DEPOSIT MOBILIZATION OF COMMERCIAL BANKS IN NEPAL
Date
2024
Authors
Tek Bohara
Journal Title
Journal ISSN
Volume Title
Publisher
Shanker Dev Campus
Abstract
The main objective of this research is to figure out the internal and external factors
position of the sample banks along with the financial performance, figure out
relationships between internal and external factors for the sample commercial banks and
DM and to analyze the impact of external and internal factors on DM for the sample
commercial bank. Sample of five commercial banks have been taken to identify the
deposit mobilization during the study period from 2013/14 to 2022/23. Data has been
taken from the annual reports of the concerned sample financial institutions, NRB,
National Statistics Office report and electronic device. The study found that Overall CAR
has statistically negative impact on DM, that is, if we change or increase the amount of
CAR will result in decline in DM. Moreover, GDP has statistically significant positive
impact on DM. Further, ER has significant positive impact on DM. In other words,
increase or decrease in amount of LDR and EF will result in increase or decrease in DM.
However, INF has negative impact on DM. INT has statistically positive influence on DM
while PG has negative impact on DM. Further, this study concluded that upon the query
of maintaining the mandatory ratio as supervision made by NRB for CAR and LDR, CA
ratio for all sample banks were satisfactory. However, NBL was not able to maintain the
CA ratio during its first two year operating correcting appropriate measures to ensure that
bank maintains the ratio thereon. KBL and NBL were not able to maintain the LD ratio as
regulated by NRB; KBL has invested high amount in loans and advance with respect to
its total deposit resulting in liquidity difficulty. Contrary, NBL have invested low amount
in loans and advances compared to total deposits resulting in high liquidity, in turn,
excessive amount of expenditure in overhead expenses. Further, NBL has the highest rate
of deposit mobilization rate while KBL has the lowest. NBL has the highest rate of non
interest expenses during the study period compared to revenue generated by bank while
SBL was the cost effective, controlling its non-interest expenses or overhead expenses
from it revenue. Upon the query of maintaining the mandatory ratio as supervision made
by NRB for CAR and LDR, CA ratio for all sample banks were satisfactory. However,
NBL was not able to maintain the CA ratio during its first two year operating correcting
appropriate measures to ensure that bank maintains the ratio thereon. KBL and NBL were
not able to maintain the LD ratio as regulated by NRB; KBL has invested high amount in
loans and advance with respect to its total deposit resulting in liquidity difficulty.
Contrary, NBL have invested low amount in loans and advances compared to total
deposits resulting in high liquidity, in turn, excessive amount of expenditure in overhead
expenses. Likewise, NBL has the highest rate of deposit mobilization rate while KBL has
the lowest. NBL has the highest rate of non-interest expenses during the study period
compared to revenue generated by bank while SBL was the cost effective, controlling its
non-interest expenses or overhead expenses from it revenue.