1

CHAPTER -1

INTRODUCTION

1.1 Background
A bank is a company that provides financial services of various sorts to various types
of customers. Its major function is to gather money from various people and to lend
that money out to other people. One of the most visible things that a bank does is to
take deposits from customers and act as a place for them to store their money. The
Customers put money in the bank and then can draw that in case of necessity.

A bank is financial institution, which deals with money and credit.lt is an institution
that provides a great variety of financial services. It accepts deposits from the public
and mobilizes the fund to productive sectors. It also provides remittance facility to
transfer money from one place to another. Generally, bank accepts deposits from
business institutions and individuals, which is mobilized into productive sectors
mainly business and consumer lending. So, it is also called a dealer of money.

Banks are regulated by the laws and central banks of their home countries; normally
they must receive a charter to engage in business. Banks are usually organized as
corporations. At present context, a bank may engage in different types of functions
such as remittance, exchange currency, joint venture. Underwriting, bank guarantee,
discounting bills etc. Banks are the principal source of credit for millions of
individuals and families and for many units of government. They are among the most
important financial institutions in the economy.

In the context of Nepal, it is very difficult to trace the correct chronological history of
the banking systems in Nepal because there are no sufficient historical records and
data about banking in Nepal. The history of banking in Nepal can be described as a
component of the gradual and organized development in the financial and economic
sphere of Nepalese life. Even now, the country's financial system is still at an early
stage. The existence of an unorganized market consisting of owners or wealthy
merchants, shop owners and other local lenders acted as a barrier to institutionalized
credit. These institutions, although underdeveloped, could still mobilize capital. For
many years, local farmers, owners, traders carried out some banking functions.
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The first bank of Nepal in its history was established in 1994 BS. Kartik 30 and
named as Nepal Bank Limited. It was established before the establishment of Nepal
Rastra bank, the central bank of Nepal. The bank has developed the culture of saving
Nepalese rupees by displacing the trend of using Indian rupees in Nepal. As well as
the culture of saving people's money and institutionalizing facilities. The role of the
bank has been praised as the first bank in the Country to promote and develop
industrialization, trade expansion, and the arrangement of import-export and
development of Nepalese economy. Nepal bank limited is a commercial bank which
obtained 'A' class from Nepal Rastra bank. Nepal bank limited has been established in
joint logistics of Nepal government and private entrepreneurs.

On June 1, 1945, the first Nepalese paper banknotes were issued tickets of the
Nepalese government. Since September 1945, their release continued the central
treasury. In 1955, the state bank act was adopted. On April 26.1956, the Nepal Rastra
bank began operations and in 1960- the issue of banknotes. A new law of 2002
confirmed its role as a central bank. Liquidity should neither be too low nor too high.
Rather, it should maintain a reasonable level. Whereas, profitability refers to the
revenues earned by firms. against their operations and incurred expenses. In order to
find the profitability level of firms, Profitability ratios are used, whereby it can clearly
be examined that where the firm stands in terms of profitability. Enhancement of
profitability is the ultimate purpose of every firm, and each of them strives to achieve
optimum profitability. Since, there is a significant relationship between liquidity and
profitability of the firm, so the firm is required to maintain optimum level of liquidity.
(Ali Khan & Ali, 2016).

In conclusion, we can say that banking is not static but a dynamic concept. It is a
product of centuries and the development which has taken place is the product of a
method of trial and error and experiences which were made and the results that
followed relating to the acceptance of money and valuables as deposits, keeping them
as such, lending them, whether to private individuals, to states or other bodies and for
controlling the multifarious and multi- dimensional activities which in the beginning
were only trivial and could be ignored but with the growth of time, become
international in character and multi-dimensional in nature. In this study, an attempt
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has been made to analyze and evaluate the trade- off between liquidity and
profitability of commercial Banks in Nepal. A bank has to perform several functions
and among such, maintaining a balance between liquidity and profitability is also
among one of the major function. In the absence of proper balance between liquidity
and profitability, a bank cannot function properly in the right direction. So, the bank
is always found paying the due consideration in maintaining the appropriate balance
between such. The profitability is the crucial factor in making stay of the bank or
commercial bank in the market for the long run because profit is the measuring rod of
the bank's long term sustainability and the survival. Only by being profitability a bank
can compete efficiently in the market to generate value and return to the investor's. As
for example the success of their unexpected multiplying the net worth to a greater
extent and exchanging market value of shares. A financial manager should
continuously evaluate the efficiency of its company in term of profit. A company or
firm should earn profit to service and grow over a long period of time. Profits are
essentials but it would be wrong to assume that every actions initiated b4y
management of the firms should be aimed at maximizing profit, irrespective of social
consequence. it is a fact that sufficient profit must be earn to sustain the operations of
the business to be able to obtain funds from investor for expansion and growth and to
contribute towards the social overheads for the welfare of the society to drive a
business firm towards the management of how effectively, a firm is being managed is
the major issue for an organization. Therefore, the researcher has selected this topic to
measure the overall efficiency of the business concern.

The development of the country is always measured by its economic development

through economic indices. Therefore, every country has given emphasis on its
economy. Nowadays, the financial institutes are viewed as catalyst in the process of
the economic growth and the mobilization of the domestic resources is the key factor
in the economic development. The financial institutes act as intermediaries by
transferring the resources from the point, of surplus to the deficit. A new organized
financial institution including financial companies, commercial banks and other
financial intermediaries play an important role for the development of the country.
They collect scattered financial resources from the mass and invest them among those
who are associated with the social, commercial, and economic activities of the
country.
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1.2 Profile of the Organization

NIC Asia Bank is one of the leading commercial banks in Nepal, established in 1998
as Nepal Industrial and Commercial Bank Ltd. (NIC Bank) and later merged with
Asia Bank Ltd. in 2013 to form NIC Asia Bank. It is headquartered in Kathmandu,
Nepal, and has a network of over 330 branches, extension counters, and ATMs across
the country.

The bank offers a wide range of banking and financial services, including deposit
products, loans, remittance, internet banking, mobile banking, SMS banking, and
debit/credit cards. It also provides services such as corporate banking, trade finance,
treasury, capital market operations, and international banking.

NIC Asia Bank has received several awards and recognitions for its services,
including "Best Commercial Bank in Nepal" by Global Banking & Finance Review
for five consecutive years (2016-2020) and "Best Bank in Nepal" by Euromoney
Awards for Excellence in 2018.

As of December 2021, the bank had total assets worth NPR 369 billion
(approximately USD 3.14 billion) and a net profit of NPR 4.6 billion (approximately
USD 39 million). The bank has a strong capital base with a capital adequacy ratio of
14.63%, well above the regulatory requirement of 11.5%. The bank's market
capitalization stood at NPR 40.74 billion (approximately USD 346 million) as of
December 2021.
This report is prepared primarily to fulfill the partial requirement of obtaining
bachelor degree under Tribhuvan University and to analyze the credit facilities of NIC
Asia Bank. Nic Asia Bank Limited carries banking activities through its 359
branches, 473 ATMs, 106 Extension counters and 81 branchless banking services in
the country. The commercial banking activities of the bank encompasses a wide range
of services including mobilizing deposits, providing investment facilities, discounting
bills, conducting money transfer and foreign exchange transactions, and performing
other related services such as safe keeping Collections and issuing guarantees,
acceptance and letter of credit.

NIC Asia Bank have different credits facilities of loans providing such as Personal
Loan, Education Loan, Auto Loan, Home Loan, Foreign Employment Loan, Fast
 5

Track Business Loan, Priority Business Loan, Working Capital Loan, Loans Against
Others Bank's Fixed Deposit Receipt and etc.

1.3 . Objectives
As of my knowledge cutoff in 2021, the objective of NIC Asia Bank was to provide
comprehensive banking services to its customers, while also maximizing shareholder
value and contributing to the overall economic development of Nepal. Some specific
objectives of the bank may have included:

 Providing a wide range of banking products and services to meet the diverse needs of
its customers, including retail and corporate banking, investment banking, and wealth
management.
 Maintaining a strong and stable financial position, through prudent risk management,
efficient operations, and strategic investments.
 Expanding its branch network and adopting new technologies to improve customer
convenience and access to banking services.
 Providing high-quality customer service and building long-term relationships with its
customers.
 Supporting the development of Nepal's economy by providing credit and financial
services to businesses and entrepreneurs, promoting financial inclusion, and
contributing to the overall growth of the financial sector.

1.4 Rationale
The rationale of NIC Asia Bank was to create a financially sustainable institution that could
provide quality banking services to the people of Nepal. Some specific factors that may have
contributed to the rationale of the bank include:

Market demand: There was a growing demand for banking services in Nepal, with a
significant portion of the population still unbanked. NIC Asia Bank was established to meet
this demand and provide convenient and accessible banking services to a wider range of
customers.
Economic growth: Nepal was experiencing rapid economic growth and development, which
created opportunities for banks to expand and contribute to the country's overall economic
growth.
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Regulatory environment: The government of Nepal had implemented policies to liberalize the
banking sector and encourage the establishment of new banks. NIC Asia Bank was
established in response to this favorable regulatory environment.

Competitive landscape: There were already several established banks operating in Nepal, but
NIC Asia Bank saw an opportunity to differentiate itself by offering innovative products and
services, leveraging new technologies, and providing superior customer service.

Entrepreneurial vision: The founders of NIC Asia Bank had a vision to create a bank that
could contribute to Nepal's development, while also generating profits for its shareholders.

1.5 Literature Review

A literature review is a comprehensive summary of previous research on a topic. The
literature review surveys scholarly articles, books, and other sources relevant to a
particular area of research. The review should enumerate, describe, summarize,
objectively evaluate and clarify this previous research. A literature review discusses
published information in a particular subject area, and sometimes information in a
particular subject area within a certain time period.

A literature review can be just a simple summary of the sources, but it usually has an
organizational pattern and combines both summary and synthesis. A summary is a recap
of the important information of the source, but a synthesis is a re-organization, or a
reshuffling, of that information. It might give a new interpretation of old material or
combine new with old interpretations. Or it might trace the intellectual progression of the
field, including major debates. And depending on the situation, the literature review may
evaluate the sources and advise the reader on the most pertinent or relevant.

 Banks and financial institutions are the vehicles through which public deposits are
mobilized in various development activity i.e. Agricultural, Industry. Trade,
Commercial Institution like commercial banks, development banks, financial
companies and various micro-financing institution with different model.”( Johnson,
1940: 130)

 Credit administration involves the creation and management of risk assets. The process
of lending takes into consideration about the people and system required for the
 7

evaluation and approval of loan request, negotiation of terms, documentation,

disbursement, administration of outstanding loans and workouts, knowledge of the
process and awareness of its strength and weaknesses are important in setting
objectives and goals for lending activities and for allocating available funds to various
lending functions such as commercial, installment and mortgage portfolios (Johnson,
1940: 132).

 The investor or whether banks, financial institutions, individuals, private or

government sector, must not take the proposal by making decision without having
adequate judgment because sometimes they perform out of norms, related studies,
policies and techniques. A project appraisal will best viable only if it has accessed
through conscious analysis as well as through thoroughly investment decisions to make
its macro and micro level viability effective.”(NRB, 2058: 125)
 “A Loan is Financial Assets resulting from the delivery of cash or to the assets by a
lender to a borrower in return for an obligation repay on specified date or dates or on
demand.” (Johnson, 1940: 45)
 Mr. Dipendra Joshi who has been already completed their research on this topic for
their Bachelor of Business Administration (BBA) of Pokhara University. He did this
research of a specific branch of Mahendranagar Branch. Joshi(2019)

1.5.1 Conceptual Review

NIC Asia Bank is one of the leading commercial banks in Nepal, established in 1998.
The bank has a diverse range of financial products and services, including deposit
accounts, loans, remittance, cards, and internet banking.

One of the key strengths of NIC Asia Bank is its strong digital banking services. The
bank has a user-friendly mobile app and internet banking platform that enables
customers to carry out various transactions, including bill payments, fund transfers,
and balance inquiries, from the convenience of their homes.

 In terms of lending, the bank provides a variety of loans such as personal loans, home
loans, business loans, and vehicle loans. The bank has also introduced innovative loan
 8

products such as the 'NIC Asia eLoan' which allows customers to apply for loans
online.

 NIC Asia Bank has a strong presence across Nepal with over 300 branches and
extension counters. This makes the bank easily accessible to customers across the
country, especially those in rural areas.

 Furthermore, the bank has been investing heavily in technology to enhance its
operations and customer experience. It has implemented various digital initiatives such
as chatbots, QR code payments, and biometric authentication for customer
transactions.

 In terms of financial performance, NIC Asia Bank has been consistently delivering
strong results with steady growth in its assets, deposits, and profits. The bank has a
strong capital base and is well capitalized to support its business growth.

 Overall, NIC Asia Bank is a reputable and reliable financial institution in Nepal,
known for its strong digital banking services, diverse range of financial products, and
customer-centric approach.

1.6. Research Methodology

Research methodology is the specific procedures or techniques used to identify,
select, process, and analyze information about a topic. In a research paper, the
methodology section allows the reader to critically evaluate a study’s overall validity
and reliability. The methodology section answers two main questions: How was the
data collected or generated? How was it analyzed? Research methodology refers to
the systematic and organized approach used by researchers to conduct scientific
investigations and answer research questions or test hypotheses. The research
methodology encompasses the methods, tools, and techniques used to gather data,
analyze it, and draw conclusions from the results.

There are two main types of research methodologies: qualitative and quantitative.
Qualitative research focuses on understanding the meaning behind phenomena, while
quantitative research is focused on numerical data and statistical analysis.
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The research process typically involves the following steps:

Defining the research problem: The researcher identifies a research question or
problem to investigate.
Conducting a literature review: The researcher reviews existing research and literature
related to the research question.
Formulating a research hypothesis: The researcher develops a hypothesis based on the
research question and literature review.
Designing the research study: The researcher determines the research design,
methodology, and data collection techniques to use.
Collecting data: The researcher collects data through various methods such as
surveys, experiments, or observations.
Analyzing data: The researcher analyzes the data collected using statistical analysis or
other methods.
Conclusions: The researcher draws conclusions from the analysis and determines the
significance of the results.
Reporting the findings: The researcher presents the research findings through
publications or presentations.

1.6.1 The research design

The major tool to analyze data is selected to commercial bank with the nature of data
and meets the Nepalese investors need. The tools and technique, which is suitable
elsewhere, may not be appropriate in our context. The information presented is
represented with tables. The tables will be helpful notice to notice the information at
glance and also assist to predict the future level. Research design refers to the plan or
strategy that a researcher develops to conduct a study or an experiment. It outlines the
overall approach, methods, and procedures that will be used to collect and analyze
data to answer research questions or test hypotheses. The research design is crucial as
it helps ensure the validity, reliability, and generalizability of the study's findings

The key components of a research design include:

Research question or hypothesis: This is the main question that the research aims to
answer or the hypothesis that the research seeks to test.
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Study population and sample: The study population is the group of individuals or
objects that the research targets, while the sample is the subset of the population that
is actually studied.

Data collection methods: These include the methods and instruments that the
researcher uses to collect data from the study participants or objects. Examples
include surveys, interviews, questionnaires, observations, and experiments.

Data analysis techniques: These are the techniques that the researcher uses to analyze
and interpret the data collected in the study. Examples include statistical analyses,
content analysis, and thematic analysis.

Ethical considerations: These refer to the ethical principles and guidelines that the
researcher must follow to ensure the safety, privacy, and confidentiality of the study
participants.

Time frame: This refers to the duration of the study, including the time required for
data collection, analysis, and reporting.

Overall, a well-designed research study should have a clear and concise research
question, a well-defined study population and sample, appropriate data collection and
analysis methods, ethical considerations, and a realistic time frame. These elements
help ensure that the study is scientifically rigorous and can produce meaningful and
useful results.

1.6.2 . Types of Research Design

A research design refers to the overall plan or strategy that a researcher employs to
answer a research question or investigate a hypothesis. There are various types of
research designs, including:

 Experimental design: In an experimental design, the researcher manipulates

one or more independent variables to determine their effect on the dependent
variable.
 Quasi-experimental design: This design is similar to an experimental design,
but the researcher does not have complete control over the independent
variable.
 Correlation design: This design aims to establish the relationship between two
or more variables.
 Survey design: In a survey design, the researcher collects data through the
administration of a questionnaire or interview.
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 Case study design: This design involves an in-depth examination of a

particular case or instance to gain insight into a particular phenomenon.
 Longitudinal design: In a longitudinal design, the researcher collects data over
an extended period to observe changes or developments in a particular
phenomenon.
 Cross-sectional design: This design involves the collection of data from a
sample of individuals or groups at a single point in time.
 Mixed-methods design: This design combines qualitative and quantitative data
collection methods to gain a more comprehensive understanding of a
particular phenomenon.

1.6.3 Types of Data

Data collection is the most essential factors in report writing. Data collection is the
most important for the project work. There are two types of data which use in data
collection. The types of data are:-

i. Primary Data
Primary Data are those types of data which is originally obtained through first- hand
investigation. It includes information collected from interview, observation, survey,
questionnaire, focus group and measurements.

ii. Secondary Data

Secondary data is the data that is collected by someone else not by users. The
data collected by government department, organizations, and semi-
government and private publications are the sources of the secondary data.
In this research, secondary data are used to bring more accuracy.

1.6.4. Population and Sample

In Nepal there are 21 commercial banks. There are many banks, which are actively
operating their activities in market. It is not possible to study all of them regarding the
research topic. Therefore among them, one reputed bank is taken as a sample bank i.e.
NIC ASIA BANK LIMITED from population for this research study. The population
of Nic Asia Bank Nepal would be all the customers who have ever used the services
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of the bank. This includes individuals and organizations who have opened accounts,
taken loans, used credit cards, and other financial services provided by Nic Asia Bank
Nepal.

Since it may not be feasible to study the entire population of Nic Asia Bank Nepal, a
sample can be taken instead. The sample would be a subset of the population, selected
in such a way that it is representative of the entire population. The sample could
include a random selection of customers from different regions of Nepal, with
different demographics, account types, and service usage patterns.

The sample size would depend on the research objectives, the level of precision
required, and the resources available. A larger sample size would generally provide
more accurate results, but it would also be more costly and time-consuming to collect
and analyze data from a larger sample.

It's important to note that the population and sample can differ depending on the
research question and objectives. For example, if the research question is about the
performance of a specific branch of Nic Asia Bank Nepal, the population would be
customers who have used services at that branch, and the sample would be a subset of
those customers who can be contacted for data collection.

1.6.5 Sources of Data

The main sources of data for this study are secondary data. According to the
requirement, published balance sheets, profit and loss account and other related
statements of account. For the purpose of study, various related books, booklets
magazines, journals, newspapers and thesis made in this field have been referred.
Personal queries, discussion and consultations are also done. Sources of data refer to
the different types of information that you can use to gather data for your report.
Depending on the nature of your report, the sources of data can vary widely. Here are
some common sources of data that you might consider while drafting a report:

Primary sources: These are original sources of information, such as surveys,

interviews, observations, and experiments, that you collect yourself.
Secondary sources: These are sources of information that have been collected and
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analyzed by someone else, such as reports, articles, books, and online databases.
Internal sources: These are sources of information that are specific to your
organization or company, such as financial statements, sales reports, and customer
feedback.
External sources: These are sources of information that are outside of your
organization or company, such as industry reports, market research, and government
statistics.
Online sources: These are sources of information that are available on the internet,
such as websites, blogs, and social media.
Printed sources: These are sources of information that are available in print, such as
books, newspapers, and magazines.
Expert sources: These are sources of information that are provided by experts in a
particular field, such as consultants, industry professionals, and academics.
It's important to use a variety of sources of data to ensure that your report is
comprehensive, accurate, and reliable.

1.6.6 Data Collection Technique

Both the primary and secondary data were used for the preparation of this report.
Necessary and required data were collected from the corporate department of NIC
Asia Bank. Concerned personnel of the respected department were in contact. For
primary data interview, field visit, and personal observation have been considered for
gathering the information. And for secondary data, annual report of NIC Asia Bank,
related academic books and literature, bank’s internal reports, files and others have
been considered for making this report authentic and more realistic. The concerned
personnel provided all the consolidated data records as per the requirement of the
report. The data compiled were classified and tabulated to the need of the study
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1.7. Limitation of the study

As the above is being carried out in a partial fulfillment of the requirement for the
degree, Bachelor of Business Administration it possesses number of limitations of its
own kind. Some of the limitations of the study are as follow:
 This study has limited to the study of Credit Facilities of Nic Asia Bank out of
21commercial banks.
 This study is based on and secondary data
 Simple techniques had been used in analysis.
 The records of limited are used to analyze the performance.
 This study only focuses on profitability of the bank.
The study has been done according to the information provided by the bank. And
bank and the information provided by them had been believed to be true.
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CHAPTER:2
DATA PRESENTATION AND ANALYSIS

NIC ASIA Bank has its antecedents in NIC bank which was established on 21st July
1998. The bank was rechristened as NIC Asia bank after the merger of NIC bank with
bank of Asia Nepal on 30th June 2013. This was a historic merger in the annals of
Nepalese financial landscape as the first of its kind merger between two successful
commercial banks in the country. Today, NIC Asia has established itself as one of the
most successful commercial banks in Nepal.
During the post merger integration phase. NIC Asia managed the transition very
smoothly receiving accolades from the regulators as well as the stakeholders, paving
the way for other mergers and consolidation in the Nepalese financial sector. After the
merger, NIC Asia was recognized as "bank of the year 2013 Nepal" by the banker,
financial times, UK. This is the second time that the bank was recognized with this
precious award, the previous occasion being in 2007.

NIC Asia bank is now, one if the largest private sector commercial banks in the
country in terms of capital base, balance sheet size, number of branches, ATM
network and customer base. The bank has 359 branches, 106 extension counters, 81
branch less banking and 473 ATMs across Nepal with a network covering all major
financial centers of the country. The bank strongly believes in meritocracy,
transparency, professionalism, team spirit and service excellence. These core values
are internalized by all functions within the bank and are reflected in all actions the
bank takes during the course of its business. The vision of this bank is to ensure
creation of optimum values for all the stakeholders. Its mission is to be a bank of
choice for all the stakeholders.

The bank is run by professionals having sound experience and exposure in

commercial banking in Nepal as well as in international markets. Mr. Roshan Kumar
Neupane is the CEO of the NIC Asia Bank whereas Mr. Sudhir Nath Pandey and Mr.
Santosh Kumar Rathi are the Deputy Chief Executive Officer. Its management team
is very creative and effective. During the review period, the bank has formulated and
implemented "Corporate governance policy 2015" which shall further strengthen the
 16

bank's corporate governance practices and values across all levels and activities of the
bank. The main objectives of the policy are as follows:
 To lay down a framework for achieving the vision. Mission and objectives of
the bank in an effective and efficient manner.
 To lay down a foundation for sound organizational development, planning
succession, control and performance.
 To lay down a comprehensive framework that instills, monitors. Reviews and
reacts to pertinent corporate governance issues so as to protect the legitimate
interest of all the stakeholders.
 To ensure that all activities of the bank are carried out in due compliance with
applicable acts. regulations and directives and
 To lay down a broad framework for formulation of other policies, manuals and
guidelines of the bank.

As a responsible corporate citizen of the country, the bank has been involved in
contributing to the society in various as a part of its corporate social responsibility
(CSR). In order to promote and focus on CSR activities the bank has established a
charitable foundation called NIC Asia foundation. The bank has committed to pledge
1% of its net profit every year to the NIC Asia foundation for promoting various CSR
related

In the past, the NIC Asia foundation has carried out various activities including but
not limited to distributing disaster relief packages to the victims of various disasters,
contributing to the prime minister relief fund, organizing health camps, organizing
blood donation camps, providing support to old ages homes and orphanages,
providing scholarships to the needy students etc. A significant number of people have
been benefitted, directly or indirectly by the activities carried out by the foundation.
Thefoundation plans to continue the same in the future as well.
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2.1 Rate of Interest Provided by NIC Asia Bank Limited

NIC Asia bank limited offer education loan, residential home loan, auto loan, SME
loan offer, personal loan etc with customer affordable lending rates. During
preparation of report this bank is providing 11% interest rate for fixed deposit
whereas 8.42% interest rate for the saving accounts. Further, the bank provides
exciting interest rates on saving deposits, fixed deposits, recurring deposits, foreign
currency deposits. Some of the popular savings accounts of this bank are as the
follows:
i. Sarbashrestha Suniya Maujdat Khata
This is the most popular saving account of the bank where most of the people are
opened their accounts for saving purpose. It's not need to have deposit some
minimum balance. It is specially designed for the general public of all income
levels, age groups and gender. Currently it is providing 8.42% interest to their
customers. Required documents are; PP size photo and original citizenship/voter
ID/Driving License. In case of NRN, NRN card.

ii. Sarbashrestha Jestha Nagarik Bachat Khata

Sarbashrestha Jestha Nagarik Bachat Khata is an interest bearing saving account
scheme targeted to the senior citizen of 55 years and above. Required documents
are; PP size photo and original citizenship/voter ID/Driving License. In case of
NRN, NRN card.

iii. Sarbashrestha Remittance Bachat Khata IPO

This is for Nepalese workers working abroad through work pemits issued by
government of Nepal. The securities board of Nepal has implemented securities
issuances regarding IPO quota allocation for Nepalese workers. Therefore,
Nepalese workers working abroad through works permits issued by the
government of Nepal shall be eligible for a 10% quota of the total IPO. Required
documents are; PP size photo and original citizenship/voter ID/Driving License.
In case of NRN, NRN card.
Additional documents are required; valid visa of the concerned country, valid
work permit from the government of Nepal.
Some of the special accounts and rate of interest are showing by the help of
following tables:
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Table no.2.1
LCY Muddati Khata
Interest
S.N. LCY Muddati Khata Rate
1 Sarbashrestha Muddati Khata-General 11.00%
2 Sarbashrestha Remittance Muddati Khata-General 12.00%
3 Masik Nichhep Khata 11.00%

Source by Nic Asia Bank web sites

Table no.2.2
Fixed Deposit Products
Interest Rate (per
Fixed Deposit Products Tenure annum)
Individual-General 3 Months to 5 Years 11.00%
Individual Mashik
Nichhep 3Months to 5 Years 11.00%
Individual-Remittance 3 Months to 5 Years 12.00%
Institutional 6 Months to 5 Years 9.00%
Source by Nic Asia Bank web sites
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Table no.2.3
FCY Fixed Deposit
Rate (% per
FCY Fixed Deposit Minimum Balance annum)
As per NRB
Call Deposit (USD) Nil Directives
Call Deposit (EURO, GBP, JPY, As per NRB
AUD) Nil Directives

Source by Nic Asia Bank web sites

Table no.2.4
FCY Fixed Deposit

Normal NRN/Foreign
Rate (% per Intuition (%
FCY Fixed Deposit Tenure annum) per annum)
FCY Fixed Deposit 3 Months to 1 Year
Account (USD) for Individual, up to 7.25% Up to 8.25%
FCY Fixed Deposit 3 Months to 1 Year
Account (EURO) for Individual, up to 5.50% Up to 6.50%
FCY Fixed Deposit 3 Months to 1 Year
Account (JPY) for Individual, up to 3.90% Up to 4.90%
FCY Fixed Deposit 3 Months to 1 Year
Account (AUD) for Individual, up to 6.60% Up to 7.60%

Source by Nic Asia Bank web site

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Deposit Note:
1. Interest Payment Frequency shall on a quarterly basis
2. For all fixed deposits (LCY and FCY) minimum tenure shall be 3 months for
Individual Depositors and 6 months for Institutional Depositors.
3. For Institutional Bidding Fixed Deposit (LCY and FCY), an additional 0.5%
interest rate shall be added to the rate mentioned above.
4. The interest rate on Akshyakosh Deposit shall be negotiable as per NRB
Directives.
5. For NRN Saving & FD (FCY) 1% additional rate shall be provided and the
tenure of FD shall be 1 year only.

Table no.2.5
Lending Rates

Lending Rates
Retails Interest (% p.a.)
Auto Loan Base rate + Up to 5%
Home Loan Base rate + Up to 5%
a. Home Loan OD Base rate + Up to 5%
b. Home Equity Loan Base rate + Up to 5%
c. Residential Home Loan Base rate + Up to 5%
Gold Loan Base rate + Up to 5%
Loan Against Shares Base rate + Up to 5%
Personal Loan Base rate + Up to 5%
Educational Loan Base rate + Up to 5%
Foreign Employment Loan Base rate + Up to 5%
Loyalty Financing Facility Base rate + Up to 5%

Source by Nic Asia Bank web sites

 21

Table no. 6
Lending Rates
Lending Rates Interest (% p.a.)
Floating Rate (% per
SME annum)
Fast Track Business Loan Base Rate + Up to 5%
Priority Business Loan Base Rate + Up to 5%
Premium Business Loan Base Rate + Up to 5%
Base Rate + Up to
2%(Guided as per NRB
Commercial Agriculture and Livestock Loan Regulations)
Floating Rate (% per
Corporate annum)
Import Credit/TR.Loan Base Rate + Up to 5%
Overdraft/Cash Credit/Working Capital Loan Base Rate + Up to 5%
Term Loan Base Rate + Up to 5%
Other Short Term Working Capital Loan Base Rate + Up to 5%
Floating Rate (% per
Deprived Sector Lending annum)
Deprived Sector Lending Base Rate + Up to 5%
Floating Rate (% per
Others annum)
Export Credit Base Rate + Up to 5%
Loan Against own FDR Base Rate + Up to 5%
Loans Against Others Bank's Fixed Deposit Receipt Base Rate + Up to 5%
Loan Against 1st Class Bank Guarantee Base Rate + Up to 5%
Loan Against Government Securities (max
drawdown 80%) Base Rate + Up to 5%
Equipment Financing Base Rate + Up to 5%
FCY Loan As per NRB Directive
Source by Nic Asia Bank web sites
Notes:
 Base rate for the month Magh 2079 is 10.71%
 Interest spread rate for the month Ashwin 2078 is 4.08%
 Rate on default account and watch list account may vary from the above
published rates.
 Interest rate on consortium loans shall be as decided by consortium.
 Interest rates in specified loans directed by Nepal Rastra bank(like agricultural
loan for youth. refinance, export oriented units in FCY, deprived sector loans
to minorities, senior citizen, differently able, widow, war victims, etc) shall be
as stated by Nepal Rastra bank circular/directive.
 22

 Penal interest rate shall be charged at the rate of additional 2% p.a. on

principal overdue and/or interest overdue on loan amount or deal or contract
outsourcing from the time interest and/ or principal becomes overdue on the
respective loan amount or deal or contract.
 In case of temporary overdrawn account highest published rate for the amount
excess to the limit shall be charged.
 Other interest rates remain unchanged.

2.3 . Credit Facilities of NIC Asia Bank

Credit is financial assets resulting from the delivery of cash or other assets by a lender
to a borrower in return for an obligation of repay on specified date on demand. Credit
is the amount of money lent by the creditor (bank) to the borrower (customers) either
on the basis of security or without security. Sum of the money lent by a bank, is
known as credit (Oxford Advanced Learners Dictionary, 1992: 279). Credit and
advances is an important item on the asset side of the balance sheet of a commercial
bank. Bank earns interest on credits and advances, which is one of the major sources
of income for banks. Bank prepares credit portfolio, otherwise it will not only add bad
debts but also affect profitability adversely (Varshney and Swaroop, 1994: 6)

1. Residential home loan: It is an attractive financing scheme bundled with

special features to purchase/construct your dream house and live with family
happily ever after. The current interest rate of home loan is 14.99% up to 10
years. You can explore residential home loan for following purpose:
 Purchase of house
 Construction of house
 Repair/ Renovation and re-construction of house
 Refinancing of existing home loan

Feature:

 Competitive interest rate

 Credit facility as term loan up to 15 million
 Flexible loan tenure up to 50 years
 Easy documentation
 23

 Hassle free loan processing

2. Auto loan: NIC Asia auto loan is an exclusive financing option to "move in
style" by owing a vehicle of your own choice. With an aim to enhance and
upgrade your automobile experience, there are varieties of auto loan scheme
available with simple loan processing and minimum turnaround time.

Feature:

 Competitive interest rate

 Attractive financing limit

• Up to 50% of VAT Bill for individuals

• Up to 80% of VAT bill for firm/companies

 Flexible loan tenure, up to 15 years

 Easy documentation
 Hassle free loan processing
 Loan facility for purchasing various type of vehicles-
 Private/red plated vehicle
 Semi-commercial vehicle
 Green plated vehicle
 Commercial/black plated vehicle

3. Loan against mortgage property: It is an attractive financing scheme bundled

with special features to finance your personal requirements.

Feature:

 Competitive interest rate

 Credit facility as term loan and/or overdraft/demand loan
 Flexible loan tenure up to 50 years
 Easy documentation
 Hassle free loan processing
 24

4.Loan against shares: With NIC Asia bank's loan against shares, you can get an
overdraft/demand loan facility against the securities of shares. This is an instant
solution if required cash within a short period of time with simple documentation and
processing.

Feature:

 Loan against pledge of shares of acceptable traded companies

 Attractive interest rate
 Fastest loan processing
 Hassel free and easy documentation

5. NIC Asia personal loan(NAPL): NIC Asia personal loan is a non-collateral based
loan scheme especially designed to facilitate Nepalese salaries individuals and
professionals to meet their individual financial requirements; offers lower monthly
obligation and hassle-free services along with fastest service delivery to our valued
customers.
Feature:
 Credit facility as term and overdraft/demand loan in monthly payment
 Minimum loan amount of NPR 0.3 million to maximum up to NPR
 1.5 million
 Loan tenure up to 5 years, subject to the annual review
 Competitive interest rate
 Easy documentation
 Hassle free loan processing
6. NlC Asia education loan: NIC Asia education loan is a collateral based loan
specially designed to facilitate Nepalese students to meet their financial
requirements to pursue higher education above +2 levels in Nepal or abroad.

Feature:

 Loan amount of minimum NPR 0.3 million to maximum NPR 10 million

 Term loan facility with a tenor of up to 15 years excluding moratorium period
 Up to 100% financing of total cost considered subject to valuation of
collateral.
 25

 Accept collateral type

• Land and/or building
• Fixed deposit
 Flexible repayment option
 Hassle free processing
 Competitive interest rate

7.Foreign employment loan: Now don't worry about the expenses to go abroad for
employment. NIC Asia bank introduces foreign employment loan, a new type of
collateral based loan targeted to people who are going to foreign country for
employment purpose.

Feature:

 Competitive interest rate

 Credit facility as term loan and overdraft/demand loan
 Loan tenure up to 5 years, subject to the annual review
 Easy documentation
 Hassle free loan processing

8.Gold loan: NIC Asia bank introduces NIC Asia gold loan, one of the easiest and
fastest loan schemes of the banking industry. NIC Asia gold loan offers hassle free
credit facility with flexible repayment options to our valued customers. Major
features of NIC Asia gold loan are:

Loan limit: Minimum NPR 30000/- and maximum NPR 50 million

Financing up to:

 70% against pledge of gold ornaments

 80% against pledge of fine gold bar and gold coins
Free insurance coverage of pledged gold

Facility type: Demand loan and overdraft

Interest rate: As published by the bank payable on quarterly basis(as per Nepali
calendar)
 26

Period: Maximum 2 (two) year (if required- to be renewed every year from the date of
maturity)
Partial payment allowed

Eligibility:

 Nepali citizens: 18 years and above

 Duly registered companies
Available at following branches:

3.1 Finding
The Finding of Credit Facilities analysis of NIC Asia Bank will provide more services
to the public and businessman to survive their proper daily work. It is most effective
to run the business and economy of the country. Some of the action implications are
as follows:
 It is help to run the business properly and providing chance of employment in
the country.
 It is help to the general people to save their money with handsome interest
rate.
 It is help to the customers to provide different types of loan to make them
satisfied.
 This bank is strictly maintaining their liquidity ratio and easily provides cash
to their customers.
 The affordable interest of loan will helps to survive their business in the
industry.
 27

CHAPTER: 3
SUMMARY AND CONCLUSION
3. 1.Summary
Nic Asia Bank Limited carries banking activities through its 359 branches, 473
ATMs, 106 Extension counters and 81 branchless banking services in the country.
The commercial banking activities of the bank encompasses a wide range of services
including mobilizing deposits, providing investment facilities, discounting bills,
conducting money transfer and foreign exchange transactions, and performing other
related services such as safe keeping, collections and issuing guarantees, acceptance
and letter of credit.

NIC Asia Bank have different credits facilities of loans providing such as Personal
Loan, Education Loan, Auto Loan, Home Loan, Foreign Employment Loan, Fast
Track Business Loan, Priority Business Loan, Working Capital Loan, Loans Against
Others Bank's Fixed Deposit Receipt and etc.

NIC Asia Bank have different saving accounts with different attractive interest rate in
the comparison of others banks. Some of the popular savings accounts are:
Sarbashrestha Sunya Maujat Bachat Khata, Sarbashrestha Remittance Bachat Khata-
Ambassador, SarbashresthaTalab Bachat Khata-The NIC ASIA Goodwill
Ambassador and etc.

NIC Asia bank is now, one of the largest private sector commercial banks in the
country in terms of capital base, balance sheet size, number of branches, ATM
network and customer base. This is one of the most prominent banks in Nepal. It is
well known organizational reputation, expertise, professionalism. The report is
analytical and descriptive in nature. The report was entitled “Credit Facilities of NIC
Asia Bank Limited”. For preparing this report researcher use only secondary data.
Qualitative and quantitative both data were analyze in this repot and data were
presented by using the Microsoft.
 28

The board of director of this bank are: Mr. Tulsi Ram Agrawal as a Chairman and Mr.
Trilok Chand Agrawal, Mr. Ram Chandra Sanghai, Mr. Keshav Prasad Lamsal, Mr.
Aditya Kumar Agrawal and Mrs. Bijayaswar are the directors.

3.2. Conclusion
This study has been analyzed the Credit Facilities of NIC Asia Bank Limited. Credit
facilities are playing very important role in banking system. Most of the individual,
stakeholders, investors and business are financing from the bank to run their works
properly. In above report have been already describe about different types of credits
facilities by the NIC Asia Bank to their customers. Forexample: Personal Loan,
Education Loan, Auto Loan, Home Loan, Foreign Employment Loan, Fast Track
Business Loan, Priority Business Loan, Working Capital Loan, Loans Against Others
Bank's Fixed Deposit Receipt and etc.

This bank is also provide different types of saving accounts in that customers are
easily save their amounts and also gets handsome interest rate from that. Some of the
popular accounts are:Sarbashrestha Sunya Maujat Bachat Khata, Sarbashrestha
Remittance Bachat Khata-Ambassador, Sarbashrestha Talab Bachat Khata-The NIC
ASIA Goodwill Ambassador and etc.
Credit facilities are also quietly important to developed the country economy and
makes the prosper Nepal. Most of the business are running from the bank loan and
provides different goods and services to the general public.
 29

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 www.nicasiabank.com
 www.scribd.com
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