LIQUIDITY POSITION OF GLOBAL IME BANK LIMITED

A Project Work Report

By

Bishal Sunuwar

Symbol no:

T.U. Registration No:

Pinnacle College

Lagankhel, Lalitpur

Submitted to

The Faculty of Management

Tribhuvan University

Kathmandu

In Partial Fulfillment of the Requirements for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Lalitpur, Nepal
JULY, 2024
 DECLARATION
I hereby declare that project work entitled "LIQUIDITY POSITION OF GLOBAL IME BANK
LIMITED" submitted to the Faculty of Management, Tribhuvan University, Kathmandu is an
original Piece of work under the supervision of Mr. Nirmal Tiwari, faculty member of Pinnacle
College, Lalitpur, and is submitted in partial fulfillment of the requirements for the degree of
Bachelor of Business Studies (BBS). This project work report has not been submitted to any
other university or institution for the award of any degree or diploma.

Signature:

Bishal Sunuwar

JULY, 2024
 SUPERVISOR'S RECOMMENDATION

The project work report entitled "LIQUIDITY POSITION OF GLOBAL IME BANK
LIMITED" submitted by Bishal Sunuwar of Pinnacle College; Lagankhel, prepared under my
supervision as per the procedure and format requirements laid by the Faculty of Management,
Tribhuvan University, as partial fulfillment of the requirements for the degree of Bachelor of
Business Studies (BBS). I, therefore, recommend the project work report for evaluation.

Signature:

Bishal Sunuwar

JULY, 2024
 ENDORSEMENT

We hereby endorse the project work entitled "LIQUIDITY POSITION OF GLOBAL IME
BANK LIMITED" submitted by Bishal Sunuwar of Pinnacle College; Lagankhel,in partial
fulfillment of the requirements for the degree of Bachelor of Business Studies (BBS) for external
evaluation.

Signature: Signature:

Chairman, Research Committee Campus Chief

Date………………… Date…………………
 ACKNOWLEDGEMENTS

This report has been prepared for the partial fulfillment of the requirement of the degree of
Bachelor of Business Studies. It would have been almost impossible to complete this without
cooperation and help from different persons.
At first, I would like to express my sincere gratitude and deep respect to my Mr. Nirmal Tiwari,
faculty members of Pinnacle College, for his valuable suggestions, guidance, and encouragement
in the completion of this study.
I would like to express thanks to all the library and administrative staff of Pinnacle College for
the necessary help in the preparation of this report. I must not forget to thank my friends and
colleagues for the regular inspiration and support.

Bishal Sunuwar

July,2024
 TABLE OF CONTENTS

Title page…………………………………………………………..i

Declaration…………………………………………………………..ii

Supervisor's Recommendation……………………………….……..iii

Endorsement………………………….………………….………….iv

Acknowledgement……………………………….……………….….v

Table of Contents…………………………..………………………vi

List of Tables……………………………………………………….vii

List of Figures………………………………………………………viii

Abbreviations……………………………………….………………ix

CHAPTER I: INTRODUCTION 1-11

1.1 Background of the Study……………………..1

1.2 Profile of organization…………..….……..….3

1.3 Objectives of the Study……………....………4

1.4 Rationale of the Study………..………….…...4

1.5 Review of the Study………………………….5

1.6 Methods of the Study…………………..…….8

1.7 Limitations……………………...……………11

CHAPTER II: RESULT AND FINDINGS………………….12-21

2.1 Date Presentation………….………………..12

2.2 Findings……………………….…………….21

CHAPTER III: SUMMARY AND CONCLUSION…………22-23

3.1 Summary…………………………………….22
 3.2 Conclusion……………….………………….22

BIBLIOGRAPHY.…………………………………………….24

APPENDICES…………………………………………………25
 LIST OF TABLE

Table No. Table Name Page No.

1. Current ratio…..……………………………………………….…….…12

2. Quick……………………………………………………………..…….15

3. Saving deposit ratio………………..……………………………...…….17

4. Fixed deposit ratio………………………………………………………19

 LIST OF FIGURE

Table No. Table Name Page No.

1. Current assets and current liabilities…………………………….…….14

2. Current ratio…….………………………………………………….….14

3. Quick assets and current liabilities…………………...…………….….16

4. Quick ratio……………………………………………………….…….16

5. Saving deposit ratio……………….……………………………..……..18

6. Fixed deposit ratio…………………………………………………..…..20

 ABBREVIATIONS

A.D Anno Domini

Asst. Assistance

ATM Automatic Teller Machine

BBS Bachelors in Business Studies

Co. Company

CSD Customer Service Department

Dept Department

DGM Deputy General Manager

GIBL Global IME Bank Limited

HRD Human Resource Development

i.e. That is

ICT Information & Communication Technology

IT Information Technology

Ltd. Limited

Mgmt Management

NBR Nepal Rastra Bank

R&D Research & Development

 CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Liquidity is the status and part of the assets which can be used to meet the obligation liquidity
can be viewed in term of liquidity available through purchased fund. The degree of liquidity
depends upon the relationship between cash assets plus those assets which can be quickly turned
into cash and liability awaiting payment. Liquidity is an important aspect of the study of
furmenty management therefore the researcher has been chosen this topic for the research work.

One of the sensitive factor or element in the bank is liquidity. Liquidity refers to the
convertibility assets into cash. It means how fast the assets can be change into cash. There are
many assets which are easily converted into cash by the bank, such as cash in hand, cash at bank,
cash at central bank, investment in government securities. But some assets are difficult to get
converted into cash as line and fixed deposit. Liquidity is also defined as the position or
capability of a bank to meet the current obligation of customers such as payment of cheque
payment of demand draft, disbursement of approved loan etc.

Liquidity is crucial for any financial institution as it ensures the ability to meet short-term
obligations promptly without adversely affecting its operations or financial stability. In the
context of Global IME Bank, analyzing its liquidity position provides insights into its ability to
manage cash flows, maintain regulatory requirements, and capitalize on growth opportunities.

Liquidity refers to the ease with which an organization can convert its assets into cash to meet
short-term liabilities. It’s crucial for ensuring smooth day-to-day operations, managing
unexpected cash outflows, and maintaining investor confidence. A company’s liquidity position
is assessed using various financial metrics and ratios that indicate its ability to manage cash flow
effectively. A strong liquidity position not only instills confidence among depositors and
investors but also enables banks to support lending activities, manage risks effectively, and
comply with regulatory requirements. Factors influencing a bank’s liquidity position include
economic conditions, interest rate environments, deposit base stability, and the effectiveness of
liquidity management strategies implemented by the bank’s management. Overall, maintaining a
robust liquidity position is essential for the stability and sustainable growth of banks in the
dynamic financial landscape.

In Nepal, the liquidity position of banks plays a pivotal role in ensuring financial stability and
operational resilience within the country’s banking sector. Banks in Nepal manage liquidity
primarily through a combination of liquid assets such as cash reserves, treasury bills, and short-
term government securities. This approach is crucial for meeting daily cash demands, fulfilling
deposit withdrawals, and supporting lending activities across various sectors of the economy.
Given Nepal’s economic landscape, which includes diverse industries and regional dynamics,
banks must navigate challenges such as seasonal fluctuations in liquidity demand and potential
impacts from external economic factors. Regulatory oversight by the Nepal Rastra Bank (NRB),
the central bank of Nepal, ensures that banks adhere to liquidity requirements designed to
maintain stability and mitigate systemic risks. Key liquidity metrics such as the Statutory
Liquidity Ratio (SLR) and the Cash Reserve Ratio (CRR) are employed to monitor and manage
liquidity levels effectively. A robust liquidity position not only bolsters depositor confidence and
investor trust but also reinforces banks’ capacity to support economic growth by facilitating
credit flow and financial intermediation. Overall, maintaining a sound liquidity position is crucial
for banks in Nepal to navigate uncertainties, promote financial inclusion, and contribute to
sustainable economic development.

1.2 Introduction to Global IME Bank Nepal

Global IME bank limited is a national level commercial bank promoted by highly prominent
business personalities groups and reputed individuals of the country who have excelled in their
field of business profession with very good integrity and social standings. under the guidance of
reputed board of directors and professional and dynamic management team having extensive
experience with proven track-record in the banking industry, global IME bank is committed to
offer a wide range of banking products and services tailored with the state-of-the-art technology
to meet the unique requirements of all the customer clients and thereby delight them by
exceeding their expectations.

With a shared vision of "The Bank for All", Global IME Bank Team is committed to providing
the quality products and services to its valued customers with utmost courtesy and care. we at
Global Bank believe that delivery products services designed customized to best suit the
customer need through continuous research development and innovation is the foundation of
build-up the trust and enhance the level of confidence between the customer and bank. hence,
Global IME Bank Team pledges its commitment to always endeavor for delivery of innovative
products services to all the customers to best suit their requirements therefore ensuring the
optimum benefit and value addition to the customer as well as to all other stake holders.

1.3 Statement of Problem

This study aims to explore whether Global IME Bank has enough readily available cash and
assets to handle its daily financial needs and unexpected expenses without running into financial
trouble. We will look into how well the bank manages its money to ensure it can meet customer
withdrawals, pay its bills on time, and comply with banking rules. Factors such as economic
changes and the bank's own strategies will be examined to see if there are ways to improve how
it manages its financial safety and stability. This study seeks to investigate the liquidity position
of Global IME Bank, focusing on its ability to handle short-term financial demands effectively. It
aims to assess whether the bank has sufficient cash and liquid assets available to meet customer
withdrawals, operational expenses, and regulatory requirements without facing liquidity
shortages. Key areas of inquiry include evaluating the bank's liquidity management practices,
understanding the impact of economic fluctuations, and identifying potential areas for enhancing
financial resilience and stability.
1.4 Objective of the study

The main objective of the study is to analyze the Global IME Bank liquidity needs and its
management for the current year. The specific objectives can be listed below:

a) To measure the liquidity ratio of the bank.

b) To analyze the deposit of Global IME Bank.

c) To evaluate current, saving and fixed deposit ratio with total deposit of Global of Global IME
Bank.

1.4 Rationale of the study

A rationale study on the liquidity position of Global IME Bank aims to understand how well the
bank manages its cash and assets to meet its short-term financial obligations. By examining its
liquidity, we can assess if the bank has enough readily available funds to cover things like
customer withdrawals and daily expenses without any problems. This study helps us see how
secure and stable the bank is financially, which is important for customers, investors, and
regulators. Understanding Global IME Bank's liquidity position will give insights into how
effectively it can operate and grow while ensuring financial safety for everyone involved.

The study aims to provide important and useful information to the investor. It will be useful for
management. This study will be beneficial to those parties who are directly or indirectly related
to the financial institution. This study covers the partial fulfillment of the requirement of BBS,
T.U.

1.5 Review of Literature

A Literature review is a summary and analysis of current knowledge about a particular topic or
areas of inquiry. In other words, the analysis of previous studies for knowing the research in
detail is known as literature review. After selecting the topic of the research, the researcher
should study different journals, periodicals, newspapers, published or unpublished
bibliographies, books etc. to collect or gather the information about the selected topic of the
research. This process of studying different educational materials is known as a review of the
literature.

Literature review in every research acts as the foundation of the base of the research. Review of
literature gives the framework of the research process. Review of literature facilitates to find out
what research studies have been done in one’s chosen field, this case is Liquidity Position of
Global IME Bank. This chapter focuses on previous researches done and the sources from which
knowledge about the related topic is gained.

1.5.1 Conceptual Framework

One of the sensitive factor or element in the bank is liquidity . Liquidity refers to the
convertibility assets into cash. It means how fast the a change into cash. There are many assets
which are easily converted into cash by the bank. Such as cash in hand, cash at bank cash at
central bank, investment in marketable security government security, government security. But
some assets are difficult to get converted into cash such as long and fixed assets.

Liquidity is also defined as the position or capability of a bank to meet the current obligation of
customers such as payment of cheque. Payment of demand drafts, disbursement of approved lone
and operation expenses of bank etc. Bank needs to maintain some reasonable level of liquidity to
fulfill different commitment such as provide money to depositors when the demand
administrative expenses, for bank's capacity to granting approved lone. Liquidity is crucial in the
business like banking. Because of the bank his high liquidity, it can no profit and if the bank has
the short fail of the liquidity it cannot satisfy its customers. Inadequate liquidity may lead to
collapse of the banks while excess liquidity is detrimental to bank's profitability. In order to
remove demerits associated with maintaining inadequate and excess liquidity, banks should
maintain an optimum level of liquidity. This is possible only when bank's liquidity needs is
correctly predicted. Prediction covers in present outflow of liquidity. If prediction shows more
outflows, bank should be prepared to cover the shortfall by borrowing or by liquidating assets. If
inflow greater than outflow, bank should plan where to invest so, that income can be increase.
Banks attach great importance short term and long term predictions. Prediction of liquidity need
should be in the firm of primary and secondary reserves so, that bank generates income and at
the same time does not compromise to liquidity.

1.5.2 Review of previous studies

 Acharya and Naqvi (2020), maintaining a robust liquidity position is essential for banks to
ensure financial stability and resilience during economic downturns. They argue that liquidity
buffers not only help banks manage day-to-day operations but also provide a cushion against
external shocks and market uncertainties.

 Chan and Thakor (2019) emphasizes the importance of liquidity regulations, such as the Liquidity
Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR), in shaping banks' liquidity management
practices. They discuss how these regulations influence banks' funding strategies and the allocation of
liquid assets to meet regulatory requirements effectively.

 Allen and Carletti (2018) explores various liquidity risk management strategies adopted by
banks. They highlight the importance of proactive liquidity risk assessment, contingency
planning, and diversification of funding sources to enhance liquidity resilience and mitigate
potential liquidity crises.

 He and Xie (2017) investigates the relationship between market liquidity conditions and bank
performance. They find that banks with stronger liquidity positions tend to outperform during
periods of market stress, suggesting that maintaining adequate liquidity buffers can contribute to
overall financial performance and investor confidence.

 Berger and Bouwman (2016) analyze the effectiveness of liquidity metrics, such as the
current ratio and quick ratio, in predicting bank failures. They conclude that while these ratios
provide valuable insights into a bank's liquidity position, a combination of multiple metrics and
qualitative factors is often necessary for a comprehensive assessment of liquidity risk.

1.5.4 Research gap

Although some previous, studies have conducted in the similar topic the present research has
selected, there is fundamental difference between those and the present on the previous
researcher focused only on the liquidity and saving deposit to total deposit ratio accept of
selected development bank from investors prospective this research has further tried to identify
the fixed deposit to total deposit ratio of the development bank under study which play signifies
role in financial performance which is done by previous researcher. This report based on the
specified analytical tools for analysis of data. Therefore come research gap also raised for the
new researches these different are estimate action of average.

1.6 Method of the Study

Research methodology refers to the various sequential steps adopted by a researcher in studying
a problem with certain objectives in view. It is way to solve research problem systematically.
Research methodology is the overall framework for how contract, process, analyze and present
data on table and diagram to find answer of the research problem question/objective. It may be
understood as a science of studying how research is done scientifically. The basic objective of
this study is to highlight the liquidity position of GIBL.

Research methodology describes the methods or process applied in the entire study. This
research is concerned with secondary data. For the purpose of achieving the objectives the
following methodology has been purposed. This include research design, population and sample,
source of data, data collection technique and data analysis tools. After the collection, data
analysis is performed for the purpose of data ending, coding, tabulating. The researcher makes
descriptive and statistical tool are used to make the analysis more effective, reliable and
authentic. To evaluate the financial condition and solving the problem of the analytical tools
researcher used.

1.6.1 Research design

The present study is mainly based on two types of research design i.e. descripted and analytical
Descriptive research design describes the general pattern of the Nepalese investor s, business
structure, problem of investment policy etc. The analytical research design makes analysis of the
gathered facts and information and makes a critical evaluation of it.

Finally research design in the plan, structure and strategy of investigation conceived so as to
obtained answer to research question and to control variance. To achieve the study descriptive
and analytical research design have been used.

1.6.2 Population and sampling

Population refers to the entire group of people events or things of interest that a researcher has to
study. The population of this study consists of the entire development bank. All the development
banks have to adequate liquidity position for smooth operation of Global IME Bank Limited has
been taken as a sample for the study. The liquidity position of the Global IME Bank Limited is
studies and analyzed as a sample in report.

1.6.3 Type of data

A research design is the arrangement condition, for the collection and analysis of data in manner
that aims to combined relevance to research purpose with economy in procedures. This study
aims on the financial analysis of the Global IME Bank Limited. This study is mainly based on
secondary data. Collected directly from the question answer, direct interview with customer and
office staff. The secondary data are collected form respective annual respects especially from the
Global IMW Bank Limited office, web sites and various other journals and from security bond
Nepal.

1.6.4 Data collection procedure

This study is based on secondary data secondary are collected from their respective annual report
other publication and journals of the related banks, Nepal Rastra Bank, Nepal Stock exchange
and other related magazines.

Research went to the branch office of Global IME Bank Limited. Get the important information.
Research collected the main annual reports of this bank directly from the web site. And other
various articles and journals from various publication and some others from the SUBO, PEPSE
and previous field reports are also taken into account.

1.6.5 Data analysis techniques

Data analysis tools means which tools the research used for present and analyzed the data. The
main tools of analysis are mathematical and statistical tools. In this reports statistical and
financial ratio tools is used for data analysis. Mean and correlation is calculated for analysis of
data as statistical tools. The first work of research is data collection second work is to
arrangement present the data in a logical order. After managing the data in report, data were
analyzed using financial tools to draw the conclusion.

i) Ratios

 Current Ratio
 Quick Ratio
 Saving deposit to total deposit ratio
 Fixed deposit to total deposit ratio

ii) Statistical tools

 Tables
 Simple bar diagram
 Trend line analysis

1.7 Limitation of the Study

This study focused on backing sector of the country. The proposed study will try to identify the
status of liquidity of Global IME Bank Limited and there by studying its impact on the bank.

a) The findings of this study will depend solely on the annual reports of Global IME Bank
Limited.
b) Primary importance will be given to secondary data.
c) This research will only be about liquidity analysis of Global IME Bank Limited.
d) Liquidity analysis well be done by studying liquidity position of Global IME Bank
Limited.
e) The main tools used for study are limited.
f) Analysis is based on the ratio and trend lines of the corresponding ratio only.
g) Only five years data will be taken for the study purpose.
 CHAPTER TWO

RESULT AND ANALYSIS

2.1 Presentation and analysis of Results

This chapter is basically concerned with the presentation and analysis of data. The data collected
for the study has been depicted in tabular from and analyzed with the help of pictorial and
diagrammatic presentation and trend analysis. Here the main data relevant to GIBL are
presented, discussed and analyzed using different statistical tools. Whole preparing this report,
data are taken from annual report of GIBL. Analysis and interpretation using various accounting
ratios give skilled and experienced analyst better understanding of liquid. This is given in the
forms of tables, charts, figure, trend line and necessary description.

2.1.1 Liquidity ratio

A liquidity ratio is an indicator of whether a company's current assets will be sufficient to meet
the company's obligations when they become due. The liquidity ratio includes the current ratio
and the acid test ratio or quick ratio. The current ratio and quick ratio are also referred to as
solvency ratios.

a) Current Ratio

The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-
term obligations. To gauge this ability, the current ratio considers the current total assets of a
company (both liquid and liquidity) relative to that company's current total liabilities. The
current ratio is called "current" because unlike some other liquidity ratios it corporate all current
assets and current liabilities. Following bar diagram can help us to understand it briefly.

Current assets
Current ratio =
Current liability
Table 1

Current ratio (Amount in Rs.)

year current assets current liabilities current ratio

2070/71 35593951713 35625163138 0.99

2071/72 42577585706 44818482586 0.95

2072/73 62576398593 65884378154 0.94

2073/74 76251638685 76871457297 0.99

2074/75 87947592841 89200385062 0.98

Source: Annual report of GIBL

Above table shows current assets, current liabilities and their ratio fiscal year 2070/71 to
2074/75. In the fiscal year 2070/71, current assets are Rs. 35593951713 current liability is Rs.
35625163138 and current ratio is 0.99 of GIBL. After the fiscal year 2071/72, 2072/73,
2073/2074 and 2074/75 the current ratio of GIBL bank is 0.95, 0.94, 0.99 and 0.98. The bank
shows that, current liability is greater than current assets. Following bar diagram and trend line
can help us to understand it briefly.

Series 1
3
Series 2
Series 3
2

0
2070/71 2070/72 2072/73 2073/74 2074/75
Figure 1 Current assets and current liabilities

From the above diagram, in the fiscal year 2070/71, current assets are Rs. 35593951713 current
liability is Rs. 35625163138 and current ratio is 0.99 of GIBL. After the fiscal year 2071/72,
2072/73, 2073/74 and 2074/75 the current ratio of GIBL bank is 0.95, 0.94, 0.99 and 0.98. The
bank shows that, current liability is greater than current assets. It shows that, the bank of GIBL is
not maintained of his liquidity position (i.e. 2:1). As a conclusion, the researcher found that the
liquidity position of the GIBL bank is so bad.

b) Quick ratio

The quick ratio is a measure of how well a company can meet its short term financial liability.
Quick ratio is also known as acid test ratio. It can be calculated as follows

Current assets−prepaid −stick

Quick Ratio =
Current liability

Table 2

Quick ratio

fiscal year quick assets current liabilities quick ratio

2070/71 4861029511 29200385062 0.17

2071/72 8407046364 35625163138 0.24

2072/73 6237789256 44818482586 0.14

2073/74 7225507364 65884378154 0.11

2074/75 10265272065 76871457297 0.13

Source: Annual report of GIBL

Table 2 shows quick ratio of Global IME Bank Limited. In fiscal year 2070/71 quick assets is
4861029511 and current liability is Rs. 29200385062. After that fiscal year 2071/72, 2072/73,
2073/74 and 2074/75 the quick assets is Rs. 8407046364, 6237789256, 7225507364 and
10265272065 and current liability is Rs. 35625163138, 44818482586, 65884378154 and
76871457297. These data can be presented in following bar diagram.
 6

Series 1
3
Series 2
Series 3
2

0
2070/71 2070/72 2072/73 2073/74 2074/75

Figure 3 Quick assets and current liabilities

In above diagram, in fiscal year 2070/71 quick assets is 4861029511 and current liability is Rs.
29200385062. After that the fiscal year 2071/72, 2072/73, 2073/74 and 2074/75 the quick assets
is Rs. 8407046364, 6237789256, 7225507364 and 10265272065 and current liability is Rs.
35625163138, 44818482586, 65884378154 and 7687457297. As a conclusion, the researcher
found that, the liquidity position of bank is not good.

2.1.2 Saving deposit to total deposit ratio

A saving account is a deposit account held at aretail bank than pay interest but can not be used
directly as money in the narrow sense of a medium of exchange (for example by writing a
cheque). These accounts let customer set aside a portion of their liquid assets while earning a
monetary return. It can be calculate as follows:

Total saving deposit

Saving deposit Ratio =
Total deposit
Table 3

Saving deposit

Fiscal Year Saving Deposit Total Deposit Saving Deposit Ratio

2070/71 7385578203 28392822287 0.26

2071/72 9523215715 35414007591 0.27

2072/73 12418043803 44740731784 0.28

2073/74 19831625077 64934358551 0.30

2074/75 18020151712 76339485090 0.23

Source: Annual report of GIBL

From table no. 3, saving deposit is Rs. 73855788203 and total deposit is Rs. 28392822287. As
on as fiscal year 2071/72, 2072/73, 2073/74 and 2074/75, the saving deposit amount is Rs.
9523215715, 12418043803, 19831625077 and 18020151712. And total deposit is Rs.
35414007591, 4474731784, 64934358551 and 76339485090.

Series 1
3
Series 2
Series 3
2

0
2070/71 2070/72 2072/73 2073/74 2074/75

Figure 5 Saving deposit

In above diagram, fiscal year 2070/71, saving deposit is Rs. 73855788203 and total deposit is Rs.
28392822287. As on as fiscal year 2071/72, 2072/73, 2073/74 and 2074/75, the saving deposit
amount is Rs. 9523215715, 12418043803, 19831625077 and18020151712. And total deposit is
Rs. 35414007591, 44740731784, 64934358551 and 76339485090. In conclusion the researcher
found that, the saving deposit of GIBL bank is good.

2.1.3 Fixed deposit to total deposit

A fixed deposit is a type of financial instrument offered by banks and it allow individual to
deposit sum of money for deposit period of time, like one month, six month, one year, five year,
ten year etc. In general fixed deposit account offer higher interest rates than saving account. It
can be calculate as follows.
¿
Fixed deposit Ratio = Total ¿ deposit Total deposit

Table 4

Fixed deposit ratio

FY Fixed Deposit Total Deposit Deposit Ratio

2070/71 10708836223 28392822287 0.38

2071/72 11876223355 35414007591 0.34

2072/73 14034643827 44740731784 0.31

2073/74 19633982453 64934358551 0.30

2074/75 33333642035 76339485090 0.43

Source: Annual report of GIBL

Table no. 4 shows fixed deposit ratio of GIBL from fiscal year 2070/71 to 2074/75. In fiscal year
2070/71, the fixed deposit ratio is 0.38. And in fiscal year 2071/72, 2072/73 and 2073/74 , the
fixed deposit ratio is decreasing order 0.34, 031 and 0.30. The last fiscal year 2074/75, fixed
deposit ratio increased i.e.0.43.
 6

Series 1
3
Series 2
Series 3
2

0
2070/71 2070/72 2072/73 2073/74 2074/75

Figure 7 Fixed deposit ratio

In above diagram, In fiscal year 2070/71, the fixed deposit ratio is 0.38. And in fiscal year
2071/72, 2072/73 and 2073/74, the fixed deposit ratio is decreasing order 0.34, 0.31 and 0.30.
The last fiscal year 2074/75, fixed deposit ratio increased i.e.0.43. In conclude the researcher
found that, fixed deposit ratio of GIBL bank is not so good.

2.14 current deposits to total deposit

A ratio that is used in determining the amount of loans that a bank has out versus the amount of
current deposits on hand at that same time. This is ratio is determined by dividing the bank's loan
amounts by its total amount of deposits.
Table 5

Current deposit

Fiscal Year Current Deposit Total Deposit Current Deposit Ratio

2070/71 6385578203 28392822287 0.22

2071/72 9923215715 35414007591 0.28

2072/73 14418043803 44740731784 0.32

2073/74 17831625077 64934358551 0.27

2074/75 19020151712 76339485090 0.24

Source: Annual report of GIBL

From table no. 5, current deposit is Rs. 63855788203 and total deposit is Rs. 283928822287. As
on as fiscal year 2071/72, 2072/73, 2073/74 and 2074/75, the current deposit amount is Rs.
9923215715, 14418043803, 17831625077 and 19020151712. And total deposit is Rs.
35414007591, 44740731782, 64934358551 and 76339485090.

Series 1
3
Series 2
Series 3
2

0
2070/71 2070/72 2072/73 2073/74 2074/75
Figure 5 Current deposit ratio

In above diagram, fiscal year 2070/71, current deposit is Rs. 73855788203 and total deposit is
Rs.28392822287. As on as fiscal year 2071/72, 2072/73, 2073/74 and 2074/75, the saving
deposit amount is Rs.9523215715, 12418043803, 19831625077 and 18020151712. And total
deposit is Rs.35414007591, 44740731784, 6493438551 and 76339485090. In conclusion the
researcher found that, the saving deposit of GIBL bank is good.
2.2 Major Finding

By studying the liquidity position of GIBL, following finding have been made:

a) The GIBL bank shows that the trend line is fluctuating mode. As a conclusion, the
researcher found that the current ratio of GIBL bank is not good.
b) In above trend line analysis, in fiscal year 2070/71, the quick ratio of the bank is 0.17.
Than the fiscal year 2071\72, 2072/73, 2073/74 and 2074/75 the quick ratio of bank is
0.24, 0.14, 0.11 and 0.13. For the above analysis the researcher conclude that the liquidity
ratio of the bank is not so good.
c) In above trend line analysis, In fiscal year 2070/71 to in fiscal year 2073/74 saving
deposit ratio is increasing mode i.e. 0.26, 0.27, 0.28 and 0.30. And in fiscal year 2074/75,
saving deposit is 0.23 that is decreasing mode. For the above analysis the searcher
conclude that the saving deposit is good.
d) In above trend line analysis, In fiscal year 2070/71 to in fiscal year 2073/74 saving
deposit ratio is increasing mode i.e. 0.26, 0.27, 0.27 and 0.30. And in fiscal 2074/75,
saving deposit is 0.23 that is decreasing mode. For the above analysis the searcher
conclude that the saving deposit is good.
e) In above trend line analysis, the fixed deposit ratio is 0.38 in a fiscal year 2070/71 of the
bank. After that the fixed deposit ratio is decreasing order in fiscal year 2071/72, 2072/73
and 2073/74 the fixed deposit ratio is 0.34, 0.31 and 0.30. In fiscal year 2074/75, the
fixed deposit ratio is increased i.e. 0.43. From the above analysis the researcher
concluded that the fixed deposit ratio is not so good.
f) Current deposit to total deposit ratio of bank was 0.22, 0.28, 0.32,. 0.27 and 0.24 from
fiscal year 2070/71 to 2074/75 respectively. Bank has highest deposit ratio in 2072/73
(i.e. 0.32) and lowest ratio was 0.22 in 2070/71. For the above analysis the searcher
conclude that the current deposit is good.
 CHAPTER THREE

SUMMARY AND CONCLUSION

3.1 Summary

Nepal is one of the least developed countries of the word. For most of the developing process, it
is financially depending upon the foreign countries. It is economically too weak. Thus, the
economic condition of the people is weak. In Nepal 85% of the people are depended upon
agricultural sector which is unable to provide full employment to the people. Nepal government
has to activate people in the nation's development thought overall industrialization of nation. For
this purpose, development of sound banking system is essential. In Nepalese banking sector,
development banks including share holder operating at present. In the absences of modern
banking any country cannot develop the economic actively. Therefore, it is essential to find out
whether or not the banks are serving an important contribution to develop sector of economy.
Liquidity is said to be general business of fund, which shows the bank ability to meet cash
requirement. In this record, this study has been based upon the objective to evaluate the liquidity
of Shiddhartha bank limited.

Global IME Bank Ltd. (GIBL) emerged after successful merger of Global Bank Ltd (an "A"
class commercial bank), IME Financial Institution (a "C" class finance company) and Lord
Buddha Finance Ltd. (a "C" class finance company) in year 2012. Two more development banks
(Social Development Bank and Gulmi Bikas Bank) merged with Global IME Bank Ltd in year
2013. Later, in the year 2014, Global IME Bank made another merger with commercial and
Trust Bank Nepal Ltd. (an "A" class commercial bank).

3.2 Conclusions

All the ratios are not satisfactory but maximum ratios are good and satisfactory in bank. For
ratios are calculated under the study out of the Two are good but Two ratio is not good the bank's
liquidity position is good in overall. The bank can take cooperative actions to improve the saving
deposit to total deposit ratio saving deposits can be increased to maintain sufficient liquidity
position by analyzing the position. The saving deposit account is nearly constant trend. The
highest ratio is 0.30 times in final year 2072/73 and the lowest ratio is 0.23 times in final year
2072/74. But the ratio is not satisfactory due to the last year ratio was decline. Fixed deposit is
fluctuated the lowest ratio is 0.31 times and highest ratio is 0.43 times on 2071/72. It is
satisfactory.

The GIBL bank shows that the trend line is fluctuating mode. As a conclusion, the researcher
found that the current ratio of GIBL bank is not good. Therefore, bank should maintain the
current assets than the current liability. The quick ratio of the bank is 0.17. Than the fiscal year
2070/71, 2071/72, 2072/73 and 2073/74 the quick ratio of bank is 0.24, 0.14, 0.11 and 0.13. For
the above analysis the researcher conclude that the liquidity ratio of the bank is not so good. So
that, bank should manage the quick assets and current liability. Saving deposit ratio is increasing
mode i.e. 0.26, 0.27, 0.28 and 0.30. And in fiscal year 2073/74, saving deposit is 0.23 that is
decreasing mode. For the above analysis the researcher conclude that the saving deposit is good.
The fixed deposit ratio is 0.38 a fiscal year 2069/70 of the bank. After that the fixed deposit ratio
is decreasing order in fiscal year 2070/71, 2071/72 and 2072/73 the fixed deposit ratio is 0.34,
0.31 and 0.30. In fiscal year 2073/74, the fixed deposit ratio is increased i.e. 0.43. From the
above analysis the researcher concluded that the fixed deposit ratio is not so good. Thus, bank
should manage the efficiency of fixed deposit for increment.
 BIBLIOGRAPHY

Acharya and Naqvi (2020). Role of Liquidity in Financial Stability.

Chan and Thakor (2019). Impact of Liquidity Regulations.

Allen and Carletti (2018). Liquidity Risk Management Strategies.

He and Xie (2017). Market Liquidity and Bank Performance.

Berger and Bouwman (2016). Empirical Evidence on Liquidity Metrics.

American Institute of banking (1972). Principle of banking operation. New York:

American institute of Banking.

Aryal, I.R, & Dhungyal, T.P (1975). A new history of Nepal, Kathmandu: Sangam press.

Bajracharya, B.C. (1996). Business statistics and business Mathematics. Kathmandu:

M.K Publishers and Distrubutiors.

Bhattarai, I. Gautam, A and Goet, J (2006). Budgeting New Delhi Lending Procedure and
control. Kathmandu: Asmita Books Publisher and Distrbutors Putalisadak.

Koirala, Dr. Y. R. Dahal Sushil, Gautam, Chintamani (2016). Budgeting and control of profit,
Kathmandu Asmita Book Publication and Distrbutors Pvt. Ltd.

Reports

Annual Report of Global IME Bank Limited, 2070/71 to 2074/75

Websites

http://www.gibl.com.np

http://www.quora.com/What-is-liquidity-in-banking

http://www.bankingnepal.com
 APPENDICES

Current assets
Current ratio =
Current liability

35593951713
CR (2070/71) = =0.99
35625163138

42577585706
CR (2071/72) = =0.95
44818482586

62576398593
CR (2072/73) = =0.94
65884378154

76251638685
CR (2073/74) = =0.99
76871457297

87947592841
CR (2074/75) = =0.98
89200385062