| Title : | Impact of interest rate on deposit mobilization: a case of Nepalese commercial banks | | Material Type: | printed text | | Authors: | Rekha Sitaula, Author | | Publication Date: | 2016 | | Pagination: | 80p. | | Size: | GRP/Thesis | | Accompanying material: | 7/B | | Languages : | English | | Descriptors: | Interest rate
| | Class number: | 332.820 | | Abstract: | Bank acts as an intermediary for transformation of fund from surplus unit to deficit unit in an effective and efficient manner. Banks collect deposits from general public providing certain rate of interest in order to provide loans to different needy persons or business houses at higher interest rate. In this way financial institutions makes profit and profit is essential for the survival of growth.(Ojwiya, 2009). Lending of funds constitutes the largest single income-earning assets in the portfolio of most deposit money banks. Hence, banks deploy huge resources to estimate, monitor and manage the quality of their loan portfolio (Olokoyo, 2011).
Eriemo(2014) found that the commercial banks are the most important saving, mobilization and financial resource allocation institutions. In performing these roles, banks are expected to have the potential scope and prospects for mobilizing financial resources and allocating them to productive investments, thus lending, which is underscored by bank deposit determinants in this study, constitute a major source of the creation of deposits to meet the growing needs of the economy.Kassri and Kassim (2009) found positive relationship between the level of Islamic bank deposit and interest rate.Mashamba, Magweva, & Gumbo(2014)This study found that there is positive relationship between banks’ deposit interest rates and deposit mobilization in Zimbabwe.
A study on deposit mobilization, problem and prospect has reported that deposit is the life blood of every financial institution including commercial banks, financial company, cooperatives or non-government organization (Pradhan, 1996). Study has highlight that most of the Nepalese people do not go for saving in institutional manner, due to lack of knowledge, however, they were user of saving in the form of casher ornament. The study also raveled that customer’s relevance deal with institutional service in rural area of Nepalese commercial banks were no more mobilization and improvements of deposit and the loan sector.
The major purpose of this study is to analyze the impact of interest rate on deposit mobilization of Nepalsese commercial banks. The specific objective s of this study are: a) to examine the structure and pattern of deposits of Nepalese commercial banks, b) to analyze the impact of interest rate on bank deposit mobilization, c) To assess the properties formed on teposit, investment, interest rate margin, deposit interest rate, inflation, GDP and broad money supply, d) to analyze the impact of investment and deposit amount on interest rate and e) to examine the relationship between macro-economic factors such as GDP, inflation and money supply with deposits of Nepalese commercial banks.
The study has employed descriptive research design and casual comparative research design to deal with issues associated with factors influencing bank deposit and lending of the commercial banks in the context of Nepal. The descriptive research design has been adopted for facts finding and search adequate information about impact of interest rate on deposit mobilization: a case of Nepalese commercial banks. The secondary data of firm-specific variables were collected from annual reports of commercial banks whereas the data of macroeconomic determinants were collected from Economic Bulletin published by Nepal Rastra Bank.
The result shows that there is positive relationship between interest rate margin, deposit interest rate, inflation, gross domestic product and money supply with the deposits. Likewise, the result shows that there is positive relationship between interest rate margin, deposit interest rate, inflation, gross domestic product and money supply with the investment. The study reveals that interest rate margin, deposit interest rate, inflation and money supply are the significant variables that affect the deposit in the context of Nepalese commercial banks. The beta coefficient for interest rate margin, deposit interest rate, inflation and money supply is positive and significant for deposits. The result indicates that higher interest rate margin, deposit interest rate, inflation and money supply higher would be the deposit. The beta coefficient for interest rate margin, deposit interest rate and inflation is positive and significant for investment. The result indicates that higher interest rate margin, deposit interest rate and inflation higher would be the investment. Interest rate margin, deposit interest rate, inflation and money supply are the major determining variables of deposit and investment.
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Impact of interest rate on deposit mobilization: a case of Nepalese commercial banks [printed text] / Rekha Sitaula, Author . - 2016 . - 80p. ; GRP/Thesis + 7/B. Languages : English | Descriptors: | Interest rate
| | Class number: | 332.820 | | Abstract: | Bank acts as an intermediary for transformation of fund from surplus unit to deficit unit in an effective and efficient manner. Banks collect deposits from general public providing certain rate of interest in order to provide loans to different needy persons or business houses at higher interest rate. In this way financial institutions makes profit and profit is essential for the survival of growth.(Ojwiya, 2009). Lending of funds constitutes the largest single income-earning assets in the portfolio of most deposit money banks. Hence, banks deploy huge resources to estimate, monitor and manage the quality of their loan portfolio (Olokoyo, 2011).
Eriemo(2014) found that the commercial banks are the most important saving, mobilization and financial resource allocation institutions. In performing these roles, banks are expected to have the potential scope and prospects for mobilizing financial resources and allocating them to productive investments, thus lending, which is underscored by bank deposit determinants in this study, constitute a major source of the creation of deposits to meet the growing needs of the economy.Kassri and Kassim (2009) found positive relationship between the level of Islamic bank deposit and interest rate.Mashamba, Magweva, & Gumbo(2014)This study found that there is positive relationship between banks’ deposit interest rates and deposit mobilization in Zimbabwe.
A study on deposit mobilization, problem and prospect has reported that deposit is the life blood of every financial institution including commercial banks, financial company, cooperatives or non-government organization (Pradhan, 1996). Study has highlight that most of the Nepalese people do not go for saving in institutional manner, due to lack of knowledge, however, they were user of saving in the form of casher ornament. The study also raveled that customer’s relevance deal with institutional service in rural area of Nepalese commercial banks were no more mobilization and improvements of deposit and the loan sector.
The major purpose of this study is to analyze the impact of interest rate on deposit mobilization of Nepalsese commercial banks. The specific objective s of this study are: a) to examine the structure and pattern of deposits of Nepalese commercial banks, b) to analyze the impact of interest rate on bank deposit mobilization, c) To assess the properties formed on teposit, investment, interest rate margin, deposit interest rate, inflation, GDP and broad money supply, d) to analyze the impact of investment and deposit amount on interest rate and e) to examine the relationship between macro-economic factors such as GDP, inflation and money supply with deposits of Nepalese commercial banks.
The study has employed descriptive research design and casual comparative research design to deal with issues associated with factors influencing bank deposit and lending of the commercial banks in the context of Nepal. The descriptive research design has been adopted for facts finding and search adequate information about impact of interest rate on deposit mobilization: a case of Nepalese commercial banks. The secondary data of firm-specific variables were collected from annual reports of commercial banks whereas the data of macroeconomic determinants were collected from Economic Bulletin published by Nepal Rastra Bank.
The result shows that there is positive relationship between interest rate margin, deposit interest rate, inflation, gross domestic product and money supply with the deposits. Likewise, the result shows that there is positive relationship between interest rate margin, deposit interest rate, inflation, gross domestic product and money supply with the investment. The study reveals that interest rate margin, deposit interest rate, inflation and money supply are the significant variables that affect the deposit in the context of Nepalese commercial banks. The beta coefficient for interest rate margin, deposit interest rate, inflation and money supply is positive and significant for deposits. The result indicates that higher interest rate margin, deposit interest rate, inflation and money supply higher would be the deposit. The beta coefficient for interest rate margin, deposit interest rate and inflation is positive and significant for investment. The result indicates that higher interest rate margin, deposit interest rate and inflation higher would be the investment. Interest rate margin, deposit interest rate, inflation and money supply are the major determining variables of deposit and investment.
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