SUBMISSION OF PROJECT SYNOPSIS & GUIDE ACCEPTANCE FORM

(To be submitted to the project steering comittee)

PART A: Synopsis Registration
I. Student Details
Name

TILAK SUNDAR KARKI

Roll Number

1408025317

Name of program

MBA

Session

Fall

Year

2015

Semester

Semester III

Specialisation

MA0040S-201508-DE

II. Project Synopsis Details

Title of the project

DIVIDEND PAYMENT PRACTICES AND POLICIES ON SELECTED COMMERCIAL BANKS OF NEPAL

Objectives of the project

To analyze the trend of dividend behavior of Nepalese Commercial Banks during the four years period
of 2008/09 to 2011/12. To examine the relationship between EPS, DPS and REPS. To examine the
relationship between DY and EY. To know whether there is any uniformity among EPS, DPS, and DPR of
the samples Commercial Banks or not. To point out the suitable suggestion based on the findings for
the future improvement. The study has used both accounting and statistical tools for the analysis. In
accounting tools P/E, DY and DC were computed to represents different ratios. In statistical tools
arithmetic mean, standard deviation, coefficient of variation. This study covers a period of four years from
2008/09 to 2011/12.

Problem Statement

Nepalese Commercial Banks are paying dividend without adopting any appropriate policy. It seems
impossible to increase shareholders wealth. Banks are advised to adopt fixed dividend policy to boost up
the wealth of shareholders. Most of the investors are expecting a quick return on their investment
rather than long term return due to declining economic condition of Nepal. They prefer dividend in form
of cash rather than stock. So, the cash dividend should be distributed to satisfy the stockholders of the
company. The legal rules and regulations must be in favor of investors to exercise the dividend practice
and to protect the shareholders right. The management unable to pay dividend feels itself safe to accuse

the interference of government for poor performance. Therefore, there should be certain program to
improve the efficiency of management and reduce the government interference in daily affair. Similarly,
managers should be alerted to perform their duties and responsibilities to protect shareholders interest
but not for operation of company desired by themselves. Banks in Nepal are not paying adequate
dividend to their shareholders even they are operating in profitable situation. There are no legal rules
regarding the payment of dividend for the Nepalese Commercial Banks. So the bank should pay regular
and adequate dividend to their shareholders to stabilize its capital through the retention of shareholders
wealth. The fluctuation in Earning per share and Dividend payout ratio of all the banks seem higher. It
may be a case of confusion to the investors or shareholders. In this situation banks are advised to have
target of earning and target payout ratio that will help banks to build good image in stock market and
investors will be in case of making investment decisions. Dividends affect individual shareholders on the
hand and the whole economic development of the nation on the other hand. Hence, it may be pertinent
to suggest the researcher of finance to develop on the subject of dividend. And it is hoped that present
study helps them.
Methodology to be used

Dividend Policy decision is one of the major decision of financial management. It affects the financial
structure, the flow of funds, corporate liquidity and investors attitude. It is related to overall financing
decision as dividend payout reduces the amount of retained earnings in the firm and affects the total
amount of internal financing. Dividend payment to share holders is an effective way to attract new
investors to invest in shares. Dividend is a life of firms because it helps to develop the firm by attracting
the investors are always profit oriented and dividend shows a simple comprehensive signal of
management interpretation of the firms recent performance and future prospectus. When a new
company intends to raise its capital, issuing shares through capital market, a large number of investors
apply for owners certificate. It indicates that people have expected good return. While investing in shares,
the return can be earned in two ways (1) by means of dividend (2) by means of capital gain i.e increase in
share price. The division of earnings of a company between dividend payout and retention of earnings
whether affects or does not affect the market price of shares of a company is a crucial question.

III. Guide Details

Name of the Guide

Sandesh Malla

Date of Birth

1979-12-07

Primary Contact Number

9852674897

Primary Email Id

mallasandesh@gmail.com

Total Experience

Country

nepal

Name of the PG

Area of
Specialisation

Year of
passing

Institution/University

Has the guide completed the PG with

55% and above

Master of Business
Studies (MBS)

Finance

2008

tribhuwan university

Does the guide has more than

two years of Experience

I Dr./Mr./Mrs/Ms. Sandesh Malla hereby confirm my willingness to guide Mr./ Ms. TILAK SUNDAR KARKI RollNo. 1408025317 attached to Learning
Centre (code) 03290 , NIVA MANAGEMENT AND IT COLLEGE, whose Project Title is DIVIDEND PAYMENT PRACTICES AND POLICIES ON SELECTED
COMMERCIAL BANKS OF NEPAL during the Fall session of 2015 (year). I agree to submit the project status/ Internal Assessment marks to the University.

(Signature of the Guide)

I hereby declare that this project synopsis is an original work carried by me and will not be submitted to any other
University for fulfillment of any course of study.
Place
Date

(Signature of the Student)