Title :	Determinants of banks lending behavior: a survey of selected commercial banks in Nepal
Material Type:	printed text
Authors:	Rakshya Gautam, Author
Publication Date:	2013
Pagination:	78p.
Size:	GRP/Thesis
Accompanying material:	2/D
General note:	Including bibliography
Languages :	English
Descriptors:	Bank and banking Bank loans Commercial banks Nepal
Keywords:	'banks lending behavior  Commercial banks  Nepal  Bank and banking  financial institutions'
Class number:	332.175
Abstract:	Bank lending behavior of the bank can be defined as the preferences and choices of bank while making loans and advances. In other words, bank lending behavior is the selection of bank’s investment on loans and advances on the account of constraints given by regulators, opportunities or threats provided by macroeconomic, factors and the preferences of customers etc. This study investigates the determinants of bank lending behavior of selected Nepalese commercial banks. The specific objectives of this study were to examine the effect of deposit growth rate, bank discount rate, cash reserve ratio, GDP, CD ratio, ROA, lagged LOA and interest spread on bank loans and advances, to analyze the impact of deposit growth, capital growth, and non-performing loan growth rate, earning assets growth rate on loan growth rate of the banks, to access the impact of input price of deposit, input price of equipment/ fixed capital, capitalization ratio, loans and advances and log of total assets on the output price of loan, to assess the views of bank employees on lending behavior of the bank. The research was based on primary and secondary data. The methods used for secondary data analysis included descriptive statistics, regression analysis, etc. Similarly the methods used for primary data analysis included percentage frequency distribution, mean scores, standard deviation and likert scale. The major conclusion of the study is that bank discount rate, GDP, CD ratio, LOA lagged and WAIS explain the loans and advances in the context of Nepalese commercial banks. Similarly in the case of loan growth rate deposit growth rate, earning assets growth rate are the important and significant explanatory variables. Similarly input price of deposit and input price of equipment explains the output price of loan in case of Nepal. Therefore banks should strive hard to manage their deposits and earning assets efficiently so that their objective of profitability can be achieved and input price of deposit and input price of equipment explain the output price of loan. Similarly in the case of primary study, the study concludes that liquidity position of the market have strong impact on bank lending behavior. Similarly there should not be mismatch between the input price of deposit and output price of loan. And in Nepalese commercial banks there is moderate effect of nonperforming loan on bank lending. Among the macro economic variables bank lending rate is ranked as the most important factor which supports the result of secondary analysis. GDP is ranked as least important factor in primary analysis where as it plays an important role in secondary analysis. Respondents ranked deposit growth rate as most important factor affecting the loan growth rate which supports the result of secondary analysis.

Determinants of banks lending behavior: a survey of selected commercial banks in Nepal [printed text] / Rakshya Gautam, Author . - 2013 . - 78p. ; GRP/Thesis + 2/D.
Including bibliography
Languages : English

Descriptors:	Bank and banking Bank loans Commercial banks Nepal
Keywords:	'banks lending behavior  Commercial banks  Nepal  Bank and banking  financial institutions'
Class number:	332.175
Abstract:	Bank lending behavior of the bank can be defined as the preferences and choices of bank while making loans and advances. In other words, bank lending behavior is the selection of bank’s investment on loans and advances on the account of constraints given by regulators, opportunities or threats provided by macroeconomic, factors and the preferences of customers etc. This study investigates the determinants of bank lending behavior of selected Nepalese commercial banks. The specific objectives of this study were to examine the effect of deposit growth rate, bank discount rate, cash reserve ratio, GDP, CD ratio, ROA, lagged LOA and interest spread on bank loans and advances, to analyze the impact of deposit growth, capital growth, and non-performing loan growth rate, earning assets growth rate on loan growth rate of the banks, to access the impact of input price of deposit, input price of equipment/ fixed capital, capitalization ratio, loans and advances and log of total assets on the output price of loan, to assess the views of bank employees on lending behavior of the bank. The research was based on primary and secondary data. The methods used for secondary data analysis included descriptive statistics, regression analysis, etc. Similarly the methods used for primary data analysis included percentage frequency distribution, mean scores, standard deviation and likert scale. The major conclusion of the study is that bank discount rate, GDP, CD ratio, LOA lagged and WAIS explain the loans and advances in the context of Nepalese commercial banks. Similarly in the case of loan growth rate deposit growth rate, earning assets growth rate are the important and significant explanatory variables. Similarly input price of deposit and input price of equipment explains the output price of loan in case of Nepal. Therefore banks should strive hard to manage their deposits and earning assets efficiently so that their objective of profitability can be achieved and input price of deposit and input price of equipment explain the output price of loan. Similarly in the case of primary study, the study concludes that liquidity position of the market have strong impact on bank lending behavior. Similarly there should not be mismatch between the input price of deposit and output price of loan. And in Nepalese commercial banks there is moderate effect of nonperforming loan on bank lending. Among the macro economic variables bank lending rate is ranked as the most important factor which supports the result of secondary analysis. GDP is ranked as least important factor in primary analysis where as it plays an important role in secondary analysis. Respondents ranked deposit growth rate as most important factor affecting the loan growth rate which supports the result of secondary analysis.