CREDIT RISK MANAGEMENT

OF
RASTRIYA BANIJYA BANK LIMITED

A Project work Report

By
Usa Kumari Tharu
T.U Reg. No: 7-2-180-258-2019
Symbol No: 701800044
Gyan Bahumukhi Campus

Submitted to
The Faculty of Management
Tribhuvan University
Kathmandu

In Partial Fulfillment of the Requirement for the Degree of

BACHELOR OF BUSINESS STUDIES(BBS)

Gyan Bahumukhi Campus

Kohalpur, Banke

August, 2024
 Declaration

I hereby declare that the project work entitled “CREDIT RISK MANAGEMENT OF RASTRIYA
BANIJYA BANK LIMITED” submitted to the Faculty of Management, Tribhuvan University,
Kathmandu is an original piece of work under the supervision of Mr. Dinesh Aryal, faculty
member, GYAN BAHUMUKHI CAMPUS, KOHALPUR, BANKE, and is submitted in
partial fulfillment of the requirements for the degree of Bachelor of Business Studies (BBS).
This project work report has not been submitted to any other university or institution for the
award of any degree or diploma.

________________________
Usa Kumari Tharu
Date:

ii
 Supervisor’s Recommendation

The project work report entitled “CREDIT RISK MANAGEMENT OF RASTRIYA

BANIJYA BANK LIMITED” submitted by Usa Kumari Tharu of GYAN BAHUMUKHI
CAMPUS, KOHALPUR, BANKE is prepared under my supervision as per the procedure and
format requirements laid by the Faculty of Management, Tribhuvan University, as partial
fulfillment of the requirements for the degree of Bachelor of Business Studies (BBS). I,
therefore, recommend the project work report for evaluation.

______________________
Mr. Dinesh Aryal

Supervisor

Date:

iii
 Endorsement

We hereby endorse the project work report entitled “CREDIT RISK MANAGEMENT OF RASTRIYA
BANIJYA BANK LIMITED” submitted by Usa Kumari Tharu of Gyan Bahumukhi Campus College,
Kohalpur, Banke, In partial fulfillment of the requirements for the degree of the Bachelor of
Business Studies (BBS) for external evaluation.

_________________ ___________________
Mr. Ganesh Kumar Khadka Mr. Tek Bhadur Gurung
Head of Research Committee (Campus Chief)
Date: Date:

iv
 Abstract

The main reason of this field work is to gaining the knowledge about various component of

credit risk of commercial bank. Under this heading it is gaining the knowledge about the

Study “CREDIT RISK MANAGEMENT OF RASTRIYA BANIJYA BANK LIMITED”. Data are extracted from

staff of bank and customers, cross verifying from various persons, who are having knowledge

about the bank.

The project report is prepared as per instructions of professor/supervisor on the selected

chapter and format received from campus. After observing necessary report of senior students,

books of various writers report writing was started. When preparing report own technique is

used without copying from any books and report but some correlation are done with some

reports of senior student and books of writers.

Under this heading it is express the Study of “CREDIT RISK MANAGEMENT OF RASTRIYA BANIJYA
BANK LIMITED” data are collected, analyzed and interpreted and presented in report.

v
 Acknowledgement

This project work report entitled “CREDIT RISK MANAGEMENT OF RASTRIYA BANIJYA BANK
LIMITED” has been prepared in the form as required by the Tribhuvan University for the partial
fulfillment of the degree of Bachelor of Business Studies (BBS). Giving me great opportunity
to prepare this Report held under Tribhuvan University Firstly, I would heartily like to thank
to Tribhuvan University.

I am highly indebted to my respectable supervisor Mr. Dinesh aryal, Head of Department of

Management of New Gyan Bahumukhi Campus, Kohalpur whose sound theoretical and
practical knowledge provided me the basis for the preparation of this report from beginning
till end.

I would like to express my great sense of gratitude to bank Manager and staff of Rastriya
Banijya Bank Ltd, Kohalpur Branch for providing me relevant data and information required
for the project work Report. I also owe an indebtedness to all reputed authors whose writings
have provided me the necessary guidance and invaluable materials for my enrichment of my
research paper in all possible way.

Usa Kumari Tharu

BBS 4th Year
Gyan Bahumukhi Campus

vi
 Table of content

Title Page i
Declaration ii
Supervisor Recommendations iii
Endorsement iv
Abstract v
Acknowledgement vi
Table of Contents vii
List of Tables ix
List of Figures x
Abbreviation xi

CHAPTER I: INTRODUCTION 1-16

1.1 Background of the Study………………………………………...….… 1

1.2 Profile of the Organization……………………........................….… 3

1.3 Objectives of the Study…………………......………………….….... 5

1.4 Rationale of the Study……………………….………………………. 6

1.5 Review of Literature……………………………..………..………... 6

1.6 Research Methodology…………….………………………..……… . 10

1.7 Limitation of the Study………………………...……………….. 15

1.8 Organization of Study…………………………….…………… 15

CHAPTER II: RESULTS AND ANALYSIS 16-28

2.1 Presentation of data in table and figure and their analysis.…….. .16
2.2 Major F\indings……………………………………………………... 27

vii
CHAPTER III: SUMMARY, CONCLUSIONS AND RECOMMENDATION 29-
3.1 Summary…………………….........................................................… 29
3.2 Conclusions……………………………………………………………... 30
3.3 Recommendations………………………………………………... 30
BIBLIOGRAPHY 32
APPENDIX 33-37

viii
 LIST OF TABLES

Titles Page No.

Table 1 Credit and Advances to Fixed Deposit Ratio ...…………………………….…… 18

Table 2 Credit and Advances to Total Deposit Ratio………………………….…….…... 19

Table 3 Credit and Advances to Total Assets Ratio ……………………………..….…... 21

Table 4 Total Debt to Equity Ratio…………………………………………………….….. 23

Table 5 Total Debt to Total Assets Ratio ……………………………………….…….……24

ix
 LIST OF FIGURES

Titles Page No.

Figure 1 Credit and Advances to Fixed Deposit Ratio................................................. 18

Figure 2 Credit and Advances to Total Deposit Ratio……….…...…………………….. .20

Figure 3 Credit and Advances to Total Assets Ratio…………….…………….………... 21

Figure 4Total Debt to Equity Ratio………………………………………….……...……… 23

Figure 5 Total Debt to Total Assets Ratio ………………………………………………… 24

x
 List of abbreviation

A/C - Account

ATM - Automated Teller Machine

BFI - Banks and Financial Institutions

BBS - Bachelor in Business Studies

BS - Bikram Sambat

CEO - Chief Executive Officer

D/E - Debt Equity Ratio

EPS - Earnings per Share

EM - Equity Multiplier

Etc. - Etcetera

FD - Fixed Deposit

FY - Financial Year

FOM - Faculty of Management

i.e., - That is

Ltd. - Limited

NPAT - Net Profit after Tax

NRB - Nepal Rastra Bank

NRs. - Nepalese Rupees

NSBIL - Nepal SBI Bank Limeted

PM - Profit Margin

RBBL - Rastriya Banijya Bank Ltd

ROA - Return on Asset

ROOA - Return on Operating Assets

ROE - Return on Equity

xi