Impact on Size of Efficiency of Commercial Banks: Evidence From Commercial Banks of Nepal Research 2022

Running head: IMPACT ON SIZE OF EFFICIENCY OF COMMERCIAL BANKS:
EVIDENCE FROM COMMERCIAL BANKS OF NEPAL
Impact on Size of Efficiency of Commercial Banks: Evidence from Commercial Banks of Nepal
Name of the Student
Name of the University
Author’s Note

IMPACT ON SIZE OF EFFICIENCY OF COMMERCIAL BANKS: EVIDENCE FROM
COMMERCIAL BANKS OF NEPAL
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Acknowledgement
I would like to thank my University and the professor for allowing me to contribute as well as
providing opportunity to complete my research despite of all challenges that I have faced. It will
not forget the efforts that are made by the professors and other for guiding me with patience,
guidance and understanding. I would not have completed this research without their guidance
and understanding and you are all special to me.

IMPACT ON SIZE OF EFFICIENCY OF COMMERCIAL BANKS: EVIDENCE FROM
COMMERCIAL BANKS OF NEPAL
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Abstract
The research basically focuses on the effect of measure productivity on commercial banks that
has focused on the focused on advertise as well as the common depiction of the recompense
procedures that are given to the commercial banks in Nepal. The study comprise of five chapters
through which the research about has been conducted almost the effectiveness of commercial
banks in Nepal. The primary chapter is the presentation which focuses out the common
information about the consideration in conjunction with the company. The targets of the inquiry
about has been talked about in this part together with the research limitations. Additionally, it
moreover incorporates the research questions beside aim and targets of the research. Within the
moment chapter, it comprise of writing survey which focuses out the variables that are to be
tended to within the study. It comprise of openings and dangers alongside assessment of
competitive advantage and methodologies for improving the execution. In chapter three, it
highlights the strategy which focuses out the strategies through which the research has been
conducted. It incorporates the reasoning, approach, plan, information collection strategy and test
of the research about. The fourth chapter incorporates the outcomes about and discoveries where
the outcomes about are to be assessed and examined as per the current circumstance which it
highlights the estimating, assessment, openings, dangers and competitive methodology. Within
the final chapter, it bargains with the conclusion where the concluding ideas have been said at
the side tending to the objectives and certain proposal. The proposal that have been specified
would offer assistance the company to manage with the dangers and challenges that are
confronting in current situation. Additionally, the long run research has too been given through
which the research can be upgraded in future a long time.

IMPACT ON SIZE OF EFFICIENCY OF COMMERCIAL BANKS: EVIDENCE FROM
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Table of Contents
Chapter 1: Introduction....................................................................................................................5
1.2 Problem Statement.................................................................................................................7
1.3 Aims and Objectives..............................................................................................................9
1.4 Research Questions..............................................................................................................10
1.5 Scope of the research...........................................................................................................10
Chapter 2: Literature review..........................................................................................................12
2.1 Size of Banks.......................................................................................................................12
2.2 Factors affecting size of efficiency of commercial banks...................................................14
2.2.1 Return on Assets (ROA)...............................................................................................15
2.2.2 Net interest margin.......................................................................................................15
2.2.3 Credit to Deposit ratio..................................................................................................16
2.2.4 Interest Spread..............................................................................................................16
2.2.5 Capital adequacy ratio..................................................................................................17
2.3 Impact of Size on Efficiency...............................................................................................17
Chapter 3: Research Methodology................................................................................................20
3.1 Research Onion....................................................................................................................20
3.2 Research Philosophy............................................................................................................21
3.3 Research Approach..............................................................................................................22

IMPACT ON SIZE OF EFFICIENCY OF COMMERCIAL BANKS: EVIDENCE FROM
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3.4 Research design...................................................................................................................22
3.5 Data Collection process.......................................................................................................23
3.6 Sampling method and sample size.......................................................................................24
3.7 Ethical consideration...........................................................................................................24
3.8 Timeline...............................................................................................................................25
Chapter 4: Data Collection and Analysis.......................................................................................26
Chapter 5: Findings........................................................................................................................39
Chapter 6: Conclusion and Recommendation...............................................................................42
6.1 Conclusion...........................................................................................................................42
6.2 Recommendation.................................................................................................................44
References......................................................................................................................................45
Appendices....................................................................................................................................50

IMPACT ON SIZE OF EFFICIENCY OF COMMERCIAL BANKS: EVIDENCE FROM
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Chapter 1: Introduction
The financial crisis in the recent years plays a crucial role in banking sector along with its
overall efficiency. Increase in overall competition and the factors of globalisation has put
forwarded their higher efficiency that puts certain impact on the size of the commercial banks.
Despite of all of the improvements in the sector of banking, the progress of efficiency and the
strict regulation along with the position that is stable risk in nature mainly highlights the overall
position of the bank (Bhattarai 2016). These can be easily impaired along with the facts that
mainly motivated the overall empirical work in the recent years for assessing its overall
performance along with the risk that indicates in the industry of banking. In recent studies it has
been found that the impact of bank specific macroeconomics mainly determines the overall
profitability of the bank.
It also includes an important direction towards the empirical investigation which points
out the overall influence of the overall structure of ownership and the structure on its
profitability. As per the new aspect of the research, it is mainly dedicated to the efficiency
measurement along with the influences of the overall performance of the bank (Bhattarai 2017).
The study expected numerous components might influence the benefit comes about within the
inlet locale. Bank measure was accepted one from the imperative components that impact
productivity for inlet banks. The estimate of the full amount of money has been found with a
critical impact on banks productivity. By knowing the linkage between bank estimate and
proficiency will offer assistance to get it in the event that bigger bank are required to decrease
the cost of banks and give higher return to speculators or not (Bhattarai 2018). The investigation
that mainly uses two main methodologies which would be useful for the commercial banks are

IMPACT ON SIZE OF EFFICIENCY OF COMMERCIAL BANKS: EVIDENCE FROM
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directly linked to the relevance of the cost efficiency that would provide stock performance of
the commercial banks.
This particular study is mainly focused on the commercial banks in Nepal which mainly
points out the positive impact of the efficiency in which the values are created as the operating
earning exceeds the overall cost of invested capital. It has also been estimated that the positive
cost of influence provides the efficiency of the shareholders who have observed the overall
influences on the commercial banks of Nepal (Panta and Bedari 2015). The industry is
developing at a fast rate which would draw in more number of workers towards the companies.
Expanding the number of firms would too increment the number of workers that would improve
the sum of lending and other exercises such as money related bolster, keeping money
administrations, loaning cash at certain intrigued rates and others. Both national as well as the
universal companies of Nepal takes after the driving way of giving the great quality of
administrations to the clients (Teshome, Debela and Sultan 2018). Creating the working
condition of the specialist is the most extreme vital portion which are to be upgraded inside the
given time period. The specialists of distinctive segments has confronted a few of the issues
which are to be included with improvement of the working condition within the banks.
This particular country include of inaccessible claimed banks and commercial banks
which are to be included interior the investigation almost. The foremost reason of the think about
is to highlight the distinctive sorts of effectiveness at the side their impacts (Marahatta et al.
2016). It has additionally been communicated that the keeping money division in Nepal requires
a number of enhancement for their headway which would increment the by and large era inside
the generation lines and increase the entirety of emolument to the pros. The Overall Assets of
commercial banks at conclusion of Saar 2074 BUS was Rest. 2621230.37 Million. Indeed in

IMPACT ON SIZE OF EFFICIENCY OF COMMERCIAL BANKS: EVIDENCE FROM
COMMERCIAL BANKS OF NEPAL
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stock showcase, Commercial Banks plays prevailing part as both delicate and add up to NAPES
List is dominated by the development in cost of Stock of Money related things (Sharma, Pant
and Thapa 2014). The imperative status of the money related knowledge within the monetary
environment of the economy has energized the analysts to ask into the determinants of
productivity. Growing the number of banks would as well increase the number of agents that
would overhaul the whole of remuneration and other works out such as effectiveness of
commercial banks, loaning capacity and others.
1.2 Problem Statement
The problem basically centres on the effect on the proficiency that are given with the
commercial banks of Nepal and it has too been famous that the increment within the concerns for
the commercial banks that are getting less significance (Amatya 2016). The issue with the effect
on their proficiency that are provided to the banks within the keeping money segment of Nepal
basically highlights as they are getting the proper productivity inside the allocated time. It is
required to be expanded with the effectiveness of banks beside long working hours, hazardous
condition, and delay in instalment of salaries. The corporate social obligation is additionally
included within the industry because it pulled in generally worldwide mindfulness together with
enhancing the reverberation within the economy of the world (Gizaw, Kebede and Selvaraj
2015). It has been caught on that in creating nations, most of the specialists of distinctive
segments are getting their correct proficiency of the banks which would be advantageous for the
financial institutions. The outside partners of the keeping money divisions besides upgrading the
settled rate that are related with the managing an account businesses (Lucky and Nwosi 2015).
The issue with the proficiency that are given to the banks inside the banking division of Nepal
fundamentally highlights as they are getting the correct instalment interior the allocated time.