LIQUIDITY ANALYSIS OF SIDDHARTHA BANK LIMITED

A Project Work Report

Submitted By:

Sneha Kumari Das

Exam Symbol No.704410001

T.U. Registration No. 7-2-441-01-2018

Campus Roll No. 7

Exam Roll NO. 704410001

Model Multiple Campus, Janakpurdham

Submitted To

The Faculty of management

Model multiple college , Janakpurdham

Tribhuvan University

In the partial fulfillment of the requirement of the Degree of

Bachelor in Business Studies

Janakpurdham, Nepal

March 28, 2025

DECLARATION
I hereby declare , this thesis entiled " Liquidity Analysis of Siddhatha Bank Limited" Submitted
to the faculty of management, T.U., Kathmandu is an original peace of work for the partial
fulfillment of the requirements for the Degree of Bachelor of Business Studies (BBS), conducted
under the supervision of Dr. Saroj Kumar Thakur, Associate professor of Model Mutiple
College, Janakpurdham.This project report has not been submitted to any other universities or
institutions for the award of any degree.

Sneha Kumari Das

Roll no : 51

Exam Roll No: 70442018

Date : 15/12/2081
 Model Multiple College
JANAKPURDHAM
TEL:-041-420100 , 420377

(Affiliated to Tribhuvan University) Date:-....

SUPERVISOR'S RECOMMENDATION
The project work report entitled "Liquidity Analysis of Siddhartha Bank Limited"
submitted by Sneha Kumari Das of Model Multiple College, Janakpurdham, is
prepared under my supervision as per the procedure and format requirements
laid by the faculty pf Management , Tribhuvan University, as partial fulfillment of
the requirements of the degree of Bachelor of Business Studies (BBS). I therefore
reccomend the project work report of evaluation.

...................
Signature

Dr. Saroj kumar Thakur

Model Multiple College

Janakpurdham

Date:-...................
 ACKNOWLEDGEMENT
First of all , I would like to express my sincere thanks to the Tribhuvan Univesity for
providing me an opportunity to have this practical course of study as partial
fulfillment of the requirement of Bachelor in Business Studies.

The successful completion of this research report could not be possible without
suggestion and guidance of different individual. I would like to express mmy
heartfelt thanks to my respected supervisor Dr Saroj Kumar Thakur, Associate
prof. of Model multiple College , Janakpurdham who guided me to complete this
research work.I also express my gratitude to campus chief Mr. Birendra Shah and
equally feel pleasure to extend my gratitude to all known and unknown lectures
and other staff members of management for helping me to make my final project
productive . The librarians of campus library will always be remembered for their
assistance to provide me necessary documents related to my thesis.

I am equally thankful to the siddharth bank Limited , kathmandu and other staff
who have been cocoperative and helpful in providing the information relating to
financial performance of the company.

Sneha Kumari Das

 TABLE OF CONTENTS
Title page ........................................................................................... i
Declaration......................................................................................... ii
supervisor's Recommendation........................................................... iii
Endorsement...................................................................................... iv
Acknowledgements............................................................................ v
Table of contents ...............................................................................vi
List of Tables....................................................................................... vii
List of Figures ..................................................................................... viii
Abbrevations....................................................................................... ix

CHAPTER I : INTRODUCTION
1.1 Background of Study ................................................................... 1-3
1.2 Profile of the Organization .......................................................... 4-5
1.3 Objectives of the Study ................................................................ 5
1.4 Rationale of Studies .................................................................... 5
1.5 Review of Litrature ......................................................................5-9
1.6 Methods ...................................................................................... 9-11

CHAPTER II; RESULTS AND ANALYSIS

2.1 Presentation of data in table and figures .......................................12
2.1.1 Current Ratio ..................................................................................12
2.1.2 Cash and Bank Balance to Current Assets .......................................13
2.1.3 Cash and Bank Balance to Total Deposit Ratio................................. 15
2.1.4 Quick Ratios ....................................................................................16
2.1.5 Debt-Assets Ratio ............................................................................17
2.1.6 Debt Equity Ratio .............................................................................18
2.1.7 Loan to Total Deposit Ratio ............................................................. 19
2.1.8 Loan and Advance to Current Assets................................................. 20
2.1.9 Cash Reserve Ratio ............................................................................21
2.2 Major Financing ................................................................................23

CHAPTER III: SUMMARY & CONCLUSION

3.1 Summary ............................................................................................ 24
3.2 Conclusion ...........................................................................................24
BIBLOGRAPHY ................................................................................26
APPENDICES ................................................................................... 27-28
 LIST OF TABLES
Table no. Title Page no

1 List of Commercial Banks .................................................. 3

2.1.1 Current Ratio .....................................................................12
2.1.2 Cash and Bank Balance to Current Assets ......................... 14
2.1.3 Cash and Bank Balance to Total Deposit Ratio................... 15
2.1.4 Quick Ratio ........................................................................ 16
2.1.5 Debt - Assets Ratio ............................................................ 17
2.1.6 Debt- Equity Ratio ............................................................. 18
2.1.7 Loan to Total Deposit Ratio ............................................... 19
2.1.8 Loan and advance to Current Ratio ................................... 20
2.1.9 Cash Reserve Ratio ............................................................. 21

LIST OF FIGURES

Table No. Title Page No

2.1.1 Current Ratio ....................................................................... 13

2.1.2 Cash and Bank Balance to current Assets ............................ 14
2.1.3 Cash and Bank Balance to Total Deposit Ratio ..................... 15
2.1.4 Quick Ratio ........................................................................... 16
2.1.5 Debt-Assets Ratio ................................................................. 17
2.1.6 Debt-Equity Ratio ................................................................. 18
2.1.7 Loan to Total Deposit ratio.................................................... 20
2.1.8 Loan and advance to Current Assets .................................... 21
2.1.9 cash Reserve Ratio ................................................................ 22
 ABBREVIATIONS
A.D : After Death of Christ
ATM : Automated Taller Machine
BBS : Bachelor of Business Studies
BOD : Board of Directors
B.S : Bikram Sambant
CA : Current Assets
CL : Current Liabilities
Co : Company
CR : Current Ratio
F/Y : Fiscal Year
SBL : Siddharta Bank Limited
NRB : Nepal Rastriya Bank
LtD : Limited
NR : Nepalese Rupees
NRB : Nepal Rastriya Bank
Reg.No : Registration Number
TU : Tribhuvan University
 CHAPTER 1 - INTRODUCTION
1.1 Background of the Study
1.1.1 Meaning of Bank
Bank is a financial institution and financial intermediaries that accepts deposits
from the public or customers and motalities these deposits into productive sector,
either directly by loaning or indirectly through capital market . Banks deals with
money and credit . A bank links together customer that have capital deficits and
customers with capital surpluses . Due to their influential status within the
financial system and upon national economics , banks are highly regulated in most
countries.
Bank play vital role in the economic development of the country. Bank is not only
work to accepting deposits and disbursing loans . In addition to this, a bank may
be engaged in different types of functions such as remittance, exchange currency,
joint venture, underwritting bank guarantee discounting bills and others services
provided to the customers. A bank has defined by different economists give
different. Some major definitions of bank asa follows.
According to Nepal Commercial Co. Act 2031 B.S., "a commercial bank refers to
such type of bank which deals in money exchange , accepting depoisits, advancing
loans and commercial transaction except specific banking related to co-operative
agriculture and industry and other objective."

1.1.2 Origin & Development of Bank

The word bank was borrowed in Middle English from Middle French banque,from
Old Italion banca , from Old High German Banc, Bank, German world bank which
means joint stock business at benches in the marketplace "bench, counter".
Beanches were used as desks or exchange counters during the renassance by
Florentine bankers , who used to make their transactions atop desk covered by
green tablecloths.
One of the oldest item foundshowing money-changing activity is a silver Greek
drachmcoin from ancient Hellenic colony Trapezus on the Black sea, modern
Trabzon , c. 350-325 BC, presented in the British Musium in London. The coin
shows a banker's table (trapeza) laden with coins, a pun on the name of the city.
In fact, even today in Modern Greek the word Trapeza means both a table and a
bank.
The track of development banking can be found in Chaldean, Egyption and
Phoenieia history . The bank of Venice was the first public banking institution
established in 1157 A.D . Then it inspired other countries to offer banking
instiitution like the:
 The Bnak of Barcelona established in 1401 A.D
 The bank of Austerdani Holland in 1609 A.D.
 Bank of England established in 1619 A.D.
 Banj of Hindustaan India in 1694 A.D.
Subscribing bank has occupied a very important place in 17th centuries enjoying
for 2 longtime the position of international commerce as prominent as " Bank of
England" today.
Though the first Bank was established in in 1694, Commercial banks expanded
only since nineteen century. In India , Bank of Bengal was established in 1809 A.D.
Bank of Bombay was established in 1843. These were known as the Presidency
banks. These Presidency banks were amalgimated in 1921 A.D to form the
imperial bank of India , which was converted , into the "State Bank of India",
saving bank in 1955. Several local and foreign banks operate in different parts of
the country.
1.1.3. Commercial Bank in Nepal
A commercial bank is a type of bank that provides services such as accepting
deposits , making bussinesses loans, and offering basic investment products.
Nepal Bank is the first commercial bank in Nepal.
Commercial bank can also refer to a bankor a division pof bnk that mostly deals
with deposits and loans from corporations or large businesses , as opposed to
individual members of the public (retail banking).
As per commercial bank act 2031 B.S. " A commercial bank means the bank which
deals in exchanging currency . Accepting deposits , giving loans and doing
commercial organization".
At present there are altogether 22 commercial banks in Nepalafter merger. The
commercial bank in Nepal is as follows.
 TABLE-1
Lists of commercial Bank in Nepal
Bank Name Established Paid-up capital
Agriculture Development 1968 1862.06 crore
Bank
Rastriya Banajiya Bank 1966 1394.59 crore
Citizens Bank International 2007 1420.10 crore

Everest Bank 1994 1069.80 crore

Global IME Bank 2012 3441.98 crore
Himalayan Bank 1993 2165.66 crore
Kumari Bank 2001 2585.09 crore
Macchapuchhre Bank 2012 1025.72 crore
Nabil Bank 1984 2283.00 crore
Nepal Investment Mega Bank 2023 3442.80 crore

Nepal SBI Bank 1993 982.59 crore

NIC Asia Bank 2013 1156.40 crore
NMB Bank 2008 1836.67 crore
Prabhu Bank 2016 2226.26 crore
Prime Commercial Bank 2007 1865.63 crore
Sanima Bank 2012 1132.74 crore
Siddhartha Bank 2002 1252.44 crore
Standard Chartered Bank 1987 942.95 crore
Sunrise Bank 2007 1011.89 crore
Nepal Bank 1937 1440.59 crore
Laxmi Bank 2002 1155.13 crore

Source: NRB Report 2079

1.2 Profile of the organization

Siddhartha Bank-- Relationship forever , Established in the year 2002 , and

Siddhartha Bank Limited (SBL) is recognized as one of the most efficient efficient
and proffessionsl banks in Nepal. A core philosophy of the banks lies in nurturing
relationships with customers and clients
To ensure convinient access to srvices , SBL integtrates digital banking in most
operations . Using anywhere in te world . The technology used to used is
continuously improved for enhanced customer experiance . Earning confidence of
its customers through these facilities and prompt services , SBL supports
innumerable CSR activities throughout the country.

Vision
Siddhartha Bank runs with a vision to be financially sound , operationally efficient
and keep abreast with technological developments.

Mission
Siddharha Bank desires to be one of the leading banks of the banking industry by
fulfilling the interest of the stakeholders . The bank also aims to provide total
customer satisfaction by way of offening products and developing and retaining
highly motivated and committed human resources.

Core Values
 Sustained Growth
 Transparency
 Innovation
 Integrity
 Customer Centricity
The Bank follows all the rules , processes and laws laid out by the authorities and
puts great emphasis on corporate governance . The Bank's priority has always
been the effective fulfillment of its roles as a responsible corporate citizen of the
nation . We always strive towards the welfare of the community.
Corporate Governance

We believe in being accountable , conducting business ethically and maintaining

transparency.

Social Responsibility

We are committed to take social initiatives for the development of nation.

1.3 Objectives of the Study

these objectives can be divided into following objectives :

 Be one of the leading banks of the industry in terms of profitability,

Productivity and innovatin.
 Aim at total customer satisfaction by rendering efficient and diversified
financial services through improved technology.
 Build a highly motivated and committed tea of staff by nurturing a good
work culture to achieve superior individual performance aiming to enhance
organizational effectiveness. Be the place of pride to all stakeholders.

1.4 Rationale of Studies

There are rationales or significant of this study among which some of them are
joined out below :
 Creates the perspective of look the problem
 Shows the relationship of the persent study with larger issue
 Shows the relevance of study to whom and why
 Shows the benefits after the completion of study

1.5 Review of Literature

This chaopter deals with the theoritical aspects of the topic of liquidity position
analysis of Siddhartha Bank in more detail and descriptive manner. For this study ,
journals, articals, and some research reports related with this topic have been
reviewed . This study has to refer lmost all books related to wih this topic
published. Some of the prior Reports by students of BBS regarding this topic have
also been reviewed.
1.5.1 Conceptual Review

One of the sensitive factor or element in the bank is Liquidity.Liquidity refers to

the convertibility assets into cash . It means how fast the assets can be change
into cash. There are many assets which are easily converted by the bank. Such as
cash in hand , Cash at bank, cash at central bank, investment in government
securities. But some assets are difficult to get converted into cash such as loan
and fixed assets.

Liquidity is also defied as the position or capability of bank to meet the current
obligation of customers such as payment of cheque, Payment of demand drafts,
disbursement of approved loan etc. Banks needs to maintain some reasonable
level of liquidiy to fulfill differnt commitments such as provide money to
Depositors when they demend for administrative expenses, for miantaining cash
bank's capacity to pay cash in exchange pf deposits, Liquidity is crucial in the
business like banking . Because if the bank has high liquidity , it can no earn a
desire profit and if the bank has the shortfall of liquidity it cannot satisfy the
customers. Inadequate liquifdity may leads to collapse of the bank while excess of
the liquidity is detrimental to banks profitability In order to remove demerits
associated with miantaining inadequate and excess liquidity, banks should
maintain an optimum level of liquidity