A CASE STUDY OF LOAN MANAGEMENT SYSTEM OF

NMB BANK LIMITED

A Research Proposal

For the Degree of Bachelor of Business Studies(BBS)

Submitted By: Puskar Dahal

St.Lawrence College

Chabahil,Kathmandu,Nepal

TU Reg.no. 7-2-788-109-2019

Submitted to: St.Lawrence College

Chabahil,Kathmandu,Nepal
Faculty of Management
TU,Kathmandu Nepal
2024
1.1 Background of the Study
As we know, loan is money given to someone for specific time on the basis of maturity

period the bank charges different interest rate for different sectors. The granting process of

loan is done after the study about the person that the loan will be repaid together with interest

or not. There are good as well as bad borrowers in the society. Thus, the bank or institution

always keeps some probability that the borrowers will not pay when a bank grants credit.So,every

institution in our country or in the world provides loan by studying some stages. Loan

approval is one of the major issues for research..

Loan is money given to some people for a specific period of time on the basis of maturity

period the bank charges different interest rate for different store. The approving authority

approves loan only after being convinced that the loan will be repaid together with interest.

Structure of loan approval system is the system which includes all the steps from the

application for the loan to it's achievement by borrower. There are many processes to

approve the loan. Normally, a borrower required document. Through the document submitted

given various information. Normally such an interview takes place for the bank purpose.

The price of loans and the interest rate spread in our country were relatively high for a long

period limiting thus the access to capital and inhibiting economic growth. Although there has

been a trend towards lower lending rates and narrower spreads in recent years, they are still

relatively high. Until now, the factors that determine lending rates and interest rate spreads

are usually analysed with economic intuition, through expert opinions and by studying the

dynamics of certain categories, which are usually considered to influence the interest rate policy of

the banks. These factors includes the low level of savings and consequently the low

supply of loans, insufficient competition in the domestic banking system, the inefficiency and

low profitability of banks, uncertainty in the economic environment, the inherited low

quality of loan portfolios, institutional limitations, etc. NMB Bank Limited licensed as "A

class financial institution by Nepal Rastra Bank in May 2008 has been operating in the

Nepalese Financial market for over twenty years and in one of the leading commercial

banks in the banking industry. The alliance with FMO positions the NMB Bank in
 becoming the market leader in managing environmental & social risks and the

leading player in renewable energy and agribusiness. To establish ourselves as a leader in

banking by providing a range of financial services suitable to the needs of the market with

high priority on customer care while simultaneously embracing the interests of all
stakeholders and value of a good corporate citizen.

1.2 Statement of the Problem

All the above contents explain here the importance of loan management system of the

bank. The important of this analysis is equally even from every aspect shareholders analyze these

statements to have information about the bank. Similarly shareholder shows great concern

about the overall strength and weakness of the bank. The study tries to seek answer to the

following
question:
 What is the loan management process of NMB Bank Limited.

 What is the relationship between types of loan and deposit types of NMB Bank
Limited?

1.3Theoretical Framework

Review of literature is a way to discover what the researcher in the area of our problems has

uncovered and also to avoid investigation problems that has been definitely answered. For

preparing this report, the researcher uses different books, reports and views of scholars,

which helps to present clear objectives of the study.

Van Horn (1976) states that investment may be defined as the purchase by an individual

institutional or investor of financial or real assets that risk assumed over some of investment period

Cheney and Moses (2001) states that an investment is commitment of found made in the

exception of some positive rates of return. If the investment is properly undertaken the return

will be commensurate with the risk the investors assumes..

Sharp and Bailey (2001) states that the initial steps, selling investment policy, involve

determining the investor's objectives and the amount of his or her invest able wealth, because
 there is a positive relationship between risk and return for sensible investment strategies, it is

not appropriate for an investor to say that his or her objective is to make a lot of money.

Agrawal (2005) states that field work assignment and report writing" provides practical
guidance to the field work and report writing. This is the basic guide book for this field work.

This book provides practical knowledge about how to write field work and report.

Fisher and Jordan (2006) states that, the investment is a commitments of funds
made in the expectation of some positive rate of return. If an investor is properly

undertakes the return will commensurate with the risk investor assumes..

1.4 Objectives of the Study

The general objective of this study was to examine the loan management system of NMB

Bank Limited, with an emphasis on performance of core business operations of banks. The

main objective of this project work report is to analysis the loan management system of the

bank. The objective of the study can be highlighted on the following points which are mentioned as

below :
•

 To examine the loan management system of NMB Bank Limited.

 To identify the relationship between loan and deposit of NMB Bank Limited.

1.5 Rationale/Significance of Study

If you are looking to finance your next deal with a traditional lender, you need an updated

pre-qualification letter to get things going. Most real estate agents will not even start the

process unless they have a letter in their possession. Sending a letter you got six months

ago does you no good. You need a lender or mortgage broker to verify updated information
 that you provide them. This may seem like a burden on your end, but it is an essential part

of the lending process. If you are unsure of what you need to provide or how the initial

stages of the loan approval process works, there are the three main steps to keep in mind.

1.6 Limitations of the Study.

The study will base on the following limitations.

 The study will be concerned only loan approval system.

 These studies will be used only simple statistical tools for data presentation and analysis..

 This study will covered only the five year data beginning from 2075/76 to 2080/81.

⚫ This study will be based on secondary data.

1.7 Methodologies of the Study

Research methodology reflects how the data are presented by using various tools and

techniques. It is also a main part of a report as it shows how clearly and effectively the

researcher has presented the report. The main methods that will be used for the study in
order to prepare this report will follow::

1.7.1 Research Variables

While preparing this report, many research variables will be used such as various types of
various types of loan, will be used to explore the bank entitled on loan management system
of NMB Bank Limited..
1.7.2 Research Design

Research Design is a master plan, regarding the method and procedure of investigation.

Analytical and descriptive research designs will be used to invest the research objectives.

1.7.3 Population and Sample

For the purpose of the study it would not possible to collect information and data from the
all organization during the short period. Therefore, the researchers will have chosen entitled
on loan management system of NMB Bank Limited. There are 20 commercial banks in
Nepal but the researcher will have done NMB Bank Limited.

1.7.4 Sources and Techniques of Data Collection

While preparing this report data will be collected from secondary sources. To analyze
profitability analysis, the researcher used quantitative data. Data collection techniques used
by secondary collection methods, which will presented below:

A. Secondary Data

The data which is not originally collected but rather obtained from other sources call

secondary data. They are ready made and collected by other already. They obtained from

following sources.

 Annual report

 Balance sheet

 Provided data published from bank

 Websites
1.7.5 Data Presentation and Analysis Tools

The data are processed, tabulated and graphed to analyze and achieve objectives of the
study. Some of the tools used in this study are as follows.

 Table

 Figure

 Bar-diagram

 Co-relation

1.8 Report Structure

The present study has been organized into 3 chapters. They are whole report summarized by

listed below :

Chapter- I: Introduction

The first chapter includes background, profile of organization, objectives, rationale, review,

methods and limitations.

Chapter-II : Results and Analysis

The second chapter included data presentation, analysis and results and findings.

Chapter-III: Summary and Conclusion

The third chapter includes summary and conclusion.
Lastly, bibliography and appendices are added at the end of this report.

1.9 Time Frame and Work Schedule

Topic selection 3 days
Proposal writing 4 days
Data collection 5 days
Data presentation and analysis 7 days
Preparation of report 5 days
Proof-reading 4 days
Setting and printing 4 days
Review of literature 3 days
Total 35 days