* 1.1.1 Background of Study
Banks are among the most important financial institution in the economy and essential business in thousand of local towns and cities. It is an institution, which deals with money and credit. It performs the main task of accepting deposit and granting loans. Hence, bank is that institution that performs the indispensable task of intermediating between two individuals and institution in order to raise fund and then loaning those funds to deficits spending individuals or institution. Thus it plays a significant role in the development of national economy. Bank helps people a great deal in saving. It provides security to the people by keeping people's money safely. It not only accepts deposit but even provides loan to different people in case of necessity. It even provides loan to trade, commerce & industrial sector. In addition, another contribution banks make is their willingness to accept risky ventures borrowing and lending activity across the financial market by taking on risky financial claims from borrowers while simultaneously issuing almost risk less claim to depositors. The term "bank" was derived from the Latin word "Bancus" which refers to the bench on which the bankers would keep its money and his records. Some people trace it origin to the French origin "Banque" and the Italian word "Banca". The development of banking was rightly observed by Geoffrey Crowther, "the present day banker has three ancestors of particular note. One the merchant .......... the banker's two other ancestors are the moneylenders and the goldsmith. Lending and borrowing are almost as old as money itself .........." According to Kent "A Bank is an origination whose principal operations are concerned with the accumulation of the temporarily idle money of the general public for the purpose of advancing to the other for expenditure." US law defines bank as, “any institution offering deposits subjected to withdrawal on demand and making loan of a commercial of business nature is bank." 1
Summarizing the above, banks are those financial institution that offer the widest rang of financial services – especially credit, saving and payments services and performs the widest range of financial function of any business firm in the economy. This multiplicity of bank service and function has lead to bank being labeled as "Financial Supermarket".
1.1.2 Meaning of Bank
Bank is that institution which is established under the law for dealing with monetary transactions. It means, those institutions are treated as bank , which accept the deposit of public as fixed deposits, current deposits and saving deposits. Banks also grant the loan to the needy person, businessman and industrialist, against security deposits by charging interest at some fixed rate. In a sentence, banks are those institutions which are established under a certain act to perform monetary and credit transaction. A bank provides to its customers a number of facilities in every sector of economy such as transfer of funds, collecting customer's funds, purchase and sale of shares, collection of dividends, opening bank draft and L.C. facilities and many more. ''An institution which trades in money and establishment of the deposits, custody and issue of money as also for making loans, discount and facilitating the transmission of remittances from one place to another", (Webster Dictionary). "A bank is an institution which collects money from those who have it spear or who are saving it out of their income and lends this out to those who require it". (Prof G.Crowther). 1.1.3 Introduction to NABIL bank
Nepal Arab Bank Ltd is first bank establish in joint investment in Nepal. Later it was changed into NABIL bank. NABIL Bank Limited, the first foreign joint venture bank of Nepal, started operations in July 1984. NABIL was incorporated...