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Factors influencing the interest setting behaviour of Nepalese commercial banks / Bikash Yadav
Title : Factors influencing the interest setting behaviour of Nepalese commercial banks Material Type: printed text Authors: Bikash Yadav, Author Publication Date: 2018 Pagination: 98p. Size: GRP/Thesis Accompanying material: 11/B Languages : English Descriptors: Bank and banking
Banks
InvestorsKeywords: 'interest rate deposit rate inflation rate return on assets return on equity' Class number: 332.6 Abstract: The interest setting behavior is treated as an important indicator of intermediation efficiency. Banks’ interest rate represents a vital component of profitability and typified a summary measure of bank net interest rate of return. Interest rates are of significant importance for efficient mobilization of resources for economic and productive activities. In the economy market, the interest setting behavior is significantly influenced by a number of factors which include macroeconomic environment, inflation and the policy interest rate (Treasury bill rate). Higher interest rate usually implies lower baking sector efficiency, marked by higher costs due to inefficient control of operating expenses, and have a negative impact of financial developments, resulting with lower investments and slower economic activity.
The major purpose of this study is to identify the firm-specific and macroeconomic factors influencing the interest setting behavior of Nepalese commercial banks. The study has the following specific objectives is to analyze the impact of assets growth ratio, efficiency ratio and capital adequacy ratio in determining the interest rate, to determine the impact of return on assets on interest setting behavior and to examine the relationship between macro-economic factors such as GDP growth and inflation on interest setting behavior.
This study is based on secondary data which were gathering for a sample of 18 commercial banks of Nepal within the time period from 2010 to 2016, leading to total of 126 observations. The secondary data have been obtained from Nepal Rastra Bank bulletin published by central bank of Nepal, annual audited financial statements and websites of respective commercial banks. The polled cross-sectional data analysis has been undertaken in the study. The research design adopted in this study is casual comparative types as it deals with relationship of bank specific factors like capital adequacy ratio, credit risk, management efficiency, liquidity position, return on assets and growth and macro-economic variables like GDP growth and inflation with dependent variable such as: I1 (interest on deposit) and I2 (interest on loan). The statistical methods used in the analysis are descriptive statistics, correlation analysis and regression analysis.
The result shows thatcapital adequacy ratio has negative relation to I1 (interest on deposit) and I2 (interest on loan). The beta coefficient of credit risk is positive and highly significant. Efficiency ratio has negative relation with interest rate. The beta coefficient of liquidity ratio is negative for I1 (interest on deposit) and positive for I2 (interest on loan). Return on assets has positive relationship with interest on deposit. The beta coefficient of return on assets is large and highly significant. In the contrast return on assets has negative relationship with interest on loan. The beta coefficient of assets growth ratio is large and highly significant. GDP growth has negative and insignificant relation with interest on deposit whereas positive and significant relation with interest on loan. The beta coefficient of inflation is small and highly insignificant for interest on deposit and significant for interest on loan.
The major conclusion of this study is thatinterest rateof Nepalese commercial banks is affected by bank-specific factors and macroeconomic factors. Credit risk and return on assets is an internal factor which holds a definitely significant positive effect on interest on deposit where as capital adequacy ratio, efficiency ratio, liquidity ratio, assets growth ratio, GDP growth rate and inflation is an internal factor which holds significant negative effect on interest on deposit. Credit risk, liquidity ratio, GDP growth rate and inflation is an internal factor which holds a definitely significant positive effect on interest on loan where as capital adequacy ratio, efficiency ratio, return on assets and assets growth ratio is an internal factor which holds significant negative effect on interest on loan.
The study also concludes that there are behaviors towards the commercial banks in Nepal, which always expects to maintain a stable interest rate at a certain level in the long term. Thus, the high interest rate is not defined as the low level of efficiency of Nepalese commercial banks, but rather reflects the high asymmetric information and the high level of profitability of the bank.
Factors influencing the interest setting behaviour of Nepalese commercial banks [printed text] / Bikash Yadav, Author . - 2018 . - 98p. ; GRP/Thesis + 11/B.
Languages : English
Descriptors: Bank and banking
Banks
InvestorsKeywords: 'interest rate deposit rate inflation rate return on assets return on equity' Class number: 332.6 Abstract: The interest setting behavior is treated as an important indicator of intermediation efficiency. Banks’ interest rate represents a vital component of profitability and typified a summary measure of bank net interest rate of return. Interest rates are of significant importance for efficient mobilization of resources for economic and productive activities. In the economy market, the interest setting behavior is significantly influenced by a number of factors which include macroeconomic environment, inflation and the policy interest rate (Treasury bill rate). Higher interest rate usually implies lower baking sector efficiency, marked by higher costs due to inefficient control of operating expenses, and have a negative impact of financial developments, resulting with lower investments and slower economic activity.
The major purpose of this study is to identify the firm-specific and macroeconomic factors influencing the interest setting behavior of Nepalese commercial banks. The study has the following specific objectives is to analyze the impact of assets growth ratio, efficiency ratio and capital adequacy ratio in determining the interest rate, to determine the impact of return on assets on interest setting behavior and to examine the relationship between macro-economic factors such as GDP growth and inflation on interest setting behavior.
This study is based on secondary data which were gathering for a sample of 18 commercial banks of Nepal within the time period from 2010 to 2016, leading to total of 126 observations. The secondary data have been obtained from Nepal Rastra Bank bulletin published by central bank of Nepal, annual audited financial statements and websites of respective commercial banks. The polled cross-sectional data analysis has been undertaken in the study. The research design adopted in this study is casual comparative types as it deals with relationship of bank specific factors like capital adequacy ratio, credit risk, management efficiency, liquidity position, return on assets and growth and macro-economic variables like GDP growth and inflation with dependent variable such as: I1 (interest on deposit) and I2 (interest on loan). The statistical methods used in the analysis are descriptive statistics, correlation analysis and regression analysis.
The result shows thatcapital adequacy ratio has negative relation to I1 (interest on deposit) and I2 (interest on loan). The beta coefficient of credit risk is positive and highly significant. Efficiency ratio has negative relation with interest rate. The beta coefficient of liquidity ratio is negative for I1 (interest on deposit) and positive for I2 (interest on loan). Return on assets has positive relationship with interest on deposit. The beta coefficient of return on assets is large and highly significant. In the contrast return on assets has negative relationship with interest on loan. The beta coefficient of assets growth ratio is large and highly significant. GDP growth has negative and insignificant relation with interest on deposit whereas positive and significant relation with interest on loan. The beta coefficient of inflation is small and highly insignificant for interest on deposit and significant for interest on loan.
The major conclusion of this study is thatinterest rateof Nepalese commercial banks is affected by bank-specific factors and macroeconomic factors. Credit risk and return on assets is an internal factor which holds a definitely significant positive effect on interest on deposit where as capital adequacy ratio, efficiency ratio, liquidity ratio, assets growth ratio, GDP growth rate and inflation is an internal factor which holds significant negative effect on interest on deposit. Credit risk, liquidity ratio, GDP growth rate and inflation is an internal factor which holds a definitely significant positive effect on interest on loan where as capital adequacy ratio, efficiency ratio, return on assets and assets growth ratio is an internal factor which holds significant negative effect on interest on loan.
The study also concludes that there are behaviors towards the commercial banks in Nepal, which always expects to maintain a stable interest rate at a certain level in the long term. Thus, the high interest rate is not defined as the low level of efficiency of Nepalese commercial banks, but rather reflects the high asymmetric information and the high level of profitability of the bank.
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Barcode Call number Media type Location Section Status 411/D 332.6 YAD Books Uniglobe Library Social Sciences Available Financial development and economic growth nexus: evidence from Nepal / Somnath Kandel
Title : Financial development and economic growth nexus: evidence from Nepal Material Type: printed text Authors: Somnath Kandel, Author Publication Date: 2016 Pagination: 79p. Size: GRP/Thesis Accompanying material: 5/B General note: Including bibilography Languages : English Descriptors: Banks
Banks and banking
Economic development
Economic growthKeywords: 'economic growth commercial bank bank bank and banking economic development nepal' Class number: 338.9 Abstract: This study has been conducted to know the long run, short run relationship and causality direction between financial development and economic growth in Nepal by using the time series data of 1970 to 2015. The relationship between financial development and economic growth has received considerable attention in the past several decades. Although there is almost a psychological consensus in all kinds of economics (developed, developing and underdeveloped economy) that financial system play important role for long run economic growth; debate on a direction of causation and level of causation either from finance to growth or vice versa is still ongoing.There are two distinct views of the finance-growth nexus in the traditional development economics. The first view was first proposed by Schumpeter(1911) who contends that services provided by financial intermediaries are essential drivers of innovation and growth. Thus, well-developed financial systems channel financial resources to their most productive use. Schumpeter's view was later formalized by Goldsmith(1969) and so many other studies. In oppose other view which believes real economic growth makes increment of financial activities consequently financial development is possible. This alternative idea was initially proposed by Robinson(1952) later on so many other studies such as Patrick(1966) and Ireland(1994) followed the idea of Robinson.
Since there contemporary literatures are divided on a causality effect of finance growth relationship, this study has also a primary objective to find out the directional of effect between these two sectors. To measure the financial development four different proxy namely i) Broad money to nominal GDP (M2/Y), ii) Domestic credit no nominal GDP (DC/Y), iii) Private sector credit to nominal GDP (PSC/Y) and iv) Commercial bank assets to total assets of commercial bank plus Nepal Rastra Bank (CBA/TA) are used. Similarly to measure the economic growth real GDP per capita (RY/P) is used.
This study has employed causal comparative research designs to deal with financial development and economic growth in context of Nepal. This study is based on secondary sources of data. The sample size has been taken from the 1970 AD to 2015 AD. Total 46 years data has been used. The econometric models used for secondary data analysis consists: i) Augmented Dickey-Fuller test: to test the stationarity of data, ii) Johansen co-integration test: to test the long run relationship between pair wise variable of economic growth and financial development, iii) Granger Causality test: to test the causal relationship and direction of causality between the pair wise variable of economic growth and financial development, and iv) Vector Error Correction Model (VECM): to test the short run dynamics and direction of short run causality between pair wise variable of economic growth and financial development.
This study has found the long run co-integrating relationship and bi-directional causality between financial development and economic growth in Nepalese time series data from 1970 to 2015. This finding is identical with contemporary studies such as Demetriades & Luintel (1996a) of India, Demirhan et al.(2011) of Turkey, Saad(2014) of Lebanon and Oguntade et al.(2014) of Federal Republic of Nigeria. Moreover the findings of this study are consistent with Nepalese studies such as Gautam(2014). However, majority of finding of this study do not support to the studies such as Timsina(2014) and Bhandari & Acharya(2015) who found only uni-directional causality ‘between real GDP per-capita and private sector credit to nominal GDP’. This study partially support to Bista(2016) who found stable long run relationship between financial developments to economic growth in Nepal.
The study supports both demand driven and supply leading hypothesis in case of Nepal. Financial liberalization has improved the functioning of financial system by increasing the availability of funds and allowing risk diversification and increased investment in Nepal because the evidence shows that volume of credit released by Nepalese BFIs to the market was tremendously increased after the 1990 AD when the government adopted the liberalized economic policy in Nepal. This study has identified one phenomenon of Nepalese economy. The developing pace rate of DC/Y and PSC/Y (major proxies of financial development) is statistically found faster than those of economic growth during the period of 1970 to 2015. Therefore, it is justifiable to conclude that the pace of economic growth is too slow as compare to the pace of financial development in Nepal.
Based on the finding recommendation has given that: government and other concern body should emphasize more on how to speed up the economic growth of Nepal by prioritizing the demand driven hypothesis of finance growth relationship. Finally, findings of this study are constrained by the measuring capacity of variables, econometric model used in this study and coverage of Nepalese financial system. There is a more room for further research by using more impactful variables, incorporating the data of other financial sectors of Nepal such as NEPSE, insurance sector, provident funds etc.Financial development and economic growth nexus: evidence from Nepal [printed text] / Somnath Kandel, Author . - 2016 . - 79p. ; GRP/Thesis + 5/B.
Including bibilography
Languages : English
Descriptors: Banks
Banks and banking
Economic development
Economic growthKeywords: 'economic growth commercial bank bank bank and banking economic development nepal' Class number: 338.9 Abstract: This study has been conducted to know the long run, short run relationship and causality direction between financial development and economic growth in Nepal by using the time series data of 1970 to 2015. The relationship between financial development and economic growth has received considerable attention in the past several decades. Although there is almost a psychological consensus in all kinds of economics (developed, developing and underdeveloped economy) that financial system play important role for long run economic growth; debate on a direction of causation and level of causation either from finance to growth or vice versa is still ongoing.There are two distinct views of the finance-growth nexus in the traditional development economics. The first view was first proposed by Schumpeter(1911) who contends that services provided by financial intermediaries are essential drivers of innovation and growth. Thus, well-developed financial systems channel financial resources to their most productive use. Schumpeter's view was later formalized by Goldsmith(1969) and so many other studies. In oppose other view which believes real economic growth makes increment of financial activities consequently financial development is possible. This alternative idea was initially proposed by Robinson(1952) later on so many other studies such as Patrick(1966) and Ireland(1994) followed the idea of Robinson.
Since there contemporary literatures are divided on a causality effect of finance growth relationship, this study has also a primary objective to find out the directional of effect between these two sectors. To measure the financial development four different proxy namely i) Broad money to nominal GDP (M2/Y), ii) Domestic credit no nominal GDP (DC/Y), iii) Private sector credit to nominal GDP (PSC/Y) and iv) Commercial bank assets to total assets of commercial bank plus Nepal Rastra Bank (CBA/TA) are used. Similarly to measure the economic growth real GDP per capita (RY/P) is used.
This study has employed causal comparative research designs to deal with financial development and economic growth in context of Nepal. This study is based on secondary sources of data. The sample size has been taken from the 1970 AD to 2015 AD. Total 46 years data has been used. The econometric models used for secondary data analysis consists: i) Augmented Dickey-Fuller test: to test the stationarity of data, ii) Johansen co-integration test: to test the long run relationship between pair wise variable of economic growth and financial development, iii) Granger Causality test: to test the causal relationship and direction of causality between the pair wise variable of economic growth and financial development, and iv) Vector Error Correction Model (VECM): to test the short run dynamics and direction of short run causality between pair wise variable of economic growth and financial development.
This study has found the long run co-integrating relationship and bi-directional causality between financial development and economic growth in Nepalese time series data from 1970 to 2015. This finding is identical with contemporary studies such as Demetriades & Luintel (1996a) of India, Demirhan et al.(2011) of Turkey, Saad(2014) of Lebanon and Oguntade et al.(2014) of Federal Republic of Nigeria. Moreover the findings of this study are consistent with Nepalese studies such as Gautam(2014). However, majority of finding of this study do not support to the studies such as Timsina(2014) and Bhandari & Acharya(2015) who found only uni-directional causality ‘between real GDP per-capita and private sector credit to nominal GDP’. This study partially support to Bista(2016) who found stable long run relationship between financial developments to economic growth in Nepal.
The study supports both demand driven and supply leading hypothesis in case of Nepal. Financial liberalization has improved the functioning of financial system by increasing the availability of funds and allowing risk diversification and increased investment in Nepal because the evidence shows that volume of credit released by Nepalese BFIs to the market was tremendously increased after the 1990 AD when the government adopted the liberalized economic policy in Nepal. This study has identified one phenomenon of Nepalese economy. The developing pace rate of DC/Y and PSC/Y (major proxies of financial development) is statistically found faster than those of economic growth during the period of 1970 to 2015. Therefore, it is justifiable to conclude that the pace of economic growth is too slow as compare to the pace of financial development in Nepal.
Based on the finding recommendation has given that: government and other concern body should emphasize more on how to speed up the economic growth of Nepal by prioritizing the demand driven hypothesis of finance growth relationship. Finally, findings of this study are constrained by the measuring capacity of variables, econometric model used in this study and coverage of Nepalese financial system. There is a more room for further research by using more impactful variables, incorporating the data of other financial sectors of Nepal such as NEPSE, insurance sector, provident funds etc.Hold
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Barcode Call number Media type Location Section Status 260/D 338.9 KAN Thesis/Dissertation Uniglobe Library Social Sciences Available Financial structure and economic growth : a case of Nepal / Himalayan Bam
Title : Financial structure and economic growth : a case of Nepal Material Type: printed text Authors: Himalayan Bam, Author Publication Date: 2015 Pagination: 87p. Size: GRP/Thesis Accompanying material: 5/B General note: Including bibilography Languages : English Descriptors: Banks
Banks and banking
Economic development
Economic growthKeywords: 'economic growth commercial bank bank bank and banking economic development nepal' Class number: 338.9 Financial structure and economic growth : a case of Nepal [printed text] / Himalayan Bam, Author . - 2015 . - 87p. ; GRP/Thesis + 5/B.
Including bibilography
Languages : English
Descriptors: Banks
Banks and banking
Economic development
Economic growthKeywords: 'economic growth commercial bank bank bank and banking economic development nepal' Class number: 338.9 Hold
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Barcode Call number Media type Location Section Status 84/D 338.9 BAM Thesis/Dissertation Uniglobe Library Technology Available Firm specific and macroeconomic determinants in stock price : evidence from Nepalese commercial bank / Jyoti Malla
Title : Firm specific and macroeconomic determinants in stock price : evidence from Nepalese commercial bank Material Type: printed text Authors: Jyoti Malla, Author Publication Date: 2015 Pagination: 78p. Size: GRP/Thesis Accompanying material: 5/B General note: Including bibilography Languages : English Descriptors: Banks
Banks and banking
Commercial banks
Firm specific
Macroeconomics
Share-PriceKeywords: 'equality share share price equality share prices return on assets return on equity' Class number: 332.632 Abstract: Share price has received much attention in academic literature. There is far less research on the empirical side. All the empirical work investigating relationship between share price, bank specific and macroeconomic variables has focused developed economy. This study investigates the relationship between share price, bank specific and macroeconomic variables of selected Nepalese commercial banks. The stock price in the market is not static rather it changes every day. The most obvious factors that influence are demand and supply factors. The price of any commodity is affected by both micro-economic and macro-economic factors.
This study basically aimed at examines the empirical relationship between the stock prices, firm specific variables, and macroeconomic factors. The specific objectives of the study are: (a) to explore the effect of firm specific variables such as size measured by total assets, earning per share, and return on assets of the commercial banks on their stock prices, (b) to identify the effect of macroeconomic variables namely gross domestic product (GDP) and inflation on common stock prices of banks, (c) to investigate the most influencing factors to explain the prices of the stock of Nepalese commercial banks, (d) to provide the suggestions based on the research findings. This study is basically based on the analysis of secondary data. The data for firm specific variables including stock market data have been obtained from financial statements of the sample firms recorded in the database of Nepal Stock Exchange (NEPSE) Limited and Securities Board of Nepal (SEBON) provided in their respective websites. NEPSE and SEBON have maintained the record of firm specific financial data from the fiscal year 2002 to 2013 in their respective database in websites. The annual data series on macroeconomic variables such as inflation and interest rate have been obtained from websites of IMF. The data relating to GDP and inflation has been obtained from the fiscal year 2002 to 2013price. For analyzing the relationship, market share price is used as a dependent variable and SIZE, EPS, ROA, GDP, Inflation and MS is used as an independent variable. Besides, the study also used descriptive statistics to analyze the views of the financial executives, which mainly focus on the qualitative part of the major aspect of the market price share.
The result of the study showed that joint ventures have higher market share price than non-joint ventures. The major conclusion of this study is the firm specific variable like Size, EPS, ROA and macroeconomic variable gross domestic product, inflation and money supply has a dominant impact on the stock price determination in Nepalese enterprises. Size had positive and significant relationship in MPS of commercial banks. To sum up, the main implication of this study is that money supply is the predominant factor that determines the market share prices of commercial bank in Nepal. Other extraneous factors also caused market share price to fluctuate. Therefore, investors must look after all factors, which explicitly of implicitly affect market share price so that they can arrive at rational decision. Finally, Nepalese bankers and policy makers should also pay adequate attention to analyze the factors that make variation in the market share price of the commercial bank.Firm specific and macroeconomic determinants in stock price : evidence from Nepalese commercial bank [printed text] / Jyoti Malla, Author . - 2015 . - 78p. ; GRP/Thesis + 5/B.
Including bibilography
Languages : English
Descriptors: Banks
Banks and banking
Commercial banks
Firm specific
Macroeconomics
Share-PriceKeywords: 'equality share share price equality share prices return on assets return on equity' Class number: 332.632 Abstract: Share price has received much attention in academic literature. There is far less research on the empirical side. All the empirical work investigating relationship between share price, bank specific and macroeconomic variables has focused developed economy. This study investigates the relationship between share price, bank specific and macroeconomic variables of selected Nepalese commercial banks. The stock price in the market is not static rather it changes every day. The most obvious factors that influence are demand and supply factors. The price of any commodity is affected by both micro-economic and macro-economic factors.
This study basically aimed at examines the empirical relationship between the stock prices, firm specific variables, and macroeconomic factors. The specific objectives of the study are: (a) to explore the effect of firm specific variables such as size measured by total assets, earning per share, and return on assets of the commercial banks on their stock prices, (b) to identify the effect of macroeconomic variables namely gross domestic product (GDP) and inflation on common stock prices of banks, (c) to investigate the most influencing factors to explain the prices of the stock of Nepalese commercial banks, (d) to provide the suggestions based on the research findings. This study is basically based on the analysis of secondary data. The data for firm specific variables including stock market data have been obtained from financial statements of the sample firms recorded in the database of Nepal Stock Exchange (NEPSE) Limited and Securities Board of Nepal (SEBON) provided in their respective websites. NEPSE and SEBON have maintained the record of firm specific financial data from the fiscal year 2002 to 2013 in their respective database in websites. The annual data series on macroeconomic variables such as inflation and interest rate have been obtained from websites of IMF. The data relating to GDP and inflation has been obtained from the fiscal year 2002 to 2013price. For analyzing the relationship, market share price is used as a dependent variable and SIZE, EPS, ROA, GDP, Inflation and MS is used as an independent variable. Besides, the study also used descriptive statistics to analyze the views of the financial executives, which mainly focus on the qualitative part of the major aspect of the market price share.
The result of the study showed that joint ventures have higher market share price than non-joint ventures. The major conclusion of this study is the firm specific variable like Size, EPS, ROA and macroeconomic variable gross domestic product, inflation and money supply has a dominant impact on the stock price determination in Nepalese enterprises. Size had positive and significant relationship in MPS of commercial banks. To sum up, the main implication of this study is that money supply is the predominant factor that determines the market share prices of commercial bank in Nepal. Other extraneous factors also caused market share price to fluctuate. Therefore, investors must look after all factors, which explicitly of implicitly affect market share price so that they can arrive at rational decision. Finally, Nepalese bankers and policy makers should also pay adequate attention to analyze the factors that make variation in the market share price of the commercial bank.Hold
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Barcode Call number Media type Location Section Status 89/B 332.632 MAL Thesis/Dissertation Uniglobe Library Technology Available Human Resource Management and employee organization commitment: a study of Nepalese commercial banks / Rubina Shrestha
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Barcode Call number Media type Location Section Status 77/D 658.303 SHR Thesis/Dissertation Uniglobe Library Technology Available Human resource management and organizational performance in Nepalese commercial banks / Bandana Panta
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PermalinkImpact of bank specific and macroeconomic variables on the performance of commercial banks of Nepal / Rabi Shrestha
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PermalinkImpact of customer relationship management efforts on customer loyalty in Nepalese commercial banks / Neeta Joshi
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PermalinkImpact of customer satisafaction on behavioral intention to use banking service in Nepalese commercial banks / Rojina Khatri
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