Deposit Mobilization of Commercial Banks in the Context of Nepal

1709 Words Jan 6th, 2012 7 Pages
Introduction

Background

Capital formation is one of the important factors leads to increase in the size of national output income and employment, solving the problem of inflation and balance of payment and foreign debts. Domestic capital formation helps in making a country self sustainable. According to classical economist, one of the main factors which helped capital formation was the accumulation of capital. Profit made by the business community constituted the major part of savings the community and the saved has assumed to be invested. They thought capital formation indeed plays a deceive role in determining the level and growth of national income and economic development. In the view of many economists, capital occupies the central
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Commercial banks are those institutions, which deals in accepting deposit of individual and giving loans. These banks provide working capital needs of trade, industry and even to agricultural sector. Moreover commercial banks also provide technical and administrative assistance to industries, trade and business enterprises. They transfer monetary sources form savers to users. Commercial bank is a corporation which accepts demand deposits subject to check and makes short terms loans to business enterprises, regardless of the scope of its other services.

The commercial banks play an important role in the modern economy. Commercial banks are the heart of financial system. They make fund available through their lending and investing activities to borrowers, individuals, business firms and services. A commercial bank must mobilize its deposits and other funds in profitable, secured and marketable sector.

So, this study deals with the efficiency of commercial banks and economic development of the country by making a survey of deposits and credit of commercial banks and how can we utilize it to fulfill the financial needs of the different sectors of the economy. It has generally been observed that the deposits of commercial banks have not been fully utilized.

Statement of Problem
Open Document