reveal the financial position of bank and study occupies an important role in the series of the studies on commercial bank. The significances of the study are * Important to know how well the bank is utilizing its deposits. * Important to policy formulator and in any case be useful for academic professionals, students particularly those involves in commerce, CA and financial institutions to formulate policies and plans on the basis of the surgery of the bank. * Important to the management party of the bank for the evaluation of the performance of their bank and comparison with other banks. * Important for the investors, customers (depositors, loan takers) and personnel of bank to take various decisions regarding deposits and loan advances. * This study will be equally important to the others who are interested to know about the area. It may encourage to investigator to query further.1.5 Relevance of the StudyCurrently, banks are gainin g the stakeholders belief through their business care management and professional receiptss and playing an eminent role in the economy. The deposit mobilization for the bank is tough job. So, the study is focused on how the deposits are mobilized by the bank. The study attempts to interlink the financial performance and the deposit mobilization of the bank.The study is expected to be useful to different stakeholders as 1. The study is expected to be useful to the shareholders as they can analyze the risk relating to credit. 2. The study is expected to be useful to the management bodies of the bank to improve the operations of the bank to add more value to its service 3. The study is expected to be useful to the government body, NRB for further seek is the area to formulate and implement sassy policies and regulations. 4. The study is expected to be useful to the other stakeholders to know the practices made over the deposit mobilization by the bank 5. The study is expected to be useful to analyzes the internal strengths and weaknesses of the bank 6. The study is expected to be useful to anyone who is conducting a bank survey in the related topic.1.6 seek QuestionsThe study intends to reveal the succeeding(a) issues of deposit mobilization practices by the bank 1. What is the relationship between deposit and loans and advances? 2. What is the effectiveness of deposit mobilization of the bank? 3. How far the interest rates of deposits have positive relationship with the deposit collection of the bank? 4. What is the change magnitude or decreasing trend of deposit mobilization of the bank?1.7 Limitations of the StudyAs every look for has its own limitation, this study is not biased. The research is done for the partial fulfillment of MBA. Therefore, this study has nearly limitations, which are listed below * This research study largely depends on the junior-grade info like annual reports (Profit and Loss Account, Balance Sheet and Financial Statements) . * The study is found on only financial and statistical tools and technology. * The study mainly found on last five years data (2003 to 2008) that are not enough for the statistical calculation and cannot be generalized for entire financial sectors.1. 8 Organization of the ReportChapter one deals with the general background of the study and the major issues which has governed the overall study, chapter two deals with the nature of Nepals banking industry and challenges of banking sector in Nepal, chapter three deals with the qualitative aspect of Nepal Credit and Commerce Bank Limited which gives the introduction of major products and services provided by NCC Bank and new innovative products recently launched by NCC Bank, chapter four deals with presentation and analysis of data and Finally chapter five deals with the findings of the study and the recommendations which have been given to the bank for improving its deposit mobilization.CHAPTER IIREVIEW OF LITERATURE2.1Review of L iteratureDeposit is the summate of money lodged with a bank, discount house or other financial institution. Deposit is nothing more than the assets of an individual which is given to the bank for safe-keeping with an indebtedness to get something (interest) from it. To a bank these deposits are liabilities. Commercial bank accomplishment 2031 (1974) defines Deposits as the amount deposited in a current, savings or persistent accounts of a bank or financial institution. The deposits are subject to climb-downs by means of cheque on a short notice by customers. There are several restrictions on these deposits, regarding the amount of deposit, number of withdrawal etc. These are considered more as investments and hence they earn some interest. The rate of interest varies depending on the nature of the deposits. The bank attracts deposits from customers by go different rates of interest and different kinds of facilities. Though the bank plays an important role in influencing the cu stomer to save and open deposit accounts with it, it is at last the customer who decides whether s/he should deposit his surplus funds in current deposit a/c, saving deposits or fixed/time deposit a/c.Bank deposits mature in two ways. When the banker receives cash, it impute the customers account, it is known as a ancient or a simple deposit. People deposit cash in the banking arranging and thereby convert one form of money, cash, into another form, bank money. They select to keep their money in deposit accounts and issue cheques against them to their creditors. Deposits also arise when customers are granted accommodation in the form of loans. When a bank grants a loan to a customer it doesnt usually present cash solely simply credits the customers account with the amount of loan. Of course, there is nothing that prevents the borrower from withdrawing the entire amount of borrowing in cash but quite often s/he retains the amount with the bank as deposit.CHAPTER IIIRESEARCH ME THODOLOGYTo solve the research problems, few authoritative ways are adoptive to collect the required data and information. Research methodology refers to the various sequential steps that are to be adopted by a researcher during the course of studying the problem with real objectives. It shows overall research method from the theoretical aspects to the collection and analysis of the data. This study covers quantitative methodology in a greater extent and also uses the descriptive part based on both technical and synthetic aspect. This study tries to perform a well designed, quantitative and qualitative research in a very clear and direct way by using both financial and statistical tools.3.1 Research DesignThis study is based on a descriptive research design and follows an uninflected approach. To achieve the study objectives, the required data are collected from secondary and primary sources and analyzed through the use of different financial and statistical tools.3.2 Research T oolsIn order to collect the data, the researcher had visited the bank as an intern for 8 weeks of time period. The tools that are used for the study is through direct observation at the time of internship, and discussions with the officers of the bank in concerned department.3.3 Data Collection MethodThe methods of collecting data are primary and secondary. Primary data includes personal observation, informal talk and also interrogate with officers whereas Secondary data includes Annual report of the bank, published and unpublished documents etc.3.4 Data Analysis ToolsThe processed data were analyzed and tested with the financial tools i.e. Ratio Analysis, Trend Analysis, graphs whereas Statistical tools are Karl Pearsons Coefficient of Correlation Analysis, equiprobable Error (P.E) and Hypothesis Testing.BIBLIOGRAPHYBooks* Annual Report of NCC Bank limited 2003/04 2007/08.* Kathmandu Frontier Associates (KFA), Professional Banking Course references. * Levin R. I and Rubin D.S. ( 2008), Statistics for Management (7th Ed.), Pearson Prentice Hall. new-made Delhi * Sharma, Pushkar Kumar and Chaudhary, Arun Kumar (2058), Statistical Methods, Kathmandu Khanal Books Prakashan. * Van Horne, C. James (2005), Financial Management and form _or_ system of government, (12th Ed.), Pearson Prentice Hall, New Delhi.Websiteswww.nrb.gov.npwww.google.comwww.wikipedia.comwww.nccbank.com.np