DEPOSIT MOBILIZATION OF RELIANCE

FINANCE LIMITED

A Project Work Report

Submitted by:
Anu Rai
T.U. Regd. No: 7-2-0202-0252-2018
Symbol number: 702020022
Damak Multiple Campus

Submitted to:
The Faculty of Management

Tribhuvan University

Kathmandu

In Partial fulfilment of the Requirements for the Degree Of

BACHELOR OF BUSINESS STUDIES

(BBS)

Baishak 2080

Damak, Jhapa
 DECLARATION

I hereby declare that the project work entitled “Deposit Mobilization of Reliance Finance
Limited” submitted to the Faculty of Management, Tribhuvan University, Kathmandu is my
original work done in the form of partial fulfilment of the requirement for the degree of
Bachelor of Business Studies (BBS) under the supervision of MR. Tej Prasad Acharya,
faculty member, Damak Multiple Campus, Damak, Jhapa. This project work report has not
been submitted to any other institution or university for the reward of anydegree or diploma.

Signature:

Anu Rai

Date: 02/01/2080

ii
 SUPERVISOR’S RECOMMENDATION

The project work report entitled “Deposit Mobilization of Reliance Finance Limited”
Submitted by Anu Rai of Damak Multiple Campus, Damak, Jhapa, is prepared under my
supervision as per the procedure and format requirements laid by the Faculty of Management,
Tribhuvan University, Kathmandu, as partial fulfilment of the requirement for the award of
the degree of Bachelor of Business Studies (BBS). I, therefore, recommend the project work
report for evaluation.

Signature: ……………….

MR. Tej Prasad Acharya

Supervisor

Damak Multiple Campus, Damak, Jhapa

Date: 02/01/2080

iii
 ENDORSEMENT

We hereby endorse the project work entitled “Deposit Mobilization of Reliance Finance
Limited” submitted by ANU RAI of DAMAK MULTIPAL CAMPUS, DAMAK, JHAPA, in
partial fulfilment of the requirements for the award of the degree of Bachelor of Business
Studies (BBS) for external evaluation.

Signature: ……………….. Signature: …………….

Mr. Tej Prasad Acharya Dr. Netra Bahadur Budhathoki
(Management Research Committee) (Campus Chief)
Date: Damak Multiple Campus
Date:

iv
 ACKNOWLEDGEMENT
Let me begin my acknowledgement by thanking a number of people and faculty for providing
suggestion and guidance throughout the preparation of my project work. So, I am thankful to
them for their continued support and advice. First of all, I am very much grateful to the
Tribhuvan University authorities to include this project work program in the syllabus of BBS
4th year, which, I think is very much helpful in the development of practical knowledge of the
students. I take this opportunity to express my profound gratitude and my deep regard to my
lecturer Mr. Tej Prasad Acharya for this thesis and also respected campus chef Mr. Netra
Bahadur Budhathoki for providing instruction to this assignment. I am obliged to staff
members of Reliance finance for the valuable information provided by them in their
respective fields. I am grateful for their cooperation during my assignment. Moreover,
number of friends had always been around to support me through hardships that occurred in
the process. I would like to thank all those helping hands that assisted me directly and
indirectly for preparing report.

Thank You!

Anu Rai

v
 TABLE OF CONTENTS

PAGE NO
TITLE……………………………………………………………………………………….. i
DECLARATION……………………………………………………………………………. ii
RECOMMENDATION……………………………………………………………………... iii
ENDORSEMENT…………………………………………………………………………… iv
ACKNOWLEDGEMENT…………………………………………………………………... v
TABLE OF CONTENT……………………………………………………………………... vi
LIST OF TABLES…………………………………………………………………………... vii
LIST OF FIGURES………………………………………………………………………….. viii
ABBREVIATIONS………………………………………………………………………….. ix
CHAPTER – 1: INTRODUCTION………………………………………..……………… 1-14
1.1 Background…………………………………………………………………………….. 1
1.2 Brief Profile of Organization…………………………………………………………… 2
1.2.1 History of Finance…………………………………………………………………….. 3
1.3 Objectives…………….…………………………………………………………………. 4
1.4 Rational…………………………………………………………………………………. 4
1.5 Review of Literature…………………………………………...………………………... 5
1.5.1 Conceptual Review……………………………………………………………………. 5
1.5.2 Types of Deposit………………………………………………………………………. 7
1.5.3 Deposit Mobilization…………………………………………………………………... 9
1.6 Research Methods……………………………………………………………………….. 12
1.6.1 Research Design……………………………………………………………………….. 12
1.6.2 Source of Data…………………………………………………………………………. 12
1.6.3 Data collection Technology……………………………………………………………. 12
1.7 Limitation of the Study…………………………………………………………..………. 14
CHAPTER - 2: RESULT AND ANALYSIS…………………………………………….. 15-20
2.1 Data Presentation…………………………………………………………….………........ 15
2.2 Findings……………………………………………………………………...……………. 20
CHAPTER - 3: SUMMARY AND CONCLUSION…………………………………….. 21-23
3.1 Summary………………………………………………………………………………….. 21
3.2 Conclusion………………………………………………………………………………... 23
BIBLIOGRAPHY……………………………………………………………………………. 24
APPENDIX

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 LIST OF TABLES

Table 1: Credit to Deposit Ratio ........................................................................................... 16

Table 2: Growth Rate in Deposit .......................................................................................... 17

Table 3: Deposit to Assets Ratio ........................................................................................... 18

Table 4: Total Deposit to Core Capital ................................................................................ 19

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 LIST OF FIGURES

Figure 1: Credit to Deposit Ratio ......................................................................................... 16

Figure 2: Growth Rate in Deposit ........................................................................................ 17

Figure 3: Deposit to Assets Ratio .......................................................................................... 18

Figure 4: Total Deposit to Core Capital .............................................................................. 19

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 ABBREVIATION

PVT = Private

LTD = Limited

F.Y = Financial Year

BBS = Bachelor of Business Studies

CD = Certificate of Deposit

LC = Letter of Credit

NRB = Nepal Rastra Bank

RBI = Reserve Bank of India

RLFL = Reliance Finance Limited

TU = Tribhuvan University

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 1

CHAPTER I
INTRODUCTION

1.1 Background of the Study:

"Finance" is a generic term that refers to a range of financial institutions that provide various
financial products and services to individuals and businesses. Deposit mobilization is a crucial
aspect of the operations of financial institutions as it provides a stable source of funding to
meet the lending requirements of their clients.
Financial institutions offer various deposit products, including savings accounts, fixed
deposits, recurring deposits, call deposits, and other digital deposit products. Savings accounts
are low-risk deposits that offer a lower rate of interest than fixed deposits. Fixed deposits are
time-bound deposits that offer a higher rate of interest than savings accounts. Recurring
deposits are deposits where customers deposit a fixed amount of money every month for a
predetermined period, and the interest rate is generally higher than savings accounts. Call
deposits are deposits that can be withdrawn anytime, and the interest rate is generally higher
than savings accounts.
Financial institutions use various marketing strategies to encourage customers to deposit with
them. These strategies include offering competitive interest rates, personalized services, and
convenient banking services. Financial institutions also offer digital banking services such as
mobile banking and internet banking, which enable customers to deposit and withdraw money
through digital channels.
Financial institutions implement various measures to ensure the safety and security of
customer deposits. These measures include maintaining a minimum statutory reserve ratio and
liquidity ratio, complying with regulatory requirements, and having a strong risk management
system in place. In some countries, deposit insurance schemes are also in place to protect
customers' deposits.
In conclusion, deposit mobilization is a crucial aspect of the operations of financial
institutions, and various deposit products and services are offered to meet the diverse needs of
customers. Financial institutions use various marketing strategies to encourage customers to
deposit with them, and various measures are implemented to ensure the safety and security of
customer deposits.
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1.2 Brief profile of Reliance Finance Limited

Reliance Finance Limited is a financial institution based in Nepal, licensed by Nepal Rastra
Bank, the central bank of Nepal. The institution provides a range of financial products and
services, including deposit mobilization, lending, remittance, and other financial services.
Deposit mobilization is a critical aspect of the financial institution's operations as it provides a
stable source of funding to meet the lending requirements of the institution's clients. Reliance
Finance Limited offers various deposit products, including fixed deposits, savings deposits, call
deposits, and recurring deposits, among others.
Reliance Finance Limited has a well-established network of branches across Nepal and offers
various incentives to encourage customers to deposit with them. The institution offers
competitive interest rates, convenient banking services, and personalized services to meet the
diverse needs of its customers.
In addition to traditional deposit products, Reliance Finance Limited also offers digital deposit
products such as e-saving accounts, which enable customers to deposit and withdraw money
through digital channels. The institution has also partnered with various payment service
providers to offer mobile banking and internet banking services to its customers.
Reliance Finance Limited has implemented various measures to ensure the safety and security
of customer deposits. The institution has a strong risk management system in place, and its
deposit products are insured by the Deposit and Credit Guarantee Corporation of Nepal. The
institution also complies with regulatory requirements, including maintaining a minimum
statutory reserve ratio and liquidity ratio.
In conclusion, Reliance Finance Limited is a well-established financial institution in Nepal that
offers a range of deposit products and services to meet the diverse needs of its customers. The
institution has a strong network of branches, digital banking services, and robust risk
management systems to ensure the safety and security of customer deposits.
There are many financial institutions operating in Nepal’s financial market, among them
Reliance Finance Limited is one of the leading financial institutions of Nepal. Reliance Finance
Limited is a ‘C’ Class Financial institution, incorporated in 2066 B.S, licensed by Nepal Rastra
Bank, to undertake financial services in the country. It started its operations since 18th
Mangshir 2066 as 84th Finance Company of Nepal under the Bank and Financial Institution
(BAFIA) Act 2063. RFL has 10 branches all across the nation with its head office in
Kathmandu which provides entire commercial financial services. Within a short span of time,
RFL has been able come up with a wide range of products and services that best suits its
clientele. RFL has been posting growth in its portfolio size and profitability consistently since
 3

the beginning of its operations. The management of the RFL has been thoroughly professional.
Reliance Finance Limited has been able to gain significant trust of the customers and all
other stakeholders to become one of the most promising financial institution in the country in
less than 12 years of its operation. The financial institution is fully committed towards
customer satisfaction.
1.2.1 History of Finance Companies in Nepal:
The evolution of Finance Companies in Nepal also can be divided into parts:
• Evolution of industry
• Evolution of commerce

1) Evolution of companies:
The evolution of financial companies has been shaped by various factors, including changes in
technology, regulation, and consumer behavior. Here are some key stages in the evolution of
financial companies:
✓ Early financial companies: In the early stages of financial services, banks and other
financial companies provided basic services such as lending, deposit-taking, and
currency exchange. These services were provided mainly through physical branches
and were limited to a few geographies.
✓ Expansion of services: Over time, financial companies began to expand their services
to include investment management, insurance, and other financial products. This
expansion was driven by changes in consumer needs and regulatory changes that
allowed financial companies to offer a wider range of products and services.
✓ Technology-driven innovation: With the rise of the internet and digital technologies,
financial companies began to adopt new technologies to improve efficiency and offer
new services. This included the introduction of online banking, mobile banking, and
digital payment services.
✓ Fintech disruption: In recent years, fintech companies have emerged, using technology
to disrupt traditional financial services. These companies offer innovative solutions
such as peer-to-peer lending, robo-advisory, and blockchain-based payment systems.
✓ Focus on customer experience: With increased competition and changing consumer
preferences, financial companies have begun to focus more on delivering a better
customer experience. This includes personalized services, user-friendly interfaces, and
faster transaction times.
✓ Sustainability and social responsibility: More recently, financial companies have also
 4

begun to focus on sustainability and social responsibility. This includes offering

sustainable investment options, supporting social causes, and promoting environmental
responsibility.

1.3 Objectives of the Study:

The main Objective of this study is to analyze, examine and interpret the deposit collected
and deposit mobilized in Reliance Finance Limited with the help of financial and non-
financial indicators. Apart from these, other major objectives are:
• To find the composition of deposit in Reliance Finance Limited.

• To assess the trends of deposit, investment, loans and advances and asset
purchased.

• To analyze the management of deposit.

• To analyze whether the deposits are effectively utilized or not.

1.4 Rationale of the Study:

As we know the main reason behind the venture of business is profit maximization. In
respect of finance companies, deposit and its mobilization plays a vital role for the
profitability of the financial institution. If the financial institution is able to convince people
to deposit money and use such money at effective and profitable areas then financial
institutions will be able to maximize its profit. This study intends:
• To provide detail information about deposit and its utilization carried outby
Reliance Finance Limited.

• To aware the citizens regarding the need of banking concepts for the overall
development of economy of the country.

• To provide information regarding the trend of savings and deposits in the financial
sectors.

• To provide and gain conceptual as well as analytical knowledge of current situation

that is being faced by Reliance Finance Limited.

• To provide suggestions and implication to the financial institution for enhancing its
performance.

• To explain the relation between interest rate and deposit collection.

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1.5 Review of Literature:

Review of literature means receiving research studies or other relevant propositions in the
related area of the study so that all the past studies their conclusion and deficiencies may be
known and further research can be conducted.

1.5.1 Conceptual Review:

Deposit is the main part of every financial institution. Without deposit collection loan could not
be followed. An attempt has been made to look in to a number of related books and the finance
publications, especially of those related to the deposits collection and mobilization aspects, and
central bank's rules and regulations that abide the commercial banks on this regard. In addition,
some sort of personal intuition has also been made.

1.5.1.1 History of Finance institution in Nepal:

Finance companies in Nepal have a relatively short history compared to other countries in the
region. The first finance company in Nepal, Nepal Indosuez Finance Company, was established
in 1986 as a joint venture between the French bank, Banque Indosuez, and Nepali investors.
Since then, the number of finance companies in Nepal has grown steadily.
In the early years, the finance companies in Nepal primarily focused on providing leasing
services to small businesses and individuals. However, as the economy grew and the demand for
financial services increased, these companies started to diversify their product offerings.
One of the key drivers of the growth of finance companies in Nepal has been the liberalization
of the financial sector in the early 1990s. The government opened up the sector to foreign
investment, which led to the entry of several multinational financial institutions into the market.
Today, there are more than 100 registered finance companies in Nepal. They offer a range of
financial services including leasing, hire purchase, loan financing, and deposit taking. Many of
these companies have also started to offer services such as mobile banking and online banking
to cater to the changing needs of their customers.
The finance sector in Nepal continues to grow and evolve, with the government and the central
bank taking steps to promote financial inclusion and enhance the regulatory framework. Despite
some challenges, such as the impact of the COVID-19 pandemic, the finance industry in Nepal
is expected to continue to play an important role in driving the country's economic growth.
Reliance Finance Limited:
Reliance Finance Limited is a non-banking financial institution (NBFI) registered with the
Nepal Rastra Bank (NRB), the central bank of Nepal. It was established in 2064 BS (2007 AD)
and is headquartered in Kathmandu, Nepal.
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Reliance Finance Limited offers a range of financial services to its clients, including deposit
schemes, loan facilities, hire purchase financing, leasing, and remittance services. It also
provides services like internet and mobile banking, debit cards, and online fund transfer.
The company has a network of 25 branches and extension counters spread across the country,
providing services to a diverse client base, including individuals, small and medium enterprises,
and corporate clients.
Reliance Finance Limited is committed to promoting financial inclusion in Nepal and has
launched several initiatives to reach out to underserved communities. The company has
introduced various products and services targeting farmers, women entrepreneurs, and small
businesses.
In terms of corporate social responsibility, Reliance Finance Limited has been involved in
various philanthropic activities, such as providing educational scholarships and support for
earthquake victims.
Reliance Finance Limited has been awarded the "Best Managed Finance Company" by New
Business Age Pvt. Ltd. and "Best Financial Institution Award" by Nepal Bankers' Association,
among others.
Vision Statement:
"To remain the leading financial institution of the country."

1.5.1.2 Concept of Finance Institution:

A finance institution is a type of financial organization that provides various financial services to
individuals, businesses, and other entities. Finance institutions can be classified into several
types, including banks, credit unions, insurance companies, investment companies, and non-
banking financial institutions (NBFIs) such as finance companies, leasing companies, and
microfinance institutions.
The primary function of finance institutions is to provide financial services to their customers,
including deposit-taking, lending, investment, insurance, and remittance services. These services
help individuals and businesses to manage their finances and achieve their financial goals.
Finance institutions are regulated by the central bank or other financial regulatory authorities in
the country where they operate. These regulatory bodies establish and enforce guidelines and
regulations to ensure that finance institutions operate in a safe and sound manner and maintain
financial stability. These regulations may include requirements for capital adequacy, liquidity,
asset quality, and risk management.
Overall, finance institutions play a crucial role in the economy by providing access to capital,
financial services, and risk management tools to individuals, businesses, and other entities. They
 7

help to promote economic growth and development by facilitating investment, promoting

entrepreneurship, and providing financial stability.
Theoretical Framework of the Study:
The theoretical framework of this study consists of the Introduction of Financial institutions
along with their role, needs and functions. The research has been done with an aim to analyze
the deposit mobilization of finance company that deals mainly with the sources and uses of
funds by the sample finance limited. This research has been done with a focus of certain
weaknesses of the finance institute regarding their sources and uses of funds.
1.5.2 Types of Deposits:
At the outset it is necessary to know what a deposit is. Finance / Commercial bank Act 2031,
defines deposits is the amounts deposited in a current, saving or fixed a/c of a bank or financial
institution. People in general, the businessmen; the industrialist & other individuals deposit
money in a bank. Bank, flows such amount as loan & invest in different sectors to earn profit.
Usually, a bank accepts three types of deposits. They are current, saving & fixed deposits. But in
other countries we find more than three deposits. In Nepal, banks grant permission to their
customers to open three types of a/c under various terms & conditions. This classification is
made on different 36 theoretical & financial basis. Therefore, deposits of bank are classified on
the following basis:
i. Demand / Current Deposits
ii. Saving Deposits
iii. Fixed deposits
I. Demand / Current Deposits:
The deposit in which an amount is immediately paid at the time of any a/c holder’s
demand is called demand deposits. In another words, we can say this type of demand
deposit as current a/c. current a/c means an a/c of amounts deposited in a bank, which
may be drawn at any time on demand. Its transaction is continual & such deposit can’t be
invested in the productive sector, so such type of amount remains as stock in the bank.
Though the bank can’t gain profit by investing it in new sector after taking from the
customers, this facility is given to the customer. Therefore, the bank doesn’t give interest
on this account. From such deposit, the merchant & traders are benefited more than the
individual. The bank should pay as many times as the checks is sent until there is deposit
in his a/c. the bank can’t impose any condition & restrictions in demand deposit. An
institution or an individual, who usually needs money daily, precedes their acts &
transaction through such deposit. The current a/c is very important for the customers of
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bank. In any institution, which carries out cash transaction, there is possibility of
corruption; misuses & fraud. There should be a provision of separate employees for the
recovery of the cash & for the payment of the cash. The current a/c is necessary to
collect and buy the bills, to use the facility of over-draft, letter of credit, remittance etc.
Current deposit on the one hand, saves time & labor & on other hand, the bank keeps the
accurate of the a/c holders, so it is a great facility for the customers. Therefore, it has a
great importance.
II. Saving Deposits:
The bank can collect capital through the saving deposit as well. This deposit is also
important & its necessity & scope is not negligible. According to the Commercial bank
Act 2031, saving accounts means an a/c of amounts deposited in a bank for savings
purposes. This account is suitable & appropriate for the people of middle class, farmers
and the labors who have low income, official & small businessmen. This saving deposit
bears the features of both of the current & fixed period deposits. Generally, most
accounts are opened saving deposit in a bank. Therefore, the deposit is popular in people
in general. According to internal rules or banks some banks demand a small amount &
some banks demand a great deal of money to open saving account. Different banks have
made different rules. Some banks have made one hundred thousand, some banks have
made two hundred thousand, some have three hundred thousand, some have five hundred
thousand & some have not fixed the limitation. So, there is divergence as to how much
amount of money can be withdrawn. Banks give some interest on it.
III. Fixed Deposits:
Under the commercial Bank Act 2031: Fixed Account means an account of amounts
deposited in a bank for certain period of time. The customers opening such account
deposit their money in this account, for a fixed period. In the other words, it is called
time deposit because this account is deposited for a certain period. Usually, only the
person or institution who wants to gain more interest opens such type of account. The
period of time can be 3 months, 6 months, 9 months, 1 year, 2 years, 3 tears, 4 years, 5
years etc. More interest rate is payable in this deposit than other deposit. Both parties the
bank & the customers can take benefit from this deposit. The banks invest this money on
the productive sector & gains profit & the customers too can be made his financial
transaction stronger by getting more interest from this deposit. The amount in the saving
deposit must be returned to the customers after date is expires. The amount can’t be
withdrawn before the fixed time.
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Some other types of deposit:

IV. Call deposit:
It is also known as hybrid deposit it is a combination of current and fixed deposit
invented for meeting customers financial needs in a flexible manner. Increasing
competition and computerization of banking has facilitated to introduce this deposit
product. This deposit mainly serves the need of appropriate assets liability management
of the financial institution. Generally, the practice of inter-bank borrowing and lending
activities are conducted through this product. This kind of account is generally opened
by bank and financial institutions, firms and companies. Bank pay certain rate of
interest to these depositors.
V. CDTD Ratio and CDFD Ratio:
They are the ratio which shows that what percent of current deposit is of total deposit
and fixed deposit. CDTD Ratio is presents the relationship between current deposit and
total deposit. Likewise, CDFD Ratio presents the relationship between current deposit
to fixed deposit.
VI. CDSD Ratio and CDCD Ratio:
Both ratios are related with current deposit. It means that what percent of current
deposit is of saving deposit and call deposit. CDSD Ratio presents the relationship
between current deposit to saving deposit and CDCD Ratio shows the relationship
between current deposit to call deposit.

1.5.3 Deposits Mobilization:

“Collecting scattered small amount of capital through different Medias & investing the
deposited fund in productive sector with a view to increase the income of the depositor is meant
deposit mobilization. In the other words, investing the collecting fund in the productive sectors
& increasing the income of the depositor, it also supports to increase the saving through the
investment of increased extra amount” (NRB, 1984 no.24, p: 10-12).
When we discuss about Deposit Mobilization, “we are concerned with increasing the income of
the low-income group of people & to make them able to save more & to invest again the
collected amount in the development activities. The main objective of Deposit Mobilization is to
convert idle saving into active saving” (NBL, 2037 N0.4, p: 7).
Saving refers to that part of the total income which is more than the expenditure of the
individual. In other words, saving = Total income – total expenditure. Basically, saving can be
divided into two parts: Voluntary saving & Compulsory Savings. Amount deposited in different
accounts of Commercial Bank, investment in government securities are some examples of
 10

voluntary saving. A commercial bank collects deposit through different accounts like fixed,
saving & current.
In developing countries there is always shortage of the capital for the development activities.
There is need of development in all sectors. It is not possible to handle & develop all the sectors
by the government alone at a time, Private people also can not undertake large business because
the per capita income of the people is very low while their propensity consumes is very high.
Due to the low income their saving is very low and capital formation is also very low. So their
saving is not sufficient for carrying on development work.
To achieve the higher rate of growth and per capita income, economic development should be
accelerated. “Economic development may be defined in a very broad sense as a process of
raising income per head through the accumulation of capital (Johnson, 1965, p:11) but how
capital can be accumulation in the development countries there are two ways one from the
external and other from the internal sources. In the first gap foreign Aid, Loans and grants are
the main. While in the later, financial institution operating with in the country, play in a
dominant role. In the context of Nepal, commercial bank is the main financial institution which
can play very important role in the resource mobilization for the economic development in the
country. Trade, industry, agriculture and commerce should be developed for the economic
development.
Economic development so defined is necessary and sufficient to generate rate of saving and
investment. The generation of high rates of saving and there by investment is possible only
through the commercial banks. Commercial banks occupies greater role in economic
development by generating the saving towards the desired sectors from one place to another,
communicating with its branches and agencies in different part of the country and the world and
advising to the commercial people." Increasing the income of the low-income group of people
and making them able to save more, deposit mobilization helps to invest the collected deposit in
desired sector" (NRB, 1984, no.24, p:25).
The saving growth rate depends among others, on the level of country's per capita income and
its growth rate, population growth rate, interest rate in saving or, on bank account, banking and
financial facilities and net factor income etc. The national income is the measure of the nation
from the economic activities. Saving is the excess if income over consumption. Investment is the
expenditure made for the formation of fixed capital. Mobilization of saving implies transfer of
resources from surplus spending unit to deficit units. In this connection, financial intermediaries
play an important role in mobilizing of voluntary saving.
The amount of saving of a typical household in Nepal is a small because the people have limited
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opportunities for investment. They prefer “to spend saving on commodities rather than on
financial assets. These restricts the process of financial intermediation, which might otherwise
bring such as reduction of investment risk and increase in liquidity when capital is highly mobile
internally, saving from abroad can also finance the investment needed at home. When capital is
not mobile internally, saving from abroad will limit investment at home.
Insurance of bank deposits, creation of proper atmosphere can increase deposits and the
development of severity of capital markets with the helps of banks will prove effective in
mobilizing the available floating resources in the country (Ghosal and Sharma, 1965, p: 92).
Capital formation is possible through collecting scattered unproductive and small saving from
the people. This collected fund can be utilized in productive sector to increase employment and
national productivity. Deposit mobilization is the most dependable and important sources of
capital formation (RBB, 2055 No.4, p: 14). Banking transaction refers to the acceptance of
deposits from the people for granting loan and advances, and returning the accepted deposit at
demand or after the expiry of a certain period. According to banking rules and regulations, this
definition clearly states that Deposit mobilization is the starting point of banking transactions.
Banking activities can be increase as much as we can mobilize the accumulated deposit
effectively.
Deposit, such as current, saving and fixed are the main part of the working Capital. it is due to
this reason that banks keep their deposit mobilization campaign always in full swing taking
resort every possible means laying at their deposal. “A Commercial bank changes the scattered
unproductive small saving into Lon able & active savings. The bank not only collect saving, but
also it provides incentives to the saver & help them to be able to save more” (RBB, 2054 No.3,
p:15). Commercial banks are set up with a view to mobilize national resources. The first
condition of National Economic Development is to be able to collect more & more deposit. In
this context, the yearly increasing rate of commercial banks deposit clearly shows the
satisfactory progress of deposit mobilization

1.5.3.1 Importance of Deposit Mobilization Analysis:

Deposit analysis is also important for finance companies as it helps them to understand the
financial health and risk profile of potential clients who want to deposit their money in the
company. Here are some reasons why deposit analysis is important for finance companies:
• Risk assessment
• Investment decisions
• Customer segmentation
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• Regulatory compliance
• Financial planning

1.6 Research Methodology:

The research methodology is the systematic, theoretical analysis of the methods applied to a
field of study. How the data is collected and which source the research use for getting the datais
under the research methodology. Research methodology is the crucial step that is carried out by
the researcher regarding their field visit. Our creativity leads us to make us our identity.
Research methodology evaluated the performance of the researcher. Research methodology
deals with collecting, presenting, and analyzing data. For my research work, the necessary
materials are collected from Reliance Finance Limited.

1.6.1 Research design:

“A research design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in procedure.”
(Kothari,1989). In fact, the research design is the conceptual structure within which research is
conducted; it constitutes the blueprint for the collection, measurement and analysis of data. As
such the design includes an outline of what the researcher will do from writing the hypothesis
and its operational implications to the final analysis of data.

1.6.2 Sources of data:

Primary Data: Primary data are taken by direct personal interview, indirect oral interview and
questionnaire. Data collected for the very first time for a specific purpose is called primary
data.

Secondary Data: Secondary Data refers to data that was collected by someone other than the
user. Common sources of secondary data for social science include censuses information
collected by government departments, organizational records and data that was originally
collected for other research purposes. Besides, formal and informal talk with the concerned
authorities and employees of the Reliance Finance are also used to get additional information.

1.6.3 Data collection techniques:

• Interviews:
Interviews can be conducted in person or over the telephone Interviews can be done
formally (structured), semi-structured, or informally. Questions should be focused,
 13

clear, and encourage open-ended responses. Interviews are mainly qualitative in

nature.
• Questionnaires and Surveys:
Responses can be analyzed with quantitative methods by assigning numerical values
to Likert-type scales. Results are generally easier (than qualitative techniques) to
analyse. Pretest/Posttest can be compared and analyzed.

• Observations:
Allows for the study of the dynamics of a situation, frequency counts of target
behaviors, or other behaviors as indicated by needs of the evaluation. Good source for
providing additional information about a particular group, can use video to provide
documentation. Can produce qualitative (e.g., narrative data) and quantitative data
(e.g., frequency counts, mean length of interactions, and instructional time).
• Focus Groups:
A facilitated group interview with individuals that have something in common.
Gathers information about combined perspectives and opinions. Responses are often
coded into categories and analyzed thematically

• Ethnographies:

Oral History, and Case Studies: Involves studying a single phenomenon. Examines
people in their natural settings. Uses a combination of techniques such as observation,
interviews, and surveys. Ethnography is a more holistic approach to evaluation.
Researcher can become a confounding variable.
• Documents and Records:
Consists of examining existing data in the form of databases, meeting minutes, reports,
attendance logs, financial records, newsletters, etc. This can be an inexpensive way to
gather information but may be an incomplete data source.
• Data Analysis Tools:
Data analysis tools means tools the research used to present and analysed the data. The
main tools of analysis are mathematical and statistical tools. In this reports statistical
and financial ratio tools is used for data analysis. Various statistical tools will be used
after compilation. The data will be process, tabulated and graphed to analyse and
achieve objectives of the study. Hence for the analysis and evaluation of the report,
tables and figures are used.
 14

1.7 Limitations of the Study:

As the study is simply a partial study for fulfillment of BBS degree, which is to be finished
within limited time period. Hence, the study is not able to be carried on professional level.
Limitations faced in course of study are as follows:
• The study is mainly based on secondary data collected from various sources.

• The study mainly focuses on deposit of Reliance Finance Limited. Therefore, overall

performance of the financial institutions cannot be judged by this report.

• The report is prepared for academic purpose only.

• Due to wide range of data deficiencies, only simple techniques have been used

for the analysis of the data.

 15

CHAPTER II
RESULT AND ANALYSIS

2.1 Presentation and Analysis:

Presentation means the presentation of the collected data through table, figure etc. Presentation
is the process of understanding the study or the report and calculating the opinion. An analysis
of a data means the process where the process where the statement or the report gets resolve
by breaking them into simple statement. Analysis means to find out something and give opinion
about the presented data.

All the collected data are tabulated and presented in the figures. For this purpose, the
researcher has applied financial tools. Financial analysis tools are one of the most efficient
ways that can be used for ensuring good profit from your investments. These financial tools
are highly helpful in evaluating the market and investing in a way so as to maximize the profit
from the investments made. These financial tools useful for deciphering both internal and
external information related to a specific business organization.

Following are the financial analysis tools to analysis deposit account of Nepalese finance bank.

i. Current Deposit to Total Deposit Ratio:

This ratio shows the relationship between total deposit and current deposit. It shows that what
percentage of current deposit is of total deposit. It is calculated as follows.

Current Deposit to Total Deposit Ratio = Current Deposit / Total Deposit

ii. Current deposit to Fixed Deposit Ratio:

This ratio shows the relationship between current deposit and fixed deposit. It shows that what
percentage of current deposit is of fixed deposit. It is calculated as follows.

Current Deposit to Fixed Deposit Ratio = Current Deposit / Fixed Deposit

iii. Current Deposit to Saving Deposit Ratio:

This ratio shows the relationship between current deposit to saving deposit. It shows that what
percentage of current deposit is of saving deposit. It is calculated as follows.

Current Deposit to Saving Deposit Ratio = Current Deposit / Saving Deposit

iv. Current Deposit to Call Deposit Ratio:

This ratio shows the relationship between current deposits to call deposit. It shows that what
percentage current deposit is of call deposit. It is calculated as follows.
 16

Current Deposit to Call Deposit = Current Deposit / Call Deposit

Credit to Deposit Ratio (CDR):

The Credit-to-Deposit Ratio (CDR) is a financial ratio that measures a bank's ability to lend
money compared to the amount of deposits it holds. The formula for calculating CDR is as
follows:
CDR = Total Loans *100%
Total Deposit

Table 1: Credit to Deposit Ratio

(NPR in 000)
Fiscal Year Total Loan Total Deposit Credit to Deposit
Ratio
2074/75 3134797 3722875 84.20365981
2075/76 3830377 4135375 92.62465919
2076/77 4149104 5207487 79.67574379
2077/78 4764874 5839924 81.59137002
2078/79 5532490 6670273 82.94248226

Source: Annual report of Reliance Finance Limited (from 2074/75 to 2078/79)

Figure 1: Credit to Deposit Ratio

In the above figure, Fiscal Years and CD Ratio have been measured in X-axis and Y-axis
respectively. From the above table it is clear that, CD Ratio has been increasing over time in an
consistent way till year 2075/76 and has been decreasing in the year 2076/77 but after that it has been
increasing gradually till the year 2078/79.
 17

Growth Ratio in Deposit:

The formula for calculating the growth rate in deposits is:

Growth Rate in Deposits = (Current Deposits - Previous Deposits) / Previous Deposits * 100%

Table 2: Growth rate in Deposit

(NPR in 000)

Fiscal Year Current Deposit Previous Deposit Growth rate in

Deposit
2074/75 3722875 3228704 15.31%

2075/76 4135375 3722875 11.08%

2076/77 5207487 4135375 25.98%

2077/78 5839924 5207487 12.14%

2078/79 6670273 5839924 14.22%

Source: Annual report of Reliance Finance Limited (from 2074/75 to 2078/79)

Figure 2: Growth rate in Deposit

In the above figure, Fiscal Years and Growth rate in Deposit have been measured in X-axis and
Y-axis respectively.
From the above table it is clear that, Deposit Growth rate has been Decreasing till 2074/75 to
2075/76 and has increased in year 2076/77 and has again decreased on the upcoming years.
 18

Deposit to Asset Ratio:

The deposit to asset ratio is a financial ratio that measures the proportion of a bank's assets that
are funded by deposits. The formula for calculating the deposit to asset ratio is:
Deposit to Asset Ratio = (Total Deposits / Total Assets) *100%

Table 3: Deposit to Assets Ratio

(NPR in 000)

Fiscal Year Total Deposit Total Assets Deposit to Assets

Ratio
2074/75 3722875 4736793 70.48%

2075/76 4135375 5282038 78.29%

2076/77 5207487 6386087 81.54%

2077/78 5839924 7215194 80.94%

2078/79 6670273 9151370 72.88%

Source: Annual report of Reliance Finance Limited (from 2074/75 to 2078/79)

Figure 3: Deposit to Assets Ratio

In the above figure, Fiscal Years and Deposit to assets ratio have been measured in X-axis and
Y-axis respectively.
From the above table it is clear that, Deposit to assets ratio has been increased till 2074/75 to
2076/77 and has decreased in 2077/78 and 2078/79.
 19

Total Deposit to core capital (Times):

The total deposit to core capital ratio is a financial ratio that measures the level of a bank's
deposit funding relative to its core capital. The formula for calculating the total deposit to core
capital ratio is:
Total Deposit to Core Capital Ratio = Total Deposits / Core Capital

Table 4: Total Deposit to Core capital

(NPR in 000)

Fiscal Year Total Deposit Core Capital Total Deposit to

Core capital
2074/75 3722875 881952 3.81

2075/76 4135375 977804 4.23

2076/77 5207487 1039571 5.01

2077/78 5839924 1218266 4.79

2078/79 6670273 1347151 4.95

Source: Annual report of Reliance Finance Limited (from 2074/75 to 2078/79)

Figure 4: Total Deposit to Core capital

In the above figure, Fiscal Years and Total Deposit to Core Capital Ratio have been measured
in X-axis and Y-axis respectively.
From the above table it is clear that, Total Deposit to Core Capital Ratio has been increasing
from 2074/75 to 2076/77 and has Decreased in year 2077/78 but had taken growth in 2078/79.
 20

2.2 Findings:
The collected data can be presented in the form of diagram and graph. They are simple methods
of representing the data the form of bars, graphs, pie-charts, lines etc. The present the data/fact
into the simpler form and show the significant features of whole at a glance. A clear idea of the
variation in the value of a variable are much more easily obtained through diagrams or graphs
than by the values given in the table.
The findings in a report, on report writing will depend on the specific objectives and research
questions of the report. However, some possible returns on findings on report writing could be:
• A description of the key components of effective report writing, such as clear and
concise communication, a well-defined structure, and attention to detail in editing and
proofreading.
• An analysis of common challenges faced by individuals or organizations when writing
reports, such as difficulties with information gathering or analysis, lack of clarity in
presentation or organization of information, or inadequate consideration of the
audience or purpose of the report.
• Identification of best practices and techniques for report writing, such as the use of
clear and concise language, the use of visual aids to communicate complex
information, and effective strategies for editing and proofreading reports.
• An assessment of the impact of technology and digital tools on report writing, such as
the use of online research databases, software tools for analysis or data visualization, or
online collaboration tools for co-authoring and sharing reports.
• Recommendations for improving the quality of report writing in a specific context,
such as in a particular industry or organization, based on the findings of the research.
 21

CHAPTER III

SUMMARY AND CONCLUSION

This chapter is an accomplished specific and indicative enclose which contains summary and
conclusion of finding and recommendations. Brief introduction to all chapters of the study
and genuine information of the present situation under the topic of the study is defined on
summary. Conclusions are analysis of applicable data by using various financial and
statistical tools, which presents strengths, weakness, opportunities and threats of the CBs.
And suggestions are obtainable in recommendation, which is arranged on the based from
finding and conclusions.

3.1 Summary
Development of a country always depends upon the economic development of that country.
Financial Institutions play vital role for economic development. Basically, it works as financial
intermediary by taking deposit and lending that money to deficit group of society. Both private
and public sector have been contributing to our nation. Integrated and speedily development of
the country is possible only when competitive banking service reaches nook and corners of the
country. Commercial banks occupy an important place in the framework of every economy
because they provide capital for the development of industry, trade, business and other
resources deficit sectors by investing the saving collected as deposits. All the economic
activities of each and every country are greatly influenced by the commercial banking business
of the country.
Mobilization as well as canalization of saving in the productive sector is important for the
economic development of the country without inflationary pressure in the economy. No doubt
commercial banks play a crucial role for the economic development by formulation of capital,
which is key variable in the economic development of the country. Scattered recourses hold no
meaning unless and until they mobilized and utilized efficiently in some productive sectors.
Commercial banks contribute to the process of capital formation by converting dispersed
saving into meaningful capital investment in order to aid industry, trade, commerce and
agriculture for the economic development of a nation. It should not be forgotten that a country
could hardly achieve its growth of economic development without a strong capital base.
Commercial banks play a vital role in performing such base for financial and economic
development by way of deposit mobilization. It is quite true that a strong financial institution is
of great need in the developing country like Nepal. Because all the economic conditions are
based on the financial institution and the development of a country depend upon the active
 22

participation of the banks in the different activities in the economy.

Deposit mobilization is the process of attracting and gathering funds from individuals,
businesses, and other entities for the purpose of depositing them into a financial institution.
Financial institutions use deposit mobilization to build up their deposit base, which enables
them to lend out money and earn interest income. Deposit mobilization is a critical function of
financial institutions as it provides them with the funds necessary to finance their operations
and support economic growth.
Deposit mobilization can be done through various channels such as traditional banking, online
banking, and mobile banking. Financial institutions offer various deposit products such as
savings accounts, current accounts, fixed deposit accounts, and recurring deposit accounts to
attract and retain customers. They may also offer incentives such as higher interest rates,
waived fees, and promotional offers to encourage customers to deposit funds.
Deposits mobilized by financial institutions are generally used to fund various activities, such
as lending to individuals and businesses, investing in financial assets, and maintaining
reserves. Deposit mobilization plays a vital role in promoting financial stability and growth in
the economy, as it helps to ensure that financial institutions have the necessary funds to
support economic activity and meet the financial needs of their customers.

3.2 Conclusion
Chapter titled Deposit Mobilization of Reliance Finance describes the conceptual framework
of financial efficiency and profitability. Financial efficiency is the ability of a given investment
to earn a return from its use. It’s vital instrument to measure not only the business
performance but also overall efficiency in its concerned. In present study seven types of
measurement tools of financial efficiency were discussed i.e., Gross profit ratio, operating
profit ratio, net profit ratio, return on capital employed, return on equity, return on assets,
current ratio, quick ratio, debt equity ratio, and debt ratio.
Deposit mobilization is a crucial function of financial institutions that plays a vital role in
promoting economic growth and financial stability. By attracting and gathering funds from
individuals, businesses, and other entities, financial institutions build up their deposit base,
which enables them to lend out money and earn interest income. Deposit mobilization allows
financial institutions to finance their operations, support economic activity, and meet the
financial needs of their customers.
Financial institutions offer various deposit products and incentives to attract and retain
customers, such as savings accounts, current accounts, fixed deposit accounts, higher interest
 23

rates, waived fees, and promotional offers. Deposits mobilized by financial institutions are
used to fund various activities, including lending to individuals and businesses, investing in
financial assets, and maintaining reserves.
Overall, deposit mobilization is a critical function that supports the growth and stability of the
financial system and the economy as a whole. Financial institutions must continue to develop
innovative deposit products and delivery channels to attract and retain customers, promote
financial inclusion, and drive economic growth.
finance banks play a vital role in the financial sector and contribute significantly to economic
development. They offer a range of financial services, including deposit-taking, lending,
investment, insurance, and remittance services, to individuals, businesses, and other entities.
Finance banks support economic growth by providing access to capital, financial services, and
risk management tools.
Finance banks are regulated by the central bank or other financial regulatory authorities in the
country where they operate. These regulatory bodies establish and enforce guidelines and
regulations to ensure that finance banks operate in a safe and sound manner and maintain
financial stability.
To stay competitive in the market, finance banks must continue to develop innovative products
and services to meet the evolving needs of their customers. They must also adopt new
technologies and delivery channels to enhance customer experience and promote financial
inclusion. Finance banks play a crucial role in the financial sector and must continue to adapt
and evolve to drive economic growth and development.
 24

BIBLIOGRAPHY

Agrawal,G.R.(2005);Project Management in Nepal.

Basant, A.(1978);Corporate Financial Management

Brigham,E.F. & Houston,J.F.(2004);Fundamental of Financial Management

Brown,J.R. & Howard,L.R.(1975);Principles & Practice of Management Accounting

Chandra,N.R.(2000);Financial Accounting for Management

Chandra ,P.(1994);Financial Management Theory and Practice

Hampton, J.J.(2005);Financial Decision Making

Khan, M.Y. & Jain,P.K.(1998);Financial Management

Kuchhal ,S.C.(1968); Ratio Charts for Top Management

Pandey,I.M.(1995);Financial Management

Paul,C.(2000);Corporate Accounting

Paul,R.&Singh,j.(1982); Management Accounting

Spender,J.C.(2014); Business Strategy

Troy,L.(1996);Alamance of Business &Industrial Financial Ratios

Van,H.& James,C-(1998);Financial Management Policy

Weston,J.F. &Brigham,E.F.(1994);Management Finance

Website:

https://www.reliancenepal.com.np
 APPENDIX – I
Table 1.1: Credit to Deposit Ratio
(NPR in 000)
Fiscal Year Total Loan Total Deposit Credit to Deposit
Ratio
2074/75 3134797 3722875 84.20365981
2075/76 3830377 4135375 92.62465919
2076/77 4149104 5207487 79.67574379
2077/78 4764874 5839924 81.59137002
2078/79 5532490 6670273 82.94248226

Source: Annual report of Reliance Finance Limited (from 2074/75 to 2078/79)

Credit to Deposit Ratio (CDR) of 2078/79 = Total Loans *100%

Total Deposit
= 5532490 *100%
6670273
= 82.94248226

Total deposit of 2078/79 = 6670273

 APPENDIX – II
Table 2.1: Growth rate in Deposit

(NPR in 000)

Fiscal Year Current Deposit Previous Deposit Growth rate in

Deposit
2074/75 3722875 3228704 15.31%

2075/76 4135375 3722875 11.08%

2076/77 5207487 4135375 25.98%

2077/78 5839924 5207487 12.14%

2078/79 6670273 5839924 14.22%

Source: Annual report of Reliance Finance Limited (from 2074/75 to 2078/79)

Growth Rate in Deposits of 2078/79 = Current Deposits - Previous Deposits *100%

Previous Deposits
= 6670273 – 5839924 *100%
5839924
= 14.22%
 APPENDIX – III
Table 3.1: Deposit to Assets Ratio

(NPR in 000)

Fiscal Year Total Deposit Total Assets Deposit to Assets

Ratio
2074/75 3722875 4736793 70.48%

2075/76 4135375 5282038 78.29%

2076/77 5207487 6386087 81.54%

2077/78 5839924 7215194 80.94%

2078/79 6670273 9151370 72.88%

Source: Annual report of Reliance Finance Limited (from 2074/75 to 2078/79)

Deposit to Asset Ratio of 2078/79 = Total Deposits *100%

Total Assets
= 6670273 *100%
9151370

= 72.88%

Total Assets = Total Liabilities + Total Equity

= 7832712 + 1318658
= 9151370
 APPENDIX – IV
Table 4.1: Total Deposit to Core Capital

(NPR in 000)

Fiscal Year Total Deposit Core Capital Total Deposit to

Core capital
2074/75 3722875 881952 3.81

2075/76 4135375 977804 4.23

2076/77 5207487 1039571 5.01

2077/78 5839924 1218266 4.79

2078/79 6670273 1347151 4.95

Source: Annual report of Reliance Finance Limited (from 2074/75 to 2078/79)

Total Deposit to Core Capital Ratio = Total Deposits

Core Capital
= 6670273
1347151
= 4.95

Given,
Total Deposit of 2078/79 = 6670273
Core Capital of 2078/79 = 1347151
 APPENDIX - V
Format of Questionnaire on
Profitability Analysis of Dabur Nepal Pvt. Ltd
Questionnaire
Section 1: Respondent profile
1. Full name:
2. Gender:
3. Age:
4. Job Position:
5.Experience:
Section 2: Information relating to Profitability Analysis
1.What is the essential factor affecting profitability of the company?
• Demand
• Management
• Substitutes
2.Do you believe economic growth of the country contributes to the company’s profitability?
• Yes
• No
3.Is the company able to adopt marketing to be more profitable
• Yes
• No
4.Which of the following is the main problem which has impact on the company’s
profitability?
• Low product prices
• High Unseen costs
• Competition
5.Which of the following rank do you give to the company amongst the companies in Nepal?
• Top
• Middle
• Low
 APPENDIX – V
Reliance Finance Limited
Five Years Balance Sheet
Reliance Finance Limited of 2078/79