Funds allocation and deposit mobilization of commercial banks in Nepal / Sabina Shrestha 

Public ISBD Title : Funds allocation and deposit mobilization of commercial banks in Nepal Material Type: printed text Authors: Sabina Shrestha, Author Publication Date: 2013 Pagination: 87p. Size: GRP/Thesis Accompanying material: 1/B Languages : English Descriptors: Deposit banking Funds allocation Keywords: 'funds allocation  bank deposits  deposit mobilization' Class number: 332.175 Abstract: Deposit is one of the important domestic capital formation factors that lead to increase in the size of national income and employment, solving the problem of inflation and balance of payment and foreign debts. Domestic capital formation helps in making a country self sustainable. For the development of any country, the financial sector of that country is responsible and must be strong. Therefore, commercial banks are the important financial intermediaries serving the general public by lending and investing in many areas or sectors of the economy. So the empirical relationship between the deposit and its explanatory variables are stated as the research questions followed by the development of the hypothesis. The major objective of this study is to analyze the relationship between the deposit and its explanatory variables. the review of literature has shown the relationship between various factors such as interest rates, GDP, branch expansion, household savings, investment, loans & advances , asset purchased etc. as and the deposit mobilization in the case of both developed and developing countries. In addition, investment, loans & advances, asset purchased are some of the variables that are found to have significant association with deposit in various contexts. Based on the reviews, this study has proposed the conceptual framework identifying investment, loans & advances and asset purchased as the most important factors affecting the deposit mobilization of the commercial bank in Nepal. For the purpose of study 12 listed commercial banks deposit from systematic random sampling is taken as sample and required data such as deposit and other independent variables are collected from various secondary sources for period of 12 years i.e. 2001 to 2012. Systematic random sampling method is used to select the sample commercial banks. Primary questionnaire survey is also conducted in order to assess the opinions of bank’s manager on deposit mobilization processes. Multiple regression analysis and correlation analysis are used to examine the connection between the deposit and the independent variables. Likewise, portfolio sorted on one way sorts of three independent variables is also employed to see if the relationship shown by regression and correlation analysis really exists. The result of secondary data analysis shows that the investment, loans & advances and asset purchased have strong and significant positive impact on deposit. Likewise, in contradiction to the findings of the secondary data, the primary survey reveals that loans & advances, investment and asset purchased are the most important sectors of deposit mobilization. The major limitations of this study lies in the fact that this study has excluded some firm specific and other productive sectors where the commercial banks could have mobilized its resources effectively and efficiently. Despite, the limitations of this study, the findings and research are still applicable in the case of Nepalese commercial banks. So this study is highly significant for commercial banks itself, depositors and the regulators too. Funds allocation and deposit mobilization of commercial banks in Nepal [printed text] / Sabina Shrestha, Author . - 2013 . - 87p. ; GRP/Thesis + 1/B. Languages : English Descriptors: Deposit banking Funds allocation Keywords: 'funds allocation  bank deposits  deposit mobilization' Class number: 332.175 Abstract: Deposit is one of the important domestic capital formation factors that lead to increase in the size of national income and employment, solving the problem of inflation and balance of payment and foreign debts. Domestic capital formation helps in making a country self sustainable. For the development of any country, the financial sector of that country is responsible and must be strong. Therefore, commercial banks are the important financial intermediaries serving the general public by lending and investing in many areas or sectors of the economy. So the empirical relationship between the deposit and its explanatory variables are stated as the research questions followed by the development of the hypothesis. The major objective of this study is to analyze the relationship between the deposit and its explanatory variables. the review of literature has shown the relationship between various factors such as interest rates, GDP, branch expansion, household savings, investment, loans & advances , asset purchased etc. as and the deposit mobilization in the case of both developed and developing countries. In addition, investment, loans & advances, asset purchased are some of the variables that are found to have significant association with deposit in various contexts. Based on the reviews, this study has proposed the conceptual framework identifying investment, loans & advances and asset purchased as the most important factors affecting the deposit mobilization of the commercial bank in Nepal. For the purpose of study 12 listed commercial banks deposit from systematic random sampling is taken as sample and required data such as deposit and other independent variables are collected from various secondary sources for period of 12 years i.e. 2001 to 2012. Systematic random sampling method is used to select the sample commercial banks. Primary questionnaire survey is also conducted in order to assess the opinions of bank’s manager on deposit mobilization processes. Multiple regression analysis and correlation analysis are used to examine the connection between the deposit and the independent variables. Likewise, portfolio sorted on one way sorts of three independent variables is also employed to see if the relationship shown by regression and correlation analysis really exists. The result of secondary data analysis shows that the investment, loans & advances and asset purchased have strong and significant positive impact on deposit. Likewise, in contradiction to the findings of the secondary data, the primary survey reveals that loans & advances, investment and asset purchased are the most important sectors of deposit mobilization. The major limitations of this study lies in the fact that this study has excluded some firm specific and other productive sectors where the commercial banks could have mobilized its resources effectively and efficiently. Despite, the limitations of this study, the findings and research are still applicable in the case of Nepalese commercial banks. So this study is highly significant for commercial banks itself, depositors and the regulators too.

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Impact of banks deposit mobilization and credit financing on capital formation: a case of Nepal / Prativa Poudel 

Public ISBD Title : Impact of banks deposit mobilization and credit financing on capital formation: a case of Nepal Material Type: printed text Authors: Prativa Poudel, Author Publication Date: 2018 Pagination: 109p. Size: GRP/Thesis Accompanying material: 11/B Languages : English Descriptors: Bank and banking Deposit banking Class number: 332.175 Abstract: Capital formation is often suggested as the most important factor of economic growth. Jhigan (1998) stated capital formation as the backbone for real economic growth and development of developed as well as developing economies. According to Ugwuegbe and Uruakpa (2013), capital formation is equivalent to an increase in physical capital stock of a nation with investment in social and economic infrastructure. Bendix (1915) stated that capital formation indeed plays a deceive role in determining the level and growth of national income and economic development. According to Jhinghan (2006), capital formation involves three interrelated conditions; (a) the existence of real savings and rise in them; (b) the existence of credit and financial institutions to mobilize savings and to direct them to desired channels; and (c) to use these savings for investment in capital goods. Aurangzeb(2012) stated that country can develop its economic growth quickly if the country has good financial system. Akani et al. (2016) concluded that that banking sector development has significant effect on Nigerian capital formation. Bencivenga and Smith (1991) argued that the absence of intermediary sector (i.e. banking institutions) results in a composition of savings that is unfavourable to capital formation. Hao (2006) found that financial intermediation has a causal effect and positive impact on capital formation through the channels of house-holds’ savings mobilization and loans for private sector. Capital formation is considered as important pillar for the economic development of nation. Capital formation plays an essential role in acceleration of the economic growth of nations, which in turn, is basically determined among others by saving and investment propensities (Brennan, 1970). According to Ainabor and Shuaib (2014), the growth rate of national income is directly related to saving ratio and capital formation. In the context of Nepal, financial sector reform programs started taking place since 1990’s, which resulted in several positive changes in the financial sector of Nepal (Bhetuwal, 2007). Bist (2017) revealed that economic growth, market capitalization, gross capital formation and inflation shared a stable long-run relationship in Nepal. Tandukar (2010) found that the deposits mobilization plays vital role in economic development of country. Voung (2013) suggested that financial market can be expand and improve through better credit and investment system with appropriate regulatory and policy reforms practices in order to support the higher economic growth of Nepal. The major objective of this study is to examine the impact banks deposit mobilization and credit financing on capital formation of Nepal. Besides, the study is conducted to ascertain the co-integration among banks deposit mobilization, credit financing and capital formation of Nepal. The major source of data are Quarterly Economic Bulletin published by Nepal Rastra Bank, Economic Survey published by Ministry of Finance of Nepal, and World Development Indicators of World Bank for the period of 1975-2015 AD. Gross capital formation growth and gross fixed capital formation growth are used as indicator of capital formation. Likewise, bank deposit and bank credit are taken as explanatory variable and economic growth, gross domestic saving and inflation are used as control variable. The Augmented Dickey Fuller (ADF) test reveals that bank deposit and bank credit are stationary at first difference, whereas economic growth, gross domestic saving, inflation, growth in gross capital formation and growth in gross fixed capital formation are stationary at level. This test also shows that none of the variables are integrated at second difference or above. The ARDL bound test reveals that there is co-integration relationship amongst banks deposit mobilization, credit financing and capital formation. The study reveals that bank deposit mobilization, credit financing, and capital formation shared a long-run co-integrating relationship throughout the study period. The estimates of ARDL model show that long-run beta coefficients are positive for bank deposit. This indicates that higher the bank deposit, higher would be the capital formation in long run. The result also shows that bank credit has positive impact on capital formation of Nepal in long-run. It indicates that higher the bank credit, higher would be the capital formation in Nepal. Likewise, the result reveals positive impact of inflation on capital formation of Nepal in long-run. The estimates of error correction model also show that beta coefficients are positive for bank deposit, bank credit and gross domestic savings, whereas, the beta coefficients are negative for inflation and economic growth. However, the coefficients are significant only for gross domestic saving and inflation at 5 percent level of significance. Impact of banks deposit mobilization and credit financing on capital formation: a case of Nepal [printed text] / Prativa Poudel, Author . - 2018 . - 109p. ; GRP/Thesis + 11/B. Languages : English Descriptors: Bank and banking Deposit banking Class number: 332.175 Abstract: Capital formation is often suggested as the most important factor of economic growth. Jhigan (1998) stated capital formation as the backbone for real economic growth and development of developed as well as developing economies. According to Ugwuegbe and Uruakpa (2013), capital formation is equivalent to an increase in physical capital stock of a nation with investment in social and economic infrastructure. Bendix (1915) stated that capital formation indeed plays a deceive role in determining the level and growth of national income and economic development. According to Jhinghan (2006), capital formation involves three interrelated conditions; (a) the existence of real savings and rise in them; (b) the existence of credit and financial institutions to mobilize savings and to direct them to desired channels; and (c) to use these savings for investment in capital goods. Aurangzeb(2012) stated that country can develop its economic growth quickly if the country has good financial system. Akani et al. (2016) concluded that that banking sector development has significant effect on Nigerian capital formation. Bencivenga and Smith (1991) argued that the absence of intermediary sector (i.e. banking institutions) results in a composition of savings that is unfavourable to capital formation. Hao (2006) found that financial intermediation has a causal effect and positive impact on capital formation through the channels of house-holds’ savings mobilization and loans for private sector. Capital formation is considered as important pillar for the economic development of nation. Capital formation plays an essential role in acceleration of the economic growth of nations, which in turn, is basically determined among others by saving and investment propensities (Brennan, 1970). According to Ainabor and Shuaib (2014), the growth rate of national income is directly related to saving ratio and capital formation. In the context of Nepal, financial sector reform programs started taking place since 1990’s, which resulted in several positive changes in the financial sector of Nepal (Bhetuwal, 2007). Bist (2017) revealed that economic growth, market capitalization, gross capital formation and inflation shared a stable long-run relationship in Nepal. Tandukar (2010) found that the deposits mobilization plays vital role in economic development of country. Voung (2013) suggested that financial market can be expand and improve through better credit and investment system with appropriate regulatory and policy reforms practices in order to support the higher economic growth of Nepal. The major objective of this study is to examine the impact banks deposit mobilization and credit financing on capital formation of Nepal. Besides, the study is conducted to ascertain the co-integration among banks deposit mobilization, credit financing and capital formation of Nepal. The major source of data are Quarterly Economic Bulletin published by Nepal Rastra Bank, Economic Survey published by Ministry of Finance of Nepal, and World Development Indicators of World Bank for the period of 1975-2015 AD. Gross capital formation growth and gross fixed capital formation growth are used as indicator of capital formation. Likewise, bank deposit and bank credit are taken as explanatory variable and economic growth, gross domestic saving and inflation are used as control variable. The Augmented Dickey Fuller (ADF) test reveals that bank deposit and bank credit are stationary at first difference, whereas economic growth, gross domestic saving, inflation, growth in gross capital formation and growth in gross fixed capital formation are stationary at level. This test also shows that none of the variables are integrated at second difference or above. The ARDL bound test reveals that there is co-integration relationship amongst banks deposit mobilization, credit financing and capital formation. The study reveals that bank deposit mobilization, credit financing, and capital formation shared a long-run co-integrating relationship throughout the study period. The estimates of ARDL model show that long-run beta coefficients are positive for bank deposit. This indicates that higher the bank deposit, higher would be the capital formation in long run. The result also shows that bank credit has positive impact on capital formation of Nepal in long-run. It indicates that higher the bank credit, higher would be the capital formation in Nepal. Likewise, the result reveals positive impact of inflation on capital formation of Nepal in long-run. The estimates of error correction model also show that beta coefficients are positive for bank deposit, bank credit and gross domestic savings, whereas, the beta coefficients are negative for inflation and economic growth. However, the coefficients are significant only for gross domestic saving and inflation at 5 percent level of significance.

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