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Browsing management by Author "Abinash Kumar Sah"

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    DETERMINANTS OF INTEREST RATE SPREAD OF COMMERCIAL BANKS IN NEPAL
    (Shanker Dev Campus, 2024) Abinash Kumar Sah; Dr. Dilliram Bhandari
    The study examines the factors affecting the interest rate spread (IRS) in commercial banks in Nepal. It focuses on six main independent variables: Non-Performing Loans (NPL), Ratio of Demand Deposit to Total Deposit (RDDTTD), Interest Earning Assets to Total Assets Ratio (IEATTA), and Capital Adequacy Ratio (CAR) as bank-specific variables, along with Inflation Rate (INF) and Exchange Rate (EXR) as macroeconomic variables. The research uses both descriptive and causal research design, analyzing panel data from 2013/14 to 2022/23 for five commercial banks: NABIL Bank, Global IME Bank, Rastriya Banijya Bank, NIC Asia Bank, and Nepal Investment Mega Bank. The descriptive analysis highlights the variation in financial characteristics among the banks, while the correlation analysis reveals a positive connection between NPL and IRS, indicating that higher NPL leads to a wider interest rate spread. Conversely, IEATTA and EXR show negative correlations with IRS, suggesting that a higher proportion of interest-earning assets and a stronger exchange rate contribute to a lower IRS. Regression analysis further confirms the importance of NPL, IEATTA, and EXR on IRS, with NPL having a significant positive impact and IEATTA and EXR having significant negative impacts. On the other hand, RDDTTD, CAR, and INF demonstrate limited influence on IRS in both correlation and regression analyses. These findings offer insights into the key factors influencing interest rate spreads in Nepal's most profitable commercial banks.