Chapter oneIntroduction1.1.1 Introduction of bank On the modern time bank is one of the important financial institution dealing with money credit and financial assets. In other words, it is an institution which deals with money by accepting various types of deposits from the depositor under various deposit schemes thereby allowing interest on them and also lending loans as mortgage to deficit unit for productive use by charging interest bank accepts various types of deposits from depositor which are repayable on demand on the short notice. Thus it helps in mobilization of cash from saver groups to user groups. Bank also encourage the use of various credit instruments such as cheque, demand drafts, overdrafts and bills of exchange for safe and faster remittance of money from one place to another. "The bankers business is to take the debts of other people to offer his own in exchange and thereby create money. "An organization whose principle operations are concerned with the accumulation of the temporarily ideal money of the general public for the purpose of advancing to other for expenditure." "Any institution offering deposits subject to withdraw on demand and making loans of a commercial or business nature is a bank." "A commercial bank refers to such types of bank which deals with money exchange, accepting deposits, advancing loans and commercial transaction except specific banking related to co-operative agricultural and industry and other objective."1.1.2 Banking scenario in Nepal In Nepal the history of growth of organized banking sector is not old however according to the historical document it can be said that as like as the other countries banking services had been provided from very ancient period in Nepal by traditional bankers like landlords, village merchants, Money lender, Goldsmith and others. However, the modern banking has been started from the establishment of "Tejarath Adda" in the period of Ranodip Singh in 1933 B.S. But Tejarath Adda was not the bank in original sense because it did not collect deposit from public but give loans to employees and public bullion. The first organized bank was established in Nepal only after establishing Nepal Bank Limited on 1944 B.S. and started to work from 1 Baisakh 1944 B.S. Nepal Rastriya Bank started to provide its services as central bank in 2013 B.S. to contribute on growth of financial sectors. After establishment of central bank development becomes possible. Another commercial bank established in Magh 22, 2022 B.S. named as Rastriya Banijya Bank. Till 2014 B.S. government adopted principle of protectisation to protect the interest of national bank therefore the rate of development of banking sector is very slow but government follows the principle of economic liberalization in 2042 B.S. and after that they allowed the establishment of joint venture banks also with the co-operation of foreign banks. In this series the first commercial bank was established in the name of Nepal Arab Bank Limited in 2042. 1.1.3 Types of bank Banks are of various types, which are explained below as:IV. Commercial bank: commercial banks are those banks which perform all kinds of banking function as accepting deposits, advancing loans, credit creation and agency function. In Nepal 18 commercial banks are operating. V. Development bank: Development banks are established for certain sector. They collect funds from share capital, debenture and long term deposit. They normally give long term loan and provide technical and other advice as well. VI. Saving bank: Saving banks help to promote small saving and mobilizethem. They have been very successful in Europe and other advice Asian countries. Postal saving scheme is one of the types of saving bank in Nepal. VII.Central bank: - It is the apex bank in a country, which controls its monetary and banking structure. It is owned by the government of the country and operates in national interest. It regulates and an issues currency, perform banking and agency services for the state, give cash reserve of commercial bank, keeps and manage international currency act as a clearance house, act as a lender of last resort, etc. In Nepal, Nepal Rastriya bank is a central bank. VIII.Co-operative banks: - Co-operative banks are those financial institutions which are organized on principle of co-operation. They provide short term loan to their members. 1.1.4 Functions of commercial banks Modern commercial bank discharges various functions, local conditions, national policy, structure of money market etc has impact upon function of commercial bank. The functions of bank can be described by: IX. Accepting deposit: This is the oldest function of bank. Bank accepts three kind of deposit from its customer. Generally bank collects deposits in form of fixed deposit, saving deposit and current deposit. X. Advancing loan: This is the primary function of bank; banks provide loans against the different securities like government securities, company's shares and debenture, promissory notes, etc. Bank charge some interest which is greater than that it provides on deposit to depositors.XI. Credit creation: It is one of the most important functions of bank. Bank accepts deposit and advance loan by keeping small cash in reserve for day to daytransaction. When a bank advances a loan, it opens an account in the name of the customer and doesn't lend him in cash. But allows him to draw the money by cheque according to his needs. By granting the loans bank create credit. XII.Financing foreign trade: Bank finance foreign trade of its customers by accepting foreign bill of exchange and collecting them from foreign bank. XIII.Agency service: A bank act as an agent of its customers in collecting and paying cheque, bills of exchange, draft, dividend, etc. it also buys and sales shares, securities, etc. for its customers. Further it pays subscription, insurance premium, rent, electrics, and water bills on behalf of its client. Bank charges fee on these.1.1.5 Need and importance of commercial bank: Banks plays an important role in the development of economic condition of country. Economic condition can't be operated without the co-operation of the bank. Bank's need and importance can be explained as bellows: XIV.Formation of private investment: To increase the ratio of economic improvement it is a must to use private investment scientifically XV.Rapid economic development: Bank play vital role in rapid economic development from the above duty. Bank provides different kinds of short term, long term and middle term loan for agriculture, industries, trades, etc. XVI.Capital formation: In the development of country's capital formation bank plays vital role. It is very important because developing country suffers from problem of liquid capital of common people. Industrial institutions use that capital in production function and provide loan to government. XVII.Mobilized capital: Banks collect scattered saving from the different part of the country in the form of saving account, current account and fixed accounts. Bank also provides some interest to depositor.1.2 Introduction of the study This study is undertaken to have a clear picture of RBB and resource mobilizationand utilization. It is very important to know the historical background of the RBB and how RBB mobilizes resources and utilize them to research maker. For this study various books are followed. 1.2.1 Historical development of RBB The first bank established in Nepal was Nepal Bank Limited. Before establishment of this bank Nepalese economy was facing and suffering from many economic and banking problems in absence of modern banking institution. Those days Nepalese economic was not in position to mobilize the saving scattered in small amounts in nooks and corner of the country. With the adoption of plan economic development program in Nepal, development activities increased more and consequently both public as well as private sector felt the dearth of resources. The existing banking system was not sufficient to meet the growing need of the country. The only commercial bank, Nepal Bank Limited was not sufficient to provide adequate banking facilities. The growing awareness emergence of some industries and other development program, the need for modern banking facilities was felt more and more important. Therefore, the need was felt for the establishment of another commercial bank. And it was in the context that the Rastriya Banijya Bank was established in Magh 10, 2022 B.S. under the Rastriya Banijya Bank act 2022 with the explicit objectives of providing banking facilities to areas or regions of the country not covered by Nepal Bank Limited. And making RBB activities more development oriented. Nepal Rastriya Bank gives the new landmark to development of bank in Nepal.1.2.2 Focus of the study In the developing countries like Nepal there is always lack of financial resources because of the available resources are not properly mobilized and are not fully utilized for the productive purposes. The geographical structure of Nepal also cause problem in collection of deposit and utilization of it. Although in terai region, the collection of resource and its utilization is good but in hilly and mountainous region resource mobilization is poor. There are the strong reasons for back-warded Nepalese economiclife. Most banking exports have pointed out that the financial help from abroad can do only a little for the economic development of a developing country as compared to proper utilization of domestic resources for the productive purpose. As a matter of fact there are several financial problems in the Nepalese economic context, which are hindering the economic upliftment of Nepalese people. Important problems are absence of organized money and capital market, little opportunity for profitable and productive investment, and lack of perfect entrepreneurship etc. To sum up mobilization of domestic saving into productive uses is the control focal point in the modern sphere of development. Rastriya Banijay Bank, commercial Bank of Nepal deserves special importance in the present study. Rastriya Banijya Bank (RBB) is playing vital role in the resource mobilization and utilization for Nepal's economic development. The aim and objective of RBB can be pointed out by following points: XVIII.To accept deposit of any persons on interest and without interest. XIX.To grant loans against Nepalese and foreign government securities share debenture of the companies, bills of exchange and promissory notes. XX.To purchase discount and issue bills of exchange promissory notes, cheque or bonds etc. RBB collecting dispersed small saving and utilization it in the national investment. About 200 branches of RBB operate in different parts of the country. Most of the branches operate in terai region while many branches of hilly region are placed out because of Maoist. So the resource mobilization in hilly region is not on proper way. 1.2.3 Research problem XXI.The total amount of resource utilization is spread among different heads to accord our true development. XXII.Priority sectors have got a very little figure as compare to total loan and advances. XXIII.The resources are also not focused on the HMG securities. XXIV.The main problem is how the total amount of resource utilization is spreadamong different hands to accord our true development needs. 1.3 Rules and regulation adopted by RBB Whenever bank offers credit facilities to the borrower, it is always subject to the terms and condition stipulated in the sanction letter. Every loan sanctioned is subjected to certain rules and regulation which can be lenient astringent depending upon the bargaining capacity of the bank and borrower. Generally bank sanctions loan to subject under all or any of the following condition: XXV.Interest rate XXVI.Repayment frequency XXVII.Disbursement frequency XXVIII.Expiry of the facility XXIX.Commitment Fee XXX.Documentation XXXI.Bank's right of inspection XXXII.Bank's right to call bank the facilities 1.4.1 Importance of Resource Mobilization: Mobilization of domestic resources holds great importance in the economic development of underdeveloped countries like Nepal. Following are the main importance of resource mobilization: XXXIII.Accumulation of small saving from different sectors can fulfill the needs of fund for economic development. XXXIV.Domestic resource mobilization is very important because underdeveloped economics have growing needs of financial resources for development. Resources are also used to finance the long term debts assets and government securities. 1.4.2 Management Techniques for Resource Mobilization Obviously, it is known to all that, in the lack of clear vision and systematic management, any business or project can't run well. A bank should keep its eyes on the management aspect too, when it is going to mobilize its resources. Generally, in every banks and institutions management techniques plays great role to divide section and department of the project and to arrange special programme and evaluation for thedevelopment of project. The study of management techniques for resources mobilization can be done according to the following methods: XXXV.Technology: - A bank studies technological aspect too when it is going to utilize its resources. How and what type of technology available in the market? Or not? Is the technology good or bad? Is the technology suitable for the management or not? Etc. XXXVI.Efficiency of plant and equipment: - The bank should examine the plant and equipment used in its management. What is the price of such equipment in the market? Is there any possibility of repairing the damaged equipment again or not? XXXVII.Technical competence: - A bank should examine the technical capacity of plants used by its management. The bank should see the competency of technician and the capacity of machine. XXXVIII.Experience: - Persons involved in management should be experienced. Management can't competent without experienced persons. Such experienced person run the management related to their sector, the management can surely get success.1.4.3 Economic feasibility of resource mobilization and its utilization The general economic and market conditions decide the economic feasibility of any project. Economic feasibility is to find the pulse of the economy and the market in terms of demand, supply, competitions marketability, business environment etc. On the basis of which the investment is returned safely and on time. In this aspect, the banker is most concerned with sales which depend upon the demand and the economic price. Genuine statistics in this regard must be sought by the bank as to come to the nearest point of accuracy. Some of the factors to be examined are briefly explained as follows: XXXIX.Demand: - Demand for the product must be reconciled by the variables like aggregate demand, population, standard of living, income level, consumer preferences, export potential etc. XL.Supply: - This is calculated on the basis of domestic production with the netimports and exports of the product. XLI.Price: - Consideration of tax, duties, rebates, discount concessions etc. XLII.Economic policy: - Economic policy of the government likely to come in future or present economic policies etc must be considered thoroughly. XLIII.Market: - This depends upon the nature of the product, buyers packaging, credit provision, perishable, durable consumer, seasonal and marketing strategy. 1.5.1 Scope and objectives of deposit It is important that a commercial banks deposit policy is the most essential policy for its existence. The growth of bank depends primarily upon the growth of its deposits. Thus, deposits are one of the aspects of bank liabilities that management has been influencing through deliberate actions. The policy of the bank in respect of deposits is shaped by its operation horizon. Bank policy in respect to deposits is clearly reflected in the options exercised by customers in using retailer or whole sale market. Thus importance factors that influence the deposits of bank are given below: XLIV.Interest rates: - The basic factors that determine the deposits in a particular bank is the earning from the deposits. XLV.Types of customers: - The nature of customer is also the second factor determining the volume of deposits. XLVI.Physical facilities: - The physical facilities available in the bank in respect to the depositors also decide the quantum of deposits in a bank. XLVII.Management accessibility to customer's: - The management's capacities to access the customer's especially large deposits such as telecommunication Authority College etc. also decide the velocity of deposits.1.5.2 Types of DepositsBanks are innovating and offering new deposit plans and pricing scheme to win the competition in challenging banking market. The deposits are collected under variety of accounts. On the basis of nature and feature of deposits can be classified into three types. The basis three types of deposit most common in modern banking market are: A) Demand deposits: - A demand deposit is a deposit that can be withdrawn on demand at any time and in any amount up to the full amount of deposit. The most common example of a demand deposit is a checking account (United States). Checking accounts are also considered transactions accounts, in that payments can be made to third parties that is to someone other than the depositor or the bank itself. Demand deposits can be further classified into two categories namely: a) Non- interest bearing demand deposit:- In these deposits, banks provide the account holders with the facilities of payment services, safekeeping funds record keeping for any transaction carried out by cheque. NIB demand deposit can be withdrawn without prior notice. So, it is the most volatile and least predictable of a bank sources of funds, with the shortest potential maturity. XLVIII.Interest bearing demand deposit: - It is the interest bearing demand deposit that allows cheque to be written against them. These deposits provide the customer with payment services etc. It appears in the form of negotiable order of withdrawal account. XLIX.Saving deposits: - Saving account pay interest to the depositors, but have no specific maturity date on which the funds need to be withdrawn or reinvested. Any amount can be withdrawn from a saving account up to the amount deposited. Withdrawals can also be made by using their Automated teller machine (ATM) card. L. Time deposits: - Time deposits are those deposits on which the depositor and the bank agree that the money will not be withdrawn without substantial penalty to the depositor before a specific date. These are frequently called certificate of deposits. Because of a substantial early withdrawal penalty, time deposits are not as liquid as demand or saving deposits nor can depositors write cheque againstthem.1.5.3 Loan management Loan management is necessary for commercial bank while granting loan to its customers. Bank determines the loan policy on the basis of its objective capacity. Bank must follow the loan policy under the condition of country and central bank directives. There is number of demand markets and suppliers of loan in money market. Among them there is high complection for interest, service securities, etc. in this condition bank requirement formulating good and capable loan policy. While formulating loan policy bank consider in bank's liquidity, safety and profit etc. and interest in the most profitable sector.1.5.4 Loan Recovery Bank must require collecting its loan from customer. Loan recovery is important function of the bank that has the objective of profit maximization, therefore, banks loan management department has to follow following function: LI. Banks require collecting lump sum interest in short term loan and collecting interest in installment in long term loan. LII.Banks require getting repayment of loan according to deal with customer. LIII.Banks require auditing the loan whether it is used in the predetermined objective or not by loan taker. LIV.All the document relating with interest recovery and loan recovery are kept safely so that may be created in future.1.5.5 Credit policyA proper credit policy is very important in loan management of a commercial bank. The credit policy is defined as a decision made by the bank management in advance about the management of credit. The main purpose of bank is to maximize the profit and shareholder wealth. For bank this collect saving under different heading and invest them in productive sectors. The interest obtained from granting loan is the main source of income for bank. Therefore, bank requires formulating credit policy considering risk and return. They provide term and medium term loan to their member. Co-operative act was introduced in Nepal in 2048. Navajeevan co-operative society limited is the first co-operative bank.1.6 Objectives of the study LV.To calculate the trend of resource mobilization of RBB. LVI.To sketch the picture of loan diversification. LVII.To calculate the area of mobilization of resources in compare to the need. LVIII.To find out the over all utilization of the resource of RBB. LIX.To utilize the resources in productive and needy areas.1.7 Limitation of the study This research work confines only to the resource mobilization and utilization of RBB other than Nepal bank limited and other commercial bank of Nepal. The study has been undergone through the data of last five year only. The time factor is also to be considered as the limitation.1.8 Research methodologyResearch methodology is a way to systematically carry out the research. Research methodology refers to the various sequential steps adopted by researcher in studying a problem with certain objectives with in view. For writing a report, reliable data play a great significance role. So we have to collect the adequate data from the related organization and institute to make the report viable. At first, we have to fix the subject mater of the report and then we should consult with the related staff of related institute for data collection. The various aspects of research methodology of data collection are as follows: i) Research design ii) source of data iv) Tools used for analysis iii) Method of analysis 1.8.1 Research design A research design is an arrangement of condition of collection and analysis of data in a manner that aims to combine avalanche to the purpose with economy is procedure. The project of the study is designing on Resource Mobilization and its Utilization of Rastriya Banijya Bank, which consists of 3 chapters. Each chapter is designed on different matters, which specifies different dealings of related chapters. Thus chapter one is designed on Introduction, chapter two is on Presentation and Analysis of data, chapter three on Summary, Conclusion and Recommendation. 1.8.2 Sources of data This method used in preparing the report are based on these two types of data: LX.Primary data: Primary data is the data which is generally collected by the investors or researcher directly by himself/herself. The data collected this way are the first hand data. Its technique includes observation, survey, interview, questionnaires etc.LXI.Secondary data :Secondary data is the data is collected by someone else and had already been used by other as well. It is the data that has been gathered not for the immediate study but for some other propose. Secondary data can be obtained either from public or private source. It is collected indirectly. This study is connected on the basis of secondary data. The data relating to the Resource Mobilization and its Utilization are directly obtained from official record of Rastriya Banijya Bank, Maharajgunj Bank. 1.8.3 Methods of analysis To achieve the objective of the study, the various and financial tools have been used in the study. The analysis of data will be done according to the pattern of data available some strong accounting tools has been used for the financial analysis. 1.8.4 Tools used (statistical) 1) Table 2) Line graph 3) Coefficient correlationChapter TwoData Presentation and Analysis2.1 Introduction The present chapter deals with the presentation and analysis of data regarding resource mobilization and utilization of RBB. Data concerning resources and their utilization are tabulated separately on different heading on the resource side. We have deposits; borrowing loans, etc.are resources side. Deposits are classified as current deposit, fixed deposit, saving deposit, and miscellaneous deposit. Likewise in the utilization side also the classification is made as such loan and advances, investments in corporation and company priority sector, bills purchased, etc. 2.2 Deposit mobilizationRBB collects the deposit under different headings such as saving deposit, current deposit, fixed deposit and miscellaneous deposit. These data are present in following table. Table no. 1 : Current deposit of RBB (Rs. in '000')Amount of current Year 2061-62 2062-63 2063-64 2064-65 2065-66 deposit 46535 45859 60779 49219 65658 % change 0 -1.45% 32.5% -19.01% 33.39%Deposits are most important resources of any commercial bank. Current deposit is one among them. Current deposit doesn't provide fund for any specific term. The bank doesn't rely on it for its resources needs. Yet it has got some importance in the sense that it decreases a significant amount of fund as compared to other types of deposit. Viewing to the above table the amount of current deposit is decreased in 2062-63 and it was increased in 2063-64 to Rs. 60779 by 32.5%.In year 2064-65 it was decreased by 19.01% but in year 2065-66 it was increased to Rs. 65658 by 33.39%.Graph showing cu rrent deposit7 0 00 06 0 00 05 0 00 04 0 00 0 Am u t o cu nt d o o n f rre ep sit Pe n g ch n e rce ta e a g3 0 00 02 0 00 01 0 00 00 2 61 2 0 -6 -1 0 00 0 2 6 -6 02 3 2 6 -6 03 4 26 5 0 4-6 20 5 6 6 -6Graph no.1Table no.2: Saving deposit of RBB (Rs. in '000')Amount of saving Year 2061-62 2062-63 2063-64 2064-65 2065-66 deposit 134799 118614 124131 131075 132514 % change 0 -12% 4.65% 5.59% 1.09%Above table shows the amount of saving deposits is increasing year by year except in the year 2062-63.In year 2063-64 it was increased by 4.65% and it was further increased in 2064-65 by 6.75%.The increase of deposits shows the expansion of economic activities as well as success for mobilization of resource of the country. This also shows that the saving habit is improving and even Nepalese people with lower income are using banks for depositing their small savings..Graph s how ing s aving deposit 160000 140000 120000 100000 80000 60000 40000 20000 0 2061-62 -20000 2062-63 2063-64 2064-65 2065-66 Amount of saving deposit percentage changeGraph no.2Table no.3: Fixed deposit of RBB (Rs. in '000')Year 2061-62 2062-63 2063-64 2064-65 2065-66 Amount of Fixed deposit 75796 73478 66444 45447 31338 % change 0 -3.05% -9.57% -31.60% -31.04%Fixed deposit is one of the most important deposits as compared to other deposit. It generally looked with large amount of fund as compared to other types of deposits. The deposit mostly depends upon the rate of interest. If the rate is high deposit increases and vice-versa. Now the above table shows that the deposit is decreased from year to year. The decline in deposit may be caused by the decline in interest rate compared to other banks. In year 2061-62 the fixed deposit amount was high but in year it was decreased to Rs.73478 by -3.05%. It was even more decrease in year 2064-65 to Rs. 45447 by -31.60%. In year 2065-66 it was further decrease by -31.04%. Therefore, the people are not interested in depositing their saving in bank.Graph s how ing fixed deposit80000 70000 60000 50000 40000 30000 20000 10000 0 2061-62 -10000 2062-63 2063-64 2064-65 2065-66Amount of Fixed deposit Percentage changeGraph no.3Table no. 4: Miscellaneous deposit trend of RBB (Amount in '000')Amount of Miscellaneous Year 2061-62 2062-63 2063-64 2064-65 2065-66 deposit 2243 1213 2068 2546 3246 percentage change 0 -45.92% 70.48% 23.11% 27.49%Miscellaneous deposit includes margin and cashier deposit. The table shows that miscellaneous deposit is decreased in 2062-63. But in year 2063-64, 2064-65, 2065-66 it was increased to Rs. 2068, 2546, and 3246.The decrease in miscellaneous deposit may be due to bad economic condition of the country.Graph showing miscellaneous deposit 35 00 30 00 25 00 20 00 15 00 10 00 5 00 0 2 -62 061 -5 00 206 2-63 206 3-64 20 64-6 5 206 5-66 Am t of M oun iscellaneo us dep osit percentage chan geGraph no. 4Table no. 5: Total deposit trend of RBB (Amount in '000')Year Deposit Current Saving Fixed Miscellaneous Total % Change 2063-64 60779 124131 66444 2068 253422 5.96% 2064-65 49219 131075 45447 2546 228287 -9.91%2061-622062-632065-6646535 134799 75796 2243 259373 045859 118614 73478 1213 239164 -7.79%65658 132514 31338 3246 232756 1.95%The total deposit shows the totals of current, saving, fixed, and miscellaneous deposits. Deposits are the main source of the bank. In year 2062-63 it was decreased to Rs. 239164 by -7.79% but in year 2063-64 total deposit was increased by 5.96%. Similarly, in year 2064-65 it was decreased to Rs. 228287 by -9.91%. In year 2065-66 the total deposit was increase to Rs. 232756 by 1.95%.Graph showing total deposit trend of RBB300000250000200000 2061-62 2062-63 2063-64 100000 2064-65 2065-66150000500000us ep os ix e eo re av To ur el la n F er ce nt ag e nt in g it d ta l PGraph no. 5Table no. 6 Amount of fund transferred trend of RBB (Amount in '000')Amount of fund Year 2061-62 2062-63 2063-64 transferred 1567515 1487558 1190000 % change 0 -5.10% -20%Mis c-50000DCS2064-65 2065-66950000 1050000-20.16% 10.52%In under developed country, there is always lack of capital to utilize for the development purpose deposit is insufficient to fulfill the investment need. In such situation RBB Maharajgunj branch got fund transferred from central office Kathmandu and other branches of RBB. In RBB Maharajgunj branch fund transferred was decreased in year 2062-63, 2063-64, 2064-65 to Rs. 1487558, 1190000, 950000. But in year the fund transferred was increased to Rs. 1050000 by 10.52%.Graph show ing a mount of fund tra ns ferred of RBB 1800000 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0 -200000 2061-62 2062-63 2063-64 2064-65 2065-66 Amount of fund transferred Percentage changeGraph no. 6Total resource available to RBB (Amount in '000')Amount of Total resource Year 2061-62 2062-63 2063-64 2064-65 2065-66 available 1826888 1726722 1443422 1178287 1282756 Amount change per year 0 -100166 -283300 -265135 104469 % change 0 -5.48% -16.40% -18.36% 8.86%Resources are the prime concern of RBB, without resources commercial bank cannot run its daily performances well. Viewing above table the amount of total resources available to RBB Maharajgunj branch was decreased in year 2062-63, 2063-64, and 2064-65. But in year 2065-66 it was increased to Rs. 1282756 by 8.86%.G ra p h sh o w in g to tal re so u rc es 20000001500000 A mount of T ot al res ourc e availa ble A mount c hange per ye ar 500000 % c hange10000000 206 1-62 -500000 2062-63 2063-64 2064-65 2065-6 6Graph no. 7Table no.8: Loan granted by RBB (Amount in '000)Year 2061-62 2062-63 2063-64 2064-65 2065-66 Amount of Granted Loan 1225041 1122369 966053 707835 822164 % change 0 -8.38% -13.92% -26.72% 16.15The loan and advances accounts are the highest percentage of total utilization. In following table, we can see that in year 2061-62 the amount of loan granted was decreased by -8.38%. In year 2064-65 it was decreased highly by -26.72 but in year 2065-66 it was increased by 16.15%. The reason of this decreased in loan granting is due the high interest rate charged by the bank. The data graph is shown as:Gra p h sh o w in g L o an Grantin g14000 00 12000 00 10000 00 8000 00 6000 00 4000 00 2000 00 0 2061-62 -2000 00 2062-63 2063 -64 2064-65 2065 -66 Am ount of Gran ted Loan Percent age cha ngeGraph no. 82.3 Total utilization of resource: The following table and graph shows the total utilization of resource Table no. 9 Amount of total utilization trend of RBB (Amount in '000')Amount of total Year 2061-62 2062-63 2063-64 2064-65 2065-66 utilization 1295807 1148504 981616 718235 827317 Amount change per year 0 -147303 -166888 -263381 109082 %change 0 -11.36% -14.5% -26.83 15.18According to the above table total utilization of resource increases in year 2065-66 this is good sign of development of RBB as well as the country. But in year 2062-63, 2063-64, 2064-65 it was decreased by -11.36%, -14.5% and -26.83%. The decrease in resource utilization may be due to less available resources or due to the political situation of the country.G raph show ing total utilization14000 00 12000 00 10000 00 8000 00 6000 00 4000 00 2000 00 0 2 061-62 -2000 00 -4000 00 2062-63 20 63-64 2064- 65 20 65-66 Am ount of total utilization Am ount chang e p er year % chang eGraph no. 9Table no. 10 Total resource available and utilization of RBB (amount in 000)Amount of Year 2053-54 2054-55 2055-56 2056-57 2057-58 Total resource 1826888 1726722 1443422 1178287 1282756 7458075 Amount of utilization 1295807 1148504 981616 718235 827317 4971479 % of Utilization 70.92% 66.51% 68.006% 60.95% 64.49% 66.65%By showing above table we can say that the RBB Maharajgunj branch average utilization Percentage is 66.65% which is good but not so much.Gra ph showing re sourc e a vailable and utiliz ation8000000 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 1 2 3 4 5 6 7Year Amount of resource Amount of utiliz ation % of UtilizationGraph no. 10 2.4 Calculation of correlation coefficient between resource available and utilization: X-Represent total resource available. Y-Represent total utilization.Table no.11Year 2061-62 2062-63 2063-64 2064-65 2065-66 N=5 x 182 172 144 117 118 X=x-144 38 28 0 -27 -26 X=13 X2 1444 784 0 729 676 X2=3633Amount in Rs.'0000000y 122 112 96 70 82 Y=y-96 26 16 0 -26 -14 Y=12 Y2 676 256 0 676 196 Y2=1804 XY 988 448 0 702 364 XY=2502Calculation of correlation coefficient:r=XY-( XY)/N[ X2- ( X )2/N] [ Y2- ( Y )2 / N] 2502 (13) (12)/5 r= [3633 (13)2/5] [1804 (12)2/5] 2502 31.2 r= [3633- 33.8] [1804- 28.8]r=2470.8 3599.2 x 1775.22470.8 r= 2527.7064r= +0.977 In the above coefficient correlation is +0.625. Therefore, the resource collection and utilization are positively correlated to each other. It clearly shows that utilization depends upon resource availability. If the resource increases the utilization also increases and if a resource decreases the utilization also decreases.Chapter 3Summary, conclusion and recommendation3.1 SummaryCommercial bank plays an important role in the economic development of a country. Banks are the most important financial institution for collecting and utilizing resources for the economic development of the country. The economic conditions are based on the financial institution and development of the country depends on the active participation of the bank in different developmental activities in the country. RBB, Maharajgunj branch has mobilized and utilized resources in different sectors. This branch has also mobilized saving from the public and utilized then into productive sector. The basic objective of the study is to assess the performance of RBB, Maharajgunj branch in mobilizing and utilizing resources efficiently and effectively in contributing for the economic development. This study is undertaken to have a clear picture of trend and pattern of resources mobilization and utilization of RBB, Maharajgunj branch. The study covers only RBB Maharajgunj branch available data used are mostly secondary data. In developing country like Nepal there is always shortage of capital for investment, only the government cannot persuade economic development of the country. Banks have to participate in this field too so they can collect small scattered saving and accumulate them to make a big resource to be utilized in the country's development. RBB Maharajgunj branch had a total resource of Rs. 1826888 thousand in 2061-62 which decreased to Rs. 1181317 thousand in 2065-66, and this trend has been affected by various factors operating in the country. The factors for decreasing resources may be political instability, Rapid growth of other financial institutions and other commercial banks and low interest rate in deposit. As per the utilization is concerned it was reported to be Rs. 1295807 in 2061-62 which decreased in year 2062-63 to Rs. 1148504 thousand and it was even more decreased in year 2065-66 to Rs. 718235 thousand but in year 2065-66 it was increased to Rs. 827317 thousand. In the above mentioned study, it has been revealed that the relation between resource collection and its utilization is significantly associated. The increasing trend of resource collection is accompanied by almost the same degree of increment in the utilization also.3.2 Conclusion RBB Maharajgunj branch has been operating successfully in the banking field for more than three decades till date. But this study covers only the major findings of the last five fiscal years (2061-62 to 2065-66) and led to the conclusion of efficient mobilization of resources by the bank. RBB Maharajgunj branch has been able to utilize 65.5% of its total resources in an average and this figure can be considered satisfactory. But yet there are rooms where work can be done to achieve more collection and utilization. And for this, endeavors are to be done on various notes as for e.g. suitable interest rate, economic development, availability of various scope of utilization. 3.3 Recommendation On the basis of the analysis done on resource mobilization and utilization following recommendation can be made so as to ascertain better and improved resource collection and utilization of RBB Maharajgunj branch: LXII.The bank should provide attention towards the priority sectors to utilize idle resources. LXIII.Following points should be pondered over to increase resource collection : v Facilities to the depositors. v Enhanced publicity. LXIV.Bank should encourage consumer's loan as well. This would help in buying consumptions goods especially durable goods. LXV.More attention for resource collection should be made by encouraging saving habit and opening new methods to encourage from wide range of people.