| Title : | Relationship between deposit interest rate and deposits : a case of Nepalese commercial banks | | Material Type: | printed text | | Authors: | Tuladhar Bhattarai, Author | | Publication Date: | 2017 | | Pagination: | 103p. | | Size: | GRP/Thesis | | Accompanying material: | 10/B | | Languages : | English | | Descriptors: | Interest rate
| | Class number: | 332.820 | | Abstract: | Deposits are an integral part of banking activity. Mobilization of savings through intensive deposit collection has been regarded as the major task of banks. Acceptance of deposits is the primary function of commercial banks. Similarly, deposits are one of the basic innovations in current Indian banking activity (Venkatesan, 2012).Banks deposits represent the most significant component of the money supply used in by the public. It also refers to an amount of money in cash or checks form or sent via a wire transfer that is placed into a bank account. The target bank account for the bank deposit can be any kind of account that accepts deposit. Banks needs inflow money from the people so that they can be able to give loans or financing to promote productivity and economic growth and at the same time to gain profit for themselves through interest or margin applied (Ostadi&Sarlak, 2014).Performance of the banks depends on deposits, since the deposits are normally considered as a cost effective source of working fund. Mobilization of deposit is one of the important objectives of the commercial banks. It helps to expand banking operations (Shettar, 2014).
The major objective of this study is to examine relationship between the interest rate on deposit and deposits by the commercial banks. The specific objectives are:a) To assess the structure and pattern of fixed deposit, saving deposit, and total deposit in Nepalese commercial banks, b) To analyze the impact of interest rate on deposits of Nepalese commercial banks, c) To examine collective impact of inflation, fixed deposit rate, saving deposit rate, interest rate margin and GDP on deposits in Nepalese commercial banks, d) To determine the major factors affecting the deposits of Nepalese commercial banks.
This study has employed descriptive and causal comparative research designs to deal with the fundamental issues associated with factors influencing interest rates on deposit and deposits in the context of commercial banks listed in Nepal Stock Exchange. The descriptive research design has been adopted for the purpose of fact-finding and searching adequate information for the study. It describes the real and actual condition, situation and facts. Hence, the research design adopted in this study is of descriptive type.This study is also based on causal comparative research design. The basic purpose of using causal comparative research design is to understand and analyze the impact of interest rates on deposits of Nepalese commercial banks.This study is based on secondary sources of data. The secondary sources of data have been used to identify the relationship between interest on deposit and deposits in Nepalese commercial banks.The data are collected for fixed deposit, saving deposit, total deposit, inflation, fixed deposit rate, saving deposit rate, interest rate margin, and gross domestic product.For the study purpose, 19 different Nepalese commercial banks were taken as a sample out of 28 Nepalese commercial banks for the period of 2006/07 to 2014/15, leading to a total of 171 observations.
The result shows that there is positive relationship of inflation, saving deposit rate, fixed deposit rate and interest rate margin with fixed deposits whereas gross domestic product has negatively correlated with fixed deposit. The result shows that there is positive relationship of inflation, saving deposit rate and interest rate margin with saving deposit whereas fixed deposit rate and gross domestic product are negatively correlated to saving deposit. Inflation, fixed deposit rate, saving deposit rate and interest rate margin has positive relationship with total deposits. However, the study observed negative relationship of gross domestic product with total deposits. The beta coefficients for fixed deposit rate, inflation and interest rate margin are positive to fixed deposits.However, the beta coefficient for gross domestic product is negative to fixed deposits. The beta coefficients for inflation, interest rate margin and saving deposit rate are positive and significant to saving deposits. This means higher the inflation, interest rate margin and saving deposit rate higher would be the saving deposits. The result also shows that gross domestic product has negatively significant impact on saving deposits which leads higher the gross domestic product lower would be the saving deposits. The beta coefficient for inflation is positive for total deposits which mean higher the inflation higher will be the total deposits. The beta coefficients for interest rate margin, saving deposit rate and fixed deposit rate are positive and significant on total deposits. This leads higher interest rate margin, saving deposit rate and fixed deposit rate higher would be the total deposits.
The study also concludes that there is positive impact of inflation, saving deposit rate, fixed deposit rate and interest rate margin on total deposits. It indicates that higher the inflation, saving deposit rate, fixed deposit rate and interest rate margin higher would be the total deposits. On the other hand, there is negative impact of gross domestic product on total deposits. It reveals that higher the gross domestic product lower would be the total deposits.
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Relationship between deposit interest rate and deposits : a case of Nepalese commercial banks [printed text] / Tuladhar Bhattarai, Author . - 2017 . - 103p. ; GRP/Thesis + 10/B. Languages : English | Descriptors: | Interest rate
| | Class number: | 332.820 | | Abstract: | Deposits are an integral part of banking activity. Mobilization of savings through intensive deposit collection has been regarded as the major task of banks. Acceptance of deposits is the primary function of commercial banks. Similarly, deposits are one of the basic innovations in current Indian banking activity (Venkatesan, 2012).Banks deposits represent the most significant component of the money supply used in by the public. It also refers to an amount of money in cash or checks form or sent via a wire transfer that is placed into a bank account. The target bank account for the bank deposit can be any kind of account that accepts deposit. Banks needs inflow money from the people so that they can be able to give loans or financing to promote productivity and economic growth and at the same time to gain profit for themselves through interest or margin applied (Ostadi&Sarlak, 2014).Performance of the banks depends on deposits, since the deposits are normally considered as a cost effective source of working fund. Mobilization of deposit is one of the important objectives of the commercial banks. It helps to expand banking operations (Shettar, 2014).
The major objective of this study is to examine relationship between the interest rate on deposit and deposits by the commercial banks. The specific objectives are:a) To assess the structure and pattern of fixed deposit, saving deposit, and total deposit in Nepalese commercial banks, b) To analyze the impact of interest rate on deposits of Nepalese commercial banks, c) To examine collective impact of inflation, fixed deposit rate, saving deposit rate, interest rate margin and GDP on deposits in Nepalese commercial banks, d) To determine the major factors affecting the deposits of Nepalese commercial banks.
This study has employed descriptive and causal comparative research designs to deal with the fundamental issues associated with factors influencing interest rates on deposit and deposits in the context of commercial banks listed in Nepal Stock Exchange. The descriptive research design has been adopted for the purpose of fact-finding and searching adequate information for the study. It describes the real and actual condition, situation and facts. Hence, the research design adopted in this study is of descriptive type.This study is also based on causal comparative research design. The basic purpose of using causal comparative research design is to understand and analyze the impact of interest rates on deposits of Nepalese commercial banks.This study is based on secondary sources of data. The secondary sources of data have been used to identify the relationship between interest on deposit and deposits in Nepalese commercial banks.The data are collected for fixed deposit, saving deposit, total deposit, inflation, fixed deposit rate, saving deposit rate, interest rate margin, and gross domestic product.For the study purpose, 19 different Nepalese commercial banks were taken as a sample out of 28 Nepalese commercial banks for the period of 2006/07 to 2014/15, leading to a total of 171 observations.
The result shows that there is positive relationship of inflation, saving deposit rate, fixed deposit rate and interest rate margin with fixed deposits whereas gross domestic product has negatively correlated with fixed deposit. The result shows that there is positive relationship of inflation, saving deposit rate and interest rate margin with saving deposit whereas fixed deposit rate and gross domestic product are negatively correlated to saving deposit. Inflation, fixed deposit rate, saving deposit rate and interest rate margin has positive relationship with total deposits. However, the study observed negative relationship of gross domestic product with total deposits. The beta coefficients for fixed deposit rate, inflation and interest rate margin are positive to fixed deposits.However, the beta coefficient for gross domestic product is negative to fixed deposits. The beta coefficients for inflation, interest rate margin and saving deposit rate are positive and significant to saving deposits. This means higher the inflation, interest rate margin and saving deposit rate higher would be the saving deposits. The result also shows that gross domestic product has negatively significant impact on saving deposits which leads higher the gross domestic product lower would be the saving deposits. The beta coefficient for inflation is positive for total deposits which mean higher the inflation higher will be the total deposits. The beta coefficients for interest rate margin, saving deposit rate and fixed deposit rate are positive and significant on total deposits. This leads higher interest rate margin, saving deposit rate and fixed deposit rate higher would be the total deposits.
The study also concludes that there is positive impact of inflation, saving deposit rate, fixed deposit rate and interest rate margin on total deposits. It indicates that higher the inflation, saving deposit rate, fixed deposit rate and interest rate margin higher would be the total deposits. On the other hand, there is negative impact of gross domestic product on total deposits. It reveals that higher the gross domestic product lower would be the total deposits.
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