E-Banking and it's Impact on Profitability of Nepalese Commercial Banks

Abstract

The introduction of electronic banking has revolutionized and redefined the ways banks were operating. PC banking, mobile banking, ATM, electronic funds transfer, account-to-account transfer, paying bills online, online statements and credit cards etc. technology is now consider as the main contribution for the organizations’ success and as their core competencies. However, the banking industry has faced challenge to keep pace with technological developments and innovative products to suit its needs to generate more profits. . This thesis shows the data of five commercial banks from fiscal year 2011/12 to fiscal year 2017/18. The present research uses mix of tools in the analysis. The study use financial ratios since the objective of the study is to determine whether e-banking has significantly improved the profitability performance of banks in Nepal with regards to the returns on equity (ROE) and returns on assets (ROA) and Different quantitative methods of statistical tools have been used for driving essence of the research data and interpret them in meaningful way; Statistical tool to measure correlation and regression analysis by using SPSS version 23. The topic of e-banking and its impact on Nepalese commercial banks is very crucial and important to those who are interested on it such as researcher, scholar investor etc. It shows the independent variables; ATM, Internet Banking, and Credit Card used in this study, no one variable has significant impact on profitability of Nepalese commercial banks in terms of ROA. It also shows that independent variables; ATM, Internet Banking, and Credit Card used in this study, no one variable has significant impact on profitability of Nepalese commercial banks in terms of ROE. Besides this various macroeconomic factors such as monetary policy, fiscal policy, Technologytransfer policy,

IT policy, Electric Transaction act political factors etc. are also the cause of profit growth in Nepal. Finally, the report shows macroeconomic environment is good in Nepal but IT infrastructure situation, technological readiness, and inefficient labour market are the main issue which should be addressed to make Nepalese banking environment more innovative, technology driven and competitive.