Professional Documents
Culture Documents
Introduction
XI. Credit creation: It is one of the most important functions of bank. Bank accepts
deposit and advance loan by keeping small cash in reserve for day to day
transaction. When a bank advances a loan, it opens an account in the name of the
customer and doesn't lend him in cash. But allows him to draw the money by
cheque according to his needs. By granting the loans bank create credit.
XII.Financing foreign trade: Bank finance foreign trade of its customers by
accepting foreign bill of exchange and collecting them from foreign bank.
XIII.Agency service: A bank act as an agent of its customers in collecting and paying
cheque, bills of exchange, draft, dividend, etc. it also buys and sales shares,
securities, etc. for its customers. Further it pays subscription, insurance premium,
rent, electrics, and water bills on behalf of its client. Bank charges fee on these.
a) Non- interest bearing demand deposit:- In these deposits, banks provide the
account holders with the facilities of payment services, safekeeping funds record
keeping for any transaction carried out by cheque.
NIB demand deposit can be withdrawn without prior notice. So, it is the
most volatile and least predictable of a bank sources of funds, with the shortest potential
maturity.
XLVIII.Interest bearing demand deposit: - It is the interest bearing demand deposit
that allows cheque to be written against them. These deposits provide the
customer with payment services etc. It appears in the form of negotiable order of
withdrawal account.
XLIX.Saving deposits: - Saving account pay interest to the depositors, but have no
specific maturity date on which the funds need to be withdrawn or reinvested.
Any amount can be withdrawn from a saving account up to the amount
deposited. Withdrawals can also be made by using their Automated teller
machine (ATM) card.
L. Time deposits: - Time deposits are those deposits on which the depositor and the
bank agree that the money will not be withdrawn without substantial penalty to
the depositor before a specific date. These are frequently called certificate of
deposits. Because of a substantial early withdrawal penalty, time deposits are not
as liquid as demand or saving deposits nor can depositors write cheque against
them.
LXI.Secondary data :
Secondary data is the data is collected by someone else and had already been used by
other as well. It is the data that has been gathered not for the immediate study but for
some other propose. Secondary data can be obtained either from public or private
source. It is collected indirectly.
This study is connected on the basis of secondary data. The data relating to the Resource
Mobilization and its Utilization are directly obtained from official record of Rastriya
Banijya Bank, Maharajgunj Bank.
Chapter Two
Data Presentation and Analysis
2.1 Introduction
The present chapter deals with the presentation and analysis of data regarding
resource mobilization and utilization of RBB. Data concerning resources and their
utilization are tabulated separately on different heading on the resource side. We have
deposits; borrowing loans, etc.are resources side. Deposits are classified as current
deposit, fixed deposit, saving deposit, and miscellaneous deposit.
Likewise in the utilization side also the classification is made as such loan and
advances, investments in corporation and company priority sector, bills purchased, etc.
Deposits are most important resources of any commercial bank. Current deposit is
one among them. Current deposit doesn't provide fund for any specific term. The bank
doesn't rely on it for its resources needs. Yet it has got some importance in the sense that
it decreases a significant amount of fund as compared to other types of deposit.
Viewing to the above table the amount of current deposit is decreased in 2062-63
and it was increased in 2063-64 to Rs. 60779 by 32.5%.In year 2064-65 it was decreased
by 19.01% but in year 2065-66 it was increased to Rs. 65658 by 33.39%.
70000
60000
50000
40000
20000
10000
0
2061-62 2062-63 2063-64 2064-65 2065-66
-10000
Graph no.1
Above table shows the amount of saving deposits is increasing year by year except in
the year 2062-63.In year 2063-64 it was increased by 4.65% and it was further
increased in 2064-65 by 6.75%.The increase of deposits shows the expansion of
economic activities as well as success for mobilization of resource of the country. This
also shows that the saving habit is improving and even Nepalese people with lower
income are using banks for depositing their small savings.
.
160000
140000
120000
100000
80000
Amount of saving deposit
60000 percentage change
40000
20000
0
2061-62 2062-63 2063-64 2064-65 2065-66
-20000
Graph no.2
Table no.3: Fixed deposit of RBB (Rs. in '000')
Fixed deposit is one of the most important deposits as compared to other deposit. It
generally looked with large amount of fund as compared to other types of deposits. The
deposit mostly depends upon the rate of interest. If the rate is high deposit increases and
vice-versa.
Now the above table shows that the deposit is decreased from year to year. The
decline in deposit may be caused by the decline in interest rate compared to other banks.
In year 2061-62 the fixed deposit amount was high but in year it was decreased to
Rs.73478 by -3.05%. It was even more decrease in year 2064-65 to Rs. 45447 by
-31.60%. In year 2065-66 it was further decrease by -31.04%. Therefore, the people are
not interested in depositing their saving in bank.
Graph s how ing fixed deposit
80000
70000
60000
50000
40000
Amount of Fixed deposit
Percentage change
30000
20000
10000
0
2061-62 2062-63 2063-64 2064-65 2065-66
-10000
Graph no.3
Miscellaneous deposit includes margin and cashier deposit. The table shows that
miscellaneous deposit is decreased in 2062-63. But in year 2063-64, 2064-65, 2065-66 it
was increased to Rs. 2068, 2546, and 3246.
The decrease in miscellaneous deposit may be due to bad economic condition of
the country.
3500
3000
2500
2000
Amount of Miscellaneous
deposit
1500
percentage change
1000
500
0
2061-62 2062-63 2063-64 2064-65 2065-66
-500
Graph no. 4
300000
250000
200000
2061-62
150000
2062-63
2063-64
2064-65
100000
2065-66
50000
0
us
e
nt
g
it
ag
ta
in
eo
os
e
re
ix
To
av
nt
ur
ep
n
F
ce
la
S
C
D
-50000
el
er
c
P
is
M
Graph no. 5
Table no. 6
Amount of fund transferred trend of RBB (Amount in '000')
Amount of fund
Year transferred % change
2061-62 1567515 0
2062-63 1487558 -5.10%
2063-64 1190000 -20%
2064-65 950000 -20.16%
2065-66 1050000 10.52%
In under developed country, there is always lack of capital to utilize for the development
purpose deposit is insufficient to fulfill the investment need. In such situation RBB
Maharajgunj branch got fund transferred from central office Kathmandu and other
branches of RBB. In RBB Maharajgunj branch fund transferred was decreased in year
2062-63, 2063-64, 2064-65 to Rs. 1487558, 1190000, 950000. But in year the fund
transferred was increased to Rs. 1050000 by 10.52%.
1800000
1600000
1400000
1200000
1000000
Amount of fund transferred
800000
Percentage change
600000
400000
200000
0
2061-62 2062-63 2063-64 2064-65 2065-66
-200000
Graph no. 6
G ra p h sh o w in g to tal re so u rc es
2000000
1500000
500000 % c hange
0
206 1-62 2062-63 2063-64 2064-65 2065-6 6
-500000
Graph no. 7
Table no.8: Loan granted by RBB (Amount in '000)
Year Amount of Granted Loan % change
2061-62 1225041 0
2062-63 1122369 -8.38%
2063-64 966053 -13.92%
2064-65 707835 -26.72%
2065-66 822164 16.15
The loan and advances accounts are the highest percentage of total utilization. In
following table, we can see that in year 2061-62 the amount of loan granted was
decreased by -8.38%. In year 2064-65 it was decreased highly by -26.72 but in year
2065-66 it was increased by 16.15%. The reason of this decreased in loan granting is due
the high interest rate charged by the bank. The data graph is shown as:
Gra p h sh o w in g L o an Grantin g
14000 00
12000 00
10000 00
8000 00
4000 00
2000 00
0
2061-62 2062-63 2063 -64 2064-65 2065 -66
-2000 00
Graph no. 8
2.3 Total utilization of resource:
The following table and graph shows the total utilization of resource
Table no. 9
Amount of total utilization trend of RBB (Amount in '000')
Amount of total Amount change per
Year utilization year %change
2061-62 1295807 0 0
2062-63 1148504 -147303 -11.36%
2063-64 981616 -166888 -14.5%
2064-65 718235 -263381 -26.83
2065-66 827317 109082 15.18
According to the above table total utilization of resource increases in year 2065-66 this is
good sign of development of RBB as well as the country. But in year 2062-63, 2063-64,
2064-65 it was decreased by -11.36%, -14.5% and -26.83%. The decrease in resource
utilization may be due to less available resources or due to the political situation of the
country.
G raph show ing total utilization
14000 00
12000 00
10000 00
8000 00
2000 00
0
2 061-62 2062-63 20 63-64 2064- 65 20 65-66
-2000 00
-4000 00
Graph no. 9
Table no. 10
Total resource available and utilization of RBB (amount in ‘000’)
Amount of Amount of % of
Year resource utilization Utilization
2053-54 1826888 1295807 70.92%
2054-55 1726722 1148504 66.51%
2055-56 1443422 981616 68.006%
2056-57 1178287 718235 60.95%
2057-58 1282756 827317 64.49%
7458075 4971479
Total 66.65%
By showing above table we can say that the RBB Maharajgunj branch average
utilization Percentage is 66.65% which is good but not so much.
Gra ph showing re sourc e a vailable and utiliz ation
8000000
7000000
6000000
5000000
Year
Amount of resource
4000000
Amount of utiliz ation
% of Utilization
3000000
2000000
1000000
0
1 2 3 4 5 6 7
Graph no. 10
2502 – 31.2
r=
[3633- 33.8] [1804- 28.8]
r= 2470.8
3599.2 x 1775.2
2470.8
r=
2527.7064
r= +0.977
Chapter 3
Summary, conclusion and recommendation
3.1 Summary
Commercial bank plays an important role in the economic development of a
country. Banks are the most important financial institution for collecting and utilizing
resources for the economic development of the country. The economic conditions are
based on the financial institution and development of the country depends on the active
participation of the bank in different developmental activities in the country. RBB,
Maharajgunj branch has mobilized and utilized resources in different sectors. This branch
has also mobilized saving from the public and utilized then into productive sector.
The basic objective of the study is to assess the performance of RBB,
Maharajgunj branch in mobilizing and utilizing resources efficiently and effectively in
contributing for the economic development.
This study is undertaken to have a clear picture of trend and pattern of resources
mobilization and utilization of RBB, Maharajgunj branch. The study covers only RBB
Maharajgunj branch available data used are mostly secondary data.
In developing country like Nepal there is always shortage of capital for
investment, only the government cannot persuade economic development of the country.
Banks have to participate in this field too so they can collect small scattered saving and
accumulate them to make a big resource to be utilized in the country's development. RBB
Maharajgunj branch had a total resource of Rs. 1826888 thousand in 2061-62 which
decreased to Rs. 1181317 thousand in 2065-66, and this trend has been affected by
various factors operating in the country. The factors for decreasing resources may be
political instability, Rapid growth of other financial institutions and other commercial
banks and low interest rate in deposit.
As per the utilization is concerned it was reported to be Rs. 1295807 in 2061-62
which decreased in year 2062-63 to Rs. 1148504 thousand and it was even more
decreased in year 2065-66 to Rs. 718235 thousand but in year 2065-66 it was increased to
Rs. 827317 thousand.
In the above mentioned study, it has been revealed that the relation between
resource collection and its utilization is significantly associated. The increasing trend of
resource collection is accompanied by almost the same degree of increment in the
utilization also.
3.2 Conclusion
RBB Maharajgunj branch has been operating successfully in the banking field for
more than three decades till date. But this study covers only the major findings of the last
five fiscal years (2061-62 to 2065-66) and led to the conclusion of efficient mobilization
of resources by the bank.
RBB Maharajgunj branch has been able to utilize 65.5% of its total resources in
an average and this figure can be considered satisfactory. But yet there are rooms where
work can be done to achieve more collection and utilization. And for this, endeavors are
to be done on various notes as for e.g. suitable interest rate, economic development,
availability of various scope of utilization.
3.3 Recommendation
On the basis of the analysis done on resource mobilization and utilization
following recommendation can be made so as to ascertain better and improved resource
collection and utilization of RBB Maharajgunj branch:
LXII.The bank should provide attention towards the priority sectors to utilize idle
resources.
LXIII.Following points should be pondered over to increase resource collection :
v Facilities to the depositors.
v Enhanced publicity.
LXIV.Bank should encourage consumer's loan as well. This would help in buying
consumptions goods especially durable goods.
LXV.More attention for resource collection should be made by encouraging saving
habit and opening new methods to encourage from wide range of people.