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Title : Credit growth and response to capital requirement: evidence from Nepalese commercial banks Material Type: printed text Authors: Ramesh Karki, Author Publication Date: 2012 Pagination: 133p. Size: GRP/Thesis Accompanying material: 1/B General note: Includes bibliography Languages : English Descriptors: Credit
Credit control
Financial economics
Financial institutions
Monetary policyKeywords: 'credit growth financial economics commercial banks banks Nepal credit capital regulation' Class number: 332.709 Abstract: Bank is a financial institution, which deals on money. The basic commercial and industrial lending process remains the lifeblood of commercial banks and other banking institutions. Prudential regulation often imposes regulatory capital requirements in order to create the necessary cushion to protect banks against unexpected losses and ultimately failure. Minimum requirement of capital changes the behavior of banks to shrink their balance sheets and in effect, it creates a slowdown in the growth of economy. Nepal Rastra Bank (NRB) has developed and enforced Capital Adequacy Requirements based on the international practices with appropriate level of customization based on domestic state of market developments. NRB has already expressed its intention to adopt the Basel II framework albeit in a simplified form. All the Nepalese Commercial Banks has been adopting the Capital Adequacy Framework 2007 (Updated July 2008) by mid July 2008 (Fiscal Year 2065/066). This study is small attempt to assess and analyzed the impact of this framework on credit growth of banks.
The main issue of this study is to analyze the relationship and impact of capital standard on credit growth. The study basically deals and tries to establish link between bank capital standards and banks’ loan supply.
This study has employed descriptive, correlation and causal comparative research designs to deal with the fundamental issues associated with credit growth and response to capital requirements in the context of Nepalese commercial banks. Besides, an effort has also been made to describe credit growth, capital adequacy, and other key balance sheet indicators of 17 commercial banks consisting of 136 observations during fiscal year 2004/05 through 2011/12 by using descriptive statistics. This study is based on both primary and secondary sources of data. The secondary sources of data have been employed to understand the form of observed relation and to analyze predictive power of firm specific and macroeconomic variables in explaining credit growth and response to capital requirements. The primary sources of data have been used to assess the opinion of respondents with respect to minimum capital requirements and its impacts on banks portfolio basically credit in Nepal and to analyze their perceptions with respect to factors affecting credit growth and regulatory capital requirements.
Based on the findings this study concludes that the larger sized banks have lower deposit to total assets, lower credit/total assets, higher investment/total assets, lower investment in Government Security/total investment, lower credit/deposit and highest investment/deposit ratio. Similarly, banks having higher credit growth rate have higher deposit/total assets, higher credit/total assets, lower investment/total assets, lower investment in government securities/total investment higher credit/deposit and lower investment/deposit ratio. This study also concluded that higher capital adequacy ratio banks have high deposit/total assets, high credit/total assets, high investment/total assets, low investment in government securities/total investment, high credit/deposit and high investment/deposit ratio.
This study also concludes that the capital adequacy framework and capital adequacy ratio have significant relationship and higher CAR banks have the lower non-performing loans. The macroeconomic variable (GDP growth rate) has no any significant relation to determine the growth of credit in Nepal. However, if credit to total assets is increased the investment to total assets ratio also increased but the deposit to total assets, investment in government securities to total investment and credit to deposit ratios are decreased. The estimated and analyzed results show the implementation of capital adequacy framework seems to have much contribution to strengthen and increase the capital base in the context of Nepal. The study results support the minimum capital requirement norm significantly influences the credit growth. This implies that the credit growth is determined by capital regulation of countries.
Credit growth and response to capital requirement: evidence from Nepalese commercial banks [printed text] / Ramesh Karki, Author . - 2012 . - 133p. ; GRP/Thesis + 1/B.
Includes bibliography
Languages : English
Descriptors: Credit
Credit control
Financial economics
Financial institutions
Monetary policyKeywords: 'credit growth financial economics commercial banks banks Nepal credit capital regulation' Class number: 332.709 Abstract: Bank is a financial institution, which deals on money. The basic commercial and industrial lending process remains the lifeblood of commercial banks and other banking institutions. Prudential regulation often imposes regulatory capital requirements in order to create the necessary cushion to protect banks against unexpected losses and ultimately failure. Minimum requirement of capital changes the behavior of banks to shrink their balance sheets and in effect, it creates a slowdown in the growth of economy. Nepal Rastra Bank (NRB) has developed and enforced Capital Adequacy Requirements based on the international practices with appropriate level of customization based on domestic state of market developments. NRB has already expressed its intention to adopt the Basel II framework albeit in a simplified form. All the Nepalese Commercial Banks has been adopting the Capital Adequacy Framework 2007 (Updated July 2008) by mid July 2008 (Fiscal Year 2065/066). This study is small attempt to assess and analyzed the impact of this framework on credit growth of banks.
The main issue of this study is to analyze the relationship and impact of capital standard on credit growth. The study basically deals and tries to establish link between bank capital standards and banks’ loan supply.
This study has employed descriptive, correlation and causal comparative research designs to deal with the fundamental issues associated with credit growth and response to capital requirements in the context of Nepalese commercial banks. Besides, an effort has also been made to describe credit growth, capital adequacy, and other key balance sheet indicators of 17 commercial banks consisting of 136 observations during fiscal year 2004/05 through 2011/12 by using descriptive statistics. This study is based on both primary and secondary sources of data. The secondary sources of data have been employed to understand the form of observed relation and to analyze predictive power of firm specific and macroeconomic variables in explaining credit growth and response to capital requirements. The primary sources of data have been used to assess the opinion of respondents with respect to minimum capital requirements and its impacts on banks portfolio basically credit in Nepal and to analyze their perceptions with respect to factors affecting credit growth and regulatory capital requirements.
Based on the findings this study concludes that the larger sized banks have lower deposit to total assets, lower credit/total assets, higher investment/total assets, lower investment in Government Security/total investment, lower credit/deposit and highest investment/deposit ratio. Similarly, banks having higher credit growth rate have higher deposit/total assets, higher credit/total assets, lower investment/total assets, lower investment in government securities/total investment higher credit/deposit and lower investment/deposit ratio. This study also concluded that higher capital adequacy ratio banks have high deposit/total assets, high credit/total assets, high investment/total assets, low investment in government securities/total investment, high credit/deposit and high investment/deposit ratio.
This study also concludes that the capital adequacy framework and capital adequacy ratio have significant relationship and higher CAR banks have the lower non-performing loans. The macroeconomic variable (GDP growth rate) has no any significant relation to determine the growth of credit in Nepal. However, if credit to total assets is increased the investment to total assets ratio also increased but the deposit to total assets, investment in government securities to total investment and credit to deposit ratios are decreased. The estimated and analyzed results show the implementation of capital adequacy framework seems to have much contribution to strengthen and increase the capital base in the context of Nepal. The study results support the minimum capital requirement norm significantly influences the credit growth. This implies that the credit growth is determined by capital regulation of countries.
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Barcode Call number Media type Location Section Status 24/D 332.709 KAR Thesis/Dissertation Uniglobe Library Social Sciences Available
Title : Impact of monetary policy instruments on profitability : a case of Nepalese commercial banks Material Type: printed text Authors: Dilli Raj Pandey, Author Publication Date: 2016 Pagination: 120p. Size: GRP/Thesis Accompanying material: 7/B Languages : English Descriptors: Monetary policy Class number: 332.46 Abstract: Monetary policy is the monetary authority’s policy to manage the supply of money with a view to achieve predetermined macroeconomic goals. Monetary policy helps in influencing the performance of the economy through as factors such as inflation, national output, and employment through its control on bank credit, quantity of money, bank deposit, interest rate etc. Monetary policy is one of the tools of controlling money supply in an economy of a nation by the monetary authorities in order to achieve a desirable economic growth (Isisaila andImoughele, 2015).
Monetary policy regulates the supply of money by frequently targeting a rate of interest and inflation aiming to promote economic growth and stability. Monetary policy can be expansionary and contractionary policy. Expansionary policy increases the total supply of money in the economy more rapidly than usual whereas the contractionary policy decrease the total money supply in the economy (Mankiw, 2013)
In the context of Nepal, Khatiwada (1994) stated that monetary policy is mainly a tool for management of money supply. Its role in the Nepalese economy should also be primarily sought in economic stabilization rather than in economic growth.Pokharel (2009) stated that the primary tool of monetary policy is open market operations. Sigdel (2006) revealed that the historical development of the Nepalese monetary policy focusing on their features, goals and instruments
The major purpose of the study is to analyze the impact of monetary policy instruments on firm profitability in the context of Nepalese commercial banks whereas the specific objectives includes to investigate the impact of monetary policy instruments on firm’s profitability, to measure the relationship between cash reserve ratio, bank rate and investment on Treasury bills on the firm’s profitability, to identify the major monetary policy instruments that plays key role in influencing the profitability of commercial banks.
The secondary data are used for the purpose of the study which was collected from annual reports of the sample banks respectively. To examine the impact of monetary policy instruments on profitability of Nepalese commercial banks data were mainly collected from the website of Nepal Rastra bank and each banks annual reports for the period of 2004/05 to 2013/14. This study entirely based on 170 observations of 17 commercial banks.
The result revealed that there is abeta coefficients are negative for investment on treasury bills, statutory liquidity ratio and cash reserve ratio with return on equity. The negative coefficient for investment on treasury bills with return on equity indicate that higher the investment on treasury bills lower would be the return on equity.Similarly, negative coefficient of statutory liquidity ratio with return on equity.Likewise, the negative coefficient of cash reserve ratio with return on equity these indicates that higher the cash reserve ratio lower would be the return on equity. The positive beta coefficients have been observed for broad money supply with return on equity.Similarly, the negative beta coefficient for statutory liquidity ratio indicate that increase in statutory liquidity ratio would lead to decrease in net interest margin.Overall, regression results indicates that beta coefficient are positive for investment on treasury bills, broad money supply and cash reserve ratio. This results reveal that higher the investment on Treasury bill higher would be the return on assets.However, the beta coefficient are negative for bank rate and statutory liquidity ratio.
The major conclusion of the study is that the cash reserve ratio, bank rate and investment on treasury bills are the most dominant variables in the monetary policy instruments to analyze it impact on the profitability of Nepalese commercial banks. Cash reserve ratio has found to have negative relationship with return on equity which indicate that higher the cash reserve ratio lower could be the bank profitability. Likewise, bank rate has found to be negative relationship with return on assets. Similarly, investment on treasury bills has found to be negative relationship with the return on equity whereas the positive relationship has found with return on assets and net interest margin. The study also conclude that positive relationship with investment on treasury bills, broad money supply and cash reserve ratio. Similarly, the positive beta coefficient for cash reserve ratio indicate that higher the cash reserve ratio higher would be the return on assets.
Impact of monetary policy instruments on profitability : a case of Nepalese commercial banks [printed text] / Dilli Raj Pandey, Author . - 2016 . - 120p. ; GRP/Thesis + 7/B.
Languages : English
Descriptors: Monetary policy Class number: 332.46 Abstract: Monetary policy is the monetary authority’s policy to manage the supply of money with a view to achieve predetermined macroeconomic goals. Monetary policy helps in influencing the performance of the economy through as factors such as inflation, national output, and employment through its control on bank credit, quantity of money, bank deposit, interest rate etc. Monetary policy is one of the tools of controlling money supply in an economy of a nation by the monetary authorities in order to achieve a desirable economic growth (Isisaila andImoughele, 2015).
Monetary policy regulates the supply of money by frequently targeting a rate of interest and inflation aiming to promote economic growth and stability. Monetary policy can be expansionary and contractionary policy. Expansionary policy increases the total supply of money in the economy more rapidly than usual whereas the contractionary policy decrease the total money supply in the economy (Mankiw, 2013)
In the context of Nepal, Khatiwada (1994) stated that monetary policy is mainly a tool for management of money supply. Its role in the Nepalese economy should also be primarily sought in economic stabilization rather than in economic growth.Pokharel (2009) stated that the primary tool of monetary policy is open market operations. Sigdel (2006) revealed that the historical development of the Nepalese monetary policy focusing on their features, goals and instruments
The major purpose of the study is to analyze the impact of monetary policy instruments on firm profitability in the context of Nepalese commercial banks whereas the specific objectives includes to investigate the impact of monetary policy instruments on firm’s profitability, to measure the relationship between cash reserve ratio, bank rate and investment on Treasury bills on the firm’s profitability, to identify the major monetary policy instruments that plays key role in influencing the profitability of commercial banks.
The secondary data are used for the purpose of the study which was collected from annual reports of the sample banks respectively. To examine the impact of monetary policy instruments on profitability of Nepalese commercial banks data were mainly collected from the website of Nepal Rastra bank and each banks annual reports for the period of 2004/05 to 2013/14. This study entirely based on 170 observations of 17 commercial banks.
The result revealed that there is abeta coefficients are negative for investment on treasury bills, statutory liquidity ratio and cash reserve ratio with return on equity. The negative coefficient for investment on treasury bills with return on equity indicate that higher the investment on treasury bills lower would be the return on equity.Similarly, negative coefficient of statutory liquidity ratio with return on equity.Likewise, the negative coefficient of cash reserve ratio with return on equity these indicates that higher the cash reserve ratio lower would be the return on equity. The positive beta coefficients have been observed for broad money supply with return on equity.Similarly, the negative beta coefficient for statutory liquidity ratio indicate that increase in statutory liquidity ratio would lead to decrease in net interest margin.Overall, regression results indicates that beta coefficient are positive for investment on treasury bills, broad money supply and cash reserve ratio. This results reveal that higher the investment on Treasury bill higher would be the return on assets.However, the beta coefficient are negative for bank rate and statutory liquidity ratio.
The major conclusion of the study is that the cash reserve ratio, bank rate and investment on treasury bills are the most dominant variables in the monetary policy instruments to analyze it impact on the profitability of Nepalese commercial banks. Cash reserve ratio has found to have negative relationship with return on equity which indicate that higher the cash reserve ratio lower could be the bank profitability. Likewise, bank rate has found to be negative relationship with return on assets. Similarly, investment on treasury bills has found to be negative relationship with the return on equity whereas the positive relationship has found with return on assets and net interest margin. The study also conclude that positive relationship with investment on treasury bills, broad money supply and cash reserve ratio. Similarly, the positive beta coefficient for cash reserve ratio indicate that higher the cash reserve ratio higher would be the return on assets.
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Barcode Call number Media type Location Section Status 177/D 332.46 PAN Books Uniglobe Library Social Sciences Available
Title : Impact of monetary policy instruments on profitability of Nepalese commercial banks: a comparative study of joint venture banks, public banks and private banks Material Type: printed text Authors: Saroj Shrestha, Author Publication Date: 2017 Pagination: 103p. Size: GRP/Thesis Accompanying material: 8/B Languages : English Descriptors: Monetary policy Class number: 332.46 Abstract: Monetary policy is the monetary authority's policy to manage the supply of money with a view to achieve pre-determined macroeconomic goals. It helps in influencing the economy through inflation, national output and employment through its control on bank credit, quantity of money, bank deposit, interest rate etc.Generally, monetary policy is formulated by the central bank of a particular country in order to control money supply and promote economic development.Monetary policy is one of the tools to control money supply in an economy of a nation. The actions are taken by the monetary authorities in order to achieve a desirable economic growth. Monetary policy plays the significant role in economic development of any country.More specifically, monetary authority adopts expansion of the money supply and reduce interest rate during recession period. In developing countries, with an objective to achieve full employment or potential output levels, it promotes and encourages economic growth both in the industrial and agricultural sectors of the economy (Meshack and Nyamute, 2016). Monetary policy has the significant contribution to sustainable economic development by enhancing the performance of the banks. Monetary policy is the actions which undertake to influence the cost of money and credit availability. There are two important channels in monetary policy i.e. interest rate channel and exchange channel. The interest rate channel is very important on banking prospective because the fluctuation in interest rate affect the market rate of short term and long term interest rate. Thus, such fluctuation leads to severe impact on banking sector. Therefore, the bank size matters a lot to cope with such issue (Zaman et al., 2014).Monetary policy transmission mechanism to the real economy remains a hot topic. One area of debate is the relative importance of the money and credit channels in the transmission of monetary policy. The main objective of monetary policy is to promote economic development by controlling money supply and providing price stability. The action taken by monetary authority plays a vital role on financial operations of most financial institutions operating in the economy. Monetary policy has the potential to trigger activities through provision of affordable and denying access to credit respectively. Commercial banks are considered as the most avenues through which monetary policy is implemented by most central bank in many countries. Thus, commercial banks performance are heavily affected by the action taken by monetary authority for macro-economic environmental changes (Meshack and Nyamute, 2016).
According to Udeh & Annebuike (2015),cash reserve ratio and minimum rediscounted rate are positively correlated to bank performance. However, liquidity rate and interest rate are negatively correlated to bank performance. Zaman et al. (2014) showed that interest rate has negative and significant relationship with bank performance. Likewise, the bank size has positive and significant relationship with bank performance. Amaliawiati and Winarso (2013) revealed that BI rate has negative and significant relationship with return on assets. Kaushal & Neha (2011)showed that cash reserve ratio, bank rate, prime lending rate and statutory liquidity ratio have negative and significant impact on profitability. However, repo has positive and significant relationship with profitability of private banks. Similarly, cash reserve ratio, bank rate, statutory liquidity ratio, prime lending rate and repo rate have negative and significant relationship with profitability of public banks. Meshack and Nyamute (2016) revealedthat there is positive relationship between open market operation rate and bank performance. However, the central bank rate and cash reserve ratio are negatively related to performance of commercial banks.
The major objective of this study is to examine the impact of monetary policy on profitability of Nepalese commercial banks. The results are based on the secondary data and contain the sample of 19 commercial banks of Nepal during the period of 2007/08 to 2014/15. Out of total sampled banks, 6 banks are joint venture, 10 banks are private, and 3 banks are public commercial banks.The data has been collected from the banking and financial statistics and bank supervision report and quarterly economic bulletin published by Nepal Rastra Bank and annual reports of selected commercial banks.The research design adopted in this study is causal comparative type as it deals with the relationship between monetary policyand profitability.
The result shows that NBB has highest average return on assets (5.04 percent), and ADBL has highest average net interest margin (6.04 percent) among the selected commercial banks over the study period. The study shows the decreasing trend of ROA for joint venture banks and private banks. Meanwhile, it shows the increasing trend of ROA for public banks. Likewise, it shows the horizontal trend of NIM for joint venture banks, private banks and public banks. Overall, the study shows that NCC has highest average cash reserve ratio (20.39 percent) andhighest average statutory liquidity ratio (54.63 percent) and ADBL has highestaverage credit to deposit ratio (106.09 percent). The result also shows that t-bills rate is highest in year 2011 (7.41%), bank rate is highest in year 2012, 2013, 2014 (8.00%) and broad money supply is highest in year 2015 (Rs 1877.80 billion).
The descriptive statistics for joint venture banks shows that the average return on assets is 2.2939 percent, average return on equity is 25.8160 percent, average net interest margin is 3.5738 percent, average short term debt ratio is 2.80412 percent, average long term debt ratio is 88.5931 percent, average total debt ratio is 91.3972 percent, average firm size is Rs. 24.6530 billion and average assets growth is 11.9928 percent. Similarly, the descriptive statistics for private banks shows that the average return on assets is 1.3938 percent, average return on equity is 15.0260 percent, average net interest margin is 3.0237 percent, average short term debt ratio is 1.8376 percent, average long term debt ratio is 87.0226 percent, average total debt ratio is 88.1653 percent, average firm size is Rs. 24.1135 billion and average assets growth is 15.6346 percent.
Likewise, the descriptive statistics for joint venture banks shows that the average return on assets is 2.59 percent, average net interest margin is 3.59 percent, average cash reserve ratio is 9.34 percent, average statutory liquidity ratio is 14.35 percent, average credit to deposit ratio is 69.19 percent, average t-bills rate is 3.45 percent, average bank rate is 7.21 percent and broad money supply growth rate 21.62 percent. Similarly, descriptive statistics for public banks shows that the average return on assets is 1.72 percent, average net interest margin is 4.38 percent, average cash reserve ratio is 11.10 percent, average statutory liquidity ratio is 17.75 percent, average credit to deposit ratio is 71.14 percent, average t-bills rate is 3.45 percent, average bank rate is 7.21 percent and broad money supply growth rate 21.62 percent. Likewise, descriptive statistics for private banks shows that the average return on assets is 1.70 percent, average net interest margin is 3.09 percent, average cash reserve ratio is 10.07 percent, average statutory liquidity ratio is 11.51 percent, average credit to deposit ratio is 82.03 percent, average t-bills rate is 3.45 percent, average bank rate is 7.21 percent and broad money supply growth rate 21.62 percent.
The correlation matrix for joint venture banks reveals that cash reserve ratio, statutory liquidity ratio, credit to deposit ratio, t-bills rate and broad money supply are positively correlated to return on assets and net interest margin while bank rateis negatively correlated to return on assets. Similarly, the correlation matrix for public banks reveals that credit to deposit ratio, t-bills rate and broad money supply are positively correlated to return on assets and net interest margin while cash reserve ratio, statutory liquidity ratio and bank rate are negatively correlated to return on assets and net interest margin. Similarly, correlation matrix for private banks reveals that statutory liquidity ratio, credit to deposit ratio and t-bills rate are positively correlated to return on assets and net interest margin. while short term debt ratio, long term debt ratio and total debt ratio are negatively correlated to return on assets. Likewise, cash reserve ratio and bank rate are positively correlated to net interest margin while broad money supply is negatively correlated to net interest margin. The cash reserve ratio, statutory liquidity ratio are negatively correlated to return on assets while broad money supply is positively correlated to return on assets.
The regression analysis reveals that cash reserve ratio, statutory liquidity ratio, credit to deposit ratio, t-bills rate and broad money supply have positive impact on return on assets whereas bank ratehas negative impact on return on assets for joint venture banks. Similarly, cash reserve ratio, statutory liquidity ratio, credit to deposit ratio, t-bills rate, bank rate and broad money supply have positive impact on net interest margin for joint venture banks. Likewise, credit to deposit ratio, t-bills rate and broad money supply have positive impact on return on assets whereas cash reserve ratio, statutory liquidity ratioand bank rate have negative impact on return on assets and net interest margin for public banks. Similarly, cash reserve ratio, statutory liquidity ratio, credit to deposit ratio and t-bills rate have positive impact on return on assets whereas bank rate and broad money supply have negative impact on return on assets for private banks. Likewise, cash reserve ratio, statutory liquidity ratio, credit to deposit ratio, t-bills rateand bank rate have positive impact on net interest margin whereas broad money supplyhas negative impact on net interest margin for private banks.
Impact of monetary policy instruments on profitability of Nepalese commercial banks: a comparative study of joint venture banks, public banks and private banks [printed text] / Saroj Shrestha, Author . - 2017 . - 103p. ; GRP/Thesis + 8/B.
Languages : English
Descriptors: Monetary policy Class number: 332.46 Abstract: Monetary policy is the monetary authority's policy to manage the supply of money with a view to achieve pre-determined macroeconomic goals. It helps in influencing the economy through inflation, national output and employment through its control on bank credit, quantity of money, bank deposit, interest rate etc.Generally, monetary policy is formulated by the central bank of a particular country in order to control money supply and promote economic development.Monetary policy is one of the tools to control money supply in an economy of a nation. The actions are taken by the monetary authorities in order to achieve a desirable economic growth. Monetary policy plays the significant role in economic development of any country.More specifically, monetary authority adopts expansion of the money supply and reduce interest rate during recession period. In developing countries, with an objective to achieve full employment or potential output levels, it promotes and encourages economic growth both in the industrial and agricultural sectors of the economy (Meshack and Nyamute, 2016). Monetary policy has the significant contribution to sustainable economic development by enhancing the performance of the banks. Monetary policy is the actions which undertake to influence the cost of money and credit availability. There are two important channels in monetary policy i.e. interest rate channel and exchange channel. The interest rate channel is very important on banking prospective because the fluctuation in interest rate affect the market rate of short term and long term interest rate. Thus, such fluctuation leads to severe impact on banking sector. Therefore, the bank size matters a lot to cope with such issue (Zaman et al., 2014).Monetary policy transmission mechanism to the real economy remains a hot topic. One area of debate is the relative importance of the money and credit channels in the transmission of monetary policy. The main objective of monetary policy is to promote economic development by controlling money supply and providing price stability. The action taken by monetary authority plays a vital role on financial operations of most financial institutions operating in the economy. Monetary policy has the potential to trigger activities through provision of affordable and denying access to credit respectively. Commercial banks are considered as the most avenues through which monetary policy is implemented by most central bank in many countries. Thus, commercial banks performance are heavily affected by the action taken by monetary authority for macro-economic environmental changes (Meshack and Nyamute, 2016).
According to Udeh & Annebuike (2015),cash reserve ratio and minimum rediscounted rate are positively correlated to bank performance. However, liquidity rate and interest rate are negatively correlated to bank performance. Zaman et al. (2014) showed that interest rate has negative and significant relationship with bank performance. Likewise, the bank size has positive and significant relationship with bank performance. Amaliawiati and Winarso (2013) revealed that BI rate has negative and significant relationship with return on assets. Kaushal & Neha (2011)showed that cash reserve ratio, bank rate, prime lending rate and statutory liquidity ratio have negative and significant impact on profitability. However, repo has positive and significant relationship with profitability of private banks. Similarly, cash reserve ratio, bank rate, statutory liquidity ratio, prime lending rate and repo rate have negative and significant relationship with profitability of public banks. Meshack and Nyamute (2016) revealedthat there is positive relationship between open market operation rate and bank performance. However, the central bank rate and cash reserve ratio are negatively related to performance of commercial banks.
The major objective of this study is to examine the impact of monetary policy on profitability of Nepalese commercial banks. The results are based on the secondary data and contain the sample of 19 commercial banks of Nepal during the period of 2007/08 to 2014/15. Out of total sampled banks, 6 banks are joint venture, 10 banks are private, and 3 banks are public commercial banks.The data has been collected from the banking and financial statistics and bank supervision report and quarterly economic bulletin published by Nepal Rastra Bank and annual reports of selected commercial banks.The research design adopted in this study is causal comparative type as it deals with the relationship between monetary policyand profitability.
The result shows that NBB has highest average return on assets (5.04 percent), and ADBL has highest average net interest margin (6.04 percent) among the selected commercial banks over the study period. The study shows the decreasing trend of ROA for joint venture banks and private banks. Meanwhile, it shows the increasing trend of ROA for public banks. Likewise, it shows the horizontal trend of NIM for joint venture banks, private banks and public banks. Overall, the study shows that NCC has highest average cash reserve ratio (20.39 percent) andhighest average statutory liquidity ratio (54.63 percent) and ADBL has highestaverage credit to deposit ratio (106.09 percent). The result also shows that t-bills rate is highest in year 2011 (7.41%), bank rate is highest in year 2012, 2013, 2014 (8.00%) and broad money supply is highest in year 2015 (Rs 1877.80 billion).
The descriptive statistics for joint venture banks shows that the average return on assets is 2.2939 percent, average return on equity is 25.8160 percent, average net interest margin is 3.5738 percent, average short term debt ratio is 2.80412 percent, average long term debt ratio is 88.5931 percent, average total debt ratio is 91.3972 percent, average firm size is Rs. 24.6530 billion and average assets growth is 11.9928 percent. Similarly, the descriptive statistics for private banks shows that the average return on assets is 1.3938 percent, average return on equity is 15.0260 percent, average net interest margin is 3.0237 percent, average short term debt ratio is 1.8376 percent, average long term debt ratio is 87.0226 percent, average total debt ratio is 88.1653 percent, average firm size is Rs. 24.1135 billion and average assets growth is 15.6346 percent.
Likewise, the descriptive statistics for joint venture banks shows that the average return on assets is 2.59 percent, average net interest margin is 3.59 percent, average cash reserve ratio is 9.34 percent, average statutory liquidity ratio is 14.35 percent, average credit to deposit ratio is 69.19 percent, average t-bills rate is 3.45 percent, average bank rate is 7.21 percent and broad money supply growth rate 21.62 percent. Similarly, descriptive statistics for public banks shows that the average return on assets is 1.72 percent, average net interest margin is 4.38 percent, average cash reserve ratio is 11.10 percent, average statutory liquidity ratio is 17.75 percent, average credit to deposit ratio is 71.14 percent, average t-bills rate is 3.45 percent, average bank rate is 7.21 percent and broad money supply growth rate 21.62 percent. Likewise, descriptive statistics for private banks shows that the average return on assets is 1.70 percent, average net interest margin is 3.09 percent, average cash reserve ratio is 10.07 percent, average statutory liquidity ratio is 11.51 percent, average credit to deposit ratio is 82.03 percent, average t-bills rate is 3.45 percent, average bank rate is 7.21 percent and broad money supply growth rate 21.62 percent.
The correlation matrix for joint venture banks reveals that cash reserve ratio, statutory liquidity ratio, credit to deposit ratio, t-bills rate and broad money supply are positively correlated to return on assets and net interest margin while bank rateis negatively correlated to return on assets. Similarly, the correlation matrix for public banks reveals that credit to deposit ratio, t-bills rate and broad money supply are positively correlated to return on assets and net interest margin while cash reserve ratio, statutory liquidity ratio and bank rate are negatively correlated to return on assets and net interest margin. Similarly, correlation matrix for private banks reveals that statutory liquidity ratio, credit to deposit ratio and t-bills rate are positively correlated to return on assets and net interest margin. while short term debt ratio, long term debt ratio and total debt ratio are negatively correlated to return on assets. Likewise, cash reserve ratio and bank rate are positively correlated to net interest margin while broad money supply is negatively correlated to net interest margin. The cash reserve ratio, statutory liquidity ratio are negatively correlated to return on assets while broad money supply is positively correlated to return on assets.
The regression analysis reveals that cash reserve ratio, statutory liquidity ratio, credit to deposit ratio, t-bills rate and broad money supply have positive impact on return on assets whereas bank ratehas negative impact on return on assets for joint venture banks. Similarly, cash reserve ratio, statutory liquidity ratio, credit to deposit ratio, t-bills rate, bank rate and broad money supply have positive impact on net interest margin for joint venture banks. Likewise, credit to deposit ratio, t-bills rate and broad money supply have positive impact on return on assets whereas cash reserve ratio, statutory liquidity ratioand bank rate have negative impact on return on assets and net interest margin for public banks. Similarly, cash reserve ratio, statutory liquidity ratio, credit to deposit ratio and t-bills rate have positive impact on return on assets whereas bank rate and broad money supply have negative impact on return on assets for private banks. Likewise, cash reserve ratio, statutory liquidity ratio, credit to deposit ratio, t-bills rateand bank rate have positive impact on net interest margin whereas broad money supplyhas negative impact on net interest margin for private banks.
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Barcode Call number Media type Location Section Status 338/D 332.46 SHR Thesis/Dissertation Uniglobe Library Social Sciences Available
Title : Modern monetary theory Material Type: printed text Authors: Kulkarni, Kishore G, Author Publisher: Macmillan Publication Date: 284 Pagination: 284p. Price: Rs.268.80 Languages : English Descriptors: Monetary policy
MoneyKeywords: 'monetary theory money' Class number: 332.402 Modern monetary theory [printed text] / Kulkarni, Kishore G, Author . - [S.l.] : Macmillan, 284 . - 284p.
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Languages : English
Descriptors: Monetary policy
MoneyKeywords: 'monetary theory money' Class number: 332.402 Hold
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Barcode Call number Media type Location Section Status 16 332.402 KUL Books Uniglobe Library Social Sciences Available 15 332.402 KUL Books Uniglobe Library Social Sciences Available 14 332.402 KUL Books Uniglobe Library Social Sciences Available 17 332.402 KUL Books Uniglobe Library Social Sciences Available
Title : Monetary policy and bank performance : evidence from commercial bank of Nepal Material Type: printed text Authors: Nirmal Bam, Author Publication Date: 2013 Pagination: 77p. Size: GRP/Thesis Accompanying material: 1/B General note: Including bibliography
Languages : English Descriptors: Banks
Banks and banking
Commercial banks
Monetary policy
Monetary policy-Nepal
Nepal
Nirmal BamKeywords: 'monetary policy bank performance banks bank and banking nepal commercial banks nirmal bam' Class number: 332.46 Monetary policy and bank performance : evidence from commercial bank of Nepal [printed text] / Nirmal Bam, Author . - 2013 . - 77p. ; GRP/Thesis + 1/B.
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Barcode Call number Media type Location Section Status 1/D 332.46 BAM Thesis/Dissertation Uniglobe Library Social Sciences Available
