A CASE STUDY ON

LOAN STRUCTURE OF
GARIMA BIKAS BANK LIMITED

A Project Work Report

By

AMRIT ROKAHA

Symbol No.:704150005

T.U. Regd. No. 7-2-297-193-2019

Nepal Adarsha Campus

Submitted to
The Faculty of Management
Tribhuvan University
Kathmandu

In Partial Fulfillment of the Requirements for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Waling, Syangja

2024
 DECLARATION

I hereby declare that the project work entitled “A Case Study on Loan Structure Of
Garima Bikas Bank Limited”. Submitted to the faculty of management, Tribhuvan
University, Kathmandu is an original piece of work under the supervision Mr. Deepak
Kafle, faculty member, NEPAL ADARSHA CAMPUS, Waling, Syangja and is submitted
in partial fulfillment of the requirement for the award of the degree of Bachelor of
Business Studies (BBS). This project work has not been submitted to any other university
or institution for award of any degree of diploma.

………………………
Amrit Rokaha
Nepal Adarsha Campus
Date: July,2024

ii
 SUPERVISOR’S RECOMMENDATION

The project work report entitled “A Case Study on Loan Structure of Garima Bikas
Bank Limited”. Submitted by Amrit Rokaha of Nepal Adarsha Campus, Waling, Syangja
is prepared under my supervision as per the procedure and format requirements laid by
the Faculty of Management, Tribhuvan University, 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.

Mr. Deepak Kafle

Supervisor
Nepal Adarsha Campus
Date: July,2024

iii
 ENDORSEMENT

We hereby endorse the project work report entitled “A Case Study on Loan Structure
Of Garima Bikas Bank Limited”. Submitted by Amrit Rokaha of Nepal Adarsha
Campus, Waling, Syangja is partial fulfillment of the requirement for award of the
Bachelor of Business Studies (BBS) for external evaluation.

….……………………. …………………………..
Mr. Shehskant Kandel Mr. Homkanta Gautam
Chairman, Research Committee Campus Chief

Nepal Adarsha Campus Nepal Adarsha Campus

Date: July, 2024 Date: July, 2024

ACKNOWLEDGEMENT
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This report entitled “Analysis of Loan Structure of Garima Bikas Bank Limited” has
been prepared in partial fulfillment for the degree of Bachelor of Business Studies (BBS).
The main objective of this study is to overview and analysis the Loan structure and
deposit mobilization Ltd.

At the time of preparing this study, I have consulted with various personalities. First of
all, I would like to express my gratitude to the department of Garima Bikash Bank Ltd.
for providing necessary documents and information required for my case study. Then, I
owe a special thanks to my respected teacher Mr. Deepak Kafle and Mr. Shehskant
Kandel for providing me necessary guidance.

At last, I am grateful to all other teachers of Nepal Adarsha Campus for providing me
encouragement and support for completing my research study.

Amrit Rokaha
B.B.S. 4th Year
Nepal Adarsha Campus
Waling, Syangja
Date: ………………...

TABLE OF CONTENT

Contents Page no.

Title Page i
Declaration ii
v
Supervisor’s Recommendation iii
Endorsement iv
Acknowledgement v
List of Tables vii
List of Figures viii
List of Abbreviations ix
Chapter I: INTRODUCTION
1.1. Background of the study 1
1.2. Profile of Garima Bikas Bank Ltd. 7
1.4 Objective of Study 12
1.5. Rational of the Study 12
1.6. Limitation of the Study 12
1.7. Report Structure 13
1.8. Literature Review 13
1.9. Conceptual Review 14
1.10. Review of Literature 14
1.11. Research Gap 15
1.12. Research Methodology 15
1.13. Research Design 16
1.14. Nature and Sources of Data 16
1.15. Instrument 16
1.16. Method of Data Analysis 16
Chapter II: RESULT AND ANALYSIS
2.1 Data Presentation 18
2.2 Result Analysis 25
2.3 Major Findings 26
CHAPTER III: SUMMARY AND CONCLUSION
3.1 Summary 27
3.2 Conclusion 27
Bibliography
Appendix

LIST OF TABLES

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Table No. Title Page No.

Table: 1 Term Loan of Garima Bikas Bank 18

Table: 2 Overdraft Loan of Garima Bikas Bank 20

Table: 3 Real Estate Loan of Garima Bikas Bank 21

Table: 4 Personal Loan of Garima Bikas Bank 22

Table: 5 Margin Loan of Garima Bikas Bank 23

Table: 6 Other Loan of Garima Bikas Bank 24

LIST OF FIGURES

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Table No. Title Page No.

Table: 1 Term Loan of Garima Bikas Bank 19

Table: 2 Overdraft Loan of Garima Bikas Bank 20

Table: 3 Real Estate Loan of Garima Bikas Bank 21

Table: 4 Personal Loan of Garima Bikas Bank 22

Table: 5 Margin Loan of Garima Bikas Bank 23

Table: 6 Other Loan of Garima Bikas Bank 24

LIST OF ABBREVIATIONS

GBBL : Garima Bikas Bank Limited

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ATM : Automated Teller Machine

i.e. : That is

Ltd. : Limited

NRB : Nepal Rastra Bank

BBS : Bachelor of Business Studies

Fig. : Figure

S.N. : Serial Number

IT : Information & Technology

P.E : Probable Error

R : Correlation

OD : Overdraft

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 CHAPTER: I
INTRODUCTION

1.1 Background of the study

Bank is a financial institution, which can also be called as the backbone in the
development of the national economy. The word bank is derived from Italian word “Bencho”
which means bench. The Italian goldsmith used to perform monetary transaction sitting on
the bench. So, the literary meaning of bank is the act as a transaction of money by accepting
various types of deposit, withdraw of deposited money, disbursing loans and rendering other
financial services. Bank is defined as the financial institution which is established under
certain law, to perform monetary, credit and other financial transactions, such institutions
accept the deposits, grants loan and other financial services to the people. Among the various
functions to provide loan to the investors is the major function.

In long run financial sectors plays a crucial role in the economic growth and prosperity of
a country. The concept of financial institution in Nepal was introduced when the first
commercial bank, Nepal Bank Ltd. As a semi-government organization was established in
1983 A.D. it was established under special banking Act 1936 having elementary function of a
commercial bank. It becomes public limited company in 1953 A.D. later on in 1957 A.D. the
first commercial bank named as ‘Nepal Rastra Bank’ was established with an objective of
supervising, protecting and directing the functions of commercial banking activities in Nepal.
Another commercial bank fully owned by the government, named as Rashly a Banijya Bank’
was established in 1966 A.D. Later on, company Act and the Commercial Bank Act. in 1974
A.D, was introduced to further enhance the financial institution and commercial banks were
established to mobilize scattered fund in the country. Since then, many private commercial
banks are listed in Nepal Stock Exchange, which have highest contribution on the market
capitalization as compared to other sector. In Nepal, foreign joint venture banks perform
better than Nepalese ones because of their higher managerial efficiency and decision-making
capability. Recently, two Nepalese Banks, Nepal Bank Limited and Rastriya Banijya Bank
are being managed by foreign management group but no considerable performance
enhancement has seemed for the period of one year of management transfer. However,
Nepalese Bank has higher potentialities to increase their risk attitude and improvement of
their internal management.

Therefore, a Bank is an institution, which deals in collection deposits and advancing of loans
and other credit activities. They collected deposits are utilized for giving loan to different
1
industrial and commercial enterprises. Besides these activities, bank also perform payment or
remittance and other activities. Simply speaking, a bank refers to a commercial bank.
Hence, we can simply define bank as a financial institution, which deals with Money. Many
schools and institutions have defined bank differently. Some of the definition is given below:
As per Oxford Dictionary:
“As bank is an establishment for custody of money which it pays out on customer’s orders.”
According to Walter Leaf:

“A bank is a person or a Corporation Which Holds itself out to receive from the public,
deposit payable on demand by cheque.”
As Per Prof. Kinley:

“A bank is an establishment where individual makes advance of money as may be required

and safely made, and to which individual entrust money when not required by them for use.”

1.1.1 Historical Development of Banks in Nepal

The history of banking in Nepal dates back to the year 1937 AD with the establishment
of Nepal Bank Ltd. as the first commercial bank in Nepal. It was established as a semi-
government bank with metallic coins worth NRs.10 million as the authorized capital. Bank
notes in Nepal weren’t introduced up until the mid1940s. It was in this year 1945 that the
earliest bank notes were issued by the treasury “Sadar Muluki Khana”. These notes were
signed by a “Khajanchi”, the head of the treasury who also was a high Hindu Priest.
Later in the year 1955, Nepal Rastra Bank Act was formulated for a better banking system
and Nepal Rastra Bank was established in 1956 as the Central Bank of Nepal accordingly.
After this date, the banknotes were issued by the Central Bank with the signatures of the
governors of the institution. Till the 1980s, the banking sector was wholly owned by the
government, with Agriculture Development Bank, Rastriya Banijiya Bank, NBL, and NRB
being the pillars of financial institution in Nepal. 1984 saw the start of the private banking
industry with the establishment of Nabil Bank and the introduction of foreign banks such as
Nepal Arab Bank, Nepal Indosuez Bank, and Nepal Grindlays.

28
Rastriya Banijiya Bank was established in 1966 A.D. as the second commercial bank of
Nepal. The Agriculture Development Bank was established in 1968 A.D. This is the first
institution in agricultural financing.
The banking sector in Nepal has faced many hurdles and hindrances. It has undergone
various political conflicts and instability. But today, the banking sector is more liberalized
and modernized. As per the change in technology, the history of banking in Nepal has taken a
swift jump from metallic coins to online payments.
There are various types of banks working in the modern banking sector in Nepal. It includes
central, development, commercial, financial, co-operative and micro credit (Grameen) banks.
The NRB has the authority to classify the institutions into A, B, C and D classes on the basis
of capital structure and working area and also provide the suitable license to the bank or
financial institution. Class ‘A’ is for commercial bank, ‘B’ for the development bank, ‘C’ for
the financial institution and ‘D’ for the micro finance development banks. As per the list
issued by NRB as of 24 February 2023, the modern banking sector includes 21 Commercial
Banks, 17 Development Banks, 17 Finance Companies, 63 Microfinance and 1(One)
infrastructure bank that are currently operating in Nepal.

1.1.2 Introduction of Bank

In general, bank refers to any Financial Institution Which deals with the transaction of
money. Here the transaction of money refers to acceptance of deposits of money of people
and lending those deposited money to the needed people in the form of loan.
Banks runs with the view to earn profit, while it aims to shoulder the responsibility of
safeguarding the financial and economic stability of the country.
According to the World Bank:

“Bank are financial institutions that accept fund in the form of deposit repayable on demand
or in short notice.”
According to Walter Leaf: “A bank is a person or Corporation Which Holds itself out to
receive from the public, deposit payable on demand by cheque.”

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1.1.3 Importance of Bank

Bank are rendering very reliable service to the community. Banks are not only safe place
to keep money it’s also profitable ones. Money deposited in saving accounts earns interest at
a specific annual rate. Some of the major notes that resemble the importance of bank.
a. Aid in developing industry and commerce.

b. Develop the habit of saving.

c. Provide security to valuable goods and property.

d. Relieve people from financial exploitation.

e. Investment opportunities in new enterprises.

f. Balance economic development as a whole.

Types of banks

The types of bank are as below:

• Commercial bank

• Investment bank

• Developing bank

• Micro finance etc.

i. Deposit Collection

Collection of deposit is the primary function of the banks. Collect deposit from individual
costumers, business sectors, government sectors, other institutions.
Generally, bank deposit is categorized as:

• Current Deposit

• Saving Deposit

• Fixed deposit

• Call deposit

• Margin deposit

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ii. Advancing Loans

The next important function of banks is advancing loans. Banks offer various types of loan to
the individuals, business units and other institutions. Deposit funds are used for this purpose
after allocation necessary amount in cash to meet current need possible for upcoming
obligation. Generally, bank loan is categorized as:
• Cash Credit

• Overdraft

• Working Capital

• Term Loan

• Hire purchase Loan

• Consumer (Housing, Auto, Mortgage, Education etc.)

iii. Credit Creation

As bankers give loans and advances to the borrowers without physical transfer of money, the
credit creation takes place. Such created money adds to the total money supply of the bank
and to the country as a whole. Thus, we have a concept of real money and credit money.
Bank credit refers to multiplication of loan and advances thus bank acquire assets in the form
of cash, securities, bonds, other fixed assets and credited deposit to bank the loans advance.
iv. Payment Function

Providing for payment mechanism or the transfer of fund is one of the important functions
performed by commercial banks and it is increasing in importance, as greater reliance is
placed on the cheques and credit cards. Moreover, banks deposits and loan payment and
transfer funds between a depositor saving and checking account.
v. Polling of National Saving

Commercial banks perform vital services to all sector of economy by providing facilities of
the pooling national saving and making them available for economically and socially
desirable purpose. The saver is rewarded by the payment of interest on his saving. These
polled funds are made available to businessmen, who use them for the expansion of their
productivity capacity and customers for such items as housing and customer goods.

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vi. Transfer Money (Remittance)

Money can be transferred from one place to other through the bank in the different ways. So,
transfer money is another important function of commercial banks in the present days.
Likewise, bank draft, hundi, electronic transfer etc.
vii. Agency Function

Commercial banks also perform a number of agency functions for and on behalf of its
customer. They handle transactions in shares, stocks, bonds and debenture for their clients
requested by their customers, they pay taxes, fees, dues and collect the receipts on the behalf
of necessary.
viii. General Utility Functions:

A number of other functions are carried on by the commercial banks to facilitate the
customer:
• Safe Deposit Locker Facilities

• Guarantee Services

• Merchant Banking

• Automatic Teller Machine

• Gift Cheque

• E-Banking and other Miscellaneous services.

1.2 Profile of Garima Bikas Bank Limited

Garima Bikas Bank Limited, a National Level Development Bank previously headquartered
at Waling, Syangja, commenced its commercial operations on the 18th of Kartik, 2064 and
the formal inauguration took place on the 7th of Marg, 2064. The bank, which initially started
its banking transactions with a paid-up capital of only NPR 26.5 million, had covered three
districts i.e. Syangja, Palpa, and Kaski as a Regional Level Development Bank. On the 20th
of Chaitra, 2068, its business coverage area was expanded to 10 districts.

Garima Bikas Bank, with a commitment to "Access to All," overcame limited business
coverage and service distribution challenges by strategically becoming a National Level
Development Bank. Through mergers with erstwhile Nilgiri Bikas Bank Limited on 29 th of

28
Asadh 2072 and erstwhile Subekshya Bikas Bank Limited on 4 th of Ashwin 2073, the bank
strengthened its capital base, expanded branch locations, and improved overall operations.
The recent acquisition of Sahara Bikas Bank Limited on 28 th of Kartik 2078 further enhances
our presence in Province 2. As a result, Garima Bikas Bank has transformed into a robust
financial institution, offering a wide range of banking services to a larger customer base and
ensuring accessible and reliable banking services across Nepal.

Vision, Mission & Core Values

We are committed to offer the best of services to customers and to be their first choice. We
have very clear vision, i.e. “Access to All”. We focus on equal access of all peoples who are
real seeker of banking services.

Banking Services Rendered by Garima Bank Limited

Garima Bikas Bank Limited has been obtaining its objectives and targets through various
kinds of banking services with a large number of facilities. The services rendered by Laxmi
Bank are as follows:
 Garima Bikas Bank Limited provides loan, advances and overdraft to the needy people
and customers against pledge and securities.
 Garima Bikas Bank Limited performs the agency services like payment of bills, provides
guarantee, transfer of money etc. on the behalf of customers.
 It accepts cheque of any bank of its customers only.

 It also provides the facility of remittance transfer, Fixed saving for certain time period as
customer choice etc.

Besides these, various instrumental and modern technological services are provided by Bank
which is discussed below:
• Deposits

• Credit cards

• ATM cards

• Mobile banking
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• E-Banking

• Home loan, Auto loan, Education loan, etc.

• Other facilities

Board of Director of the GBBL

The board members constitute the following six members:

• Shyam Prasad Basyal Chairman

• Bimal Pandey Director

• Dr. Ananda Prasad Shrestha Director

• Dipendra Shrestha Director

• Saraswati Pathak Director

• Mukunda Raj Acharya Independent Director

Activities of Garima Bikas Bank Limited

The Bank is committed for good corporate governance practice and banking activities with
prudent banking culture. It has been offering various products and services for its customers
with competitive rate in market. It has been able to provide diversified service (Modern
Banking Limited Banking and Microfinance) backed by the latest technology.

1.3 Meaning and concept of Loan Structure

Loan structure refers to the different characteristics that a lender can choose from when
extending credit to borrower. Loan structure is can also be referred to the components that
makes up a loan, like the loan term, interest rate, collateral, and repayment.it is also often
referred to as credit structure. The process of spreading out a loan into payments that consist
of both principal and interest over a set of timelines. The loan structure is derived by taking
into consideration several factors, such as the purpose, the timelines, and the risk profile of
the borrower.

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Criteria that influence Loan Structure

Loan structure is informed, at least in part, by any underlying assets that are being financed.
Criteria that influence Loan Structure are explained below:

The borrower’s level of risk

Lender has complex risk rating model that helps them understand the borrower’s likelihood
of triggering an event of default. The higher the likelihood of default, the greater the credit
risk.

The desirability of any underlying collateral

Credit is generally extended to support the financing of an asset. The quality of that asset as
collateral will also help to inform loan structure, including loan-to-value (LTV).

Aligning cash inflows and outflows

This is particularly true of corporate borrowers -think about a piece of manufacturing

equipment. If equipment is being purchased and it’s intended to produce cash flow for 10
years, it’s not unreasonable to consider a 10-years repayment period.
The upper limit on amortization may be governed by the condition of the asset, but,
intuitively, it would be odd to force a company to pay in full upfront for an asset that will
generate cash flow for many years into the future.

Mitigating transaction or asset-specific risks

This, too, is mostly true of corporate borrowers. Consider a management team that strips a lot
of cash out of the company by way of dividends. A lender may wish to put a covenant in
place that would restrict dividends to ensure that a sufficient cash buffer is retained in the
corporation to support liquidity (and timely loan payments).

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Loan Structure Characteristics

While this is not an exhaustive list, important considerations around loan structure include
the following:

• The loan amount, which is generally a function of the loan-to-value (LTV).

• The interest rate, as well as whether it should be a fixed rate or a variable (floating)
rate.
• Is it operating (revolving) credit, or will the loan be structured as term financing?
• Will the loan be reducing (amortizing)? If reducing, will the payments be periodic, or
will it be structured as a “bullet” repayment?
• Is the loan secured or unsecured?

• Will security charges be first ranking, or will the loan be “subordinated” (i.e., first vs.
second mortgage) behind another loan or lender?
• How frequently will the borrower be expected to provide financial reporting to the
lender, and what quality should that reporting?
• Will there be any specific financial or non-financial loan covenants that the borrower
must comply with?

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 • Will there be any type of secondary security taken (i.e. government guarantee
programs, personal guarantees by owners, etc.)?

1.3.1 Statement of the Problem

The problem towards which this study is directed by today’s banking sector which is
competitive. There are different banks established to provide service to customer and achieve
existence in the market. Therefore, problem may arise due to the current situation has
brought a cutthroat competition in banking business. In this context, the Garima Bikas bank
ltd. is facing problems because it has to give service to the remote people where financial
benefit is at low at the same time, Bank mobilize deposit by making finances and by
investing in various financial markets. Acceptance of deposits is the primary function of
commercial banks. And deposit mobilization is one of the basic innovations in current
Nepalese banking activity. Hence, the study is carried out in order to look into the trend and
growth in deposit mobilization of Garima Bikas Bank Limited. Banks and financial
institution are facing huge competition and lots of challenges regarding liquidity risk, credit
risk, inflation risk, operational risk and interest rate risk. At present research raised the
following questions:
• What is the right approach on deposit mobilization of Garima Bikas bank ltd.?
• What are the liquidity and profitability position of Garima Bikas bank ltd.?
• What is the relationship among deposit, loan and advances and investment of Garima
Bikas bank ltd.?

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1.4 Objective of the study

The main objective of the fieldwork study is to analyze deposit position and loan structure
Garima Bikas bank ltd., Waling. The study is intending to present a brief and clear picture of
deposit. The main objective of the study on deposit mobilization are as bellow:
• To identify and analyze the successes and failures of the loan structure in the case
study.

• To analyze the loan structure and types of loan of Garima Bikas bank ltd.

• To conduct a comparative analysis of loan structures in different regions or financial

institutions to identify best practices and areas for improvement.

1.5 Rationale of the study

In Nepal. Most of the investor are investing in the stock without adequate knowledge of
the market. This study is useful for the firm’s perspective and to aware the Nepalese
investors. There are basically two objectives:
• Receiving deposit analysis of investment bank

• To know the objective of investor and they can develop their plans and policies
accordingly.

1.6 Limitations of study

The study is limited to the deposit mobilization of Garima Bikas Bank. The data
information over the period of 5 years are used in study. Balance Sheets, Profit and loss
accounts, NR.13 data, etc. Are considered as basic various sources. For the literature review
various newspapers journals, unpublished thesis works and nevertheless the internet has been
referred. Best efforts have been to make the report accurate and to the point. But some
drawbacks, which could not be avoided, are mentioned below:
• Simple statistical methods are used to analyze the data.
• The report is based on the data of five years from 2075/76 to 2079/80.
• The accuracy of the report is the function of the accuracy of the data provided by the
bank.
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 No authentic proof has been checked.
• Time limitation i.e. the study is carried in one month periodic.

• The study is limited only in the financial performance of the banks.

• The choice of analytical methods may influence the results. Different methods could
yield different insights.
• The study will be done on the basis of the data provided by the bank and through the
annual reports, journals, textbooks, magazines etc. so the output of the study is entirely
based on the data provided by the bank.
1.7 Report Structure

The entire study was carried out to different stages and producers as it needed. The study
is organized in the following chapter in order to make the study easy to understand. The
report is in three chapters:
The First chapter is an introductory chapter, which contains background of the study.
Statement of the problems, objectives of the study. Rational of study, limitation of the study
and organization of the study. This contains conceptual formwork, review of legislative
provision, review of research paper and published and unpublished thesis of T.U. It contains
introduction, research design, and source of data, population and sample, financial analysis
and statistical analysis.
The Second chapter is analyzing chapter, which deals with result and finding of relevant
data through definite courses of research methodology with financial and statistical analysis
related to investment and deposit mobilization of Garima Bikas Bank. Major finding of the
study has presented at the end of this chapter.
The Third chapter is the past of the study which provides Discussion and conclusion for
improving the future performance of the sample banks. Finally, an extensive bibliography
and appendices are also presented at the end of the project work.

1.8 Literature Review

This section represents the review of already published materials. The main aim of this
section is to show the relevant literature related to the same topic and provide theoretical
framework. Every possible effort has been made to grasp knowledge and information that is

28
available from libraries and the documents available from relevant literatures and concerned
commercial banks have been reviewed. This chapter helps to take feedback to broaden the
information base and inputs to my study. This part can be divided into three parts. They are:
I. Conceptual Review
II. Review of literature
III. Research Gap

1.8.1 Conceptual Review

Financial development is one of the key indicators of economic growth for any country and
financial institution grant regular energy for investments. Which is needed for economic
development. Capital formation is one of the important factors for economic development.
The capital formation leads to increase in the size of national output. Income and
employment, solving the problem of inflation, balance of payment and making the economy
free from the burden of foreign debts. Domestic capital formation helps in making a country
self-sustainable. In developing countries, the rate of saving is quite low and existing
institutions are half successful in mobilizing such saving as most people have lower income
so that all current income must be spent in maintaining a subsistence level of consumptions.
Under this heading the concept of the bank and banking transactions are described after
reading thoroughly the available hooks.

1.8.2 Review of Literature

Review of literature is a crucial part of all studies. It helps to find out already discovered
things. Part studies are also the basis for the research so it cannot be ignored because they
provide the foundation to the present study. The review of literature accomplishes the
following functions:
• It will establish a point of departure for future research.
• It will avoid needless duplication of costly research effort.

• It will reveal areas of needed research.

The primary purpose of literature is to learn, and it helps researcher to find out what research
studies have been conducted in one’s chosen field of study. And what remains to be done. For
review study, the researcher uses different books. Reports journals and research studies

28
published by various institutions; unpublished dissertations submitted by masted level
students have been reviewed.
 Conceptual Review

• Concept of Bank

• Concept of Commercial Bank

• Concept of Deposit Mobilization

 Review of Related Studies

 Review of previous Studies

1.8.3 Research Gap

Previous researchers covered all the commercial banks, and some were either on the case
study between two commercial banks or some were on the particular bank branch. but this
study focused on some particular sample banks. This research is related only loan structure
(deposit mobilization). It covers the previous deposit mobilization of selected banks.
Moreover, this study has not been done by previous researcher as separately. Thus, to fill the
gap this study has been conducted.
All of the above research mentioned is primarily concerned with the mobilization of deposit
mainly in loan and advance. The research made does not cover the mobilization of deposit in
other short-term investment. Thus, to fulfill the gap this study will try to employ the
relationship of deposit mobilization with each use of fund, including fixed assets as well
without which the operation of daily transaction is almost impossible.

1.9 Research Methodologies

Research methodology is systematic way to solve research problem Research methodology

describes the methods and process applied in the entire aspects of the study. It includes all
the procedures from theoretical foundation to the collection and analysis of data. “Research
methodology refers to the various sequential step to be adopted by a researcher is studying a
problem with certain object in view.”

28
According to Kothari C.R. (1991), “Research methodology refers to the four various
sequential steps to be adopted by researcher in studying a problem with certain objective in
view. Research methodology basically describes the methods, processes, tools and
techniques applied in the entire process of a scientific referee to Michael V.P. (2000),
“Research is the process of systematic and in-depth study or search for any particular topic,
subject or area of investigation backed by collection. Presentation and interpretation or
relevant details or data.

1.9.1 Research Design

Research design is the plan. Structure and strategy of investigation conceived so as to

obtain answer to research question and control variance. To achieve the objectives of the
study, descriptive as well as analytical research design have been used. This study is based on
secondary data.

1.9.2 Nature and Sources of Data

The study is conducted on the basis of secondary data. The data relating to the investment,
deposit, loan and advances, assets profit are directly obtained from the Balance Sheet and
Profit and Loss a/c of the concerned bank's annual reports. Supplementary data and
information are also collected from number of institution and authoritative sources like NRB,
NEPSE, SEB, web sites, etc.
1.9.3 Instrument

Instruments for the study will be previous balance sheet, interview of personnel other
previous financial report etc. Descriptive analysis as well as statistical analysis has been
applied.
Calculated results are tabulated under different headings according to the objectives &
significance to interpret result.

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1.9.4 Method of Data Analysis

Analysis and presentation of the data is the core of every research work. This study
requires some financial and statistical tools to accomplish the objective of the study.
The financial and statistical tools are most reliable. In this study various financial, statistical
and accounting tools have been used. These tools make the analysis more effective,
convenience, reliable and authentic.
The various results obtained with the help of financial, accounting, and statistical tools are
tabulated under different headings. Then they are compared with each other to interpret the
results. Two kinds of tools have been used to achieve the certain goals.

1.10 Financial Tools

Analysis and interpretation of various ratio should give experienced, skilled and analysis
of a better understanding of a financial condition and performance of the form than they
would obtain from analysis of the financial data alone. The type of analysis varies according
to specific interest of the party involved. Financial tools basically help to identify the
financial strengths and weaknesses of the firm by properly establishing relationships between
the items of the balance sheet and the profit & loss account.
Liquidity Ratios:

The ability of a bank to meet its short-term obligation is known as liquidity. It reflects the
short- term financial strength of the bank. These ratios are used to known capacity of the
concerned to repay its short-term liability.
All the necessary data are collected from published data as annual reports, bulletins.
Financial statements and annual balance sheets, etc. of the banks. For the analysis of the data
financial tools like (Credit Deposit Ratio) and statistical tools like (Mean, Standard
Deviation, Coefficient of Variation, Time Series & Trend Analysis, Correction, Percentage).

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 CHAPTER- II
RESULT AND ANALYSIS

2.1 Data Presentation

Banks are the highly leveraged intuitions that are strictly depended on attracting deposits.
The main indicator affecting the deposits is the interest provided for those depositors by the
bank. Garima Bikas bank ltd. As a commercial bank has also the responsibility of mobilizing
these deposits in profit-making sector to generate revenue from the depositors, they would
lend the bank for profit. Because of the interest provided to the depositors, people become
interested in saving of their income. To provide these facilities, bank need to utilize its
deposits to invest in appropriate sectors. If so, they could be able to pay the loan and the
advances that bank is loan and the advance that bank usually give to the creditors in higher
rate that the interest they paid to the depositors. Thus, the spread over of the interest rate in
deposits and credits will be one of the incomes of the bank.

2.1.1 Term Loan

A term loan is a type of loan offered by bank that are appr by business to help them
manage their cash flows. It can be categorized into two types, depending on the tenure of the
loan, such as unsecured and secured ones. An unsecured loan does not require any collateral
to be provided whereas a secured one does.
Table No. 2.1 Term Loan of Garima Bikas Bank Ltd

Fiscal Year Term Loan

2075/76 9,449,673,826

2076/77 12,267,742,730

2077/78 16,816,887,491

2078/79 18,883,205,341

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 2079/80 24,074,362,563
(Source: Annual Report of GBBL)

Figure No. 2.1

Bar Diagram on Term Loan of Garima Bikas Bank Ltd

Term Loan
30,000,000,000

25,000,000,000

20,000,000,000

15,000,000,000

10,000,000,000

5,000,000,000

0
2075/76 2076/77 2077/78 2078/79 2079/80

Term Loan

The term loan taken by the entity has shown a consistent upward trend over the years, starting
at 9.45 billion in 2075/76 and reaching 24.07 billion in 2079/80. This growth suggests
increasing financial commitments or investments undertaken by the organization. The
substantial rise from 2075/76 to 2079/80 highlights a significant expansion in borrowing,
potentially for business expansion or capital investments.

2.1.2 Overdraft Loan

An overdraft means that the bank allows customers to borrow a set amount of money. There
is interest on the loan, and there is typically a fee per overdraft. An overdraft occurs when an
account lacks the funds to cover a withdrawal, but the bank allows the transaction to go
through anyway. The overdraft allows the customer to continue paying bills even when there
is insufficient money. An overdraft is like any other loan: The account holder pays interest on
it and will typically be charged a onetime insufficient funds fee.
Overdraft protection is provided by some banks to customers when their account reaches
zero, it avoids insufficient funds charges, but often includes interest and other fees.

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 Table No. 2.2

Overdraft loan of Garima Bikas bank ltd.

Fiscal Year Overdraft Loan

2075/76 7,435,971,107

2076/77 8,340,278,981

2077/78 14,333,541,679

2078/79 16,281,404,097

2079/80 15,108,806,253
(Source: Annual Report of GBBL)

Figure No. 2.2:

Bar Diagram on Overdraft Loan of Garima Bikas bank ltd.

Overdraft Loan
18,000,000,000
16,000,000,000
14,000,000,000
12,000,000,000
10,000,000,000
8,000,000,000
6,000,000,000
4,000,000,000
2,000,000,000
0
2075/76 2076/77 2077/78 2078/79 2079/80

Overdraft Loan

The overdraft loan balance fluctuated over the years, starting at 7.44 billion in 2075/76,
peaking at 16.28 billion in 2078/79, and then decreasing to 15.11 billion in 2079/80.This
indicates varying liquidity needs or management of short-term finances by the entity. The

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highest balance in 2078/79 suggests a period of increased reliance on overdraft facilities,
possibly for operational expenses or cash flow management.

2.1.3 Real Estate Loan

The real estate loan is financing used to purchase a property, and there are several types
available to aspiring homeowners and real estate investors alike. Each loan type will come
with different approval requirements, interest rates, and terms.
Table No. 2.3

Real Estate Loan of Garima Bikas bank ltd.

Fiscal Year Real Estate

2075/76 959,409,262

2076/77 1,153,635,271

2077/78 473,070,209

2078/79 904,372,130

2079/80 968,132,385
(Source: Annual Report of GBBL)

Figure No. 2.3

Bar Diagram on Real Estate Loan of Garima Bikas bank ltd.

Real Estate
1,400,000,000
1,200,000,000
1,000,000,000
800,000,000
600,000,000
400,000,000
200,000,000
0
2075/76 2076/77 2077/78 2078/79 2079/80

Real Estate

The value of real estate holdings fluctuated over the fiscal years, starting at 959.41 million in
2075/76, peaking at 1.15 billion in 2076/77, and then declining sharply to 473.07 million in

28
2077/78. It recovered to 904.37 million in 2078/79 and stabilized around 968.13 million in
2079/80. These changes suggest varying investments or valuations in real estate assets over
the specified period.
2.1.4 Personal Loan

A personal loan is an amount of motley you can borrow to use for a variety of purpose.
For instance, you may use a personal loan to consolidate debt or pay for home renovations.
Or plan a dream wedding.
Table No. 2.4

Personal Loan of Garima Bikas bank ltd.

Fiscal Year Personal Loan

2075/76 3,288,774,702

2076/77 4,076,338,143

2077/78 8,107,046,451

2078/79 9,537,928,337

2079/80 11,978,024,382
(Source: Annual Report of GBBL)

Figure No. 2.4

Bar Diagram on Personal Loan of Garima Bikas bank ltd.

Personal Loan
14,000,000,000
12,000,000,000
10,000,000,000
8,000,000,000
6,000,000,000
4,000,000,000
2,000,000,000
0
2075/76 2076/77 2077/78 2078/79 2079/80

Personal Loan

The amount of personal loans increased consistently over the fiscal years, beginning at 3.29
billion in 2075/76 and rising to 11.98 billion in 2079/80. This upward trend indicates

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growing consumer borrowing, possibly for various personal expenses such as education,
healthcare, or home improvements. The substantial rise from 2075/76 to 2079/80 suggests an
increasing reliance on personal loans as a financial resource.

2.1.5 Margin Loan

Margin lending is a type of loan that allows you to borrow money to invest, by using your
existing shares, managed funds and/ or cash as security. It is a type of gearing, which is
borrowing money to invest.
Table No. 2.5
Margin Loan of Garima Bikas bank ltd.

Fiscal Year Margin loan

2075/76 259,216,575

2076/77 303,641,474

2077/78 1,326,816,503

2078/79 1,040,310,513

2079/80 1,334,104,585
(Source: Annual Report of GBBL)

Figure No. 2.5

Bar Diagram on Margin Loan of Garima Bikas bank ltd.

Margin loan
1,600,000,000
1,400,000,000
1,200,000,000
1,000,000,000
800,000,000
600,000,000
400,000,000
200,000,000
0
2075/76 2076/77 2077/78 2078/79 2079/80

Margin loan

From the above figure, the margin loan portfolio of Garima Bikas Bank Ltd. showed
significant growth over the fiscal years, starting at 259.22 million in 2075/76 and peaking at
1.33 billion in 2079/80. This indicates a substantial increase in lending against securities,
28
possibly reflecting higher market participation or investor activity. The fluctuations in
between suggest adjustments in risk management or market conditions influencing the bank's
margin lending operations.
2.1.6 Other Loan

Other Loan is a form of debt incurred by an individual or other entity. The lender usually
a corporation, financial institution, or government advances a sum of money to the borrower.
In return, the borrower agrees to a certain set of terms including any finance charges, interest
repayment data, and other conditions.
Table No. 2.6
Other Loan of Garima Bikas bank ltd.

Fiscal Year Other loan

2075/76 1,488,742,618
2076/77 2,333,054,255
2077/78 2,407,532,396
2078/79 3,417,385,097
2079/80 2,689,611,685
(Source: Annual Report of GBBL)
Figure No. 2.6
Bar Diagram on Other Loan of Garima Bikas bank ltd.

Other loan
4,000,000,000
3,500,000,000
3,000,000,000
2,500,000,000
2,000,000,000
1,500,000,000
1,000,000,000
500,000,000
0
2075/76 2076/77 2077/78 2078/79 2079/80

Other loan

The above figure shows that the Other Loan from 2075/76 to 2079/80 of Garima Bikas Bank
Ltd. The highest Other Loan is found in the year 2078/79. In year 2079/80 the Other Loan is
decreased. From the year 2075/76 to 2078/79. The Other Loan has gradually increased.
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2.2 Result Analysis

The Result analysis can be used to find out the internal and external changes in environment
of organization analysis is conducted to find out the strength, weakness, opportunity and
threats of Garima Bikas Bank on the basis of the information and data collected through
primary and secondary sources. A.
• The growth suggests that the bank is increasingly providing long-term financing,
possibly for business expansion or capital investments. The upward trend reflects
growing financial commitments or investments undertaken by the organization.
• The fluctuations indicate varying liquidity needs or management of short-term
finances. The peak in 2078/79 suggests a period of increased reliance on overdraft
facilities, possibly due to operational expenses or cash flow management.
• The steady rise in personal loans indicates growing consumer borrowing, possibly for
various personal expenses such as education, healthcare, or home improvements. This
trend suggests an increasing reliance on personal loans as a financial resource among
consumers.
• The increase in margin lending reflects higher market participation or investor
activity, indicating that more customers are borrowing against their securities.
Fluctuations in between years suggest adjustments in risk management or market
conditions influencing the bank's margin lending operations.
• The gradual increase followed by a decline in other loans suggests varying demand
for miscellaneous types of financing provided by the bank. The peak in 2078/79 indicates
a period of higher loan issuance, which subsequently decreased in the following year.

2.3 Major Findings:

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 The consistent increase in term loans reflects the bank's strategy to support long-term
financing needs, indicating a strong focus on business expansion and capital
investments.
 The fluctuations in overdraft loans highlight the bank's role in managing short-term
liquidity needs for its clients, with a notable peak suggesting times of higher financial
stress or operational needs.
 The steady rise in personal loans signifies growing consumer confidence and reliance
on the bank for personal financial needs, indicating a robust demand for personal loan
products.
 The growth in margin loans points to increased investor activity and participation,
suggesting the bank's active role in supporting investment financing.
 The trends in other loans suggest that while there was a period of increased
miscellaneous loan issuance, the subsequent decline indicates changes in demand or
shifts in the bank's lending strategy.

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 CHAPTER – III

SUMMARY AND CONCLUSION

3.1 Summary
Commercial bank is the backbone of economic development of a developed country. At
present situation in Nepal, the bank deposit is the dependable and permanent source of
capital accumulation. However, since the commercial bank is operated in the business point
of view, most of their branches are in urban areas, which affect the proper accumulation of
capital and mobilization of deposits. There are many banks operated in Nepal these days. We
have also practiced that some of the banks operated in Nepal have been suffering from loss.
In this situation, a bank can succeed to complete with other banks only when it can provide
efficient services. Only collecting deposits should not aim of a bank. It has to disseminate the
collected funds in different investment as well. In this case, study of deposit mobilization of
Garima Bikas Bank has been allocating in investments and loans.

3.2 Conclusion
Following conclusion can be prescribed from study:

• Garima Bikas Bank is more successful in term of CDR but according to collected
maximum deposit and credit. The branches of banks have computerized system.
• Banks stuff was much motivating. There are opportunities on training, seminar,
observation tours and incentives to staff to increase to staff to increase their
efficiency.
• The evaluation of the staff should be done according to the quality and quantity of the
work they performed.
• To collect necessary and accurate information of the clients as well as getting success
in each mobilization, more local staffs are suggested to appoint in each branch.
• There should be certain cell for Ad display and the opportunity of people’s
participation in each branch if possible.

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• Respective treatment should be given to high client and deposit that help so make
long term close relation between the client and hank. The physical appears of the staff
may possibly always he smiling and cheerful in order to provide better customer
services in time and also eager to solve the problems of in valuable customers.
Effective campaign for deposition, AD and displays should also be taken into
consideration to attract the prospective clients.
• Effective communication has to play vital role to maintain good faith and reliability
in the transaction between bank and its customers. It is also recommended that the
bank should pay more attention on attractive interest policy in credit for shareholders
and borrowers.
• Finally, it can be concluded that study and analysis of the above source of
information that deposit control is the major economic activities of nation. The policy
matters the bank have to apply appropriate policy with attractive of nation. The policy
matters of the bank have to apply appropriate policy with attractive interest rates so
that large capital ca be collected at very low cost, which encourage the industrial and
commercial activities better economic development and employment opportunity.

Lastly, Garima Bikas Bank should on with its quality services to the country with loyalty
and devotion. I wish for their future progress.

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 BIBLIOGRAPHY

Adhikari, Devraj, Pandey, Dhrubalal. (2017). Business Research Methods.

Kathmandu: Asmita Publication.

Agrawal, G.R. (2005). Project Management in Nepal. Kathmandu: MK Publisher.

Koirala, K.D. (2007). Fundamental of Marketing Decision. Kathmandu: M.K. Publishers.

Gup, B.E., Kolari, J.W. (2016). Commercial Banking. New Delhi: Wiley India

Pandey, D.L. (2010). Effect of training on organizational performance in the service of

Nepal. The management review, 15:1, 149-161.

Annual Report of Garima Bikas Bank Limited from fiscal year 2075/76 to 2079/80

Website accessed
 www.garimabank.com.np
 www.wikipedia.com
 www.investopedia.com
 www.google.com.np
 www.merolagani.com.np
 www.sharesansar.np

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APPENDIX

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