Comparative Study of Commercial Banks of Nepal

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CHAPTER I INTRODUCTION
1.1 INTRODUCTION TO THE TOPIC
Banking industry has stood as the most vulnerable yet the most profitable sector in Nepalese economy. The banking sector is prospering with much lesser difficulty in spite of increasing economic downturn and political instability in the nation. The clear picture is reflected in Nepal stock exchange; where 90% of stock traded is that of financial sector of which majority shares are held by commercial banks. With more number of commercial banks catering to the same market, it has given rise to the intense competition. So far, there are 31 commercial banks, 87 development banks, 79 finance companies, 21 micro-finance development banks, 16 saving and credit cooperatives and 38 NGO (financial intermediaries) all these financial institutions are doing very well even in the slowdown of the economy. With increasing number of finance companies, development banks and cooperatives; commercial banks had no option but to increase their banking services, thereby maintaining competitive edge over others. In terms of market competitiveness, market leaders in Nepalese banking sector are Standard Chartered Nepal Bank Limited, Himalayan Bank Limited, NABIL Bank Limited, Nepal Investment Bank Limited and Everest Bank Limited. So for my comparative study I too have considered these five banks. Since there is intense competition in the Nepalese banking industry I have tried to do comparative study in terms of deposit, lending, capital fund, profit after tax and market share value between these five banks.

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1.2 OBJECTIVES OF THE STUDY
    To compare the capital structure of these five banks. To do the comparison regarding the lending and deposit position of these banks. To identify the profit after tax of these five banks. To compare the non-performing loans of these banks.

 To identify and compare the current market share of these banks.

1.3 METHODOLOGY
The methodology used in these report preparation is Exploratory Research Design. It is entirely based on the secondary data required through internet services.

1.4 LIMITATIONS OF THE STUDY
 The time period of ten days was not sufficient for the detail comparative study of five banks  This report is mainly based on my individual theoretical knowledge that has been previously studied.  The study undertaken is purely on the basis of the financial statements of the firm over the years obtained through website of central bank of Nepal.

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CHAPTER II INTRODUCTION TO BANKING INDUSTRY
2.1 CONCEPT OF BANK
The term „bank‟ is derived from the Latin Word „bancus‟, Italian word „banca‟, French word „banque‟, which means „a bench‟ and German word „bank‟ which means Joint Stock Company. Bank is a financial institution engaged in monetary transaction. It accepts deposits from surplus units and mobilizes those funds to the deficit unit. In other words, it receives deposits from those having savings and lends it to the ones who are in need of money for some purpose. Besides this, a bank is also involved in a number of other agency services like remitting and collecting cash on behalf of its clients, opening bank draft and LC facilities, underwriting shares of newly established companies etc. Bank, a financial service institution, especially concentrates on credit, savings and payment services and performs the widest range of financial functions of any business firm in the economy. Its major function is to formulate the capital by collecting the small diversified savings scattered all over the nation. A typical modern bank performs various functions like accepting deposits, granting loans, exchange of foreign currency, transfer of funds, credit creation, and functioning as an agent of customer. According to Nepal Rastra Bank Act 2002 “Bank is a financial institution which provides financial services that may be in the form of accepting deposits, advancing loans, providing necessary technical advices, dealing over foreign...
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