DEPOSIT MOBILIZATION AND ITS DETERMINANTS OF COMMERCIAL BANKS IN NEPAL A

Abstract

Innovative marketing techniques, such as the deployment of mobile van banks, should be developed in order to raise the volume of low-cost deposits that commercial banks in Nepal are able to collect. This study's main goal is to examine how macroeconomic and bank-specific factors affect Nepal's commercial banks' ability to mobilize deposits. The secondary data analysis used in this study spans the fiscal years 2013–14 through 2022–23. The information was gathered from the annual financial stability report, the annual report of the respective banks, and the economic statistics and bulletin issued by Nepal Rastra Bank. Descriptive, correlational, and casual comparative research designs have all been utilized to meet the study's goals. The total deposit is the dependent variable, and the independent variables are macroeconomic (inflation rate, gross domestic product) and bank-specific (deposit interest rate, loan to deposit ratio, return on assets). The coefficient values for the following variables are as follows: 1.863, - 0.130, -2.458, -0.482, -0.688 for the deposit interest rate, loan to deposit ratio, return on assets, and gross domestic product, respectively. At the five percent significance level, the deposit interest rate has a positive and statistically significant impact on the total amount of deposits in the bank. At the 10% significance level, the gross domestic product shows a statistically significant negative correlation with total deposit. On the total deposit of banks, the loan to deposit ratio, the return on assets, and the inflation rate have a negative and statistically negligible impact. The impact of interest rate changes on savings and general financial stability should be taken into account by central banks. To optimize benefits, practitioners should carefully craft deposit interest rate policies.