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Refine your search Apply to external sourcesEffect of interest rate on commercial bank deposits in Nepal / Binita Shrestha
Title : Effect of interest rate on commercial bank deposits in Nepal Material Type: printed text Authors: Binita Shrestha, Author Publication Date: 2017 Pagination: 105p. Size: GRP/Thesis Accompanying material: 9/B Languages : English Descriptors: Interest rate Class number: 332.820 Abstract: Deposits are the most secured and liquid financial assets. Deposit is the sum of money collected by the financial institution which is an important factor for the bank to operate its banking activities and manage bank profitability. Deposits are very important for banks as well as for the economy of the country. Deposit is one of the most important sources of capital for commercial banks.Thus, the change of interest rate will affect the performance of deposits.
This study attempts to examine the effects of interest rate on bank deposits and its short term and long term effects in Nepalese commercial banks. The study is based on secondary data of 21 commercial banks with 147 observations for the period of 2008/09 to 2014/15. Data and information have been collected from Banking and Financial Statistics of NRB and annual reports of the selected commercial banks. The research design adopted in this study is descriptive and causal comparative research design as it deals with the examine the effects of interest rate on bank deposits and its short term and long term effects in Nepalese commercial banks.
The result shows that average saving deposit is highest for RBB (Rs. 50,154 Million) and lowest for LUBL (Rs. 3,015 Million).It has been found that saving deposit has increased in the majority of the selected commercial banks during the study period. The average fixed deposit is highest for SBI (Rs. 27,098 Million) and lowest for LUBL (Rs. 4,756 Million). It has been found that fixed deposit has increased in the majority of the selected commercial banks during the study period.The average net interest margin is highest for ADBL (6.45 percent) and lowest for LUBL (5.91 percent).It has been found that net interest margin has increased in the majority of the selected commercial banks during the study period.The average saving deposit interest rate is highest for SUNBL (3.34 percent) and lowest for SCBL (2.15 percent). It has been found that deposit interest rate has decreased in the majority of the selected commercial banks during the study period. The average fixed deposit rate is highest for NABIL (6.00percent) and lowest for NBL (2.36 percent).
The descriptive statistics for commercial banks shows that the average saving deposit, fixed deposit, net interest margin, saving deposit interest rate, fixed deposit interest rate, inflation, gross domestic product and money supply are Rs. 12,782 million, Rs. 6,576 million, 3.82%, 2.50%, 4.32%, and 18.71% respectively.
The correlation matrix shows that net interest margin and money supply are positively related to saving deposit, whilesaving deposit interest rate, inflation and gross domestic product are negatively related to saving deposits. However, net interest margin, fixed deposit interest rate, inflation, gross domestic product and money supply have negative relationship with fixed deposits.
The regression analysis reveals that net interest margin and money supply have positive impact on saving deposit. This indicates that higher the net interest margin and money supply, higher would be the saving deposits. However, fixed deposit interest rate, inflation and gross domestic product have negative impact on fixed deposits. This reveals that higher the fixed deposit interest rate, inflation and gross domestic product, lower would be the fixed deposits.
Effect of interest rate on commercial bank deposits in Nepal [printed text] / Binita Shrestha, Author . - 2017 . - 105p. ; GRP/Thesis + 9/B.
Languages : English
Descriptors: Interest rate Class number: 332.820 Abstract: Deposits are the most secured and liquid financial assets. Deposit is the sum of money collected by the financial institution which is an important factor for the bank to operate its banking activities and manage bank profitability. Deposits are very important for banks as well as for the economy of the country. Deposit is one of the most important sources of capital for commercial banks.Thus, the change of interest rate will affect the performance of deposits.
This study attempts to examine the effects of interest rate on bank deposits and its short term and long term effects in Nepalese commercial banks. The study is based on secondary data of 21 commercial banks with 147 observations for the period of 2008/09 to 2014/15. Data and information have been collected from Banking and Financial Statistics of NRB and annual reports of the selected commercial banks. The research design adopted in this study is descriptive and causal comparative research design as it deals with the examine the effects of interest rate on bank deposits and its short term and long term effects in Nepalese commercial banks.
The result shows that average saving deposit is highest for RBB (Rs. 50,154 Million) and lowest for LUBL (Rs. 3,015 Million).It has been found that saving deposit has increased in the majority of the selected commercial banks during the study period. The average fixed deposit is highest for SBI (Rs. 27,098 Million) and lowest for LUBL (Rs. 4,756 Million). It has been found that fixed deposit has increased in the majority of the selected commercial banks during the study period.The average net interest margin is highest for ADBL (6.45 percent) and lowest for LUBL (5.91 percent).It has been found that net interest margin has increased in the majority of the selected commercial banks during the study period.The average saving deposit interest rate is highest for SUNBL (3.34 percent) and lowest for SCBL (2.15 percent). It has been found that deposit interest rate has decreased in the majority of the selected commercial banks during the study period. The average fixed deposit rate is highest for NABIL (6.00percent) and lowest for NBL (2.36 percent).
The descriptive statistics for commercial banks shows that the average saving deposit, fixed deposit, net interest margin, saving deposit interest rate, fixed deposit interest rate, inflation, gross domestic product and money supply are Rs. 12,782 million, Rs. 6,576 million, 3.82%, 2.50%, 4.32%, and 18.71% respectively.
The correlation matrix shows that net interest margin and money supply are positively related to saving deposit, whilesaving deposit interest rate, inflation and gross domestic product are negatively related to saving deposits. However, net interest margin, fixed deposit interest rate, inflation, gross domestic product and money supply have negative relationship with fixed deposits.
The regression analysis reveals that net interest margin and money supply have positive impact on saving deposit. This indicates that higher the net interest margin and money supply, higher would be the saving deposits. However, fixed deposit interest rate, inflation and gross domestic product have negative impact on fixed deposits. This reveals that higher the fixed deposit interest rate, inflation and gross domestic product, lower would be the fixed deposits.
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Barcode Call number Media type Location Section Status 304/D 332.820 SHR Thesis/Dissertation Uniglobe Library Social Sciences Available
Title : Effect of interest rate on the performance of Nepalese commercial banks Material Type: printed text Authors: Sushmita Amatya, Author Publication Date: 2016 Pagination: 65p. Size: GRP/Thesis Accompanying material: 4/B General note: Including bibilography Languages : English Descriptors: Bank and banking
Bank loans
Interest rateKeywords: 'interest rate deposit rate inflation rate return on assets return on equity' Class number: 332.820 Abstract: Banks specialize in assessing the credit worthiness of borrowers and providing an ongoing monitoring function to ensure borrowers meet their obligations. Business and other financial institutions are in the market to settle day-to-day transactions (Vohra and Sehgal 2012). By almost any measure, the commercial bank is the most important financial intermediary serving the public today. They offer more services than the majority of other financial Institutions, which include expanding the money supply by granting credits (loans) to borrowers. Interest rate directly affects the lending of the any financial institutions (Felicia, 2011). Lending behavior of the bank can be defined as the preferences and choices of bank while making loans and advances. 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 (Musleh, 2007).
Nepalese economy is under the crucial transformation through changes in bothintersectoral importance and linkages. The composition of GDP has changed with servicesector emerging as nearly the largest sector, trade-GDP ratio has increased, and foreignexchange regime has been liberalized. banking sector is facing with the danger of liquidity crisis, inflated interest rate, declining deposits and the problem of the liquidity started which has affected the inter banking interest rate (Shrestha, 2011). In spite of higher interest rate provided by commercial bank in the deposits, it still fails to attract the depositors. growing competition in the financial sector, recent increase in transaction of security and capital markets as well as the taxation laid on higher deposits in banks are, among others, the factors affecting bank's profitability. The impact of market interest rates on commercial bank revenues, costs, and profitability has increasingly concerned economists and policymakers as financial market conditions have become more volatile in recent years (Shahi, 2008).
This study has aimed to examine effect of interest rate on banking performance in Nepalese commercial banks. Specifically, it examines the effect on bank rate, deposit rate, loan rate, inflation rate and non performing loan to return on assets and return on equity of commercial banks of Nepal. This study has used secondary sources of data to analyze the impact of interest rate structure on bank performance. The secondary sources of data have been used to investigate the relationship of interest rate and banking performance. The secondary data for bank performance and interest rate have been taken from annual report of the commercial bank for the year2009/10 to 2013/14. Total of 21 sample banks have been taken with 105 observations from the five year period. This study has used descriptive statistics, and correlation analysis, stepwise regressions have been carried out to examine the secondary data.
This result has found that return on assets is positively related to loan rate, bank rate, capital adequacy, and non performing loan while negatively related to deposit rate and the inflation. ROE is positively related with loan rate, capital adequacy and the inflation rate. While negative relation is observed with bank rate, deposit rate and non performing loan.Beta coefficient is positive for loan rate with return on assets (ROA) which indicates that increase in loan rate increases the return on assets.The beta coefficient for capital adequacy is positive with ROA indicating banks with higher capital adequacy can increases its return on assets, but it is not significant at five percent level.
The results also revealed that beta coefficient for deposit rate is negative with return on assets and is significant at five percent. This indicates that increases in deposit rate leads to decrease in return on assets.Beta coefficient is negative for bank rate with return on assets indicating increased bank rate decreases the return on assets of the banks.Result also revealed that beta coefficient is negative for non performing loan with return on assets and is significant at one and five percent level. This result reveals that if bank became able to decreases its volume of nonperforming loan, can increase bank performance as measured by return on assets (ROA).
The study concludes that bank can increase its profitability if bank can manage its interest rates. If bankisable to increase loan rate, bank can improve bank performance in the coming year. This study also concludes that non performing loan is also positively related to interest rate or loan rate in the bank. Nonperforming loan is also positively related to interest rate, higher interest rates may reduce the tendency to repay the loan because of the higher cost of loan, banks can reduce the interest amount from the customer so that they would be willing to repay the loan in time. This study suggests that banks willing to increase bank performance should properly assess the cause of decrease in return on assets, and should have remedies as earlier as possible.Effect of interest rate on the performance of Nepalese commercial banks [printed text] / Sushmita Amatya, Author . - 2016 . - 65p. ; GRP/Thesis + 4/B.
Including bibilography
Languages : English
Descriptors: Bank and banking
Bank loans
Interest rateKeywords: 'interest rate deposit rate inflation rate return on assets return on equity' Class number: 332.820 Abstract: Banks specialize in assessing the credit worthiness of borrowers and providing an ongoing monitoring function to ensure borrowers meet their obligations. Business and other financial institutions are in the market to settle day-to-day transactions (Vohra and Sehgal 2012). By almost any measure, the commercial bank is the most important financial intermediary serving the public today. They offer more services than the majority of other financial Institutions, which include expanding the money supply by granting credits (loans) to borrowers. Interest rate directly affects the lending of the any financial institutions (Felicia, 2011). Lending behavior of the bank can be defined as the preferences and choices of bank while making loans and advances. 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 (Musleh, 2007).
Nepalese economy is under the crucial transformation through changes in bothintersectoral importance and linkages. The composition of GDP has changed with servicesector emerging as nearly the largest sector, trade-GDP ratio has increased, and foreignexchange regime has been liberalized. banking sector is facing with the danger of liquidity crisis, inflated interest rate, declining deposits and the problem of the liquidity started which has affected the inter banking interest rate (Shrestha, 2011). In spite of higher interest rate provided by commercial bank in the deposits, it still fails to attract the depositors. growing competition in the financial sector, recent increase in transaction of security and capital markets as well as the taxation laid on higher deposits in banks are, among others, the factors affecting bank's profitability. The impact of market interest rates on commercial bank revenues, costs, and profitability has increasingly concerned economists and policymakers as financial market conditions have become more volatile in recent years (Shahi, 2008).
This study has aimed to examine effect of interest rate on banking performance in Nepalese commercial banks. Specifically, it examines the effect on bank rate, deposit rate, loan rate, inflation rate and non performing loan to return on assets and return on equity of commercial banks of Nepal. This study has used secondary sources of data to analyze the impact of interest rate structure on bank performance. The secondary sources of data have been used to investigate the relationship of interest rate and banking performance. The secondary data for bank performance and interest rate have been taken from annual report of the commercial bank for the year2009/10 to 2013/14. Total of 21 sample banks have been taken with 105 observations from the five year period. This study has used descriptive statistics, and correlation analysis, stepwise regressions have been carried out to examine the secondary data.
This result has found that return on assets is positively related to loan rate, bank rate, capital adequacy, and non performing loan while negatively related to deposit rate and the inflation. ROE is positively related with loan rate, capital adequacy and the inflation rate. While negative relation is observed with bank rate, deposit rate and non performing loan.Beta coefficient is positive for loan rate with return on assets (ROA) which indicates that increase in loan rate increases the return on assets.The beta coefficient for capital adequacy is positive with ROA indicating banks with higher capital adequacy can increases its return on assets, but it is not significant at five percent level.
The results also revealed that beta coefficient for deposit rate is negative with return on assets and is significant at five percent. This indicates that increases in deposit rate leads to decrease in return on assets.Beta coefficient is negative for bank rate with return on assets indicating increased bank rate decreases the return on assets of the banks.Result also revealed that beta coefficient is negative for non performing loan with return on assets and is significant at one and five percent level. This result reveals that if bank became able to decreases its volume of nonperforming loan, can increase bank performance as measured by return on assets (ROA).
The study concludes that bank can increase its profitability if bank can manage its interest rates. If bankisable to increase loan rate, bank can improve bank performance in the coming year. This study also concludes that non performing loan is also positively related to interest rate or loan rate in the bank. Nonperforming loan is also positively related to interest rate, higher interest rates may reduce the tendency to repay the loan because of the higher cost of loan, banks can reduce the interest amount from the customer so that they would be willing to repay the loan in time. This study suggests that banks willing to increase bank performance should properly assess the cause of decrease in return on assets, and should have remedies as earlier as possible.Hold
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Barcode Call number Media type Location Section Status 166/D 332.820 AMA Books Uniglobe Library Social Sciences Available
Title : Effects of interest rate on deposit mobilization in Nepalese commercial Banks Material Type: printed text Authors: Ganesh Raj Joshi, Author Publication Date: 2014 Pagination: 88p. Size: GRP/Thesis Accompanying material: 3/B General note: Including bibilography Languages : English Descriptors: Banks
Banks and banking
Commercial banks
Interest rate
Mobilization
NepalKeywords: 'interest rate deposit mobilization banks banks and banking commercial banks nepal' Class number: 332.820 Effects of interest rate on deposit mobilization in Nepalese commercial Banks [printed text] / Ganesh Raj Joshi, Author . - 2014 . - 88p. ; GRP/Thesis + 3/B.
Including bibilography
Languages : English
Descriptors: Banks
Banks and banking
Commercial banks
Interest rate
Mobilization
NepalKeywords: 'interest rate deposit mobilization banks banks and banking commercial banks nepal' Class number: 332.820 Hold
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Barcode Call number Media type Location Section Status 47/D 332.820 JOS Books Uniglobe Library Technology Available
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.
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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Barcode Call number Media type Location Section Status 179/D 332.820 SIT Books Uniglobe Library Social Sciences Available
Title : Impact of interest rate on profitability of Nepalese commercial banks Material Type: printed text Authors: Biraj Singh, Author Publication Date: 2016 Pagination: 101p. Size: GRP/Thesis Accompanying material: 6/B Languages : English Descriptors: Interest rate Class number: 332.820 Abstract: Financial liberalization in many developing countries started in the 1980’s and it involved reduction and removal of in interest rate control. It also entailed new laws, institutional reforms and regulations that are governing the financial sector, as well as restructuring and privatization of banks (Chirwa and Mlachila, 2004). Efficient financial intermediation is important because it mobilizes resources required for growth and development. Ghasemi and Rostami (2015) concluded that the economic activities including productive and unproductive, value adding or non-value adding, socially useful or useless are needed to access the loan and credit from banks, to be successful.
The major purpose of this study is to identify the impact of interest rate on profitability of Nepalese commercial banks. The study has the following specific objectives is to analyze the structure and pattern of return on assets, return on equity, loan rate, deposit rate and bank rate, to evaluate the effect of Treasury bill rate and deposit rate for on profitability, to examine the impact of reverse repo rate and bank rate on profitability and to identify the structure and pattern of profitability and its determinants in Nepalese commercial banks.
This study based on the secondary of data which were gather for a sample of 22 commercial banks of Nepal within the time period from 2009/10 to 2013/14, leading to the total of 110 observations. The secondary data have been obtain from Nepal Rastra Bank bulletin published by central bank of Nepal, annual audited financial statements and websites of respective commercial banks. The research design adopted in this study is causal comparative types as it deals with relationship of bank specific factors like Treasury bill rate, bank rate, reverse repo rate, loan rate and deposit rate and control variables capital adequacy ratio and liquidity with dependent variable such as: return on assets and return on equity. The statistical methods used in the analysis are descriptive statistics, correlation analysis and regression analysis.
The result shows that there is positive relationship of loan rate and reserve repo rate with return on assets which indicates higher the loan rate and reserve repo rate, higher would be the return on asset. Similarly, the study observed positive relationship of capital adequacy and liquidity with return on asset and return on equity which indicates that an increase in the capital adequacy and liquidity lead to an increase in the return on asset and return on equity. The result shows that deposit rate and Treasury bill rate are negatively correlated with return on assets and return on equity, which indicates that higher the deposit rate and Treasury bill rate, lower would be the return on asset and return on equity. Likewise, bank rate has negative relationship with return on asset and return on equity which indicates that an increase in the bank rate leads to a decrease in the return on assets and return on equity. The beta coefficient is positive for capital adequacy ratio, liquidity, loan rate and reverse repo rate with return on assets and return on equity whereas the beta coefficient is negative for bank rate, Treasury bill rate and deposit rate with return on assets and return on equity. The beta coefficient issignificant at 5 percent level of significance.
The major conclusion of the study is that higher the capital adequacy ratio, higher would be net return on assets and return on equity of banks. Similarly, higher the loan rate, higher would be return on assets and return on equity. Similarly, increase in liquidity of bank increases return on assets of banks. Likewise, it also shows that higher the deposit rate, lower would be return on assets and return on equity.
Impact of interest rate on profitability of Nepalese commercial banks [printed text] / Biraj Singh, Author . - 2016 . - 101p. ; GRP/Thesis + 6/B.
Languages : English
Descriptors: Interest rate Class number: 332.820 Abstract: Financial liberalization in many developing countries started in the 1980’s and it involved reduction and removal of in interest rate control. It also entailed new laws, institutional reforms and regulations that are governing the financial sector, as well as restructuring and privatization of banks (Chirwa and Mlachila, 2004). Efficient financial intermediation is important because it mobilizes resources required for growth and development. Ghasemi and Rostami (2015) concluded that the economic activities including productive and unproductive, value adding or non-value adding, socially useful or useless are needed to access the loan and credit from banks, to be successful.
The major purpose of this study is to identify the impact of interest rate on profitability of Nepalese commercial banks. The study has the following specific objectives is to analyze the structure and pattern of return on assets, return on equity, loan rate, deposit rate and bank rate, to evaluate the effect of Treasury bill rate and deposit rate for on profitability, to examine the impact of reverse repo rate and bank rate on profitability and to identify the structure and pattern of profitability and its determinants in Nepalese commercial banks.
This study based on the secondary of data which were gather for a sample of 22 commercial banks of Nepal within the time period from 2009/10 to 2013/14, leading to the total of 110 observations. The secondary data have been obtain from Nepal Rastra Bank bulletin published by central bank of Nepal, annual audited financial statements and websites of respective commercial banks. The research design adopted in this study is causal comparative types as it deals with relationship of bank specific factors like Treasury bill rate, bank rate, reverse repo rate, loan rate and deposit rate and control variables capital adequacy ratio and liquidity with dependent variable such as: return on assets and return on equity. The statistical methods used in the analysis are descriptive statistics, correlation analysis and regression analysis.
The result shows that there is positive relationship of loan rate and reserve repo rate with return on assets which indicates higher the loan rate and reserve repo rate, higher would be the return on asset. Similarly, the study observed positive relationship of capital adequacy and liquidity with return on asset and return on equity which indicates that an increase in the capital adequacy and liquidity lead to an increase in the return on asset and return on equity. The result shows that deposit rate and Treasury bill rate are negatively correlated with return on assets and return on equity, which indicates that higher the deposit rate and Treasury bill rate, lower would be the return on asset and return on equity. Likewise, bank rate has negative relationship with return on asset and return on equity which indicates that an increase in the bank rate leads to a decrease in the return on assets and return on equity. The beta coefficient is positive for capital adequacy ratio, liquidity, loan rate and reverse repo rate with return on assets and return on equity whereas the beta coefficient is negative for bank rate, Treasury bill rate and deposit rate with return on assets and return on equity. The beta coefficient issignificant at 5 percent level of significance.
The major conclusion of the study is that higher the capital adequacy ratio, higher would be net return on assets and return on equity of banks. Similarly, higher the loan rate, higher would be return on assets and return on equity. Similarly, increase in liquidity of bank increases return on assets of banks. Likewise, it also shows that higher the deposit rate, lower would be return on assets and return on equity.
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Barcode Call number Media type Location Section Status 216/D 332.820 SIN Books Uniglobe Library Social Sciences Available
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