A STUDY ON DEPOSIT ANALYSIS OF

HIMALAYAN BANK LIMITED

A Project Work Report

Submitted By:
Shova Pudasaini
Exam Roll No.:9200049
T.U. Regd. No: 7-2-920-132-2016
Group: Finance
Danfe College
Putalisadak, Kathmandu.

Submitted To:
Office of Controller of Examination
Faculty of Management
Tribhuvan University

In the partial fulfillment of the requirement for the degree of

BACHELOR OF BUSINESS STUDIES (BBS)
Kathmandu, Nepal
January, 2021
 DECLARATION

I hereby declare that the project work entitled “A STUDY ON DEPOSIT ANALYSIS OF
HIMALAYAN BANK LIMITED” submitted to the faculty of management, Tribhuvan
University, Kathmandu. This is original piece of work done under the supervision of Mr.
GANESH KHADKA, Research Professor, DANFE COLLEGE and is submitted in partial
fulfillment of the requirement for the award of the degree of Bachelor of Business Studies
(BBS). This project has not been submitted to any other university or institution for the
award of any degree or diploma.

………………………

Shova Pudasaini

T.U. Regd. No.: 7-2-920-132-2016

ii
 Supervisor’s Recommendation

The project work report entitled A STUDY ON DEPOSIT ANALYSIS OF HIMALAYAN

BANK LIMITED submitted by Shova Pudasaini of DANFE COLLEGE, KATHMANDU,
is prepared under my supervision as per the procedure and format requirements laid by the
Faculty of Management, Tribhuvan University, as partial fulfillment of the requirements of
the degree of Bachelor in Business Studies (BBS). I, therefore, recommend the project work
report for evaluation.

Mr. Ganesh Khadka

Supervisor

Danfe College:

Signature:

Date:

iii
 Endorsement

We hereby endorse the project work report entitled A STUDY ON DEPOSIT ANALYSIS
OF HIMALAYAN BANK submitted by Shova Pudasaini of DANFE COLLEGE,
KATHMANDU, in partial fulfillment of the requirements for the degree of Bachelor in
Business Studies (BBS) for external evaluation.

Signature: Signature:

Name of chairman: Name of principal :[Link]

Khanal

Chairman,Research Commitee Campus chief/Principal

Danfe College Date:

Date:

iv
 ACKNOWLEDGEMENTS

This project is entitled “A STUDY ON DEPOSIT ANALYSIS OF HIMALAYAN BANK

LIMITED” is a partial fulfillment of the requirement for the degree of Bachelor in Business
Studies.

Firstly, I would like to express my gratitude to Tribhuvan University for providing me chance to
have a practical knowledge of project by performing the field work assessment report. This
report would never be accomplished without the support of bank manager and staffs, for
providing necessary primary data. I am equally grateful to my respected teacher, Mr. GANESH
KHADKA for his excellent supervision of my work time to time.

Lastly, I would like to thanks to all the people who supported me directly and indirectly for their
constant support and inspiration from initial to putting everything together into final print out.

Thank You
Shova Pudasaini
Danfe College

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 TABLE OF CONTENT
Page No.

Title Page………………………………………………………………………………………...i
Declaration…………………………..…………………………………………………………..ii
Supervisor's Recommendation…………………………….………………………………….....iii

Endorsement……………………………………………………………………………………..iv

Acknowledgements…………………………………………………………………………...….v

Table of contents…………………………………………………………………………..…….vi

List of tables…………………………………………………………………………………....viii

List of figures……………………………………………………………………………..……...ix

CHAPTER-ONE:INTRODUCTION
1.1 Background…………………………………………………………………………..1
1.2 Profile of Himalayan Bank Ltd……………………………………………………...4
1.3 Objective of the study……………………………………………………………….6
1.4 Rationale of the study………………………………………………………………..6
1.5 Statement of the problem……………………………………………………………7
1.6 Review of Literature………………………………………………………………...8
1.7 Organization of the study…………………………………………………………..10
1.8 Research methodology………………………………………..……………………10

1.9 Limitation of the study…………………………………………………………......15

CHAPTER-TWO: RESULTS AND ANALYSIS
2.1 Presentation of Data……………………………………………………………….16
2.2 Major Findings …………………………………………………………………....28
CHAPTER-THREE: SUMMARY, CONCLUSIONS AND RECOMMENDATION

3.1 Summary…………………………………………………………………………..29
3.2 Conclusion Recommendation…………………..…………………………………29
3.3 Recommendation……..…………………………………………………………………………………………30

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BIBLOGRAPHY
APPENDICES

vii
 List of tables
1. Deposits of Himalayan Bank ……………………………………………Table No 2.1
2. Return on…………………………………………………………………Table No.2.2
3. Return on shareholder’s Equity…………………………………………..Table No.2.3
4. Cash and Bank balance to Deposit ratio………….………………………Table No.2.4

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 List of Figures
Deposit of Himalayan Bank………………………………………………………..Figure No. 2.1
Pie Chart of Deposit in 2071/72………………………………………………...…Figure No. 2.2
Pie Chart of Deposit in 2072/73…………………………………………………...Figure No. 2.3
Pie Chart of Deposit in 2073/74…………………………………………………...Figure No. 2.4
Pie Chart of Deposit in 2074/75…………………………………………………...Figure No. 2.5
Pie chart of Deposit in 2075/76……………………………………………………Figure No. 2.6
Trend line of Fixed Deposit………………………………......................................Figure No. 2.7
Trend line of saving deposit…………………………..............................................Figure No. 2.8
Trend line of call deposit…………………………………………………………..Figure No. 2.9
Trend line of Return on Assets………………………………………...................Figure No. 2.10
Trend line of Return of Shareholders’ equity……………………….....................Figure No. 2.11
Trend line of cash and Bank Balance……………………....……………………..Figure No.2.12
Trend Line of Deposit to Total Capital…………….……………………………...Figure No.2.13

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 CHAPTER-1
INTRODUCTION

1.1Background of the Study

Generally, an institution established by law. Which deals with money and credit is called bank. A
bank is an institution, which deals in money, receiving it on deposit from customers, honoring
customer’s drawings against such deposits on demand, collecting cheques for customers and
lending or investing surplus deposits until they are required for repayment.
A bank is an institute, which deals with money and credit. It accepts deposits from the public
and mobilizes the fund to productive sectors. It also provides remittance facility to transfer
money from one institution and individuals, which is mobilized into productive sectors mainly
business and consumer leading. Bank is therefore known as the dealer of money. At present
context bank is not only confined to accepting deposits and disbursing loan. In addition to this, a
bank may be engaged in different types of functions such as remittance, exchange currency, joint
venture, under writing, bank guarantee, discounting bills, etc. A modern bank performs such a
variety of functions that it is difficult to give a precise and general definition of bank. It is
because of this reason that different economists give different definition the bank.
Himalayan Bank’s Policy is to extend quality and personalized service to its customers as
promptly as possible. All customers are treated with utmost courtesy as valued clients. The Bank,
as far as possible, offers tailor made facilities to its customers, Himalayan Bank has been
adopting innovative and latest banking technology. This has not only helped the Bank to
constantly improve its service level but has also kept it prepared for future adaptation of new
technology.
Simply deposit refers to the collection of money from various sectors like individuals,
institutions, organizations, government etc. In other words, deposit is that money which was
collected by the banks and financial institutions through different sector within a certain terms
and conditions. So a deposit account holder may deposit or withdrew the money. Commercial
banks and financial institutions provides various deposit accounts to the depositors, they may be
interest bearing or non-interest bearing. In the deposit account, through restrictions placed an
access depends upon the terms and conditions of the account and the provider the account holder

1
retains rights to have their funds repaid on demand. The customer may able to withdraw the
funds in account by cheque or ATM.
Deposit mobilization is one of the most important functions of commercial banks. Without the
deposit the bank cannot operates smoothly. So, it is clear that the growth and development of
commercial banks primarily depends upon its deposit in two forms such as non-interest bearing
and interest bearing deposit. The non-interest bearing deposit includes current deposit margin
deposit and other deposit. But interest bearing deposits include saving deposit, fixed deposit, call
deposit and certificate deposits. Commercial bank accepts the deposit in different types of
account and such deposit was mobilized as a form of investment, loans etc. Collected deposit is
the liabilities for the banks and financial institution. So, they treat such deposit in the liabilities
side of the balance sheet.
Introduction of Deposit Policy
A bank is a mediator or a financial institution. It performs many functions which are very
important and sensitive too. Therefore, deposit policy is one of the main functions of each and
every bank. Banks can’t run their nosiness without this function, so they generally deal in short
term credit. Idle saving of people is collected and these finance the temporary needs of
commercial and industrial firms. The volume of investment and lending depends on volume of
deposits. Different people their money with a different view for instance.

At the outset, it is necessary to know what a deposit is. Commercial Bank Act 2031 B.S. defines
“deposits” as the amounts deposited in a current, saving or fixed accounts of a bank or financial
institution. People in general, the businessmen, the industrialists and other individuals deposit
money in a bank. Actually, such amount is the main sources of capital for the commercial bank,
flows such amount as loan and invest in different sectors to earn profit.

Types of Deposits with Its Features

Usually, bank accepts three types of deposits in Nepal. But in other countries we find more than
three types of deposits. In Nepal, banks grant permission to their customers to open three types
of accounts under various terms and conditions. Therefore, the deposits of bank are classified on
the following basis:

Current Deposit
In deposit terminology, the term Current Deposit refers to a deposit to a bank account or
financial institution without a specified maturity date. These types of Current Deposit account
generally only earn demand deposit interest. According to sec. 2(0) “Current account means an
account of amount deposited in a bank, which may be drawn at any time on demand”.

2
There are two types of current deposit:

a) Non-interest bearing demand deposit

b) Interest bearing demand deposit
Features of current deposit:

 Can be withdrawn in any number and in any amount.

 Suitable to business customer.
 Interest isn’t allowed.
 May be charged for operating account called incidental charge.
 Overdraft facility.
Saving Deposit
According to sec. 2(P), “Saving account means an account of amount deposited in a bank for
saving purpose”. Hence saving or deposit is accepted by banks from individuals and non-profit
making organizations. NRB however does not bar banks from accepting savings deposit from
profit making organizations. So, the purpose of this deposit is to encourage the habit of saving
among the common people and institutions.

Features of saving deposit:

 It has a number of restrictions, how many cheques are to be issued.

 This has two-way benefit. The customer can get amount at any time and he gets interest.
 At the time of liquidation, they have first priority.
 The interest rate is normally less than that of long-term deposit but more than of short-term
deposit.
Fixed Deposit
According to sec. 2(n), “Fixed account means an account of deposited in a bank for a certain
period of time”. Fixed deposit is also called term or time deposit. Under it, bank offers fixed
interest rate on the deposit and repays principal together with interest at fixed maturity period.

Features of fixed deposit

 The amount can be withdrawn according to specified rule.

 It is suitable for the saver.
 Its objective is to earn profit.
 Fixed and long term maturity period.
 Higher the interest rate.

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1.2 Profile of Organization:

Himalayan Bank was established in 1993 in joint venture with Habib Bank Limited of Pakistan.
Despite the tough competition in the Nepalese Banking sector, Himalayan Bank has been able to
maintain a lead in the primary banking activities- Loans and Deposits.

Legacy of Himalayan lives on in an institution that's known throughout Nepal for its innovative
approaches to merchandising and customer service. Products such as Premium Savings Account,
HBL Proprietary Card and Millionaire Deposit Scheme besides services such as ATMs and Tele-
banking were first introduced by HBL. Other financial institutions in the country have been
following our lead by introducing similar products and services. Therefore, we stand for the
innovations that we bring about in this country to help our Customers besides modernizing the
banking sector. With the highest deposit base and loan portfolio amongst private sector banks
and extending guarantees to correspondent banks covering exposure of other local banks under
our credit standing with foreign correspondent banks, we believe we obviously lead the banking
sector of Nepal. The most recent rating of HBL by Bankers’ Almanac as country’s number 1
Bank easily confirms our claim.

All Branches of HBL are integrated into Globus (developed by Temenos), the single Banking
software where the Bank has made substantial investments. This has helped the Bank provide
services like ‘Any Branch Banking Facility’, Internet Banking and SMS Banking. Living up to
the expectations and aspirations of the Customers and other stakeholders of being innovative,
HBL introduced several new products and services. Millionaire Deposit Scheme, Small and
Medium Enterprises Loan, Pre-paid Visa Card, International Travel Quota Credit Card,
Consumer Finance through Credit Card and online TOEFL, SAT, IELTS, etc. fee payment
facility are some of the products and services. HBL also has a dedicated offsite ‘Disaster
Recovery Management System’. Looking at the number of Nepalese workers abroad and their
need for formal money transfer channel; HBL has developed exclusive and proprietary online
money transfer software- HimalRemitTM. By deputing our own staff with technical tie-ups with
local exchange houses and banks, in the Middle East and Gulf region, HBL is the biggest inward
remittance handling Bank in Nepal. All this only reflects that HBL has an outside-in rather than
inside-out approach where Customers’ needs and wants stand first.

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Activities/Awards
Himalayan Bank Ltd. has performed the following activities:
1) Contribution to Restore Patan Durbar Square
2) CSR to Helping Hands Children’s Home
3) CSR to Bal Sudhar Sangh
4) CSR to Kuleshwor Awas Secondary School
5) HBL Sponsored OPD Ticket Books to Siddhi Memorial Foundation
6) CSR to Siddhi Memorial Foundation
7) CSR to Orphan Home
8) Contribution during COVID-19
9) CSR to Bhimsen Temple

Awards:

1) HBL Daayitwa Fellowship Award- 2017

2) HBL TFP Award -2019

Capital Structure:
Issued Capital - – Rs .8, 520,255,844
Paid up Capital – Rs.8,520,255,844

Bank’s Vision:
Himalayan Bank Limited holds of a vision to become a Leading Bank of the country by
providing premium products and services to the customers, thus ensuring attractive and
substantial returns to the stakeholders of the Bank.

Bank’s Mission:
The Bank’s mission is to become preferred provider of quality financial services in the country.
There are two components in the mission of the Bank; Preferred Provider and Quality
Financial Services; therefore we at HBL believe that the mission will be accomplished only by
satisfying these two important components with the Customer at focus. The Bank always strives
positioning itself in the hearts and minds of the customers.

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The Bank’s Objective:

To become the Bank of first choice is the main objective of the Bank.

1.3 Objective of Study:

The basic objective of the study is to evaluating financial performance and position of
Himalayan Bank. This aims is to examine its efficiency, effectiveness, systematization and
sincerity in disturbing fund and analyzing deposit policies as well within the directive of Nepal
Rastra Bank, Commercial Bank Act, other related acts and rules and its own policy. The other
objectives of the study are as follows:
 To examine the trend of deposit collection of Himalayan Bank Limited.
 To examine trend of credit position of Himalayan Bank Limited.
 To review the efficiency of deposit mobilization.
 To find out relation between deposit and loan advance.

1.4 Rationale of the Study:

The study will be helpful for the shareholder, stakeholder and other third parties to know the
financial performance and position of Himalayan Bank Limited. The study also compels the
management of Himalayan Bank Limited for self-assessment of what they have done in the past
and guides them in their future plan and programs. The liquidity position helps to those unknown
people by providing required information.
 In the context of modern economy of Nepal, deposited can play a vital role to improve the
whole banking condition.
 Investor can measure the banking liquidity before they invest.
Similarly, this report will be helpful for the forthcoming bachelor students of the management.

1.5 Statement of the Problems:

Nepal is an underdeveloped and economically backward country because of the un-exploitation
of resources and due to the political instability, terror activities and numerous other obstacles.

6
Numerous resources are remained untouched and unemployment has become the major problem
among the youth. Population growth as well is to be sorted out soon.

However, major problem in almost all underdeveloped countries and Nepal is no exception, is
that of capital formation and proper utilization. In such countries, the commercial banks have to
shoulder more responsibilities and act as development banks, due to the lack of other specialized
institutions. Liberalize financial policy and policy of welcoming more of joint venture banks in
Nepal and participation of foreign investors in Nepal is helping to eliminate the mentioned
problem. There are already some of joint venture banks which are highly contributing in making
cash inflow in country. We need more plateful hands to serve our current economic position.

Efficiency of financial performance of banks is very important in all societies and economic
systems. One of the most important challenges faced by bank managers, therefore, is how to
optimally use their scarce financial resources. In-depth analysis and evaluation of the financial
performance of different banks can identify the strengths and weaknesses in the system for
further improvement.
At present we have twenty-eight commercial banks. In spite of rapid growth, some indicators
show performance is not much encouraging towards the service coverage. In such a situation the
study tries to analyze the present performance of banks, which would give the answers of
following queries.
1. What does the financial trend reflect?
2. Does the bank face difficulties in financing its loan and future investment expansions?
3. Is the profitability of HBL strong enough to exist in the competitive financial industry?
4. How is the company utilizing its assets?
5. What is the company’s financial position to meet its current obligation?
6. What is the liquidity, efficiency of assets management, profitability and risk position in
comparison to HBL?
7. What is the trend of deposit collection, its utilization, net profit and its projection?
1.6 Review of Literature:
This chapter is composed of two major parts: the theoretical framework and empirical studies.
The theoretical framework part presents meaning of financial statements, Presentation of Bank

7
Financial Statements, Meaning of Financial Statement Analysis, Objective of Financial
Statement Analysis, and Tools for Financial Analysis used in the financial performance
evaluation of banks. The empirical studies part presents various related researches and their
results.

1.6.1 Theoretical Review:

Banking and financial Institution Act 2073 defines deposit as “ amounts deposited in current,
savings or fixed accounts of a bank or financial institution through costumer with or without
accruing interests and the term also includes such amounts which a bank or financial institution
accepts through different financial instruments as specified by the Rastra Bank from time to
time”. General public, businessman deposit the idle money left with them in banks to earn
interest on the idle money and for safety purpose. This amount which bank receives as deposit is
the main sources for the bank. Just as a manufacturing company can’t operate without the raw
materials, a bank can’t operate without collection of depositors. Depositors are the main sources
for all types of banks. These deposits are collected for different frame. In other word deposits are
the main sources of raising capital. These deposits are received in different form of account.
As per Banking and Financial Institution Act 2073 deposit means “The amount stored in
current/saving/fixed a/c by the customers in any banking or financial institute.” As per the clause
of Banking and Financial Institution Act 2073, “The a/c which records transaction of such
deposits which are deposit for a certain fixed Call is known as fixed deposit a/c.” According to
Banking and Financial Institutions Act 2073 “Saving a/c is the account which records transaction
of such deposit which is deposited for saving purpose.”
During the two decades after the Diamond-Dybvig model was published, many theorists have
tried to enhance it byadding features that exist in the real-life bank deposit contracts. For
instance, von Thadden (1998) introduced continuous-time framework, Bhattacharya and Gale
(1987) modified investment technology, Villamil (1991) made the technology risky, etc. One of
the main refinements arose from a critique by Jacklin (1987). The author points out that liquidity
could be obtained through direct trading by savers without risk-sharing in a bank; that is, the
savers could invest some of their savings directly in equity stocks (of productive projects) and, if
faced a consumption shock, could sell the  stocks to other savers who did not have such a shock.

8
The critique highlights the fact that autonomous (direct) financial markets also play a role in
liquidity provision, and the dominance of the banks as the liquidity providers, observed in some
countries, may be well explained by institutional deficiencies of their markets for direct
financing and by high transaction cost.
“Deposit may define as the surplus by and individual depositors of bank that proportional to the
risk assumed over some future deposit period” (Bailey; 2000). A bank is an instruction where
financial services are broadly offered and wide ranges of financial are performed. It accepts
deposit from public, makes the fund available to these who need them and helps in remittance of
money from one place to another. A bank performs a highly appreciable function in the economy
by offering relatively safe, convenient, liquid and accessible securities and at the same Call by
accepting relatively risky, illiquid, inconvenient, long term and large denomination securities
offered by the borrower.
To sum up, the review of the economic literature in the field shows that deposit is not the only
means capable of coping with bank runs. However, at present it is a dominant solution since the
modern payment systems are still based on the bank deposit convertibility, and the banks
dominate credit channels in most nations of the world.
It means that nowadays the real challenge to a public policy from the banking instability is how
to structure deposit insurance in order to curtail the moral hazard and other negative effects while
preserving its ability to stabilize the banking.

1.6.2 Empirical Review:

Deposit means sum of money paid into a bank or building society account, it is also a sum
payable as a first installment on the purchase of something or as a pledge for a contract , the
balance being payable later. Deposit is also a place for safekeeping or in trust, especially in a
bank account. Bank deposits consist of money placed into banking institutions for safekeeping.
These deposits are made into accounts such as saving account, fixed account, call account and
other many according to the banks rules. The account holder has the right to withdraw
deposited fund. When money is deposited into banking account, it earns interest. This means
that, at fixed intervals, a small percentage of amount’s total is added to the amount of money
already in the account. Interest can be compounded at different rates and frequencies

9
depending on the bank or institutions. The deposit itself is a liability owned by the bank to the
depositor, and the word refers to the actual funds that have been deposited.  

1.7 Organization of the Study:

The study has been organized mainly into three chapters:
1.7.1 Chapter One: Introduction
The first chapter contains the brief summary of background of the study, statement of the
problem, objectives of the study, method of the study, limitations of the study, review of
literature and significance of the study.

1.7.2 Chapter Two: Result and Analysis

The second chapter contains the methodologies used in the study to find out the relevant data
regarding the study such as nature and sources of data, tools and techniques of
analysis .Similarly, it involves the presentation of results and findings observed during the
research.

1.7.3 Chapter Three: Summary and Conclusion

The third chapter deals with the summary of the report, and conclusion based on the finding of
the report.

1.8 Research Methodology

Research method is a systematic plan for doing research. It is the systematic, theoretical analysis
of the methods applied to a field of study. It comprises the theoretical analysis of the body of
methods and principles associated with a branch of knowledge. This is mainly a descriptive and
analytical research in which a 5-year (FY 2014/15- FY 2018/19) time horizon is taken to assess
the data.

1.8.1 Research Gap:

10
A research gap is defined as a topic or area for which missing or insufficient information limits
the ability to reach a conclusion for a question. A research need is defined as a gap that limits the
ability of a decision maker from making decision.

1.8.2 Research Design:

To achieve the objective of the study, the descriptive research design has been used. It has
included all the process of collecting, verifying and evaluation of past evidences systematically
to reach the final conclusion. Some financial tools have been adapted to examine factors in this
study and descriptive techniques have been adopted to study the investment policy of HBL.

In fact, the research design is the conceptual structure within which the research is conduct.
General objective; of this research study is to examine and evaluate the financial performance of
Himalayan Bank Limited in order to achieve the objective, both descriptive and analytical
research design has been followed.

1.8.3 Population and Sample:

The population for this study comprises all the commercial banks currently operating in the
country. All the functions of commercial banks under rules, regulations and directives of Nepal
Rastra Bank. There are 27 Commercial banks currently operating in [Link] all the
commercial banks the sample is Himalayan Bank Limited.

[Link]. Bank Name Headquarter

1 Kumari Bank Ltd Tangal, Kathmandu
2 Agriculture Development Bank Ltd Ramshahpath, Kathmandu
3 Nabil Bank Ltd Beena Marg, Kathmandu
4 Nepal Investment Bank Ltd Durbarmarg, Kathmandu

11
 [Link]. Bank Name Headquarter
5 Standard Chartered Bank Nepal Ltd Nayabaneshwor, Kathmandu
6 Himalayan Bank Ltd Kamaladi, Kathmandu
7 Nepal SBI Bank Ltd Kesharmahal, Kathmandu
8 Nepal Bangaladesh Bank Ltd Kamaladi, Kathmandu
9 Everest Bank Ltd Lazimpat, Kathmandu
10 Nepal Bank Ltd Dharmapath,Kathmandu
11 Laxmi Bank Ltd Hattisar, Kathmandu
12 Citizens Bank International Ltd Narayanhitipath, Kathmandu
13 Prime Commercial Bank Ltd Kamalpokhari, Kathmandu
14 Sunrise Bank Ltd Gairidhara, Kathmandu
15 Century Commercial Bank Ltd Putalisadak, Kathmandu
16 Sanima Bank Ltd Nagpokhari, Kathmandu
17 Machhapuchhre Bank Ltd Lazimpat, Kathmandu
18 NIC Asia Bank Ltd Thapathali, Kathmandu
19 Global IME Bank Ltd Kamaladi, Kathmandu
20 NMB Bank Ltd Babarmahal, Kathmandu
21 Siddhartha Bank Ltd Hattisar, Kathmandu
22 Bank of Kathmandu Ltd Kamaladi, Kathmandu
23 Civil Bank Ltd Sundhara, Kathmandu
24 Nepal Credit and Commerce Bank Ltd Bagbazar, Kathmandu
25 Rastriya Banijya Bank Singhadurbarplaza,Kathmandu
26 Prabhu Bank Ltd Babarmahal, Kathmandu
27 Mega Bank Nepal Ltd Kamaladi, Kathmandu

1.8.4 Method of Data collection

There are two sources of the data collection, primary sources and secondary sources. This study
was conducted on the basis of secondary data relating to deposit policy e.g. deposit, loan and
advances and profit/loss that have been collected from profit and loss account, balance sheet of
related banks and annual report of auditors. The annual reports of the concerned banks were the

12
major sources of data for the study. Besides the annual reports of the banks, the following
sources of data have been used.
-        Notices published in newspapers, articles.
-        NRB published books, reports and bulletin
-        Annual reports and statement of HBL
-        Banks bulletin
-        Webpage of HBL
-        Information given by bank staffs.

1.8.5 Method of Data Analysis:

Data obtained from the, various sources cannot be directly used in their original form further
they need to be verified and simplified for the purpose of analysis. Data information, figure and
facts so obtained need to be checked, rechecked edited and tabulated for computation. According
to the nature of data, they have been inserted in meaningful tables. Using financial and statistical
tools (data analysis) have been analyzed and interpreted.

Finanacial Tools:
 Profitability ratios
Maximization of profit is the main objectives of each and every business concern. It is very
necessary to earn maximum profit for the successful running of a business concern. According to
Lord Keynes, profit is the engine that drives the business enterprises. The profit is also important
to preserve the existence of business as well as strength and expand it. Following Ratios are
calculated to measure the profitability of the bank.

 Return on assets (ROA)

 Return on shareholder's equity
 Net interest Earned to Total Assets Ratio

 Liquidity ratios
The ability of firm to meet its short term obligation is known as liquidity. It reflects the short
term financial strength of business the ratios are used to know the capacity of concern to repay
is short term liability. The ratios indicating the liquidity of a firm is:

13
 -   Current Ratio
-    Cash and Bank Balance to Deposit Ratio.

 Activity ratios
This ratio reflects how efficiently the company is managing its resources. Thus these ratios
measure the degree of effectiveness in use of resources or funds by a firm. Under this ratio
following ratio are calculated.
Interest Expenses to Total Expenses Ratio

Statistical Tools:
 Simple table and multiple bar diagrams
Tabulation Method: 
Generally, the tables are classified in two ways.
According to purpose:
a)  Reference table: It is big and has large data and general in nature.
b)  Summary table: It contains data, which may be useful for the study of particular
problem and specific in nature.
According to character:
a)  Simple table: It provides information about only one characteristic of the particular
data.
b)  Complex table: The data are classified with respect to two or more inter-related
characteristics.
Bar Graph:
Bar graph shows the comparatively between the two variables and numerical values of
variables are represented by the height of length of lines of rectangles of equal width.

 Pie chart and trend line

Charts:
The chart is used to show the range of variation in the values.

14
 Pie-chart: It divides the data into several parts into which it is broken up form of circle and
the divided sectors that each represent a proportion of the whole. It is called pie-chart
because it looks like slices of a pie.
Percentage and Average
A percentage is a number or ratio expressed as a fraction of 100. It is often denoted using
the percent sign, "%". A percentage is a dimensionless number (pure number).
 An average is the sum of a list of numbers divided by the number of numbers in the list.
Most of the time, this is used in finding a number. In mathematics and statistics, this would
be called the arithmetic mean. In statistics, mean, median, and mode are all known
as measures of central tendency.

 Correlation coefficient
It is a statistical tool for measuring the intensity or the magnitude of the linear relationship
between two series. Karl Pearson's measure known as Pearson's correlation coefficient between
two variable and series X and Y is usually denoted by 'r' and can be obtained as where, (see in
Annex-I)
The Karl Pearson Coefficient of correlation always falls between -1 and 1. The value of
correlation in minus signifies the negative correlation and in plus signifies the positive
correlation. As the value of correlation reaches to zero, it is said there is no significant
relationship between the variables.

1.9 Limitations of the Study

15
The analysis performed and conclusion drawn regarding the deposit analysis of Himalayan Bank
Ltd. there is a place for arguing about its accuracy and reliability as every study has been
conducted within certain limitation and assumptions. Such limitations are as follows:
 This report is heavily based on secondary data.
 This study is only with the deposit trends not with the other activities of the bank.
 This study is only related on deposit mobilization of Himalayan Bank Ltd, Battisputali
branch.
 Only simple statistical tools are used to present and analyze the data.
 Date relating to five years i.e. from Fiscal Year 2071/72(2014/15) to
2075/76(2018/19) are taken into consideration for the purpose of study. Out of 27
commercial banks, only Himalayan bank has been studied

16
 CHAPTER-2
RESULTS AND ANALYSIS

Since the report is based on the contribution of saving deposits in the bank’s total capital, the
way of presenting the data are of numerical form i.e. the mathematical numbers the data are
presented in the tabulation method. In this chapter collected data has been presented in tabular
and graphical form. The data and information collected by the researcher are in the raw form,
which is difficult to understand and have vast meaning and also cannot be used to generate
accurate analysis of the organization. So, raw data should be arranged in appropriately using
certain techniques such as editing, coding, classification and so on.

2.1 Presentation of Data:

Data presentation and analysis forms an important part of all academic studies, commercial,
industrial and marketing activities as well as professional practices. It is necessary to make use of
collected data which is considered to be raw data which must be processed to put for any use.
Data analysis helps in interpretation of data and take a decision or answer the research question.
Data analysis starts with the collection of data followed by sorting and processing it. Processed
data helps in obtaining information from it as the raw data is non-comprehensive in nature.
Presenting the data includes the pictorial representation of the data by using graphs, charts, maps
and other methods. These methods help in adding visual aspect to data which makes it much
easier and quick to understand.
Table 2.1: Deposit of Himalayan Bank (In million)

17
 Year Fixed Saving Call Total Difference
14,763.8
2071/72 10,305.43
38,731.97 2 63,801.22  8,863.35
13,583.6
2072/73
16,763.52 46,429.00 6 76,776.18 12,974.96
6,419.6
2073/74
37,501.07 38,133.81 0 82,054.48 5,278.30
20- 4,027.8
74/75 41,659.17 38,996.61 4 84,683.62 2,629.14
5,243.9
2075/76
50,428.57 38,494.64 3 94,167.13 9,483.51
(Sources: Annual report of Himalayan Bank from 2071/72 to 2075/76)
In the fiscal year 2071/72 bank collect the total deposit of Rs.63, 801.22 million. In the fiscal
year 2072/73, 2073/74, 2074/75 and 2075/76 banks collect the total deposit of Rs.76,776.18
Rs.82,054.48, Rs.84,054.48and Rs.94,167.13 million respectively. This all the total deposit are
collected from Fixed, call and saving deposit from the annual report of Himalayan Bank Limited.
The above table of deposit can be shown by multiple bar diagrams. The multiple bar diagrams
for presenting the above data are as follows:-
60,000.00

50,000.00

40,000.00

30,000.00

20,000.00

10,000.00

-
2071/72 2072/73 2073/74 2074/75 2075/76

Fixed Saving Call

18
 Figure 2.1 Deposit of Himalayan Bank from the FY 2071/72 to 2075/76
In this multiple bar diagram x-axis represents the time/year whereas y-axis represents the amount
of deposit. According to above multiple bar diagrams saving deposit is higher in the all fiscal
year 2071/72, 2072/73, 2073/74, 2074/75 and 2075/76 than other deposit. Call is higher than
fixed in 2071/72 and Fixed is higher than call in 2073/74, 2074/75 and 2075/76. Saving is the
higher deposit in above FY.

Analysis of Results:
Financial Ratios
A Financial ratio is a relative magnitude of two selected numerical values taken from an
enterprise's financial statements. Often used in accounting, there are many standard ratios used to
try to evaluate the overall financial condition of a corporation or other organization.

Profitability ratios:

Maximization of profit is the main objectives of each and every business concern. It is very
necessary to earn maximum profit for the successful running of a business concern. According to
Lord Keynes, profit is the engine that drives the business enterprises. Following Ratios are
calculated to measure the profitability of the bank.

Return on Assets (ROA)

This ratio shows the return or profit generated out of total assets of firm. It is calculated as:
NPAT
Return on Assets =
Total Assets
Table 2.2: Return on Assets (In RS ‘000)
Year NPAT Total Assets Ratio (times)
2071/7 1,112,286.00 82,801,550.61 0.013

19
 2
2072/7 0.019
1,935,907.00 99,863,008.00
3
2073/7 0.020
2,178,235.00 107,255,479.97
4
2074/7 0.016
116,462,301.38
5 1,875,610.47
2075/7 0.027
2,977,623.00 107,444,920.00
6
(Sources: Annual report of Himalayan Bank from 2071/72 to 2075/76)
In the above table 2071/2072 NPAT is lower than 2075/76 and total assets also increase than the
previous year. Bank increase their ratio by the new facilities and political stability.
Return on Shareholder’s equity:
It is the amount of net income returned as a percentage of shareholders equity. This ratio can be
calculated by dividing net profit after taxes by shareholders equity.
NPAT
      Return on Shareholder’s equity = 
Shreholde r ' s Equity

Table 2.3: Return on shareholders’ equity (In RS ‘000)

Year NPAT Shareholder’s equity Ratio (times)

2071/7
1,112,286.00 6,958,900.00 0.16
2
2072/7
1,935,907.00 8,823,800.00 0.22
3
2073/7
2,178,235.00 11,705,200.00 0.19
4
2074/7
1,875,610.47 14,137,969.95 0.13
5
2075/7
2,977,623.00 16,908,181.22 0.18
6

20
 (Sources: Annual report of Himalayan Bank from 2071/72 to 2075/76)
In the above table 2074/2075 NPAT is lower than 2075/76 and total assets also increase than the
previous year. Bank increase their ratio by the new facilities and political stability and ratio helps
to increase the shareholder and there return. Its helps to make a liquidity strong of the bank and
easily to face the certain loan and exchange offer.
Liquidity ratios
Cash and Bank Balance to deposits Ratio
This ratio is part of liquidity and is also called as cash reserve. This is the amount of cash balance
branches maintain to meet their liabilities. This ratio can be calculated by dividing cash and bank
balance by deposit liabilities of the banks.

Cash∧Bank Balance
Cash and Bank Balance to deposit ratio = 
Deposit Liabilities
Table 2.4: Cash and bank balance to deposits ratio (In RS ‘000)

Year Cash & bank balance Deposits liabilities Ratio (times)

2071/7
8,387,412.00 73,538,200.00 0.11
2
2072/7
7,874,984.00 0.09
3 87,335,786.00
2073/7
4 8,915,386.00 92,881,114.00 0.10
2074/7
5 4,741,359.38 98,988,791.21 0.05
2075/7
6 4,658,563.97 109,184,801.60 0.04
(Sources: Annual report of Himalayan Bank from 2071/72 to 2075/76)
In the above table 2075/2076 cash and bank balance is lower than 2073/74 and Deposit liabilities
is higher in 2075/76 and in 2072/73, 2073/74 cash and bank balance increasing rapidly and
deposit liabilities also increase before the fiscal year 2075/76.  Bank increase the balance and
decrease the liabilities. Which increase the ratio of deposit.

21
Activity / Turnover Ratio
Turnover ratios reflect the efficiency with which an organization manages and uses assets in
generating sales. These ratios indicate the degree of conversion of assets into sales. The quicker
the conversion in conformity with the investment, the more efficient the management of the
assets.
Proportion of individual deposit account in different fiscal year
(See for the detail information in Annex-II)

2071/72

Fixed Saving Call

Figure 2.2 Pie chart of deposit in FY 2071/72

In the above pie chart the deposit that collected by the bank in the fiscal year 2071/72 is shown.
The above pie chart clearly shows that the saving deposit was higher than other types of deposit
in the fiscal year 2071/72 and fixed deposit is lower than the other deposit. Call deposit is higher
than fixed deposit and lower than the saving deposit.
In this fiscal year the saving is significantly higher. It is because in this fiscal year, bank lunch
many types of facilities to the saving account holder such as Himalayan saving.

22
 2072/73

Fixed Saving Call

Figure 2.3 Pie chart of deposit in FY 2072/73

In the above pie chart the deposit that collected by the bank in the FY 2072/73 was shown. The
above pie chart clearly shows that the saving deposit was greater than the other types of deposit
in the FY 2072/73 and call deposit is lower than the other deposit. Fixed deposit is higher than
the call deposit and lower than the saving deposit.
In the fiscal year 2072/73 also the saving deposit was significantly higher. In was favorable
environment to the investor who wants to invest their saving in productive sector. Therefore, the
investor draw their money form fixed deposit account and kept them in to saving deposit.

2073/74

Fixed Saving Call

Figure 2.4 Pie chart of deposit in FY 2073/74

In the above pie chart the deposit that collected by the bank in the fiscal year 2073/74 was
shown. The above pie chart clearly shown that the saving deposit is greater than the other types

23
of deposit in fiscal year 2073/74 and call deposit is lower than the other deposit. Fixed deposit is
higher than the call deposit and lower than the saving deposit.
In this fiscal year also saving deposit was significantly higher. Due to the political stability in the
country savers deposit their saving in the saving account without any hesitation. And also bank
adds the personal accidental insurance facilities to the saving account holders.

2074/75

Fixed Saving Call

Figure 2.5 Pie chart of deposit in FY 2074/75

In the above pie chart the deposit that collected by the bank in the fiscal year 2074/75 was
shown. The above pie chart clearly shown that the saving deposit is greater than the other types
of deposit in fiscal year 2074/75 and call deposit is lower than the other deposit. Fixed deposit is
higher than the call deposit and lower than the saving deposit.
In this fiscal year also saving deposit was significantly higher. Due to the political stability in the
country, previous policies, favorable environment, those previous facilities that bank provide
savers deposit their saving in the saving account without any hesitation. And also bank adds the
personal accidental insurance facilities to the saving account holders.

24
 2075/76

Fixed Saving Call

Figure 2.6 Pie chart of deposit in FY 2075/76

In the above pie chart the deposit that collected by the bank in the fiscal year 2075/76 was
shown. The above pie chart clearly shown that the saving deposit is greater than the other types
of deposit in fiscal year 2075/76 and call deposit is lower than the other deposit. Fixed deposit is
higher than the call deposit and lower than the saving deposit.
In this fiscal year also saving deposit was significantly higher. Due to the political stability in the
country, previous policies, favorable environment, those previous facilities that bank provide
savers deposit their saving in the saving account without any hesitation. And also bank adds the
personal accidental insurance facilities to the saving account holders.
Trend of deposit account in different fiscal year

Fixed
60,000.00

50,000.00

40,000.00

30,000.00

20,000.00

10,000.00

-
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 2.7 Trend line of fixed deposit

25
In the above trend line, the values of dependent variables (i.e. fixed deposit) are taken on y-axis
whereas period is taken as x-axis. From the 2071/72 to 2075/76 there is increasing trend in fixed
deposit. Bank have to change their variable year by year. Bank try the same of decrease
the dependent variable and it gives the same result but when bank increase the dependent
variable it increase the fixed deposit.

Saving
50,000.00
45,000.00
40,000.00
35,000.00
30,000.00
25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
-
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 2.8Trend line of saving deposit

In the above trend line (i.e. figure 2.8) the position of saving deposit in different fiscal year was
shown. Year was taken along x-axis and saving deposit was taken along y-axis. It shows saving
deposit in different fiscal year plot in the trend. It shows the amount of saving deposit increased
from 2071/72 to 2072/73. And decreased from 2072/73 to 2073/74 and there is constant from
2073/74 to 2075/76. Bank increase the saving deposit it help to customer to deposit easily and
bank provide the satisfying interest rate to the customer. It is because in recent years facilities to
investors were attractive interest rate and different facilities investors were interested on saving
deposit account. Bank provides the different facilities for the depositor which helps to increase
the saving deposit. By the new trend of mobile banking and online banking Himalayan Bank try
to maintain the service and bank have to give the new facilities and policies for the new
customer.

26
 Call
16,000.00
14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
-
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 2.9: Trend line of Call deposit

In the above trend line (i.e. figure: 2.9) the position of Call deposit in different fiscal year was
shown. The Call was measure in X-axis whereas Call deposit in different fiscal Y-axis. When
amount of Call deposit in different fiscal years were plotted in the trend line then we found the
decreasing trend line till 2074/75 and it has increased in recent year (i.e. 2075/76). Customer
deposit the huge amount and withdrew allows the unlimited. Some new facilities of mobile
banking and online banking reducing the call deposit trend. This help to maintain the relationship
the customer and bank. Decrease of call deposit effect the other deposit of the bank and it affect
the profit of the bank.  

ROA
0.03

0.02

0.01

-
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 2.10: Trend line of Return on Asset (ROA)

In the above trend line (i.e. figure: 2.10) the position of Return of Assets in different fiscal year
was shown. The Year is measured in X-axis whereas return in different fiscal Y-axis. When

27
amount of Return of Assets in different fiscal years were plotted in the trend line then we found
the decreasing trend line till 2074/75 and it has increased in recent year (i.e. 2075/76).  Bank
Return on Assets decrease at the 2074/2075 and at the 2072/73 to 2073/74 it is same but at the
Fiscal year of 2075/76 bank increases the Return on Asset.

ROE
0.25

0.20

0.15

0.10

0.05

-
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 2.11: Trend line of Return on Shareholders’ Equity (ROE)

In the above trend line (i.e. figure: 2.11) the position of Return of Shareholders equity in
different fiscal year was shown. The Year is measured in X-axis whereas return in different fiscal
Y-axis. When amount of Return of Shareholders in different fiscal years were plotted in the trend
line then we found the decreasing trend line till 2074/75 and it has increased in recent year (i.e.
2075/76).  

Cash & Bank Balance to Deposit

0.12

0.10

0.08

0.06

0.04

0.02

0.00
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 2.12: Trend line of Cash and bank balance to deposit ratio
In the above trend line (i.e. figure: 2.12) the position of Cash and bank balance to deposit ratio in
different fiscal year was shown. The Year is measured in X-axis whereas return in different fiscal

28
Y-axis. When amount of Cash and bank balance to deposit ratio in different fiscal years were
plotted in the trend line then we found the increasing trend line .At the Fiscal Year there are
some trend of deposit so the customer deposit where there is important and there is some
decrease ratio from the 2071/72 to 2075/76
Correlation between deposit and profit
Let the deposit (in billion Rs.) be the ‘X’ and profit be the ‘Y’, then: 0.92
(See detail information in Annex-III)
Proportion of deposit in the total capital
For measurement of proportion of deposit in the total capital, deposit to total capital ratio is one
of the best tools. So, in this report also researcher used the deposit to capital ratio to know the
proportion of deposit in the total capital. The deposit to total capital is calculated by dividing
total amount of deposit by the total capital. 
Total Amount of Deposits
Deposit to total capital ratio=
Total Capital
(See detail information in Annex II)
The above table shows the proportion deposit in the total capital of the bank. In the fiscal year
2071/72, 10.57 of total capital were covered by the deposit. Such percentage in the fiscal year
2072/73, 2073/74, 2074/75 and 2075/76 were 9.90, 7.94, 7.00 and 6.46 respectively. When such
percentage was plot in the graph we found the following trend line.

Deposit to total capital ratio

12.00

10.00

8.00

6.00

4.00

2.00

0.00
2071/72 2072/73 2073/74 2074/75 2075/76
.
Figure 2.13 Trend line of deposit to total capital ratio

29
 In this trend line time/year was taken on x-axis whereas deposit to total capital ratio was taken on
y-axis. By plotting the deposit to total capital ratio in different fiscal ratio in different fiscal year
in graph then the researcher found the fluctuated trend, which shows the higher risk of the bank.

2.2 Major Findings

The major findings of the study of the study are as follows.
 In the fiscal year 2071/72, the saving deposit is 52.67%, fixed deposit is 14.01% and the call
deposit is 20.08% of the total deposit. Here, saving deposit is greater than the other types of
deposit.
 In the fiscal year 2072/73, the fixed deposit is 19.19%, saving deposit is 53.16% and the Call
deposit is 15.55% of the total deposit. Here also saving deposit is greater than the other types of
deposit.
 In the fiscal year 2073/74, the call deposit is only 6.91% saving deposit is 41.06% and the fixed
deposit is 40.38%. Here, also saving deposit is higher than the other types of deposit.
 In the fiscal year 2074/75, the saving deposit is 46.05% of the total deposit, fixed deposit is
49.19% and the call deposit is 4.76%. Here, the fixed deposit was greater than the other types of
deposit.
 In the fiscal year 2075/76, the saving deposit is 40.08% of the total deposit, fixed deposit is
53.55% and the call deposit is 5.57%. Here, the fixed deposit was greater than the other types of
deposit.
 There is 0.92 positive correlations between the deposit and profit. Correlation coefficient is used
to measure this relationship and found r = 0.92
 It also shows the increasing and decreasing deposit trends of all the deposits from year 2071/72
to 2075/76.

30
 CHAPTER 3:
SUMMARY, CONCLUSIONS AND RECOMMENDATION

3.1 Summary
As deposit is one of the significant functions of commercial banks, the researcher has analyzed
deposit mobilization of Himalayan bank which is one of the successful commercial bank of
Nepal. Deposit covers wide area so the researcher has setup deposit mobilization. The basic
objectives of this study are to identify the different types of deposit account, to know the trend of
individual deposit account, to know the trend of individual deposit in several fiscal years and
also in research researcher want to examine the relationship between deposit and profit. As the
other research report also have some limitation. Call, data, area, methodology used to collect and
analyzed data were the main limitation of the study.
In the part of knowing the deposit mobilization of Himalayan bank, researcher has collect
required data from the concern bank as well as by visiting website of the bank. Then the
collected data are presented and analyzed. Adopting number of graphical and statistical tools
such as multiple bar diagrams, pie chart, trend line and correlation coefficient etc.
From the research, the researcher found that the total amount of deposit and other deposits are
more consistencies than the fixed deposit and Call deposit. The proportion of saving deposit is
seemed significantly higher than the other types of deposits.

3.2 Conclusion
From the above analysis the researcher conclude that Himalayan Bank Ltd. Battisputali has
shown the masterful task in the field of deposit mobilization. The data analysis clearly shows that
the total amount of deposit collected by bank has been significantly increased over the analyzing
period. This shows the greater opportunities to earn profit by mobilizing such deposit.

31
 In all most all analyzing period the saving was greater than the other types of deposit. It shows
the efficiency of different types of saving scheme and facilities provided by the banks. There
were high degree of positive correlation between deposit and profit. So, if bank able to collect
deposit then it is certain that it’s profit also increase.

3.3 Recommendations
With the help of above research, I found the some weakness of the bank in the field of deposit
mobilization. So, to overcome such weakness researcher provides following recommendation to
the management of Himalayan Bank Limited, Battisputali. They are as follows:-
 Although, the total deposit is in increasing trend but it is not sufficient as a commercial bank. So,
it is needed to give much more concern to collect a deposit.
 As we know that the deposit in an important function of commercial bank but in the Battisputali
branch of Himalayan bank there were no any separate department for the deposit and loans. So,
the bank should establish a separate department for the collection and mobilization of deposit.
 The scheme and facilities provided by the bank toward the deposit holders is not sufficient to
compete in this competitive environment. So, the bank should add other attractive scheme and
facilities.
 Bank provides any branch banking service (ABBS) but it is not so effective due to its transaction
cost. So, bank should provide free ABBS service as a other banks.
 The other deposit was the non-interest bearing but the proportion of other deposit as compare to
other types of deposit is very less. So, bank should take corrective action for increment of other
deposit so that the bank’s profitability also increases.
 

32
33