A STUDY ON

LOAN AND DEPOSIT ANALYSIS OF NEPAL SBI BANK LIMITED

A Project work of Report

Submitted By

Surakshya Gurung

Finance Group

TU Regd No.-7-2-32-411-2020

Saraswoti multiple campus

Lekhnathmarg,Thamel, kathmandu

Submitted To

The Faculty of Management

Tribhuvan University,Kathmandu

In the partial fulfillment of the requirements for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Kathmandu, Nepal

January,2025
 CHAPTER 1

INTRODUCTION

1.1 BACK GROUND OF THE STORY:

Background of the Study The study is entitled “A Study on Loan and Deposit Analysis
Nepal SBI Bank Limited.” The main focus of the study is to analyze the loan
disbursement and deposit mobilization trends of the bank. According to financial
principles, a bank’s ability to effectively manage loans and deposits determines its
financial stability and growth.

Nepal SBI Bank Limited (NSBL) was established on July 17, 1992, as a joint venture
between the State Bank of India (SBI), Employee Provident Fund of Nepal, and the
general public. Since its inception, NSBL has played a crucial role in Nepal’s banking
industry by offering various financial services, including loan products and deposit
schemes, aimed at enhancing financial inclusion and economic development.Loans and
deposits are fundamental to a bank’s operations. Deposits serve as a major source of
funds, while loans are the primary income-generating asset for banks. The efficiency of
deposit mobilization and loan disbursement affects the overall liquidity, profitability, and
risk exposure of a financial institution.

In today's competitive banking sector, financial institutions play a vital role in supporting
economic activities by facilitating credit and encouraging savings. Nepal SBI Bank
Limited (NSBL) has been actively contributing to Nepal’s banking sector by providing
various loan products and deposit schemes. It is essential to conduct research to evaluate
the bank’s loan and deposit trends, identify challenges, and recommend solutions that
will enhance its financial performance and stability.

This study focuses on Nepal SBI Bank Limited, considering its historical background,
loan distribution strategies, deposit mobilization techniques, and financial impact on
Nepal’s banking industry. Furthermore, the study aims to analyze trends in loan

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disbursement and deposit collection, their impact on the bank’s profitability, and risk
management strategies.

1.2 Statement of the Problem

The main statement problem has primary issue addressed in this study is the challenge
faced by Nepal SBI Bank Limited in managing its loan and deposit portfolios. Despite
the bank’s considerable market share, it faces ongoing competition in the financial sector
and challenges related to loan defaults, deposit mobilization, and liquidity management.
This study will investigate these challenges and offer potential solutions for better
financial management.

1.3Objectives of the Study

The key objectives of this study are:

 To evaluate the loan and deposit patterns of SBI Bank Limited over time.
 To analyze the impact of loan and deposit portfolios on the bank's profitability
and financial health.

1.4 Research Questions

The research will be guided by the following primary questions:

 What are the prevailing trends in the loan and deposit portfolios of NSBL?
 How do the bank's loan and deposit operations influence its profitability and
overall performance?
 What risk management practices does the bank employ to ensure the effective
handling of its loan and deposit portfolio?

1.5 Significance of the Study

This study is significant for several stakeholders:

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  For the bank management, it provides a detailed analysis that can inform future
strategies for managing loans and deposits.
 For customers, it offers insights into the types of financial products that best suit
their needs and financial goals.
 For investors, this research offers valuable information regarding the financial
health and risk exposure of NSBL, helping them make informed decisions about
their investments.

1.6 Limitations
The study has certain limitations:

 The research will be focused solely on the loan and deposit portfolios of NSBL,
excluding other services the bank offers.
 Data will primarily be obtained from the bank’s published reports, which may not
always reflect the most up-to-date changes in the bank’s operations.
 The scope of the study is limited to the analysis of the bank’s financial data from
2019 to 2024, so insights drawn from this period may not be entirely applicable to
future developments.

1.7 Organization of the Study

This study will be organized as follows:

 Chapter 1

introduces the study, presenting the background, objectives, research questions,

and significance.

 Chapter 2

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 provides the data analysis and findings, presenting a detailed examination of the
bank’s loan and deposit portfolios and their impact on the bank’s financial health.

 Chapter 3

concludes the report, offering a summary of key findings and recommendations for
improving the bank's financial management strategies related to loans and deposits.

1.8 Review of Literature

As the study on management of loans and deposits is crucial for the financial health of
banks . Global studies highlight that a balanced loan portfolio and diverse deposit base
ensure stability (Mishkin, 2007). In Nepal, Adeniran et al. (2014) stress the need for
better risk assessment due to high non-performing loans. Gurung (2019) notes that
digital banking and customer service are key to deposit growth. The economic reliance
on agriculture and remittances in Nepal affects loan repayment and deposit levels (Thapa,
2018). Risk management, particularly credit and liquidity risks, is vital for reducing
defaults (Shrestha, 2020). Overall, the literature shows that successful loan and deposit
management requires effective credit policies, risk management, and strategies tailored to
the specific economic context of Nepal

1.9 Research Gap

There is many studies have analyzed general banking practices in Nepal, there is a lack of
in-depth research focused specifically on the loan and deposit strategies of individual
banks like Nepal SBI Bank Limited. This study seeks to fill this gap by focusing on
NSBL’s financial performance in these areas, offering valuable insights for both
academics and practitioners.

1.10 Research Methodology

In this study of research methodology section outlines how the study is conducted,
detailing the methods for data collection, analysis, and interpretation. It explains the
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approach used to address the research problem and achieve the objectives. For your topic
on the loan and deposit analysis of Nepal SBI Bank Limited, the methodology could
include both qualitative and quantitative research techniques. Data will be gathered
from secondary sources such as the bank’s financial statements, annual reports, and
publications from Nepal Rastra Bank. In addition, primary data will be collected through
surveys and interviews with bank employees and customers to gain further insights into
the bank’s loan and deposit offerings. Quantitative analysis will include financial ratio
analysis, trend analysis, andth oer statistical methods to interpret the data.

1.11 Types of Research

The research will be primarily descriptive and analytical. Descriptive research will
provide an overview of the bank’s current loan and deposit strategies, while analytical
research will evaluate the relationship between these financial products and the bank’s
overall performance.

1.12 Population and Sample

The population of this study includes the entire loan and deposit portfolio of NSBL, with
a sample drawn from the bank’s data over the past five years (2019-2024). This data will
allow for the analysis of trends and financial performance over a reasonable period.

1.13 Types of Data

On this study will use both primary and secondary data. Primary data will be collected
through surveys and interviews with NSBL staff and customers. Secondary data will
come from financial reports, the bank’s annual statements, and documents published by
Nepal Rastra Bank.

1.14 Data Collection and Procedure

The data collection will involve gathering information from multiple sources. Primary
data will be collected through structured questionnaires and interviews. Secondary data
will be collected from official reports and financial statements of NSBL. Data will then
be analyzed to identify key trends, patterns, and insights.

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1.15 Technique of Analysis
The technique of analysis data will be analyzed using various techniques, including
financial ratio analysis (such as loan-to-deposit ratio, non-performing loan ratio), trend
analysis (to observe growth patterns in loans and deposits), and regression analysis (to
examine the impact of loans and deposits on profitability).

CHAPTER 2

DATA ANALYSIS AND FINDINGS

2.1 Result and Analysis

The result and analysis of this chapter will present the results of the data analysis,
focusing on trends in NSBL’s loan and deposit portfolios over the past few years. The
analysis will cover areas such as loan growth, deposit mobilization, and any changes in
the non-performing loans ratio. The findings will be linked to the bank’s overall financial
performance.

2.2 Presentation of Data

The data will be presented visually through charts, tables, and graphs to help readers
easily understand the trends and patterns in the bank’s loan and deposit operations. These
visual tools will provide a clearer picture of how the bank's financial products have
evolved over time.

2.3 Major Findings

The major findings from the analysis will be discussed in this section. Key trends such as
growth in specific loan types, changes in deposit levels, and risk factors like non-
performing loans will be highlighted. This section will also include a discussion of how
these findings affect the overall financial health of NSBL.

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 CHAPTER 3
SUMMARY AND CONCLUSION

3.1 Summary and Conclusion

This study aimed to evaluate the loan and deposit management practices of Nepal SBI
Bank Limited. The findings show that the bank has experienced steady growth in its loan
and deposit portfolios, although challenges like non-performing loans (NPLs) and
fluctuating deposit levels remain. The bank’s focus on digital banking and customer
service has been effective in enhancing deposit mobilization.

Additionally, the relationship between loan growth and profitability was evident,
indicating that a well-managed loan portfolio contributes significantly to the bank’s
financial performance. However, risk management remains a key area for improvement,
particularly in minimizing loan defaults and enhancing recovery processes.

In conclusion, Nepal SBI Bank Limited loan and deposit strategies have contributed
positively to its growth. However, improvements in risk management, better credit
evaluation, and diversifying loan products could further enhance the bank’s financial
stability and long-term success.

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 TABLE OF CONTENTS

CHAPTER 1
1.1 BACKGROUND ..........................................................2

1,2 STATEMENT OF PROBLEM......................................3

1,3 OBJECTIVES OF THE STUDY .................................. 3

1.4 RESEARCH QUESTION..............................................3

1.5 SIGNIFICATION OF QUESTION................................3

1.6 LIMITATION................................................................4

1.7 ORGANIZATION OF THE STUDY ........................... 4,5

1.8 REVIEW OF THE LITERATURE................................5

1.9 RESEARCH GAP..........................................................5

1.10 RESEARCH METHODOLOGY................................ 5,6

1.11 TYPES OF RESEARCH .............................................6

1.12 POPULATION AND SAMPLE .................................6

1.13 TYPES OF DATA .......................................................6

1.14 DATA COLLECTION AND PROCEDURE .............6

1.15 TECHNIQUE OF ANALYSIS....................................7

CHAPTER 2 : DATA ANALYSIS AND FINDING

2.1 RESULT AND ANALYSIS .........................................7

2.2 PRESENTATION OF DATA........................................7

2.3 MAJOR FINDING ........................................................7

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CHAPTER 3 : SUMMARY AND CONCLUSION

3.1 SUMMARY AND CONCLUSION...............................8

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