CAPITAL BUDGETING TECHNIQUE APPLIED IN BANKING OF SOUTH EAST BANK LIMITED”, DINAJPUR BRANCH

Abstract

The main purpose of this study is to empirically test the impact of Capital Budgeting on different project of the bank and acceptability of this Project. To investigate this relationship between these two, the author collected secondary data from South East Bank of Bangladesh Ltd., Dinajpur Branch for the period of 2011 to 2013. For this purpose, in this study we use different types of Capital Budgeting Technique, such as accounting rate of return, payback period, net present value, profitability index, internal rate of return, equivalent annuity, return on asset ratio. Then we calculate all the technique and find out the acceptability and rejectable of this project. The results of this research show that there is a significant impact of Capital Budgeting on the bank and their profitability. Therefore, Manager may enhance the profitability of their bank by calculating payback period, Net present value, Internal rate of return and then take decision for their investment of their new project. So, the results indicate that through proper Capital Budgeting in the project increase its benefit. This study will be benefited for the banking sectors in the Department of Capital Budgeting if it use in such as efficient manner so that they can enhance their benefit.