SAVING DEPOSIT REPORT OF KUMARI BANK LIMITED

BY: DILLI RAJ PANDEY

CHAPTER - I: INTRODUCTION

1.1 Background of the Study

1.1.1 Meaning of Saving Deposit Account

Saving deposit account is a kind of deposit Account that will be opened by general severs and
middle class people. It can be opened by anybody on his own behalf, on behalf of any other of
whom he/she is a guardian. The main aim of opening saving deposit indicates the habit of
Nepalese people to deposit money in the banks and help to accumulate the scattered resources
and invest them in needy and productive sector. In this deposit account, bank may give lower
rate of interest and money can be withdrawn with minimum limit given by the concerned bank.
Pre-notice is needed when sums over a fixed amount are required to be withdrawn.

Saving deposit is the deposit which helps to store cash securely and provides interest to our
money.

1.1.2 Role and Importance of Saving Deposit Account

Role:
 To invest money in business sector such as finance, loan etc.
 Return specified interest to customer
 To earn profit
Importance:
 To mobilized the deposit
 Making habit of saving a small deposit or money
 Safety for small deposit money for client

1.1.3 Saving Deposit Account of KBL

Saving deposit is generally meant for Individual account which provides lower interest rate.
Withdrawal of fund from the saving account has certain restriction i.e. amount withdrawal per
week/per month is limited. Kumari bank has different saving schemes. They provide certain
interest on different savings schemes. Currently they have saving schemes as below:
SAVINGS DEPOSIT
(% Per annum)
Kumari Smart Bachat Khata 8.00
Shareholders Saving Account 8.00
Twinkle Star Saving 8.00
Shuva Laxmi Bachat 8.00
50 Plus Savings 8.00
Kumari Swastha Jeevan Bachat Khata 8.00
Kumari Saving 8.00
Kumari Salary Saving 8.00
Kumari Big Savings Khata 8.00
Kumari Social Security Allowance Khata 8.00
Kumari Remit Bachat Khata 8.00
Nagarik Bachat Khata (effective from 5th April 2018) 8.00
Source: KBL website (April, 2018)

Minimum balance to be maintained, features, terms and conditions etc. applies as per KBL's
rules on above mentioned saving accounts.

1.1.4 Document Necessary for Opening Account

The documents required for opening saving A/C by various firms and individual are as follows:

Corporate Account:

 Company's registration certification

 Board resolution for opening and operating account in any or specified commercial bank.
 Article of Association
 Memorandum of Association
 Registration and income tax Association
 Citizenship identification of company secretary or chair person or at least two
 A director in case company secretary is not available.

Partnership Firm:

 Partnership deed
 Registration certificates
 Citizenships of the partners
 Income tax certificates
  Authorization if anyone of the partner is to operate the A/c.
Identification of mandate, if any sole Proprietorship Firm:
 Registration certificates
 Income tax certificates
 Citizenship of the proprietor
 Identification of mandate

Personal Account:

 Identification document passport, citizenship or identify card for Nepalese citizen.

1.2 Profile of Kumari Bank Limited

1.2.1 Introduction to Kumari Bank Limited

Kumari Bank Limited,Nepalgunj Branch came into existence as the fifteenth commercial bank of
Nepal by starting its banking operations from Chaitra 21, 2060 B.S (April 03, 2004) with an
objective of providing competitive and modern banking services in the Nepalese financial
market. Kumari Bank Ltd has been providing wide range of modern banking services through 76
points of representations located in various urban and semi urban part of the country, 74
branches outside and inside the valley; and 2 extension counters.
Currently, the banking is operating from its Head office promises located at Putalisadak,
Kathmandu and it is in the process of branching outing the country in the near future.

Table -1: The capital Structure of KBL (Total)

Authorized capital 10,000,000,000

Issue and paid-Up capital 8,000,000,000
Right share 13,500,000 shares being issued

1.2.2Services Provided by KBL

KBL has been providing different services to their customers from all of its branches in and
outside the valley.

i) All Branch Banking Services

A person who has an account in any branch of KBL, Nepalgunj can make certain operations
withdraw and deposit of cash and checks from any other branches easily.

ii) Accepting the Deposits

The main functions of commercial banks are to accept deposits. In the same way KBL,
Nepalgunj as a commercial bank has service to accept deposits. Deposits are mainly of Four
types.

 Current Deposits.
 Saving Deposits.
 Fixed Deposits.
 Call Deposits.

iii) Agency services

On this ground KBL perform following services:

 Issuing the letter of credit, Bank drafts, traveller cheque etc.

 Dealing with the transactions of foreign exchange business.
 Purchase and sales of different types of securities, remittance of funds.
 Serving agent of correspondent on behalf of the client.
 Collect and payment of cheques, bills, promissory notes, coupons, dividends and other
types of bonds.

iv) Loans

 Overdraft
 Short term loan
 Direct loan with collateral financing advisory to loan taker.
 Direct housing finance
 Direct vehicle finance
 Direct education loan scheme

1.3 Objectives of the Study

The basic objectives of the study are to analyze the saving deposit of KBL. To achieve the basic
objectives, following objectives have been formulated.
  To analyze the position of saving deposit of KBL.

 To analyze the ratio of saving deposit to total

deposit, current deposit to total deposit, fixed deposit to total deposit of KBL.
 To analyze the trend of saving deposit of KBL and provide suggestion.
 To compare saving deposit with current deposit, fixed deposit and total deposit.

1.4 Significant of the Study

The basic significant of the study are to analyze the saving deposit of KBL. The following
significance has been given below.

 Saving deposit show the performance or ability of the bank to obtain the minimal
point of profit.
 It helps to show the historical and current situation of the relative to saving
deposit.
 It also shows how the banks succeed to utilize the deposit for earning interest
income.
 It gives its significant performance of bank to utilize its saving deposit to earn
income.

1.5 Review of Study

1.5.1 Meaning of Bank

Bank is financial institution where financial services are broadly offered and performed. So,
bank can be said as financial supermarket. In general sense, bank is a kind of business, which
deals in money by accepting deposits, advancing loans and rendering other financial services. In
a broad sense bank can be defined as the financial intermediary between depositor and
entrepreneurs. There are several definitions regarding the bank, which are given by many writers,
authors and act of different country. Among them some of definitions are as follows.

According to Crowther "The banker's business is to take the debt of other peoples to offers his
own in exchange and there by create money."

According to U.S Law "Any institution offering deposit subject to withdrawal on demand and
making loans of a commercial or business nature is a bank."
According to Concise Oxford Dictionary "A bank is an establishment of the custody of money
which it pays out on customer's order."

Therefore a bank is an institution, which accepts deposits from the public and in turn advances
loans by creating credit. It should be differentiated from the other financial institutions, as they
cannot create credit though they accent deposits.

Section 2 (a) Of the Nepal Rastra Bank act 2058 (2002) defines bank as follows:

"Bank" means the Nepal Rastra Bank established under section 3 of this act. Likewise according
to section 2 (b) of the commercial banks act 2031 (1974) . Bank means "a commercial bank
established under this act." Though the banks established by both of these to (a) of the negotiable
instrument act 2034 (1977) defines that a bank, which is established under the existing law
should be called bank.

Summarizing the above, banks are those financial institution that offer the widest range of
financial services principally credit, saving and payment services-and perform the widest range
of financial function of any business form.

1.5.2 Banking System in Nepal

Modern banking originates in medieval Italy, despite strong Christian prohibitions, according to
the canon law. Florence, Genoa and Lucca became the centers of finance and trade in 12th and
13th centuries. The first bank called the bank of Venice' was established in venice, Italy in 1157
to finance the monarch in his wars. Folling its establishment, the bank established were the bank
of Barcelona and the Bank of Genon in 1401 and 1407 respectively. England's banking system
was well established by the late seventeenth century. In England, the banking began with the
English gold smiths only after 1640. In 1694 Bank in the England at first established. But yet the
development of the modern commercial banking institutions had to wait for another century and
four decades until the passage of banking Act of 1833 which provided freedom for the
establishment of joint stock banks, while banking across far early and more rapidly in some
centuries than other. It was only in the 19th century than the modern joint stock commercial
banking system developed in the leading countries of the world. When colonies were established
in north and South American old banking services was transferred to the new world.

Like other countries goldsmiths, merchants and moneylenders were the ancient bankers of Nepal
Tejarath adda established during the tenure of then Prime Minister Randip singh (B.S 1933) was
the first step towards the institutional development of banking in Nepal. Tejarath adda did not
collect deposits from the public but gave loans to employees and public against the billion.

Banking in modern sense started with the inception of Nepal Bank Limited on B.S 1994/07/30.
Nepal Bank Limited has Herculean responsibility of attracting people toward banking sector
from predominate money lender met and expanding of banking services. Being a commercial
bank, it was natural that Nepal Bank Limited paid more attention to profit generating business
and preferred opening branches at urban centers.

Likewise, Nepal Rastra Bank was established in B.S 2013/01/14 as a central Bank under Nepal
Rastra Bank act 2012. Since then, it has been functioning as the Government Bank and has
contributed to the growth of financial sector. In that way, considering the fact that integrated and
speedily development of the country is possible only when competitive banking services reaches
nooks and corner of the country, government established Rastiya Banijya Bank in B.S
2022/10/10 as fully government owned commercial bank.

After the pace of time, commercial banks are made free from performing all type of their
commercial task that to be performed by other financial institution like ADB, NIDC etc. Hence,
industrial development center (IDC) was set up in 2013 for industrial development. In 2016, IDC
was converted to Nepal Industrial Development Corporation (NIDC). Similarly, Agricultural
Development Bank (ADB) was established in B.S 2024/10/07 to provide loan for Agricultural
produces. Moreover, security exchange center was established in 1976 to enhance capital market
activities. It was renamed Nepal Stock Exchange (NEPSE) in 1993. NEPSE opened its trading
floor in 13th January 1994.

Now a day Nepal, Banks and financial functions have started to grow considerably and getting
concentrations on both of balance sheet and on balance activities. Presently in our country, there
are 31 commercial banks, 3 Development banks, 5 rural development banks, 54 finance
companies, a large number of NGOs and some non-banks financial institution operating with
their legally provided framework and with directed fields of performing portfolios. Only after
2041 B.S his majesty's government (HMG) allowed joint venture banks to operate in the country,
and then came a board of joint venture public, commercial bank in country.
1.5.3 Function of Commercial Banks
Profit maximization is a main objective of commercial bank, to achieve this objective,
commercial bank performs various functions under the mandatory rules and regulation and
directives of NRB and BAFIA 2073.

a) Primary function

1. Acceptance of the deposits

Commercial bank collects from public in different of deposit account:

 Saving account

 Fixed account

 Current account

 Call Deposits.

2. Advancing of loan

Commercial bank provides the required loan or credit to various sectors of economy such as
industry, trade, agriculture, business, provide sectors etc. In this way bank creates credit. It
provides loan from various producers in different from such as:

 Discounting bill of exchange

 Overdraft
 Loans of money at call and short notice
 Cash credit
 Direct loan with collateral

b) Agency functions

Commercial banks also perform function for which its acts as agent and claims commission
on some facilities such as:

 To under write the government and private securities

 Collection of customer's money from other bank
 Financial advisory service
 Receipt and payment of dividend, interest
  Security brokerage service

c) General utility function

Commercials banks also perform general utility functions such as:

 Keeping valuable things safe custody

 Collection and payment of cheque, bills, promissory note etc.
 Dealing of the foreign exchange.
 Collection of trade information and banking statistics.
 Remittance of the money.

1.6 Statement of the Problem

Ratio of saving deposit to total deposit is fluctuating. Due to the financial knowledge and
awareness peoples are diversifying their money. They can easily estimate their income and
expenses. Due to the competition on interest rate and customer services commercial banks are
struggling to attract saving deposits towards them. Saving and credit co-operative, Micro
financial institutions, Development banks gives higher interest than commercial bank and gives
better customer services. This is arising as headache to the commercial banks. KBL is also facing
such fluctuation in saving deposit. Fluctuation of saving deposit to total deposit ratio shows
bank's weakness in maintaining saving ratio properly.

Such fluctuation in saving deposit requires solution for better liquidity. KBL should set different
strategies to and deposit scheme.

1.7 Research Methodology

1.7.1 Research Design

The analysis of study is certain research design. The research design followed for this study is
analytical as well as exploratory. For the analytical purpose the data were collected from
different sources and published on different year.

1.7.2 Nature and Sources of Data

This study was mainly based on secondary data. These data collected from bank's audited annual
reports like balance sheet, profit & loss account and other printed materials like published
literature, annual report, survey report, special report, article etc.
1.7.3 Data Analysis for Tools
Financial and statistical tools were used to analyze the data. Ratio analysis was used in the study.
Result is tabulated, listed under variable headings. The result was compared with the
corresponding result of the past in order to interpret them in a meaningful way. A brief
description of the tools is given below.

 Financial Tools

1. Ratio analysis

i) Saving with other ratio

The other financial ratio used in the study is as follows:

a) Saving Deposit to Total Deposit Ratio

It measures the percentage of saving deposit out of total deposit. This is calculated by
dividing saving deposit to total deposit.

𝑆𝑎𝑣𝑖𝑛𝑔 𝐷𝑒𝑝𝑜𝑠𝑖𝑡
Saving Deposit to Total Deposit = 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡

Fixed Deposit to Total Deposit Ratio

It measures the percentage of fixed deposit out of total deposit. This is calculated by
dividing fixed deposit to total deposit.

𝐹𝑖𝑥𝑒𝑑 𝐷𝑒𝑝𝑜𝑠𝑖𝑡
Fixed Deposit to Total Deposit = 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡
× 100

b) Current Deposit to Total Deposit Ratio

It measures the percentage of current deposit out of total deposit. This is calculated by
dividing current deposit to total deposit.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐷𝑒𝑝𝑜𝑠𝑖𝑡
Current Deposit to Total Deposit = 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡
× 100

d) Total Investment to Saving Deposit Ratio

It measures the percentage of Total Investment to Saving Deposit Ratio. This is

calculated by dividing fixed deposit to total deposit.

𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
Investment to Saving Deposit =
𝑆𝑎𝑣𝑖𝑛𝑔 𝐷𝑒𝑝𝑜𝑠𝑖𝑡
 ii) Utilization Ratio

a) Loans Advance & Bills Purchase to Total Deposit Ratio

Loans and advances to total deposits ratio measures the banks’ ability to their deposits
in terms of granting loans and advances. It is competed by dividing loans and advances
by total deposits.

𝐿𝑜𝑎𝑛 𝑎𝑑𝑣𝑎𝑛𝑐𝑒𝑠 & 𝑏𝑖𝑙𝑙𝑠 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒

Loan and advances total depo. = 𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑝𝑜𝑠𝑖𝑡

b) Loans and advances to saving deposit ratio

This ratio measures how much of loans and advances are granted against saving
deposits. It is also interest payable deposit. It is calculated by dividing loans and
advances by saving deposits.

𝐿𝑜𝑎𝑛𝑠 𝑎𝑛𝑑 𝑎𝑑𝑣𝑎𝑛𝑐𝑒𝑠

Loans & advances to saving deposits = 𝑆𝑎𝑣𝑖𝑛𝑔 𝑑𝑒𝑝𝑜𝑠𝑖𝑡𝑠

iii) Liquidity Ratio

a) Cash Reserve Ratio

Cash reserve ratio refers to availability of immediate cash fund of the bank to meet
its unanticipated demand on deposit i.e. current, saving, fixed and others. Dividing cash
and bank balance of the bank by total deposit collected in different accountants
calculate it.

𝐶𝑎𝑠ℎ 𝑎𝑛𝑑 𝑏𝑎𝑛𝑘 𝑏𝑎𝑙𝑎𝑛𝑐𝑒

CRR = 𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑝𝑜𝑠𝑖𝑡

b) Balance With NRB to Total Deposit

The commercial bank is required to maintain to a certain percentage of total deposit

with NRB to fulfill the requirement of legal revision. This ratio is calculated by dividing
balance with NRB by total sepsis if different accounts.

𝐵𝑎𝑙𝑎𝑛𝑐𝑒 𝑤𝑖𝑡ℎ 𝑁𝑅𝐵

Balance with NRB to Total Deposit = 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡

 Statistical Tools

a) Mean
 It is the statistical tool which is used to measure the central tendency.
Mathematically,

X = ∑X/N

Where, X = Mean

∑X = Sum of observations

N = Numbers of observations

b) Correlation and Regression

Correlation and regression measure the relationship of those variables that can justify
mathematically. It helped not only to here a quantitative relationship of the variables,
analysis of correlation help to get coefficient of determinant. Coefficient of
determinant measures the degree of relationship between two variables. Coefficient
of determinant was obtained by squaring the value of correlation co-efficient
significance of relationship was also obtained by using the static of probable error.
Following information presents the calculation technique of correlation co-efficient
that was used in the study.

Karl Pearson's correlation was used for the analysis. The value of correlation Co-
efficient was measured between (  ) 1 in order to interpret the results. The following
computation method was adapted to obtain the value of correlation co-efficient.

Correlation co-efficient(r) =  xy   x2 *  y2 
c) Trend Line

One of the important tasks before the economists and businessman is to estimate
future growth rate analysis was carried out as certain growth rate of the past. Trend
analysis was adopted ascertain future factor. It predicted the future behavior of data
analysis was taken as tool to evaluate the future financial position of banks. Out of
various methods, least square method trend analysis was used.

The equation used to obtain the trend values are:

Y = a+ bx
 Where,

Y = Dependent variables

x = independent variables

a = y intercept

b = slope of the trend

1.8 Limitations of the Study

There are some factors which limit our study, they are listed as following.

 Focus is made only on saving deposit.

 This study is fully dependent on secondary data.
 Only few financial and statistical tools are used in the analysis.
 The study covers five year period.

CHAPTER - II: DATA PRESENTATION AND ANALYSIS

2.1 Data Presentation

2.1.1 Saving with other Ratios

2.1.1.1 Saving Deposit to Total Deposit

The following table shows the amount of saving deposit and deposit in different years, which are
used to calculate the existing ratio between saving and total deposit.

Table - 2: Saving Deposit to Total Deposit

Rs. in Ten Thousands

Fiscal Year Saving Deposit Total Deposit Ratio% (1/2 × 100)

(1) (2)
2068/69 5887 21985 26.78%
2069/70 6832 25319 26.98%
2070/71 7234 27579 26.23%
2071/72 8005 33422 23.95%
2072/73 9581 37951 25.25%
(Sources: - Annual Report of KBL, Nepalgunj)

Figure - 1: Saving Deposit to Total Deposit

40000
35000
30000
25000
20000 Current Deposit

15000 Total Deposit

10000
5000
0
2068/69 2069/70 2070/71 2071/72 2072/73

The percentage of saving deposit to total deposit in 2068/69 to 2072/73 were 26.78%, 26.98%,
26.23%, 23.95% and 25.25% respectively. In aggregate KBL has collected 25.84% of Total
deposit in saving account.

2.1.1.2 Current Deposit to Total Deposit

The following table shows the amount of current deposit and deposit in different years, which are
used to calculate the existing ratio between current and total deposit.

Table - 3: current deposit to total deposit

Rs.in Ten Thousands

Fiscal Year Current Deposit (1) Total Deposit (2) Ratio% (1/2 × 100)

2068/69 1135 21985 5.16

2069/70 1175 25319 4.64

2070/71 1391 27579 5.04

2071/72 1666 33422 4.98

2072/73 2070 37951 5.45

(Sources: - Annual Report of KBL,Nepalgunj)

Figure - 2: Current deposit total deposit

40000
35000
30000
25000
20000 Current Deposit (1)
15000 Total Deposit (2)
10000
5000
0
2068/69 2069/70 2070/71 2071/72 2072/73

The percentage of current deposit to total deposit in 2068/69 to 2072/73 were 5.16%, 4.64%,
5.04%, 4.98%, and 5.45% respectively. In aggregate KBL has collected 5.05% of total deposit in
current deposit.

2.1.1.3 Fixed Deposit to Total Deposit

The following table shows the amount of fixed deposit and deposit in different years, which are
used to calculate the existing ratio between fixed and total deposit.

Table - 4: Fixed deposit to total deposit

Rs.in Ten Thousands

Fiscal Year Fixed Deposit(1) Total Deposit(2) Ratio% (1/2 × 100)

2068/69 9158 21985 41.66

2069/70 11353 25319 44.84

2070/71 12142 27579 44.03

2071/72 14470 33422 43.29

2072/73 17528 37951 46.19

(Sources: - Annual Report of KBL, Nepalgunj)

Figure - 3: Fixed deposit to total deposits

 40000
35000
30000
25000
20000 Fixed Deposit
15000 Total Deposit
10000
5000
0
2068/69 2069/70 2070/71 2071/72 2072/73

The percentage of fixed deposit to total deposit in 2068/69 to 2072/73 were 41.66%, 44.84%,
44.03%, 43.29% and 46.19% respectively. In aggregate KBL has 44.00% of total deposit in fixed
deposit.

2.1.1.4 Investment to Total Deposit Ratio

The following table shows the amount of investment in government treasury bills, development
bond and shares of few company made by KBL along with the ratio (in percentage) of
investment to total deposit, which measures the capacity of KBL to manage its fund.

Table - 5: Total Investment to Total Deposit Ratio

Rs. in Ten Thousands

Fiscal Year Investment Total deposit Ratio %

(1) (2) (1/2 100)
2068/69 2940 21985 13.37%
2069/70 4130 25319 16.31%
2070/71 3160 27579 11.46%
2071/72 5290 33422 15.83%
2072/73 7740 37951 20.39%
(Source: - Annual Report of KBL,Nepalgunj)

Figure - 4: Total Investment to Saving Deposit Ratio

 40000
35000
30000
25000
20000 Investment
15000 Total deposit
10000
5000
0
2068/69 2069/70 2070/71 2071/72 2072/73

From the above analysis, we can say that KBL has maintained the ratio of investment to total
deposit as; 13.37%, 16.31%, 11.46%, 15.83% and 20.39% for 2068/69 to 2072/73 respectively
.The KBL have fluctuating trend throughout the study period.

2.1.2 Utilization Ratio

2.1.2.1 Loan Advances and Bills Purchase to Total Deposit Ratio

The following table shows the amount of loans provided by KBL as personal loan, education
loan, agricultural and productive loan to total deposit.

Table - 6: Loan Advances and Bills Purchase to Total Deposit Ratio

Rs. in Ten Thousands

fiscal Year Loan Advances and Bills Total Deposit (2) Ratio%
purchase (1) (1/2 × 100)
2068/69 18100 21985 82.23%
2069/70 20110 25319 79.43%
2070/71 22800 27579 82.67%
2071/72 27070 33422 80.99%
2072/73 30110 37951 79.34%
(Source: - Annual Report of KBL,Nepalgunj)

Figure - 5: Loan Advances and Bill Purchase to Total Deposit

 40000
35000
30000
25000
20000 Loan Advances and Bills
purchase
15000
Total Deposit
10000
5000
0
2068/69 2069/70 2070/71 2071/72 2072/73

The Table Highlights that loan and advances to total deposits (in Percentage) for different five
years (2068/69 to 2072/73) arrived 82.23%, 79.43%, 82.67%, 80.99%, and 79.34% respectively.
The ratio is in fluctuating trend.

2.1.3 Liquidity Ratio

2.1.3.1. Cash reserve Ratio

The following table shows the cash and bank balance of KBL amount to total deposit and ratios.

Table - 7: Cash and bank balance to total deposit Ratio

Rs. in Ten Thousands

Fiscal year Cash and bank Total deposit Ratio%

balance(1) (2) [1/2× 100]
2068/69 859.70 21985 3.92%
2069/70 868.92 25319 3.43%
2070/71 1066.34 27579 3.86%
2071/72 1641.97 33422 4.92%
2072/73 1406.71 37951 3.70%
(Source: - Annual Report of KBL, Nepalgunj)

From the above table, it is clearly seen that KBL has cash and bank balance to total deposit ratio
of 3.92% during the fiscal year 2068/69 the total deposit amount Rs. 21985 million cash and
bank balance amounts to Rs. 859.70 million. Among the bank's total deposit Rs. 25319 million,
868.92 million is cash and bank balance that is decreased to 3.43% in 2069/70, the CRR was
3.86% of total deposit in 2070/71. It was able to increase its total deposit from 27579 to 33422
million and CRR to 4.92% and finally its CRR are decreased to 3.70% in 2072/73. It shows that
CRR ratio was in fluctuating trend during the study period.

2.1.3.2 Balance with NRB To Total Deposit

The following table indicates the balance maintained by KBL, Nepalgunj with NRB and total
amount of deposit collected account.

Table - 8: Balance with NRB to Total Deposit

Rs. in Ten Thousands
Fiscal Year Balance With NRB (1) Total Deposit Ratio
(2) (1/2)× 100
2068/ 69 2862.92 21985 13.02%
2069/70 2537.96 25319 10.02%
2070/71 3829.35 27579 13.88%
2071/72 3349.00 33422 10.02%
2072/73 3104.48 37951 8.18%
(Source: - Annual Report of KBL,Nepalgunj)

Figure - 6: Balance with NRB Total to Deposit

40000

35000

30000

25000

20000 Balance With NRB

Total Deposit
15000

10000

5000

0
2068/ 69 2069/70 2070/71 2071/72 2072/73

On the basis of above analysis, we can conclude that KBL has maintained its balance with NRB
and total deposit. In fiscal year 2068/69 KBL's balance with NRB and total deposit ratio is
13.02% which is higher than required. Likewise, in 2069/70 KBL is balance with NRB is Rs.
2537.96 million and total deposit is Rs. 25319 million. KBL is balance with NRB and total
deposit ratio is 13.88% in 2071/72. In study period, KBL has maintained the percentage of
balance with NRB to total deposit 11.02% in average.

2.2 Data Analysis

2.2.1 Statistical Tools

2.2.1.1 Correlation Coefficient Analysis

 Correlation Coefficient between Saving Deposit and Investment

The correlation coefficient between Saving Deposit and Investment deposit and total investment
is to measure the degree of relationship between the two variables, for this purpose. Saving
deposit is independent variables (x) and total investment is a dependent variable (y). The purpose
of this analysis is to examine whether deposit liability is significantly related to total investment
or not? If yes what is the degree of relationship. Correlation coefficient between the saving
deposit (independent variable) and total investment is 0.97742 it has shown a positive
relationship between two variables.
Table – 9: Correlation Coefficient between Saving Deposit and Investment

Rs. In Ten Thousands

Saving Investment
Fiscal
Deposit (y) x2 y2 Xy
year
(x)

2068/ 69 5887 2940 34656769 8643600 17307780

2069/70 6832 4130 46676224 17056900 28216160
2070/71 7234 3160 52330756 9985600 22859440
2071/72 8005 5290 64080025 27984100 42346450
2072/73 9581 7740 91795561 59907600 74156940
Total ∑x= ∑y= ∑x2=2895393 ∑y2=1235778 ∑xy=
37539 23260 35 00 184886770
Mean X Y =4652
=7507.80

Now,

Correlation Coefficient between Saving Deposit and Investment

=  xy   x2 *  y2 

= 184886770  289539335 * 123577800 

= 0.97742

 Correlation Coefficient between Saving Cash & Bank Balance

The correlation coefficient between saving and cash & bank balance is to measure the degree of
relationship between the two variables. For this purpose, saving deposit is independent variables
(x) and bank balance is dependent variables (y). The purpose of this analysis is to examine
whether the banks given due consideration in managing cash and bank balance in relation to may
charges in the deposit liability or not.

Table – 10: Correlation Coefficient between Saving Cash & Bank Balance
 Rs. in Ten Thousands

Fiscal Saving Cash & Bank x2 y2 Xy

year Deposit Balance
(x) (y)

2068/69 5887 859.70 34656769 739084.09 5061054

2069/70 6832 868.92 46676224 755021.9664 5936461

2070/71 7234 1066.34 52330756 1137080.996 7713904

2071/72 8005 1641.97 64080025 2696065.481 13143970

2072/73 9581 1406.71 91795561 1978833.024 13477689

Total ∑x= ∑y= ∑x2= ∑y2= ∑xy=

37539 5843.64 289539335 7306085.557 45333077

Mean X= Y=
7507.8 1168.728

Now,

Correlation Coefficient between Saving Deposit and Cash & Bank Balance

r=  xy   x2 *  y2 

= 45333077  289539335 * 7306085.557 

= 0.98564

The result of KBL has positive relationship. It implies that increase and decrease in saving
deposit of KBL has been followed by similar changes in the cash and bank balance.

2.2.1.2 Trend Analysis of Saving Deposit

The following table shows the saving deposit amount of KBL and the increasing percentage in
saving deposit yearly.

Table - 11: Trend Analysis of Saving Deposit

 Rs. in Ten Thousands

Fiscal Year Saving Deposit Trend value(Y=a+bX)

2068/69 5887 5795.6

2069/70 6832 6651.7

2070/71 7234 7507.8

2071/72 8005 8363.9

2072/73 9581 9220
(Source: - Annual Report to KBL)

Figure - 7: Trend Analysis of Saving Deposit

12000

10000

8000

6000 Saving Deposit

Trend value(Y=a+bX)
4000

2000

0
2068/69 2069/70 2070/71 2071/72 2072/73

The trend line of saving deposit goes upward from left to right, it indicates that the saving
deposit of KBL the been increasing year by year but fluctuating ratio.

The above table shows that the amount of saving deposit is increasing year in the year 2068/69 to
2072/73.

2.3 SWOT Analysis

This free sample SWOT analysis shows strength, weaknesses, opportunities and threats. We
cover over 40,000 companies and industries. This sample SWOT analysis for Kumari bank can
provide a competitive advantage.

Strengths:

 Domestic market
  Skilled workforce

 High profitability and revenue

 Experienced business unit

 High growth rate

 Reduced labor cost

Weaknesses:

 Investments in research and development

 Future profitability

 Competitive market

 Costs

Opportunities:

 Growth rates and profitability

 Income level is at a constant increase

 Growing economy

 New markets

Threats:

 Rising cost or raw materials

2.4 Major Findings

 The main concentration area of KBL is limited in Banke District, city of Nepalgunj area.

 The CRR maintained by KBL in average is 19.70% which is high than legal requirement.
But in the fiscal year 2067/68 and 2068/69 CRR was being 10.95% and 11.61% of total
deposit

 The saving deposit to total deposit, current deposit to total deposit, fixed deposit
maintained by KBL new road branch in average is 21.46%, 51.026%, 27.514%
respectively.

 Now in 2070/71 KBL new road branch has mobilizing in different are and taking risk
also so that bank could get high profit.

 Outsider deposits it means the deposit ratio balanced the study period. It indicates that the
bank is not risk from the view point of depositor.

 The deposit of KBL, Nepalgunj has been increasing trend in overall study period.
CHAPTER - III: SUMMARY AND CONCLUSION

3.1 Summary
This study has discussed the overall position of saving A/C of KBL. The basic objective of the
study is analyzing the saving deposit of KBL. Due to lack of proper standard it is very difficult to
interpret the performance of KBL. It is conducted by using secondary data. Financial the study
review of literature of saving deposit has also been made. Results are tabulated, listed under
various headings. The results were compared with the corresponding result of the past in order to
interpret them in a meaningful way.

In order to analyze and evaluate the banks position of saving deposit, they were calculated
various ratio under four categories-Liquidity ratios, utilization rations, saving with others rations.
In addition to these tools, there also used frequency distribution method to show incremental
trend of saving deposits.

From the analysis and interpretation of the obtained data, CRR is high during all the study
period. It has fluctuating ratio of CRR. Bank his maintained the ratio of 11.74% in average
which is above the NRB regulation regarding the cash and bank balance to total deposits ratio
and has found fluctuating trend as against it is base year.

Saving deposit ratio is increasing slightly. Total investment to saving ratio of KBL have
fluctuating trend throughout the study period, High ratio indicates successful mobilization and
vice-versa. In different fiscal year, KBL has mobilizing its saving deposits in different area and
has taken risk also.

The loans, advance and bills purchase to total deposit ratio (in percentage ) for different five
years (2068/69 to 2072/73) arrived 82.23%, 79.43%, 82.67%, 80.99%, and 79.34% respectively.
The ratio is in fluctuation trend.

KBL has positive correlation between saving deposit and total investment. The degree of
relationship is also significant. Correlation coefficient between saving deposit and cash and bank
balance has also positive relationship. The relationship is significant.
3.2 Conclusion

 A commercial bank by its own judgment may decide of maintain an appropriate level of
liquidity ratio. The analysis of liquidity ratio of the bank showed that the overall liquidity
position is a satisfactory level.

 The analysis of cash and bank balance to total deposit ratio has been found fluctuating
trend during the study period. This shows that KBL could not maintain cash and bank
balance properly. The saving deposit to total deposits ratio during the study period
fluctuating. The lower percentage of saving deposit out of total deposit indicates that
either the clients are not attached towards this deposit on the frequent withdrawal habit
of its clients who deposits amount is saving is increasing. But in the relevant year this
percentage is increasing slightly.

 Loan, advance and bills purchase to saving deposits has been increased in comparison to
the preceding year but the ratio remain fluctuating because the saving episodic not
increased in the same ratio as loan, advance and bills purchase.

 As per NRB's rules and regulation of NRB KBL has maintained its CRR. But During the
study period it has higher CRR than minimum requirement.

 As per regulation of NRB, there is a legal provision for the commercial bank to maintain
its balance with NRB at least 7% of its total deposit. Bank has successfully maintained
ratio.

 The main concentration area of KBL is limited in Kathmandu Valley and other major
cities like Biratnagar, Birgunj Pokhara, Nepalgunj, Kohalpur etc. However the most
Nepalese are living villages where they are highly exploited by traditional bankers,
sahumahajan by charging high interest, compound Interest and even manipulation
principal amount. The overall economic development of the country is almost impossible
until and unless the programs are matched with those people's requirements. Therefore, it
is suggested to KBL to expand its branches in rural areas for the economic enlistment of
poor people who live in villages.
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