THE Case Study of Nepal Banking Industry and Foreign Direct Investment: Opportunities as well as Threat Analysis.

By

ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family as well as friends for their support as well as guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names as well as surname here], declare that contents of this dissertation/thesis represent my own unaided work, as well as that dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions as well as not necessarily those of University.

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ABSTRACT

This paper examines foreign direct investment (FDI) in Nepali economy in period of post-communist transition since 2009. Nepal adopted the fairly aggressive approach to welcome foreign investment during this period as well as as the result had highest per capita FDI in region since 2001. We discuss impact of FDI in terms of strategic intent, ie, market for service as well as resource seeking FDI. effect of these two types of FDI is opposed to examining impact of resource-seeking FDI in manufacturing sectors as well as market serving FDI in service industries. In case of economies in transition, it is argued that due to strategic intent, resource seeking FDI may involve short-term impact on economic development while markets it serves strategic FDI involves the long presence time with greater benefits for economic development of the transition economy. Our focus is to serve markets of FDI in Nepali banking sector, which has led to the better service as well as products to multinational companies as well as Nepali. This has been accompanied by introduction of innovative financial products for consumers Nepali, particularly consumer credit, including mortgage financing. However, latter remains an underserved sector with great potential for growth. For public policy in Nepal as well as other economies in transition, we conclude that authorities should consider strategic intention of FDI to maximize their profits in their economies.

TABLE OF CONTENT

Table of Contents

ACKNOWLEDGEMENTii

DECLARATIONiii

ABSTRACTiv

TABLE OF CONTENTv

CHAPTER 1: INTRODUCTION1

Background of research1

Problem Statement1

Rationale2

Aims as well as Objectives2

Significance3

Research Question4

Theoretical Frame work4

Limitation of Study5

Reliability5

Validity6

Ethical Concern6

CHAPTER 2: LITERATURE REVIEW8

Foreign direct investment in Nepal9

FDI in services: banking sector in Nepal10

Privatization Dilemmas as well as Arrival of Foreign Banks12

CHAPTER 3: METHODOLOGY13

Methodology of Study13

Primary data13

Secondary data13

Internalization advantages15

Location Advantages (Locatj)17

Wealth as well as size of local market17

Presence of an international financial centre17

Country political as well as economic risk18

Hypothesis 1 (H1)18

Hypothesis 2 (H2)19

Data19

Model20

Empirical findings20

CHAPTER 5: CONCLUSION22

BIBLIOGRAPHY43

CHAPTER 1: INTRODUCTION

Background of research

banking system was inaugurated with establishment of Nepal Bank ltd, which was first bank in Nepal in 2007. However, banking system was exist inside country were carried by private dealer as well as trading center. bank's objectives are to render services to people whether rich or poor to contribute to nation's development. After 15 years, Nepal Rastra bank was established in 2005 which is center bank of Nepal. bank is established to monitor, control as well as to formulate rules, regulation, guidelines as well as policy to supervise banking system through ...