Risk and Return Analysis on Common Stock of Standard Chartered Bank Nepal Ltd and Nepal Investment Bank Ltd.
Chapter I
Introduction
1.1 Background
Finance is the backbone of any organization. No organization can sustain and develop without finance. The organizations with the sound financial structure can compete and lead the market. Economic growth of the nation depends on the availability, mobilization and utilization of the financial resources. Financial institutions play the major role for economic development of any country. Financial sector primarily indicates the banking sector. So, there is a very much dependence on the banking sector for the overall economic development of any nation. Number of banks are increasing rapidly in recent years in Nepal. This is a good symptom for the development of economy in Nepal. This is a positive impact of the financial reform of the country.
Generally, a word bank indicates a commercial bank. Authors have defined in various aspects about bank. A modern bank performs number of functions; it has become very difficult to give a precise definition of a bank. Some of the important and commonly used definitions of a bank are given below.
“Ordinary banking business consists of changing cash for bank deposits and bank deposits for cash; transferring bank deposits from one person to corporation (one depositor) to another; giving bank deposits in exchange for bills of exchange, government bonds, secured or unsecured promises of businessmen to repay.”[1]
“A commercial bank is one which exchange money, deposits money, accepts deposits, grants loans and performs commercial banking functions and which is not a bank meant for cooperative, agriculture industry or for specific purpose.”[2]
“A commercial banker is a dealer in money and in substitutes for money, such as checks or bill of exchange. He also provides a variety of financial service.”[3]
“A commercial bank is essentially a dealer in money. It is a banking institution that accepts the demand and time deposits from business institutions and individuals and
Introduction
1.1 Background
Finance is the backbone of any organization. No organization can sustain and develop without finance. The organizations with the sound financial structure can compete and lead the market. Economic growth of the nation depends on the availability, mobilization and utilization of the financial resources. Financial institutions play the major role for economic development of any country. Financial sector primarily indicates the banking sector. So, there is a very much dependence on the banking sector for the overall economic development of any nation. Number of banks are increasing rapidly in recent years in Nepal. This is a good symptom for the development of economy in Nepal. This is a positive impact of the financial reform of the country.
Generally, a word bank indicates a commercial bank. Authors have defined in various aspects about bank. A modern bank performs number of functions; it has become very difficult to give a precise definition of a bank. Some of the important and commonly used definitions of a bank are given below.
“Ordinary banking business consists of changing cash for bank deposits and bank deposits for cash; transferring bank deposits from one person to corporation (one depositor) to another; giving bank deposits in exchange for bills of exchange, government bonds, secured or unsecured promises of businessmen to repay.”[1]
“A commercial bank is one which exchange money, deposits money, accepts deposits, grants loans and performs commercial banking functions and which is not a bank meant for cooperative, agriculture industry or for specific purpose.”[2]
“A commercial banker is a dealer in money and in substitutes for money, such as checks or bill of exchange. He also provides a variety of financial service.”[3]
“A commercial bank is essentially a dealer in money. It is a banking institution that accepts the demand and time deposits from business institutions and individuals and